Exhibit 10.1

 

LIMITED PARTNERSHIP AGREEMENT

 

OF

 

INP RETAIL, L.P.

 

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LIMITED PARTNERSHIP AGREEMENT

OF

INP RETAIL, L.P.

 

THIS LIMITED PARTNERSHIP AGREEMENT (this “Agreement”) is made and entered into
as of June 3, 2010 (the “Effective Date”) among Inland Real Estate Corporation,
a Maryland corporation (“Inland”), Stichting Depositary PGGM Private Real Estate
Fund (the “Depositary”), a Dutch foundation, acting in its capacity as
depositary of and for the account and risk of PGGM Private Real Estate Fund (the
“Fund”, and together with the Depositary, “PGGM PRE Fund”), a Dutch fund for the
joint account of the participants (fonds voor gemene rekening)  (Inland and PGGM
PRE Fund are hereafter individually referred to as a “Limited Partner” and
collectively as “Limited Partners”), and INP Retail Management Company, LLC, a
Delaware limited liability company (hereafter referred to as the “General
Partner”).

 

THE PARTNERSHIP INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE, BUT HAVE BEEN ISSUED
PURSUANT TO EXEMPTIONS UNDER THE FEDERAL SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND APPLICABLE STATE SECURITIES LAWS.  THE SALE, TRANSFER,
PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF ANY OF SAID INTERESTS IS
RESTRICTED AND MAY NOT BE ACCOMPLISHED EXCEPT IN ACCORDANCE WITH THIS AGREEMENT
AND AN APPLICABLE REGISTRATION STATEMENT OR AN OPINION OF COUNSEL SATISFACTORY
TO THE GENERAL PARTNER THAT REGISTRATION IS UNNECESSARY OR AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.

 

W I T N E S S E T H:

 

WHEREAS, the General Partner, Inland and PGGM PRE Fund desire to provide for the
operation, management and governance of a limited partnership known as INP
Retail, L.P. (the “Partnership”), which was formed immediately prior to entering
into this Agreement pursuant to the Act.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
and other good and valuable consideration, the receipt, adequacy and sufficiency
of which are hereby acknowledged by the parties, the parties agree as follows:

 

ARTICLE 1

 

DEFINITIONS

 

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The following capitalized terms shall have the meaning specified in this
ARTICLE 1.  Other terms are defined in the text of this Agreement; and
throughout this Agreement, these terms shall have the meanings respectively
ascribed to them.

 

“Act” means the Delaware Revised Uniform Limited Partnership Act, as amended as
of the date hereof.

 

“Additional Inland Properties” means the Properties identified in the attached
Schedule 6.2(a)-2.

 

“Additional Properties REIT Entity” shall mean the entity organized as a private
Domestically Controlled REIT and which shall own 100% of the equity ownership
interests in each Property Entity owning an Additional Property.

 

“Additional Property” shall have the meaning set forth in Section 7.1(a).

 

“Adjusted Capital Account Deficit” means, with respect to any Partner, the
deficit balance, if any, in such Partner’s Capital Account as of the end of the
relevant Allocation Period, after giving effect to the following adjustments:

 

(a)                                  credit to such Capital Account any amounts
which such Partner is obligated to restore to the Partnership pursuant to any
provision of this Agreement or is deemed to be obligated to restore pursuant to
the penultimate sentences of Regulations Section 1.704-2(g)(1) and
1.704-2(i)(5); and

 

(b)                                 debit to such Capital Account the items
described in Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and
1.704-1(b)(2)(ii)(d)(6) of the Regulations.

 

The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Regulations
and shall be interpreted consistently therewith.

 

“Affiliate” means and includes any Person that directly, or through one or more
intermediaries, controls or is controlled by or is under common control with a
Partner; or any person in which such Partner has a direct, or indirect through
one or more intermediaries, controlling interest as a partner, member, general
partner, manager, principal, shareholder, beneficiary or otherwise as an owner.

 

“Agreement” means this Agreement, as amended from time to time.

 

“Allocation Period” means the period commencing on January 1 (or, for 2010, the
date of this Agreement) and ending on December 31, or any portion thereof for
which the Partnership is required to allocate or otherwise allocates Profits,
Losses and other items of income, gain, loss, expense, or deduction pursuant to
this Agreement.

 

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“Book Value” means, with respect to any asset, such asset’s adjusted basis for
federal income tax purposes, except as follows:

 

(a)                                  the initial Book Value of any asset other
than cash contributed by a Partner to the Partnership shall be the gross fair
market value of such asset at the time of contribution, as determined by the
Partners, provided, that, in the case of an Inland Property, such gross fair
market value shall be the Contribution Value of the Inland Property as
determined under Section 6.2(d);

 

(b)                                 the Book Values of all Partnership assets
shall be adjusted to equal their respective gross fair market values, as
determined by the Partners, as of the following times: (i) the contribution of
more than a de minimis amount of assets to the Partnership by a new or an
existing Partner as consideration for an interest in the Partnership; (ii) the
distribution by the Partnership to a Partner of more than a de minimis amount of
Partnership assets as consideration for all or any part of such Partner’s
interest in the Partnership; (iii) the issuance of an interest in the
Partnership (other than a de minimis interest) as consideration for the
provision of services to or for the benefit of the Partnership; and (iv) the
liquidation of the Partnership within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(g); provided, however, that adjustments pursuant to
clauses (i) and (ii) of this sentence shall be made only if the Partners
determine that such adjustments are necessary or appropriate to reflect the
relative economic interests of the Partners in the Partnership;

 

(c)                                  the Book Value of any Partnership asset
other than cash distributed to any Partner shall be the gross fair market value
of such asset on the date of distribution, as determined by the Partners;

 

(d)                                 without duplicating any adjustment under
subparagraph (b) above, the Book Value of Partnership assets shall be adjusted
to reflect any adjustments to the adjusted basis of those assets under Code
Sections 734(b) or 743(b), but only to the extent that those adjustments are
taken into account in determining Capital Accounts under Regulations
Section 1.704-1(b)(2)(iv)(m) and subparagraph (e) of the definition of “Profits”
and “Losses” or Section 8.6(c)(v) hereof; and

 

(e)                                  if the Book Value of an asset has been
determined or adjusted pursuant to subparagraphs (a), (b) or (d) above, such
Book Value shall thereafter be adjusted by the Depreciation taken into account
with respect to such asset for purposes of computing Profits and Losses (and not
the depreciation, amortization or other cost recovery deductions allowable with
respect to that asset for federal income tax purposes).

 

“Business Day” means a day other than a Saturday, Sunday or other day on which
commercial banks in Chicago, Illinois or the Netherlands are authorized or
required by applicable law to close.

 

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“Business Plan” shall have the meaning set forth in Section 9.9.

 

“Calendar Year” means the 12-month period ending December 31.

 

“Capital Account” means the capital account established and maintained for each
Partner pursuant to Section 8.6(a).

 

“Capital Call” means a written notice from the General Partner as provided
herein to the Limited Partners setting forth the amount of the Capital
Commitment to be contributed, the subsection or subsections of Sections 6.2 or
6.3 pursuant to which the Capital Call is being made, the purpose of said
Capital Call, each Limited Partner’s share of the Capital Call, whether the
Capital Call is to be funded in cash by such Limited Partner, the date the
Capital Contribution with respect to such Capital Call is due (which date shall
be not less than ten (10) Business Days after the date the Capital Call is
made), and wire transfer instructions for the bank account of the Partnership or
such other bank accounts as the General Partner may direct into which such
Capital Contribution, if cash, shall be deposited; provided, however that if no
such wire transfer instructions are specified the amounts shall be wired as set
forth in the instructions attached hereto as EXHIBIT 1-A, as such default wire
instructions may be modified by the General Partner from time to time by written
notice to the Limited Partners.

 

“Capital Commitment(s)” means the Inland Capital Commitment and the PGGM PRE
Fund Capital Commitment, as more particularly described in Section 6.1.

 

“Capital Contributions” means all contributions to the capital of the
Partnership, including those in respect of each Limited Partner’s Capital
Commitments.

 

“Capital Event” means any transaction with respect to any Partnership Entity or
Owned Property which generates cash receipts other than ordinary operating
income, including, without limitation, dispositions of equity interests in REIT
Entities or Property Entities, sales of real or personal property (other than
sales of personal property in the ordinary course of business), condemnations
(and conveyances in lieu thereof) (but only to the extent not required to be
paid to mortgagees, tenants or other third parties and not applied to the
restoration of the Owned Property), damage recoveries (but only to the extent
not required to be paid to mortgagees, tenants or other third parties and not
applied to the restoration of the Owned Property), receipts of insurance
proceeds (but only to the extent not required to be paid to mortgagees, tenants
or other third parties and not applied to the restoration of the Owned
Property), borrowings, financings or refinancings in excess of existing
indebtedness, and other transfers or dispositions of all or a significant part
of (i) any Owned Property or any Partnership Entity or (ii) the aggregate assets
of the Partnership, but excluding, for the avoidance of doubt, any Rebated Third
Party Fee.

 

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“Certificate” means the Certificate of Limited Partnership of the Partnership,
filed in the Office of the Secretary of State of the State of Delaware on
May 18, 2010 (as amended from time to time).

 

“Change of Control” means that a Person or group of Persons acting in concert
(other than the direct or indirect beneficial owners of the outstanding equity
interests of Inland as of the date hereof) shall, as a result of a tender or
exchange offer, open market purchase, privately negotiated purchases or other
acquisitions, have become the direct or indirect beneficial owner (within the
meaning of Rule 13d3 under the Exchange Act of 1934, as amended) of securities
of Inland representing more than fifty percent (50%) of the combined voting
power of the outstanding voting securities for the election of directors or
shall have the right to elect a majority of the management committee or board of
managers of Inland, or shall otherwise have the right to direct the management
of Inland.

 

“Code” means the Internal Revenue Code of 1986, as amended, or any successor
law.

 

“Confidential Information” means all information or data: (i) covered by a
non-disclosure agreement to which any Partnership Entity is a party; or
(ii) relating to the business and affairs of the Partnership Entities, Inland or
PGGM PRE Fund and not generally known outside of the Partnership Entities,
Inland and PGGM PRE Fund, including, without limitation, (A) any information
related to the Properties, including, but not limited to leases, leasing
information and other Property ownership and management details, (B) any
information related to any potential investments in Properties, including, but
not limited to, materials delivered in connection with an Initial Notice or
Board Package (as such terms are defined in Section 7.1(c)), the details of
pending contracts and the negotiations with respect thereto, but excluding such
information related to Properties which are thereafter rejected by the Partners
if such information is the subject of a non-disclosure agreement to which any
Partnership Entity is a party, or (C) any of the processes, data, designs,
compilations of information, apparatus, computer programs, information of or
relating to suppliers or customers, customer requirements, cost or price data,
research data, business plans, marketing or sales plans or information,
financial data, salary information, policies and procedures, or sales know-how
of the Partnership Entities, or (D) any other information that may be considered
to be proprietary to or a trade secret of a Partnership Entity, whether or not
such information is considered a trade secret within the meaning of applicable
law.  Information shall not be considered “Confidential Information” if any of
the following apply:

 

(a)                                  It is already in or enters into the public
domain otherwise than as a consequence of a breach of the terms of this
Agreement;

 

(b)                                 It is already properly and lawfully in the
possession of the receiving party and is not subject to any obligation of
secrecy on the receiving party’s part;

 

(c)                                  It becomes available to a party on a
non-confidential basis from a source other than the Partnership Entities,
provided that such information was properly and

 

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lawfully in the possession of such source and not, so far as the receiving party
is aware (after making due and careful inquiry), subject to any obligation of
secrecy on the part of such source;

 

(d)                                 It is contained in this Agreement or any
other agreement contemplated hereby and same is required to be filed with the
Securities and Exchange Commission or other regulatory agency, as determined by
the General Partner’s securities counsel.

 

“Control” means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.

 

“Default Rate” means the cumulative annual interest rate equal to the lesser of
(i) 18% per annum and (ii) the maximum rate of interest permitted by applicable
law, compounded monthly on the average daily outstanding balance of principal.

 

“Depreciation” means, for each Allocation Period, an amount equal to the
depreciation, amortization or other cost recovery deduction allowable for
federal income tax purposes with respect to an asset for such Allocation Period;
provided, however, that if the Book Value of an asset differs from its adjusted
basis for federal income tax purposes at the beginning of such Allocation
Period, Depreciation shall be an amount that bears the same ratio to such
beginning Book Value as the federal income tax depreciation, amortization, or
other cost recovery deduction with respect to such asset for such Allocation
Period bears to such beginning adjusted tax basis; and, provided, further, that
if the federal income tax depreciation, amortization or other cost recovery
deduction for such Allocation Period is zero, Depreciation shall be determined
with reference to such beginning Book Value under any reasonable method selected
by the General Partner.

 

“Disagreement” means the inability of the Limited Partners to agree: (a) on a
Major Decision or other matter which makes it impossible or impractical to
continue the Partnership or the operation of an Owned Property as anticipated in
this Agreement for a period of sixty (60) days or more, (b) on the determination
of whether a Property meets, or continues to meet the Investment Guidelines, in
either event for thirty (30) days or more, (c) the determination of whether a
Material Adverse Effect or Material Change exists, for thirty (30) days or more,
(d) the determination of whether a Manager Event, as defined in the Property
Management Agreement, has occurred without the General Partner having exercised
the Owner’s, as defined in the Property Management Agreement, rights and
remedies thereunder for thirty (30) days or more after the request of a Limited
Partner to do so, (e) the determination of whether a Partner is entitled to
indemnification, pursuant to Section 9.7(e), or (f) the determination of whether
a Partner consenting or withholding its consent to indemnification pursuant to
Section 9.7(e) has acted in good faith.

 

“Domestically Controlled REIT” means a real estate investment trust within the
meaning of Code Section 856(a) that is “domestically controlled” within the
meaning of Code

 

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Section 897(h)(4)(B) and that is not a “pension-held REIT” within the meaning of
Code Section 856(h)(3)(D).

 

“Emergency Situation” means any event, circumstance, or situation, which shall
cause the Partnership, a REIT Entity, Property Entity or Owned Property to incur
an Expense other than as contemplated in an annual Business Plan, and in the
reasonable discretion of the General Partner, the failure to promptly pay such
Expense, notwithstanding that same may be a Major Decision or otherwise require
the consent of the Limited Partners, will have a material adverse impact on the
business or operations of the Partnership, REIT Entity, Property Entity or Owned
Property.

 

“Excess Financing” shall have the meaning set forth on EXHIBIT 10-D.

 

“Executive Order” means Executive Order No. 13224 on Terrorist Financing
(effective September 24, 2001).

 

“Expenses” means, for a given period of time, a sum equal to the aggregate of
the expenditures, charges and costs actually paid (or if such period is in the
future, required to be paid during such period of time in accordance with the
terms of this Agreement or in accordance with any annual Business Plan approved
pursuant to this Agreement) in connection with the business of the Partnership, 
REIT Entities or Property Entities, and permitted net increases in Reserves
(which may be negative and therefore reduce Expenses), including, without
limitation or duplication:

 

(I)                                     EXPENSES, COSTS AND CHARGES IN
CONNECTION WITH THE ACQUISITION, OWNERSHIP, SALE, OPERATION, MANAGEMENT OR
LEASING OF ALL OR ANY PORTION OF ANY OWNED PROPERTY;

 

(II)                                  EXPENSES, COSTS AND CHARGES IN CONNECTION
WITH THE REPAIR, MAINTENANCE, REPLACEMENT, ALTERATION OF OR ADDITION OR CAPITAL
IMPROVEMENT TO ANY PORTION OF ANY OWNED PROPERTY, INCLUDING ANY CASUALTY OR
CONDEMNATION LOSSES, TO THE EXTENT THAT THE LOSSES ARE NOT REIMBURSED DURING THE
APPLICABLE ACCOUNTING PERIOD BY ANY THIRD PARTY RESPONSIBLE THEREFOR OR THROUGH
INSURANCE MAINTAINED BY THE PARTNERSHIP;

 

(III)                               PAYMENTS OF PRINCIPAL AND INTEREST DUE WITH
RESPECT TO ANY FINANCINGS AND PARTNERSHIP LOANS, IF ANY;

 

(IV)                              ALL SALES, PAYROLL, REAL ESTATE, PERSONAL
PROPERTY, OCCUPANCY AND OTHER EXCISE, PROPERTY, PRIVILEGE OR SIMILAR TAXES AND
ASSESSMENTS IMPOSED UPON THE PARTNERSHIP OR ANY OWNED PROPERTY;

 

(V)                                 UTILITY COSTS AND DEPOSITS AND OTHER COSTS
AND DEPOSITS REQUIRED TO OBTAIN OR LEASE ANY SERVICE OR EQUIPMENT RELATING TO
ANY OWNED PROPERTY;

 

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(VI)                              MANAGEMENT FEES, ASSET MANAGEMENT FEES, AND
OTHER FEES AND REIMBURSEMENTS PAYABLE TO THE PROPERTY MANAGER (AS DEFINED IN
SECTION 9.2(D)) PURSUANT TO THE PROPERTY MANAGEMENT AGREEMENT (AS DEFINED IN
SECTION 9.2(D));

 

(VII)                           LEASING FEES PAYABLE TO THE LEASING AGENT (AS
DEFINED IN SECTION 9.2(D)) AND ANY CO-BROKERS OR AGENTS PURSUANT TO THE LEASING
AGREEMENT (AS DEFINED IN SECTION 9.2(D)).

 

(VIII)                        LEASING FEES TO NON-AFFILIATED THIRD PARTIES;

 

(IX)                                ACQUISITION FEES TO NON-AFFILIATED THIRD
PARTIES;

 

(X)                                   FEES SET FORTH IN THE ATTACHED EXHIBIT
10-D;

 

(XI)                                EXPENDITURES REQUIRED TO BE MADE IN
CONNECTION WITH ANY LEASE COVERING SPACE IN OR AT ANY OWNED PROPERTY, INCLUDING
TENANT IMPROVEMENTS, TENANT ALLOWANCES AND PAYMENTS, COSTS INCURRED IN
CONNECTION WITH THE PARTNERSHIP (OR ANY REIT ENTITY OR PROPERTY ENTITY) ASSUMING
A TENANT’S LEASE OBLIGATIONS WITH RESPECT TO OTHER REAL PROPERTY AND COSTS
INCURRED IN CONNECTION WITH THE PARTNERSHIP’S (OR ANY REIT ENTITY’S OR PROPERTY
ENTITY’S) EXERCISE OF A RIGHT, OR ENTERING INTO AN AGREEMENT, TO “TAKEBACK”
SPACE IN ANY OWNED PROPERTY;

 

(XII)                             (A) THE FEES AND EXPENSES ASSOCIATED WITH THE
QUALIFICATION OF A REIT ENTITY OWNING INLAND EQUITY INTERESTS RELATING TO AN
INLAND PROPERTY AS A DOMESTICALLY CONTROLLED REIT UPON THE CONTRIBUTION OF SUCH
INLAND EQUITY INTERESTS TO THE APPLICABLE REIT ENTITY FOLLOWING INLAND’S INITIAL
CONTRIBUTION OF SUCH INLAND EQUITY INTERESTS TO THE PARTNERSHIP, (B) THE FEES
AND EXPENSES ASSOCIATED WITH THE ORGANIZATION OF ANY ADDITIONAL REIT ENTITY FOR
THE PURPOSE OF OWNING EQUITY INTERESTS IN A PROPERTY ENTITY THAT HOLDS AN
ADDITIONAL PROPERTY, AND (C) THE FEES AND EXPENSES ASSOCIATED WITH MAINTAINING A
REIT ENTITY AS A DOMESTICALLY CONTROLLED REIT;

 

(XIII)                          SUBJECT TO THE LIMITATIONS SET FORTH IN
SECTION 6.6 HEREOF, THE FEES AND EXPENSES OF ATTORNEYS, ACCOUNTANTS, ARCHITECTS,
ENGINEERS, APPRAISERS, AND OTHER PROFESSIONALS RETAINED BY OR ON BEHALF OF THE
PARTNERSHIP IN ACCORDANCE WITH THE TERMS HEREOF; AND

 

(XIV)                         ALL OTHER CUSTOMARY AND NECESSARY DIRECT
OUT-OF-POCKET COSTS AND EXPENSES OF THE PARTNERSHIP REASONABLY INCURRED IN
ACCORDANCE WITH THIS AGREEMENT.

 

Notwithstanding the foregoing, there shall, however, be excluded from Expenses:

 

(i)                                     all noncash items such as depreciation;

 

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(II)                                  DISTRIBUTIONS;

 

(III)                               ALL PAYMENTS, DEPOSITS, EXPENSES AND
RESERVES DEDUCTED FROM THE PROCEEDS OF A CAPITAL EVENT TO DETERMINE THE NET
EXTRAORDINARY CASH FLOW;

 

(IV)                              EXPENSES OF THE GENERAL PARTNER FOR
ENTERTAINMENT, PUBLICITY, FUND RAISING, OFFICE SPACE, INFORMATION TECHNOLOGY,
EMPLOYMENT, PERSONNEL OR OTHER MATTERS THAT ARE GENERALLY CONSIDERED TO BE
CORPORATE OVERHEAD, INCLUDING, WITHOUT LIMITATION, INSURANCE OF THE GENERAL
PARTNER AND ITS PERSONNEL;

 

(V)                                 ANY EXPENSE, COST OR CHARGE ENUMERATED
ABOVE, TO THE EXTENT SUCH EXPENSE, COST OR CHARGE WAS PAID FROM RESERVES, WHICH
PAYMENT SHALL BE DEEMED TO REDUCE RESERVES; AND

 

(VI)                              EXPENDITURES THAT WOULD BE CAPITALIZED
PURSUANT TO GENERALLY ACCEPTED ACCOUNTING PRINCIPLES CONSISTENTLY APPLIED, TO
THE EXTENT THAT (X) THE PARTNERSHIP HAS RESERVES AVAILABLE TO PAY SUCH
EXPENDITURES; (Y) THE PARTNERSHIP HAS OBTAINED A CREDIT FACILITY WHICH IS
AVAILABLE TO PAY SUCH EXPENDITURES; OR (Z) THE PARTNERS AGREED, PRIOR TO
ACQUIRING THE OWNED PROPERTY TO WHICH SAID EXPENDITURES RELATE, TO CONTRIBUTE
ADDITIONAL CAPITAL WHEN NEEDED TO PAY SUCH EXPENDITURES.

 

“Fair Market Value” shall have the meaning set forth on EXHIBIT 11.5-A.

 

“Financing” means any indebtedness of the Partnership, the REIT Entities or the
Property Entities for borrowed money.

 

“Fiscal Year” means the fiscal year of the Partnership, as determined by the
General Partner.

 

“GAAP” means generally accepted accounting principles utilized in the United
States, consistently applied.

 

“General Partner” means INP Retail Management Company, LLC, a Delaware limited
liability company, having such powers and authority over the management of the
Partnership as set forth in this Agreement, and any Person substituted for the
General Partner pursuant to Section 5.5(e) or 9.1 or ARTICLE 11.

 

“Holding Period” means, with respect to an Owned Property, the period agreed to
by the Limited Partners, as of the contribution or acquisition of such Owned
Property, during which the Partnership, through a Property Entity, will maintain
ownership of such Owned Property, and as determined pursuant to Section 7.6.

 

“Initial Inland Properties” means those Properties identified on the attached
Schedule 6.2(a)-1.

 

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“Initial Percentage Interest” means with respect to Inland 55%, and with respect
to PGGM PRE Fund 45%.

 

“Inland Additional Capital Contributions” shall have the meaning set forth in
Section 6.3.

 

“Inland Basis” means, with respect to an Inland Property, the adjusted tax basis
of that Inland Property, as determined for federal income tax purposes,
immediately prior to the contribution to the Partnership of the Inland Equity
Interests in the Property Entity that holds such Inland Property.

 

“Inland Built-In Gain” means, with respect to an Inland Property, the excess, if
any, of the initial Book Value of that Inland Property, as determined pursuant
to subparagraph (a) of the definition of “Book Value” and the Contribution Value
of that Inland Property as determined under Section 6.2(d), over the Inland
Basis with respect to that Inland Property immediately prior to the contribution
to the Partnership of the Inland Equity Interests in the Property Entity that
holds such Inland Property.

 

“Inland Capital Commitment” shall have the meaning set forth in Section 6.1.

 

“Inland Capital Contribution” means the sum of the Inland Initial Capital
Contributions and the Inland Additional Capital Contributions.

 

“Inland Equity Interests” means, with respect to any Inland Property, all of the
equity ownership interests in the Property Entity owning such Inland Property.

 

“Inland Initial Capital Contributions” shall have the meaning set forth in
Section 6.2(a).

 

“Inland Maximum Capital Contributions” shall have the meaning set forth in
Section 6.3(f)(ii).

 

“Inland Party” or “Inland Parties” shall mean Inland and Inland’s Affiliates
which shall include the Property Entities, but with respect to the Property
Entities, only prior to the contribution of the Inland Equity Interests relating
thereto to the Partnership by Inland in accordance with this Agreement.

 

“Inland Property” or “Inland Properties” shall have the meanings set forth in
Section 6.3(a)(i).

 

“Inland Properties REIT Entity” means the entity organized as a private
Domestically Controlled REIT and which shall own 100% of the equity ownership
interests in each Property Entity owning an Inland Property.

 

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“Interest” or “Partnership Interest” means the interest of each Partner in the
Partnership attributable to its status as a Partner in the Partnership,
including the right of such Partner to any and all distributions and other
benefits (including management and voting rights) to which such Partner may be
entitled as provided in this Agreement and under applicable law, subject to all
liabilities and obligations of such Partner as provided in this Agreement and
under applicable law.

 

“Investment Area” means the metropolitan statistical area (MSA) for each of the
following cities: (i) Chicago, Illinois; (ii) Minneapolis, Minnesota;
(iii) Madison, Wisconsin; (iv) Milwaukee, Wisconsin; (v) Omaha, Nebraska;
(vi) Indianapolis, Indiana and (vii) Columbus, Ohio.

 

“Investment Guidelines” shall have the meaning set forth in ARTICLE 4.

 

“Investment Period” means the time period beginning on the date of this
Agreement and ending on the two (2) year anniversary thereof; provided, however
that such period may be extended upon mutual agreement of the Limited Partners
for an additional one (1) year period.

 

“Knowledge” shall mean the actual knowledge of the party in question, after
reasonable inquiry, of any fact, circumstance or condition, and (i) in the case
of the Inland Parties, Beth Sprechter Brooks and (ii) in the case of the PGGM
PRE Fund, Werner Sohier and Steven Zeeman.

 

“Limited Partner” means Inland and PGGM PRE Fund, and any Person substituted for
a Limited Partner pursuant to ARTICLE 11, but excluding any Limited Partner for
whom another Person has been substituted pursuant to this Agreement.

 

“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the business, prospects, condition (financial or otherwise)
or results of operations of a Property taken as a whole, (b) a material
impairment of the ability of the Property to operate as it had as of the date of
the Initial Notice, or (c) a material adverse effect on any substantial portion
of the Property or the improvements situated thereon, taken as a whole.

 

“Material Change” shall have the meaning set forth in Section 7.1(c)(iv).

 

“Net Extraordinary Cash Flow” means, with respect to the Partnership, (a) the
net cash proceeds received by the Partnership in connection with the
Partnership’s disposition in a Capital Event of any of its assets, including its
equity interests in any REIT Entity, or any REIT Entity’s disposition in a
Capital Event of any of its assets, including its equity interests in any
Property Entity, in each case after subtracting such reasonable reserves
approved by the General Partner, as modified from time to time, (b) the
Partnership’s distributive share paid or to be paid by the REIT Entity with
respect to the Partnership’s ownership interest therein of the REIT Entity’s
distributive share paid or to be paid by the Property Entity with respect to the
REIT Entity’s

 

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ownership interest therein of the amount remaining, if any, after subtracting
from the cash receipts (but not Receipts) arising from a Capital Event with
respect to the Owned Property owned by the Property Entity (i) all expenses of,
and payments and deposits by or on behalf of, the Property Entity related to
such Capital Event, including, without limitation, any payment made in respect
of any indebtedness encumbering such Owned Property, and (ii) such reasonable
reserves for the Property Entity approved by the General Partner, as modified
from time to time, and (iii) the payment of all outstanding principal and
interest due with respect to Partnership Loans with respect to such Owned
Property, if any, and (c) cash proceeds received by the Partnership to the
extent such cash proceeds were released from reserves previously established by
the General Partner and referred to in either clause (a) or clause (b) above.

 

“Net Ordinary Cash Flow” means, with respect to the Partnership, the aggregate
of the Partnership’s distributive share paid or to be paid by the REIT Entities
with respect to the Partnership’s ownership interest therein of each such REIT
Entity’s distributive share paid or to be paid by the Property Entity with
respect to the REIT Entity’s ownership interest therein of the Receipts from the
applicable Owned Property for such period of time minus the Expenses from such
Owned Property for such period of time less Reserves.

 

“Non-Affiliated Partner” means, with respect to the sale or purchase of goods,
services, property or materials by or from a Person who is an Affiliate of a
Partner, any Partner who is not an Affiliate of such Person.

 

“OFAC” means the U.S. Treasury Department’s Office of Foreign Assets Control

 

“Owned Property” and “Owned Properties” means the necessity based shopping
centers owned by the Property Entities, and all improvements, additions,
replacements, easements and any and all other rights appurtenant thereto, and
all personal property that might be used or useful in connection therewith, and
shall include the Inland Properties and Additional Properties.

 

“Partner” means each of the Parties executing this Agreement as Limited Partners
or as the General Partner and any Person substituted for a Partner pursuant to
Section 5.5(e) or 9.1, or ARTICLE 11, excluding any Partner for whom another
Person has been substituted pursuant to this Agreement; provided that a Partner
may be both a Limited Partner and a General Partner under this Agreement.

 

“Partnership Entities” means any group of two or more or all of the Partnership,
REIT Entities and Property Entities, as the context may apply.

 

“Partnership Entity” means any one of the Partnership, any REIT Entity or
Property Entity, as the context may apply.

 

“Partnership Interest” shall have the meaning ascribed to it in the definition
of “Interest”.

 

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“Percentage Interest” means the percentage interest determined for each Partner
in accordance with Section 8.3.

 

“Person” means any individual, sole proprietorship, partnership, limited
liability company, corporation, trust or other entity.

 

“PGGM PRE Fund Additional Capital Contributions” shall have the meaning set
forth in Section 6.3.

 

“PGGM PRE Fund Capital Commitment” shall have the meaning set forth in
Section 6.1(b) of this Agreement.

 

“PGGM PRE Fund Capital Contribution” shall mean the sum of the PGGM PRE Fund
Initial Capital Contribution and the PGGM PRE Fund Additional Capital
Contributions.

 

“PGGM PRE Fund Initial Capital Contributions” shall have the meaning set forth
in Section 6.2(a).

 

“PGGM PRE Fund Maximum Capital Contribution” shall have the meaning set forth in
Section 6.3(f)(i).

 

“Post-Acquisition Financing” shall have the meaning set forth on EXHIBIT 10-D.

 

“Profit” and “Loss” means, for each Allocation Period, an amount equal to the
Partnership’s taxable income or loss for such Allocation Period, determined in
accordance with Code Section 703(a) (but including in taxable income or loss,
for this purpose, all items of income, gain, loss, expense or deduction required
to be stated separately pursuant to Code Section 703(a)(1)), with the following
adjustments:

 

(A)                                  ANY INCOME OF THE PARTNERSHIP THAT IS
EXEMPT FROM FEDERAL INCOME TAX AND NOT OTHERWISE TAKEN INTO ACCOUNT IN COMPUTING
PROFIT OR LOSS PURSUANT TO THIS PROVISION SHALL BE TAKEN INTO ACCOUNT IN
COMPUTING SUCH TAXABLE INCOME OR LOSS;

 

(B)                                 ANY EXPENDITURE OF THE PARTNERSHIP DESCRIBED
IN SECTION 705(A)(2)(B) OF THE CODE OR TREATED AS A CODE
SECTION 705(A)(2)(B) EXPENDITURE PURSUANT TO REGULATIONS
SECTION 1.704-1(B)(2)(IV)(I), AND NOT OTHERWISE TAKEN INTO ACCOUNT IN COMPUTING
PROFIT OR LOSS PURSUANT TO THIS PROVISION, SHALL BE TAKEN INTO ACCOUNT IN
COMPUTING SUCH TAXABLE INCOME OR LOSS;

 

(C)                                  IN THE EVENT THE BOOK VALUE OF ANY
PARTNERSHIP ASSET IS ADJUSTED IN ACCORDANCE WITH SUBPARAGRAPH (B) OR
SUBPARAGRAPH (C) OF 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 PROFIT OR LOSS;

 

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(D)                                 GAIN OR LOSS RESULTING FROM THE DISPOSITION
OF ANY PARTNERSHIP ASSET 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;

 

(E)                                  TO THE EXTENT AN ADJUSTMENT TO THE ADJUSTED
TAX BASIS OF ANY PARTNERSHIP ASSET PURSUANT TO SECTION 734(B) OF THE CODE IS
REQUIRED, PURSUANT TO REGULATIONS SECTION 1.704-1(B)(2)(IV)(M)(4), TO BE TAKEN
INTO ACCOUNT IN DETERMINING CAPITAL ACCOUNTS AS A RESULT OF A DISTRIBUTION OTHER
THAN IN LIQUIDATION OF A PARTNER’S INTEREST IN THE PARTNERSHIP, THE AMOUNT OF
SUCH ADJUSTMENT SHALL BE TREATED AS AN ITEM OF GAIN (IF THE ADJUSTMENT INCREASES
THE BASIS OF SUCH ASSET) OR LOSS (IF THE ADJUSTMENT DECREASES SUCH BASIS) FROM
THE DISPOSITION OF SUCH ASSET AND SHALL BE TAKEN INTO ACCOUNT FOR PURPOSES OF
COMPUTING PROFIT AND LOSS;

 

(F)                                    IN LIEU OF THE DEPRECIATION,
AMORTIZATION, AND OTHER COST RECOVERY DEDUCTIONS TAKEN INTO ACCOUNT IN COMPUTING
SUCH TAXABLE INCOME OR LOSS, THERE SHALL BE TAKEN INTO ACCOUNT DEPRECIATION FOR
SUCH ALLOCATION PERIOD; AND

 

(G)                                 NOTWITHSTANDING ANY OTHER PROVISION OF THIS
DEFINITION, ANY ITEMS OF INCOME, GAIN, LOSS, EXPENSE OR DEDUCTION THAT ARE
SPECIALLY ALLOCATED PURSUANT TO THIS AGREEMENT SHALL NOT BE TAKEN INTO ACCOUNT
IN COMPUTING PROFIT AND LOSS.

 

If the Partnership’s taxable income or loss for such Allocation Period, as
adjusted in the manner provided above, is a positive amount, such amount shall
be the Partnership’s Profit for such Allocation Period; and if a negative
amount, such amount shall be the Partnership’s Loss for such Allocation Period. 
The amounts of the items of Partnership income, gain, loss, expense or deduction
available to be specially allocated pursuant to this Agreement shall be
determined by applying rules analogous to those set forth in subparagraphs
(a) through (f) above.

 

“Prohibited Person” shall mean any of the following:  (i) a person or entity
that is listed in the Annex to, or is otherwise subject to the provisions of,
the Executive Order (ii) a person or entity owned or controlled by, or acting
for or on behalf of any person or entity that is listed in the Annex to, or is
otherwise subject to the provisions of, the Executive Order; (iii) a person or
entity that is named as a “specially designated national” or “blocked person” on
the most current list published by OFAC at its official website,
http://www.treas.gov/offices/enforcement/ofac; (iv) a person or entity that is
otherwise the target of any economic sanctions program currently administered by
OFAC; or (v) a person or entity that is affiliated with any person or entity
identified in clause (i), (ii), (iii) and/or (iv) above.

 

“Property” and “Properties” shall mean any real property acquired by the
Partnership and shall include Qualified Properties, and non-Qualified
Properties.

 

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“Property Entities” shall mean any group of two or more or all (as the context
may apply) of the entities each of which is established as a Property Entity
pursuant to this Agreement.

 

“Property Entity” shall mean a single purpose entity that is disregarded as
separate from its owner for federal income tax purposes and that owns and
operates an Owned Property.

 

“Protective Expenditures” means expenditures necessary for the preservation or
operation of an Owned Property, Property Entity or REIT Entity, as the case may
be, including but not limited to expenses: (i) resulting from an Emergency
Situation; (ii) for the payment of real estate taxes, insurance premiums and
utility charges on any Owned Property; (iii) necessary to comply with, or to
cure any failure of any of the assets of the Partnership, any REIT Entity, or
any Property Entity to comply with applicable laws, ordinances, regulations,
orders and other legal requirements; (iv) necessary on an emergency basis for
the protection or preservation of any Owned Property, or for the protection of
the health and safety of the public or any employees of any Property Entity or
REIT Entity; (v) necessary to comply with, or to cure any default on the part of
the any Partnership Entity under any leases, loan documents, or other contracts
affecting any Partnership Entity, including the payment of principal, interest
and other amounts when due under any loan documents to which any Partnership
Entity is a party or to which any Owned Property is subject; or (v) incurred in
connection with litigation (whether as a plaintiff or as a defendant),
including, but not limited to, the payment of any judgments rendered against the
Partnership, any REIT Entity, or any Property Entity.

 

“Qualified Property” means a necessity-based, grocery-anchored or community
retail shopping center meeting the Investment Guidelines described on EXHIBIT
4-B and located in the Investment Area.

 

“Rebated Third Party Fee” shall have the meaning set forth on EXHIBIT 10-D.

 

“Receipts” means, for a given period of time, a sum equal to the aggregate of
all amounts actually received by or unconditionally made available to the
Property Entities from or in respect of all of the Owned Properties during such
period, including, without limitation:

 

(A)                                  ALL RENTS, PERCENTAGE RENTS, EXPENSE
REIMBURSEMENTS AND OTHER CHARGES RECEIVED FROM TENANTS AND OTHER OCCUPANTS OF
THE OWNED PROPERTIES;

 

(B)                                 PROCEEDS OF RENT INSURANCE AND BUSINESS
INTERRUPTION INSURANCE;

 

(C)                                  ALL UTILITY OR OTHER DEPOSITS OWNED BY AND
RETURNED TO THE PROPERTY ENTITIES;

 

(D)                                 INTEREST, IF ANY, EARNED ON TENANTS’
SECURITY DEPOSITS OR ESCROWS TO THE EXTENT UNCONDITIONALLY RETAINED AND SECURITY
DEPOSITS TO THE EXTENT APPLIED PURSUANT TO THE PROVISIONS OF THE APPLICABLE
LEASES;

 

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(E)                                  INTEREST, IF ANY, EARNED AND AVAILABLE TO
THE PROPERTY ENTITIES ON ANY RESERVES OR OTHER FUNDS OF THE PROPERTY ENTITIES,
OR ON ANY ESCROW OR OTHER FUNDS DEPOSITED BY THE PROPERTY ENTITIES WITH OTHERS;

 

(F)                                    THE AMOUNT OF ANY NET REDUCTION OF
RESERVES OTHER THAN TO PAY EXPENSES; AND

 

(G)                                 REVENUE RECEIVED BY THE PROPERTY ENTITIES
FROM ANY OTHER SOURCE.

 

Notwithstanding the foregoing, Receipts shall not include (w) amounts
contributed or loaned by the Partners pursuant to this Agreement, (x) each
tenant’s security deposit and interest thereon, if any, as long as the
applicable Property Entity has a contingent legal obligation to return that
deposit or such interest thereon, and (y) amounts arising from a Capital Event.

 

“REIT Agreement” means the limited liability company operating agreement
governing the business and operations of a REIT Entity, in the form of the
Limited Liability Company Agreement attached hereto as EXHIBIT 4-A.

 

“REIT Compliance Interests” means the equity interests in a REIT Entity that are
issued to Persons in order to comply with the requirement of Code
Section 856(a)(5) that the beneficial interests in a real estate investment
trust must be held by one hundred (100) or more persons.  The terms of the REIT
Compliance Interests shall be determined unanimously by the Partners.

 

“REIT Entity” or “REIT Entities” means any one or both of the Inland Properties
REIT Entity and the Additional Properties REIT Entity.

 

“Regulations” means the Income Tax Regulations, including any temporary
regulations, promulgated under the Code, as such Regulations may be amended from
time to time (it being understood that all references herein to specific
sections of the Regulations shall be deemed also to refer to any corresponding
provisions of succeeding Regulations).

 

“Reserves” means the amounts of reserved cash set forth in an annual Business
Plan, or otherwise reasonably determined from time to time or at any time by the
General Partner to be necessary or advisable, or as required by any Secured
Lender for (i) payment of debt service coming due within a reasonable future
time with respect to indebtedness of the Property Entity; (ii) management,
operation, improvement, maintenance, replacement or preservation of any Owned
Property; (iii) payment of taxes, insurance premiums and other reasonably
anticipated costs and expenses of the Partnership, the REIT Entities or the
Property Entities; (iv) increases in working capital and other contingencies;
(v) leasing commissions reasonably anticipated as coming due within a reasonable
future time; (vi) no less than one month’s Property Management Fee; and
(vi) capital expenditures as set forth in the Business Plan.  Reserves shall be
determined and maintained on an aggregate basis for the foregoing amounts for
all Owned Properties.

 

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“Secured Lender” means a secured lender to a REIT Entity or Property Entity, as
the case may be, pursuant to any Financing.

 

“Service” means the Internal Revenue Service.

 

“State” means the State of Delaware.

 

“Term” means the period commencing on the date of the filing by the Partnership
of the Certificate with the Secretary of State and extending until the
Partnership is terminated pursuant to Section 5.5(d).

 

“Terrorist” means a Person, group, entity or nation named by any Executive Order
or the United States Treasury Department Office of Foreign Assets Control as a
terrorist, terrorist entity, “Specially Designated National and Blocked
Persons”, or other banned or blocked person, group, entity, nation or
transaction pursuant to any law, order, rule or regulation that is enforced or
administered by the Office of Foreign Assets Control.

 

“Third Party Fee” shall have the meaning set forth on EXHIBIT 10-D.

 

“Total Equity Capitalization” means the amount determined pursuant to the
formula set forth in paragraph 3 of Schedule 6.2(d).

 

“Transaction Documents” shall mean this Agreement, the Contribution Agreement,
Property Management Agreement, REIT Agreement and any and all other agreements
contemplated by the Partnership Agreement.

 

“Transfer” means as a noun, the transfer, sale, assignment, conveyance, gift,
mortgage, pledge, hypothecation, charge or other encumbrance of a Partner’s
Interest (including a direct or indirect interest in any Partner), in whole or
in part, whether voluntarily or by operation of law, or the entry by a Partner
into any agreement or contract to do so (that is not conditioned on any approval
or other conditions required hereunder), or the consent by or permission of a
Partner to any of the foregoing with respect to such Partner’s Interest (or a
direct or indirect interest in such Partner), or the sufferance by a Partner of
any third person to do any of the foregoing; and as a verb, to take any of the
preceding actions.

 

“Transfer Affiliate” means, with respect to each Partner, any Person that
directly, or through one or more intermediaries, controls or is controlled by or
is under common control with, such Partner; or any Person in which such Partner
has a direct, or indirect through one or more intermediaries, controlling
interest as a partner, member, manager, general partner, principal, shareholder,
beneficiary or otherwise as an owner, and with specific reference to PGGM PRE
Fund also means any fund sponsored, managed or advised by PGGM Vermogensbeheer
B.V.

 

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Attached hereto as EXHIBIT 1-B is a Cross Reference Index to capitalized items
used in this Agreement that are not defined in this ARTICLE 1.

 

ARTICLE 2

 

FORMATION OF PARTNERSHIP

 

2.1                                 STATUTORY AUTHORITY.  THE PARTIES HEREBY
AGREE TO OPERATE THE PARTNERSHIP UNDER AND PURSUANT TO THE PROVISIONS OF THE
ACT.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, THE RIGHTS AND
OBLIGATIONS OF THE PARTNERSHIP, ITS LIMITED PARTNERS AND THE GENERAL PARTNER
SHALL BE GOVERNED BY THE ACT.

 

2.2                                 FILINGS.  THE PARTNERSHIP HAS BEEN FORMED
PURSUANT TO THE CERTIFICATE FILED WITH THE SECRETARY OF STATE OF DELAWARE ON
MAY 20, 2010, AND THE GENERAL PARTNER SHALL MAKE OR CAUSE TO BE MADE SUCH OTHER
FILINGS AND RECORDINGS AND SHALL DO OR CAUSE TO BE DONE SUCH OTHER ACTS AND
THINGS CONFORMING THERETO AS SHALL CONSTITUTE COMPLIANCE WITH ALL REQUIREMENTS
FOR THE FORMATION AND CONTINUATION OF A LIMITED PARTNERSHIP UNDER THE ACT AND,
IF REQUIRED BY APPLICABLE LAW, THE QUALIFICATION OF THE PARTNERSHIP TO TRANSACT
BUSINESS IN SUCH OTHER STATES IN WHICH THE PARTNERSHIP ELECTS TO DO BUSINESS.
THE GENERAL PARTNER SHALL NOT MAKE ANY FILINGS OR RECORDINGS WITH RESPECT TO THE
PARTNERSHIP THAT ARE NOT REQUIRED BY THIS AGREEMENT UNLESS SO AUTHORIZED BY THE
LIMITED PARTNERS.

 

ARTICLE 3

 

NAME

 

The name of the Partnership shall be “INP Retail, L.P.”  All of the affairs of
the Partnership shall be conducted under the Partnership name.  Any change of
the Partnership’s name shall require the approval of the Limited Partners.  On
behalf of the Partnership, the General Partner shall execute and file with the
proper offices any and all certificates required by the fictitious name or
assumed name statutes of the states in which the Partnership elects to do
business.

 

ARTICLE 4

 

PURPOSE OF THE PARTNERSHIP

 

The Partnership is organized for the object and purpose of making investments in
Properties in the Investment Area, owning, managing, supervising and disposing
of such investments through Property Entities and REIT Entities, sharing the
profits and losses therefrom

 

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and engaging in furtherance of the foregoing in such activities necessary,
incidental or ancillary thereto for which limited partnerships may be organized
under the Act.

 

As further provided in ARTICLES 6 and 7, below, the Partnership may cause a
Property Entity to acquire an Additional Property only in accordance with the
Investment Guidelines attached hereto as EXHIBIT 4-B and made a part hereof
(such Investment Guidelines, as they may be amended from time to time by the
unanimous written approval of the Limited Partners are hereinafter called the
“Investment Guidelines”), or, if not meeting the Investment Guidelines, then
upon the unanimous consent of the Limited Partners, and may acquire Inland
Properties.

 

ARTICLE 5

 

OFFICES, RECORDS, AGENTS AND TERM OF THE PARTNERSHIP

 

5.1                                 PRINCIPAL OFFICE OF THE PARTNERSHIP.  THE
PRINCIPAL OFFICE OF THE PARTNERSHIP SHALL BE LOCATED AT SUCH PLACE WITHIN THE
CHICAGO METROPOLITAN AREA AS THE GENERAL PARTNER MAY FROM TIME TO TIME
DESIGNATE. THE PARTNERSHIP MAY HAVE ITS PRINCIPAL OFFICE OR SECONDARY OFFICES AT
SUCH OTHER PLACE OR PLACES AS THE GENERAL PARTNER MAY FROM TIME TO TIME
DESIGNATE, SUBJECT TO THE APPROVAL OF THE LIMITED PARTNERS.  INITIALLY, THE
PRINCIPAL OFFICE OF THE PARTNERSHIP WILL BE LOCATED AT 2901 BUTTERFIELD ROAD,
OAK BROOK, ILLINOIS 60523.

 

5.2                                 RECORDS TO BE MAINTAINED.  AT ALL TIMES
DURING THE CONTINUANCE OF THE PARTNERSHIP, THE GENERAL PARTNER SHALL CAUSE THE
PARTNERSHIP TO KEEP AT THE PARTNERSHIP’S PRINCIPAL OFFICE SUCH RECORDS AND
INFORMATION AS REQUIRED BY THIS AGREEMENT OR AS THE PARTNERSHIP MAY BE REQUIRED
TO MAINTAIN IN ACCORDANCE WITH THE ACT, WHICH SHALL BE SUBJECT TO INSPECTION
AND/OR COPYING AT THE REQUEST OF ANY LIMITED PARTNER OR ITS LEGAL REPRESENTATIVE
(WITH ALL SUCH COPIES TO BE MADE AT THE PARTNERSHIP’S EXPENSE) DURING ORDINARY
BUSINESS HOURS, INCLUDING, WITHOUT LIMITATION, THE FOLLOWING:

 

(A)                                  PARTNER LIST.  A LIST OF THE FULL NAME AND
LAST KNOWN ADDRESS OF EACH PARTNER, SETTING FORTH THE AMOUNT OF CASH EACH
PARTNER HAS CONTRIBUTED OR HAS AGREED TO CONTRIBUTE IN THE FUTURE, A DESCRIPTION
AND STATEMENT OF THE AGREED VALUE OF THE OTHER PROPERTY OR SERVICES EACH PARTNER
HAS CONTRIBUTED OR HAS AGREED TO CONTRIBUTE IN THE FUTURE AND THE DATE ON WHICH
EACH BECAME A PARTNER.

 

(B)                                 CERTIFICATE.  A COPY OF THE CERTIFICATE, AS
AMENDED OR RESTATED, TOGETHER WITH EXECUTED COPIES OF ANY POWERS OF ATTORNEY
UNDER WHICH ANY ARTICLE, APPLICATION OR CERTIFICATE HAS BEEN EXECUTED.

 

(C)                                  TAX RETURNS.  COPIES OF THE FEDERAL, STATE
AND LOCAL TAX RETURNS AND REPORTS OF THE PARTNERSHIP, THE REIT ENTITIES AND THE
PROPERTY ENTITIES.

 

(D)                                 RECORDS.  COPIES OF THIS AGREEMENT AND ANY
AMENDMENTS HERETO, AND OF ANY FINANCIAL STATEMENTS OF THE PARTNERSHIP, THE REIT
ENTITIES AND THE PROPERTY ENTITIES.

 

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(E)                                  OTHER INFORMATION.  SUCH OTHER INFORMATION
AND RECORDS AS ARE SPECIFIED IN THE ACT.

 

IN ADDITION TO THE FOREGOING, THE GENERAL PARTNER SHALL CAUSE THE PARTNERSHIP TO
KEEP AT THE PARTNERSHIP’S PRINCIPAL OFFICE FOR INSPECTION BY THE PARTNERS, ALL
INFORMATION RELATED TO THE OWNED PROPERTIES AND THE FINANCIAL RECORDS OF THE
PARTNERSHIP ENTITIES, AND SHALL MAKE SUCH INFORMATION RELATED TO THE PROPERTIES
AND FINANCIAL RECORDS AVAILABLE TO THE PARTNERS AT THE PARTNERSHIP’S PRINCIPAL
OFFICE ON NO LESS THAN TWO (2) BUSINESS DAYS PRIOR WRITTEN NOTICE TO THE GENERAL
PARTNER.

 

5.3                                 REGISTERED OFFICE AND REGISTERED AGENT.  THE
PARTNERSHIP’S REGISTERED AGENT FOR SERVICE OF PROCESS REQUIRED TO BE MAINTAINED
PURSUANT TO THE ACT SHALL BE CORPORATION SERVICE COMPANY, AND THE ADDRESS OF THE
PARTNERSHIP’S REGISTERED AGENT IN THE STATE OF DELAWARE SHALL BE 2711
CENTERVILLE ROAD, SUITE 400, WILMINGTON, DELAWARE 19808.  SUCH AGENT AND SUCH
OFFICE MAY BE CHANGED FROM TIME TO TIME BY THE PARTNERS.  THE PARTNERS SHALL
SELECT AND DESIGNATE A REGISTERED OFFICE AND REGISTERED AGENT FOR THE
PARTNERSHIP IN EACH OTHER STATE IN WHICH THE PARTNERSHIP IS REQUIRED TO MAINTAIN
OR APPOINT ONE.

 

5.4                                 TERM OF THE PARTNERSHIP.  THE PARTNERSHIP
SHALL DISSOLVE AT THE END OF THE MAXIMUM TERM, AS DEFINED IN SECTION 5.5(D) (AND
THEREAFTER WIND UP), UNLESS SOONER TERMINATED OR EXTENDED IN ACCORDANCE WITH
SECTION 5.5 BELOW.

 

5.5                                 TERMINATION.  THE PARTNERSHIP SHALL DISSOLVE
AND WIND UP ITS AFFAIRS UPON THE EARLIEST TO OCCUR OF THE FOLLOWING:

 

(A)                                  SALE OF ASSETS. THE SALE, OTHER DISPOSITION
OR DISTRIBUTION OF ALL OR SUBSTANTIALLY ALL OF THE PARTNERSHIP’S NON-CASH
ASSETS;

 

(B)                                 EXPIRATION OF HOLDING PERIODS. UPON THE
EXPIRATION OF THE HOLDING PERIOD OF THE LAST OWNED PROPERTY ACQUIRED BY A
PROPERTY ENTITY;

 

(C)                                  DISSOLUTION BY PARTNERS.  IF THE LIMITED
PARTNERS SHALL EXECUTE AN INSTRUMENT RESOLVING TO DISSOLVE THE PARTNERSHIP;

 

(D)                                 MAXIMUM TERM.  AS OF THE END OF A PERIOD OF
TEN (10) YEARS FROM THE DATE OF THIS AGREEMENT (THE “MAXIMUM TERM”); PROVIDED,
HOWEVER, THE LIMITED PARTNERS MAY AGREE TO EXTEND THE MAXIMUM TERM FOR TWO
(2) ADDITIONAL 1-YEAR PERIODS OR SUCH OTHER LENGTH OF TIME APPROVED BY THE
LIMITED PARTNERS;

 

(E)                                  REMOVAL, ETC.  THE BANKRUPTCY, DISSOLUTION,
WITHDRAWAL, REMOVAL FOR CAUSE OR OTHER CESSATION OF THE GENERAL PARTNER AS A
GENERAL PARTNER OF THE PARTNERSHIP (WITHIN THE MEANING OF THE ACT) UNLESS (I) AT
THE TIME THERE IS AT LEAST ONE (1) OTHER GENERAL PARTNER OF THE PARTNERSHIP
WHICH IS HEREBY AUTHORIZED, AND AGREES, TO CONTINUE THE BUSINESS OF THE
PARTNERSHIP OR (II) WITHIN NINETY (90) DAYS AFTER SUCH CESSATION OF THE GENERAL
PARTNER TO BE A GENERAL PARTNER OF THE PARTNERSHIP, THE LIMITED PARTNERS AGREE
IN WRITING TO CONTINUE THE BUSINESS OF THE PARTNERSHIP WITHOUT DISSOLUTION AND
TO THE

 

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APPOINTMENT, EFFECTIVE AS OF THE DATE OF SUCH CESSATION, OF A NEW GENERAL
PARTNER, WHICH NEW GENERAL PARTNER UPON REMOVAL OF THE GENERAL PARTNER FOR CAUSE
SHALL BE APPOINTED BY PGGM PRE FUND AS PROVIDED IN SECTION 9.1(C); OR

 

(F)                                    JUDICIAL DISSOLUTION.  UPON THE ENTRY OF
A DECREE OF DISSOLUTION OF THE PARTNERSHIP BY THE COURT OF CHANCERY OF THE STATE
OF DELAWARE.

 

IN THE EVENT OF THE DISSOLUTION OF THE PARTNERSHIP PURSUANT TO THIS SECTION 5.5,
THEN THIS AGREEMENT GENERALLY AND ARTICLE 13 IN PARTICULAR SHALL GOVERN THE
CONDUCT OF THE PARTIES DURING THE WINDING UP OF THE PARTNERSHIP.

 

ARTICLE 6

 

CAPITAL CONTRIBUTIONS

 

6.1                                 CAPITAL COMMITMENTS.

 

(A)                                  INLAND’S CAPITAL COMMITMENT.  INLAND AGREES
TO CONTRIBUTE TO THE PARTNERSHIP THE INLAND CAPITAL CONTRIBUTION UP TO THE
INLAND MAXIMUM CAPITAL CONTRIBUTIONS IN THE AMOUNT, IN THE FORM AND AT THE TIMES
SET FORTH IN SECTIONS 6.2 AND 6.3, BELOW (THE “INLAND CAPITAL COMMITMENT”).

 

(B)                                 PGGM PRE FUND’S CAPITAL COMMITMENT.  PGGM
PRE FUND AGREES TO CONTRIBUTE TO THE PARTNERSHIP THE PGGM PRE FUND CAPITAL
CONTRIBUTION UP TO THE PGGM PRE FUND MAXIMUM CAPITAL CONTRIBUTIONS IN THE FORM
OF CASH CONTRIBUTIONS IN THE AMOUNTS AND AT THE TIMES SET FORTH IN SECTIONS 6.2
AND 6.3, BELOW (THE “PGGM PRE FUND CAPITAL COMMITMENT”).

 

6.2                                 INITIAL CAPITAL CONTRIBUTIONS.

 

(A)                                  INITIAL CAPITAL CONTRIBUTION.  AS THE
INITIAL INLAND CAPITAL CONTRIBUTION, INLAND SHALL CONTRIBUTE TO THE PARTNERSHIP
(I) THE INLAND EQUITY INTERESTS IN THE PROPERTY ENTITIES OWNING THE INITIAL
INLAND PROPERTIES AND (II) CASH AS DESCRIBED IN SECTION 6.2(C) (THE “INLAND
INITIAL CAPITAL CONTRIBUTIONS”).  AS THE INITIAL PGGM PRE FUND CAPITAL
CONTRIBUTION, PGGM PRE FUND SHALL SIMULTANEOUSLY WITH THE MAKING OF THE INLAND
INITIAL CAPITAL CONTRIBUTION CONTRIBUTE CASH TO THE PARTNERSHIP IN THE AMOUNT
AND AT THE TIME SET FORTH BELOW (THE “PGGM PRE FUND INITIAL CAPITAL
CONTRIBUTION”, AND COLLECTIVELY WITH THE INLAND INITIAL CAPITAL CONTRIBUTION,
THE “INITIAL CAPITAL CONTRIBUTIONS”).  THE INITIAL CAPITAL CONTRIBUTIONS SHALL
BE MADE PURSUANT TO ONE OR MORE CONTRIBUTION AGREEMENTS (AS DEFINED AND MORE
PARTICULARLY DESCRIBED IN SECTION 6.2(B), BELOW) WITHIN A MUTUALLY AGREEABLE
TIME AFTER THE EXECUTION OF THIS AGREEMENT.

 

(B)                                 CONTRIBUTION AGREEMENT.  IN CONNECTION WITH
INLAND’S CONTRIBUTION OF THE INLAND INITIAL CAPITAL CONTRIBUTIONS, AND, AS
DESCRIBED IN SECTION 6.3(A), BELOW, PGGM

 

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PRE FUND’S SELECTION OF AN ADDITIONAL INLAND PROPERTY FOR AN INLAND ADDITIONAL
CAPITAL CONTRIBUTION, INLAND, PGGM PRE FUND AND THE PARTNERSHIP SHALL EXECUTE A
CONTRIBUTION AGREEMENT OR CONTRIBUTION AGREEMENTS SUBSTANTIALLY IN THE FORM
ATTACHED HERETO AS EXHIBIT 6-2B (EACH, A “CONTRIBUTION AGREEMENT”).  EACH
CONTRIBUTION AGREEMENT SHALL SET FORTH, AMONG OTHER THINGS:

 

(I)                                     THE INLAND EQUITY INTERESTS TO BE
CONTRIBUTED BY INLAND AND THE CORRESPONDING AMOUNT OF THE PGGM PRE FUND INITIAL
CAPITAL CONTRIBUTION OR PGGM PRE FUND ADDITIONAL CAPITAL CONTRIBUTION, AS THE
CASE MAY BE;

 

(II)                                  THE BUSINESS DAY ON WHICH THE
CONTRIBUTIONS SHALL OCCUR (THE “CONTRIBUTION CLOSING DATE”), WHICH SHALL BE NO
EARLIER THAN TEN (10) BUSINESS DAYS AFTER EXECUTION OF THE CONTRIBUTION
AGREEMENT;

 

(III)                               THAT THE APPLICABLE PROPERTY ENTITIES TO BE
CONTRIBUTED BY INLAND WILL BE DISREGARDED FROM INLAND FOR FEDERAL INCOME TAX
PURPOSES ON THE APPLICABLE CONTRIBUTION CLOSING DATE, SO THAT FOR FEDERAL INCOME
TAX PURPOSES INLAND WILL BE TREATED AS CONTRIBUTING ON THE APPLICABLE
CONTRIBUTION CLOSING DATE THE INLAND PROPERTIES HELD BY THOSE PROPERTY ENTITIES;

 

(IV)                              THAT THE CONTRIBUTION SHALL OCCUR AS OF
11:59 P.M. CHICAGO TIME ON THE CONTRIBUTION CLOSING DATE, AND THAT ALL ITEMS OF
INCOME, GAIN, LOSS, EXPENSE AND DEDUCTION DERIVED FROM THE APPLICABLE INLAND
PROPERTIES ON OR PRIOR TO THE APPLICABLE CONTRIBUTION CLOSING DATE SHALL BE
REPORTED FOR INCOME TAX PURPOSES SOLELY BY INLAND AND THAT NO SUCH ITEMS SHALL
BE REPORTED FOR INCOME TAX PURPOSES BY THE PARTNERSHIP;

 

(V)                                 SUBJECT TO THE LIMITATIONS SET FORTH IN
SECTION 6.2(C) BELOW, THE CONDITIONS PRECEDENT TO THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED THEREBY, WHICH MAY INCLUDE, BUT ARE NOT LIMITED TO,
LENDER CONSENTS OR WAIVERS OF PREPAYMENT PENALTIES; AND

 

(VI)                              EACH PARTNER’S ACKNOWLEDGEMENT THAT THE OTHER
PARTNERS ACTING ALONE OR ON BEHALF OF THE PARTNERSHIP, SHALL HAVE THE RIGHT TO
EXERCISE THE PARTNERSHIP’S RIGHTS AND REMEDIES AT LAW OR IN EQUITY UNDER THE
CONTRIBUTION AGREEMENT.

 

(C)                                  CALCULATION OF AND LIMITATION ON THE
CAPITAL CONTRIBUTIONS IN CONNECTION WITH CONTRIBUTION OF THE INITIAL INLAND
PROPERTIES AND ADDITIONAL INLAND PROPERTIES.

 

(I)                                     INLAND SHALL CONTRIBUTE (A) THE INLAND
EQUITY INTERESTS IN EACH OF THE PROPERTY ENTITIES OWNING THE INITIAL INLAND
PROPERTIES AND THE ADDITIONAL INLAND PROPERTIES SELECTED BY PGGM PRE FUND, AS
THE CASE MAY BE, AND (B) CASH IN THE AMOUNT OF FIFTY-FIVE PERCENT (55%) OF THE
COSTS AND EXPENSES, INCLUDING

 

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TRANSFER TAXES (THE “TRANSFER EXPENSES”), PAYABLE BY THE PARTNERSHIP IN
CONNECTION WITH THE CONTRIBUTION OF THE INLAND EQUITY INTERESTS IN SUCH PROPERTY
ENTITY AS SET FORTH IN THE RELATED CONTRIBUTION AGREEMENT AS THE INLAND INITIAL
CAPITAL CONTRIBUTION AND AS A PORTION OF THE INLAND ADDITIONAL CAPITAL
CONTRIBUTION, RESPECTIVELY.  THE INLAND INITIAL CAPITAL CONTRIBUTION AND THE
INLAND ADDITIONAL CAPITAL CONTRIBUTION IN RESPECT OF THE ADDITIONAL INLAND
PROPERTIES SHALL BE VALUED IN AN AMOUNT EQUAL TO THE AGGREGATE CONTRIBUTION
VALUE OF THE INITIAL INLAND PROPERTIES OR THE ADDITIONAL INLAND PROPERTIES, AS
THE CASE MAY BE, AS PROVIDED IN SECTION 6.2(D), LESS ANY REMAINING INDEBTEDNESS
SECURED BY SUCH INITIAL INLAND PROPERTIES OR THE ADDITIONAL INLAND PROPERTIES,
AS THE CASE MAY BE (“NET EQUITY VALUE”), PLUS FIFTY-FIVE PERCENT (55%) OF THE
AMOUNT OF RELATED TRANSFER EXPENSES.

 

(II)                                  THE AMOUNT OF THE PGGM PRE FUND INITIAL
CAPITAL CONTRIBUTION OR PGGM PRE FUND ADDITIONAL CAPITAL CONTRIBUTION, AS THE
CASE MAY BE, TO BE MADE WITH RESPECT TO ANY ONE CONTRIBUTION AGREEMENT SHALL BE
EQUAL TO THE LESSER OF: (A) AN AMOUNT EQUAL TO FORTY-FIVE PERCENT (45%) OF THE
NET EQUITY VALUE OF THE INITIAL INLAND PROPERTIES OR THE ADDITIONAL INLAND
PROPERTIES, AS THE CASE MAY BE, CONTRIBUTED PURSUANT TO SUCH CONTRIBUTION
AGREEMENT PLUS FORTY-FIVE (45%) OF THE RELATED TRANSFER EXPENSES; OR (B) THE
AMOUNT OF THE PGGM PRE FUND MAXIMUM CAPITAL CONTRIBUTIONS MINUS THE SUM OF
(X) THE AGGREGATE OF THE PGGM PRE FUND INITIAL CAPITAL CONTRIBUTIONS PREVIOUSLY
MADE PURSUANT TO THIS SECTION 6.2 PLUS (Y) THE AGGREGATE OF THE PGGM PRE FUND
ADDITIONAL CAPITAL CONTRIBUTIONS PREVIOUSLY MADE PURSUANT TO SECTION 6.3.

 

(D)                                 CONTRIBUTION VALUE OF THE INLAND
PROPERTIES.  THE “CONTRIBUTION VALUE” OF EACH INLAND PROPERTY OTHER THAN THE
FOUR FLAGGS PROPERTY, AS DEFINED IN SECTION 6.3(A)(II), SHALL BE CALCULATED
PURSUANT TO THE VALUATION FORMULA AS SET FORTH IN PARAGRAPH 1 OF THE ATTACHED
SCHEDULE 6.2(D); THE CONTRIBUTION VALUE OF THE FOUR FLAGGS PROPERTY SHALL BE
DETERMINED UPON PGGM PRE FUND’S SELECTION OF SUCH PROPERTY FOR CONTRIBUTION
PURSUANT TO THE FORMULA AS SET FORTH IN PARAGRAPH 2 ON SCHEDULE 6.2(D).

 

(E)                                  SUBSEQUENT CONTRIBUTION.  WITH RESPECT TO
EACH INLAND PROPERTY, AS OF 12:00 A.M. ON THE BUSINESS DAY IMMEDIATELY FOLLOWING
THE CONTRIBUTION CLOSING DATE RELATING TO SUCH INLAND PROPERTY (THE “SUBSEQUENT
CONTRIBUTION CLOSING DATE”) THE PARTNERSHIP SHALL CONTRIBUTE SUCH INLAND EQUITY
INTERESTS TO THE INLAND PROPERTIES REIT ENTITY.  THE INLAND PROPERTIES REIT
ENTITY SHALL FILE AN IRS FORM 8832 (AND ANY APPLICABLE STATE OR LOCAL INCOME TAX
ELECTION FORMS) TO ELECT TO BE CLASSIFIED AS A CORPORATION FOR FEDERAL AND
APPLICABLE STATE AND LOCAL INCOME TAX PURPOSES, WHICH ELECTION SHALL BE
EFFECTIVE ON OR PRIOR TO THE SUBSEQUENT CONTRIBUTION CLOSING DATE RELATING TO
THE FIRST CONTRIBUTED INLAND EQUITY INTERESTS.  THE APPLICABLE CONTRIBUTION
CLOSING DATE AND THE ASSOCIATED SUBSEQUENT CONTRIBUTION CLOSING DATE SHALL BE
TIMED TO OCCUR ON IMMEDIATELY CONSECUTIVE DAYS THAT ARE BOTH BUSINESS DAYS, SO
THAT THE APPLICABLE CONTRIBUTION CLOSING DATE AND SUBSEQUENT CONTRIBUTION
CLOSING DATE ARE NOT SEPARATED

 

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BY ANY NON-BUSINESS DAYS (SUCH AS A WEEKEND DAY OR HOLIDAY).  THE PARTNERSHIP
AND THE INLAND PROPERTIES REIT ENTITY SHALL EXECUTE A CONTRIBUTION AGREEMENT
SUBSTANTIALLY IN THE FORM AGREED TO BY THE GENERAL PARTNER, THE LIMITED PARTNERS
AND THE PARTNERSHIP AS OF THE DATE HEREOF (EACH, A “REIT CONTRIBUTION
AGREEMENT”).  EACH REIT CONTRIBUTION AGREEMENT SHALL SET FORTH, AMONG OTHER
THINGS:

 

(I)                                     THE INLAND EQUITY INTERESTS TO BE
CONTRIBUTED BY THE PARTNERSHIP;

 

(II)                                  THE CLOSING DATE OF SUCH CONTRIBUTION TO
THE INLAND PROPERTIES REIT ENTITY;

 

(III)                               THAT THE APPLICABLE PROPERTY ENTITY TO BE
CONTRIBUTED BY THE PARTNERSHIP TO THE INLAND PROPERTIES REIT ENTITY WILL BE
DISREGARDED FROM THE PARTNERSHIP FOR FEDERAL INCOME TAX PURPOSES ON THE
APPLICABLE SUBSEQUENT CONTRIBUTION CLOSING DATE, SO THAT FOR FEDERAL INCOME TAX
PURPOSES THE PARTNERSHIP WILL BE TREATED AS CONTRIBUTING ON THE APPLICABLE
SUBSEQUENT CONTRIBUTION CLOSING DATE THE INLAND PROPERTY HELD BY THAT PROPERTY
ENTITY;

 

(IV)                              THAT THE CONTRIBUTION SHALL OCCUR AS OF
12:00 A.M. CHICAGO TIME ON THE SUBSEQUENT CONTRIBUTION CLOSING DATE, AND THAT
ALL ITEMS OF INCOME, GAIN, LOSS, EXPENSE AND DEDUCTION DERIVED FROM THE
APPLICABLE INLAND PROPERTY ON AND AFTER THE APPLICABLE SUBSEQUENT CONTRIBUTION
CLOSING DATE SHALL BE REPORTED FOR INCOME TAX PURPOSES SOLELY BY THE INLAND
PROPERTIES REIT ENTITY AND THAT NO SUCH ITEMS SHALL BE REPORTED FOR INCOME TAX
PURPOSES BY THE PARTNERSHIP; AND

 

(V)                                 THE CONDITIONS PRECEDENT TO THE CONSUMMATION
OF THE TRANSACTIONS CONTEMPLATED THEREBY, WHICH MAY INCLUDE, BUT ARE NOT LIMITED
TO, LENDER CONSENTS OR WAIVERS OF PREPAYMENT PENALTIES.

 

WITHIN A REASONABLE TIME AFTER THE CONSUMMATION OF THE CONTRIBUTION BY THE
PARTNERSHIP OF THE INLAND EQUITY INTERESTS RELATED TO THE INITIAL INLAND
PROPERTIES TO THE INLAND PROPERTIES REIT ENTITY, THE GENERAL PARTNER SHALL TAKE
ANY AND ALL STEPS NECESSARY TO CAUSE THE INLAND PROPERTIES REIT ENTITY TO BE
QUALIFIED AS A DOMESTICALLY CONTROLLED REIT.

 

6.3                                 ADDITIONAL CAPITAL CONTRIBUTIONS.  IN
ADDITION TO THE INITIAL CAPITAL CONTRIBUTIONS, THE LIMITED PARTNERS SHALL MAKE
ADDITIONAL CAPITAL CONTRIBUTIONS TO THE PARTNERSHIP (WITH RESPECT TO INLAND, THE
“INLAND ADDITIONAL CAPITAL CONTRIBUTIONS”, WITH RESPECT TO PGGM PRE FUND, THE
“PGGM PRE FUND ADDITIONAL CAPITAL CONTRIBUTIONS” AND COLLECTIVELY, THE
“ADDITIONAL CAPITAL CONTRIBUTIONS”) IN ACCORDANCE WITH THEIR PERCENTAGE
INTERESTS AS FOLLOWS:

 

(A)                                  SELECTION OF ADDITIONAL INLAND PROPERTIES.

 

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(I)                                     DURING THE INVESTMENT PERIOD, PGGM PRE
FUND SHALL HAVE THE RIGHT TO SELECT FOR CONTRIBUTION TO THE PARTNERSHIP BY
INLAND THE INLAND EQUITY INTERESTS RELATING TO ONE OR MORE OF THE ADDITIONAL
INLAND PROPERTIES (THE ADDITIONAL INLAND PROPERTIES, TOGETHER WITH THE INITIAL
INLAND PROPERTIES, WHEN AND AS CONTRIBUTED TO THE PARTNERSHIP, COLLECTIVELY, THE
“INLAND PROPERTIES” AND, INDIVIDUALLY, AN “INLAND PROPERTY”), EXCEPT AS LIMITED
WITH RESPECT TO THE FOUR FLAGGS PROPERTY, AS DEFINED IN
SECTION 6.3(A)(II) BELOW, AS FOLLOWS:  (X) AT ANY TIME THAT THE BALANCE OF THE
PIC FUNDS IS LESS THAN $5,000,000, PGGM PRE FUND SHALL HAVE THE RIGHT TO SELECT
AN ADDITIONAL INLAND PROPERTY FOR CONTRIBUTION TO THE PARTNERSHIP BY INLAND,
PROVIDED THAT AFTER GIVING EFFECT TO THE CONTRIBUTION OF SUCH ADDITIONAL INLAND
PROPERTY THE BALANCE OF THE PIC FUNDS WOULD NOT EXCEED $10,000,000; AND (Y) AT
ANY TIME THERE IS AN INITIAL APPROVAL IN EFFECT WITH RESPECT TO THE ACQUISITION
OF AN ADDITIONAL PROPERTY, PGGM PRE FUND SHALL HAVE THE RIGHT TO SELECT AN
ADDITIONAL INLAND PROPERTY FOR CONTRIBUTION TO THE PARTNERSHIP BY INLAND,
PROVIDED THAT: (1) AFTER GIVING EFFECT TO THE CONTRIBUTION OF SUCH ADDITIONAL
INLAND PROPERTY AND THE ACQUISITION OF SUCH ADDITIONAL PROPERTY ON THE TERMS
THAT WERE SUBJECT TO THE INITIAL APPROVAL, THE BALANCE OF THE PIC FUNDS WOULD
NOT EXCEED $10,000,000; AND (2) THE CLOSING OF THE ACQUISITION OF THE ADDITIONAL
PROPERTY SHALL BE A CONDITION PRECEDENT TO THE CLOSING OF THE CONTRIBUTION OF
SUCH ADDITIONAL INLAND PROPERTY.

 

(II)                                  WITH RESPECT TO THE PROPERTY IDENTIFIED AS
“FOUR FLAGGS” IN THE ATTACHED SCHEDULE 6.2(A)-2 (THE “FOUR FLAGGS PROPERTY”), AS
AND FROM THE DATE HEREOF, INLAND SHALL USE ITS GOOD FAITH EFFORTS TO STABILIZE
THE SAME IN REGARDS TO SUCH PROPERTY’S OCCUPANCY RATE, CASH FLOW AND GENERAL
OPERATIONS.  UPON THE EARLIER TO OCCUR OF (A) THE STABILIZATION (AS DEFINED
HEREIN) OF THE FOUR FLAGGS PROPERTY, OR (B) MARCH 31, 2011, PGGM PRE FUND MAY
THEREAFTER FOR THE BALANCE OF THE INVESTMENT PERIOD, SELECT THE FOUR FLAGGS
PROPERTY FOR CONTRIBUTION TO THE PARTNERSHIP, IN THE SAME MANNER AS ALL OTHER
ADDITIONAL INLAND PROPERTIES IDENTIFIED IN SCHEDULE 6.2(A)-2.  FOR PURPOSES
HEREOF, “STABILIZATION” SHALL MEAN THE COMMENCEMENT OF LEASES FOR 11,000 SQUARE
FEET OF UNITS 2, 4 AND 32 ON THE FOUR FLAGGS PROPERTY.

 

(B)                                 DUE DILIGENCE; END OF INVESTMENT PERIOD.

 

(i)                                     Prior to the selection of any Additional
Inland Property, PGGM PRE Fund shall be entitled to conduct such due diligence
related to the condition and results of operation thereof, as PGGM PRE Fund, in
its sole discretion, may require and Inland shall cooperate with PGGM PRE Fund
in connection with such due diligence, including providing access to such
information in Inland’s possession or control that PGGM PRE Fund may request. 
PGGM PRE Fund shall provide Inland with notification of PGGM PRE Fund’s
selection of such Property or Properties.  Any Properties listed in Schedule
6.2(a)-2 not selected by PGGM PRE Fund for an Inland Additional Capital
Contribution prior to the end

 

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of the Investment Period shall no longer be available for contribution to the
Partnership, and Inland shall be entitled to take any action with respect to
same, including the disposition or operation thereof, with no further obligation
owed to the Partnership with respect to such Properties.

 

(ii)                                  Prior to the end of the Investment Period,
without the prior written consent of PGGM PRE Fund in each instance, Inland
shall not (A) other than in connection with a refinancing of existing Property
Entity debt, transfer, sell, assign, convey, gift or otherwise dispose of the
Inland Equity Interests, in whole or in part, in any of the Property Entities
that owns property listed on Schedule 6.2(a)-1 or 6.2(a)-2 (an “Inland Property
Entity”) whether voluntarily or by operation of law, or enter into any agreement
or contract to do so, or consent to or permit any of the foregoing with respect
to the Inland Equity Interests, in whole or in part, in any of the Inland
Property Entities, or suffer any third person to do any of the foregoing, or
(B) other than in connection with a refinancing of existing Property Entity
debt, consent to or permit any of the Inland Property Entities to transfer,
sell, assign, convey, gift or otherwise dispose of their respective interests in
the such property, or any interest therein, in whole or in part, whether
voluntarily or by operation of law, or enter into any agreement or contract to
do so, or consent to or permit any of the foregoing with respect to the any such
property provided, however, that the foregoing shall not include the leasing of
space for occupancy by a tenant.

 

(C)                                  PURPOSES OF ADDITIONAL CAPITAL
CONTRIBUTIONS.  ADDITIONAL CAPITAL CONTRIBUTIONS SHALL BE MADE FOR THE FOLLOWING
PURPOSES:

 

(I)                                     ACQUISITION EXPENSE CAPITAL CALLS.  IF
THERE IS A FINAL APPROVAL FOR AN ACQUISITION OF AN ADDITIONAL PROPERTY BY THE
PARTNERSHIP PURSUANT TO SECTION 7.1 DURING THE INVESTMENT PERIOD, THEN THE
GENERAL PARTNER SHALL CAUSE THE PARTNERSHIP TO MAKE A CAPITAL CALL FOR
SUFFICIENT FUNDS TO ENABLE THE PARTNERSHIP TO PAY THE PURCHASE PRICE AND ALL
TRANSFER EXPENSES OF SAID ACQUISITION (COLLECTIVELY WITH TERMINATED ACQUISITION
EXPENSES, AS DEFINED BELOW IN THIS SECTION 6.3(C)(I), “ACQUISITION EXPENSES”) IN
ACCORDANCE WITH THE ACQUISITION BUDGET (AS DEFINED IN SECTION 7.1(B)) FOR SAID
PROPERTY.  IN ADDITION, DURING THE INVESTMENT PERIOD, THE GENERAL PARTNER SHALL
CAUSE THE PARTNERSHIP TO MAKE A CAPITAL CALL FOR SUFFICIENT FUNDS TO ENABLE THE
PARTNERSHIP TO PAY OR REIMBURSE THE GENERAL PARTNER OR INLAND FOR ALL THIRD
PARTY COSTS INCURRED BY THEM AS PROVIDED IN SECTIONS 7.1(C)(II), (III) AND
(V) (“TERMINATED ACQUISITION EXPENSES”).  THE AMOUNT OF EACH LIMITED PARTNER’S
ADDITIONAL CAPITAL CONTRIBUTION TO BE MADE IN RESPONSE TO A CAPITAL CALL
DESCRIBED IN SECTION 6.3(A)(I) WITH RESPECT TO THE CONTRIBUTION OF THE
ADDITIONAL INLAND PROPERTIES AND WITH RESPECT TO CAPITAL CALLS MADE PURSUANT TO
THIS SECTION 6.3(C)(I) (COLLECTIVELY, THE “ACQUISITION ADDITIONAL CAPITAL
CONTRIBUTIONS”) SHALL BE INCLUDED IN THE CALCULATION OF THE INLAND MAXIMUM
CAPITAL CONTRIBUTIONS AND THE PGGM PRE FUND MAXIMUM CAPITAL CONTRIBUTIONS, AS
THE CASE MAY BE,

 

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AS SET FORTH IN SECTION 6.3(F) AND SHALL BE INCLUDED IN AND NOT EXCEED THE
INLAND MAXIMUM ACQUISITION ADDITIONAL CAPITAL CONTRIBUTIONS AND THE PGGM PRE
FUND MAXIMUM ACQUISITION ADDITIONAL CAPITAL CONTRIBUTIONS, AS THE CASE MAY BE,
AS SET FORTH IN SECTION 6.3(F).

 

(II)                                  ORGANIZATIONAL EXPENSE CAPITAL CALLS.  THE
PARTNERSHIP SHALL PAY THE ORGANIZATIONAL EXPENSES OF THE PARTNERSHIP
(COLLECTIVELY, “ORGANIZATIONAL EXPENSES”), AS MORE PARTICULARLY SET FORTH AND
SUBJECT TO THE LIMITATIONS CONTAINED IN SECTION 6.6.  UPON THE INCURRENCE OF
ORGANIZATIONAL EXPENSES AS DESCRIBED IN SECTION 6.6, THE GENERAL PARTNER SHALL
CAUSE THE PARTNERSHIP TO MAKE A CAPITAL CALL DURING THE INVESTMENT PERIOD FOR
SUFFICIENT FUNDS TO ENABLE THE PARTNERSHIP TO PAY SUCH ORGANIZATIONAL EXPENSES. 
THE AMOUNT OF EACH LIMITED PARTNER’S ADDITIONAL CAPITAL CONTRIBUTION TO BE MADE
IN RESPONSE TO SUCH A CAPITAL CALL (COLLECTIVELY, THE “ORGANIZATIONAL EXPENSES
CAPITAL CONTRIBUTIONS”) SHALL BE INCLUDED IN THE CALCULATION OF THE INLAND
MAXIMUM CAPITAL CONTRIBUTIONS AND THE PGGM PRE FUND MAXIMUM CAPITAL
CONTRIBUTIONS, AS THE CASE MAY BE, AS SET FORTH IN SECTION 6.3(F).

 

(III)                               SHORTFALL EXPENSE CAPITAL CALLS.  AT ANY
TIME DURING THE TERM, THE GENERAL PARTNER SHALL ALSO MAKE CAPITAL CALLS FOR THE
FOLLOWING PURPOSES (THE AMOUNTS SPECIFIED IN ANY SUCH CAPITAL CALL, HEREINAFTER
REFERRED TO COLLECTIVELY AS “SHORTFALL EXPENSES”):

 

(A)                              OPERATING SHORTFALL CAPITAL CALLS.  IF THE
ANTICIPATED AGGREGATE RECEIPTS OF THE PROPERTY ENTITIES DURING ANY 90-DAY PERIOD
AND THE AVAILABLE FUNDS OF THE PROPERTY ENTITIES DURING SUCH TIME (INCLUDING ANY
RESERVES, BUT ONLY FOR THE PURPOSE FOR WHICH THE APPLICABLE RESERVE IS
MAINTAINED AND INCLUDING LOAN PROCEEDS, BUT ONLY TO THE EXTENT SAID BORROWING
HAS BEEN APPROVED BY THE LIMITED PARTNERS), ARE LESS THAN THE EXPENSES OF THE
PARTNERSHIP (INCLUDING, FOR THE AVOIDANCE OF DOUBT, FUNDS TO BE USED FOR
INDEMNIFICATION PURSUANT TO SECTION 7.4 OR 9.7) AND OR PROPERTY ENTITIES
ANTICIPATED TO BE INCURRED DURING SAID 90-DAY PERIOD PURSUANT TO THE
THEN-CURRENT ANNUAL BUSINESS PLAN, THEN THE GENERAL PARTNER SHALL CAUSE THE
PARTNERSHIP TO MAKE A CAPITAL CALL IN THE AMOUNT OF THE SHORTFALL (THE
“OPERATING SHORTFALL”).

 

(B)                                REFINANCING SHORTFALL CAPITAL CALLS.  IF AT
ANY TIME THERE IS (OR IS PROJECTED TO BE) A “REFINANCING SHORTFALL” (AS SUCH
TERM IS HEREINAFTER DEFINED), THE GENERAL PARTNER SHALL CAUSE THE PARTNERSHIP TO
MAKE A CAPITAL CALL IN THE AMOUNT OF THE REFINANCING SHORTFALL.  AS EMPLOYED
HEREIN, THE TERM “REFINANCING SHORTFALL” MEANS THE AMOUNT, IF ANY, BY WHICH THE
PROCEEDS OF ANY FINANCING (INCLUDING THE COSTS AND EXPENSES OF OBTAINING SAID
FINANCING) INCURRED FOR THE PURPOSE OF REPAYING ANY OTHER FINANCING UPON THE
MATURITY OF SAID FINANCING, IS LESS THAN THE AMOUNT REQUIRED TO PAY OFF SAID
FINANCING IN FULL AT SUCH TIME.

 

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

 

(IV)                              PROTECTIVE EXPENDITURE CAPITAL CALLS.  IF AT
ANY TIME DURING THE TERM, AFTER PAYING ALL EXPENSES IN ACCORDANCE WITH THE
THEN-CURRENT ANNUAL BUSINESS PLAN, THE PARTNERSHIP LACKS SUFFICIENT FUNDS TO
MAKE PROTECTIVE EXPENDITURES, THE GENERAL PARTNER SHALL CAUSE THE PARTNERSHIP TO
MAKE A CAPITAL CALL IN THE AMOUNT OF SUCH PROTECTIVE EXPENDITURES (THE
“PROTECTIVE EXPENDITURES”).

 

The amount of each Limited Partner’s Additional Capital Contribution to be made
in response to a Capital Call described in Sections 6.3(a)(i), 6.3(c)(i) and
(ii) shall be included in the calculation of the Inland Maximum Capital
Contributions, the Inland Maximum Additional Capital Contribution, the PGGM PRE
Fund Maximum Capital Contribution, and the PGGM PRE Fund Maximum Additional
Capital Contribution, and the Capital Calls for Shortfall Expenses and
Protective Expenditures, as the case may be, shall be included in the
calculations of the Inland Maximum Capital Contributions, Inland Maximum
Shortfall/Protective Capital Contributions, the PGGM PRE Fund Maximum Capital
Contributions, and the PGGM PRE Fund Maximum Shortfall/Protective Capital
Contributions.

 

(D)                                 DETERMINATION OF AMOUNT OF ADDITIONAL
CAPITAL CONTRIBUTIONS.  WITHIN TEN (10) BUSINESS DAYS AFTER RECEIPT OF A CAPITAL
CALL FROM THE GENERAL PARTNER UNDER THIS SECTION 6.3, THE LIMITED PARTNERS SHALL
MAKE THE ADDITIONAL CAPITAL CONTRIBUTIONS.  WHEN DETERMINING THE AMOUNT OF
ADDITIONAL CAPITAL CONTRIBUTIONS REQUIRED TO BE MADE IN RESPONSE TO A CAPITAL
CALL, INLAND SHALL CONTRIBUTE 55% AND PGGM PRE FUND SHALL CONTRIBUTE 45% OF THE
TRANSFER EXPENSES, ACQUISITION EXPENSES, ORGANIZATIONAL EXPENSES, SHORTFALL
EXPENSES OR PROTECTIVE EXPENDITURES SET FORTH IN SUCH CAPITAL CALL; PROVIDED
HOWEVER, THAT THE REMAINING BALANCE OF PIC FUNDS (AS HEREAFTER DEFINED) SHALL BE
TREATED AS FUNDS THAT ARE AVAILABLE FOR PAYMENT OF INLAND’S PRO-RATA SHARE OF
THE TRANSFER EXPENSES, ACQUISITION EXPENSES, ORGANIZATIONAL EXPENSES, SHORTFALL
EXPENSES OR PROTECTIVE EXPENDITURES, TO THE EXTENT OF SUCH REMAINING BALANCE. 
SEE ILLUSTRATIONS BELOW:

 

(I)                     ILLUSTRATION 1.  THE PARTNERSHIP REQUIRES $100 FOR
TRANSFER EXPENSES, ACQUISITION EXPENSES, ORGANIZATIONAL EXPENSES, SHORTFALL
EXPENSES OR PROTECTIVE EXPENDITURES WHEN THERE IS $49 OF PIC FUNDS. INLAND WILL
BE REQUIRED TO MAKE AN ADDITIONAL CAPITAL CONTRIBUTION IN THE AMOUNT OF $55, AND
$49 OF PIC FUNDS MAY BE USED TO SATISFY SUCH ADDITIONAL CAPITAL CONTRIBUTION,
REDUCING THE BALANCE OF THE PIC FUNDS TO $0.  IF THE PIC FUNDS ARE UTILIZED,
INLAND WILL CONTRIBUTE AN ADDITIONAL $6 TO COMPLETE ITS ADDITIONAL CAPITAL
CONTRIBUTION.  PGGM PRE FUND WILL CONTRIBUTE $45 AS ITS ADDITIONAL CAPITAL
CONTRIBUTION IN RESPONSE TO SUCH CAPITAL CALL.

 

(II)                  ILLUSTRATION 2.  THE PARTNERSHIP REQUIRES $30 FOR TRANSFER
EXPENSES, ACQUISITION EXPENSES, ORGANIZATIONAL EXPENSES, SHORTFALL EXPENSES OR
PROTECTIVE EXPENDITURES WHEN THERE IS $49 OF PIC FUNDS. INLAND WILL BE REQUIRED
TO MAKE AN

 

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ADDITIONAL CAPITAL CONTRIBUTION IN THE AMOUNT OF $16.50, AND A PORTION OF THE
PIC FUNDS UP TO INLAND’S ADDITIONAL CAPITAL CONTRIBUTION MAY BE USED TO SATISFY
SAME, REDUCING THE BALANCE OF THE PIC FUNDS TO $32.50.  PGGM PRE FUND WILL
CONTRIBUTE $13.50 AS ITS ADDITIONAL CAPITAL CONTRIBUTION IN RESPONSE TO SUCH
CAPITAL CALL.

 

(E)                                  CAPITAL CALL BY LIMITED PARTNER.  IF THE
GENERAL PARTNER FAILS TO CAUSE THE PARTNERSHIP TO MAKE A CAPITAL CALL WHEN
REQUIRED OR AUTHORIZED TO DO SO PURSUANT TO SECTION 6.3(C), ABOVE, OR UPON THE
APPROVAL OF A MAJOR DECISION BY THE LIMITED PARTNERS, AND SAID FAILURE SHALL
CONTINUE FOR TEN (10) BUSINESS DAYS OR MORE FOLLOWING WRITTEN NOTICE TO THE
GENERAL PARTNER FROM ANY LIMITED PARTNER, ANY LIMITED PARTNER SHALL HAVE THE
RIGHT TO CAUSE THE PARTNERSHIP TO MAKE THE CAPITAL CALL IN QUESTION.

 

(F)                                    LIMITATION ON CAPITAL CALLS. 
NOTWITHSTANDING ANYTHING IN SECTION 6.2 OR THIS SECTION 6.3 TO THE CONTRARY, IN
NO EVENT SHALL INLAND AND PGGM PRE FUND BE REQUIRED TO MAKE CAPITAL
CONTRIBUTIONS TO THE PARTNERSHIP IN EXCESS OF THE AMOUNTS DESCRIBED BELOW IN
THIS SECTION 6.3(F), PROVIDED HOWEVER, SUCH CONTRIBUTIONS MAY BE INCREASED PRO
RATA IN ACCORDANCE WITH PERCENTAGE INTERESTS BY APPROVAL OF THE LIMITED PARTNERS
AS A MAJOR DECISION.

 

(I)                                     IN NO EVENT SHALL PGGM PRE FUND BE
REQUIRED TO MAKE CAPITAL CONTRIBUTIONS TO THE PARTNERSHIP

 

(A)                              FOR ANY REASON, IN EXCESS OF $130,000,000 (THE
“PGGM PRE FUND MAXIMUM CAPITAL CONTRIBUTIONS”);

 

(B)                                FOR ORGANIZATIONAL EXPENSES, IN EXCESS OF
$303,750 (THE “PGGM PRE FUND MAXIMUM ORGANIZATIONAL CAPITAL CONTRIBUTIONS”);

 

(C)                                FOR ACQUISITION ADDITIONAL CAPITAL
CONTRIBUTIONS IN EXCESS OF $125,000,000 LESS THE PGGM PRE FUND INITIAL CAPITAL
CONTRIBUTION (THE “PGGM PRE FUND MAXIMUM ACQUISITION ADDITIONAL CAPITAL
CONTRIBUTIONS”); OR

 

(D)                               FOR THE AGGREGATE OF SHORTFALL EXPENSES AND
PROTECTIVE EXPENDITURES, IN EXCESS OF THE LESSER OF (Y) $5,000,000 OR (Z) THE
AMOUNT OF PGGM PRE FUND MAXIMUM CAPITAL CONTRIBUTIONS LESS THE SUM OF THE PGGM
PRE FUND INITIAL CAPITAL CONTRIBUTIONS, ORGANIZATIONAL EXPENSES CAPITAL
CONTRIBUTIONS AND ACQUISITION ADDITIONAL CAPITAL CONTRIBUTIONS MADE BY PGGM PRE
FUND (THE “PGGM PRE FUND MAXIMUM SHORTFALL/PROTECTIVE CAPITAL CONTRIBUTIONS”);

 

(II)                                  IN NO EVENT SHALL INLAND BE REQUIRED TO
MAKE CAPITAL CONTRIBUTION TO THE PARTNERSHIP:

 

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(A)          FOR ANY REASON, IN EXCESS OF $158,888,889 (THE “INLAND MAXIMUM
CAPITAL CONTRIBUTIONS”);

 

(B)           FOR ORGANIZATIONAL EXPENSES, IN EXCESS OF $371,250 (THE “INLAND
MAXIMUM ORGANIZATIONAL CAPITAL CONTRIBUTIONS”);

 

(C)           FOR ACQUISITION ADDITIONAL CAPITAL CONTRIBUTIONS IN EXCESS OF 
$152,777,778 LESS THE INLAND INITIAL CAPITAL CONTRIBUTION (THE “INLAND MAXIMUM
ACQUISITION ADDITIONAL CAPITAL CONTRIBUTIONS”); OR

 

(D)          FOR THE AGGREGATE OF SHORTFALL EXPENSES AND PROTECTIVE
EXPENDITURES, IN EXCESS OF THE LESSER OF (Y) $6,111,111 OR (Z) THE AMOUNT OF
INLAND MAXIMUM CAPITAL CONTRIBUTIONS LESS THE SUM OF THE INLAND INITIAL CAPITAL
CONTRIBUTIONS, ORGANIZATIONAL EXPENSES CAPITAL CONTRIBUTIONS, AND ACQUISITION
ADDITIONAL CAPITAL CONTRIBUTIONS MADE BY INLAND (THE “INLAND MAXIMUM
SHORTFALL/PROTECTIVE CAPITAL CONTRIBUTIONS”)

 

6.4           FAILURE TO CONTRIBUTE CAPITAL.

 

(A)           FAILURE TO CONTRIBUTE.  IF A LIMITED PARTNER (THE “DEFAULTING
PARTNER”) FAILS TO MAKE SUCH LIMITED PARTNER’S CAPITAL CONTRIBUTION WITHIN THE
TIME PERIOD PRESCRIBED IN THE APPLICABLE CONTRIBUTION AGREEMENT OR AS PROVIDED
IN THIS AGREEMENT (I.E., IN RESPONSE TO A CAPITAL CALL), AND THE OTHER LIMITED
PARTNER (THE “NON-DEFAULTING PARTNER”) HAS MADE ITS CAPITAL CONTRIBUTION IN
ACCORDANCE WITH THIS AGREEMENT OR THE APPLICABLE CONTRIBUTION AGREEMENT, THE
GENERAL PARTNER SHALL SO INFORM THE DEFAULTING PARTNER AND THE NON-DEFAULTING
PARTNER WITHIN TWENTY (20) BUSINESS DAYS, AND, SUBJECT TO THE LIMITATIONS
PROVIDED BELOW, THE NON-DEFAULTING PARTNER SHALL HAVE THE RIGHT, BUT NOT THE
OBLIGATION, TO:

 

(I)       WITHDRAW THE CAPITAL CONTRIBUTION (IF THE PARTNERSHIP IS CAPABLE OF
REFUNDING SUCH CAPITAL CONTRIBUTION) IT MADE WHEN THE DEFAULTING PARTNER FAILED
TO MAKE ITS CAPITAL CONTRIBUTION, IN WHICH EVENT THE NON-DEFAULTING PARTNER
SHALL HAVE NO LIABILITY FOR FAILURE TO CONTRIBUTE SUCH CAPITAL CONTRIBUTION, OR
DESIGNATE ANY PORTION OF THE CAPITAL CONTRIBUTION THE NON-DEFAULTING PARTNER HAS
NOT WITHDRAWN AS AN ADVANCE TO THE PARTNERSHIP AS A PARTNERSHIP LOAN; AND / OR

 

(II)      ELECT TO PAY ALL OR ANY PORTION OF THE AMOUNT DUE FROM THE DEFAULTING
PARTNER (THE “DEFICIENCY AMOUNT”) TO THE PARTNERSHIP (A “DEFAULT CONTRIBUTION”),
WHICH AMOUNT MAY BE DESIGNATED BY THE NON-DEFAULTING PARTNER AS (A) AN ADVANCE
DIRECTLY TO THE PARTNERSHIP AS A PARTNERSHIP LOAN (AS DEFINED IN
SECTION 6.4(C)), OR (B) DESIGNATE SUCH AMOUNT AS PART CAPITAL CONTRIBUTION AND
PART PARTNERSHIP LOAN, IN SUCH PROPORTION AS IS DESIGNATED BY THE NON-DEFAULTING
PARTNER.

 

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These provisions shall be applicable each time that a Limited Partner shall fail
to contribute a Capital Contribution as required in this Agreement and the
applicable Contribution Agreement.  The Non-Defaulting Partner shall elect which
of the foregoing remedies it will pursue and, if it so chooses, advance to the
Partnership the Deficiency Amount, within twenty (20) days of receipt of the
notice by the General Partner of the Defaulting Partner’s failure to make its
Capital Contribution.  Notwithstanding the foregoing, PGGM PRE Fund may not
elect to treat a Default Contribution as a Capital Contribution, if, after the
application of Section 6.4(b), PGGM PRE Fund’s Percentage Interest in the
Partnership would exceed 49%.

 

(B)           EFFECT ON PERCENTAGE INTERESTS AND CAPITAL ACCOUNTS.  IF THERE IS
A DEFICIENCY AMOUNT AS A RESULT OF THE FAILURE OF A DEFAULTING PARTNER TO MAKE A
CAPITAL CONTRIBUTION, AND A LIMITED PARTNER MAKES A DEFAULT CONTRIBUTION OF ALL
OR ANY PORTION OF THE DEFICIENCY AMOUNT AS A CAPITAL CONTRIBUTION FOR ITS OWN
ACCOUNT PURSUANT TO SECTION 6.4(A)(II), THEN, EFFECTIVE FROM THE DATE ON WHICH
THE LIMITED PARTNER MAKES ANY SUCH CAPITAL CONTRIBUTION, THE PERCENTAGE INTEREST
OF THE DEFAULTING PARTNER IMMEDIATELY PRIOR THERETO SHALL BE REDUCED (BUT NOT
BELOW 0%) BY THE NUMBER OF PERCENTAGE POINTS EQUIVALENT TO THE FRACTION (THE
“DILUTION FRACTION”) OBTAINED BY DIVIDING (I) 100% OF THE APPLICABLE DEFICIENCY
AMOUNT BY (II) THE AGGREGATE AMOUNT OF THE CAPITAL CONTRIBUTIONS MADE BY ALL OF
THE PARTNERS (INCLUDING ANY DEFAULT CONTRIBUTION TREATED AS A CAPITAL
CONTRIBUTION), AND CONCOMITANTLY, THE PERCENTAGE INTEREST OF THE NON-DEFAULTING
PARTNER (CALCULATED AFTER ADJUSTING FOR ANY CAPITAL CONTRIBUTIONS MADE WITH
RESPECT TO THE CAPITAL CALL RESULTING IN THE DEFICIENCY AMOUNT) SHALL BE
INCREASED BY THE SAME NUMBER OF PERCENTAGE POINTS.  BY WAY OF EXAMPLE, SUPPOSE
THAT ALL PARTNERS HAD PREVIOUSLY FUNDED AN AGGREGATE OF $100 IN CAPITAL
CONTRIBUTIONS, THAT A CAPITAL CALL FOR $100 IN ADDITIONAL CAPITAL CONTRIBUTIONS
IS MADE, AND THAT PGGM PRE FUND FAILS TO CONTRIBUTE ITS SHARE ($45) OF SAID
ADDITIONAL CAPITAL CONTRIBUTIONS.  IF INLAND ELECTS TO MAKE A CAPITAL
CONTRIBUTION OF $55 AND A DEFAULT CONTRIBUTION TREATED AS A CAPITAL CONTRIBUTION
UNDER SECTION 6.4(A)(II) IN THE AMOUNT OF PGGM PRE FUND’S DEFICIENCY AMOUNT
(I.E., $45), THEN THE DILUTION FRACTION WOULD BE EQUAL TO $45 (100% OF THE
DEFICIENCY AMOUNT) DIVIDED BY $200, OR 0.225.  THUS, THE PERCENTAGE INTEREST OF
PGGM PRE FUND WOULD BE REDUCED BY 22.5 PERCENTAGE POINTS AND THE PERCENTAGE
INTEREST OF INLAND WOULD BE INCREASED BY 22.5 PERCENTAGE POINTS.

 

(C)           PARTNERSHIP LOAN.  IF THE NON-DEFAULTING PARTNER SHALL ELECT TO
MAKE A LOAN TO THE PARTNERSHIP AS PROVIDED IN SECTION 6.4(A) ABOVE WHICH THE
PARTNERSHIP IS LIABLE FOR THE REPAYMENT THEREOF, SUCH LOAN SHALL BE REFERRED TO
AS A “PARTNERSHIP LOAN.”  PARTNERSHIP LOANS SHALL BEAR INTEREST AT THE DEFAULT
RATE.  INTEREST EXPENSE INCURRED ON ANY PARTNERSHIP LOAN SHALL BE TREATED AS AN
OBLIGATION AND EXPENSE OF THE PARTNERSHIP.  PAYMENTS ON THE PARTNERSHIP LOANS
SHALL BE MADE IN EQUAL MONTHLY INSTALLMENTS OF PRINCIPAL AND INTEREST CALCULATED
AS THE PARTNERSHIP LOAN AMOUNT AMORTIZED OVER THE BALANCE OF THE MAXIMUM TERM
(AS OF THE DATE OF THE MAKING OF SUCH PARTNERSHIP LOAN) AT THE RATE SET FORTH
HEREIN, PROVIDED THAT THE BALANCE THEREOF TOGETHER WITH ANY ACCRUED AND UNPAID
INTEREST SHALL BE IMMEDIATELY DUE IF THE PARTNERSHIP IS TERMINATED PRIOR TO THE

 

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EXPIRATION OF THE MAXIMUM TERM (SUBJECT TO FUNDS BEING AVAILABLE FROM THE
WINDING UP AND LIQUIDATION OF THE PARTNERSHIP).  ALL PAYMENTS SHALL BE APPLIED
FIRST TO ACCRUED INTEREST AND THEN TO PRINCIPAL.

 

(D)           ACKNOWLEDGEMENT AND AGREEMENT.  EACH LIMITED PARTNER ACKNOWLEDGES
AND AGREES THAT THE OTHER LIMITED PARTNER WOULD NOT BE ENTERING INTO THIS
AGREEMENT WERE IT NOT FOR (I) THE LIMITED PARTNERS AGREEING TO MAKE THE CAPITAL
CONTRIBUTIONS PROVIDED FOR IN THIS ARTICLE 6, AND (II) THE PROVISIONS OF THIS
ARTICLE 6 THAT DESCRIBE THE CONSEQUENCES OF BEING A DEFAULTING PARTNER (THE
“REMEDY PROVISIONS”).  EACH LIMITED PARTNER ACKNOWLEDGES AND AGREES THAT IN THE
EVENT A LIMITED PARTNER FAILS TO MAKE ITS CAPITAL CONTRIBUTIONS PURSUANT TO THIS
AGREEMENT, THE OTHER LIMITED PARTNER WILL SUFFER SUBSTANTIAL DAMAGES AND THE
REMEDY PROVISIONS ARE FAIR, JUST AND EQUITABLE IN ALL RESPECTS.  ALTHOUGH IT IS
THE INTENT OF THE LIMITED PARTNERS THAT THE REMEDY PROVISIONS WILL BE FULLY
EFFECTIVE WITHOUT THE EXECUTION OF ANY DOCUMENTS OR INSTRUMENTS BY THE
DEFAULTING PARTNER IN CONNECTION THEREWITH, EACH DEFAULTING PARTNER HEREBY
AGREES THAT IN THE EVENT THE NON-DEFAULTING PARTNER EXERCISES ANY OF THE REMEDY
PROVISIONS, THE DEFAULTING PARTNER SHALL EXECUTE AND DELIVER SUCH CONVEYANCES,
AGREEMENTS, NOTES, INSTRUMENTS OR OTHER DOCUMENTS WHICH MAY BE REASONABLY
NECESSARY IN THE JUDGMENT OF THE NON-DEFAULTING PARTNER TO CONFIRM AND RENDER
FULLY EFFECTIVE THE REMEDY PROVISIONS, INCLUDING, BUT NOT LIMITED TO, ANY
AMENDMENTS TO THIS AGREEMENT AND TO THE CERTIFICATE OF THE PARTNERSHIP.

 

6.5           PIC FUNDS. THE GENERAL PARTNER SHALL CAUSE THE PGGM PRE FUND
CAPITAL CONTRIBUTIONS MADE IN CONNECTION WITH (A) THE CONTRIBUTION OF THE
INITIAL INLAND PROPERTIES OR (B) THE CONTRIBUTION OF ANY ADDITIONAL INLAND
PROPERTIES, IN EITHER EVENT AS AND WHEN CONTRIBUTED TO THE PARTNERSHIP, LESS 45%
OF THE TRANSFER EXPENSES PAYABLE BY THE PARTNERSHIP IN CONNECTION WITH SUCH
CONTRIBUTION (COLLECTIVELY, THE “PIC FUNDS”), TO BE INVESTED IN INTEREST BEARING
INVESTMENTS PENDING THE USE THEREOF FOR TRANSFER EXPENSES, ACQUISITION EXPENSES,
ORGANIZATIONAL EXPENSES, SHORTFALL EXPENSES OR PROTECTIVE EXPENDITURES.  THE
GENERAL PARTNER SHALL HAVE SOLE DISCRETION TO DETERMINE THE NATURE OF SUCH
INTEREST BEARING INVESTMENTS.  FOR BOOK AND TAX PURPOSES, INTEREST EARNINGS ON
THE PIC FUNDS SHALL BE ALLOCABLE 95% TO INLAND AND 5% TO PGGM PRE FUND.  ALL
INTEREST EARNINGS ON THE PIC FUNDS SHALL NOT BE CONSIDERED ADDITIONAL PIC FUNDS
AND SHALL INSTEAD BE DISTRIBUTED TO INLAND AND PGGM PRE FUND IN ACCORDANCE WITH
SECTION 8.5(A).  THE GENERAL PARTNER SHALL APPLY AND ADJUST THE BALANCE OF THE
PIC FUNDS IN ACCORDANCE WITH SECTION 6.3(D) AND THIS SECTION 6.5. THE BALANCE OF
THE PIC FUNDS FROM TIME TO TIME SHALL BE REDUCED TO PAY (A) AMOUNTS DISTRIBUTED
TO INLAND UNDER SECTION 8.4 (INCLUDING UNDER SECTION 8.5(B)(I) BY REASON OF
SECTION 8.4(A)), AND (B) THE TRANSFER EXPENSES, ACQUISITION EXPENSES,
ORGANIZATIONAL EXPENSES, SHORTFALL EXPENSES OR PROTECTIVE EXPENDITURES PAID FROM
PIC FUNDS ON BEHALF OF INLAND PURSUANT TO SECTION 6.3(D), (C) AMOUNTS APPLIED
PURSUANT TO THE PROVISO IN SECTION 8.4(B) TO SATISFY INLAND’S CASH CONTRIBUTION
OBLIGATIONS UNDER SECTION 13.4, AND (D) ALL INVESTMENT LOSSES INCURRED IN
CONNECTION WITH THE TEMPORARY INVESTMENT OF THE PIC FUNDS.  IT IS EXPRESSLY
UNDERSTOOD THAT THE AMOUNT OF ANY ADDITIONAL CAPITAL CONTRIBUTION BY PGGM PRE
FUND MADE IN CONNECTION WITH THE ACQUISITION OF ANY ADDITIONAL PROPERTY SHALL IN
NO CIRCUMSTANCES CONSTITUTE PIC FUNDS, EVEN IF (X) SAID ADDITIONAL CAPITAL
CONTRIBUTION IS MADE

 

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prior to the contribution of the Inland Equity Interests relating to the Inland
Properties, and (y) all Inland Equity Interests in one or more of the Property
Entities owning Inland Properties are never contributed to the Partnership.

 

6.6           ORGANIZATIONAL EXPENSES.  EACH PARTNER WILL BEAR ITS OWN LEGAL,
DUE DILIGENCE AND OTHER EXPENSES ASSOCIATED WITH THE ORGANIZATION AND
ESTABLISHMENT OF THE PARTNERSHIP EXCEPT AS FOLLOWS:

 

(A)           ESTABLISHMENT OF PARTNERSHIP; QUALIFICATION OF REIT ENTITIES. 
EXPENSES, NOT TO EXCEED $675,000, ASSOCIATED WITH THE ESTABLISHMENT OF THE
PARTNERSHIP AND OF THE QUALIFICATION, AS NECESSARY, OF THE REIT ENTITIES AS
DOMESTICALLY CONTROLLED REITS, AS WELL AS ANY EXPENSES ASSOCIATED WITH THE
CONTRIBUTION OF THE INLAND EQUITY INTERESTS RELATING TO THE INLAND PROPERTIES
WILL BE PAID BY THE PARTNERSHIP;

 

(B)           PGGM PRE FUND’S LEGAL EXPENSES.  PGGM PRE FUND SHALL HAVE THE
RIGHT TO RECEIVE REIMBURSEMENT FROM THE PARTNERSHIP UP TO $200,000 OF THIRD
PARTY LEGAL EXPENSES ASSOCIATED WITH NEGOTIATING THE FINAL ORGANIZATIONAL
DOCUMENTS OF THE PARTNERSHIP, INCLUDING BUT NOT LIMITED TO THIS AGREEMENT, AND
THE CONTRIBUTION AGREEMENT; SUCH AMOUNT SHALL BE A PART OF, AND NOT IN ADDITION
TO THE $675,000 LIMIT SET FORTH IN SECTION 6.6(A);

 

(C)           PGGM PRE FUND’S DUE DILIGENCE EXPENSES.  PGGM PRE FUND SHALL HAVE
THE RIGHT TO REIMBURSEMENT FROM THE PARTNERSHIP OF UP TO $275,000 OF THIRD PARTY
LEGAL AND BUSINESS DUE DILIGENCE COSTS INCURRED IN CONNECTION WITH THE INLAND
PROPERTIES AND ADDITIONAL PROPERTIES, SUCH AMOUNT TO BE A PART OF AND NOT IN
ADDITION TO, THE $675,000 LIMIT SET FORTH IN SECTION 6.6(A);

 

(D)           INLAND’S LEGAL AND OTHER EXPENSES.  INLAND SHALL HAVE THE RIGHT TO
REIMBURSEMENT FROM THE PARTNERSHIP OF UP TO $200,000 OF EXPENSES COMPRISED OF
ANY OF THE FOLLOWING: (I) THIRD PARTY LEGAL EXPENSES ASSOCIATED WITH THE
DRAFTING AND NEGOTIATING THE ORGANIZATIONAL DOCUMENTS OF THE PARTNERSHIP,
INCLUDING BUT NOT LIMITED TO THIS AGREEMENT, (II) THE QUALIFICATION, AS
NECESSARY, OF THE REIT ENTITIES AS DOMESTICALLY CONTROLLED REITS, AND (III) THE
PAYMENT OF ANY COMMISSION BASED FEE OWED OR PAYABLE TO INLAND INSTITUTIONAL
CAPITAL PARTNERS OR ITS AFFILIATE AS A RESULT OF THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT, IN ALL CASES SUCH AMOUNTS TO BE A PART OF, AND NOT IN
ADDITION TO, THE $675,000 LIMIT SET FORTH IN SECTION 6.6(A);

 

(E)           EXCEEDING LIMITS.  TO THE EXTENT LEGAL, DUE DILIGENCE AND OTHER
EXPENSES ASSOCIATED WITH THE ESTABLISHMENT OF THE PARTNERSHIP AND OF THE
QUALIFICATION, AS NECESSARY, OF THE REIT ENTITIES AS DOMESTICALLY CONTROLLED
REITS, EXCEED EITHER PARTNER’S LIMITS AS NOTED ABOVE, SUCH EXPENSES SHALL BE FOR
THE ACCOUNT OF THE PARTY EXCEEDING THE LIMIT; AND

 

(F)            REAL PROPERTY AND OTHER TRANSFER TAXES.  ALL REAL PROPERTY AND
OTHER TRANSFER TAXES AND COSTS CONNECTED WITH THE INLAND INITIAL CAPITAL
CONTRIBUTION SHALL BE PARTNERSHIP EXPENSES, BUT SHALL NOT BE SUBJECT TO THE
$675,000 OVERALL LIMIT SET FORTH IN

 

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SECTION 6.6(A), OR TO INDIVIDUAL LIMITED PARTNER LIMITS SET FORTH IN
SECTIONS 6.6(B), (C) AND (D), ABOVE.

 

6.7           NO OTHER COMMITMENTS.  EXCEPT AS SET FORTH HEREIN OR AS REQUIRED
BY THE ACT, NO PARTNER SHALL BE ASSESSED FOR, OR SHALL HAVE THE RIGHT TO MAKE,
ADDITIONAL CAPITAL CONTRIBUTIONS TO THE PARTNERSHIP.

 

ARTICLE 7

 

ADDITIONAL PROPERTIES TO BE ACQUIRED; OPERATION OF THE PARTNERSHIP

 

7.1           ADDITIONAL PROPERTIES TO BE ACQUIRED.

 

(A)           ACQUISITION OF ADDITIONAL PROPERTIES.  DURING THE INVESTMENT
PERIOD, THE PARTNERSHIP SHALL SEEK TO ACQUIRE ADDITIONAL PROPERTIES FROM
NON-AFFILIATE THIRD PARTIES.  THE PARTNERSHIP MAY CONSIDER FOR ACQUISITION
PROPERTIES THAT MEET THE INVESTMENT GUIDELINES IN THE INVESTMENT AREA (EACH, A
“QUALIFIED PROPERTY”) AND PROPERTIES THAT ARE NOT QUALIFIED PROPERTIES (EACH, A
“NON-QUALIFIED PROPERTY”).  TITLE TO ANY ADDITIONAL PROPERTY ACQUIRED BY THE
PARTNERSHIP (EACH, IF ACQUIRED BY THE PARTNERSHIP, AN “ADDITIONAL PROPERTY”)
SHALL BE HELD AS DESCRIBED IN SECTION 7.1(F).  PROVIDED THAT THE EXCLUSIVE
ACQUISITION RIGHT DESCRIBED IN SECTION 7.1(B) HAS NOT TERMINATED AS PROVIDED
THEREIN, INLAND WILL USE COMMERCIALLY REASONABLE EFFORTS TO IDENTIFY QUALIFIED
PROPERTIES, AND MAY, IN ITS SOLE DISCRETION, PROPOSE THE ACQUISITION OF A
NON-QUALIFIED PROPERTY.

 

(B)           EXCLUSIVE ACQUISITION RIGHT.  THE PARTNERSHIP, AND NOT THE
PARTNERS ACTING ON THEIR OWN BEHALF, SHALL HAVE THE EXCLUSIVE RIGHT (THE
“EXCLUSIVE ACQUISITION RIGHT”) TO ACQUIRE ANY QUALIFIED PROPERTY IDENTIFIED BY
INLAND OR THE GENERAL PARTNER; PROVIDED HOWEVER THAT SUCH EXCLUSIVE ACQUISITION
RIGHT SHALL TERMINATE AND THEREAFTER INLAND SHALL NOT BE REQUIRED TO PRESENT ANY
PROPERTY (EITHER QUALIFIED OR NON-QUALIFIED) FOR POTENTIAL ACQUISITION BY THE
PARTNERSHIP IF ON THREE (3) OCCASIONS DURING ANY TWELVE (12) CONSECUTIVE MONTH
PERIOD ANY OF THE FOLLOWING OCCURS (EACH A “QUALIFIED PROPERTY REJECTION”):

 

(I)            PGGM PRE FUND CHOOSES NOT TO CONSENT TO THE ACQUISITION OF A
QUALIFIED PROPERTY DURING THE INITIAL APPROVAL PERIOD FOLLOWING THE DELIVERY OF
AN INITIAL NOTICE (AS DEFINED IN SECTION 7.1(C)(II), BELOW);

 

(II)           EXCEPT AS PROVIDED IN SECTION 7.1(C)(IV) OR 7.1(E), PGGM PRE FUND
WITHDRAWS ITS CONSENT TO THE ACQUISITION OF A PROPERTY AFTER HAVING GIVEN ITS
INITIAL APPROVAL FOLLOWING THE DELIVERY OF AN INITIAL NOTICE; OR

 

(III)          PGGM PRE FUND’S REFUSAL TO CONSENT TO THE ACQUISITION OF A
PROPERTY AFTER (A) THE SUBMISSION OF A DISAGREEMENT RELATING TO SUCH PROPERTY
UNDER CLAUSE (B) OR (C) OF THE DEFINITION OF “DISAGREEMENT” TO AN ARBITRATOR,
AND (B) THE ARBITRATOR’S DETERMINATION THAT THE PROPERTY MEETS, OR CONTINUES TO
MEET THE

 

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INVESTMENT GUIDELINES, OR THAT A MATERIAL ADVERSE EFFECT OR MATERIAL CHANGE DOES
NOT EXIST, AS THE CASE MAY BE.

 

UPON THE TERMINATION OF THE EXCLUSIVE ACQUISITION RIGHT, INLAND AND THE GENERAL
PARTNER SHALL NO LONGER BE REQUIRED TO PROPOSE QUALIFIED PROPERTIES TO THE
PARTNERSHIP FOR ACQUISITION.

 

(C)           APPROVAL PROCESS.

 

(I)            INITIAL IDENTIFICATION.  UPON INLAND’S OR THE GENERAL PARTNER’S
IDENTIFICATION OF A PROPERTY FOR POTENTIAL ACQUISITION BY THE PARTNERSHIP, THE
GENERAL PARTNER SHALL PROVIDE THE LIMITED PARTNERS WITH A NARRATIVE SUMMARY OF
THE PROPERTY, A DESCRIPTION OF WHETHER IT FITS THE PARTNERSHIP’S INVESTMENT
GUIDELINES AND A BROKERAGE PACKAGE WHICH SHALL INCLUDE GENERAL INFORMATION
IDENTIFYING THE PROPERTY INCLUDING LOCATION AND SQUARE FOOTAGE AND ANY SUCH
ADDITIONAL INFORMATION AS IS MADE AVAILABLE TO THE PUBLIC BY THE LISTING BROKER
WITH RESPECT TO SUCH PROPERTY (COLLECTIVELY, THE “BROKERAGE PACKAGE”).  THE
LIMITED PARTNERS SHALL HAVE SEVEN (7) BUSINESS DAYS FROM THE RECEIPT OF THE
BROKERAGE PACKAGE TO APPROVE THE PARTNERSHIP’S FURTHER INVESTIGATION INTO THE
ACQUISITION OF THE SUBJECT PROPERTY.  IF PGGM PRE FUND REJECTS THE PROPOSED
ACQUISITION OF THE PROPERTY, INLAND OR ITS AFFILIATES MAY ACQUIRE SUCH PROPERTY
WITH NO FURTHER OBLIGATION TO THE PARTNERSHIP OR THE OTHER LIMITED PARTNER. 
INLAND AND THE GENERAL PARTNER, AS APPLICABLE, SHALL BE RESPONSIBLE FOR ITS OWN
EXPENSES INCURRED IN IDENTIFYING PROPERTIES TO PROPOSE TO THE PARTNERSHIP FOR
ACQUISITION AND THE SUBMISSION OF THE BROKERAGE PACKAGE.

 

(II)           INITIAL NOTICE. IF THE LIMITED PARTNERS CONSENT TO INLAND’S OR
THE GENERAL PARTNER’S FURTHER INVESTIGATION INTO THE ACQUISITION OF A PROPERTY
PURSUANT TO SECTION 7.1(C)(I), THE GENERAL PARTNER OR INLAND SHALL OBTAIN SUCH
FURTHER INFORMATION AS THE GENERAL PARTNER REASONABLY DEEMS MATERIAL WITH
RESPECT TO THE CONSIDERATION OF SUCH PROPERTY FOR ACQUISITION, AND SHALL DELIVER
TO THE LIMITED PARTNERS A WRITTEN NOTICE CONTAINING SUCH INFORMATION (THE
“INITIAL NOTICE”); PROVIDED HOWEVER THAT AN INITIAL NOTICE SHALL AT A MINIMUM
CONTAIN:  (A) AN ACQUISITION BUDGET RELATING TO THE PROPERTY, INCLUDING
ACQUISITION PRICE AND PROJECTED ACQUISITION COSTS AND EXPENSES (AN “ACQUISITION
BUDGET”), (B) A CASH FLOW ANALYSIS, (C) DEMOGRAPHIC INFORMATION, (D) REAL
PROPERTY INFORMATION AND LOCATION, (E) TENANT PROFILE AND SALES INFORMATION,
(F) ANY KNOWN ENVIRONMENTAL OR TITLE ISSUES RELATED TO THE PROPERTY,
(G) EXPECTED CAPITAL CONTRIBUTIONS WITH RESPECT TO SUCH ACQUISITION AND
(H) EXPECTED CAPITAL STRUCTURE AND FINANCING, ALL IN REASONABLE DETAIL.  WITHIN
SEVEN (7) BUSINESS DAYS FROM THE RECEIPT BY THE LIMITED PARTNER OF THE INITIAL
NOTICE (“INITIAL APPROVAL PERIOD”), EACH LIMITED PARTNER SHALL ADVISE THE
GENERAL PARTNER IN WRITING OF ITS INITIAL APPROVAL OR DISAPPROVAL OF THE
ACQUISITION OF THE SUBJECT PROPERTY BASED UPON THE INITIAL NOTICE; PROVIDED,
HOWEVER, THAT IF A LIMITED PARTNER FAILS TO PROVIDE WRITTEN APPROVAL OR
DISAPPROVAL WITH FIVE (5) BUSINESS DAYS OF ITS RECEIPT OF THE INITIAL

 

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NOTICE, THE GENERAL PARTNER SHALL PROVIDE SUCH LIMITED PARTNER WITH A NOTICE
CONTAINING REMINDER OF THE PENDING INITIAL APPROVAL PERIOD TERMINATION, AND
PROVIDED FURTHER THAT IF A LIMITED PARTNER FAILS TO PROVIDE A WRITTEN
NOTIFICATION WITHIN SUCH INITIAL APPROVAL PERIOD, SUCH LIMITED PARTNER SHALL BE
DEEMED TO HAVE DISAPPROVED OF THE ACQUISITION OF SUCH PROPERTY.  SUBJECT TO THE
PROVISO IN THE LAST SENTENCE OF SECTION 7.1(C)(V), THE PARTNERSHIP SHALL PAY OR
REIMBURSE THE GENERAL PARTNER OR INLAND FOR THEIR THIRD PARTY COSTS INCURRED IN
SUBMITTING THE INITIAL NOTICE TO THE LIMITED PARTNERS.  PGGM PRE FUND’S
DISAPPROVAL OF AN ACQUISITION OF A QUALIFIED PROPERTY AS PERMITTED BY THIS
SECTION 7.1(C) SHALL CONSTITUTE A QUALIFIED PROPERTY REJECTION AND SHALL COUNT
AGAINST THE THREE (3) OCCASION LIMIT SET FORTH IN SECTION 7.1(B).

 

(III)          DUE DILIGENCE.  AFTER THE LIMITED PARTNERS APPROVE THE
ACQUISITION OF A PROPERTY UNDER SECTION 7.1(C)(II) (THE “INITIAL APPROVAL”) THE
GENERAL PARTNER SHALL ENGAGE CONSULTANTS AND PROFESSIONALS AT THE EXPENSE OF THE
PARTNERSHIP, AS APPROPRIATE, FROM LISTS OF CONSULTANTS AND PROFESSIONALS
APPROVED BY THE LIMITED PARTNERS, TO PERFORM LEGAL, BUSINESS AND PHYSICAL DUE
DILIGENCE ON BEHALF OF THE PARTNERSHIP, AND SAID CONSULTANTS AND PROFESSIONALS
SHALL PERMIT THE PARTNERS TO RELY ON THEIR REPORTS.  IN ADDITION, THE
PARTNERSHIP AND THE GENERAL PARTNER SHALL BE AUTHORIZED TO TAKE SUCH ACTIONS AND
INCUR SUCH REASONABLE EXPENSES AS THE GENERAL PARTNER DETERMINES TO BE NECESSARY
TO CONTROL THE PROPERTY AND ANALYZE THE INVESTMENT OPPORTUNITY, SECURE
GOVERNMENTAL APPROVALS AND FINANCING COMMITMENTS WITH RESPECT TO THE SUBJECT
PROPERTY AND, SUBJECT TO THE PROVISO IN THE LAST SENTENCE OF SECTION 7.1(C)(V),
THE PARTNERSHIP SHALL PAY OR REIMBURSE THE GENERAL PARTNER OR INLAND FOR THEIR
THIRD PARTY COSTS IN TAKING SUCH ACTIONS.

 

(IV)          FINAL REVIEW.  UPON SUBSTANTIAL COMPLETION OF DUE DILIGENCE AS
DEEMED NECESSARY OR ADVISABLE BY THE GENERAL PARTNER, THE GENERAL PARTNER SHALL
DELIVER TO THE LIMITED PARTNERS FINAL REVIEW MATERIALS SETTING FORTH THE RESULTS
OF SUCH DUE DILIGENCE INVESTIGATION REGARDING THE PROPERTY THAT THE GENERAL
PARTNER DEEMS REASONABLY MATERIAL WITH RESPECT TO THE CONSIDERATION OF SUCH
PROPERTY FOR ACQUISITION (THE “BOARD PACKAGE”).  INLAND MAKES NO REPRESENTATIONS
AS TO THE VERACITY OF THE MATERIALS OR THE CONTENTS THEREOF, WHICH SHALL BE
SUBMITTED TO THE LIMITED PARTNERS FOR INFORMATION PURPOSES ONLY.  A LIMITED
PARTNER MAY, BY WRITTEN NOTICE TO THE GENERAL PARTNER, WITHDRAW ITS INITIAL
APPROVAL WITHIN THREE (3) BUSINESS DAYS FROM RECEIPT OF THE BOARD PACKAGE IF
THERE HAS BEEN A MATERIAL CHANGE (AS HEREIN DEFINED) TO THE TERMS OF THE
ACQUISITION OF THE SUBJECT PROPERTY FROM THE DATE OF THE INITIAL APPROVAL UNTIL
THE DELIVERY OF THE BOARD PACKAGE OR THERE EXISTS ANY OTHER FACT, CIRCUMSTANCE
OR CONDITION THAT SUCH LIMITED PARTNER REASONABLY EXPECTS TO HAVE A MATERIAL
ADVERSE EFFECT ON THE SUBJECT PROPERTY INCLUDING, WITHOUT LIMITATION, WITH
RESPECT TO ENVIRONMENTAL OR TITLE MATTERS.  WITHDRAWAL OF PGGM’S INITIAL
APPROVAL OF A QUALIFIED PROPERTY AS PERMITTED BY THE PRECEDING SENTENCE SHALL
NOT CONSTITUTE A QUALIFIED PROPERTY

 

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REJECTION AND SHALL NOT COUNT AGAINST THE THREE (3) OCCASION LIMIT SET FORTH IN
SECTION 7.1(B).  FOR PURPOSES HEREOF, A “MATERIAL CHANGE” SHALL MEAN ANY ONE OR
MORE OF THE FOLLOWING: (I) AN INCREASE TO THE FINANCING NECESSARY FOR THE
ACQUISITION OF THE PROPERTY IN EXCESS OF TEN PERCENT (10%) ABOVE THE FINANCING
DESCRIBED IN THE INITIAL NOTICE; OR (II) AN EVENT OR CIRCUMSTANCE WHICH HAS OR
CAN REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON THE RETURN ON
INVESTMENT WITH RESPECT TO SUCH PROPERTY, INCLUDING WITHOUT LIMITATION, ADVERSE
REVISIONS TO THE ACQUISITION BUDGET OR ADVERSE CHANGES IN THE RENT ROLLS.  IF
THE LIMITED PARTNERS DO NOT AGREE AS TO WHETHER THERE HAS BEEN A MATERIAL CHANGE
OR MATERIAL ADVERSE EFFECT, THEY MAY ARBITRATE SUCH DISAGREEMENT PURSUANT TO THE
TERMS OF SECTION 10.9.

 

(V)           CONSENT OF THE LIMITED PARTNERS.  IN THE EVENT THAT THE LIMITED
PARTNERS FAIL TO ISSUE THE INITIAL APPROVAL OR FINAL APPROVAL WITH RESPECT TO
ANY PROPERTY WITHIN THE TIME PERIOD SET FORTH IN THIS AGREEMENT, OR IF EITHER
INLAND OR PGGM PRE FUND TERMINATES THE PARTNERSHIP’S EFFORTS TO ACQUIRE A
PROPERTY BY DELIVERING WRITTEN NOTICE PURSUANT TO THE PROVISIONS OF
SECTION 7.1(C)(IV) ABOVE OR SECTION 7.1(E) BELOW, THE PROPERTY SHALL BE DEEMED
REJECTED BY THE PARTNERSHIP AND THE PARTNERSHIP SHALL NOT ACQUIRE THE PROPERTY,
AND INLAND OR ANY AFFILIATE OF INLAND SHALL BE FREE TO ACQUIRE THE PROPERTY FOR
ITS OWN ACCOUNT IN ACCORDANCE WITH THE MATERIAL TERMS AND CONDITIONS DESCRIBED
IN THE INITIAL NOTICE OR BOARD PACKAGE AS THE CASE MAY BE.  AT SUCH TIME AS THE
INITIAL APPROVAL, WITH RESPECT TO A QUALIFIED PROPERTY IS NOT GIVEN OR IS
WITHDRAWN, THE GENERAL PARTNER SHALL BE REIMBURSED ALL REASONABLE COSTS AND
EXPENSES INCURRED IN EVALUATING AND CONTROLLING SUCH PROPERTY, INCLUDING, BUT
NOT LIMITED TO, ALL OF THE ORDINARY AND CUSTOMARY OUT-OF-POCKET THIRD-PARTY
COSTS ASSOCIATED WITH THE REVIEW AND ACQUISITION OF SUCH PROPERTY AND PAID TO
ENTITIES THAT ARE NOT AFFILIATED WITH EITHER LIMITED PARTNER OR THE GENERAL
PARTNER, INCLUDING, BUT NOT LIMITED TO, SUCH COSTS AS DUE DILIGENCE, ENGINEERING
AND ENVIRONMENTAL INSPECTIONS AND REPORTS, OUTSIDE LEGAL COUNSEL RETAINED BY THE
PARTNERSHIP, NON-REFUNDABLE EARNEST MONEY DEPOSITS, AND LEGAL FEES (AT OR BELOW
MARKET RATES) PAID TO ANY OTHER COUNSEL RETAINED BY THE PARTNERSHIP; PROVIDED
THAT IF INLAND OR AND INLAND AFFILIATE PURCHASES SUCH PROPERTY, INLAND SHALL PAY
OR REIMBURSE THE PARTNERSHIP OR THE GENERAL PARTNER FOR ALL SUCH COSTS AND
EXPENSES.

 

(D)           OBLIGATION UPON FINAL APPROVAL.  UPON THE LAPSE OF THE
THREE (3) BUSINESS DAYS AFTER RECEIPT OF THE BOARD PACKAGE WITHOUT A LIMITED
PARTNER HAVING WITHDRAWN ITS INITIAL APPROVAL, THE LIMITED PARTNERS SHALL BE
DEEMED TO HAVE APPROVED THE PROPERTY (THE “FINAL APPROVAL”) AND THE LIMITED
PARTNERS SHALL BE OBLIGATED TO CONTRIBUTE THEIR SHARE OF THE CAPITAL
CONTRIBUTIONS NEEDED TO CONSUMMATE SUCH ACQUISITION, TO THE EXTENT AND IN THE
RELATIVE PERCENTAGES SET FORTH IN SECTIONS 6.1, 6.2, AND 6.3 ABOVE, AND THE
GENERAL PARTNER SHALL SPECIFY IN THE APPLICABLE CAPITAL CALL THE CONDITIONS AND
THE TIME WHEN SUCH AMOUNTS ARE DUE AND PAYABLE UNDER ANY LETTER OF INTENT OR
AGREEMENT OF PURCHASE AND SALE, INCLUDING, WITHOUT LIMITATION, THE FUNDING OF
ANY

 

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EARNEST MONEY DEPOSITS AND EARN-OUTS, WHICH EARN-OUTS MAY BE REQUIRED TO BE
FUNDED TO AN ESCROW AT CLOSING OF AN ACQUISITION OR AT A POINT IN TIME AFTER
SUCH CLOSING.

 

(E)           INVESTMENT GUIDELINES.  NOTWITHSTANDING ANYTHING TO THE CONTRARY
SET FORTH HEREIN, OTHER THAN WITH RESPECT TO A NON-QUALIFYING PROPERTY THAT IS
THE SUBJECT OF AN INITIAL APPROVAL, IF AT ANY TIME PRIOR TO THE EXPIRATION OF
ANY DUE DILIGENCE PERIOD UNDER ANY LETTER OF INTENT OR AGREEMENT FOR PURCHASE
AND SALE WITH ANY THIRD PARTY, INLAND DETERMINES IN GOOD FAITH AND IN ITS
REASONABLE DISCRETION THAT THE SUBJECT PROPERTY NO LONGER SATISFIES THE
INVESTMENT GUIDELINES, OTHER THAN WITH RESPECT TO A NON-QUALIFYING PROPERTY THAT
IS THE SUBJECT OF AN INITIAL APPROVAL THEN INLAND SHALL HAVE THE UNILATERAL
RIGHT TO TERMINATE THE LETTER OF INTENT OR AGREEMENT OF PURCHASE AND SALE AND
THE PARTNERSHIP SHALL NOT ACQUIRE THE PROPERTY, NOTWITHSTANDING ANY PRIOR
APPROVALS OR CONSENTS TO SUCH ACQUISITION WHICH HAVE BEEN PROVIDED BY THE
LIMITED PARTNERS, AND IF INLAND SO ELECTS TO TERMINATE, SHALL PROVIDE THE
GENERAL PARTNER WITH WRITTEN NOTICE OF SAME.  IN SUCH EVENT, THE GENERAL PARTNER
SHALL EITHER TERMINATE THE LETTER OF INTENT OR AGREEMENT FOR PURCHASE AND SALE,
IF ANY, OR IN THE ALTERNATIVE, WITH PGGM PRE FUND’S CONSENT, ASSIGN SUCH LETTER
OF INTENT OR AGREEMENT FOR PURCHASE AND SALE TO INLAND OR AN AFFILIATE OF
INLAND, AND INLAND OR THE AFFILIATE OF INLAND SHALL BE FREE TO ACQUIRE THE
SUBJECT REAL PROPERTY FOR ITS OWN ACCOUNT, IN WHICH EVENT INLAND SHALL PAY OR
REIMBURSE THE PARTNERSHIP FOR ALL COSTS AND EXPENSES AS PROVIDED IN
SECTION 7.1(C)(V).  FURTHER, IF AT ANY TIME PRIOR TO THE EXPIRATION OF ANY DUE
DILIGENCE PERIOD UNDER ANY LETTER OF INTENT OR AGREEMENT FOR PURCHASE AND SALE
WITH ANY THIRD PARTY, PGGM PRE FUND DETERMINES IN GOOD FAITH AND ITS REASONABLE
DISCRETION THAT THE SUBJECT PROPERTY NO LONGER SATISFIES THE INVESTMENT
GUIDELINES, OTHER THAN WITH RESPECT TO A NON-QUALIFYING PROPERTY THAT IS THE
SUBJECT OF AN INITIAL APPROVAL, THEN PGGM PRE FUND SHALL HAVE THE UNILATERAL
RIGHT TO REQUIRE THE PARTNERSHIP NOT TO ACQUIRE THE SUBJECT REAL PROPERTY,
NOTWITHSTANDING ANY PRIOR APPROVALS OR CONSENTS TO SUCH ACQUISITION WHICH HAS
BEEN PROVIDED BY THE LIMITED PARTNERS, AND IF PGGM PRE FUND SO ELECTS TO
TERMINATE, IT SHALL PROVIDE THE GENERAL PARTNER WITH WRITTEN NOTICE OF SAME.  IN
SUCH EVENT, THE GENERAL PARTNER SHALL EITHER TERMINATE THE LETTER OF INTENT OR
AGREEMENT FOR PURCHASE AND SALE, OR IN THE ALTERNATIVE, ASSIGN SUCH LETTER OF
INTENT OR AGREEMENT FOR PURCHASE AND SALE TO INLAND OR AN AFFILIATE OF INLAND,
AND THE AFFILIATE OF INLAND SHALL BE FREE TO ACQUIRE THE PROPERTY FOR ITS OWN
ACCOUNT, IN WHICH EVENT INLAND SHALL PAY OR REIMBURSE THE PARTNERSHIP FOR ALL
COSTS AND EXPENSES AS PROVIDED IN SECTION 7.1(C)(V).  IN THE EVENT EITHER
LIMITED PARTNER TERMINATES THE PARTNERSHIP’S RIGHT TO ACQUIRE A PROPERTY AS
PROVIDED IN THIS SECTION 7.1(E), SUBJECT TO SECTION 7.1(C)(V), ALL THIRD PARTY
COSTS INCURRED BY INLAND OR THE GENERAL PARTNER UP TO THE DATE OF SUCH
TERMINATION SHALL BE REIMBURSED BY THE PARTNERSHIP WITHIN TEN (10) DAYS AFTER
SUCH TERMINATION OR TEN (10) DAYS AFTER RECEIPT OF AN INVOICE THEREFORE,
WHICHEVER IS LATER.  INLAND’S OR PGGM PRE FUND’S TERMINATION OF THE ACQUISITION
OF A PROPERTY THAT BOTH LIMITED PARTNERS AGREE IN THEIR REASONABLE JUDGMENT, IN
WRITING, NO LONGER MEETS THE INVESTMENT GUIDELINES SHALL NOT COUNT AGAINST THE
THREE (3) PROPERTY TURN-DOWN LIMIT FOR TERMINATION OF THE PARTNERSHIP’S
EXCLUSIVE ACQUISITION RIGHT DESCRIBED IN SECTION 7.1(B).  IF THE LIMITED
PARTNERS ARE UNABLE TO AGREE AS TO WHETHER A PROPERTY (OTHER THAN TO A
NON-QUALIFYING PROPERTY THAT IS THE SUBJECT OF AN INITIAL APPROVAL) NO LONGER
MEETS THE

 

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INVESTMENT GUIDELINES, THEY MAY ARBITRATE SUCH DISAGREEMENT PURSUANT TO THE
TERMS OF SECTION 10.9.

 

(F)            TITLE TO PROPERTIES.  TITLE TO EACH OF THE ADDITIONAL PROPERTIES
ACQUIRED BY THE PARTNERSHIP SHALL BE HELD IN A SEPARATE PROPERTY ENTITY THAT IS
DISREGARDED AS SEPARATE FROM ITS OWNER FOR FEDERAL INCOME TAX PURPOSES, AND ONE
HUNDRED PERCENT (100%) OF THE EQUITY OWNERSHIP INTERESTS OF ALL PROPERTY
ENTITIES OWNING ADDITIONAL PROPERTIES WILL BE HELD BY THE ADDITIONAL PROPERTIES
REIT ENTITY.  THE PARTNERSHIP SHALL BE THE OWNER OF ALL OF THE OUTSTANDING
EQUITY INTERESTS IN THE ADDITIONAL PROPERTIES REIT ENTITY OTHER THAN THE REIT
COMPLIANCE INTERESTS IN THE ADDITIONAL PROPERTIES REIT ENTITY.  EXCEPT TO THE
EXTENT THAT THE HOLDER OF ANY FINANCINGS (AS DEFINED HEREIN) MAY REQUIRE THAT
SAID PROPERTY ENTITY OR ADDITIONAL PROPERTIES REIT ENTITY ALSO HAVE AN
INDEPENDENT MANAGER FOR THE PURPOSE OF PROVIDING THE LENDER WITH BANKRUPTCY
PROTECTION, INLAND OR AN INLAND AFFILIATE WILL BE THE MANAGER OF EACH PROPERTY
ENTITY AND THE ADDITIONAL PROPERTIES REIT ENTITY.  ALL CASH FLOW DISTRIBUTIONS
FROM THE ADDITIONAL PROPERTIES REIT ENTITY TO THE PARTNERSHIP SHALL BE
CHARACTERIZED AS NET ORDINARY CASH FLOW OR NET EXTRAORDINARY CASH FLOW OF THE
PARTNERSHIP IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT AND SHALL RETAIN SUCH
CHARACTERIZATION FOR ALL PURPOSES HEREUNDER, INCLUDING, BUT NOT LIMITED TO,
DISTRIBUTIONS TO PARTNERS.

 

(G)           NO WARRANTY OR GUARANTY.  NEITHER INLAND OR THE GENERAL PARTNER
MAKE, OR SHALL BE DEEMED TO MAKE, ANY REPRESENTATION, WARRANTY, COVENANT OR
GUARANTY HEREUNDER REGARDING THE PROPERTIES, INCLUDING, WITHOUT LIMITATION, THAT
(I) ANY OR ALL OF THE PROPERTIES PRESENTED FOR APPROVAL HEREUNDER SATISFIES THE
INVESTMENT GUIDELINES; OR (II) THAT ANY OR ALL OF THE PROPERTIES WHICH MAY
HEREAFTER BE ACQUIRED BY THE PARTNERSHIP WILL CONTINUE TO SATISFY THE INVESTMENT
GUIDELINES OR WILL GENERATE, INDIVIDUALLY, OR IN THE AGGREGATE, ANY LEVEL OF
RETURN. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, THIS SECTION SHALL NOT
BE DEEMED TO EXCULPATE INLAND OR THE GENERAL PARTNER WITH RESPECT TO ANY OTHER
BREACH OF THIS AGREEMENT OR ANY OTHER AGREEMENT.

 

(H)           INLAND ACQUISITION FEE.  INLAND SHALL BE PAID AN ACQUISITION FEE
(THE “ACQUISITION FEE”) EQUAL TO TWENTY-FIVE (25) BASIS POINTS MULTIPLIED BY THE
EQUITY PORTION OF THE PURCHASE PRICE OF THE ADDITIONAL PROPERTY, TO BE PAID AT
CLOSING OF THE PURCHASE OF EACH ADDITIONAL PROPERTY.

 

(I)            END OF THE INVESTMENT PERIOD.  AT THE END OF THE INVESTMENT
PERIOD, THE PARTNERSHIP SHALL CEASE TO ACQUIRE ADDITIONAL PROPERTIES, PROVIDED
THAT IT SHALL COMPLETE ANY TRANSACTIONS TO ACQUIRE ADDITIONAL PROPERTIES FOR
WHICH IT HAS BECOME CONTRACTUALLY BOUND DURING THE INVESTMENT PERIOD.

 

(J)            DEFINITIVE PURCHASE AGREEMENT.  EACH ADDITIONAL PROPERTY SHALL BE
CONVEYED TO THE PROPERTY ENTITY DESCRIBED IN SECTION 7.1(F) PURSUANT TO A
DEFINITIVE PURCHASE AGREEMENT CONTAINING STANDARD AND CUSTOMARY TERMS AND
PROVISIONS, REPRESENTATIONS, WARRANTIES, INDEMNITIES, AND CLOSING CONDITIONS;
PROVIDED HOWEVER, THAT IF SUCH ADDITIONAL PROPERTY IS TO BE ACQUIRED PURSUANT TO
AN AUCTION, FORECLOSURE OR OTHER

 

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NON-NEGOTIATED SALE TRANSACTION, THEN THE CONSUMMATION OF THE CONVEYANCE THEREOF
SHALL TAKE PLACE PURSUANT TO THE TERMS AND CONDITIONS OF SUCH AUCTION,
FORECLOSURE OR OTHER NON-NEGOTIATED SALE TRANSACTION.

 

7.2           PARTNERSHIP LIMITS ON DEBT FINANCING.  EXCEPT AS PROVIDED IN
SECTION 7.5, OTHER THAN REFINANCING OF DEBT BALANCES, THE PARTNERSHIP SHALL NOT
OBTAIN ANY FINANCING AND THE PROPERTY ENTITIES AND THE REIT ENTITIES MAY NOT
OBTAIN ANY FINANCING UNLESS AGREED TO IN ADVANCE BY THE LIMITED PARTNERS ON
TERMS ACCEPTABLE TO THEM IN THEIR SOLE DISCRETION.  EXCEPT AS PROVIDED IN
SECTION 7.4, THE PARTNERSHIP SHALL NOT GUARANTY ANY INDEBTEDNESS.

 

7.3           PROPERTY ENTITY DEBT FINANCING.  IT IS ANTICIPATED THE FINANCING
FOR THE ACQUISITION OF AN OWNED PROPERTY WILL BE INCURRED BY THE PROPERTY ENTITY
ACQUIRING OR OWNING THE OWNED PROPERTY.  IN ORDER TO ACCOMMODATE THE INTENT OF
THIS AGREEMENT, THE PARTNERSHIP, EACH REIT ENTITY AND EACH PROPERTY ENTITY WILL
USE THEIR COMMERCIALLY REASONABLE EFFORTS TO INSURE THAT THE LOANS ON ALL OWNED
PROPERTIES WILL PERMIT THE FOLLOWING:

 

(A)           A PURCHASE OR SALE BY INLAND OF AN OWNED PROPERTY, OR A PURCHASE
OR SALE BY INLAND OR PGGM PRE FUND OF A PARTNERSHIP INTEREST WITHOUT THE DUE ON
SALE LOAN PROVISIONS BEING TRIGGERED AND WITHOUT PAYING A PREPAYMENT PENALTY OR
ASSUMPTION FEE;

 

(B)           THE ASSUMPTION OF THE LOAN BY THE LIMITED PARTNER PURCHASING AN
OWNED PROPERTY OR THE OTHER LIMITED PARTNER’S PARTNERSHIP INTEREST; AND

 

(C)           THE RELEASE OF THE APPLICABLE PROPERTY ENTITY AND REIT ENTITY FROM
THEIR OBLIGATIONS ON THE LOAN IN EITHER OF THE EVENTS IN (A) OR (B) ABOVE.

 

7.4           REQUIRED GUARANTIES.

 

(A)           PARTNERSHIP.  IN THE EVENT A LENDER REQUIRES A GUARANTY FOR A LOAN
ON AN OWNED PROPERTY, THE PARTNERSHIP AGREES THAT IT WILL BE OBLIGATED TO
EXECUTE A NON-RECOURSE CARVE OUT GUARANTY ONLY.

 

(B)           PARTNERS.  NO PARTNER SHALL BE OBLIGATED TO PROVIDE A GUARANTY TO
ANY LENDER OR OTHER PARTY OR OTHERWISE TO USE OR PLEDGE ITS CREDIT IN CONNECTION
WITH ANY FINANCING ON BEHALF OF OR IN CONNECTION WITH THE PARTNERSHIP, ANY REIT
ENTITY, ANY PROPERTY ENTITY OR ANY OWNED PROPERTY.  NONETHELESS, IN THE EVENT A
PARTNER PROVIDES A NON-RECOURSE CARVE OUT GUARANTY FOR A FINANCING WITH RESPECT
TO THE PARTNERSHIP, A REIT ENTITY, PROPERTY ENTITY OR AN OWNED PROPERTY THE
PARTNERSHIP SHALL, TO THE FULLEST EXTENT PERMITTED BY LAW INDEMNIFY AND HOLD THE
PARTNER EXECUTING SUCH GUARANTY, AND ITS DIRECTORS, OFFICERS, SHAREHOLDERS,
PARTNERS, MEMBERS, MANAGERS, GENERAL PARTNERS, EMPLOYEES AND AGENTS, OR ANY OF
THEM, HARMLESS FROM ANY AND ALL CLAIMS, DEMANDS, ACTIONS, LOSSES, LIABILITIES,
COSTS OR EXPENSES (INCLUDING REASONABLE ATTORNEYS FEES) ARISING OUT OF OR IN
CONNECTION WITH ALL OBLIGATIONS OR LIABILITIES OF THE GUARANTY; AND PROVIDED
FURTHER, IN THE EVENT SUCH CLAIM, DEMAND, ACTION, LOSS, LIABILITY, COST OR
EXPENSE (INCLUDING REASONABLE ATTORNEYS’ FEES) ARISES DUE TO THE FRAUD, BAD
FAITH, WILLFUL MISCONDUCT OR BREACH

 

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OF AN OBLIGATION SUCH PARTNER, SUCH PARTNER SHALL INDEMNIFY AND HOLD THE OTHER
PARTNERS, THE PARTNERSHIP, THE PROPERTY ENTITIES AND THE REIT ENTITIES, AS
APPLICABLE, AND THEIR DIRECTORS, OFFICERS, SHAREHOLDERS, PARTNERS, MEMBERS,
MANAGERS, GENERAL PARTNERS, EMPLOYEES OR AGENTS, OR ANY OF THEM, HARMLESS FROM
ANY AND ALL CLAIMS, DEMANDS, ACTIONS, LOSSES, LIABILITIES, COSTS OR EXPENSES
(INCLUDING REASONABLE ATTORNEYS’ FEES) ARISING OUT OF OR IN CONNECTION WITH SUCH
FRAUD, BAD FAITH, WILLFUL MISCONDUCT OR BREACH OF AN OBLIGATION BY SUCH PARTNER.

 

7.5           LIMITATIONS ON FINANCING.  THE PARTNERSHIP WILL TARGET AN OVERALL
LOAN-TO-TOTAL-VALUE RATIO OF 30% WITH A MAXIMUM OF 40% DURING THE FIRST YEAR OF
THE TERM, AND AN OVERALL LOAN-TO-VALUE OF 40% WITH A MAXIMUM OF 50% FOR THE
REMAINING TERM OF THE PARTNERSHIP.  ONLY LONG TERM, FIXED RATE, NON-RECOURSE
FIRST MORTGAGE DEBT AT THE OWNED PROPERTY OR PROPERTY ENTITY LEVEL WITH A YIELD
SPREAD OF AT LEAST 150 BASIS POINTS BELOW THE OWNED PROPERTY YIELD AT THE TIME
THE MORTGAGE INDEBTEDNESS IS OCCURRED SHALL BE UTILIZED, UNLESS OTHERWISE AGREED
BY THE LIMITED PARTNERS.  THE FOREGOING MAXIMUM LOAN-TO-VALUE RATIOS SHALL BE
DETERMINED WITH RESPECT TO THE PORTFOLIO OF OWNED PROPERTIES, IN THE AGGREGATE,
AND ANY ONE OWNED PROPERTY OR GROUP OF OWNED PROPERTIES LESS THAN THE ENTIRE
PORTFOLIO MAY EXCEED THE MAXIMUM LOAN-TO-VALUE RATIOS SET FORTH ABOVE.  DURING
THE INVESTMENT PERIOD, THE PARTNERSHIP WILL ACQUIRE ADDITIONAL PROPERTIES FREE
AND CLEAR OF ANY DEBT, EXCEPT WHEN THE UNLEVERED INITIAL YIELD WOULD BE LESS
THAN 8%, OR WHEN THE PARTNERS UNANIMOUSLY DETERMINE PURSUANT TO EXHIBIT 10-A
(MAJOR DECISIONS) THAT RETAINING DEBT IN PLACE OR PROCURING NEW FINANCING WITH
RESPECT TO AN ADDITIONAL PROPERTY AT THE TIME OF OR SUBSEQUENT TO THE PURCHASE
IS ADVANTAGEOUS TO THE PARTNERSHIP.  INLAND OR AN AFFILIATE OF INLAND, WILL BE
ENTITLED TO RECEIVE A FEE (THE “FINANCING FEE”) FOR ANY NEW MORTGAGE LOANS THAT
SUCH PARTY ARRANGES FOR AN OWNED PROPERTY EQUAL TO TWENTY-FIVE (25) BASIS POINTS
MULTIPLIED BY THE AMOUNT OF THE FINANCING.  IN THE ALTERNATIVE, IF AN
UNAFFILIATED THIRD PARTY BANK IS UTILIZED TO ARRANGE FINANCING, SUCH PARTY WILL
BE COMPENSATED AT A STANDARD MARKET RATE, OR AT A RATE OTHERWISE AGREED TO BY
THE LIMITED PARTNERS, AND SUCH COMPENSATION WILL BE AN EXPENSE OF THE
PARTNERSHIP.  THE PAYMENT OF THE FINANCING FEE SHALL BE AS FURTHER SET FORTH IN
EXHIBIT 10-D.

 

7.6           DETERMINATION OF HOLDING PERIOD.  THE LIMITED PARTNERS SHALL AGREE
TO A HOLDING PERIOD TO BE ASSIGNED WITH RESPECT TO EACH OF THE INLAND PROPERTIES
AND THE ADDITIONAL PROPERTIES (EACH, A “HOLDING PERIOD”) WHICH HOLDING PERIOD
SHALL BE ASSIGNED AS OF THE DATE OF CONTRIBUTION (WITH RESPECT TO AN INLAND
PROPERTIES) OR ACQUISITION (WITH RESPECT TO AN ADDITIONAL PROPERTY), SHALL BE
FOR A PERIOD OF TIME DETERMINED BY THE LIMITED PARTNERS, NOT TO EXCEED THE
BALANCE OF THE MAXIMUM TERM, AND, IF NOT AGREED TO ON OR PRIOR TO THE DATE OF
CONTRIBUTION OR ACQUISITION, AS THE CASE MAY BE, SHALL BE FOR A PERIOD OF TIME
EQUAL TO THE BALANCE OF THE MAXIMUM TERM, AS SAME MAY BE EXTENDED FROM TIME TO
TIME PURSUANT TO SECTION 5.5(D).

 

ARTICLE 8

 

ACCOUNTING; DISTRIBUTIONS; TAX MATTERS

 

8.1           BOOKS OF ACCOUNT.  AT ALL TIMES DURING THE CONTINUANCE OF THE
PARTNERSHIP, THE GENERAL PARTNER SHALL CAUSE PROPER AND TRUE BOOKS OF ACCOUNT TO
BE MAINTAINED IN CONFORMITY WITH GAAP WHEREIN THERE SHALL BE ENTERED PARTICULARS
OF ALL MONIES, GOODS OR EFFECTS BELONGING

 

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TO OR OWING TO OR BY THE PARTNERSHIP, THE REIT ENTITIES, AND THE PROPERTY
ENTITIES, OR PAID, RECEIVED, SOLD OR PURCHASED IN THE COURSE OF THEIR RESPECTIVE
ACTIVITIES, AND ALL OF SUCH OTHER TRANSACTIONS, MATTERS AND THINGS RELATING TO
THEM AS ARE USUALLY ENTERED IN BOOKS OF ACCOUNT KEPT BY PERSONS ENGAGED IN
ACTIVITIES OF A LIKE KIND AND CHARACTER.  ALL REPORTS PREPARED PURSUANT TO THIS
ARTICLE 8 SHALL BE PREPARED SEPARATELY FOR EACH REIT ENTITY AND ALSO ON A
CONSOLIDATED BASIS FOR THE PARTNERSHIP.

 

8.2           FINANCIAL STATEMENTS, REPORTS AND TAX RETURNS.

 

(A)           REPORTS AS TO EACH OWNED PROPERTY.  EXHIBIT 8 ATTACHED HERETO SETS
FORTH THE FINANCIAL STATEMENTS AND FINANCIAL INFORMATION WHICH SHALL BE
DELIVERED TO THE LIMITED PARTNERS BY THE GENERAL PARTNER WITH RESPECT TO THE
OWNED PROPERTIES, REIT ENTITIES AND PROPERTY ENTITIES (THE “FINANCIAL
STATEMENTS”) ON A QUARTERLY BASIS.  ON A QUARTERLY BASIS, IN ADDITION TO THE
ACCRUAL BASIS FINANCIAL STATEMENTS TO BE PREPARED FOR EACH OWNED PROPERTY, THE
GENERAL PARTNER SHALL PROVIDE TO THE PARTNERS FINANCIAL STATEMENTS WITH RESPECT
TO ALL OF THE OWNED PROPERTIES WITH NECESSARY SUPPORT, AS REASONABLY REQUESTED,
ALONG WITH A DETAILED LEASING STATUS REPORT AND REPORT OF MAJOR VARIANCES
BETWEEN BUDGET AND ACTUAL.  ALL QUARTERLY FINANCIAL STATEMENTS SHALL BE
DELIVERED TO THE PARTNERS WITHIN FORTY-FIVE (45) DAYS AFTER THE END OF THE
QUARTER.

 

(B)           QUARTERLY PARTNERSHIP REPORTS.  AS SOON AS AVAILABLE, AND IN ANY
EVENT WITHIN FORTY-FIVE (45) DAYS AFTER THE END OF EACH FISCAL QUARTER OF THE
PARTNERSHIP, THE PARTNERSHIP SHALL DELIVER TO EACH PARTNER THE CONSOLIDATED AND
CONSOLIDATING BALANCE SHEETS OF THE PARTNERSHIP, THE REIT ENTITIES AND THE
PROPERTY ENTITIES, AS AT THE END OF SUCH FISCAL QUARTER, AND THE RELATED
CONSOLIDATED AND CONSOLIDATING STATEMENTS OF INCOME, PARTNERS’ EQUITY AND CASH
FLOW FOR SUCH FISCAL QUARTER AND FOR THE PERIOD FROM THE BEGINNING OF THE THEN
CURRENT FISCAL YEAR OF THE PARTNERSHIP TO THE END OF SUCH FISCAL QUARTER AS WELL
AS THE OTHER REPORTS AND INFORMATION DESCRIBED ON EXHIBIT 8 ATTACHED HERETO.

 

(C)           ANNUAL FINANCIAL STATEMENTS.  THE PARTNERSHIP’S BOOKS OF ACCOUNT
SHALL BE CLOSED AS SOON AS PRACTICABLE AFTER THE CLOSE OF EACH FISCAL YEAR AND
WITHIN FORTY-FIVE (45) DAYS FROM THE APPROVAL OF THE PARTNERSHIP’S ANNUAL BOOK
OF ACCOUNTS BY AN INDEPENDENT AUDITOR, AND NOT LATER THAN WITHIN ONE HUNDRED
TWENTY (120) DAYS FROM THE END OF THE FISCAL YEAR TO WHICH THE ANNUAL ACCOUNTS
RELATE, THE PARTNERSHIP SHALL DELIVER TO EACH PARTNER THE CONSOLIDATED AND
CONSOLIDATING BALANCE SHEETS OF THE PARTNERSHIP, THE REIT ENTITIES AND THE
PROPERTY ENTITIES AS AT THE END OF SUCH FISCAL YEAR AND THE RELATED CONSOLIDATED
AND CONSOLIDATING STATEMENTS OF INCOME, PARTNERS’ EQUITY AND CASH FLOW FOR SUCH
FISCAL YEAR.  AN ANNUAL AUDIT SHALL BE PERFORMED AT THE EXPENSE OF THE
PARTNERSHIP IN ACCORDANCE WITH GAAP BY KPMG OR SUCH OTHER INDEPENDENT CERTIFIED
PUBLIC ACCOUNTING FIRM APPROVED BY THE LIMITED PARTNERS (SUCH INITIAL FIRM OF
ACCOUNTANTS, OR ANY REPLACEMENT FIRM SO SELECTED, THE “ACCOUNTANTS”), WHICH
FINAL AUDITED FINANCIAL STATEMENT SHALL BE DELIVERED NO MORE THAN SEVENTY-FIVE
(75) DAYS AFTER THE END OF THE FISCAL YEAR, AS WELL AS THE REPORTS SET FORTH ON
EXHIBIT 8.  SUCH FINANCIAL STATEMENTS SHALL INCLUDE CERTIFICATION BY THE GENERAL
PARTNER THAT ANY AND ALL DISTRIBUTIONS MADE BY

 

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THE PARTNERSHIP WERE MADE IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, AND A
VERIFICATION THEREOF BY THE ACCOUNTANTS.

 

(D)           TAX RETURNS.  THE GENERAL PARTNER SHALL CAUSE TO BE PREPARED AND
DELIVERED TO THE PARTNERS WITHIN ONE HUNDRED FIVE (105) DAYS AFTER THE CLOSE OF
EACH FISCAL YEAR, SUBJECT TO SUCH FILING EXTENSIONS AS REASONABLY REQUESTED BY
THE GENERAL PARTNER, THE INCOME TAX RETURNS FOR THE PARTNERSHIP, THE REIT
ENTITIES AND, IF APPLICABLE, THE PROPERTY ENTITIES, INCLUDING THE SCHEDULES K-1
ISSUED BY THE PARTNERSHIP, WHICH CAN BE USED BY THE PARTNERS FOR TAX REPORTING
PURPOSES.  THE GENERAL PARTNER SHALL BE RESPONSIBLE FOR ENGAGING THE ACCOUNTANTS
TO PREPARE AND FILE ALL FEDERAL, STATE AND LOCAL TAX RETURNS ON BEHALF OF THE
PARTNERSHIP, THE REIT ENTITIES AND THE PROPERTY ENTITIES AND ALL COSTS OF
PREPARING THE AUDITED FINANCIAL STATEMENTS AND OTHER REPORTS TO WHICH THIS
SECTION 8.2 REFERS AND SUCH TAX RETURNS SHALL BE AN EXPENSE OF THE PARTNERSHIP.

 

(E)           APPRAISALS.  THE OWNED PROPERTIES SHALL BE APPRAISED AS DESCRIBED
ON EXHIBIT 11.5-A AND THE FAIR MARKET VALUES DETERMINED AS DESCRIBED ON SUCH
EXHIBIT SHALL BE REFLECTED IN THE FINANCIAL STATEMENTS AND REPORTS REQUIRED BY
EXHIBIT 8 AND THIS SECTION 8.2.

 

8.3           PERCENTAGE INTERESTS.  THE “PERCENTAGE INTEREST” OF EACH PARTNER
AT ANY TIME SHALL BE A PERCENTAGE CALCULATED AS FOLLOWS:

 

(A)           INITIAL PERCENTAGE INTERESTS.  THE INITIAL PERCENTAGE INTERESTS OF
THE PARTNERS SHALL BE AS SET FORTH IN THE DEFINITION OF “INITIAL PERCENTAGE
INTEREST.”

 

(B)           ADJUSTMENTS TO PERCENTAGE INTERESTS.  THE PERCENTAGE INTERESTS OF
THE LIMITED PARTNERS ARE EXPECTED TO REMAIN THE SAME THROUGHOUT THE TERM OF THE
PARTNERSHIP; PROVIDED, HOWEVER, THE PERCENTAGE INTERESTS SHALL BE MODIFIED TO
REFLECT ANY ADDITIONAL CAPITAL CONTRIBUTIONS MADE BY ANY LIMITED PARTNER,
INCLUDING IN THE EVENT A LIMITED PARTNER MAKES A DEFAULT CONTRIBUTION DEEMED A
CAPITAL CONTRIBUTION PURSUANT TO SECTION 6.4(A), IN WHICH EVENT THE PERCENTAGE
INTERESTS OF THE PARTNERS SHALL BE ADJUSTED ON THE BASIS SET FORTH THEREIN; AND
PROVIDED FURTHER THE PERCENTAGE INTEREST OF PGGM PRE FUND MAY BE REDUCED UPON
THE CLOSING OF THE EXERCISE OF THE OPTIONS AS PROVIDED AND AS SUCH TERM IS
DEFINED IN SECTION 11.5.

 

8.4           DISTRIBUTION OF PIC FUNDS.  THE GENERAL PARTNER SHALL DISTRIBUTE
THE PIC FUNDS, TO THE EXTENT THAT THE PIC FUNDS HAVE NOT BEEN APPLIED PURSUANT
TO SECTION 6.3(D) TO SATISFY INLAND’S CAPITAL CONTRIBUTION OBLIGATIONS, AS
FOLLOWS (PROVIDED, HOWEVER, THAT THE PIC FUNDS MAY NOT BE DISTRIBUTED TO THE
EXTENT THAT THE PIC FUNDS ARE THEN REQUIRED TO BE USED TO SATISFY INLAND’S
CAPITAL CONTRIBUTION OBLIGATIONS PURSUANT TO SECTION 6.3(D) OR ITS CASH
CONTRIBUTION OBLIGATIONS PURSUANT TO SECTION 13.4):

 

(A)           IN THE EVENT OF A CAPITAL EVENT, THE PIC FUNDS SHALL BE USED TO
FUND THE DISTRIBUTION TO INLAND PURSUANT TO SECTION 8.5(B)(I) AND SHALL BE
DEEMED TO BE NET EXTRAORDINARY CASH FLOW FOR PURPOSES OF SECTION 8.5(B) WHEN SO
APPLIED; AND

 

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(B)           ALL PIC FUNDS REMAINING UPON THE EARLIER TO OCCUR OF (I) THE
TERMINATION OF THE INVESTMENT PERIOD OR (II) THE LIQUIDATION OF THE PARTNERSHIP
SHALL BE DISTRIBUTED TO INLAND; PROVIDED, HOWEVER, THAT IF THERE ARE PIC FUNDS
REMAINING UPON THE LIQUIDATION OF THE PARTNERSHIP AND INLAND REQUESTS, PURSUANT
TO SECTION 13.4, AN IN KIND DISTRIBUTION FROM THE PARTNERSHIP HAVING AN
AGGREGATE FAIR MARKET VALUE GREATER THAN INLAND’S PRO RATA SHARE (BASED ON THE
RESPECTIVE PERCENTAGE INTERESTS OF INLAND AND PGGM PRE FUND) OF THE FAIR MARKET
VALUE OF THE PARTNERSHIP’S NON-PIC FUND ASSETS, THE REMAINING PIC FUNDS SHALL
FIRST BE APPLIED TO SATISFY INLAND’S OBLIGATION UNDER SECTION 13.4 TO CONTRIBUTE
TO THE PARTNERSHIP SUCH EXCESS AMOUNT IN CASH AND THE REMAINING PIC FUNDS, IF
ANY, SHALL THEN BE DISTRIBUTED PURSUANT TO THIS SECTION 8.4(B); AND, PROVIDED,
FURTHER, THAT IF THE REMAINING PIC FUNDS ARE INSUFFICIENT TO FULLY SATISFY
INLAND’S OBLIGATION UNDER SECTION 13.4 TO CONTRIBUTE SUCH EXCESS AMOUNT, INLAND
SHALL CONTRIBUTE ADDITIONAL CASH TO THE PARTNERSHIP SO THAT INLAND’S OBLIGATION
UNDER SECTION 13.4 TO CONTRIBUTE CASH TO THE PARTNERSHIP IS SATISFIED IN FULL.

 

8.5           DISTRIBUTIONS OF CASH FLOW.

 

(A)           DISTRIBUTION OF NET ORDINARY CASH FLOW.  NET ORDINARY CASH FLOW
SHALL BE DISTRIBUTED ON A MONTHLY BASIS WITHIN FIFTEEN (15) DAYS AFTER THE END
OF THE MONTH FOR WHICH SUCH NET ORDINARY CASH FLOW IS BEING DETERMINED.  NET
ORDINARY CASH FLOW SHALL BE DISTRIBUTED TO THE PARTNERS ACCORDING TO THEIR
PERCENTAGE INTERESTS; PROVIDED, HOWEVER, THAT ALL INTEREST DERIVED FROM THE
TEMPORARY INVESTMENT OF THE PIC FUNDS IN INTEREST BEARING INSTRUMENTS PENDING
THEIR APPLICATION OR DISTRIBUTION SHALL BE DISTRIBUTED 95% TO INLAND AND 5% TO
PGGM PRE FUND AT THE SAME TIME AS THE PARTNERSHIP MAKES DISTRIBUTIONS OF NET
ORDINARY CASH FLOW.  FOR THE AVOIDANCE OF DOUBT, THE PIC FUNDS DO NOT CONSTITUTE
NET ORDINARY CASH FLOW AND SHALL BE APPLIED OR DISTRIBUTED, AS APPLICABLE, IN
ACCORDANCE WITH SECTIONS 6.3(D) AND 8.4.

 

(B)           DISTRIBUTION OF NET EXTRAORDINARY CASH FLOW.  NET EXTRAORDINARY
CASH FLOW SHALL BE DISTRIBUTED WITHIN TEN (10) DAYS OF THE CAPITAL EVENT FROM
WHICH THE NET EXTRAORDINARY CASH FLOW IS DERIVED (I) FIRST, TO INLAND AN AMOUNT
EQUAL TO THE BALANCE OF THE PIC FUNDS; (II) SECOND, THE BALANCE TO AND AMONG THE
PARTNERS PRO RATA ACCORDING TO THEIR PERCENTAGE INTERESTS.

 

(C)           REPAYMENT OF LOANS.  PRIOR TO THE DISTRIBUTION BY THE GENERAL
PARTNER OF ANY NET ORDINARY CASH FLOW OR NET EXTRAORDINARY CASH FLOW TO THE
PARTNERS, THE GENERAL PARTNER SHALL CAUSE THE ENTIRE OUTSTANDING PRINCIPAL
AMOUNT AND ANY ACCRUED AND UNPAID INTEREST ON ANY PARTNERSHIP LOAN MADE BY
LIMITED PARTNERS TO THE PARTNERSHIP TO BE REPAID IN FULL FROM THE DISTRIBUTIVE
SHARE THAT WOULD HAVE OTHERWISE BEEN DISTRIBUTED TO THE DEFAULTING PARTNER.

 

(D)           RESTRICTIONS ON DISTRIBUTIONS.  NOTWITHSTANDING THE DISTRIBUTIONS
CONTEMPLATED BY THIS SECTION, IF THE PARTNERSHIP HAS CREDITORS, NO DISTRIBUTION
WILL BE MADE IF, AFTER GIVING EFFECT TO SUCH DISTRIBUTION, (I) THE PARTNERSHIP
WOULD BE UNABLE TO PAY ITS DEBTS AS THEY BECOME DUE IN THE USUAL COURSE OF
BUSINESS, (II) THE NET ASSETS OF THE

 

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Partnership would be less than zero, or (iii) the Partnership would be in
violation of Section 17-607 of the Act.

 

8.6           CAPITAL ACCOUNTS; ALLOCATION OF PROFITS AND LOSSES; ETC.  THE
AGREEMENT OF THE PARTNERS CONCERNING THE MAINTENANCE OF CAPITAL ACCOUNTS,
ALLOCATION OF PROFITS, LOSSES, AND ITEMS OF PARTNERSHIP INCOME, GAIN, LOSS,
EXPENSE AND DEDUCTION, AND OTHER RELATED TAX MATTERS IS SET FORTH BELOW:

 

(A)           MAINTENANCE OF CAPITAL ACCOUNTS.  A SEPARATE CAPITAL ACCOUNT SHALL
BE ESTABLISHED AND MAINTAINED FOR EACH PARTNER IN ACCORDANCE WITH THE RULES OF
REGULATIONS SECTION 1.704-1(B)(2)(IV) AND THE FOLLOWING PROVISIONS:  (I) TO SUCH
PARTNER’S CAPITAL ACCOUNT THERE SHALL BE CREDITED THE AMOUNT OF CASH AND THE
INITIAL BOOK VALUE OF ANY OTHER PROPERTY CONTRIBUTED BY THAT PARTNER TO THE
PARTNERSHIP, SUCH PARTNER’S DISTRIBUTIVE SHARE OF PROFITS AND ITEMS OF INCOME OR
GAIN SPECIALLY ALLOCATED UNDER THIS AGREEMENT AND THE AMOUNT OF ANY PARTNERSHIP
LIABILITIES THAT ARE ASSUMED BY SUCH PARTNER OR THAT ARE SECURED BY ANY ASSETS
OF THE PARTNERSHIP DISTRIBUTED TO SUCH PARTNER; (II) TO SUCH PARTNER’S CAPITAL
ACCOUNT THERE SHALL BE DEBITED THE AMOUNT OF CASH AND THE BOOK VALUE OF ANY
OTHER PROPERTY OF THE PARTNERSHIP DISTRIBUTED TO SUCH PARTNER, SUCH PARTNER’S
DISTRIBUTIVE SHARE OF LOSSES AND ITEMS OF LOSS, EXPENSE AND DEDUCTION SPECIALLY
ALLOCATED UNDER THIS AGREEMENT AND THE AMOUNT OF ANY LIABILITIES OF SUCH PARTNER
THAT ARE ASSUMED BY THE PARTNERSHIP OR THAT ARE SECURED BY ANY PROPERTY
CONTRIBUTED BY SUCH PARTNER TO THE PARTNERSHIP; AND (III) IN DETERMINING THE
AMOUNT OF ANY LIABILITY FOR PURPOSES OF THIS SECTION 8.6(A), THERE SHALL BE
TAKEN INTO ACCOUNT CODE SECTION 752(C) AND ANY OTHER APPLICABLE PROVISIONS OF
THE CODE AND THE REGULATIONS.  THIS SECTION 8.6(A) SHALL BE INTERPRETED AND
APPLIED IN A MANNER CONSISTENT WITH REGULATIONS SECTION 1.704-1(B)(2)(IV).  UPON
THE TRANSFER OF ALL OR A PART OF AN INTEREST IN THE PARTNERSHIP, THE TRANSFEREE
SHALL SUCCEED TO THAT PORTION OF THE CAPITAL ACCOUNT OF THE TRANSFEROR THAT IS
ATTRIBUTABLE TO THE TRANSFERRED INTEREST.

 

(B)           ALLOCATIONS OF PROFITS AND LOSSES.

 

(I)       GENERAL ALLOCATIONS OF PROFITS AND LOSSES.  EXCEPT AS OTHERWISE
PROVIDED IN SECTION 8.6(B)(II), PROFITS AND LOSSES OF THE PARTNERSHIP FOR EACH
ALLOCATION PERIOD SHALL BE ALLOCATED TO THE PARTNERS IN ACCORDANCE WITH THEIR
PERCENTAGE INTERESTS.

 

(II)      ALLOCATION OF INCOME AND LOSS FROM THE PIC FUNDS.  ALL INTEREST INCOME
DERIVED FROM THE TEMPORARY INVESTMENT OF THE PIC FUNDS SHALL BE ALLOCATED 95% TO
INLAND AND 5% TO PGGM PRE FUND.  LOSSES DERIVED FROM THE PIC FUNDS SHALL BE
ALLOCATED 95% TO INLAND AND 5% TO PGGM PRE FUND.

 

(C)           SPECIAL ALLOCATIONS, ETC.  THE PARTNERSHIP SHALL MAKE THE
FOLLOWING ALLOCATIONS, IN THE FOLLOWING ORDER OF PRIORITY, PRIOR TO MAKING ANY
ALLOCATIONS UNDER SECTION 8.6(B) FOR ANY ALLOCATION PERIOD.

 

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(I)            CHARGEBACKS OF NONRECOURSE DEDUCTIONS.  NOTWITHSTANDING ANY OTHER
PROVISION OF THIS AGREEMENT TO THE CONTRARY, IN THE EVENT THAT THERE IS A NET
DECREASE IN PARTNERSHIP MINIMUM GAIN (AS THAT TERM IS DEFINED IN REGULATIONS
SECTION 1.704-2(B)(2)) WITH RESPECT TO THE PARTNERSHIP DURING A TAXABLE YEAR OF
THE PARTNERSHIP, THE PARTNERS SHALL BE ALLOCATED ITEMS OF INCOME AND GAIN IN
ACCORDANCE WITH REGULATIONS SECTION 1.704-2(F).  THE PRECEDING SENTENCE IS
INTENDED TO COMPLY WITH THE MINIMUM GAIN CHARGEBACK REQUIREMENT OF REGULATIONS
SECTION 1.704-2(F) AND SHALL BE INTERPRETED AND APPLIED IN A MANNER CONSISTENT
THEREWITH.

 

(II)           CHARGEBACKS OF PARTNER NONRECOURSE DEDUCTIONS.  NOTWITHSTANDING
ANY OTHER PROVISION OF THIS AGREEMENT, IF DURING A TAXABLE YEAR OF THE
PARTNERSHIP THERE IS A NET DECREASE IN PARTNER NONRECOURSE DEBT MINIMUM GAIN (AS
THAT TERM IS DEFINED IN REGULATIONS SECTION 1.704-2(I)(2)), THAT DECREASE SHALL
BE CHARGED BACK AMONG THE PARTNERS IN ACCORDANCE WITH REGULATIONS
SECTION 1.704-2(I)(4).  THE PRECEDING SENTENCE IS INTENDED TO COMPLY WITH THE
PARTNER NONRECOURSE DEBT MINIMUM GAIN CHARGEBACK REQUIREMENT OF REGULATIONS
SECTION 1.704-2(I)(4) AND SHALL BE INTERPRETED AND APPLIED IN A MANNER
CONSISTENT THEREWITH.

 

(III)          QUALIFIED INCOME OFFSET.  IN THE EVENT ANY PARTNER UNEXPECTEDLY
RECEIVES ANY ADJUSTMENT, ALLOCATION, OR DISTRIBUTION DESCRIBED IN REGULATIONS
SECTION 1.704-1(B)(2)(II)(D)(4), REGULATIONS SECTION 1.704-1(B)(2)(II)(D)(5), OR
REGULATIONS SECTION 1.704-1(B)(2)(II)(D)(6) THAT CAUSES THAT PARTNER TO HAVE AN
ADJUSTED CAPITAL ACCOUNT DEFICIT, ITEMS OF PARTNERSHIP INCOME AND GAIN SHALL BE
SPECIALLY ALLOCATED TO SUCH PARTNER IN AN AMOUNT AND MANNER SUFFICIENT TO
ELIMINATE, TO THE EXTENT REQUIRED BY THE REGULATIONS, THE ADJUSTED CAPITAL
ACCOUNT DEFICIT OF SUCH PARTNER AS QUICKLY AS POSSIBLE, PROVIDED THAT AN
ALLOCATION PURSUANT TO THIS SECTION 8.6(C)(III) SHALL BE MADE IF AND ONLY TO THE
EXTENT THAT SUCH PARTNER WOULD HAVE AN ADJUSTED CAPITAL ACCOUNT DEFICIT AFTER
ALL OTHER ALLOCATIONS PROVIDED FOR IN THIS ARTICLE 8 HAVE BEEN TENTATIVELY MADE
AS IF THIS SECTION 8.6(C)(III) WERE NOT IN THIS AGREEMENT.  THIS
SECTION 8.6(C)(III) IS INTENDED TO COMPLY WITH THE “QUALIFIED INCOME OFFSET”
REQUIREMENT IN REGULATIONS SECTION 1.704-1(B)(2)(II)(D)(3), AND SHALL BE
INTERPRETED CONSISTENTLY THEREWITH.

 

(IV)          LIMITATION ON LOSS ALLOCATIONS.  THE LOSSES ALLOCATED TO ANY
PARTNER PURSUANT TO SECTION 8.6(B) WITH RESPECT TO ANY ALLOCATION PERIOD SHALL
NOT EXCEED THE MAXIMUM AMOUNT OF LOSSES THAT CAN BE SO ALLOCATED WITHOUT CAUSING
SUCH PARTNER TO HAVE AN ADJUSTED CAPITAL ACCOUNT DEFICIT AT THE END OF SUCH
ALLOCATION PERIOD.  ALL LOSSES OTHERWISE ALLOCABLE TO A PARTNER IN EXCESS OF THE
LIMITATION SET FORTH IN THIS SECTION 8.6(C)(IV) SHALL BE ALLOCATED (A) FIRST, TO
THOSE PARTNERS WHO ARE NOT SUBJECT TO THIS LIMITATION IN ACCORDANCE WITH
SECTION 8.6(B), AND (B) SECOND, ANY REMAINING AMOUNT TO THE PARTNERS IN THE
MANNER REQUIRED BY THE CODE AND THE REGULATIONS.

 

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(V)           SECTION 743(B) AND SECTION 734(B) ADJUSTMENTS.  TO THE EXTENT THAT
AN ADJUSTMENT TO THE ADJUSTED TAX BASIS OF ANY ASSET OF THE PARTNERSHIP PURSUANT
TO CODE SECTION 743(B) OR CODE SECTION 734(B) IS REQUIRED, PURSUANT TO
REGULATIONS SECTION 1.704-1(B)(2)(IV)(M)(2) OR, IN THE CASE OF A DISTRIBUTION TO
A PARTNER IN COMPLETE LIQUIDATION OF ITS INTEREST IN THE PARTNERSHIP, PURSUANT
TO REGULATIONS SECTION 1.704-1(B)(2)(IV)(M)(4), TO BE TAKEN INTO ACCOUNT IN
DETERMINING CAPITAL ACCOUNTS, THE AMOUNT OF SUCH ADJUSTMENT TO THE CAPITAL
ACCOUNTS SHALL BE TREATED AS AN ITEM OF GAIN (IF THE ADJUSTMENT INCREASES THE
BASIS OF THE ASSET) OR LOSS (IF THE ADJUSTMENT DECREASES SUCH BASIS), AND SUCH
GAIN OR LOSS SHALL BE SPECIALLY ALLOCATED TO THE PARTNERS IN ACCORDANCE WITH
THEIR INTERESTS IN THE PARTNERSHIP IN THE EVENT THAT REGULATIONS
SECTION 1.704-1(B)(2)(IV)(M)(2) APPLIES, OR TO THE PARTNERS TO WHICH SUCH
DISTRIBUTION WAS MADE IN THE EVENT THAT REGULATIONS
SECTION 1.704-1(B)(2)(IV)(M)(4) APPLIES.

 

(VI)          NONRECOURSE DEDUCTIONS.  NONRECOURSE DEDUCTIONS (AS DEFINED IN
REGULATIONS SECTION 1.704-2(B)(1)) SHALL BE ALLOCATED TO THE PARTNERS IN
PROPORTION TO THEIR RESPECTIVE PERCENTAGE INTERESTS.

 

(VII)         PARTNER NONRECOURSE DEDUCTIONS.  ANY PARTNER NONRECOURSE
DEDUCTIONS (AS DEFINED IN REGULATIONS SECTION 1.704-2(I)(1)) SHALL BE ALLOCATED
TO THE PARTNER WHO (IN ITS CAPACITY, DIRECTLY OR INDIRECTLY, AS LENDER,
GUARANTOR OR OTHERWISE) BEARS THE ECONOMIC RISK OF LOSS WITH RESPECT TO THE LOAN
TO WHICH SUCH PARTNER NONRECOURSE DEDUCTIONS ARE ATTRIBUTABLE IN ACCORDANCE WITH
REGULATIONS SECTION 1.704-2(I).

 

(VIII)        REGULATORY ALLOCATIONS.  THE ALLOCATIONS SET FORTH IN
SECTIONS 8.6(C)(III) AND 8.6(C)(IV) ARE INTENDED TO COMPLY WITH CERTAIN
REQUIREMENTS OF THE REGULATIONS.  IT IS THE INTENT OF THE PARTNERS THAT, TO THE
EXTENT POSSIBLE, ALL SUCH ALLOCATIONS SHALL BE OFFSET AS RAPIDLY AS POSSIBLE
WITH SPECIAL ALLOCATIONS OF OTHER ITEMS OF INCOME, GAIN, LOSS, EXPENSE, OR
DEDUCTION OF THE PARTNERSHIP.  THEREFORE, SUBJECT TO THE OTHER PROVISIONS OF
THIS SECTION 8.6(C), SUCH OFFSETTING SPECIAL ALLOCATIONS OF INCOME, GAIN, LOSS,
EXPENSE, OR DEDUCTION OF THE PARTNERSHIP SHALL BE MADE SO THAT, AFTER SUCH
OFFSETTING ALLOCATIONS ARE MADE, EACH PARTNER’S CAPITAL ACCOUNT BALANCE IS, TO
THE GREATEST EXTENT POSSIBLE, EQUAL TO THE CAPITAL ACCOUNT BALANCE SUCH PARTNER
WOULD HAVE HAD IF SECTIONS 8.6(C)(III), 8.6(C)(IV), AND 8.6(C)(VIII) WERE NOT
PART OF THIS AGREEMENT AND ALL ITEMS OF THE COMPANY WERE ALLOCATED PURSUANT TO
SECTIONS 8.6(B), 8.6(C)(I), 8.6(C)(II), AND 8.6(C)(V) - 8.6(C)(VII).

 

(IX)           SECTION 704(C) AND CAPITAL ACCOUNT REVALUATION ALLOCATIONS.  IN
ACCORDANCE WITH SECTION 704(C) OF THE CODE AND THE “TRADITIONAL METHOD” OF
REGULATIONS SECTION 1.704-3(B) OR AN ALTERNATIVE METHOD OR METHODS UNANIMOUSLY
SELECTED BY THE PARTNERS, INCOME, GAIN, LOSS, EXPENSE, AND DEDUCTION WITH
RESPECT TO ANY PROPERTY CONTRIBUTED TO THE PARTNERSHIP SHALL, SOLELY FOR INCOME
TAX PURPOSES, BE ALLOCATED AMONG THE PARTNERS SO AS TO TAKE ACCOUNT OF ANY
VARIATION

 

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BETWEEN THE ADJUSTED BASIS OF SUCH PROPERTY FOR FEDERAL INCOME TAX PURPOSES AND
ITS INITIAL BOOK VALUE.  IN THE EVENT THE BOOK VALUE OF ANY ASSET OF THE
PARTNERSHIP IS ADJUSTED PURSUANT TO THE DEFINITION OF “BOOK VALUE”, SUBSEQUENT
ALLOCATIONS OF INCOME, GAIN, LOSS, EXPENSE, AND DEDUCTION WITH RESPECT TO SUCH
ASSET SHALL TAKE ACCOUNT OF ANY VARIATION BETWEEN THE ADJUSTED BASIS OF SUCH
ASSET FOR FEDERAL INCOME TAX PURPOSES AND ITS BOOK VALUE IN THE SAME MANNER AS
UNDER SECTION 704(C) OF THE CODE AND THE “TRADITIONAL METHOD” OF REGULATIONS
SECTION 1.704-3(B) OR AN ALTERNATIVE METHOD OR METHODS UNANIMOUSLY SELECTED BY
THE PARTNERS.  ALLOCATIONS PURSUANT TO THIS SECTION 8.6(C)(IX) ARE SOLELY FOR
PURPOSES OF FEDERAL, STATE AND LOCAL TAXES AND SHALL NOT AFFECT, OR IN ANY WAY
BE TAKEN INTO ACCOUNT IN COMPUTING, ANY PARTNER’S CAPITAL ACCOUNT OR SHARE OF
PROFITS, LOSSES, OTHER ITEMS OR DISTRIBUTIONS PURSUANT TO ANY PROVISION OF THIS
AGREEMENT.  THE PARTNERS ACKNOWLEDGE AND AGREE THAT ALL PARTNERSHIP INCOME AND
GAIN DERIVED FROM (I) TAXABLE DISPOSITIONS OF EQUITY INTERESTS IN REIT ENTITIES
(INCLUDING LIQUIDATING DISTRIBUTIONS UNDER CODE SECTION 331 THAT ARE RECEIVED BY
THE PARTNERSHIP FROM REIT ENTITIES), (II) CAPITAL GAIN DIVIDENDS OR OTHER
DISTRIBUTIONS FROM REIT ENTITIES, OR (III) THE DISGUISED SALE OF ONE OR MORE
INLAND PROPERTIES AS DETERMINED IN ACCORDANCE WITH REGULATIONS SECTIONS 1.707-3
SHALL IN EACH CASE, TO THE EXTENT ATTRIBUTABLE TO INLAND BUILT-IN GAINS, BE
ALLOCATED SOLELY TO INLAND IN ACCORDANCE WITH CODE SECTION 704(C) AND THE
REGULATIONS THEREUNDER, AND THIS SECTION 8.6(C)(IX) AND THE OTHER PROVISIONS OF
THIS AGREEMENT SHALL BE INTERPRETED AND APPLIED IN A MANNER CONSISTENT WITH SUCH
AGREEMENT OF THE PARTNERS.

 

(X)            ADDITIONAL ALLOCATION RULES.  FOR PURPOSES OF DETERMINING THE
PROFITS, LOSSES OR ANY OTHER ITEMS ALLOCABLE TO ANY PERIOD, PROFITS, LOSSES AND
ANY SUCH OTHER ITEMS SHALL BE DETERMINED ON A DAILY, MONTHLY OR OTHER BASIS (BUT
NO LESS FREQUENTLY THAN ONCE ANNUALLY), AS REASONABLY DETERMINED BY THE GENERAL
PARTNER USING ANY METHOD THAT IS PERMISSIBLE UNDER THE CODE (INCLUDING WITHOUT
LIMITATION SECTION 706) AND THE REGULATIONS THEREUNDER.  WITHOUT LIMITING THE
FOREGOING, IF THERE IS ANY CHANGE IN ANY PARTNER’S PERCENTAGE INTEREST, THEN THE
THEN-CURRENT ALLOCATION PERIOD SHALL END ON THE LAST DAY PRECEDING THE CHANGE
AND A NEW ALLOCATION PERIOD SHALL COMMENCE ON THE FIRST DAY FOR WHICH THE CHANGE
IS EFFECTIVE.  EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, ALL ITEMS OF
INCOME, GAIN, LOSS AND DEDUCTION OF THE PARTNERSHIP AND ANY OTHER ALLOCATIONS
NOT OTHERWISE PROVIDED FOR SHALL BE ALLOCATED AMONG THE PARTNERS IN THE SAME
MANNER AS IS APPLICABLE TO PROFITS AND LOSSES FOR THE ALLOCATION PERIOD IN
QUESTION.  THE PARTNERS ARE AWARE OF THE INCOME TAX CONSEQUENCES OF THE
ALLOCATIONS MADE BY THIS AGREEMENT AND HEREBY AGREE TO BE BOUND BY THE
PROVISIONS OF THIS AGREEMENT IN REPORTING THEIR SHARES OF INCOME AND LOSS OF THE
PARTNERSHIP FOR INCOME TAX PURPOSES.

 

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(D)           METHOD OF ACCOUNTING.  UNLESS OTHERWISE DETERMINED BY THE PARTNERS
OR REQUIRED BY LAW, THE PARTNERSHIP SHALL USE THE ACCRUAL METHOD OF ACCOUNTING
FOR BOTH TAX AND FINANCIAL REPORTING PURPOSES.

 

(E)           NO DEFICIT RESTORATION OBLIGATION.  NOTWITHSTANDING ANYTHING TO
THE CONTRARY CONTAINED IN THIS AGREEMENT, NO PARTNER SHALL HAVE ANY OBLIGATION
TO THE PARTNERSHIP OR TO ANY OTHER PARTNER TO RESTORE ANY DEFICIT BALANCE IN ITS
CAPITAL ACCOUNT TO THE PARTNERSHIP; PROVIDED HOWEVER, IF THE DEFICIT IS CREATED
DUE TO A DISTRIBUTION OF ASSETS IN-KIND, THE PARTNER RECEIVING SUCH DISTRIBUTION
SHALL RESTORE ANY DEFICIT IN ITS CAPITAL ACCOUNT CREATED BY SUCH DISTRIBUTION
IN-KIND BY CONTRIBUTING CASH EQUAL TO SUCH DEFICIT TO THE PARTNERSHIP.

 

8.7           WITHHOLDING MATTERS; TAX COVENANTS.  THE PARTNERSHIP AND THE
GENERAL PARTNER SHALL BE SUBJECT TO AND COMPLY WITH SUCH OBLIGATIONS AND
COVENANTS WITH RESPECT TO THE WITHHOLDING OF INCOME FROM DISTRIBUTIONS AND TAX
MATTERS AS THE LIMITED PARTNERS MAY REASONABLY AGREE.

 

ARTICLE 9

 

RIGHTS, DUTIES, LIABILITIES AND RESTRICTIONS OF THE GENERAL PARTNER

 

9.1           GENERAL PARTNER.

 

(A)           GENERALLY.  SUBJECT TO THE TERMS OF THIS AGREEMENT, THE DAY-TO-DAY
BUSINESS AFFAIRS OF THE PARTNERSHIP SHALL BE MANAGED BY THE GENERAL PARTNER, WHO
SHALL BE APPOINTED AND, AS THE CASE MAY BE, REMOVED AND REPLACED, IN ACCORDANCE
WITH THE TERMS OF THIS AGREEMENT.

 

(B)           NUMBER.  THERE SHALL BE ONE GENERAL PARTNER OF THE PARTNERSHIP.

 

(C)           APPOINTMENT; REMOVAL AND REPLACEMENT FOR CAUSE.  THE LIMITED
PARTNERS DO HEREBY APPOINT INP RETAIL MANAGEMENT COMPANY, LLC AS THE INITIAL
GENERAL PARTNER OF THE PARTNERSHIP.  PGGM PRE FUND SHALL HAVE THE AUTHORITY AT
ANY TIME AND FROM TIME TO TIME HEREAFTER TO REMOVE (SOLELY FOR CAUSE, AS DEFINED
BELOW), REPLACE AND APPOINT THE GENERAL PARTNER.  NOTWITHSTANDING THE FOREGOING,
THE PERSON APPOINTED AS GENERAL PARTNER SHALL SERVE AS GENERAL PARTNER UNLESS
AND UNTIL REPLACED PURSUANT TO THIS SECTION 9.1.  PGGM PRE FUND MAY REMOVE THE
GENERAL PARTNER UPON THE OCCURRENCE OF ANY OF THE FOLLOWING EVENTS (“CAUSE”):

 

(I)            OTHER THAN WITH RESPECT TO AN EMERGENCY SITUATION, THE GENERAL
PARTNER BREACHES THIS AGREEMENT BY TAKING ANY ACTION THAT CONSTITUTES A MAJOR
DECISION WITHOUT THE UNANIMOUS APPROVAL OF THE LIMITED PARTNERS;

 

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(II)                                  THE GENERAL PARTNER TAKES ANY ACTION OR
OMITS TO TAKE ANY ACTION ON BEHALF OF THE PARTNERSHIP THAT CONSTITUTES FRAUD,
BAD FAITH, GROSS NEGLIGENCE, RECKLESSNESS, OR WANTON OR WILLFUL MISCONDUCT;

 

(III)                               THE VOLUNTARY OR INVOLUNTARY BANKRUPTCY OF
THE GENERAL PARTNER;

 

(IV)                              INLAND’S FAILURE TO COMPLY FULLY WITH
SECTIONS 14.4 OR 14.6 OF THIS AGREEMENT; OR

 

(V)                                 A CHANGE OF CONTROL OF INLAND;

 

AND, WITH RESPECT TO ANY BREACH THAT IS CAPABLE OF BEING CURED, SUCH FAILURE IS
NOT CURED (A) WITH RESPECT TO A MATTER WHICH IS SOLELY WITHIN THE CONTROL OF THE
GENERAL PARTNER, WITHIN THIRTY (30) DAYS AND (B) WITH RESPECT TO A MATTER WHICH
IS NOT SOLELY WITHIN THE CONTROL OF THE GENERAL PARTNER, WITHIN NINETY (90)
DAYS, OR IF SUCH MATTER IS NOT CAPABLE OF BEING CURED WITHIN SAID NINETY (90)
DAY PERIOD, AS OTHERWISE EXTENDED WITH AGREEMENT OF PGGM PRE FUND, IN EACH CASE
AFTER WRITTEN NOTICE FROM PGGM PRE FUND (THE “AGGRIEVED PARTNER”), THEN THE
AGGRIEVED PARTNER SHALL HAVE THE RIGHT BY NOTICE TO THE GENERAL PARTNER (THE
“REPLACEMENT NOTICE”) TO DESIGNATE A REPLACEMENT TO REPLACE THE GENERAL PARTNER
AND THEREAFTER TO SERVE AS GENERAL PARTNER, WITH SAID REPLACEMENT TO BE
EFFECTIVE ON THE 10TH DAY FOLLOWING THE FURNISHING OF THE REPLACEMENT NOTICE,
SUBJECT HOWEVER TO THE GENERAL PARTNER’S RIGHTS TO DISPUTE SAID REPLACEMENT, AS
PROVIDED BELOW IN THIS SECTION 9.1(C).  IF THE GENERAL PARTNER DISPUTES THE
BASIS ON WHICH THE REPLACEMENT NOTICE IS ISSUED BY THE AGGRIEVED PARTNER, THE
GENERAL PARTNER SHALL HAVE THE RIGHT, TO BE EXERCISED WITHIN TEN (10) DAYS AFTER
RECEIVING THE REPLACEMENT NOTICE, TO SUBMIT THE MATTER OF WHETHER THE AGGRIEVED
PARTNER IS ENTITLED TO REPLACE THE GENERAL PARTNER IN ACCORDANCE WITH THIS
SECTION 9.1(C) (AND NO OTHER MATTER) TO THE AMERICAN ARBITRATION ASSOCIATION IN
CHICAGO, ILLINOIS FOR ADJUDICATION WITHIN THIRTY (30) DAYS PURSUANT TO THE
COMMERCIAL ARBITRATION RULES UTILIZING EXPEDITED PROCEDURES.  IF THE GENERAL
PARTNER DOES MAKE SUCH SUBMISSION WITHIN SUCH 10-DAY PERIOD, THE GENERAL PARTNER
SHALL REMAIN AS THE GENERAL PARTNER UNLESS THE ARBITRATORS CONCLUDE THAT THE
GENERAL PARTNER SHOULD BE REPLACED BY THE AGGRIEVED PARTNER’S DESIGNATED
AFFILIATE.  THE DECISION OF THE ARBITRATORS SHALL BE FINAL AND MAY BE ENFORCED
BY THE WINNING PARTY IN ANY COURT OF COMPETENT JURISDICTION.  ALL COSTS OF THE
ARBITRATION AND SUCH ENFORCEMENT SHALL BE BORNE AND PROMPTLY PAID BY THE
PARTNERSHIP.  THE GENERAL PARTNER AND THE AGGRIEVED PARTNER SHALL MAKE ALL
SUBMISSIONS TO THE ARBITRATORS IN A TIMELY MANNER AND SHALL OTHERWISE COOPERATE
TO ACHIEVE A TIMELY RESOLUTION OF THE DISPUTE.  NOTWITHSTANDING ANYTHING TO THE
CONTRARY IN THIS AGREEMENT, REMOVAL OF A GENERAL PARTNER WILL NOT AFFECT THE
RIGHTS UNDER THIS AGREEMENT OF ANY PARTNER WHO IS AFFILIATED WITH THE GENERAL
PARTNER SO REMOVED.  NOTWITHSTANDING ANYTHING CONTAINED IN THE FOREGOING TO THE
CONTRARY, IN THE ABSENCE OF AN EVENT CONSTITUTING CAUSE, INLAND MAY IN ITS SOLE
DISCRETION, APPOINT AN INLAND AFFILIATE AS A REPLACEMENT GENERAL PARTNER.

 

(D)                                 PARTNERSHIP INTERESTS OF GENERAL PARTNER. 
THE GENERAL PARTNER SHALL HAVE NO PARTNERSHIP INTEREST RELATING TO PROFITS AND
LOSSES OF THE PARTNERSHIP.

 

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(E)                                  BANKRUPTCY, DISSOLUTION OR WITHDRAWAL OF
THE GENERAL PARTNER.  IN THE EVENT OF THE BANKRUPTCY OR DISSOLUTION AND
COMMENCEMENT OF WINDING-UP OF THE GENERAL PARTNER OR THE OCCURRENCE OF ANY OTHER
EVENT THAT CAUSES THE GENERAL PARTNER TO CEASE TO BE A GENERAL PARTNER OF THE
PARTNERSHIP UNDER THE ACT, THE PARTNERSHIP SHALL BE DISSOLVED AND WOUND UP AS
PROVIDED IN THIS AGREEMENT, UNLESS THE GENERAL PARTNER IS REPLACED PURSUANT TO
SECTION 5.5(E) OR THIS SECTION 9.1.  THE GENERAL PARTNER SHALL TAKE NO ACTION TO
ACCOMPLISH ITS VOLUNTARY DISSOLUTION.  THE GENERAL PARTNER SHALL NOT VOLUNTARILY
WITHDRAW AS GENERAL PARTNER OF THE PARTNERSHIP PRIOR TO THE DISSOLUTION OF THE
PARTNERSHIP, UNLESS UNANIMOUSLY AGREED TO BY THE LIMITED PARTNERS.

 

9.2                                 AUTHORITY OF GENERAL PARTNER.

 

(A)                                  EXCLUSIVE RIGHT TO MANAGE.  SUBJECT TO THE
DIRECTION OF THE LIMITED PARTNERS AS PROVIDED IN SECTIONS 9.9 AND 9.2(C) AND
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, (I) THE GENERAL
PARTNER SHALL HAVE THE SOLE AND EXCLUSIVE RIGHT AND AUTHORITY TO MANAGE, CONTROL
AND CONDUCT THE AFFAIRS OF THE PARTNERSHIP, AND (II) THE GENERAL PARTNER SHALL
MAKE ALL DECISIONS AFFECTING THE AFFAIRS AND BUSINESS OF THE PARTNERSHIP AND
SHALL CARRY OUT THE PURPOSES OF THE PARTNERSHIP AS SET FORTH HEREIN.

 

(B)                                 POWER AND AUTHORITY.  CONSISTENT WITH THE
PURPOSES OF THE PARTNERSHIP, THE GENERAL PARTNER SHALL HAVE THE POWER AND
AUTHORITY, SUBJECT TO THE PROVISIONS OF THIS AGREEMENT (INCLUDING THE EXHIBITS
HERETO), TO ACQUIRE ASSETS; PURCHASE GOODS AND SERVICES; SELL, EXCHANGE, LEASE,
LICENSE OR OTHERWISE DEAL IN OR WITH ANY AND ALL ASSETS OF THE PARTNERSHIP;
BORROW FUNDS TO FINANCE THE PARTNERSHIP’S ACTIVITIES AND IN CONNECTION WITH SUCH
BORROWING, MORTGAGE, HYPOTHECATE, PLEDGE, LIEN OR OTHERWISE ENCUMBER THE
REVENUES AND ASSETS OF THE PARTNERSHIP; MANAGE OR ARRANGE FOR THE MANAGEMENT OF
THE OWNED PROPERTIES; SUPERVISE ANY CONSTRUCTION ON THE PROPERTIES; ENTER INTO
ANY CONTRACT OR AGREEMENT OR AMEND OR CANCEL THE SAME; INVEST AND REINVEST ANY
FUNDS OR OTHER ASSETS OF THE PARTNERSHIP, ALL AS INCIDENT TO OR NECESSARY FOR
THE OPERATIONS OF THE PARTNERSHIP.

 

(C)                                  MAJOR DECISIONS.  NOTWITHSTANDING ANY OTHER
PROVISIONS OF THIS AGREEMENT THAT ARE OR MAY BE CONSTRUED TO THE CONTRARY, THE
GENERAL PARTNER SHALL NOT BE AUTHORIZED TO TAKE, AND SHALL NOT TAKE, ANY OF THE
ACTIONS OR MAKE ANY OF THE DECISIONS THAT ARE LISTED ON EXHIBIT 10-A HERETO
(EACH A “MAJOR DECISION”), WITHOUT THE PRIOR WRITTEN CONSENT OF THE LIMITED
PARTNERS.

 

(D)                                 PROPERTY MANAGEMENT, LEASING AND OTHER
SERVICES.

 

(I)                                     EXCEPT WHERE A LENDER TO THE PARTNERSHIP
REQUIRES OTHERWISE, THE PARTNERSHIP, REIT ENTITIES AND/OR PROPERTY ENTITIES
SHALL RETAIN ANY ONE OR MORE INLAND AFFILIATES (THE “PROPERTY MANAGER”) TO
PROVIDE DAY-TO-DAY DECISIONS AND OPERATIONS AS TO THE MANAGEMENT OF THE OWNED
PROPERTIES, WHICH SERVICES SHALL BE PROVIDED TO THE PROPERTY ENTITIES PURSUANT
TO THE TERMS OF A PROPERTY MANAGEMENT AGREEMENT IN THE FORM OF THE PROPERTY
MANAGEMENT AGREEMENT ATTACHED HERETO AS EXHIBIT 10-B (THE “PROPERTY MANAGEMENT
AGREEMENT”) AND SHALL INCLUDE,

 

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BUT NOT BE LIMITED TO, IN-HOUSE LEGAL SERVICES OUTSIDE LEGAL SERVICES, OUTSIDE
MARKETING SERVICES, OR AS OTHERWISE DETERMINED TO BE APPROPRIATE BY THE GENERAL
PARTNER.  INLAND OR ITS AFFILIATES WILL PROVIDE PROPERTY MANAGEMENT SERVICES FOR
ALL OWNED PROPERTIES.  THE PROPERTY MANAGEMENT AGREEMENT SHALL BE ENTERED INTO
BETWEEN THE PARTNERSHIP (OR THE RESPECTIVE PROPERTY ENTITIES) AND THE PROPERTY
MANAGER WITH RESPECT TO EACH OF THE OWNED PROPERTIES.  UPON TERMINATION OF THE
PROPERTY MANAGEMENT AGREEMENT AS PROVIDED THEREIN, INCLUDING ANY TERMINATION FOR
“CAUSE” AS PROVIDED IN THE PROPERTY MANAGEMENT AGREEMENT, THE GENERAL PARTNER
AGREES TO SECURE AN UNAFFILIATED THIRD PARTY PROPERTY MANAGER AND LEASING AGENT
SATISFACTORY TO BOTH LIMITED PARTNERS, AND FURTHER, IF MANAGEMENT AND LEASING
SERVICES ARE NOT BEING PROVIDED BY AN AFFILIATE OF INLAND, THE CONSENT OF THE
LIMITED PARTNERS SHALL BE REQUIRED FOR ANY ADDITIONAL OUTSOURCING OF SERVICES TO
THIRD PARTIES.  ANY AND ALL SUCH AGREEMENTS SHALL TERMINATE UPON THE SALE OF THE
SUBJECT OWNED PROPERTY.  THE PROPERTY MANAGER SHALL BE ENTITLED TO ENTER INTO
SUB-MANAGEMENT AGREEMENTS WITH RESPECT TO ANY OWNED PROPERTY TO BE MANAGED
PURSUANT TO THE PROPERTY MANAGEMENT AGREEMENT.  IN THE EVENT THE LIMITED
PARTNERS ARE UNABLE TO AGREE AS TO WHETHER A MANAGER EVENT, AS DEFINED IN THE
PROPERTY MANAGEMENT AGREEMENT, HAS OCCURRED WITHOUT THE GENERAL PARTNER HAVING
EXERCISED THE OWNER’S, AS DEFINED IN THE PROPERTY MANAGEMENT AGREEMENT, RIGHTS
AND REMEDIES THEREUNDER FOR THIRTY (30) DAYS OR MORE AFTER THE REQUEST OF A
LIMITED PARTNER TO DO SO, A LIMITED PARTNER SHALL BE ENTITLED TO ARBITRATE SUCH
DISAGREEMENT AS PROVIDED IN SECTION 10.9.

 

(II)                                  EXCEPT WHEN A LENDER TO THE PARTNERSHIP
REQUIRES OTHERWISE, INLAND OR ITS AFFILIATES (THE “LEASING AGENT”) WILL PROVIDE
DAY TO DAY DECISIONS AND OPERATIONS AS TO THE LEASING OF THE OWNED PROPERTIES,
WHICH SERVICES SHALL BE PROVIDED TO THE PROPERTY ENTITIES PURSUANT TO THE TERMS
OF A LEASING AGREEMENT IN THE FORM OF THE LEASING AGREEMENT ATTACHED HERETO AS
EXHIBIT 10-C (THE “LEASING AGREEMENT”).  THE LEASING AGREEMENT SHALL BE ENTERED
INTO BETWEEN THE PARTNERSHIP (OR THE PROPERTY ENTITIES) AND THE LEASING AGENT
WITH RESPECT TO EACH OF THE OWNED PROPERTIES.  UPON TERMINATION OF THE LEASING
AGREEMENT AS PROVIDED THEREIN, INCLUDING ANY TERMINATION “FOR CAUSE” AS PROVIDED
IN THE LEASING AGREEMENT, THE GENERAL PARTNER AGREES TO SECURE AN UNAFFILIATED
THIRD PARTY LEASING AGENT SATISFACTORY TO BOTH PARTNERS, AND FURTHER, IF LEASING
SERVICES ARE NOT BEING PROVIDED BY AN AFFILIATE OF THE PARTNERS, THE CONSENT OF
THE PARTNERS SHALL BE REQUIRED FOR ANY ADDITIONAL OUTSOURCING OF SERVICES TO
THIRD PARTIES.

 

FEES FOR MANAGEMENT SERVICES, LEASING SERVICES AND OTHER SERVICES PROVIDED BY
THE PARTNERS OR THEIR AFFILIATES ARE SET FORTH IN EXHIBIT 10-D.

 

(E)                                  INSURANCE.  THE GENERAL PARTNER SHALL CAUSE
THE PARTNERSHIP, THE REIT ENTITIES AND OR PROPERTY ENTITIES TO CARRY
COMPREHENSIVE LIABILITY AND FIRE INSURANCE AND, WHERE APPROPRIATE AND
COMMERCIALLY AVAILABLE, TERRORISM, EARTHQUAKE, FLOOD AND WIND INSURANCE,
EXTENDED COVERAGE, AND OTHER APPROPRIATE INSURANCE COVERAGE AS DETERMINED BY

 

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THE GENERAL PARTNER, INCLUDING ANY INSURANCE COVERAGE REQUIRED BY ANY LENDER TO
THE PARTNERSHIP, WITH RESPECT TO EACH OWNED PROPERTY ALL IN FORM AND SUBSTANCE
ACCEPTABLE TO THE GENERAL PARTNER.    THE REQUIRED INSURANCE FOR THE
PARTNERSHIP, REIT ENTITIES AND PROPERTY ENTITIES SHALL BE SET FORTH IN THE
ANNUAL BUSINESS PLAN.  NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH
HEREIN, INLAND MAY INCLUDE THE PARTNERSHIP WITHIN ANY UMBRELLA INSURANCE
COVERAGE MAINTAINED BY INLAND, AND UPON THE GENERAL PARTNER’S GOOD FAITH
DETERMINATION OF THE ADEQUACY OF SAME, THE GENERAL PARTNER MAY ELECT TO CAUSE
THE OWNED PROPERTIES TO BE COVERED UNDER ANY CAPTIVE INSURANCE PROGRAM
MAINTAINED BY INLAND.

 

(F)                                    NO DUTY TO INQUIRE.  NOTHING HEREIN
CONTAINED SHALL IMPOSE ANY OBLIGATION ON ANY PERSON OR FIRM DOING BUSINESS WITH
THE PARTNERSHIP TO INQUIRE AS TO WHETHER OR NOT THE GENERAL PARTNER HAS EXCEEDED
ITS POWER AND AUTHORITY IN EXECUTING ANY CONTRACT, LEASE, MORTGAGE, SECURITY
AGREEMENT, DEED OR OTHER INSTRUMENT ON BEHALF OF THE PARTNERSHIP, AND ANY SUCH
THIRD PERSON SHALL BE FULLY PROTECTED IN RELYING UPON SUCH AUTHORITY.

 

(G)                                 TAX ELECTIONS; TAX STATUS OF PARTNERSHIP AND
REIT ENTITIES.  SUBJECT TO THE OTHER PROVISIONS OF THIS AGREEMENT (INCLUDING,
WITHOUT LIMITATION, ARTICLE 8) AND ANY LIMITATIONS WITH RESPECT TO MAJOR
DECISIONS, THE GENERAL PARTNER SHALL HAVE THE RIGHT TO MAKE (AND REVOKE) ANY AND
ALL TAX ELECTIONS FOR THE PARTNERSHIP, INCLUDING, WITHOUT LIMITATION, AN
ELECTION TO ADJUST THE TAX BASIS OF PARTNERSHIP ASSETS; PROVIDED, HOWEVER, THAT
THE PARTNERSHIP SHALL MAKE AN ELECTION UNDER CODE SECTION 754 AT PGGM PRE FUND’S
REQUEST; AND, PROVIDED, FURTHER, THAT IN NO EVENT SHALL THE GENERAL PARTNER
MAKE, OR PERMIT THE PARTNERSHIP, THE REIT ENTITIES, OR THE PROPERTY ENTITIES TO
MAKE, ANY TAX ELECTION OR OTHERWISE TAKE, OR PERMIT THE PARTNERSHIP, THE REIT
ENTITIES, OR THE PROPERTY ENTITIES TO TAKE, ANY ACTION THAT RESULTS IN (I) ANY
REIT ENTITY FAILING TO QUALIFY AS A DOMESTICALLY CONTROLLED REIT, (II) THE
PARTNERSHIP FAILING TO BE CLASSIFIED FOR FEDERAL INCOME TAX PURPOSES AS A
PARTNERSHIP THAT IS NOT A “PUBLICLY TRADED PARTNERSHIP” WITHIN THE MEANING OF
CODE SECTION 7704, OR (III) THE PARTNERSHIP BEING CONVERTED INTO A FORM OF LEGAL
ENTITY THAT IS NOT CLASSIFIED AS A PARTNERSHIP FOR FEDERAL INCOME TAX PURPOSES.

 

(H)                                 PROSCRIPTIONS.  THE GENERAL PARTNER SHALL
HAVE NO AUTHORITY TO EXPEND OR USE PARTNERSHIP MONEY OR PROPERTY OTHER THAN ON
THE ACCOUNT AND FOR THE BENEFIT OF THE PARTNERSHIP OR TO PLEDGE ANY OF THE
PARTNERSHIP’S CREDIT OR PROPERTY FOR OTHER THAN PARTNERSHIP PURPOSES.

 

(I)                                     MAINTENANCE OF REIT ENTITIES.  THE
GENERAL PARTNER SHALL NOT TAKE ANY ACTIONS SO AS TO CAUSE A REIT ENTITY TO LOSE
ITS STATUS AS A DOMESTICALLY CONTROLLED REIT, AND, UPON THE CHANGE IN ANY LAW OR
REGULATION EFFECTING THE QUALIFICATION OF A REIT ENTITY AS A “REAL ESTATE
INVESTMENT TRUST”, SHALL PROMPTLY COMMENCE DISCUSSION WITH THE LIMITED PARTNERS
REGARDING THE STEPS NECESSARY TO BRING SUCH REIT ENTITY INTO COMPLIANCE WITH
SUCH CHANGED LAW OR REGULATION.

 

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9.3                                 BANK ACCOUNTS.  PENDING ANY EXPENDITURE,
DISTRIBUTION OR LONG-TERM INVESTMENT, ALL FUNDS OF THE PARTNERSHIP SHALL BE
DEPOSITED IN THE PARTNERSHIP NAME IN SUCH BANK ACCOUNT OR ACCOUNTS AS SHALL BE
DESIGNATED BY THE GENERAL PARTNER FROM TIME TO TIME; INCLUDING, BUT NOT LIMITED
TO, SEGREGATED OR CO-MINGLED OPERATING ACCOUNTS OF THE PARTNERSHIP AS DETERMINED
BY THE GENERAL PARTNER FROM WHICH THE RECEIPTS AND EXPENSES OF THE OWNED
PROPERTIES WILL BE MANAGED, A LOCK-BOX ACCOUNT THROUGH WHICH RENTS AND OTHER
RECEIPTS WILL BE COLLECTED AND SUCH OTHER PARTNERSHIP ACCOUNTS AS SHALL BE
NECESSARY IN CONNECTION WITH THE OPERATIONS OF THE PARTNERSHIP AND PAYMENT OF
PARTNERSHIP OPERATING EXPENSES.  ALL EXPENSES OF THE OWNED PROPERTIES SHALL BE
PAID FROM AND MAINTAINED IN CO-MINGLED ACCOUNTS, BUT RESERVES SHALL BE PAID FROM
AND MAINTAINED IN SEGREGATED ACCOUNTS FOR THE BENEFIT OF THE PARTNERSHIP;
PROVIDED, HOWEVER, THAT THE GENERAL PARTNER SHALL CAUSE ANY FUNDS IN EXCESS OF
EXPENSES OF THE OWNED PROPERTIES AND RESERVES TO BE TRANSFERRED TO A SEGREGATED
ACCOUNT FOR THE PARTNERSHIP ON A MONTHLY BASIS.  ALL WITHDRAWALS FROM ACCOUNTS
MAINTAINED FOR OR ON BEHALF OF THE PARTNERSHIP SHALL BE MADE UPON THE SIGNATURE
OF SUCH PERSON OR PERSONS AS THE GENERAL PARTNER MAY DESIGNATE.  IN NO EVENT
SHALL FUNDS OF A REIT ENTITY OR PROPERTY ENTITY BE DEPOSITED IN ANY ACCOUNT OF
ANY PERSON OTHER THAN THE PARTNERSHIP, SUCH REIT ENTITY OR PROPERTY ENTITY.  THE
GENERAL PARTNER SHALL NOT BE LIABLE IF CO-MINGLING THE FUNDS OF THE PARTNERSHIP,
ANOTHER REIT ENTITY OR PROPERTY ENTITY COULD CAUSE THE CORPORATE VEIL OF THE
PARTNERSHIP, REIT ENTITY, OR PROPERTY ENTITY TO BE PIERCED OR OTHERWISE AFFECT
THE LIMITED LIABILITY OF THE PARTNERSHIP, ANY REIT ENTITY OR PROPERTY ENTITY;
PROVIDED, THAT THE CO-MINGLING OF FUNDS OF THE PARTNERSHIP, ANY REIT ENTITY OR
PROPERTY ENTITY WAS DETERMINED BY THE GENERAL PARTNER IN GOOD FAITH TO BE
COMMERCIALLY REASONABLE.

 

9.4                                 COMPENSATION OF GENERAL PARTNER.  THE
GENERAL PARTNER SHALL RECEIVE A QUARTERLY VENTURE MANAGEMENT FEE (THE “VENTURE
MANAGEMENT FEE”) PAYABLE BY THE PARTNERSHIP EQUAL TO TEN (10) BASIS POINTS
MULTIPLIED BY THE AVERAGE QUARTERLY TOTAL EQUITY CAPITALIZATION OF THE
PARTNERSHIP (AS DEFINED AND DETERMINED PURSUANT TO THE FORMULA VALUE SET FORTH
IN PARAGRAPH 3 OF SCHEDULE 6.2(E)) FOR THE PRECEDING QUARTER (ON A PRO RATA
BASIS FOR ANY QUARTERLY PERIOD THAT IS NOT A FULL THREE CALENDAR MONTH PERIOD),
PAYABLE QUARTERLY IN ARREARS, AND COMMENCING WITH RESPECT TO THE FISCAL QUARTER
OF THE DATE OF THIS AGREEMENT.  EXCEPT AS OTHERWISE SET FORTH IN THIS AGREEMENT,
THE GENERAL PARTNER SHALL NOT BE ENTITLED TO ANY FEES OR OTHER REMUNERATIONS FOR
ITS SERVICES AS GENERAL PARTNER OF THE PARTNERSHIP.  ANY BREAK UP FEES,
MONITORING FEES, DIRECTOR FEES, TRANSACTION FEES AND OTHER SIMILAR PAYMENTS
RECEIVED BY THE GENERAL PARTNER FROM THIRD PARTIES SHALL BE PAID TO THE
PARTNERSHIP.

 

9.5                                 EXPENDITURES BY GENERAL PARTNER.  THE
PARTNERSHIP SHALL REIMBURSE THE GENERAL PARTNER FOR ALL ACTUAL THIRD PARTY OUT
OF POCKET COSTS AND REASONABLE AFFILIATE OUT OF POCKET COSTS APPROVED OR
CONTEMPLATED BY THIS AGREEMENT THAT MAY BE EXPENDED BY THE GENERAL PARTNER IN
ACCORDANCE WITH THIS AGREEMENT AND ALL REASONABLE AFFILIATE OR NON-AFFILIATE
COSTS EXPENDED BY THE GENERAL PARTNER IN RESPONSE TO AN EMERGENCY SITUATION.

 

9.6                                 LIABILITY OF PARTNERS.  THE GENERAL PARTNER
AND EACH LIMITED PARTNER (WHICH EACH OF SUCH PERSONS FOR PURPOSES OF THIS
SECTION 9.4 AND SECTION 9.7 SHALL INCLUDE ITS PARTNERS, OFFICERS, DIRECTORS,
SHAREHOLDERS, MEMBERS, MANAGERS, EMPLOYEES, AGENTS, AFFILIATES AND LEGAL
REPRESENTATIVES) SHALL NOT BE LIABLE TO ANOTHER PARTNER OR THE PARTNERSHIP FOR
HONEST MISTAKES OF

 

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JUDGMENT, OR FOR ACTION OR INACTION, TAKEN REASONABLY AND IN GOOD FAITH FOR A
PURPOSE THAT WAS REASONABLY BELIEVED TO BE IN THE BEST INTERESTS OF THE
PARTNERSHIP, OR FOR LOSSES DUE TO SUCH MISTAKES, ACTION OR INACTION, OR FOR THE
NEGLIGENCE OF ANY EMPLOYEE, PROVIDED THAT SUCH EMPLOYEE WAS SUPERVISED WITH
REASONABLE CARE, OR FOR THE NEGLIGENCE, DISHONESTY OR BAD FAITH OF ANY BROKER OR
OTHER AGENT OF THE PARTNERSHIP, PROVIDED THAT SUCH BROKER OR AGENT WAS SELECTED,
ENGAGED OR RETAINED AND SUPERVISED WITH REASONABLE CARE.  THE GENERAL PARTNER
AND EACH LIMITED PARTNER MAY CONSULT WITH COUNSEL AND ACCOUNTANTS IN RESPECT OF
PARTNERSHIP AFFAIRS AND BE FULLY PROTECTED AND JUSTIFIED IN ANY ACTION OR
INACTION THAT IS TAKEN IN ACCORDANCE WITH THE ADVICE OR OPINION OF SUCH
COUNSELOR OR ACCOUNTANTS, PROVIDED THAT THEY SHALL HAVE BEEN SELECTED WITH
REASONABLE CARE.  THE PARTNERS SHALL LOOK SOLELY TO THE ASSETS OF THE
PARTNERSHIP FOR THE RETURN OF THEIR CAPITAL AND, IF THE ASSETS OF THE
PARTNERSHIP REMAINING AFTER PAYMENT OR DISCHARGE OF THE DEBTS AND LIABILITIES OF
THE PARTNERSHIP ARE INSUFFICIENT TO RETURN SUCH CAPITAL, THEY SHALL HAVE NO
RECOURSE AGAINST THE GENERAL PARTNER OR THE LIMITED PARTNERS FOR SUCH PURPOSE. 
NOTWITHSTANDING ANY OF THE FOREGOING TO THE CONTRARY, THE PROVISIONS OF THIS
SECTION SHALL NOT BE CONSTRUED TO RELIEVE (OR ATTEMPT TO RELIEVE) ANY PARTNER
FOR ANY LIABILITY IT MAY HAVE TO ANOTHER PARTNER OR THE PARTNERSHIP FOR ANY
ACTIONS BY IT OR ITS AGENTS OR EMPLOYEES, WHICH CONSTITUTE THE BREACH OR
VIOLATION OF ITS OBLIGATIONS UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
LIABILITY BY REASON OF FRAUD, BAD FAITH, GROSS NEGLIGENCE, RECKLESSNESS OR
INTENTIONAL WRONGDOING OR TO THE EXTENT (BUT ONLY TO THE EXTENT) THAT SUCH
LIABILITY MAY NOT BE WAIVED, MODIFIED OR LIMITED UNDER APPLICABLE LAW, BUT SHALL
BE CONSTRUED SO AS TO EFFECTUATE THE PROVISIONS OF THIS SECTION TO THE FULLEST
EXTENT PERMITTED BY LAW.

 

9.7                                 INDEMNITY.

 

(A)                                  PARTNERSHIP INDEMNITY.  THE PARTNERSHIP
SHALL, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, INDEMNIFY, DEFEND AND
HOLD HARMLESS EACH PARTNER AND ITS AFFILIATES, INCLUDING WITHOUT LIMITATION, THE
GENERAL PARTNER, AND THE MANAGERS, MEMBERS, OFFICERS, EMPLOYEES OR AGENTS OF ANY
OF THE FOREGOING (COLLECTIVELY, THE “INDEMNIFIED PARTY”) AGAINST ANY LOSSES,
CLAIMS, COST, EXPENSES, DAMAGES, DEMANDS OR LIABILITIES TO WHICH SUCH
INDEMNIFIED PARTY MAY BECOME SUBJECT AS A RESULT OF CLAIMS BROUGHT BY THIRD
PARTIES (I.E., ANY PERSON THAT IS NOT AN AFFILIATE OF INLAND OR PGGM PRE FUND)
IN CONNECTION WITH ANY MATTER ARISING OUT OF OR INCIDENTAL TO ANY ACT PERFORMED
OR OMITTED TO BE PERFORMED BY ANY SUCH INDEMNIFIED PARTY IN CONNECTION WITH THIS
AGREEMENT OR THE PARTNERSHIP’S BUSINESS OR AFFAIRS; BUT ONLY TO THE EXTENT THAT
SUCH ACT OR OMISSION (I) WAS NOT ATTRIBUTABLE TO SUCH INDEMNIFIED PARTY’S FRAUD,
BAD FAITH, WILLFUL MISCONDUCT OR GROSS NEGLIGENCE AND (II) DID NOT CONSTITUTE A
BREACH OR VIOLATION BY SAID INDEMNIFIED PARTY OF ITS MATERIAL OBLIGATIONS UNDER
OR IN CONNECTION WITH THIS AGREEMENT.  IF AN INDEMNIFIED PARTY BECOMES INVOLVED
IN ANY CAPACITY IN ANY ACTION, PROCEEDING OR INVESTIGATION IN CONNECTION WITH
ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE
PARTNERSHIP’S BUSINESS OR AFFAIRS, THE PARTNERSHIP SHALL MAKE ADVANCES TO SUCH
INDEMNIFIED PARTY FOR ITS REASONABLE LEGAL AND OTHER REASONABLE OUT OF POCKET
EXPENSES (INCLUDING THE COST OF ANY INVESTIGATION AND PREPARATION) AS THEY ARE
INCURRED IN CONNECTION THEREWITH, PROVIDED THAT SUCH INDEMNIFIED PARTY SHALL
PROMPTLY REPAY TO THE PARTNERSHIP THE AMOUNT OF ANY SUCH REIMBURSED EXPENSES
PAID TO IT IF IT SHALL ULTIMATELY BE DETERMINED THAT SUCH INDEMNIFIED PARTY WAS
NOT ENTITLED TO BE INDEMNIFIED BY THE

 

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PARTNERSHIP IN CONNECTION WITH SUCH ACTION, PROCEEDING OR INVESTIGATION.  ANY
INDEMNITY OR ADVANCEMENT UNDER THIS SECTION 9.7(A) SHALL BE PAID SOLELY OUT OF
AND TO THE EXTENT OF PARTNERSHIP ASSETS AND SHALL NOT BE A PERSONAL OBLIGATION
OF ANY PARTNER.

 

(B)                                 [INTENTIONALLY OMITTED.].

 

(C)                                  SURVIVAL.  THE PROVISIONS OF THIS
SECTION 9.7 SHALL SURVIVE FOR A PERIOD OF THREE (3) YEARS FROM THE DATE OF
DISSOLUTION OF THE PARTNERSHIP, PROVIDED THAT IF AT THE END OF SUCH PERIOD THERE
ARE ANY ACTIONS, PROCEEDINGS OR INVESTIGATIONS THEN PENDING, AN INDEMNIFIED
PARTY MAY SO NOTIFY THE PARTNERSHIP, THE PARTNERS AND THE GENERAL PARTNER PRIOR
TO SUCH TIME (UNLESS THE INDEMNIFIED PARTY HAS PREVIOUSLY PROVIDED NOTICE TO THE
PARTNERSHIP, THE PARTNERS AND THE GENERAL PARTNER OF SUCH MATTER), WHICH NOTICE
SHALL INCLUDE A BRIEF DESCRIPTION OF EACH SUCH ACTION, PROCEEDING OR
INVESTIGATION AND THE LIABILITIES ASSERTED THEREIN AND THE PROVISIONS OF THIS
SHALL SURVIVE WITH RESPECT TO EACH SUCH ACTION, PROCEEDING OR INVESTIGATION (OR
ANY RELATED ACTION, PROCEEDING OR INVESTIGATION BASED UPON THE SAME OR SIMILAR
CLAIM) FOR WHICH THE PARTNERSHIP HAD NOTICE UNTIL SUCH DATE THAT SUCH ACTION,
PROCEEDING OR INVESTIGATION IS FINALLY RESOLVED, AND THE OBLIGATIONS OF THE
PARTNERSHIP UNDER THIS SECTION 9.7 SHALL BE SATISFIED SOLELY OUT OF PARTNERSHIP
ASSETS.

 

(D)                                 EXPENSES.  TO THE EXTENT THAT AN INDEMNIFIED
PARTY HAS BEEN SUCCESSFUL, ON THE MERITS OR OTHERWISE, IN THE DEFENSE OF ANY
ACTION, SUIT OR PROCEEDING REFERRED TO IN PARAGRAPH (A), ABOVE, OR IN DEFENSE OF
ANY CLAIM, ISSUE OR MATTER THEREIN, THE PERSON SHALL BE INDEMNIFIED BY THE
PARTNERSHIP AGAINST EXPENSES (INCLUDING REASONABLE ATTORNEY’S FEES) ACTUALLY AND
REASONABLY INCURRED BY THE PERSON IN CONNECTION THEREWITH.

 

(E)                                  DETERMINATION.  ANY INDEMNIFICATION, BUT
NOT ADVANCEMENT (WHICH SHALL BE MANDATORY), UNDER PARAGRAPH (A), ABOVE (UNLESS
ORDERED BY A COURT), SHALL BE MADE BY THE PARTNERSHIP IF THE INDEMNIFIED PARTY
HAS MET THE APPLICABLE STANDARD OF CONDUCT SET FORTH IN PARAGRAPH (A), ABOVE. 
THE DETERMINATION WHETHER THE INDEMNIFIED PARTY HAS MET THE APPLICABLE STANDARD
OF CONDUCT SHALL BE MADE IN GOOD FAITH BY THE PARTNER OR PARTNERS NOT AFFILIATED
WITH SUCH INDEMNIFIED PARTY.

 

(F)                                    INDEMNIFICATION NOT EXCLUSIVE.  THE
INDEMNIFICATION AND ADVANCEMENT RIGHTS PROVIDED BY THIS SECTION 9.7 SHALL NOT BE
DEEMED EXCLUSIVE OF ANY OTHER RIGHTS TO WHICH THOSE SEEKING INDEMNIFICATION OR
ADVANCEMENT MAY BE ENTITLED UNDER THE CERTIFICATE OR ANY AGREEMENT, VOTE OF
PARTNERS OR DISINTERESTED MANAGERS, OR OTHERWISE, BOTH AS TO ACTION IN THE
PERSON’S OFFICIAL CAPACITY AND AS TO ACTION IN ANOTHER CAPACITY WHILE HOLDING
OFFICE, AND SHALL CONTINUE AS TO A PERSON WHO HAS CEASED TO BE A DIRECTOR,
OFFICER, GENERAL PARTNER, MANAGER, EMPLOYEE OR AGENT, AND SHALL INURE TO THE
BENEFIT OF THE HEIRS, EXECUTORS AND ADMINISTRATORS OF SUCH PERSON.

 

(G)                                 INSURANCE.  THE PARTNERSHIP, SUBJECT TO
APPROVAL OF THE PARTNERS, MAY PURCHASE AND MAINTAIN INSURANCE ON BEHALF OF ANY
PERSON WHO IS OR WAS A GENERAL PARTNER, OFFICER, EMPLOYEE OR AGENT OF THE
PARTNERSHIP, OR WHO IS OR WAS SERVING AT THE

 

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REQUEST OF THE PARTNERSHIP AS A DIRECTOR, OFFICER, GENERAL PARTNER, MANAGER,
EMPLOYEE OR AGENT OF ANOTHER LIMITED LIABILITY COMPANY, CORPORATION,
PARTNERSHIP, JOINT VENTURE, TRUST OR OTHER ENTERPRISE, AGAINST ANY LIABILITY
ASSERTED AGAINST THE PERSON AND INCURRED BY THE PERSON IN ANY CAPACITY; OR
ARISING OUT OF THE PERSON’S STATUS AS SUCH, WHETHER OR NOT THE PARTNERSHIP WOULD
HAVE THE POWER TO INDEMNIFY THE PERSON AGAINST THE LIABILITY UNDER THE
PROVISIONS OF THIS SECTION 9.7.

 

(H)                                 REPORT TO PARTNERS.  IF THE PARTNERSHIP HAS
ADVANCED EXPENSES TO THE GENERAL PARTNER, OR ANY INDEMNIFIED PARTY OF THE
GENERAL PARTNER, THE PARTNERSHIP SHALL PROMPTLY REPORT THE INDEMNIFICATION OR
ADVANCE IN WRITING TO THE PARTNERS.

 

(I)                                     DEFINITIONS.  FOR PURPOSES OF THIS
SECTION, REFERENCES TO “SERVING AT THE REQUEST OF THE PARTNERSHIP” SHALL INCLUDE
ANY SERVICE AS A GENERAL PARTNER, OFFICER, EMPLOYEE OR AGENT OF THE PARTNERSHIP
THAT IMPOSES DUTIES ON, OR INVOLVES SERVICES BY THE GENERAL PARTNER, OFFICER,
EMPLOYEE OR AGENT WITH RESPECT TO AN EMPLOYEE BENEFIT PLAN, ITS PARTICIPANTS OR
BENEFICIARIES.

 

9.8                                 TAX MATTERS PARTNER.  THE GENERAL PARTNER
SHALL BE THE PARTNERSHIP’S “TAX MATTERS PARTNER” AS DEFINED IN CODE
SECTION 6231(A)(7) (THE “TMP”).  THE TMP SHALL EMPLOY EXPERIENCED TAX COUNSEL TO
REPRESENT THE PARTNERSHIP IN CONNECTION WITH ANY AUDIT OR INVESTIGATION OF THE
PARTNERSHIP BY THE SERVICE AND IN CONNECTION WITH ALL SUBSEQUENT ADMINISTRATIVE
AND JUDICIAL PROCEEDINGS ARISING OUT OF SUCH AUDIT.  THE PARTNERSHIP SHALL NOT
BE OBLIGATED TO PAY ANY FEES OR OTHER COMPENSATION TO THE TMP IN ITS CAPACITY AS
SUCH; PROVIDED, HOWEVER, THAT ALL REASONABLE EXPENSES INCURRED BY THE TMP IN
SERVING AS THE TMP SHALL BE PARTNERSHIP EXPENSES AND THE TMP SHALL BE REIMBURSED
BY THE PARTNERSHIP IN CONNECTION THEREWITH.  NOTWITHSTANDING THE FOREGOING, IT
SHALL BE THE RESPONSIBILITY OF THE GENERAL PARTNER AND OF EACH PARTNER, AT THEIR
EXPENSE, TO EMPLOY TAX COUNSEL TO REPRESENT THEIR RESPECTIVE SEPARATE
INTERESTS.  IF THE TMP IS REQUIRED BY LAW OR REGULATION TO INCUR FEES AND
EXPENSES IN CONNECTION WITH TAX MATTERS NOT AFFECTING EACH OF THE PARTNERS, THEN
THE TMP MAY, IN ITS SOLE DISCRETION, SEEK REIMBURSEMENT FROM THOSE PARTNERS ON
WHOSE BEHALF SUCH FEES AND EXPENSES WERE INCURRED.  THE TMP SHALL TAKE SUCH
ACTION AS MAY BE NECESSARY TO CAUSE EACH PARTNER TO BECOME A “NOTICE PARTNER”
WITHIN THE MEANING OF CODE SECTION 6231(A)(8).  THE TMP SHALL KEEP THE PARTNERS
INFORMED OF ALL ADMINISTRATIVE AND JUDICIAL PROCEEDINGS, AS REQUIRED BY CODE
SECTION 6223(G), AND SHALL FURNISH TO EACH PARTNER A COPY OF EACH NOTICE OR
OTHER MATERIAL COMMUNICATION RECEIVED BY THE TMP FROM THE SERVICE, AND EACH
NOTICE OR OTHER COMMUNICATION SENT BY THE TMP TO THE SERVICE, EXCEPT SUCH
NOTICES OR COMMUNICATIONS AS ARE SENT DIRECTLY TO SUCH PARTNER BY THE SERVICE. 
THE RELATIONSHIP OF THE TMP TO THE PARTNERS IS THAT OF A FIDUCIARY, AND THE TMP
HAS A FIDUCIARY OBLIGATION TO PERFORM ITS DUTIES AS TMP IN SUCH MANNER AS WILL
SERVE THE BEST INTERESTS OF THE PARTNERSHIP AND ALL OF THE PARTNERS. 
NOTWITHSTANDING THE FOREGOING, THE TMP SHALL NOT TAKE ANY POSITION OR ACTION
WITH THE SERVICE WITHOUT PRIOR APPROVAL FROM THE LIMITED PARTNERS, INCLUDING BUT
NOT LIMITED TO ANY DECISION:

 

(A)                                  TO ENTER INTO A SETTLEMENT AGREEMENT WHICH
PURPORTS TO BIND THE PARTNERSHIP OR THE PARTNERS OTHER THAN THE TMP;

 

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(B)                                 TO FILE A PETITION CONTEMPLATED IN
SECTION 6226(A) OR 6228(A) OF THE CODE;

 

(C)                                  TO FILE ANY REQUEST CONTEMPLATED IN
SECTION 6227(B) OF THE CODE;

 

(D)                                 TO ENTER INTO AN AGREEMENT EXTENDING THE
PERIOD OF LIMITATIONS AS CONTEMPLATED IN SECTION 6229(B)(1)(B) OF THE CODE.

 

To the fullest extent permitted by law, the Partnership agrees to indemnify the
TMP and its agents and save and hold them harmless, from and in respect of
(i) all reasonable fees, costs and expenses in connection with or resulting from
any claim, action or demand against the TMP, the General Partner or the
Partnership that arise out of or in any way relate to the TMP’s status as TMP
for the Partnership, and (ii) all such claims, actions and demands and any
losses or damages therefrom, including amounts paid in settlement or compromise
of any such claim, action or demand; provided that this indemnity shall not
extend to conduct by the TMP adjudged (A) not to have been undertaken reasonably
and in good faith to promote the best interests of the Partnership in accordance
with this Agreement or (B) to have constituted gross negligence, recklessness,
intentional wrongdoing or breach or violation of this Agreement by the TMP.

 

9.9                                 BUSINESS PLAN AND INVESTMENT STRATEGY.  THE
BUSINESS PLAN, INVESTMENT STRATEGY AND ANNUAL BUDGET FOR THE PARTNERSHIP AND THE
REIT ENTITIES AND PROPERTY ENTITIES FOR THE UPCOMING CALENDAR YEAR SHALL BE
PREPARED BY THE GENERAL PARTNER AND PROPOSED TO THE LIMITED PARTNERS FOR
APPROVAL, ANNUALLY (THE “BUSINESS PLAN”) ON OR BEFORE NOVEMBER 15 OF THE
CALENDAR YEAR PRECEDING THE CALENDAR YEAR APPLICABLE TO THE BUSINESS PLAN.  THE
LIMITED PARTNERS WILL MEET, IN PERSON OR BY TELEPHONE, NO LESS OFTEN THAN
QUARTERLY TO DISCUSS THE PARTNERSHIP’S BUSINESS PLAN, MAJOR DECISIONS AND
OPERATIONS OF THE OWNED PROPERTIES.  THE GENERAL PARTNER SHALL CARRY OUT THE
TERMS OF THE BUSINESS PLANS AS APPROVED.  UNLESS AN ANNUAL BUSINESS PLAN IS
APPROVED BY THE LIMITED PARTNERS, THE OPERATIONS OF THE PARTNERSHIP SHALL BE
GOVERNED BY THE LAST APPROVED BUSINESS PLAN.

 

ARTICLE 10

 

LIMITED PARTNERS

 

10.1                           RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS. 
THE LIMITED PARTNERS SHALL TAKE NO PART IN THE CONTROL OR MANAGEMENT OF THE
AFFAIRS OF THE PARTNERSHIP, AND NO LIMITED PARTNER HAVE ANY AUTHORITY TO ACT FOR
OR ON BEHALF OF THE PARTNERSHIP EXCEPT AS OTHERWISE PROVIDED HEREIN.

 

10.2                           APPROVAL OF PARTNERS.  EXCEPT AS OTHERWISE
PROVIDED HEREIN, WHENEVER ANY VOTE, APPROVAL, AGREEMENT OR CONSENT OF THE
LIMITED PARTNERS OR THE PARTNERS SHALL BE REQUIRED PURSUANT TO THIS AGREEMENT,
INCLUDING BUT NOT LIMITED TO MAJOR DECISIONS, SUCH VOTE, APPROVAL, AGREEMENT OR
CONSENT SHALL MEAN AND REQUIRE THE PRIOR UNANIMOUS WRITTEN AGREEMENT OF ALL OF
THE LIMITED PARTNERS.

 

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10.3                           RELIANCE ON PARTNER COMMUNICATIONS.  INLAND
AGREES THAT IN THE EVENT AN ACTION, CONSENT, APPROVAL, DECISION, JUDGMENT,
NOTICE OR OTHER COMMUNICATION (AN “INLAND COMMUNICATION”) IS MADE BY MARK
ZALATORIS OR SCOTT CARR, THEN PGGM PRE FUND, THE PARTNERSHIP AND THE GENERAL
PARTNER SHALL BE ENTITLED TO RELY UPON SUCH INLAND COMMUNICATION, AND INLAND
SHALL BE BOUND BY ALL SUCH INLAND COMMUNICATIONS.  PGGM PRE FUND AGREES THAT IN
THE EVENT AN ACTION, CONSENT, APPROVAL, DECISION, JUDGMENT, NOTICE OR OTHER
COMMUNICATION (A “PGGM PRE FUND COMMUNICATION”) IS MADE BY WERNER SOHIER OR
STEVEN ZEEMAN, THEN INLAND, THE PARTNERSHIP AND THE GENERAL PARTNER SHALL BE
ENTITLED TO RELY UPON SUCH PGGM PRE FUND COMMUNICATION AND PGGM PRE FUND SHALL
BE BOUND BY ALL SUCH PGGM PRE FUND COMMUNICATIONS.  EITHER OF THE LIMITED
PARTNERS MAY DESIGNATE IN WRITING DELIVERED TO THE OTHER LIMITED PARTNER FROM
TIME TO TIME A REPLACEMENT PERSON(S) UPON WHOSE COMMUNICATIONS THE PARTNERSHIP,
THE GENERAL PARTNER AND SUCH OTHER LIMITED PARTNER SHALL BE ENTITLED TO RELY.

 

10.4                           MEETINGS OF THE LIMITED PARTNERS.  MEETINGS OF
THE LIMITED PARTNERS SHALL BE HELD AT LEAST QUARTERLY.  SPECIAL MEETINGS OF THE
LIMITED PARTNERS MAY BE CALLED FOR ANY PURPOSE AT ANY TIME BY ANY LIMITED
PARTNER OR THE GENERAL PARTNER.  MEETINGS SHALL BE HELD BY TELEPHONE OR AT THE
PRINCIPAL OFFICE OF THE PARTNERSHIP OR SUCH OTHER PLACE AS MAY BE DESIGNATED BY
THE PERSON CALLING THE MEETING IN THE NOTICE OF A SPECIAL MEETING (WHICH PLACE
MUST BE REASONABLE).  ANY ACTIONS REQUIRED OR PERMITTED TO BE TAKEN AT A MEETING
OF THE LIMITED PARTNERS MAY BE TAKEN WITHOUT A MEETING UPON THE UNANIMOUS
WRITTEN CONSENT OF THE LIMITED PARTNERS.  LIMITED PARTNERS MAY PARTICIPATE AND
ACT AT ANY MEETING THROUGH THE USE OF A CONFERENCE TELEPHONE OR OTHER
COMMUNICATIONS EQUIPMENT BY MEANS OF WHICH ALL PERSONS PARTICIPATING IN THE
MEETING CAN HEAR AND SPEAK TO EACH OTHER.

 

10.5                           OFFICERS OF THE PARTNERSHIP.  THE GENERAL PARTNER
MAY FROM TIME TO TIME APPOINT ONE OR MORE PERSONS TO SERVE AS OFFICERS OF THE
PARTNERSHIP, IN SUCH CAPACITIES AND WITH SUCH DELEGATED RIGHTS AND POWERS AS THE
LIMITED PARTNERS MAY UNANIMOUSLY APPROVE FOR THE GENERAL PARTNER; PROVIDED,
HOWEVER, THAT NO SUCH OFFICER SHALL HAVE ANY DIFFERENT OR GREATER RIGHTS AND
POWERS THAN THE GENERAL PARTNER HAS UNDER THIS AGREEMENT.  OFFICERS APPOINTED BY
THE GENERAL PARTNER SHALL BE ENTITLED TO BE INDEMNIFIED BY THE PARTNERSHIP IN
ACCORDANCE WITH SECTION 9.7.  AT INCEPTION, THE PARTNERSHIP IS NOT ANTICIPATED
TO HAVE ANY OFFICERS.

 

10.6                           RESTRICTIONS ON AUTHORITY OF PARTNERS.  THE
PARTNERS SHALL HAVE NO AUTHORITY TO:

 

(A)                                  DO ANY ACT IN CONTRAVENTION OF THIS
AGREEMENT OR THE ACT; OR

 

(B)                                 POSSESS PROPERTY, OR ASSIGN RIGHTS IN
SPECIFIC PARTNERSHIP PROPERTY, FOR OTHER THAN A PARTNERSHIP PURPOSE; OR
KNOWINGLY PERFORM ANY ACT THAT WOULD SUBJECT ANY PARTNER TO LIABILITY FOR THE
OBLIGATIONS OF THE PARTNERSHIP IN ANY JURISDICTION.

 

10.7                           LIABILITY OF LIMITED PARTNERS.  TO THE MAXIMUM
EXTENT PERMITTED UNDER THE ACT, THE LIMITED PARTNERS SHALL NOT BE LIABLE TO THE
PARTNERSHIP OR TO ANY PARTNER FOR ANY LOSSES SUSTAINED OR LIABILITIES INCURRED
AS A RESULT OF ANY ACT OR OMISSION OF THE LIMITED PARTNER IF THE ACT OR OMISSION
DID NOT CONSTITUTE FRAUD, BAD FAITH, GROSS NEGLIGENCE, OR WILLFUL OR WANTON
MISCONDUCT.  FOR PURPOSES OF THIS AGREEMENT, ANY ACT OR OMISSION, IF DONE OR
OMITTED TO BE DONE

 

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IN RELIANCE, IN WHOLE OR IN PART, UPON THE ADVICE OF INDEPENDENT LEGAL COUNSEL
OR INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS UNANIMOUSLY SELECTED BY THE LIMITED
PARTNERS, WILL BE PRESUMED TO HAVE BEEN DONE OR OMITTED TO BE DONE IN GOOD FAITH
AND NOT TO CONSTITUTE FRAUD, BAD FAITH, GROSS NEGLIGENCE OR WILLFUL OR WANTON
MISCONDUCT.

 

10.8                           LIABILITY.  NO LIMITED PARTNER SHALL BE BOUND BY,
OR BE PERSONALLY LIABLE FOR, THE EXPENSES, LIABILITIES OR OBLIGATIONS OF THE
PARTNERSHIP BEYOND THE AMOUNT AGREED TO BE CONTRIBUTED BY IT TO THE CAPITAL OF
THE PARTNERSHIP PURSUANT TO THIS AGREEMENT, NOR SHALL ANY LIMITED PARTNER BE
RESPONSIBLE FOR ANY LOSSES OF ANY OTHER PARTNER.

 

10.9                           DISAGREEMENTS.  IN THE EVENT OF A DISAGREEMENT,
EITHER LIMITED PARTNER, MAY, AT ITS OPTION SUBMIT THE DISAGREEMENT TO AN
ARBITRATOR WITH THE AMERICAN ARBITRATION ASSOCIATION IN CHICAGO, ILLINOIS FOR
ADJUDICATION WITHIN THIRTY (30) DAYS PURSUANT TO THE COMMERCIAL ARBITRATION
RULES UTILIZING EXPEDITED PROCEDURES.  EACH PARTY SHALL SUBMIT TO THE ARBITRATOR
AND EXCHANGE WITH THE OTHER, IN ACCORDANCE WITH A PROCEDURE TO BE ESTABLISHED BY
THE ARBITRATOR, SUCH LIMITED PARTNER’S BEST OFFER WITH RESPECT TO THE RESOLUTION
OF THE DISAGREEMENT. THE ARBITRATOR SHALL BE LIMITED TO AWARDING ONLY ONE OR THE
OTHER OF THE TWO POSITIONS SUBMITTED BY THE LIMITED PARTNERS.  IF THE GENERAL
PARTNER FAILS TO ENFORCE THE DETERMINATION OF THE ARBITRATOR WITHIN FIVE
(5) BUSINESS DAYS AFTER RECEIPT OF NOTICE OF SUCH FAILURE, ANY PARTNER SHALL BE
ENTITLED, AT THE EXPENSE OF THE PARTNERSHIP, TO ENFORCE THE DETERMINATION OF THE
ARBITRATOR, UTILIZING THE SAME EXPEDITED PROCEDURES.

 

ARTICLE 11

 

ADMISSION OF ADDITIONAL PARTNERS: ASSIGNMENT PROVISIONS

 

11.1                           ADDITIONAL PARTNERS AND PARTNERSHIP INTERESTS. 
NO ADDITIONAL PARTNERS MAY BE ADMITTED TO THE PARTNERSHIP, OTHER THAN ANY
TRANSFEREE OF THE INTERESTS IN THE PARTNERSHIP CURRENTLY OWNED BY INLAND OR PGGM
PRE FUND, AS THE CASE MAY BE, AS AND TO THE EXTENT PERMITTED UNDER THIS
AGREEMENT.  NO ADDITIONAL PARTNERSHIP INTERESTS MAY BE ISSUED.

 

11.2                           GENERAL PROVISIONS.  THE FOLLOWING RULES SHALL
APPLY TO TRANSFERS OF PARTNERSHIP INTERESTS:

 

(A)                                  RESTRICTIONS ON TRANSFER OF LIMITED PARTNER
INTERESTS.  THE LIMITED PARTNERS SHALL HAVE NO RIGHT TO TRANSFER THEIR
PARTNERSHIP INTERESTS, EXCEPT WITH THE PRIOR WRITTEN CONSENT OF THE OTHER
PARTNERS, AND UNLESS SUCH TRANSFER OTHERWISE COMPLIES WITH THE CONDITIONS TO
TRANSFER SET FORTH IN THIS AGREEMENT.  EXCEPT AS EXPRESSLY PERMITTED IN SECTIONS
11.2(C) AND (D), NO LIMITED PARTNER SHALL TRANSFER, OR CAUSE OR PERMIT THE
TRANSFER OF, ALL OR ANY PORTION OF ITS INTEREST OR ANY INTEREST THEREIN, WITHOUT
OBTAINING THE PRIOR WRITTEN CONSENT OF THE LIMITED PARTNERS.  SUCH CONSENT MAY
NOT BE UNREASONABLY WITHHELD.  ANY TRANSFER, OR PURPORTED TRANSFER, OF ALL OR
ANY PART OF AN INTEREST MADE IN VIOLATION OF THE PROVISIONS OF THIS ARTICLE 11
SHALL BE VOID AND OF NO FORCE OR EFFECT AGAINST THE PARTNERSHIP, THE OTHER
PARTNERS, ANY CREDITOR OF THE PARTNERSHIP OR ANY CLAIMANT AGAINST THE
PARTNERSHIP, EXCEPT AS SET FORTH IN ARTICLE 11 HEREOF.  IF A LIMITED PARTNER

 

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CONSENTS TO A TRANSFER OF THE INTEREST OF ANOTHER PARTNER OR IF A PARTNER
EFFECTS A TRANSFER OF ITS INTEREST PERMITTED UNDER THIS ARTICLE 11, THEN THE
GIVING OF ANY SUCH CONSENT OR THE MAKING OF SUCH PERMITTED TRANSFER IN ANY ONE
OR MORE INSTANCES SHALL NOT LIMIT OR WAIVE THE REQUIREMENT FOR SUCH CONSENT OR
THE APPLICATION OF THE PROVISIONS OF THIS ARTICLE 11 TO ANY OTHER OR SUBSEQUENT
TRANSFER OF SUCH PARTNER’S INTEREST.

 

(B)                                 CONDITION TO ALL TRANSFERS.  IT SHALL BE A
CONDITION TO ANY TRANSFER THAT ANY REQUIRED CONSENT TO SUCH TRANSFER BY ANY
SECURED LENDER SHALL HAVE BEEN OBTAINED.  IT SHALL ALSO BE A CONDITION TO THE
EFFECTIVENESS OF ANY TRANSFER OF ALL OR PART OF THE INTEREST TO A PERSON OTHER
THAN A PARTNER, INCLUDING TRANSFERS OTHERWISE PERMITTED BY SECTIONS 11.2(D) AND
(E), AND A CONDITION TO THE PURPORTED TRANSFEREE OF SUCH TRANSFER BEING ADMITTED
AS A PARTNER OF THE PARTNERSHIP OR OTHERWISE BEING ENTITLED TO ANY BENEFITS OR
RIGHTS UNDER THIS AGREEMENT OR OTHERWISE ASSOCIATED WITH SUCH INTEREST, THAT:

 

(I)                                     EXCEPT IN THE CASE OF A TRANSFER OF
OWNERSHIP INTERESTS IN A PARTNER PERMITTED BY SECTIONS 11.2(C), (A) THE
TRANSFEREE SHALL EXECUTE AND DELIVER TO THE OTHER PARTNERS A WRITTEN AGREEMENT
REASONABLY SATISFACTORY TO THE OTHER PARTNERS ACCEPTING AND ADOPTING THE TERMS
OF THIS AGREEMENT AND UNCONDITIONALLY ASSUMING AND AGREEING TO BE BOUND BY ALL
OBLIGATIONS, CONDITIONS AND COVENANTS OF THE TRANSFERRING PARTNER HEREUNDER WITH
RESPECT TO THE INTEREST TRANSFERRED (WHETHER IN EXISTENCE AT THE TIME OF SUCH
TRANSFER OR ACCRUING THEREAFTER), AND (B) ANY GUARANTOR OF THE OBLIGATIONS OF
THE TRANSFEROR UNDER THIS AGREEMENT SHALL EXECUTE A WRITTEN GUARANTY OF THE
OBLIGATIONS OF THE TRANSFEREE HEREUNDER, TO THE SAME EXTENT AND ON THE SAME
TERMS AS SUCH GUARANTY OF THE TRANSFEROR’S OBLIGATIONS;

 

(II)                                  EXCEPT IN THE CASE OF A TRANSFER OF
OWNERSHIP INTERESTS IN A PARTNER PERMITTED BY SECTIONS 11.2(C), THE OTHER
PARTNERS SHALL HAVE RECEIVED SUCH EVIDENCE (INCLUDING OPINIONS OF COUNSEL, WHICH
MAY BE IN-HOUSE COUNSEL) OF THE DUE AUTHORIZATION, EXECUTION AND DELIVERY OF
INSTRUMENTS BY, AND THE VALIDITY AND ENFORCEABILITY OF SUCH INSTRUMENTS AGAINST,
SUCH TRANSFEREE AS THE OTHER PARTNERS SHALL REASONABLY REQUEST;

 

(III)                               THE OTHER PARTNERS, AT THEIR OPTION, SHALL
HAVE RECEIVED AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE OTHER PARTNERS
THAT (A) SUCH TRANSFER SHALL NOT VIOLATE ANY FEDERAL OR APPLICABLE STATE
SECURITIES LAW OR CAUSE THE PARTNERSHIP TO FAIL TO QUALIFY FOR AN EXEMPTION FROM
REGISTRATION UNDER THE FEDERAL AND ANY APPLICABLE STATE SECURITIES LAWS, AND
(B) SUCH TRANSFER WILL NOT RESULT IN THE IMPOSITION OF FIDUCIARY RESPONSIBILITY
ON THE PARTNERSHIP, ANY PARTNER OR ANY AFFILIATE OF ANY PARTNER UNDER THE
EMPLOYEE RETIREMENT INCOME AND SECURITY ACT OF 1974, AS AMENDED FROM TIME TO
TIME (“ERISA”);

 

(IV)                              SUCH TRANSFER WILL NOT RESULT IN ANY REIT
ENTITY NO LONGER QUALIFYING AS A DOMESTICALLY CONTROLLED REIT; AND

 

(V)                                 SUCH TRANSFER WILL NOT RESULT IN THE
PARTNERSHIP BEING TREATED AS A

 

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“PUBLICLY TRADED PARTNERSHIP” WITHIN THE MEANING OF CODE SECTION 7704.

 

(C)                                  CERTAIN PERMITTED TRANSFERS. 
NOTWITHSTANDING THE PROVISIONS OF SECTION 11.2(A), BUT SUBJECT TO THE
LIMITATIONS OF SECTION 11.2(B), ANY PERSON WHO IS A STOCKHOLDER, PARTNER, MEMBER
OR OTHER DIRECT OR INDIRECT OWNER OF ANY PARTNER MAY, FROM TIME TO TIME,
TRANSFER ALL OR A PORTION OF SUCH PERSON’S DIRECT OR INDIRECT INTEREST IN SUCH
PARTNER TO ANY PERSON, PROVIDED THAT (I) ANY REQUIRED CONSENT HAS BEEN RECEIVED,
(II) EITHER (A) THE ASSIGNEE OF SUCH INTEREST SATISFIES THE PROVISIONS SET FORTH
IN SECTION 11.2(D) OR (B) THE PARTNERS RECEIVE OTHER EVIDENCE SATISFACTORY TO
EACH OF THEM THAT THE PROPOSED TRANSFER SHALL NOT RESULT IN ADVERSE CONSEQUENCES
TO SUCH PARTNER OR THE PARTNERSHIP RELATING TO ERISA OR RESULT IN ANY REIT
ENTITY NO LONGER QUALIFYING AS A DOMESTICALLY CONTROLLED REIT, AND (III) AFTER
GIVING EFFECT TO SUCH TRANSFER, SUCH PARTNER WOULD COME WITHIN THE DEFINITION OF
A TRANSFER AFFILIATE AS APPLIED TO SUCH PARTNER AS CONSTITUTED ON THE EFFECTIVE
DATE.  FOR AVOIDANCE OF DOUBT, THE PARTIES EXPRESSLY AGREE THAT THE FOREGOING
PROVISIONS (I), (II) AND (III) SHALL NOT BE APPLICABLE TO ANY TRANSACTION WHICH
IS NOT DEEMED TO BE A “TRANSFER” PURSUANT TO THE EXCEPTIONS CONTAINED IN THE
DEFINITION OF “TRANSFER”.

 

(D)                                 TRANSFERS TO TRANSFER AFFILIATES.  SUBJECT
TO THE LIMITATIONS OF SECTION 11.2(B), EACH PARTNER SHALL HAVE THE RIGHT, AT ANY
TIME OR FROM TIME TO TIME, WITHOUT THE CONSENT OF THE GENERAL PARTNER OR ANY
OTHER PARTNER, TO SELL OR ASSIGN ALL OR ANY PORTION OF ITS INTEREST TO A
TRANSFER AFFILIATE OF SUCH PARTNER.  IN THE EVENT OF ANY SUCH TRANSFER, THE
TRANSFEREE SHALL ASSUME ALL OBLIGATIONS OF THE TRANSFEROR ATTRIBUTABLE TO THE
INTEREST TRANSFERRED, IN ACCORDANCE WITH SECTION 11.2(B), PROVIDED THAT THE
TRANSFEROR SHALL NOT THEREBY BE RELEASED AND SHALL CONTINUE TO BE JOINTLY AND
SEVERALLY LIABLE WITH SUCH TRANSFEREE FOR ALL SUCH OBLIGATIONS UNLESS SUCH
TRANSFER AFFILIATE IS AN INSTITUTIONAL INVESTOR THAT HAS A NET WORTH IN EXCESS
OF $1 BILLION.  FURTHERMORE, ANY TRANSFEREE OF ALL OR ANY PORTION OF THE
INTEREST OF A PARTNER SHALL HAVE THE RIGHT, PURSUANT TO THIS SECTION 11.2(E), TO
ASSIGN ALL OR ANY PORTION OF ITS INTEREST TO SUCH PARTNER OR ANY TRANSFER
AFFILIATE OF SUCH PARTNER, EXCEPT THAT IF A PARTNER HAS ASSIGNED ITS ENTIRE
INTEREST, ANY FURTHER ASSIGNMENT OF ALL OR ANY PORTION OF SUCH INTEREST SHALL
THEREAFTER BE SUBJECT TO THE PROVISIONS OF THIS ARTICLE 11.  IF A PARTNER SHALL
TRANSFER LESS THAN ITS ENTIRE INTEREST TO A TRANSFER AFFILIATE, REFERENCES TO
SUCH PARTNER IN THIS AGREEMENT SHALL REFER TO SUCH PARTNER AND ITS TRANSFER
AFFILIATE COLLECTIVELY, AND SUCH TRANSFEROR PARTNER SHALL BE AUTHORIZED TO ACT
ON BEHALF OF SUCH TRANSFER AFFILIATE FOR ALL PURPOSES UNDER THIS AGREEMENT.

 

(E)                                  ERISA PROVISIONS.  A PURCHASER OR ASSIGNEE
REFERRED TO IN SECTION 11.2(A) SHALL SATISFY THE PROVISIONS OF THIS
SECTION 11.2(E) IF (A) SUCH PERSON IS NOT AN “EMPLOYEE BENEFIT PLAN” AS DEFINED
IN SECTION 3(3) OF ERISA, WHICH IS SUBJECT TO TITLE I OF ERISA, (B) THE ASSETS
OF SUCH PERSON DO NOT CONSTITUTE “PLAN ASSETS” OF ONE OR MORE SUCH PLANS WITHIN
THE MEANING OF 29 C.F.R. SECTION 2510.3101, AND (C) SUCH PERSON IS NOT A
“GOVERNMENTAL PLAN” WITHIN THE MEANING OF SECTION 3(32) OF ERISA.  EACH PARTNER
HEREBY AGREES TO INDEMNIFY, DEFEND AND HOLD THE OTHER PARTNER HARMLESS FROM AND
AGAINST ALL LOSS, COST, DAMAGE AND EXPENSE (INCLUDING, WITHOUT LIMITATION,
ATTORNEYS’ FEES AND COSTS INCURRED IN THE INVESTIGATION, DEFENSE AND SETTLEMENT
OF CLAIMS AND LOSSES INCURRED IN

 

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CORRECTING ANY PROHIBITED TRANSACTION, AND IN OBTAINING ANY INDIVIDUAL
PROHIBITED TRANSACTION EXEMPTION UNDER ERISA THAT MAY BE REQUIRED, IN SUCH OTHER
PARTNER’S SOLE DISCRETION) THAT SUCH OTHER PARTNER MAY INCUR, DIRECTLY OR
INDIRECTLY, AS A RESULT OF A TRANSFER OF A DIRECT OR INDIRECT INTEREST IN SUCH
PARTNER TO ANY PERSON NOT SATISFYING THE PROVISIONS OF THIS SECTION 11.2(E).

 

(F)                                    BINDING EFFECT.  ANY PERSON ACQUIRING OR
CLAIMING AN INTEREST IN THE PARTNERSHIP, IN ANY MANNER WHATSOEVER, SHALL BE
SUBJECT TO AND BOUND BY ALL TERMS, CONDITIONS AND OBLIGATIONS HEREOF TO WHICH
ITS PREDECESSOR IN INTEREST, IF ANY, WAS SUBJECT OR BOUND, WITHOUT REGARD TO
WHETHER SUCH PERSON HAS EXECUTED A COUNTERPART HEREOF OR ANY OTHER DOCUMENT
CONTEMPLATED HEREBY.  NO PERSON, INCLUDING THE LEGAL REPRESENTATIVES, HEIRS OR
LEGATEES OF A DECEASED PARTNER, SHALL HAVE ANY RIGHTS OR OBLIGATIONS GREATER
THAN THOSE SET FORTH HEREIN AND NO PERSON SHALL ACQUIRE AN INTEREST IN THE
PARTNERSHIP OR BECOME A PARTNER EXCEPT AS PERMITTED HEREBY.

 

(G)                                 ACTIONS PRIOR TO ACCEPTANCE OF ASSIGNMENT. 
THE PARTNERSHIP AND THE GENERAL PARTNER SHALL BE ENTITLED TO TREAT THE ASSIGNOR
OF THE ASSIGNED INTEREST AS THE ABSOLUTE OWNER THEREOF IN ALL RESPECTS AND SHALL
INCUR NO LIABILITY FOR DISTRIBUTIONS MADE IN GOOD FAITH TO SUCH ASSIGNOR PRIOR
TO SUCH TIME AS THE DOCUMENTS SPECIFIED IN PARAGRAPH (B), ABOVE, HAVE BEEN
DELIVERED TO AND ACCEPTED BY THE GENERAL PARTNER.

 

(H)                                 COSTS.  THE OUT-OF-POCKET COSTS INCURRED BY
THE PARTNERSHIP IN PROCESSING AN ASSIGNMENT (INCLUDING ATTORNEY’S FEES) SHALL BE
BORNE BY THE ASSIGNEE, AND SHALL BE PAYABLE PRIOR TO AND AS A CONDITION OF
ADMISSION TO THE PARTNERSHIP.

 

11.3                           [INTENTIONALLY OMITTED].

 

11.4                           CONTINUATION OF PARTNERSHIP UPON CERTAIN EVENTS. 
THE DEATH, DISABILITY, COURT DECLARATION OF INCOMPETENCE, BANKRUPTCY,
DISSOLUTION, LIQUIDATION OR OTHER DISSOCIATION OF A LIMITED PARTNER SHALL NOT
DISSOLVE THE PARTNERSHIP, BUT IT SHALL BE CONTINUED WITH THE SUCCESSOR OR LEGAL
REPRESENTATIVE OF SUCH PARTNER; SUCH SUCCESSOR OR LEGAL REPRESENTATIVE SHALL, TO
THE EXTENT OF THE INTEREST ACQUIRED, BE ENTITLED ONLY TO THE PREDECESSOR
PARTNER’S RIGHTS, IF ANY, IN THE CAPITAL, PROFITS AND LOSSES AND DISTRIBUTIONS
OF THE PARTNERSHIP, AND NO SUCH PERSON SHALL HAVE ANY RIGHT TO PARTICIPATE IN
THE MANAGEMENT OF THE AFFAIRS OF THE PARTNERSHIP OR VOTE ON ANY PARTNERSHIP
MATTER WITHOUT THE WRITTEN CONSENT OF THE PARTNERS.

 

11.5                           PUT/PURCHASE OPTIONS.

 

(A)                                  PGGM PRE FUND’S PUT OPTION. FOR EACH 12
CALENDAR MONTH PERIOD (EACH, AN “OPTION YEAR”) PGGM PRE FUND SHALL HAVE THE
OPTION TO SELL UP TO AN AGGREGATE OF TWENTY PERCENT (20%) OF PGGM PRE FUND’S
INITIAL PERCENTAGE INTEREST TO INLAND, AS PROVIDED IN THIS SECTION 11.5(A) AND
FOR THE PURCHASE PRICE AND PURSUANT TO THE TERMS SET FORTH IN
SECTION 11.5(C) BELOW (THE “PGGM PRE FUND PUT OPTION”).  THE PGGM PRE FUND PUT
OPTION SHALL BE EXERCISABLE IN WHOLE OR IN PART ON A QUARTERLY BASIS AS FOLLOWS:

 

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(I)                                     PGGM PRE FUND SHALL FIRST HAVE THE RIGHT
TO EXERCISE THE PGGM PRE FUND PUT OPTION DURING THE EXERCISE PERIOD (AS DEFINED
BELOW) IN THE CALENDAR QUARTER FOLLOWING THE CALENDAR QUARTER OF THE SIXTH
ANNIVERSARY OF THE FIRST INLAND INITIAL CAPITAL CONTRIBUTION (THE “PUT OPTION
COMMENCEMENT QUARTER”);

 

(II)                                  BEGINNING WITH THE PUT OPTION COMMENCEMENT
QUARTER, AND ON A QUARTERLY BASIS THEREAFTER UNTIL EXERCISED IN FULL, PGGM PRE
FUND MAY EXERCISE THE PGGM PRE FUND PUT OPTION AT ANY TIME DURING AN EXERCISE
PERIOD BY DELIVERING TO INLAND NOTICE OF PGGM PRE FUND’S ELECTION TO EXERCISE
THE PGGM PRE FUND PUT OPTION, SETTING FORTH THE PERCENTAGE OF PGGM PRE FUND’S
PARTNERSHIP INTEREST THAT PGGM PRE FUND ELECTS TO SELL AS OF SUCH TIME (THE
“PGGM PRE FUND EXERCISE NOTICE”).

 

(III)                               FOR PURPOSES HEREOF, THE “EXERCISE PERIOD”
SHALL MEAN A PERIOD BEGINNING WITH THE DELIVERY OF THE PARTNERSHIP’S QUARTERLY
REPORTS AND FINANCIAL STATEMENTS TO PGGM PRE FUND AS PROVIDED IN ARTICLE 8 AND
ENDING TEN (10) BUSINESS DAYS THEREAFTER DURING EACH CALENDAR QUARTER DURING AN
OPTION YEAR, COMMENCING WITH THE PUT OPTION COMMENCEMENT QUARTER.  A PGGM PRE
FUND EXERCISE NOTICE DELIVERED AFTER THE END OF THE THEN-CURRENT EXERCISE PERIOD
SHALL BE CONSIDERED APPLICABLE TO THE IMMEDIATELY FOLLOWING EXERCISE PERIOD.

 

(B)                                 INLAND’S PURCHASE OPTION.  DURING EACH
OPTION YEAR, BEGINNING WITH THE PUT OPTION COMMENCEMENT QUARTER, INLAND SHALL
HAVE THE OPTION TO PURCHASE UP TO AN AGGREGATE OF TWENTY PERCENT (20%) OF PGGM
PRE FUND’S INITIAL PERCENTAGE INTEREST (LESS ANY PGGM PRE FUND’S INITIAL
PARTNERSHIP INTEREST PREVIOUSLY SOLD PURSUANT TO SECTION 11.5(A) DURING SUCH
CALENDAR YEAR OR THAT PGGM PRE FUND ELECTS TO SELL DURING THE THEN-CURRENT
EXERCISE PERIOD), EXERCISABLE ON A QUARTERLY BASIS AS PROVIDED IN THIS
SECTION 11.5(B) AND FOR THE PURCHASE PRICE AND PURSUANT TO THE TERMS SET FORTH
IN SECTION 11.5(C) BELOW (THE “INLAND PURCHASE OPTION”, AND TOGETHER WITH THE
PGGM PRE FUND PUT OPTION, AN “OPTION” OR THE “OPTIONS”). THE INLAND PURCHASE
OPTION SHALL BE EXERCISABLE IN WHOLE OR IN PART ON A QUARTERLY BASIS AS FOLLOWS:

 

(I)                                     INLAND SHALL FIRST HAVE THE RIGHT TO
EXERCISE THE INLAND PURCHASE OPTION DURING THE EXERCISE PERIOD IN THE PUT OPTION
COMMENCEMENT QUARTER;

 

(II)                                  BEGINNING DURING THE EXERCISE PERIOD WHICH
TAKES PLACE IN THE PUT OPTION COMMENCEMENT QUARTER, AND ON AN QUARTERLY BASIS
THEREAFTER UNTIL EXERCISED IN FULL, INLAND MAY EXERCISE THE INLAND PURCHASE
OPTION AT ANY TIME DURING THE EXERCISE PERIOD BY DELIVERING TO PGGM PRE FUND
NOTICE OF INLAND’S ELECTION TO EXERCISE THE INLAND PURCHASE OPTION, SETTING
FORTH THE PERCENTAGE OF PGGM PRE FUND’S INITIAL PARTNERSHIP INTEREST INLAND
ELECTS TO PURCHASE AS OF SUCH TIME (THE “INLAND EXERCISE NOTICE”, AND TOGETHER
WITH THE PGGM PRE FUND EXERCISE NOTICE, THE “EXERCISE NOTICE” OR “EXERCISE
NOTICES”).

 

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(C)                                  PAYMENT; VALUATION.

 

(I)                             THE PURCHASE PRICE FOR THE PGGM PRE FUND
PARTNERSHIP INTEREST TO BE SOLD AND PURCHASED AS SET FORTH IN AN EXERCISE NOTICE
(THE “PURCHASE PRICE”) SHALL BE THE NAV OF THE PARTNERSHIP AS SET FORTH IN THE
QUARTERLY REPORT AND FINANCIAL STATEMENTS DESCRIBED IN SECTION 8.2, THE DELIVERY
OF WHICH COMMENCED THE APPLICABLE EXERCISE PERIOD, MULTIPLIED BY THE PERCENTAGE
INTEREST SET TO BE SOLD IN SUCH EXERCISE NOTICE, UNLESS EITHER INLAND OR PGGM
PRE FUND, AS THE CASE MAY BE, NOTIFIES THE OTHER IN THE EXERCISE NOTICE THAT IT
DISAGREES WITH SUCH NAV AND REQUESTS THAT THE PURCHASE PRICE BE DETERMINED IN
ACCORDANCE WITH THE METHOD DESCRIBED IN PARAGRAPH 3 ON EXHIBIT 11.5-A (AN
“APPRAISAL”) IN WHICH CASE THE “PURCHASE PRICE” SHALL BE THE PRICE DETERMINED BY
SUCH APPRAISAL.  IN THE EVENT THAT BOTH INLAND AND PGGM PRE FUND DELIVER AN
EXERCISE NOTICE WITHIN THE SAME EXERCISE PERIOD AND ONLY ONE OF THEM ELECTS AN
APPRAISAL, THE FULL AMOUNT OF THE PGGM PRE FUND PARTNERSHIP INTEREST TO BE SOLD
PURSUANT TO SUCH EXERCISE NOTICES SHALL BE SOLD AT THE PURCHASE PRICE DETERMINED
PURSUANT TO THE APPRAISAL.

 

(II)                                  THE PURCHASE PRICE SHALL BE PAYABLE AT A
CLOSING OCCURRING AT 10:00 A.M. CST ON THE 5TH BUSINESS DAY AFTER (A) THE END OF
THE APPLICABLE EXERCISE PERIOD, IF NEITHER INLAND OR PGGM PRE FUND ELECTS AN
APPRAISAL IN ITS EXERCISE NOTICE, OR (B) DETERMINATION OF THE PURCHASE PRICE
PURSUANT TO AN APPRAISAL (THE “CLOSING DATE”) AT THE PRINCIPAL OFFICES OF THE
PARTNERSHIP OR SUCH OTHER TIME AND PLACE AS AGREED BY INLAND AND PGGM PRE FUND
AS FOLLOWS:  (Y) IN THE EVENT THE PURCHASE PRICE IS PAID IN CASH, THE PURCHASE
PRICE SHALL BE PAID TO PGGM PRE FUND, AND AN ASSIGNMENT OF PGGM PRE FUND’S
PARTNERSHIP INTEREST BEING SOLD SHALL BE DELIVERED TO INLAND BY PGGM PRE FUND;
OR (Z) IN THE EVENT THE PURCHASE PRICE IS TO BE PAID ALL OR PARTIALLY IN STOCK
(AS DEFINED BELOW), THE STOCK SHALL BE DELIVERED TO PGGM PRE FUND, THE CASH
PORTION OF THE PURCHASE PRICE (IF ANY) SHALL BE PAID TO PGGM PRE FUND, AND AN
ASSIGNMENT OF PGGM PRE FUND’S PARTNERSHIP INTEREST BEING SOLD SHALL BE DELIVERED
TO INLAND BY PGGM PRE FUND.

 

(III)                               INLAND, IN ITS SOLE DISCRETION, MAY ELECT TO
PAY ALL OR A PORTION OF THE PURCHASE PRICE IN REGISTERED, NON-RESTRICTED SHARES
OF COMMON STOCK OF INLAND OR A SUCCESSOR COMPANY (THE “STOCK”); PROVIDED THAT TO
THE EXTENT THE STOCK PROPOSED TO BE ISSUED TO PGGM PRE FUND, WHEN ADDED TO ANY
SHARES OF INLAND EQUITY THEN HELD BY PGGM PRE FUND, EXCEEDS FIVE PERCENT (5%) OF
ALL OUTSTANDING EQUITY INTERESTS OF INLAND, PGGM PRE FUND’S CONSENT SHALL BE
REQUIRED FOR INLAND TO PAY ANY PORTION OF THE PURCHASE PRICE IN STOCK.  THE
SHARES OF STOCK SHALL BE ISSUED TO PGGM PRE FUND AT A PRICE (THE “PRICE PER
SHARE”) EQUAL TO THE TRAILING FIVE (5) CALENDAR DAY AVERAGE CLOSING PRICE OF
INLAND’S COMMON STOCK, LESS FIVE PERCENT (5%), FOR THE FIVE (5) CALENDAR DAYS
PRECEDING THE CLOSING DATE AND SHALL BE SUBJECT TO THE TERMS OF A SUBSCRIPTION
AND LOCK-UP AGREEMENT IN THE FORM OF

 

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SUBSCRIPTION AND LOCK-UP AGREEMENT ATTACHED HERETO AS EXHIBIT 11.5-B
(“SUBSCRIPTION AND LOCK-UP AGREEMENT”), PURSUANT TO WHICH, AMONG OTHER THINGS,
PGGM PRE FUND SHALL AGREE NOT TO SELL OR OTHERWISE TRANSFER STOCK EQUAL TO MORE
THAN ONE-TENTH OF THE OUTSTANDING EQUITY INTERESTS OF INLAND IN ANY SINGLE
BUSINESS DAY FOR ONE YEAR AFTER ISSUANCE BY INLAND.

 

(D)                                 END OF VENTURE.  UPON THE TERMINATION OF THE
TERM OF THE PARTNERSHIP AS PROVIDED HEREIN, EACH OF INLAND AND PGGM PRE FUND
SHALL IMMEDIATELY HAVE THE RIGHT TO ACCELERATE THE EXERCISE OF THE OPTION, IN
WHOLE OR IN PART, BY DELIVERING AN EXERCISE NOTICE TO INLAND OR PGGM PRE FUND,
AS THE CASE MAY BE, WITHIN SIXTY (60) BUSINESS DAYS FOLLOWING THE END OF THE
TERM, FOR A PURCHASE PRICE DETERMINED IN ACCORDANCE WITH SECTION 11.5(C);
PROVIDED HOWEVER, THAT (I) THE OPTION SHALL BE EXERCISABLE TO THE FULL EXTENT OF
PGGM PRE FUND’S PARTNERSHIP INTEREST AT THE END OF THE TERM AND NOT LIMITED TO
TWENTY PERCENT (20%) PGGM PRE FUND’S INITIAL PARTNERSHIP INTEREST AS OTHERWISE
PROVIDED IN SECTIONS 11.5(A) AND (B), AND (II) THE CLOSING DATE FOR THE PURCHASE
OF THE PGGM PRE FUND PARTNERSHIP INTEREST TO BE SOLD PURSUANT TO THIS
SECTION 11.5(D) SHALL BE THE 5TH BUSINESS DAY FOLLOWING (A) THE DELIVERY OF THE
EXERCISE NOTICE, IF NEITHER INLAND OR PGGM PRE FUND ELECTS AN APPRAISAL IN ITS
EXERCISE NOTICE, OR (B) DETERMINATION OF THE PURCHASE PRICE PURSUANT TO AN
APPRAISAL DESCRIBED IN PARAGRAPH 3 OF EXHIBIT 11.5-A.

 

(E)                                  PRE-CLOSING DISTRIBUTIONS AND ALLOCATIONS. 
SECTIONS 8.5(A), 8.5(B), AND 8.6(B) SHALL BE APPLIED ON A “CLOSING OF THE BOOKS”
BASIS IN CONNECTION WITH A SALE OF ALL OR ANY PORTION OF PGGM PRE FUND’S
PARTNERSHIP INTEREST TO INLAND PURSUANT TO THIS SECTION 11.5.  NET ORDINARY CASH
FLOW AND NET EXTRAORDINARY CASH FLOW ATTRIBUTABLE TO THE PERIOD ENDING AS OF THE
CLOSE OF BUSINESS ON THE LAST DAY PRECEDING THE CHANGE IN THE PARTNERS’
RESPECTIVE PERCENTAGE INTERESTS UPON A SALE OF ALL OR ANY PORTION OF PGGM PRE
FUND’S PARTNERSHIP INTEREST TO INLAND PURSUANT TO THIS SECTION 11.5 SHALL BE
DISTRIBUTED UNDER SECTIONS 8.5(A) AND 8.5(B) IN ACCORDANCE WITH THE PARTNERS’
RESPECTIVE PERCENTAGE INTERESTS IN EFFECT PRIOR TO SUCH CHANGE.  AS PROVIDED IN
SECTION 8.6(C)(X), AS A RESULT OF THE CHANGE IN THE PARTNERS’ RESPECTIVE
PERCENTAGE INTERESTS UPON A SALE OF ALL OR ANY PORTION OF PGGM PRE FUND’S
PARTNERSHIP INTEREST TO INLAND PURSUANT TO THIS SECTION 11.5, THE THEN-CURRENT
ALLOCATION PERIOD SHALL END AS OF THE CLOSE OF BUSINESS ON THE LAST DAY
PRECEDING THE CHANGE AND A NEW ALLOCATION PERIOD SHALL COMMENCE ON THE FIRST DAY
FOR WHICH THE CHANGE IS EFFECTIVE.

 

ARTICLE 12

 

RESIGNATION, WITHDRAWALS, AND PRIORITIES

 

12.1                           RESIGNATIONS AND WITHDRAWALS.  NO PARTNER SHALL
BE ENTITLED TO WITHDRAW OR RESIGN FROM THE PARTNERSHIP.  THE GENERAL PARTNER
SHALL NOT HAVE THE RIGHT TO RESIGN OR WITHDRAW AS GENERAL PARTNER OF THE
PARTNERSHIP.  NO PARTNER SHALL BE ENTITLED TO RECEIVE ANY MONEY OR PROPERTY FROM
THE PARTNERSHIP EXCEPT (A) BY WAY OF DISTRIBUTIONS UPON THE WINDING UP OF THE

 

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PARTNERSHIP PURSUANT TO ARTICLE 13, (B) BY WAY OF DISTRIBUTIONS AS PROVIDED
PURSUANT TO SECTIONS 8.4 AND 8.5, AND (C) PURSUANT TO THE INDEMNITY PROVISIONS
IN SECTION 9.7.

 

12.2                           PRIORITIES.  EXCEPT AS EXPRESSLY PROVIDED IN THIS
AGREEMENT TO THE CONTRARY, NO PARTNERS SHALL HAVE A PRIORITY RIGHT AS TO
WITHDRAWALS, DISTRIBUTIONS OR THE RETURN OF CONTRIBUTIONS.

 

12.3                           INTEREST ON CAPITAL CONTRIBUTIONS.  OTHER THAN
INTEREST WHICH MAY ACCRUE ON PIC FUNDS AS INVESTED (WHICH, PURSUANT TO
SECTION 8.5 IS CONSIDERED NET ORDINARY CASH FLOW AND NOT INTEREST ON A CAPITAL
CONTRIBUTION), AND UNLESS OTHERWISE PROVIDED IN THIS AGREEMENT, NO INTEREST
SHALL BE ALLOWED TO ANY PARTNER UPON THE AMOUNT OF ITS CAPITAL CONTRIBUTIONS OR
CAPITAL ACCOUNT.

 

ARTICLE 13

 

DISSOLUTION

 

13.1                           LIQUIDATION PROCEDURES.  UPON DISSOLUTION OF THE
PARTNERSHIP PURSUANT TO SECTION 5.5, THE AFFAIRS OF THE PARTNERSHIP SHALL BE
WOUND UP AND ITS ASSETS SHALL BE LIQUIDATED AND DISTRIBUTED IN ACCORDANCE WITH
THIS AGREEMENT AND THE ACT.

 

13.2                           LIQUIDATING TRUSTEE.  UPON THE DISSOLUTION OF THE
PARTNERSHIP BUSINESS FOR ANY REASON, THE GENERAL PARTNER SHALL ACT AS
“LIQUIDATING TRUSTEE” OR SHALL ELECT A LIQUIDATING TRUSTEE WHO SHALL WIND UP THE
AFFAIRS OF THE PARTNERSHIP IN ACCORDANCE WITH THIS AGREEMENT AND THE ACT.  IF
THE GENERAL PARTNER HAS BEEN REMOVED, HAS WITHDRAWN OR IS UNWILLING OR UNABLE TO
ACT AS OR ELECT A LIQUIDATING TRUSTEE, THE LIMITED PARTNERS SHALL APPOINT A
LIQUIDATING TRUSTEE.  THE LIQUIDATING TRUSTEE SHALL HAVE FULL POWER TO SELL,
ASSIGN AND ENCUMBER PARTNERSHIP ASSETS IN ANY ORDERLY MANNER FOR ALL-CASH IN
TRANSACTIONS WITH PERSONS THAT ARE NOT AFFILIATES OF EITHER PARTNER AND ARE NOT
ACTING AS NOMINEES FOR EITHER PARTNER.  ALL CERTIFICATES OR NOTICES REQUIRED BY
LAW SHALL BE FILED ON BEHALF OF THE PARTNERSHIP BY THE LIQUIDATING TRUSTEE.

 

13.3                           DISTRIBUTION ON WINDING UP.  IN THE EVENT OF THE
WINDING UP OF THE PARTNERSHIP FOR ANY REASON, THE PROCEEDS OF LIQUIDATION SHALL
BE APPLIED BY THE END OF THE FISCAL YEAR IN WHICH THE LIQUIDATION OCCURS OR, IF
LATER, WITHIN NINETY (90) DAYS AFTER THE DATE OF SUCH LIQUIDATION, IN THE
FOLLOWING RANK AND ORDER:

 

(A)                                  CREDITORS.  TO THE CREDITORS OF THE
PARTNERSHIP, INCLUDING PARTNERS WHO ARE CREDITORS (INCLUDING UNDER UNPAID
PARTNERSHIP LOANS OR OUTSTANDING INDEMNIFICATION PAYMENTS, IF NOT PROHIBITED BY
THE PARTNERSHIP’S CREDITORS IN THE DOCUMENTS EVIDENCING SUCH CREDITOR
OBLIGATIONS), IN SATISFACTION OF LIABILITIES OF THE PARTNERSHIP, ALL IN THE
ORDER OF PRIORITY AND TO THE EXTENT PROVIDED BY LAW.

 

(B)                                 EXPENSES.  TO THE PAYMENT OF COSTS AND
EXPENSES INCURRED IN THE DISSOLUTION AND TERMINATION OF THE PARTNERSHIP.

 

(C)                                  PARTNERS.  AMONG THE PARTNERS IN ACCORDANCE
WITH ARTICLE 8.

 

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13.4                           DISTRIBUTIONS IN KIND.  IN CONNECTION WITH THE
LIQUIDATION OF THE PARTNERSHIP, THE LIQUIDATING TRUSTEE SHALL, AT INLAND’S
REQUEST, DISTRIBUTE EQUITY INTERESTS IN THE REIT ENTITIES TO INLAND IN KIND;
PROVIDED, HOWEVER THAT IF THE AGGREGATE FAIR MARKET VALUE OF THE EQUITY
INTERESTS IN THE REIT ENTITIES THAT INLAND REQUESTS THE LIQUIDATING TRUSTEE TO
DISTRIBUTE IN KIND TO INLAND EXCEEDS INLAND’S PRO RATA SHARE (BASED ON THE
RESPECTIVE PERCENTAGE INTERESTS OF INLAND AND PGGM PRE FUND) OF THE AGGREGATE
FAIR MARKET VALUE OF THE PARTNERSHIP’S NON-PIC FUND ASSETS TO WHICH INLAND IS
OTHERWISE ENTITLED PURSUANT TO THIS ARTICLE 13, THEN, AS A CONDITION PRECEDENT
TO ANY SUCH IN KIND DISTRIBUTION TO INLAND, INLAND SHALL CONTRIBUTE TO THE
PARTNERSHIP SUCH EXCESS AMOUNT IN CASH (WHICH CASH CONTRIBUTION OBLIGATION MAY
BE SATISFIED, IN WHOLE OR IN PART, WITH REMAINING PIC FUNDS IN ACCORDANCE WITH
SECTION 8.4(B)), AND SUCH CASH SHALL BE DISTRIBUTED TO PGGM PRE FUND
CONCURRENTLY WITH THE IN KIND DISTRIBUTION OF THE EQUITY INTERESTS IN THE REIT
ENTITIES TO INLAND.  FOR THE AVOIDANCE OF DOUBT, NOTHING IN THIS SECTION 13.4
SHALL BE INTERPRETED OR APPLIED IN A MANNER THAT WOULD RESULT IN PGGM PRE FUND
RECEIVING DISTRIBUTIONS IN CONNECTION WITH THE LIQUIDATION OF THE PARTNERSHIP
THAT ARE LESS THAN THE DISTRIBUTIONS THAT PGGM PRE FUND WOULD RECEIVE IF NO
DISTRIBUTIONS IN KIND WERE MADE TO INLAND.  EXCEPT AS SET FORTH IN THIS
SECTION 13.4, DISTRIBUTIONS IN KIND SHALL NOT BE MADE TO ANY OTHER LIMITED
PARTNER UNLESS EXPRESSLY APPROVED IN ADVANCE BY THE LIMITED PARTNERS.  THE FAIR
MARKET VALUE OF THE EQUITY INTERESTS IN THE REIT ENTITIES TO BE DISTRIBUTED IN
KIND TO INLAND PURSUANT TO THIS SECTION 13.4 SHALL BE DETERMINED AS SET FORTH IN
PARAGRAPH 3 OF EXHIBIT 11.5-A.

 

13.5                           PARTITION.  NO PARTNER SHALL HAVE THE RIGHT TO
PARTITION ANY PROPERTY OF THE PARTNERSHIP DURING THE TERM OF THIS AGREEMENT, NOR
SHALL ANY PARTNER MAKE APPLICATION TO ANY COURT OF AUTHORITY HAVING JURISDICTION
IN THE MATTER OR COMMENCE OR PROSECUTE ANY ACTION OR PROCEEDING FOR SUCH
PARTITION AND THE SALE THEREOF, AND UPON ANY BREACH OF THE PROVISIONS OF THIS
SECTION BY ANY PARTNER, THE OTHER PARTNERS, IN ADDITION TO ALL OF THE RIGHTS AND
REMEDIES IN LAW AND IN EQUITY THAT THEY MAY HAVE, SHALL BE ENTITLED TO A DECREE
OR ORDER RESTRAINING AND ENJOINING SUCH APPLICATION, ACTION OR PROCEEDING.

 

ARTICLE 14

 

CONFLICTS AND COVENANTS

 

14.1                           GENERAL PARTNER TIME COMMITMENT.  THE GENERAL
PARTNER SHALL CAUSE SO MUCH TIME TO BE DEVOTED TO THE BUSINESS OF THE
PARTNERSHIP AS, IN ITS GOOD FAITH JUDGMENT, THE CONDUCT OF THE PARTNERSHIP’S
BUSINESS SHALL REASONABLY REQUIRE.

 

14.2                           RELATED BUSINESS PARTNERS.  WITHOUT THE PRIOR
WRITTEN APPROVAL OF THE NON-AFFILIATED PARTNERS, THE PARTNERSHIP, REIT ENTITIES
OR PROPERTY ENTITIES MAY NOT EMPLOY, CONTRACT FOR SERVICES WITH, ACQUIRE OR SELL
GOODS, PROPERTY AND MATERIALS FROM OR TO AND OTHERWISE DEAL WITH ANY MEMBER,
MANAGER, PARTNER OR GENERAL PARTNER OR ANY AFFILIATE OF ANY LIMITED PARTNER OR
GENERAL PARTNER, ON ANY BASIS, WITH THE EXCEPTION OF (A) THE PROPERTY MANAGEMENT
AGREEMENT; (B) THE LEASING AGREEMENT; OR (C) AGREEMENTS AND ARRANGEMENTS WHICH
ARE APPROVED BY THE LIMITED PARTNERS AS A MAJOR DECISION PURSUANT TO
SECTION 9.2(C).  OTHER COSTS AND EXPENSES WHICH SHALL BE INCURRED BY THE
PARTNERSHIP SHALL BE CUSTOMARY AND COMPETITIVE AND OTHERWISE FAIR AND REASONABLE
TO THE PARTNERSHIP.

 

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14.3                           COMPETITIVE UNDERTAKINGS.  EXCEPT AS OTHERWISE
PROVIDED IN SECTIONS 14.3 AND 14.5 OF THIS AGREEMENT, ANY PARTNER AND THE
GENERAL PARTNER MAY ENGAGE IN BUSINESS VENTURES OF ANY NATURE AND DESCRIPTION
INDEPENDENTLY OR WITH OTHERS, INCLUDING, BUT NOT LIMITED TO, BUSINESS OF THE
CHARACTER DESCRIBED IN ARTICLE 4 (OR ANY PART THEREOF), AND NEITHER THE
PARTNERSHIP NOR ANY OF THE PARTNERS SHALL HAVE ANY RIGHTS IN OR TO SUCH
INDEPENDENT VENTURES OR THE INCOME OR PROFITS DERIVED THEREFROM, NOR SHALL ANY
PARTNER OR GENERAL PARTNER HAVE ANY FIDUCIARY OR OTHER DUTY TO ANY OTHER PARTNER
WITH RESPECT TO THE PARTNERSHIP OR ITS PROPERTIES AS A RESULT OF SUCH OTHER
BUSINESS VENTURES.

 

14.4                           EXCLUSIVITY COVENANT OF INLAND.  INLAND AGREES,
FOR AND ON BEHALF OF ITSELF, AND EACH INLAND AFFILIATE THAT INLAND CONTROLS
(WHICH FOR PURPOSES OF ARTICLE 14 IS REFERRED TO HEREIN COLLECTIVELY AS
“INLAND”), THAT THE PARTNERSHIP WILL BE INLAND’S EXCLUSIVE VEHICLE FOR FUTURE
ACQUISITION OF QUALIFIED PROPERTIES DURING THE INVESTMENT PERIOD, OR, IF
EARLIER, UNTIL THE EARLIEST TO OCCUR OF (A) THE TERMINATION OF THE PARTNERSHIP
PURSUANT TO THE TERMS OF THIS AGREEMENT, (B) INLAND’S CAPITAL COMMITMENTS ARE
FULLY FUNDED BY INLAND OR THE ACQUISITION OF QUALIFIED PROPERTIES PURSUANT TO
BINDING AGREEMENTS WOULD REQUIRE A CAPITAL CONTRIBUTION IN EXCESS OF INLAND’S
CAPITAL COMMITMENT, OR (C) THE OCCURRENCE OF THREE (3) QUALIFIED PROPERTY
REJECTIONS (OTHER THAN WITH RESPECT TO FOUR FLAGGS) DURING ANY TWELVE (12)
CONSECUTIVE MONTH PERIOD (COLLECTIVELY AND AS APPLICABLE, THE “INLAND
RESTRICTION PERIOD”).  DURING THE INLAND RESTRICTION PERIOD, WITHOUT PGGM PRE
FUND’S CONSENT, INLAND WILL NOT DIRECTLY OR INDIRECTLY, WHETHER INDIVIDUALLY, OR
AS A SHAREHOLDER, PARTNER, MEMBER, OWNER, MANAGER, GENERAL PARTNER, EMPLOYEE,
AGENT, CONSULTANT OR CREDITOR OF ANY BUSINESS (WHICH INCLUDES OWNING, MANAGING,
OPERATING, CONTROLLING, BEING EMPLOYED BY, ACTING AS A CONSULTANT TO, GIVING
FINANCIAL ASSISTANCE TO, PARTICIPATING IN OR BEING CONNECTED IN ANY MATERIAL WAY
WITH ANY BUSINESS OR PERSON SO ENGAGED) ACQUIRE OR BRING TO THE ATTENTION OF OR
OFFER TO ANY PARTY OTHER THAN THE PARTNERSHIP FOR ACQUISITION OR INVESTMENT A
QUALIFIED PROPERTY WITHIN THE INVESTMENT AREA.  THIS EXCLUSIVITY SHALL NOT APPLY
TO: (I) ANY INLAND JOINT VENTURES OR OTHER INVESTMENTS EXISTING AS OF THE
EFFECTIVE DATE AND SET FORTH ON THE ATTACHED SCHEDULE 14.4 (EACH, AN “EXISTING
INLAND JV”); (II) OPPORTUNITIES PRESENTED TO INLAND BY THIRD PARTIES THAT DO NOT
INCLUDE A QUALIFIED PROPERTY; (III) PROPERTIES THAT DO NOT SATISFY THE
INVESTMENT GUIDELINES; OR (IV) PROPERTIES PRESENTED TO THE PARTNERSHIP FOR
APPROVAL PURSUANT TO SECTION 7.1 FOR WHICH PGGM PRE FUND WITHHOLDS ITS APPROVAL
FOR PURCHASE BY THE PARTNERSHIP.  INLAND FURTHER AGREES TO PROVIDE PGGM PRE FUND
WITH NOTICE OF THE PROPOSED ACQUISITION BY AN EXISTING INLAND JV OF A QUALIFIED
PROPERTY DURING THE INVESTMENT PERIOD.

 

14.5                           EXCLUSIVITY COVENANT OF PGGM.  PGGM PRE FUND
AGREES THAT, DURING THE INVESTMENT PERIOD, OR, IF EARLIER, IN EACH CASE UNTIL
THE EARLIEST TO OCCUR OF (A) THE TERMINATION OF THE PARTNERSHIP PURSUANT TO THE
TERMS OF THIS AGREEMENT, (B) PGGM PRE FUND’S CAPITAL COMMITMENTS ARE FULLY
FUNDED BY PGGM PRE FUND OR THE ACQUISITION OF A QUALIFIED PROPERTY WOULD REQUIRE
A CAPITAL CONTRIBUTION IN EXCESS OF PGGM PRE FUND’S CAPITAL COMMITMENT, OR
(C) PGGM PRE FUND IS NO LONGER A PARTNER, WITHOUT INLAND’S CONSENT IT WILL NOT
COMMIT TO INVEST IN, SUBSCRIBE FOR AN INTEREST IN, OR ENTER INTO ANY OTHER
PARTNERSHIP OR JOINT VENTURE ARRANGEMENT, WITH ANY ENTITY WHOSE INVESTMENT
STRATEGY IS FOCUSED SOLELY ON NECESSITY-BASED, GROCERY-ANCHORED OR COMMUNITY
RETAIL SHOPPING CENTERS IN THE INVESTMENT AREA.  THIS EXCLUSIVITY SHALL

 

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NOT APPLY TO (I) OPPORTUNITIES THAT DO NOT INCLUDE A QUALIFIED PROPERTY;
(II) PROPERTIES THAT DO NOT SATISFY THE INVESTMENT GUIDELINES; (III) INVESTMENTS
IN ENTITIES WITH A NATIONAL FOCUS, INCLUDING, FOR THE AVOIDANCE OF DOUBT, ANY
ENTITY WHICH MAY TARGET A PROPERTY THAT MEETS THE INVESTMENT GUIDELINES; OR
(IV) INVESTMENTS IN PUBLICLY LISTED ENTITIES.  PGGM PRE FUND FURTHER AGREES TO
PROVIDE INLAND WITH NOTICE OF THE PROPOSED ACQUISITION BY PGGM PRE FUND
INVESTMENT OF A QUALIFIED PROPERTY DURING THE INVESTMENT PERIOD OF WHICH THE
PGGM PRE FUND INVESTMENT OFFICER MONITORING ITS INVESTMENT IN THE PARTNERSHIP
BECOMES AWARE.

 

14.6         CONFIDENTIALITY COVENANT.  EACH PARTNER, ON BEHALF OF ITSELF AND
ITS ADVISORS, AND THE GENERAL PARTNER AGREES THAT IT SHALL NOT AT ANY TIME OR IN
ANY MANNER, EITHER DIRECTLY OR INDIRECTLY, PUBLISH, COMMUNICATE, DIVULGE,
DISCLOSE, DISSEMINATE OR OTHERWISE REVEAL TO ANY PERSON OR ENTITY OTHER THAN
SAID PARTNER’S BOARD MEMBERS OR MANAGERS, GENERAL PARTNERS, OFFICERS AND
EMPLOYEES, PROSPECTIVE LENDERS TO THE PARTNERSHIP, REIT ENTITIES OR PROPERTY
ENTITIES, PROSPECTIVE INVESTORS OR PURCHASERS OF THE PARTNERSHIP, REIT ENTITIES,
PROPERTY ENTITIES OR OWNED PROPERTIES OR ANY PARTNER’S INTEREST IN THE
PARTNERSHIP (WHICH INVESTORS OR PURCHASERS ARE THEMSELVES SUBJECT TO
CONFIDENTIALITY AGREEMENTS REASONABLY APPROVED BY THE LIMITED PARTNERS), ANY
ATTORNEYS, AGENTS, ADVISORS, CONSULTANTS OR PROFESSIONALS ENGAGED BY SAID
PARTNER, THE GENERAL PARTNER IN CONNECTION WITH A PARTNER’S INVESTMENT IN THE
PARTNERSHIP OR THE EXERCISE (OR POTENTIAL EXERCISE) OF A PARTNER’S RIGHTS UNDER
THIS AGREEMENT, OR USE FOR ANY PURPOSE WHATSOEVER ANY CONFIDENTIAL INFORMATION,
EXCEPT AS MAY BE NECESSARY IN THE COURSE OF PERFORMING AUTHORIZED SERVICES FOR
THE PARTNERSHIP, INCLUDING THE MANAGEMENT AND LEASING OF THE PROPERTIES, OR AS
MAY BE REQUIRED BY APPLICABLE ORDER OF COURT OR ANY GOVERNMENTAL AUTHORITY, ANY
LAW, STATUTE OR REGULATION, THE RULES OF ANY STOCK EXCHANGE ON WHICH SAID
PARTNER’S SHARES ARE TRADED, ANY APPLICABLE FEDERAL OR STATE FREEDOM OF
INFORMATION ACT, OTHER SIMILAR LEGISLATION, OR ANY REQUIREMENTS OF THE SERVICE
REGARDING DISCLOSURE OR REPORTING OF THE TAX ASPECTS OF THIS AGREEMENT.  BEFORE
DISCLOSING ANY CONFIDENTIAL INFORMATION UNDER COMPULSION OF LAW, THE PARTNERS
SHALL USE COMMERCIALLY REASONABLE EFFORTS TO NOTIFY THE PARTNERSHIP TO THE
EXTENT PRACTICABLE AND PERMITTED BY LAW.  NOTWITHSTANDING THE FOREGOING, PGGM
PRE FUND AND INLAND MAY (I) PUBLICLY DISCLOSE, INCLUDING ON ITS WEBSITE ON ITS
OWN BEHALF AND ON BEHALF OF AN INVESTOR IN PGGM PRE FUND, THE NAME OF THE
PARTNERSHIP, THE NAME OF THE GENERAL PARTNER AND ITS EQUITY OWNERS, A GENERAL
DESCRIPTION OF THE PARTNERSHIP’S INVESTMENT STRATEGY AND INVESTMENT GUIDELINES,
INCLUDING THE GEOGRAPHIC AREA AND SECTOR IN WHICH THE PARTNERSHIP INTENDS TO
PURCHASE PROPERTIES AND THE AGGREGATE CAPITAL COMMITMENTS OF PGGM PRE FUND TO
THE PARTNERSHIP; (II) PROVIDE COPIES OF THE PARTNERSHIP AGREEMENT AND ALL
RELATED AGREEMENTS TO INVESTORS AND POTENTIAL INVESTORS IN THE PGGM PRE FUND;
AND (III) DISCLOSE A GENERAL DESCRIPTION OF THE PARTNERSHIP AGREEMENT AND
RELATED AGREEMENTS TO POTENTIAL INVESTORS IN THE PGGM PRE FUND, PROVIDED IN THE
CASE OF CLAUSES (II) AND (III) SUCH INVESTOR OR POTENTIAL INVESTOR IS SUBJECT TO
AN AGREEMENT CONTAINING CONFIDENTIALITY COVENANTS EQUIVALENT TO THOSE CONTAINED
IN THIS AGREEMENT IN RESPECT OF ANY SUCH DISCLOSURE.

 

14.7         REMEDIES.

 

(A)           REMEDIES OF PARTNERSHIP.  THE PARTNERS AGREE THAT THE SCOPE AND
TIME PERIODS CONTAINED IN THIS ARTICLE HAVE BEEN CAREFULLY CONSIDERED AND
SPECIFICALLY AGREED TO

 

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AS BEING REASONABLE AND NECESSARY.  IF ANY PARTNER OR ANY PARTNER’S ADVISORS
SHALL AT ANY TIME BREACH, VIOLATE OR FAIL TO COMPLY FULLY WITH ANY OF THE TERMS,
PROVISIONS OR CONDITIONS OF THIS ARTICLE, THE PARTNERSHIP SHALL BE ENTITLED TO
EQUITABLE RELIEF BY WAY OF INJUNCTION (IN ADDITION TO, BUT NOT IN SUBSTITUTION
FOR, ANY AND ALL OTHER RELIEF TO WHICH THE PARTNERSHIP MAY BE ENTITLED EITHER IN
LAW OR IN EQUITY) TO RESTRAIN SUCH BREACH OR VIOLATION OR TO REQUIRE COMPLIANCE
FULLY WITH THE TERMS, PROVISIONS OR CONDITIONS OF THIS ARTICLE.  IN ANY SUCH
PROCEEDING THE PARTNERS AGREE NOT TO RAISE AS A DEFENSE IN ANY SUCH PROCEEDING
ANY ALLEGATION THAT ANY OF THE PROVISIONS OF THIS ARTICLE ARE EITHER UNNECESSARY
OR UNREASONABLE OR THAT ANY OF THEM ILLEGALLY RESTRAIN TRADE OR ANY PERSONAL
RIGHTS.  THE PARTNERS FURTHER AGREE TO REIMBURSE THE PARTNERSHIP FOR ANY COST OF
ENFORCING THE PROVISIONS OF THIS ARTICLE, INCLUDING REASONABLE ATTORNEY’S FEES.

 

(B)           REMEDIES BY INLAND.  IF PGGM PRE FUND SHALL AT ANY TIME BREACH,
VIOLATE OR FAIL TO COMPLY FULLY WITH ANY OF THE TERMS, PROVISIONS OR CONDITIONS
OF SECTIONS 14.5 OR 14.6 OF THIS ARTICLE, INLAND SHALL BE ENTITLED TO EQUITABLE
RELIEF BY WAY OF INJUNCTION (IN ADDITION TO, BUT NOT IN SUBSTITUTION FOR, ANY
AND ALL OTHER RELIEF TO WHICH INLAND MAY BE ENTITLED EITHER IN LAW OR IN EQUITY)
TO RESTRAIN SUCH BREACH OR VIOLATION OR TO REQUIRE COMPLIANCE FULLY WITH THE
TERMS, PROVISIONS OR CONDITIONS OF SECTIONS 14.5 OR 14.6 OF THIS ARTICLE.  IN
ANY SUCH PROCEEDING PGGM PRE FUND AGREES NOT TO RAISE AS A DEFENSE IN ANY SUCH
PROCEEDING ANY ALLEGATION THAT ANY OF THE PROVISIONS OF THIS ARTICLE ARE EITHER
UNNECESSARY OR UNREASONABLE OR THAT ANY OF THEM ILLEGALLY RESTRAIN TRADE OR ANY
PERSONAL RIGHTS.  PGGM PRE FUND FURTHER AGREES TO REIMBURSE INLAND FOR ANY COST
OF ENFORCING THE PROVISIONS OF THIS ARTICLE, INCLUDING REASONABLE ATTORNEY’S
FEES AND COSTS.

 

(C)           REMEDIES BY PGGM PRE FUND.  IF INLAND OR THE GENERAL PARTNER SHALL
AT ANY TIME BREACH, VIOLATE OR FAIL TO COMPLY FULLY WITH ANY OF THE TERMS,
PROVISIONS OR CONDITIONS OF SECTIONS 14.4 OR 14.6 OF THIS ARTICLE, PGGM PRE FUND
AND THE PARTNERSHIP SHALL BE ENTITLED TO EQUITABLE RELIEF BY WAY OF INJUNCTION
(IN ADDITION TO, BUT NOT IN SUBSTITUTION FOR, ANY AND ALL OTHER RELIEF TO WHICH
PGGM PRE FUND AND THE PARTNERSHIP MAY BE ENTITLED EITHER IN LAW OR IN EQUITY) TO
RESTRAIN SUCH BREACH OR VIOLATION OR TO REQUIRE COMPLIANCE FULLY WITH THE TERMS,
PROVISIONS OR CONDITIONS OF SECTIONS 14.4 OR 14.6 OF THIS ARTICLE.  IN ANY SUCH
PROCEEDING INLAND AGREES NOT TO RAISE AS A DEFENSE IN ANY SUCH PROCEEDING ANY
ALLEGATION THAT ANY OF THE PROVISIONS OF THIS ARTICLE ARE EITHER UNNECESSARY OR
UNREASONABLE OR THAT ANY OF THEM ILLEGALLY RESTRAIN TRADE OR ANY PERSONAL
RIGHTS.  INLAND FURTHER AGREES TO REIMBURSE PGGM PRE FUND FOR ANY COST OF
ENFORCING THE PROVISIONS OF THIS ARTICLE, INCLUDING REASONABLE ATTORNEY’S FEES
AND COSTS.  FURTHER, IF INLAND SHALL AT ANY TIME BREACH, VIOLATE OR FAIL TO
COMPLY FULLY WITH ANY OF THE TERMS, PROVISIONS, OR CONDITIONS OF SECTIONS 14.4
OR 14.6 OF THIS ARTICLE, PGGM PRE FUND SHALL BE ENTITLED TO REMOVE THE GENERAL
PARTNER FOR CAUSE AS PROVIDED IN SECTION 9.1.

 

(D)           MODIFICATION BY COURT.  IF A COURT OR OTHER BODY OF AUTHORITY AND
COMPETENT JURISDICTION DETERMINES THAT THE COVENANTS CONTAINED IN THIS
ARTICLE ARE UNENFORCEABLE, IN WHOLE OR IN PART, DUE TO THE DURATION OR SCOPE OF
THE RESTRICTIONS OR LIMITATIONS IMPOSED THEREIN OR FOR ANY OTHER REASON, THEN
THE COURT IS HEREBY AUTHORIZED

 

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AND DIRECTED TO MAKE SUCH MODIFICATIONS THERETO AS ARE NECESSARY TO RENDER SAID
COVENANTS ENFORCEABLE TO THE MAXIMUM EXTENT PERMITTED UNDER APPLICABLE LAW, THAT
BEING THE INTENTION OF THE PARTIES HERETO.

 

14.8         ACTIVITIES OF INLAND AND PGGM PRE FUND.

 

(A)           COVENANTS OF THE PARTIES.  THE PARTNERS EXPRESSLY ACKNOWLEDGE AND
AGREE THAT EACH OF INLAND AND PGGM PRE FUND AND THEIR AFFILIATES AND
SUBSIDIARIES ARE ENGAGED IN ALL ASPECTS OF REAL PROPERTY OWNERSHIP, MANAGEMENT,
LEASING, ACQUISITION AND DISPOSITION, INCLUDING, BUT NOT LIMITED TO, EACH OF THE
ACTIVITIES TO BE UNDERTAKEN BY THE PARTNERSHIP PURSUANT TO THE TERMS OF THIS
AGREEMENT.  EXCEPT AS PROVIDED IN THE PROPERTY MANAGEMENT AGREEMENT AND THE
LEASING AGREEMENT, NEITHER INLAND, NOR PGGM PRE FUND, NOR THE PARTNERSHIP SHALL
HAVE ANY OBLIGATION TO THE OTHERS WITH RESPECT TO LEASING OR DIRECTING TENANTS
TO THE PARTNERSHIP, REIT ENTITIES OR PROPERTY ENTITIES.  EXCEPT AS EXPRESSLY
AGREED TO BY INLAND IN SECTION 14.4, AND PGGM PRE FUND IN SECTION 14.5, NOTHING
SET FORTH IN THIS AGREEMENT IS INTENDED TO REQUIRE THAT INLAND OR PGGM PRE FUND
OR ANY OF THEIR AFFILIATES OPERATE THEIR BUSINESSES IN A MANNER WHICH SHALL
CAUSE ANY OF THEM TO TAKE ANY ACTIONS WHICH ARE NOT IN THE BEST INTERESTS OF THE
OWNERS OR THE TENANTS OF ANY OF THE RETAIL PROPERTIES WHICH ARE NOW OR HEREAFTER
OWNED, DEVELOPED OR MANAGED BY INLAND OR PGGM PRE FUND OR ANY OF THEIR
AFFILIATES, INCLUDING THE OWNED PROPERTIES.

 

(B)           MANAGEMENT BY INLAND.  IN CONNECTION WITH ITS UNDERTAKING
HEREUNDER, INLAND INTENDS, IN ITS CAPACITY AS A PARTNER OF THE PARTNERSHIP, TO
USE COMMERCIALLY REASONABLE EFFORTS AND SHALL CAUSE THE GENERAL PARTNER TO USE
COMMERCIALLY REASONABLE EFFORTS TO TAKE ALL ACTIONS IN THE USUAL AND CUSTOMARY
COURSE OF ITS BUSINESS TO CAUSE THE OWNED PROPERTIES OWNED BY THE PROPERTY
ENTITIES TO BE OPERATED, MANAGED, LEASED, ACQUIRED AND DISPOSED OF IN THE BEST
INTERESTS OF THE PARTNERSHIP AND EACH OF ITS PARTNERS. NOTWITHSTANDING THE
FOREGOING, PGGM PRE FUND ACKNOWLEDGES AND AGREES THAT INLAND OR THE GENERAL
PARTNER OWES NO FIDUCIARY OR OTHER DUTY TO PGGM PRE FUND TO CAUSE THE OWNED
PROPERTIES TO BE TREATED ANY DIFFERENTLY THAN ANY OTHER PROPERTY WHICH MAY NOW
OR HEREAFTER BE OWNED, MANAGED OR LEASED BY INLAND, THE GENERAL PARTNER OR ANY
OF THEIR AFFILIATES, AND THAT INLAND AND THE GENERAL PARTNER SHALL BE ENTITLED
TO DIRECTLY COMPETE WITH THE PARTNERSHIP AND PGGM PRE FUND WITH RESPECT TO THE
ACTIVITIES OF THE PARTNERSHIP PROVIDED SUCH COMPETITION DOES NOT OTHERWISE
VIOLATE THE PROVISIONS OF SECTION 14.4, THE PROPERTY MANAGEMENT AGREEMENT OR THE
LEASING AGREEMENT.  INLAND, ON BEHALF OF ITSELF AND ITS AFFILIATES AND
SUBSIDIARIES, AGREES THAT, AND SUBJECT TO OBTAINING THE APPROVAL OF THE LIMITED
PARTNERS IN THE CASE OF MAJOR DECISIONS, FOR AS LONG AS THE GENERAL PARTNER IS
AN AFFILIATE OF INLAND, THE GENERAL PARTNER SHALL OPERATE THE PARTNERSHIP, REIT
ENTITIES, PROPERTY ENTITIES AND OWNED PROPERTIES IN A MANNER CONSISTENT WITH THE
CUSTOMARY STANDARDS FOR SIMILAR EQUITY INVESTMENTS AND PROPERTIES OWNED BY
INLAND AND ITS AFFILIATES TAKING INTO CONSIDERATION THE SPECIFIC CHARACTERISTICS
OF THE OWNED PROPERTIES.

 

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ARTICLE 15

 

COUNSEL; AMENDMENTS

 

15.1         COUNSEL TO THE PARTNERSHIP.  THE GENERAL PARTNER SHALL, WITH THE
APPROVAL OF THE LIMITED PARTNERS, SELECT ATTORNEYS FOR THE PARTNERSHIP, REIT
ENTITIES AND PROPERTY ENTITIES.  THE REASONABLE FEES AND DISBURSEMENTS OF
ATTORNEYS SO SELECTED SHALL BE PAID BY THE PARTNERSHIP.

 

15.2         AMENDMENTS.  THE TERMS AND PROVISIONS OF THIS AGREEMENT MAY BE
MODIFIED OR AMENDED AT ANY TIME AND FROM TIME TO TIME ONLY WITH THE UNANIMOUS
WRITTEN CONSENT OF THE LIMITED PARTNERS.

 

ARTICLE 16

 

REPRESENTATIONS AND WARRANTIES AND CONDITIONS

 

16.1         REPRESENTATIONS OF INLAND.  INLAND REPRESENTS AND WARRANTS TO PGGM
PRE FUND, AS AN INDUCEMENT TO PGGM PRE FUND TO EXECUTE THIS AGREEMENT AND
PERFORM ITS COVENANTS AND AGREEMENTS CONTAINED HEREIN AS FOLLOWS:

 

(A)           ORGANIZATION AND AUTHORITY.

 

(I)            INLAND IS DULY FORMED AND IS VALIDLY EXISTING AND IN GOOD
STANDING UNDER THE LAWS OF THE STATE OF MARYLAND.

 

(II)           INLAND HAS THE FULL RIGHT, CORPORATE POWER AND CORPORATE
AUTHORITY AND HAS OBTAINED ANY AND ALL CONSENTS REQUIRED OF IT TO ENTER INTO
THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS, TO CAUSE THE INLAND PARTIES
TO COMPLY WITH THE TERMS OF THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS
TO WHICH THEY ARE A PARTY AND TO CONSUMMATE OR CAUSE TO BE CONSUMMATED THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY. THIS AGREEMENT HAS BEEN, AND ALL
OF THE DOCUMENTS TO BE EXECUTED AND DELIVERED BY INLAND OR ANY INLAND PARTY AT
THE CLOSING OF A CONTRIBUTION OF AN INLAND PROPERTY OR THE ACQUISITION OF AN
ADDITIONAL PROPERTY WILL BE WILL BE, AUTHORIZED AND PROPERLY EXECUTED AND
CONSTITUTE, OR WILL CONSTITUTE, AS APPROPRIATE, THE LEGAL, VALID AND BINDING
OBLIGATION OF INLAND AND THE APPLICABLE INLAND PARTY, ENFORCEABLE IN ACCORDANCE
WITH THEIR TERMS, SUBJECT TO APPLICABLE LAWS OF BANKRUPTCY OR INSOLVENCY AND
PRINCIPLES OF EQUITY.

 

(B)           AGENTS AND FINANCIAL ADVISORS.  OTHER THAN INLAND’S RETENTION OF
INLAND INSTITUTIONAL CAPITAL PARTNERS (“IICP”) OR ITS AFFILIATE, THERE ARE NO
AGENTS, BROKERS OR FINANCIAL ADVISORS INVOLVED IN CONNECTION WITH THE FORMATION
OF THE PARTNERSHIP AND NEITHER INLAND NOR PGGM PRE FUND HAS ENGAGED ANY PARTY
OTHER THAN IICP WHICH WOULD OTHERWISE PROVIDE FOR THE PAYMENT OF ANY COMMISSIONS
OR SIMILAR FEES WITH REGARD TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. 
FOR THE AVOIDANCE OF DOUBT, THE PARTNERSHIP SHALL NOT BE RESPONSIBLE FOR ANY
SUCH COMMISSIONS OR FEES.

 

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

 

(C)           CONFLICTS AND PENDING ACTION.

 

(I)            NEITHER THE EXECUTION AND DELIVERY OF THIS AGREEMENT, NOR THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY WILL: (A) VIOLATE ANY
CONSTITUTION, STATUTE, REGULATION, RULE, INJUNCTION, JUDGMENT, ORDER, DECREE,
RULING, CHARGE, OR OTHER RESTRICTION OF ANY GOVERNMENT, GOVERNMENTAL AGENCY, OR
COURT TO WHICH INLAND OR ANY INLAND PARTY IS SUBJECT OR ANY PROVISION OF THE
BYLAWS OR CHARTER OF INLAND OR THE EQUIVALENT CONSTITUTIONAL DOCUMENTS OF ANY
INLAND PARTY; OR (B) EXCEPT AS SET FORTH IN ANY SCHEDULE TO BE ATTACHED TO A
CONTRIBUTION AGREEMENT WITH RESPECT TO INDEBTEDNESS SECURED BY A CONTRIBUTED
PROPERTY, CONFLICT WITH, RESULT IN A BREACH OF, CONSTITUTE A DEFAULT UNDER,
RESULT IN THE ACCELERATION OF, CREATE IN ANY PARTY THE RIGHT TO ACCELERATE,
TERMINATE, MODIFY, OR CANCEL, OR REQUIRE ANY NOTICE UNDER ANY MATERIAL
AGREEMENT, CONTRACT, LEASE, LICENSE, INSTRUMENT, OR OTHER ARRANGEMENT TO WHICH
INLAND OR ANY INLAND PARTY IS A PARTY OR BY WHICH IT IS BOUND OR TO WHICH ANY OF
ITS ASSETS IS SUBJECT (OR RESULT IN THE IMPOSITION OF ANY LIEN UPON ANY OF ITS
ASSETS).

 

(II)           THERE IS NO LITIGATION, ACTION OR PROCEEDING PENDING, OR TO
INLAND’S KNOWLEDGE, THREATENED AGAINST INLAND OR ANY INLAND PARTY WHICH WOULD
CHALLENGE OR IMPAIR INLAND’S ABILITY TO PERFORM ITS OBLIGATIONS UNDER THIS
AGREEMENT OR ANY OF THE TRANSACTION DOCUMENTS, OR CHALLENGE OR IMPAIR THE
ABILITY OF ANY INLAND PARTY TO TRANSFER ITS PROPERTY.

 

(D)           BROKERAGE COMMISSIONS.  OTHER THAN INLAND’S RETENTION OF INLAND
IICP OR ITS AFFILIATE, NEITHER INLAND NOR ANY INLAND PARTY HAS DEALT WITH ANY
REAL ESTATE BROKER, SALES PERSON OR FINDER IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT (EITHER ON THEIR OWN BEHALF OR ON BEHALF OF THE
PARTNERSHIP). IF ANY CLAIM IS MADE FOR BROKER’S OR FINDER’S FEES OR COMMISSIONS
IN CONNECTION WITH THE NEGOTIATION, EXECUTION OR CONSUMMATION OF THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY AS A RESULT OF ANY ACTION OF INLAND OR
ANY INLAND PARTY, INLAND SHALL DEFEND, INDEMNIFY AND HOLD HARMLESS THE
PARTNERSHIP AND PGGM PRE FUND FROM AND AGAINST ANY SUCH CLAIM BASED UPON ANY
STATEMENT, REPRESENTATION OR AGREEMENT OF SUCH PARTY.

 

(E)           NOT A PROHIBITED PERSON.  INLAND IS NOT A PROHIBITED PERSON.  THE
ASSETS INLAND WILL TRANSFER TO THE PARTNERSHIP PURSUANT TO THIS AGREEMENT ARE
NOT THE PROPERTY OF, AND ARE NOT BENEFICIALLY OWNED, DIRECTLY OR INDIRECTLY, BY
A PROHIBITED PERSON.

 

16.2         REPRESENTATIONS OF PGGM PRE FUND.  PGGM PRE FUND REPRESENTS AND
WARRANTS TO INLAND, AS AN INDUCEMENT TO INLAND TO EXECUTE THIS AGREEMENT AND
PERFORM ITS COVENANTS AND AGREEMENTS CONTAINED HEREIN AS FOLLOWS:

 

(A)           ORGANIZATION AND AUTHORITY.

 

(I)            PGGM PRE FUND IS DULY FORMED AND IS VALIDLY EXISTING AND IN GOOD
STANDING UNDER THE LAWS OF THE NETHERLANDS.

 

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

 

(II)           PGGM PRE FUND HAS THE FULL RIGHT, POWER AND AUTHORITY AND HAS
OBTAINED ANY AND ALL CONSENTS REQUIRED OF IT TO ENTER INTO THIS AGREEMENT, TO
COMPLY WITH THE TERMS OF THIS AGREEMENT AND TO CONSUMMATE OR CAUSE TO BE
CONSUMMATED THE TRANSACTIONS CONTEMPLATED HEREBY. THIS AGREEMENT HAS BEEN, AND
ALL OF THE DOCUMENTS TO BE DELIVERED BY PGGM PRE FUND IN CONNECTION WITH THE
CLOSING OF A CONTRIBUTION OF AN INLAND PROPERTY OR THE ACQUISITION OF AN
ADDITIONAL PROPERTY WILL BE, AUTHORIZED AND PROPERLY EXECUTED AND CONSTITUTE, OR
WILL CONSTITUTE, AS APPROPRIATE, THE LEGAL, VALID AND BINDING OBLIGATION OF PGGM
PRE FUND, ENFORCEABLE IN ACCORDANCE WITH THEIR TERMS, SUBJECT TO APPLICABLE LAWS
OF BANKRUPTCY OR INSOLVENCY AND PRINCIPLES OF EQUITY.

 

(B)           AGENTS AND FINANCIAL ADVISORS.  OTHER THAN INLAND’S RETENTION OF
IICP OR ITS AFFILIATE, THERE ARE NO AGENTS, BROKERS OR FINANCIAL ADVISORS
INVOLVED IN CONNECTION WITH THE FORMATION OF THE PARTNERSHIP AND NEITHER INLAND
NOR PGGM PRE FUND HAS ENGAGED ANY PARTY OTHER THAN IICP WHICH WOULD OTHERWISE
PROVIDE FOR THE PAYMENT OF ANY COMMISSIONS OR SIMILAR FEES WITH REGARD TO THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.  FOR THE AVOIDANCE OF DOUBT, THE
PARTNERSHIP SHALL NOT BE RESPONSIBLE FOR ANY SUCH COMMISSIONS OR FEES.

 

(C)           CONFLICTS AND PENDING ACTION.

 

(I)            NEITHER THE EXECUTION AND DELIVERY OF THIS AGREEMENT, NOR THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY WILL: (A) VIOLATE ANY
CONSTITUTION, STATUTE, REGULATION, RULE, INJUNCTION, JUDGMENT, ORDER, DECREE,
RULING, CHARGE, OR OTHER RESTRICTION OF ANY GOVERNMENT, GOVERNMENTAL AGENCY, OR
COURT TO WHICH PGGM PRE FUND IS SUBJECT OR ANY PROVISION OF THE CONSTITUTIONAL
DOCUMENTS OF PGGM PRE FUND;  OR (B) CONFLICT WITH, RESULT IN A BREACH OF,
CONSTITUTE A DEFAULT UNDER, RESULT IN THE ACCELERATION OF, CREATE IN ANY PARTY
THE RIGHT TO ACCELERATE, TERMINATE, MODIFY, OR CANCEL, OR REQUIRE ANY NOTICE
UNDER ANY MATERIAL AGREEMENT, CONTRACT, LEASE, LICENSE, INSTRUMENT, OR OTHER
ARRANGEMENT TO WHICH PGGM PRE FUND IS A PARTY OR BY WHICH IT IS BOUND OR TO
WHICH ANY OF ITS ASSETS IS SUBJECT (OR RESULT IN THE IMPOSITION OF ANY LIEN UPON
ANY OF ITS ASSETS);

 

(II)           THERE IS NO LITIGATION, ACTION OR PROCEEDING PENDING, OR TO PGGM
PRE FUND’S KNOWLEDGE, THREATENED AGAINST PGGM PRE FUND RELATING TO ITS
CONTRIBUTION WHICH WOULD CHALLENGE OR IMPAIR PGGM PRE FUND’S ABILITY TO PERFORM
ITS OBLIGATIONS UNDER THIS AGREEMENT OR ANY TRANSACTION DOCUMENT TO WHICH PGGM
PRE FUND IS A PARTY.

 

(D)           GOVERNMENTAL CONSENTS.  NO CONSENT, WAIVER, APPROVAL OR
AUTHORIZATION OF OR FILING, REGISTRATION, OR QUALIFICATION WITH, OR NOTICE TO
ANY GOVERNMENTAL AUTHORITY,  BUREAU, DEPARTMENT, COMMISSION OR AGENCY, OR ANY
OTHER ENTITY OR PERSON WHETHER OR NOT GOVERNMENTAL IN CHARACTER, IS REQUIRED TO
BE MADE, OBTAINED, OR GIVEN BY PGGM PRE FUND TO EXECUTE, DELIVER AND PERFORM
THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT TO WHICH PGGM PRE FUND IS A
PARTY, EXCEPT SUCH CONSENT, WAIVER, APPROVAL,

 

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

 

AUTHORIZATION, FILING, REGISTRATION, OR QUALIFICATION WHICH HAS ALREADY BEEN
MADE, OBTAINED OR GIVEN.

 

(E)           BROKERAGE COMMISSIONS.  PGGM PRE FUND HAS NOT DEALT WITH ANY REAL
ESTATE BROKER, SALES PERSON OR FINDER IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT (EITHER ON THEIR OWN BEHALF OR ON BEHALF OF THE
PARTNERSHIP). IF ANY CLAIM IS MADE FOR BROKER’S OR FINDER’S FEES OR COMMISSIONS
IN CONNECTION WITH THE NEGOTIATION, EXECUTION OR CONSUMMATION OF THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY AS A RESULT OF ANY ACTION OF PGGM PRE
FUND, PGGM PRE FUND SHALL DEFEND, INDEMNIFY AND HOLD HARMLESS THE PARTNERSHIP
AND INLAND FROM AND AGAINST ANY SUCH CLAIM BASED UPON ANY STATEMENT,
REPRESENTATION OR AGREEMENT OF SUCH PARTY, IT BEING UNDERSTOOD, HOWEVER, THAT
THE FEES OF ICAP ARE THE RESPONSIBILITY OF INLAND.

 

(F)            NOT A PROHIBITED PERSON.  PGGM PRE FUND IS NOT A PROHIBITED
PERSON.  THE ASSETS PGGM PRE FUND WILL TRANSFER TO THE PARTNERSHIP PURSUANT TO
THIS AGREEMENT ARE NOT THE PROPERTY OF, AND ARE NOT BENEFICIALLY OWNED, DIRECTLY
OR INDIRECTLY, BY A PROHIBITED PERSON.

 

16.3         SECURITIES REPRESENTATIONS.  EACH OF THE PARTNERS HEREBY REPRESENTS
AND WARRANTS TO THE OTHER PARTNERS AS TO ITSELF AS FOLLOWS:

 

(A)           NO REGISTRATION STATEMENT.  IT HAS BEEN ADVISED NO REGISTRATION
STATEMENT RELATING TO INTERESTS IN THE PARTNERSHIP, THE PGGM PRE FUND PUT
OPTION, OR OTHERWISE HAS BEEN OR SHALL BE FILED WITH THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION UNDER THE FEDERAL SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE.

 

(B)           REPRESENTATIONS AND WARRANTIES.  EACH LIMITED PARTNER REPRESENTS
AND WARRANTS TO THE GENERAL PARTNER AND TO THE PARTNERSHIP AS TO ITSELF THAT:

 

(I)            THIS AGREEMENT HAS BEEN DULY AUTHORIZED, EXECUTED AND DELIVERED
BY SUCH PARTNER AND CONSTITUTES THE VALID AND LEGALLY BINDING AGREEMENT OF SUCH
PARTNER, ENFORCEABLE IN ACCORDANCE WITH ITS TERMS AGAINST SUCH PARTNER, EXCEPT
AS SUCH ENFORCEABILITY MAY BE LIMITED BY BANKRUPTCY, INSOLVENCY, MORATORIUM AND
OTHER SIMILAR LAWS RELATING TO CREDITOR’S RIGHTS GENERALLY, BY GENERAL EQUITABLE
PRINCIPLES AND BY ANY IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING.

 

(II)           SUCH PARTNER’S INTEREST IN THE PARTNERSHIP, AND WITH RESPECT TO
PGGM PRE FUND, THE PGGM PRE FUND PUT OPTION, HAS BEEN OR WILL BE ACQUIRED SOLELY
BY AND FOR THE ACCOUNT OF SUCH PARTNER, FOR INVESTMENT PURPOSES ONLY AND IS NOT
BEING PURCHASED FOR SUBDIVISION, FRACTIONALIZATION, RESALE OR DISTRIBUTION; SUCH
PARTNER HAS NO CONTRACT, UNDERTAKING, AGREEMENT OR ARRANGEMENT WITH ANY PERSON
TO SELL, TRANSFER OR PLEDGE TO SUCH PERSON OR ANYONE ELSE SUCH PARTNER’S
INTEREST, OR WITH RESPECT TO PGGM PRE FUND, THE PGGM PRE FUND PUT OPTION (OR ANY
PORTION THEREOF); AND SUCH PARTNER HAS NO PRESENT PLANS OR INTENTIONS TO ENTER
INTO ANY SUCH CONTRACT, UNDERTAKING OR ARRANGEMENT.

 

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

 

(III)          SUCH PARTNER’S INTEREST IN THE PARTNERSHIP, AND WITH RESPECT TO
PGGM PRE FUND, THE PGGM PRE FUND PUT OPTION, HAS NOT AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OR THE SECURITIES LAWS OF ANY STATE, AND CANNOT BE SOLD
OR TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION PROVISIONS OF SECURITIES
ACT, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, OR COMPLIANCE WITH
EXEMPTIONS, IF ANY, AVAILABLE THEREUNDER.  SUCH PARTNER UNDERSTANDS THAT NEITHER
THE PARTNERSHIP NOR THE GENERAL PARTNER HAVE ANY OBLIGATION OR INTENTION TO
REGISTER THE INTERESTS OR THE PGGM PRE FUND PUT OPTION UNDER ANY FEDERAL OR
STATE SECURITIES ACT OR LAW, OR TO FILE THE REPORTS TO MAKE PUBLIC THE
INFORMATION REQUIRED BY RULE 144 UNDER THE SECURITIES ACT.  SUCH PARTNER
EXPRESSLY REPRESENTS THAT (A) IT HAS SUCH KNOWLEDGE AND EXPERIENCE IN FINANCIAL
AND BUSINESS MATTERS IN GENERAL, AND IN SOPHISTICATED REAL ESTATE TRANSACTIONS
OF THE TYPE TO BE MADE BY THE PARTNERSHIP IN PARTICULAR; (B) IT IS CAPABLE OF
EVALUATING THE MERITS AND RISKS OF AN INVESTMENT IN THE PARTNERSHIP; (C) ITS
FINANCIAL CONDITION IS SUCH THAT IT HAS NO NEED FOR LIQUIDITY WITH RESPECT TO
ITS INVESTMENT IN THE PARTNERSHIP TO SATISFY ANY EXISTING OR CONTEMPLATED
UNDERTAKING OR INDEBTEDNESS; (D) IT IS ABLE TO BEAR THE ECONOMIC RISK OF ITS
INVESTMENT IN THE PARTNERSHIP FOR AN INDEFINITE PERIOD OF TIME, INCLUDING THE
RISK OF LOSING ALL OF SUCH INVESTMENT, AND LOSS OF SUCH INVESTMENT WOULD NOT
MATERIALLY ADVERSELY AFFECT IT; (E) IT HAS EITHER SECURED INDEPENDENT TAX ADVICE
WITH RESPECT TO THE INVESTMENT IN THE PARTNERSHIP, UPON WHICH IT IS SOLELY
RELYING, OR IT IS SUFFICIENTLY FAMILIAR WITH THE INCOME TAXATION OF PARTNERSHIPS
THAT IT HAS DEEMED SUCH INDEPENDENT ADVICE UNNECESSARY; (F) IT IS FAMILIAR WITH
RULE 144 UNDER THE SECURITIES ACT, WHICH ESTABLISHES DEFINITIVE GUIDELINES
GOVERNING, AMONG OTHER THINGS, THE RESALE OF “RESTRICTED SECURITIES”
(SECURITIES, SUCH AS THE PARTNERSHIP INTERESTS AND THE PGGM PRE FUND PUT OPTION,
SUBORDINATED NOTES AND CONVERTIBLE NOTES, WHICH ARE ACQUIRED FROM THE ISSUER OF
SUCH SECURITIES IN A TRANSACTION NOT INVOLVING ANY PUBLIC OFFERING); AND (G) IT
ACKNOWLEDGES THAT RULE 144 IS NOT PRESENTLY AVAILABLE FOR TRANSFERS OF THE
PARTNERSHIP INTERESTS OR THE PGGM PRE FUND PUT OPTION, BECAUSE, AMONG OTHER
THINGS, THE PARTNERSHIP IS NOT PRESENTLY REQUIRED TO FILE THE REPORTS REQUIRED
TO BE FILED BY SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 AND DOES NOT
HAVE A CLASS OF SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THAT STATUTE;
AND, EVEN IF THE PARTNERSHIP WERE REQUIRED TO FILE REPORTS UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AND HAD FILED ALL REPORTS REQUIRED TO BE FILED, RELIANCE
ON RULE 144 TO TRANSFER THE PARTNERSHIP INTERESTS AND THE PGGM PRE FUND PUT
OPTION IS SUBJECT TO OTHER RESTRICTIONS AND LIMITATIONS, AS SET FORTH IN SUCH
RULE.

 

(IV)          SUCH PARTNER ACKNOWLEDGES THAT ALL DOCUMENTS PERTAINING TO THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN HAVE BEEN MADE AVAILABLE AND
AN OPPORTUNITY TO ASK QUESTIONS AND RECEIVE ANSWERS THERETO AND TO VERIFY AND
CLARIFY ANY INFORMATION CONTAINED IN THE DOCUMENTS HAS BEEN PROVIDED.  SUCH
PARTNER IS AWARE OF THE PROVISIONS OF THIS AGREEMENT PROVIDING FOR CAPITAL
CONTRIBUTIONS AND DILUTION OF ITS INTEREST IN THE PARTNERSHIP.

 

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

 

(V)           SUCH PARTNER HAS RELIED SOLELY UPON THE DOCUMENTS SUBMITTED TO IT
AND INDEPENDENT INVESTIGATIONS MADE BY IT IN MAKING THE DECISION TO PURCHASE ITS
INTEREST IN THE PARTNERSHIP.

 

(VI)          SUCH PARTNER EXPRESSLY ACKNOWLEDGES THAT (A) NO FEDERAL OR STATE
AGENCY HAS REVIEWED OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE INFORMATION
SET FORTH IN THE DOCUMENTS SUBMITTED TO SUCH PARTNER OR MADE ANY FINDING OR
DETERMINATION AS TO THE FAIRNESS FOR INVESTMENT, OR ANY RECOMMENDATION OR
ENDORSEMENT OF AN INVESTMENT IN THE PARTNERSHIP; (B) THERE ARE RESTRICTIONS ON
THE TRANSFERABILITY OF SUCH PARTNER’S INTEREST IN THE PARTNERSHIP; (C) THERE
WILL BE NO PUBLIC MARKET FOR THE INTEREST, AND, ACCORDINGLY, IT MAY NOT BE
POSSIBLE FOR SUCH PARTNER TO LIQUIDATE ITS INVESTMENT IN THE PARTNERSHIP; AND
(D) ANY ANTICIPATED FEDERAL OR STATE INCOME TAX BENEFITS APPLICABLE TO SUCH
PARTNER’S INTEREST MAY BE LOST THROUGH CHANGES IN, OR ADVERSE INTERPRETATIONS
OF, EXISTING LAWS AND REGULATIONS.

 

(VII)         THE BONA FIDE PRINCIPAL PLACE OF BUSINESS OF SUCH PARTNER IS AT
THE ADDRESS SET FORTH ON THE SIGNATURE PAGES HEREOF AND THAT IT WAS NOT FORMED
FOR THE PURPOSE OF MAKING AN INVESTMENT IN THE PARTNERSHIP.

 

16.4         NATIONAL SECURITY REPRESENTATIONS.  EACH PARTNER REPRESENTS,
WARRANTS AND CERTIFIES TO THE OTHER THAT (A) THE PARTNER IS NOT, AND IS NOT
ACTING, DIRECTLY OR INDIRECTLY, FOR OR ON BEHALF OF, A TERRORIST, AND (B) THE
PARTNER IS NOT ENGAGED IN THIS TRANSACTION, DIRECTLY OR INDIRECTLY, ON BEHALF
OF, OR INSTIGATING OR FACILITATING THIS TRANSACTION, DIRECTLY OR INDIRECTLY, ON
BEHALF OF, ANY TERRORIST.  NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT
TO THE CONTRARY, NO PARTNER, OR ANY PERSON ACTING ON BEHALF OF A PARTNER SHALL
KNOWINGLY PERMIT ANY OWNED PROPERTY OR ANY PORTION THEREOF TO BE USED BY ANY
PERSON, ENTITY, CONCESSIONAIRE, LICENSEE, ASSIGNEE, LESSEE OR SUBLESSEE THAT IS
OR HAS BEEN DESIGNATED AS A TERRORIST.  IN ADDITION TO, AND NOT IN LIMITATION
OF, ANY AND ALL OTHER INDEMNITIES OF A PARTNER CONTAINED HEREIN, EACH PARTNER
AGREES TO INDEMNIFY THE PARTNERSHIP AND EACH OTHER PARTNER FOR ANY AND ALL
LOSSES, LIABILITIES, DAMAGES, PENALTIES (CIVIL AND CRIMINAL), FINES, COSTS AND
EXPENSES SUFFERED OR INCURRED BY THE PARTNERSHIP OR THE OTHER PARTNER AND
ARISING FROM OR RELATED TO ANY VIOLATION OR BREACH OF THE FOREGOING
REPRESENTATIONS, WARRANTIES, CERTIFICATIONS AND OBLIGATIONS.

 

ARTICLE 17

 

GENERAL PROVISIONS

 

17.1         NOTICES.  ALL NOTICES, OFFERS OR OTHER COMMUNICATIONS REQUIRED OR
PERMITTED TO BE GIVEN PURSUANT TO THIS AGREEMENT SHALL BE IN WRITING AND SHALL
BE CONSIDERED AS PROPERLY GIVEN:

 

(A)           UPON PERSONAL DELIVERY OR AFFIRMATIVE REFUSAL OF RECEIPT OF
DELIVERY WITH GENERAL KNOWLEDGE OF ITS CONTENTS AND PURPOSE;

 

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

 

(B)           ON THE NEXT BUSINESS DAY FOLLOWING DELIVERY VIA A RECOGNIZED
OVERNIGHT DELIVERY SERVICE SUCH AS FEDERAL EXPRESS, UPS OR DHL, PROVIDED THAT
SUCH DAY IS A BUSINESS DAY IN THE RECIPIENT’S JURISDICTION; OR

 

(c)           Upon mechanical confirmation of receipt by facsimile or email,
provided that a copy is also sent via a recognized overnight delivery service
for delivery the next day.

 

NOTICES HEREUNDER SHALL BE ADDRESSED AS FOLLOWS:

 

If to Inland or the General Partner

 

with a copy to:

 

 

 

Inland Real Estate Corporation

 

Stahl Cowen Crowley Addis LLC

2901 Butterfield Road

 

55 West Monroe Street

Oak Brook, Illinois 60523

 

Suite 1200

Attn: Mark Zalatoris

 

Chicago, Illinois 60603

PH: (630) 218-7351

 

Attn: Jeffrey J. Stahl

Fax: (630) 218-7327

 

Lauane C. Addis

e-mail: zalatoris@inlandrealestate.com

 

PH: (312) 641-0060

 

 

Fax: (312) 641-6959

 

 

e-mail: jstahl@stahlcowen.com

 

 

 

If to PGGM PRE Fund:

 

with a copy to:

 

 

 

Stichting Depositary PGGM Private Real Estate Fund, acting in its capacity as
depositary of and for the account and risk of

 

Stichting Depositary PGGM Private Real Estate Fund, acting in its capacity as
depositary of and for the account and risk of

PGGM Private Real Estate Fund

 

PGGM Private Real Estate Fund

c/o PGGM Vermogensbeheer B.V.

 

c/o PGGM Vermogensbeheer B.V.

Kroostweg-Noord 149

 

Kroostweg-Noord 149

P.O. Box 117

 

P.O. Box 117

3700 AC Zeist

 

3700 AC Zeist

The Netherlands

 

The Netherlands

Attention: Steven Zeeman

 

Attention: Werner Sohier

Fax: 011.31.30.277 4724

 

Fax: 011.31.30.277 4724

Email: steven.zeeman@pggm.nl

 

Email: werner.sohier@pggm.nl

 

Any Partner may change its address for all future notices, offers or other
communications by giving notice to the General Partner and all Partners stating
its new address.

 

17.2         SUCCESSORS.  THIS AGREEMENT AND ALL THE TERMS AND PROVISIONS HEREOF
SHALL BE BINDING UPON AND SHALL INURE TO THE BENEFIT OF ALL PARTNERS AND THEIR
LEGAL REPRESENTATIVES, HEIRS, SUCCESSORS AND PERMITTED ASSIGNS, EXCEPT AS
EXPRESSLY HEREIN OTHERWISE PROVIDED.

 

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17.3         GOVERNING LAW.  THIS AGREEMENT SHALL BE CONSTRUED IN CONFORMITY
WITH THE LAWS OF THE STATE OF DELAWARE, AS APPLIED TO AGREEMENTS WHOSE ONLY
PARTIES ARE RESIDENTS OF SUCH STATE AND WHICH ARE TO BE PERFORMED ENTIRELY
WITHIN SUCH STATE.

 

17.4         PERSONAL JURISDICTION.  EXCEPT AS OTHERWISE SET FORTH HEREIN, THE
PARTNERSHIP, THE GENERAL PARTNER AND EACH LIMITED PARTNER HEREBY IRREVOCABLY
CONSENT TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS FOR PURPOSES OF ANY LITIGATION AMONG OR BETWEEN THE
PARTNERSHIP, THE GENERAL PARTNER AND ANY LIMITED PARTNER CONCERNING THE
PARTNERSHIP OR THIS AGREEMENT, INCLUDING FOR THE AVOIDANCE OF DOUBT THE
SCHEDULES AND EXHIBITS TO THIS AGREEMENT, OR ANY OTHER LITIGATION TO WHICH THE
PARTNERSHIP, THE GENERAL PARTNER OR ANY LIMITED PARTNER IS A PARTY UNDER ANY
CONTRIBUTION AGREEMENT, REIT CONTRIBUTION AGREEMENT, THE PROPERTY MANAGEMENT
AGREEMENT, THE SUBSCRIPTION AND LOCK-UP AGREEMENT OR THE LEASING AGREEMENT.  IN
ANY SUCH PROCEEDING, THE PARTNERSHIP AND EACH PARTNER SHALL BE DEEMED TO HAVE
WAIVED ITS RIGHT TO A TRIAL BY JURY.  THE PARTIES HERETO HEREBY INDIVIDUALLY
AGREE THAT THEY SHALL NOT ASSERT ANY CLAIM THAT THEY ARE NOT SUBJECT TO THE
JURISDICTION OF SUCH COURTS, THAT THE VENUE IS IMPROPER, THAT THE FORUM IS
INCONVENIENT OR ANY SIMILAR OBJECTION, CLAIM OR ARGUMENTS.  SERVICE OF PROCESS
ON ANY OF THE PARTIES HERETO WITH REGARD TO ANY SUCH ACTION MAY BE MADE BY
MAILING THE PROCESS TO SUCH PERSON BY REGULAR OR CERTIFIED MAIL TO THE ADDRESS
OF SUCH PERSON SET FORTH HEREIN OR TO ANY SUBSEQUENT ADDRESS TO WHICH NOTICES
SHALL BE SENT.

 

17.5         COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN COUNTERPARTS, EACH
OF WHICH SHALL BE AN ORIGINAL, BUT ALL OF WHICH SHALL CONSTITUTE ONE AND THE
SAME INSTRUMENT.

 

17.6         PRONOUNS AND HEADINGS.  AS USED HEREIN, ALL PRONOUNS SHALL INCLUDE
THE MASCULINE, FEMININE, NEUTER, SINGULAR AND PLURAL THEREOF WHEREVER THE
CONTEXT AND FACTS REQUIRE SUCH CONSTRUCTION.  THE HEADINGS, TITLES AND SUBTITLES
HEREIN ARE INSERTED FOR CONVENIENCE OF REFERENCE ONLY AND ARE TO BE IGNORED IN
ANY CONSTRUCTION OF THE PROVISIONS HEREOF.

 

17.7         PARTNERS NOT AGENTS.  NOTHING CONTAINED HEREIN SHALL BE CONSTRUED
TO CONSTITUTE ANY PARTNER THE AGENT OF ANOTHER PARTNER, EXCEPT AS SPECIFICALLY
PROVIDED HEREIN.

 

17.8         NO THIRD PARTY BENEFICIARIES.  WITHOUT LIMITING ANY OF THE
PROVISIONS OF THIS AGREEMENT, INCLUDING ANY OBLIGATIONS OF PARTNERS TO MAKE
CAPITAL CONTRIBUTIONS OR TO RETURN MONEY OR OTHER PROPERTY TO THE PARTNERSHIP,
EXCEPT FOR SECTIONS 7.4 AND 9.7, THE PROVISIONS OF THIS AGREEMENT ARE INTENDED
SOLELY TO BENEFIT THE PARTNERSHIP AND THE PARTIES HERETO AND, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, SHALL NOT BE CONSTRUED AS CONFERRING ANY
BENEFIT UPON ANY CREDITOR OF THE PARTNERSHIP (AND NO SUCH CREDITOR SHALL BE A
THIRD PARTY BENEFICIARY OF THIS AGREEMENT), AND THE PARTNERS SHALL HAVE NO DUTY
OR OBLIGATION TO ANY CREDITOR OF THE PARTNERSHIP TO MAKE ANY CONTRIBUTIONS OR
RETURN ANY MONEY OR OTHER PROPERTY TO THE PARTNERSHIP.

 

17.9         ENTIRE UNDERSTANDING.  THIS AGREEMENT, INCLUDING FOR THE AVOIDANCE
OF DOUBT THE SCHEDULES AND EXHIBITS TO THIS AGREEMENT, THE CONTRIBUTION
AGREEMENT, THE REIT CONTRIBUTION AGREEMENT, THE PROPERTY MANAGEMENT AGREEMENT,
THE REIT AGREEMENT, THE SUBSCRIPTION AND LOCK-UP AGREEMENT AND THE LEASING
AGREEMENT CONSTITUTE THE ENTIRE

 

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

 

UNDERSTANDING AMONG THE PARTNERS AND SUPERSEDES ANY PRIOR UNDERSTANDING AND/OR
WRITTEN OR ORAL AGREEMENTS AMONG THEM WITH RESPECT TO THE PARTNERSHIP.

 

17.10       SEVERABILITY.  IF ANY PROVISION OF THIS AGREEMENT, OR THE
APPLICATION OF SUCH PROVISION TO ANY PERSON OR CIRCUMSTANCE, SHALL BE HELD
INVALID BY A COURT OF COMPETENT JURISDICTION, THE REMAINDER OF THIS AGREEMENT,
OR THE APPLICATION OF SUCH PROVISION TO PERSONS OR CIRCUMSTANCES OTHER THEN
THOSE TO WHICH IT IS HELD INVALID BY SUCH COURT, SHALL NOT BE AFFECTED THEREBY.

 

17.11       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.

 

17.12       PARTNERSHIP SET-OFF RIGHTS.  THE PARTNERSHIP SHALL BE ENTITLED TO
SET OFF AGAINST ANY AMOUNTS WHICH MAY BE OR BECOME DUE TO A PARTNER FROM THE
PARTNERSHIP ANY OBLIGATIONS, FEES, EXPENSES OR OTHER AMOUNTS WHICH MAY BE
PAYABLE TO THE PARTNERSHIP BY SUCH PARTNER.

 

17.13       PREVAILING PARTY.  IF ANY PARTY TO THIS AGREEMENT SHALL COMMENCE ANY
ACTION AGAINST ANOTHER SUCH PARTY IN ORDER TO ENFORCE ANY PROVISION OF THIS
AGREEMENT, OR TO RECOVER DAMAGES AS THE RESULT OF THE BREACH OF ANY OF THE
PROVISIONS OF THIS AGREEMENT, THE PREVAILING PARTY IN SUCH ACTION SHALL BE
ENTITLED TO RECOVER ALL REASONABLE COSTS (INCLUDING REASONABLE ATTORNEY’S FEES
AND PARALEGAL’S FEES) INCURRED IN CONNECTION THEREWITH AGAINST THE PARTY WHO HAS
BREACHED THIS AGREEMENT.  NOTWITHSTANDING A SETTLEMENT OR OTHER RESOLUTION OF
ANY SUCH ACTION WITHOUT THE ISSUANCE OF A DEFINITIVE RULING BY A COURT,
INCLUDING, BUT NOT LIMITED TO, ANY AGREEMENT BY THE PARTIES THAT SUCH SETTLEMENT
IS NOT AN ADMISSION OF LIABILITY BY EITHER PARTY, NO SUCH SETTLEMENT OR
RESOLUTION SHALL CONSTITUTE A WAIVER OF THIS SECTION, AND EACH PARTY
ACKNOWLEDGES AND AGREES THAT IT SHALL BE ENTITLED TO PETITION THE COURT FOR A
DETERMINATION THAT IT IS THE PREVAILING PARTY AND ENTITLED TO RECOVERY OF ITS
REASONABLE COSTS HEREUNDER.

 

17.14       PRESS RELEASES.  NO PRESS RELEASES SHALL BE ISSUED BY ANY PARTY WITH
RESPECT TO THE MATTERS THAT ARE THE SUBJECT OF THIS AGREEMENT WITHOUT THE PRIOR
APPROVAL OF THE OTHER PARTY, WHICH APPROVAL WILL NOT BE UNREASONABLY WITHHELD. 
IF ANY PARTY SHALL FAIL TO RESPOND TO A REQUEST FOR APPROVAL OF A PRESS RELEASE
WITHIN TWO BUSINESS DAYS AFTER SUCH PARTY HAS BEEN GIVEN THE PRESS RELEASE BY
THE PARTY REQUESTING APPROVAL, SUCH PRESS RELEASE SHALL BE DEEMED TO BE
APPROVED.

 

17.15       CONSTRUCTION.  THIS AGREEMENT WAS NEGOTIATED BY THE PARTIES WITH THE
BENEFIT OF LEGAL REPRESENTATION, AND ANY RULE OF CONSTRUCTION OR INTERPRETATION
OTHERWISE REQUIRING THIS AGREEMENT TO BE CONSTRUED OR INTERPRETED AGAINST ANY
PARTY SHALL NOT APPLY TO ANY CONSTRUCTION OR INTERPRETATION HEREOF.

 

17.16       ATTORNEYS’ FEES AND COSTS.  EXCEPT AS PROVIDED IN SECTION 6.6, EACH
PARTNER SHALL BE SOLELY RESPONSIBLE FOR ITS ATTORNEYS’ FEES AND COSTS INCURRED
IN THE DRAFTING, NEGOTIATION AND PREPARATION OF THIS AGREEMENT AND ALL DOCUMENT
INCIDENT THERETO.

 

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

 

17.17       LIMITED LIABILITY.  THE OTHER PARTNERS ACKNOWLEDGE AND AGREE THAT
(I) PGGM PRE FUND HAS INFORMED THEM THAT PGGM PRE FUND IS NOT A PARTNERSHIP
(PERSONENVENNOOTSCHAP) UNDER DUTCH LAW AND (II) ANY CLAIMS THAT THEY MAY HAVE
AGAINST PGGM PRE FUND ARE AGAINST THE PGGM PRE FUND AS SUCH, AND NOT AGAINST THE
INVESTORS IN PGGM PRE FUND, WHO ACCORDINGLY, ARE NOT LIABLE FOR ANY SUCH CLAIMS.

 

17.18       EXCLUSION POLICY.  THE GENERAL PARTNER AGREES THAT THE PARTNERSHIP
SHALL APPLY THE PGGM PRE FUND’S EXCLUSIONS POLICY (THE “PGGM EXCLUSIONS POLICY”)
WHICH REFERS TO THE PGGM EXCLUSIONS LIST (THE “PGGM EXCLUSIONS LIST”) ATTACHED
HERETO AS EXHIBIT 17.18-A.  THE GENERAL PARTNER ACKNOWLEDGES THAT THE PGGM PRE
FUND MAY, FROM TIME TO TIME, REQUIRE ADDITIONAL EXCLUSIONS TO BE ADDED TO THE
PGGM EXCLUSIONS LIST (EACH, AN “ADDITIONAL PGGM EXCLUSION”). THE GENERAL PARTNER
AGREES THAT THE PGGM PRE FUND HAS THE RIGHT TO UPDATE THE PGGM EXCLUSIONS LIST
WITH ADDITIONAL PGGM EXCLUSIONS TWICE A YEAR.  IN THE EVENT PGGM PRE FUND
NOTIFIES THE GENERAL PARTNER IN WRITING OF ANY ADDITIONAL PGGM EXCLUSION, THE
GENERAL PARTNER AGREES TO USE ITS REASONABLE EFFORTS TO THE EXTENT CONSISTENT
WITH ITS DUTIES AND OBLIGATIONS TO THE PARTNERSHIP NOT TO MAKE ANY INVESTMENTS
ON BEHALF OF THE PARTNERSHIP THAT VIOLATE SUCH ADDITIONAL PGGM EXCLUSION.  FOR
THE AVOIDANCE OF DOUBT, THE GENERAL PARTNER HEREBY CONFIRMS THAT THE PARTNERSHIP
SHALL AT NO TIME INVEST IN ANY PUBLICLY TRADED UNITED STATES REAL ESTATE
INVESTMENT TRUSTS OR TAXABLE AUSTRALIAN PROPERTY WITHIN THE MEANING OF
DIVISION 855 OF THE AUSTRALIAN INCOME TAX ASSESSMENT ACT (1997).

 

17.19       RIRE.  THE GENERAL PARTNER SHALL ADHERE TO THE RESPONSIBLE
INVESTMENT POLICY FOR REAL ESTATE (THE “RIRE”) ATTACHED HERETO AS
EXHIBIT 17.19-A.  AS OF THE DATE HEREOF, THE GENERAL PARTNER IS NOT AWARE OF ANY
CONFLICT BETWEEN THE TERMS OF THIS AGREEMENT AND THE RIRE.  THE GENERAL PARTNER
ACKNOWLEDGES THAT THE PGGM PRE FUND MAY FROM TIME TO TIME UPDATE THE RIRE.  THE
GENERAL PARTNER WILL USE ITS COMMERCIALLY REASONABLE EFFORTS TO ADHERE TO SUCH
UPDATES.

 

[Intentionally Left Blank; Signature Page to Follow.]

 

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

 

[Signature page to Limited Partnership Agreement]

 

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

 

LIMITED PARTNERS:

 

 

 

 

 

INLAND REAL ESTATE CORPORATION, a Maryland corporation

 

STICHTING DEPOSITARY PGGM PRIVATE REAL ESTATE FUND, ACTING IN ITS CAPACITY AS
DEPOSITARY OF AND FOR THE ACCOUNT AND RISK OF PGGM PRIVATE REAL ESTATE FUND

By:

 

 

 

Name:

 

 

 

Its:

 

 

Represented by:  PGGM

 

 

VERMOGENSBEHEER, B.V.

 

 

 

 

GENERAL PARTNER:

 

By:

 

 

 

Name:

 

 

 

Its:

 

 

 

 

INP RETAIL MANAGEMENT COMPANY, LLC, a Delaware

 

 

 

limited liability company

 

By:

 

 

 

Name:

 

 

By: Inland Real Estate Corporation

 

Its:

 

 

Its: Manager

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Its:

 

 

 

 

 

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

 

EXHIBIT 1-A

 

INITIAL PARTNERSHIP WIRE INSTRUCTIONS

 

To be separately provided.

 

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

 

EXHIBIT 1-B

 

Defined Terms Index

 

Term

 

Reference

Accountants

 

Section 8.2(c)

Acquisition Additional Capital Contributions

 

Section 6.3(c)(i)

Acquisition Budget

 

Section 7.1(c)(ii)

Acquisition Expenses

 

Section 6.3(c)(i)

Acquisition Fee

 

Exhibit 10-D

Additional Capital Contributions

 

Section 6.3

Additional PGGM Exclusion

 

Section 17.18

Aggrieved Partner

 

Section 9.1(c)(v)

Appraisal

 

Section 11.5(c)(i) and Exhibit 11.5-A

Appraiser

 

Exhibit 11.5-A

Board Package

 

Section 7.1(c)(iv)

Brokerage Package

 

Section 7.1(c)(i)

Cause

 

Section 9.1(c)

Closing Date

 

Section 11.5(c)(ii)

Contribution Agreement

 

Section 6.2(b)

Contribution Closing Date

 

Section 6.2(b)(ii)

Contribution Value

 

Section 6.2(d)

Default Contribution

 

Section 6.4(a)(ii)

Defaulting Partner

 

Section 6.4(a)

Deficiency Amount

 

Section 6.4(a)(ii)

Depositary

 

First paragraph

Dilution Fraction

 

Section 6.4(b)

Effective Date

 

First paragraph

ERISA

 

Section 11.2(b)(iii)

Excess Financing

 

Exhibit 10-D

Exclusive Acquisition Right

 

Section 7.1(b)

 

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

 

Exercise Notice

 

Section 11.5(b)(ii)

Exercise Period

 

Section 11.5(a)(iii)

Existing Inland JV

 

Section 14.4

Final Approval

 

Section 7.1(d)

Financial Statements

 

Section 8.2(a)

Financing Fee

 

Section 7.5 and Exhibit 10-D

Four Flaggs Property

 

Section 6.3(a)(ii)

Fund

 

First paragraph

IICP

 

Section 16.1(b)

Initial Approval Period

 

Section 7.1I(ii)

Initial Capital Contributions

 

Section 6.2(a)

Initial Notice

 

Section 7.1I(ii)

Inland

 

First paragraph and Section 14.4

Inland Communication

 

Section 10.3

Inland Exercise Notice

 

Section 11.5(b)(ii)

Inland Maximum Acquisition Additional Capital Contributions

 

Section 6.3(f)(ii)I

Inland Maximum Organizational Capital Contributions

 

Section 6.3(f)(ii)(B)

Inland Maximum Shortfall/Protective Capital Contributions

 

Section 6.3(f)(ii)(D)

Inland Property Entity

 

Section 6.3(b)(ii)

Inland Purchase Option

 

Section 11.5(b)

Inland Restriction Period

 

Section14.4

Leasing Agent

 

Section 9.2(d)(ii)

Leasing Agreement

 

Section 9.2(d)(ii)

Leasing Fee

 

Exhibit 10-D

Liquidating Trustee

 

Section 13.2

Major Decision

 

Section 9.2I and Exhibit 10-A

Maximum Term

 

Section 5.5(d)

Net Equity Value

 

Section 6.2I(i)

 

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

 

Non-Defaulting Partner

 

Section 6.4(a)

Non-Qualified Property

 

Section 7.1(a)

Operating Shortfall

 

Section 6.3I(iii)(A)

Option

 

Section 11.5(b)

Option Year

 

Section 11.5(a)

Organizational Expenses

 

Section 6.3I(ii)

Organizational Expenses Capital Contributions

 

Section 6.3I(ii)

Partnership Loan

 

Section 6.4I

PGGM Exclusions List

 

Section 17.18

PGGM Exclusions Policy

 

Section 17.18

PGGM PRE Fund

 

First paragraph

PGGM PRE Fund Communication

 

Section 10.3

PGGM PRE Fund Exercise Notice

 

Section 11.5(a)(ii)

PGGM PRE Fund Maximum Acquisition Additional Capital Contributions

 

Section 6.3(f)(i)I

PGGM PRE Fund Maximum Organizational Capital Contributions

 

Section 6.3(f)(i)(B)

PGGM PRE Fund Maximum Shortfall/Protective Capital Contributions

 

Section 6.3(f)(i)(D)

PGGM PRE Fund Put Option

 

Section 11.5(a)

PIC Funds

 

Section 6.5

Post-Acquisition Financing

 

Exhibit 10-D

Price Per Share

 

Section 11.5I(iii)

Property Management Agreement

 

Section 9.2(d)(i)

Property Management Fee

 

Exhibit 10-D

Property Manager

 

Section 9.2(d)(i)

Purchase Price

 

Section 11.5I(i)

Put Option Commencement Quarter

 

Section 11.5(a)(i)

Qualified Property

 

Section 7.1(b)

Qualifying Lease

 

Exhibit 10-A(7)

Rebated Third Party Fee

 

Exhibit 10-D

Refinancing Shortfall

 

Section 6.3I(iii)(B)

 

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

 

REIT Contribution Agreement

 

Section 6.2(e)

Remedy Provisions

 

Section 6.4(d)

Replacement Notice

 

Section 9.1I(v)

RIRE

 

Section 17.19

Securities Act

 

Second paragraph

Shortfall Expenses

 

Section 6.3I(iii)

Stabilization

 

Section6.3(a)(ii)

Stock

 

Section 11.5I(iii)

Subscription and Lock-Up Agreement

 

Section11.5I(iii)

Subsequent Contribution Closing Date

 

Section 6.2(e)

Term

 

Section 5.4

Terminated Acquisition Expenses

 

Section 6.3I(i)

Third Party Fee

 

Exhibit 10-D

TMP

 

Section 9.8

Transfer Expenses

 

Section 6.2(c)(i)

Venture Management Fee

 

Section 9.4 and Exhibit 10-D

 

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

 

EXHIBIT 4-A

 

FORM OF

 

REIT AGREEMENT

 

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

 

 

 

 

 

 

LIMITED LIABILITY COMPANY AGREEMENT

 

OF

 

[                          ], LLC

 

(a Delaware limited liability company)

 

 

 

 

 

           , 2010

 

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

 

CONTENTS

 

 

 

Page

 

 

ARTICLE 1  Definitions

1

 

 

 

ARTICLE 2  ORGANIZATION

5

 

 

 

2.1

Formation

5

2.2

Name

5

2.3

Certificate

5

2.4

Principal Place of Business

5

2.5

Registered Office and Registered Agent

5

2.6

Term

5

2.7

Purposes and Powers

6

2.8

Effectiveness of this Agreement

8

2.9

Qualification as a Real Estate Investment Trust, Etc.

8

 

 

 

ARTICLE 3  Capital

9

 

 

3.1

Interests in the Company

9

3.2

Issuance of Interests in the Company

9

 

 

 

ARTICLE 4  Distributions

10

 

 

4.1

Cash Distributions

10

4.2

Withholding

10

 

 

 

ARTICLE 5  Members

10

 

 

 

5.1

Limitation of Liability

10

5.2

No Termination

11

 

 

 

ARTICLE 6  EXCESS UNIT PROVISIONS

11

 

 

6.1

Definitions

11

6.2

Ownership Limitation

13

6.3

Excess Units

14

6.4

Prevention of Transfer

15

6.5

Notice

15

6.6

Information for the Company

15

6.7

Other Action by Manager

16

6.8

Ambiguities

16

6.9

Modification of Existing Holder Limits

16

6.10

Increase or Decrease in Ownership Limit

17

6.11

Limitations on Changes in Existing Holder and Ownership Limits

17

 

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

 

CONTENTS

 

Section

 

Page

 

 

 

6.12

Waivers by Manager

17

6.13

Severability

17

6.14

Trust for Excess Units

17

6.15

Distributions on Excess Units

18

6.16

Voting of Excess Units

18

6.17

Non-Transferability of Excess Units

18

6.18

Call by the Company on Excess Units

19

 

 

 

ARTICLE 7  Transfers

19

 

 

7.1

Transfer of Interests in the Company

19

 

 

 

ARTICLE 8  Manager

20

 

 

8.1

Appointment of the Manager

20

8.2

Rights, Duties and Powers of the Manager

21

8.3

Business with Affiliates; Other Activities

21

 

 

 

ARTICLE 9

Dissolution and Termination

22

 

 

 

9.1

Events of Dissolution

22

9.2

Application of Assets

23

9.3

Procedural and Other Matters

24

 

 

 

ARTICLE 10  Appointment of Attorney-in-Fact

25

 

 

10.1

Appointment and Powers

25

10.2

Presumption of Authority

25

 

 

 

ARTICLE 11  Miscellaneous Provisions

25

 

 

 

11.1

Notices

25

11.2

Access to Information; Books and Records

26

11.3

Word Meanings

26

11.4

Successors

26

11.5

Amendments

26

11.6

Waiver

26

11.7

Applicable Law

27

11.8

Title to Company Assets

27

11.9

Severability of Provisions

27

11.10

Headings

27

11.11

Further Assurances

27

11.12

Counterparts

27

 

ii

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

 

CONTENTS

 

Section

 

Page

 

 

 

11.13

Entire Agreement

28

11.14

Jurisdiction; Venue

28

11.15

Appointment of the Paying Agent

28

 

 

 

EXHIBIT A

Members of the Company

 

 

 

 

EXHIBIT B

Description of the Owned Properties

 

 

 

 

EXHIBIT C

Preferred Units

 

 

 

 

EXHIBIT D

Major Decisions

 

 

iii

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

 

LIMITED LIABILITY COMPANY AGREEMENT
OF
[                          ], LLC
(a Delaware limited liability company)

 

THIS LIMITED LIABILITY COMPANY AGREEMENT of [                      ], LLC, a
Delaware limited liability company (the “Company”), dated and effective as of
                 , 2010, is entered into by and among those Persons who have
executed this Agreement or a counterpart hereof, or who become parties hereto
pursuant to the terms of this Agreement.

 

W I T N E S S E T H

 

WHEREAS, the Company was formed on May 18, 2010, at which time the Certificate
was filed with the Secretary of State of Delaware;

 

WHEREAS, INP Retail Management Company, LLC, a Delaware limited liability
company (the “Manager”), is the Manager of the Company;

 

WHEREAS, the Company will elect to be taxed as a real estate investment trust
under Sections 856-860 of the Code; and

 

WHEREAS, this Agreement shall constitute the “limited liability company
agreement” (within the meaning of the Act) of the Company, and shall be binding
upon all Persons now or at any time hereafter that are Members.

 

NOW, THEREFORE, in consideration of the mutual covenants and obligations set
forth in this Agreement, and of other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto, intending legally
to be bound, hereby agree as follows:

 

ARTICLE 1

DEFINITIONS

 

Capitalized terms used in this Agreement (including exhibits, schedules and
amendments) shall have the meanings set forth below or in the Section of this
Agreement referred to below, except as otherwise expressly indicated or limited
by the context in which they appear in this Agreement.  All terms defined in
this Agreement in the singular have the same meanings when used in the plural
and vice versa.  Accounting terms used but not otherwise defined shall have the
meanings given to them under generally accepted accounting principles. 
References to Sections, Articles and Exhibits refer to the sections and articles
of, and the exhibits to, this Agreement, unless the context requires otherwise.

 

“Act” means the Delaware Limited Liability Company Act, as amended.

 

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

 

“Affiliate” means, with respect to a specified Person, (i) any Person that,
directly or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with the specified Person, or (ii) any
Person that is an officer, general partner or trustee of, or serves in a similar
capacity with respect to, the specified Person or of which the specified Person
serves in a similar capacity.  For this purpose, the term “control” (including
the terms “controlling,” “controlled by” and “under common control with”) means
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.

 

“Agreement” means this Limited Liability Company Agreement, as it may be
amended, restated, supplemented or otherwise modified from time to time as
herein provided.

 

“Budget” has the meaning ascribed thereto in the Partnership Agreement.

 

“Capital Contribution” means the amount of cash and the fair market value of
other property contributed to the Company from time to time by a Member as set
forth on Exhibit A.

 

“Certificate” means the “Certificate of Formation” of the Company, as originally
filed with the office of the Secretary of State of the State of Delaware on
May 18, 2010, as amended, restated, supplemented or otherwise modified from time
to time as herein provided.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and any subsequent federal law of similar import, and, to the extent applicable,
any Treasury Regulations promulgated thereunder.

 

“Common Units” means the limited liability company interests in the Company
designated as such with the rights, powers and duties set forth herein, and
expressed in the number set forth on Exhibit A, as such exhibit may be amended
from time to time.

 

“Company” means [                          ].

 

“Company Asset” means the direct or indirect interest of the Company in the
Owned Properties.

 

“Domestically-Controlled REIT” means a real estate investment trust that is a
“domestically-controlled qualified investment entity” for purposes of
Section 897(h)(4)(B) of the Code.

 

“Entity” means any partnership, corporation, business trust, limited liability
company, proprietorship, joint stock company, trust, estate, unincorporated
association joint venture, pension fund, governmental entity, cooperative,
association or other foreign or domestic entity or enterprise.

 

2

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

 

“Indemnified Parties” has the meaning ascribed thereto in Section 5.1(b).

 

“Inland” means Inland Real Estate Corporation, a Maryland corporation.

 

“Liquidator” has the meaning ascribed thereto in Section ARTICLE 0(a).

 

“Major Decision” has the meaning ascribed thereto in Exhibit D.

 

“Manager” means INP Retail Management, LLC or any other manager or managers of
the Company designated from time to time in accordance with Section ARTICLE 0,
each which shall be deemed to be a “manager” within the meaning of the Act.

 

“Members” means all Persons, including, without limitation, any successor or
assign of an existing Member in accordance with the terms of this Agreement,
holding interests in the Company whose Capital Contributions have been accepted
by the Company so long as such Persons’ capital is invested in the Company, and
including each Person admitted as an additional Member of the Company, as listed
from time to time on Exhibit A in such Person’s capacity as “members” of the
Company within the meaning of the Act.

 

“Net Cash Flow” means, for any period, all cash revenues and other funds
received by the Company during such period (other than Capital Contributions),
plus amounts released from reserves, less all sums paid to lenders and all cash
expenses, costs and capital expenditures made during such period from such
sources and after setting aside appropriate reserves, as determined by the
Manager in its sole discretion.

 

“Owned Property” and “Owned Properties” shall mean the necessity based shopping
centers owned by the Property Entities, and all improvements, additions,
replacements, easements and any and all other rights appurtenant thereto, and
all personal property that might be used or useful in connection therewith.

 

“Partner” shall mean any Limited Partner or the General Partner, as such terms
are defined in the Partnership Agreement.

 

“Partnership” means INP Retail, L.P., a Delaware limited partnership, in its
capacity as a Member of the Company, including, without limitation, any
successor or assign of the Partnership.

 

“Partnership Agreement” means that Limited Partnership Agreement of the
Partnership, dated as of June 3, 2010, as amended from time to time in
accordance with the terms thereof.

 

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“Percentage Interest” means, as to each Member, its interest in the Company as
determined by dividing the number of Common Units owned by such Member by the
total number of Common Units then issued and outstanding and as set forth on
Exhibit A, as such exhibit may be amended from time to time.

 

“Person” means any individual or Entity, and the heirs, executors,
administrators, legal representatives, successors, and assigns of such Person
where the context so admits.

 

“Preferred Units” has the meaning ascribed thereto in Section 3.1(a).

 

“Property Entities” shall mean any group of two or more or all (as the context
may apply) of the entities each of which is established as a Property Entity
pursuant to this Agreement.

 

“Property Entity” shall mean a single purpose entity that is disregarded as
separate from its owner for federal income tax purposes and that owns and
operates an Owned Property.

 

“Property Management Agreement” means the Property Management Agreement in the
form to be agreed to by the General Partner, the Limited Partners and the
Partnership pursuant to the Partnership Agreement.

 

“Qualifying Lease” means a lease entered into with respect to any Owned Property
covering 10,000 rentable square feet or more.

 

“REIT Compliance Interests” means the equity interests in the Company that are
issued to the REIT Compliance Parties in order to comply with the requirement of
Code Section 856(a)(5) that the beneficial interests in a real estate investment
trust must be held by one hundred (100) or more persons.  The terms of the REIT
Compliance Interests shall be determined by the Manager.

 

“REIT Compliance Parties” shall mean all of the Members other than the
Partnership.

 

“Securities Act” means the Securities Act of 1933, or any successor thereto, as
amended from time to time.

 

“Transfer” means to give, sell, assign, pledge, hypothecate, devise, bequeath,
or otherwise dispose of, transfer, or permit to be transferred, during life or
at death.  The word “Transfer,” when used as a noun, shall mean any Transfer
transaction.

 

“Treasury Regulations” means the federal income tax regulations, including any
temporary or proposed regulations, promulgated under the Code, as such Treasury
Regulations may be amended from time to time (it being understood that all
references herein to specific sections of the Treasury Regulations shall be
deemed also to refer to any corresponding provisions of succeeding Treasury
Regulations).

 

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“Units” means the limited liability company interests in the REIT and shall
include the Common Units and the Preferred Units.

 

“U.S. GAAP” means U.S. generally accepted accounting principles at the time in
effect.

 

“U.S. Person” means a “U.S. Person” as such term is defined in
Section 7701(a)(30) of the Code.

 

ARTICLE 2

ORGANIZATION

 

Formation.  The parties hereto hereby agree to the formation of the limited
liability company known as [                ], LLC, as a limited liability
company under the provisions of the Act.

 

Name.  The name of the Company shall be “[                  ], LLC”.  The
business of the Company shall be conducted under such name or such other names
as the Manager may from time to time designate.

 

Certificate.  The Manager, and any other Person designated by the Manager, is
hereby authorized to execute, file and record all such certificates and
documents, including amendments to the Certificate, and to do such other acts as
may be appropriate to comply with all requirements for the formation,
continuation and operation of a limited liability company, the ownership of
property and the conduct of business under the laws of the State of Delaware and
any other jurisdiction in which the Company may own property or conduct
business.

 

Principal Place of Business.  The principal place of business shall be located
at 2901 Butterfield Road, Oak Brook, Illinois 60523, or at such other location
as may be designated by the Manager.

 

Registered Office and Registered Agent.  The address of the registered office of
the Company in the State of Delaware shall be 1209 Orange Street, Wilmington,
Delaware 19805, or such other place as may be designated from time to time by
the Manager.  The name of the registered agent for service of process on the
Company in the State of Delaware at such address shall be The Corporation Trust
Company, or such other Person as may be designated from time to time by the
Manager.

 

Term.  The term of the Company commenced on the date of the filing of the
Certificate and shall continue until dissolved pursuant to the provisions of
Article 10.

 

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Purposes and Powers.  The Company is organized for the object and purpose of
owning one hundred percent (100%) of the limited liability company membership
interests in and to one or more Property Entities, sharing the profits and
losses therefrom and engaging in such activities necessary, incidental or
ancillary thereto and to engage in any other lawful act or activity for which
limited liability companies may be organized under the Act in furtherance of the
foregoing.  Subject to Section 8.2(a), the Company, and the Manager on behalf of
the Company, may execute, deliver and perform such agreements and documents as
the Manager determines are necessary or desirable for the formation and
organization of the Company.  Any provision herein regarding the purpose and
power of the Company and the authorization (or the limitation on authorization,
including those limitations set forth in Section 8.2(a)) of actions or decisions
hereunder may be done through a direct or indirect subsidiary of the Company. 
In furtherance of this purpose, the Company shall have all powers necessary,
suitable or convenient for the accomplishment of the aforesaid purpose, subject
to the limitations and restrictions set forth in this Agreement and the
Partnership Agreement, as principal or agent, including, without limitation, all
of the powers that may be exercised by the Manager on behalf of and, except as
specifically provided herein, at the expense of the Company pursuant to this
Agreement or the Act, and further including, without limitation, the following:

 

(a)           to act as general or limited partner, member, joint venturer,
manager or shareholder of any Entity and to exercise all of the powers, duties,
rights and responsibilities associated therewith;

 

(b)           to acquire, or obtain the right to acquire, a direct or indirect
ownership interest in the Owned Properties;

 

(c)           to borrow money, encumber assets and otherwise incur recourse and
non-recourse indebtedness (including, without limitation, the issuance of
guarantees of the payment or performance obligations by any Person) in
connection with or in furtherance of the acquisition or development of or the
financing or refinancing of the Owned Properties;

 

(d)           to improve, develop, redevelop, construct, reconstruct, maintain,
renovate, rehabilitate, reposition, manage, lease, mortgage and otherwise deal
with the assets and/or businesses of the Company;

 

(e)           to alter or restructure the Company’s investment in the Owned
Properties at any time during the term of the Company without any precondition
that the Manager make any distributions to the Members in connection therewith;

 

(f)            to enter into, perform and carry out contracts of any kind with
any Person (including, without limitation, Members and their respective
Affiliates and the Manager), necessary to, in connection with, or incidental to
the accomplishment of the purposes of the Company;

 

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(g)           to, subsequent to the Company’s initial investment in an Owned
Property, make additional investments in an Owned Property (including, without
limitation, additional investments made to finance acquisitions or any capital
improvements, tenant improvements or other improvements or alterations to the
Owned Property or otherwise to protect the Company’s investment in the Owned
Property or to provide working capital with respect to the Owned Property);

 

(h)           to pay the commissions, fees or other charges to Persons that may
be applicable in connection with any transactions entered into by or on behalf
of the Company;

 

(i)            to, either by itself or by contract with others, including,
without limitation, a Person whose stockholders, owners, partners, officers or
employees are stockholders, owners, partners, officers or employees of the
Manager or an Affiliate thereof, have and maintain one or more offices within or
without the State of Delaware and in connection therewith to rent, lease or
purchase office space, facilities and equipment, to engage and pay personnel and
do such other acts and things and incur such other expenses on its behalf as may
be necessary or advisable in connection with the maintenance of such office or
offices and the conduct of the business of the Company;

 

(j)            to open, maintain and close accounts with brokers;

 

(k)           to open, maintain and close bank accounts and draw checks and
other orders for the payment of moneys;

 

(l)            to enter into, make and perform all contracts, agreements and
other undertakings as may be necessary or advisable or incident to carrying out
its purpose;

 

(m)          to sue and be sued, to prosecute, arbitrate, settle or compromise
all claims of or against third parties, to compromise, arbitrate, settle or
accept judgment with respect to claims of or against the Company and to execute
all documents and make all representations, admissions and waivers in connection
therewith;

 

(n)           to register or qualify the Company under any applicable federal or
state laws or foreign laws, or to obtain exemptions under such laws, if such
registration, qualification or exemption is deemed necessary or desirable by the
Manager;

 

(o)           to form one or more corporations or partnerships or other
entities, to register or qualify such entities and to utilize such corporations,
partnerships or other entities as vehicles for making investments and to
otherwise carry out the business of the Company and to cause such partnerships,
corporations or other entities to take any action which the Manager would have
the authority to take on behalf of the Company;

 

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(p)           to make any and all elections and filings for federal, state,
local and foreign tax purposes;

 

(q)           to enter into and perform the terms of any credit facility as
guarantor and cause any subsidiary to enter into and perform the terms of any
credit facility as borrower, including, without limitation, repaying  borrowings
under any credit facility on behalf of the Company;

 

(r)            to create, and admit as a Member, any Person that may be
necessary, convenient or incidental to the accomplishment of the purposes of the
Company;

 

(s)           to purchase or repurchase any or all interests in the Company from
any Person for such consideration as the Manager may determine in its reasonable
discretion (whether more or less than the original issuance price of such
interests in the Company or the then market value of such interest); and

 

(t)            to do such other things and engage in such other activities as
the Manager may deem necessary, convenient or advisable with respect to the
conduct of the business of the Company, and have and exercise all of the powers
and rights conferred upon limited liability companies formed pursuant to the
Act.

 

Effectiveness of this Agreement.  This Agreement shall govern the operations of
the Company and the rights and restrictions applicable to the Members, to the
extent permitted by law.  Pursuant to Section 18-101(7)(a) of the Act, all
Persons who become holders of Units shall be bound by the provisions of this
Agreement.  The execution by a Person of this Agreement and acceptance thereof
by the Manager in accordance with the terms of this Agreement or the receipt of
Units as a successor or assign of an existing Member in accordance with the
terms of this Agreement shall be deemed to constitute a request that the records
of the Company reflect such admission, and shall be deemed to be a sufficient
act to comply with the requirements of Section 18-101(7)(a) of the Act and to so
cause that Person to become a Member as of the date of acceptance of its Capital
Contribution by the Company and to bind that Person to the terms and conditions
of this Agreement (and to entitle that Person to the rights of a Member
hereunder).

 

Qualification as a Real Estate Investment Trust, Etc.  The Manager shall use
best efforts to cause the Company to qualify for U.S. federal income tax
treatment as a real estate investment trust under Sections 856 through 860 of
the Code that is a Domestically-Controlled REIT and that is not a “pension-held
REIT” within the meaning of Section 856(h)(3)(D) of the Code.  The Company shall
not be a financial institution referred to in Section 582(c)(2) of the Code or
an insurance company to which subchapter L of the Code applies.

 

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ARTICLE 3

CAPITAL

 

Interests in the Company.

 

(a)           Designation and Number.  The Company is authorized to issue Twelve
Thousand Three Hundred Seventy Five (12,375) units of common membership
interests (the “Common Units”), having the rights, preferences, powers and
limitations described in this Agreement.  In addition to the Common Units, the
Company is authorized to issue One Hundred Twenty-Five (125) units of preferred
membership interests, having the rights, preferences, powers and limitations
described in this Agreement including without limitation those described in
Exhibit C (the “Preferred Units”).  In the event of any conflict between the
terms of the Preferred Units in Exhibit C and any other provisions in this
Agreement, the terms contained in Exhibit C shall control.  For purposes hereof,
the Preferred Units shall be considered REIT Compliance Interests.  Assuming
that all Common Units and Preferred Units are issued and outstanding, the Common
Units will represent 99% of the total number of Units issued and outstanding and
the Preferred Units will represent 1% of the total number of Units issued and
outstanding.

 

(b)           Rank.  The Common Units shall rank junior to the Preferred Units
with respect to certain rights as more particularly described in this Agreement,
including Exhibit C hereto

 

Issuance of Interests in the Company.  Subject to Article 6, the Manager may
accept Capital Contributions from additional Members and additional Capital
Contributions from existing Members at any time.  Each such additional Member
shall be admitted as a Member as of the date of acceptance of its Capital
Contribution by the Manager, at which time the Manager shall cause the Company
to issue to such Person such number of Common Units or Preferred Units, as
determined by the Manager in its sole discretion.  Upon the Manager’s acceptance
of a Capital Contribution from any Person, such Person shall become a party to
this Agreement and a Member of the Company and the obligations contained herein
shall continue for so long as such Person is a Member.  The Manager shall amend
Exhibit A to reflect the admission of additional Members and, if applicable, the
increase in Capital Contributions from existing Members, and the Manager shall
take any other appropriate action in connection therewith.  Each Member hereby
consents to any and all admissions of such additional Members and the acceptance
of any and all such additional contributions.  The Capital Contribution of any
such additional Members shall be specified by the Manager at the time of
admission of such additional Members.  No Member shall be entitled to any
interest or compensation by reason of its Capital Contributions or by reason of
serving as a Member.

 

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ARTICLE 4

DISTRIBUTIONS

 

Cash Distributions.  Net Cash Flow shall be distributed as determined by the
Manager in its sole discretion (provided that such determination may take into
account the Company’s ongoing expenses (including debt payments), anticipated
investments or capital expenditures and reserves) to the holders of the Common
Units in proportion to their respective Percentage Interests, subject to any
distributions required to be made to any holders of Preferred Units. 
Notwithstanding anything to the contrary in this Agreement, the Manager shall
make distributions of Net Cash Flow as shall be necessary for the Company to
qualify as a real estate investment trust under the Code.

 

Withholding.  Notwithstanding any other provision of this Agreement, the Manager
shall take any action that it determines to be necessary or appropriate to cause
the Company to comply with any withholding requirements established under any
federal, state or local tax law, including, without limitation, withholding
amounts from any distribution to be made to any Member.  Any amounts required to
be withheld under any such law by reason of the status of, or any action or
failure to act (other than an action or failure to act pursuant to this
Agreement) by, any Member shall be withheld from distributions otherwise to be
made to such Member, and, to the extent such amounts exceed such distributions,
such Member shall pay the amount of such excess to the Company in the manner and
at the time or times required by the Manager.  For purposes of this Agreement,
any amount withheld from a distribution to a Member and paid to a governmental
body shall be treated as if distributed to such Member.

 

ARTICLE 5

MEMBERS

 

Limitation of Liability.

 

(a)           Except as expressly provided in this Agreement or under the Act,
the Members shall have no liability under this Agreement, and the debts,
obligations and liabilities of the Company, whether arising in contract, tort or
otherwise, shall be solely the debts, obligations and liabilities of the
Company, and the Members shall not be obligated personally for any such debt,
obligation or liability of the Company solely by reason of being a Member.  The
Members shall not be required to lend any funds to the Company.  Each of the
Members shall be liable to make payment of his, her or its respective
contributions as and when due hereunder and other payments as expressly provided
in this Agreement.  If and to the extent a Member’s contributions shall be fully
paid, such Member shall not, except as required by the express provisions of the
Act regarding repayment of sums wrongfully distributed to Members or its
subscription document, be required to make any further contributions.

 

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(b)           To the maximum extent permitted under the Act in effect from time
to time, neither the Manager nor any of its Affiliates (the “Indemnified
Parties”) shall be liable to the Company or to any Member for any act or
omission performed or failed to be performed by any of them, or for any losses,
claims, costs, damages or liabilities arising from any such act or omission,
except to the extent that such loss, claim, cost, damage or liability results
from such Indemnified Party’s willful misconduct or fraud.  To the maximum
extent permitted under the Act as in effect from time to time, the Company shall
indemnify, defend and hold harmless each Indemnified Party from and against any
losses, claims, costs, damages or liabilities to which such Indemnified Party
may become subject in connection with the business or affairs of the Company or
any of its subsidiaries, except to the extent that any such loss, claim, cost,
damage or liability results from the willful misconduct or fraud of such
Indemnified Party.

 

No Termination.  The death, retirement, resignation, expulsion, bankruptcy,
dissolution or any other event that terminates the existence of a Member shall
not affect the existence of the Company, and the Company shall continue for the
term of this Agreement until its existence is terminated as provided herein.

 

ARTICLE 6

EXCESS UNIT PROVISIONS

 

Definitions.  For purposes of this Article 6, the following terms shall have the
following meanings:

 

“Beneficial Ownership” shall mean ownership of Units by a Person who would be
treated as an owner of such Units either directly or constructively through the
application of Section 544 of the Code, as modified by Section 856(h)(1)(B) of
the Code.  The terms “Beneficial Owner,” “Beneficially Owns,” “Beneficially Own”
and “Beneficially Owned” shall have correlative meanings.

 

“Charitable Beneficiary” shall mean an organization or organizations described
in Sections 170(b)(1)(A) and 170(c) of the Code and identified by the Manager as
the beneficiary or beneficiaries of the Excess Unit Trust.

 

“Excess Units” shall have the meaning given to it in Section 6.3(a).

 

“Excess Unit Trust” shall mean the trust created pursuant to Section 6.14.

 

“Excess Unit Trustee” shall mean a Person, who shall be unaffiliated with the
Company, any Purported Beneficial Transferee and any Purported Record
Transferee, identified by the Manager as the trustee of the Excess Unit Trust.

 

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“Existing Holder” shall mean (a) the Partnership, (b) the REIT Compliance
Parties and (b) any Person to whom an Existing Holder Transfers, subject to the
limitations provided in this Agreement, Beneficial Ownership of Units causing
such transferee to Beneficially Own Units in excess of the Ownership Limit.

 

“Existing Holder Limit” (a) for the Partnership shall mean, initially, 99% of
the Units, and, after any adjustment pursuant to Section 6.9, shall mean such
percentage of the outstanding Units, as the case may be, as so adjusted, (b) for
the REIT Compliance Parties shall mean, initially 1% of the Units, and, after
any adjustment pursuant to Section 6.9, shall mean such percentage of
outstanding Units, as the case may be, as so adjusted, and (c) for any Existing
Holder who becomes an Existing Holder by virtue of clause (b) of the definition
thereof, shall mean, initially, the percentage of the outstanding Units
Beneficially Owned by such Existing Holder at the time that such Existing Holder
becomes an Existing Holder, but in no event shall such percentage be greater
than the Existing Holder Limit for the Existing Holder who Transferred
Beneficial Ownership of such Units or, in the case of more than one transferor,
in no event shall such percentage be greater than the smallest Existing Holder
Limit of any transferring Existing Holder, and, after any adjustment pursuant to
Section 6.9, shall mean such percentage of the outstanding Units as so adjusted.

 

“Market Price” shall mean the market price of such class of Units on the
relevant date as determined in good faith by the Manager.

 

“Ownership Limit” shall initially mean 9.8% in number of the Units or value of
the outstanding Units, and after any adjustment as set forth in Section 6.10,
shall mean such greater percentage of the outstanding Units as so adjusted.  The
number and value of the outstanding Units of the Company shall be determined by
the Manager in good faith, which determination shall be conclusive for all
purposes hereof.

 

“Person” shall mean an individual, corporation, partnership, estate, trust
(including, without limitation, a trust qualified under Section 401(a) or
501(c)(17) of the Code), portion of a trust permanently set aside for or to be
used exclusively for the purposes described in Section 642(c) of the Code,
association, private foundation within the meaning of Section 509(a) of the
Code, joint stock company or other Entity.

 

“Prohibited Owner Event” has the meaning provided in Section 6.3(c).

 

“Purported Beneficial Transferee” shall mean, with respect to any purported
Transfer which results in Excess Units, the beneficial holder of the Units, if
such Transfer had been valid under Section 6.2.

 

“Purported Record Transferee” shall mean, with respect to any purported Transfer
which results in Excess Units, the record holder of the Units, if such Transfer
had been valid under Section 6.2.

 

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“Redemption Price” has the meaning provided in Section 6.18.

 

“Restriction Termination Date” shall mean the first day on which the Manager
determines that it is no longer in the best interests of the Company to attempt
to, or continue to, qualify as a real estate investment trust under the Code.

 

Ownership Limitation.

 

(a)           Except as provided in Section 6.12, until the Restriction
Termination Date, no Person (other than an Existing Holder) shall Beneficially
Own Units in excess of the Ownership Limit and no Existing Holder shall
Beneficially Own Units in excess of the Existing Holder Limit for such Existing
Holder.

 

(b)           Except as provided in Section 6.12, until the Restriction
Termination Date, any Transfer that, if effective, would result in any Person
(other than an Existing Holder) Beneficially Owning Units in excess of the
Ownership Limit shall be void ab initio as to the Transfer of the Units which
would otherwise be Beneficially Owned by such Person in excess of the Ownership
Limit; and the intended transferee shall acquire no rights in such Units.

 

(c)           Except as provided in Sections 6.9 and 6.12, until the Restriction
Termination Date, any Transfer that, if effective, would result in any Existing
Holder Beneficially Owning Units in excess of the applicable Existing Holder
Limit shall be void ab initio as to the Transfer of the Units which would be
otherwise Beneficially Owned by such Existing Holder in excess of the applicable
Existing Holder Limit; and such Existing Holder shall acquire no rights in such
Units.

 

(d)           Until the Restriction Termination Date, any Transfer that, if
effective, would result in the Units being beneficially owned (as provided in
Section 856(a) of the Code) by less than 100 Persons (determined without
reference to any rules of attribution) shall be void ab initio as to the
Transfer of Units which would be otherwise beneficially owned (as provided in
Section 856(a) of the Code) by the transferee; and the intended transferee shall
acquire no rights in such Units.

 

(e)           Until the Restriction Termination Date, any Transfer that, if
effective, would result in the Company being “closely held” within the meaning
of Section 856(h) of the Code shall be void ab initio as to the Transfer of the
Units which would cause the Company to be “closely held” within the meaning of
Section 856(h) of the Code; and the intended transferee shall acquire no rights
in such Units.

 

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(f)            Until the Restriction Termination Date, any Transfer that, if
effective, would result in the Company otherwise failing to qualify as a real
estate investment trust under the Code shall be void ab initio as to the
Transfer of Units that would result in the Company failing to qualify as a real
estate investment trust under the Code; and the intended transferee shall
acquire no rights in such Units.

 

(g)           Until the Restriction Termination Date, any Transfer that, if
effective, would result in the Company becoming a “pension-held REIT” as defined
in Section 856(h) of the Code shall be void ab initio as to the Transfer of
Units which would result in the Company becoming a “pension-held REIT”; and the
intended transferee shall acquire no rights in such Units.

 

(h)           Until the Restriction Termination Date, any Transfer that would
result in the Company not maintaining its status as a Domestically-Controlled
REIT shall be void ab initio as to the Transfer of Units which would result in
the Company failing to maintain its status as a Domestically-Controlled REIT;
and the intended transferee shall acquire no rights in such Units.

 

Excess Units.

 

(a)           If, notwithstanding the other provisions contained in this
Article 6, at any time, until the Restriction Termination Date, there is a
purported Transfer or other change in the capital structure of the Company such
that any Person would Beneficially Own Units in excess of the applicable
Ownership Limit or Existing Holder Limit (as applicable), then, except as
otherwise provided in Sections 6.9 and 6.12, the Units Beneficially Owned in
excess of such Ownership Limit or Existing Holder Limit (rounded up to the
nearest whole Unit) shall constitute “Excess Units” and shall be treated as
provided in this Article 6.  Such designation and treatment shall be effective
as of the close of business on the business day prior to the date of the
purported Transfer or change in capital structure.

 

(b)           If, notwithstanding the other provisions contained in this
Article 6, at any time, until the Restriction Termination Date, there is a
purported Transfer or other change in the capital structure of the Company (as a
result of a direct or indirect Transfer or otherwise) which, if effective, would
cause the Company to (i) be beneficially owned (as provided in Section 856(a) of
the Code) by less than 100 Persons, (ii) become “closely held” within the
meaning of Section 856(h) of the Code,  (iii) become a “pension-held REIT”
within the meaning of Section 856(h) of the Code, (iv) fail to qualify as a
Domestically-Controlled REIT or (v) otherwise fail to qualify as real estate
investment trust under the Code, then the Units that are the subject of such
Transfer or other event which would cause the Company to fail such requirement
shall constitute “Excess Units” and shall be treated as provided in this
Article 6.  Such designation and treatment shall be

 

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effective as of the close of business on the business day prior to the date of
the purported Transfer or change in capital structure.

 

(c)           If, at any time prior to the Restriction Termination Date,
notwithstanding the other provisions contained in this Article 6, there is an
event (a “Prohibited Owner Event”) which would result in the disqualification of
the Company as a real estate investment trust under the Code  by virtue of
actual, beneficial or constructive ownership of Units, then Units which result
in such disqualification shall be automatically exchanged for an equal number of
Excess Units to the extent necessary to avoid such disqualification.  Such
exchange shall be effective as of the close of business on the business day
prior to the date of the Prohibited Owner Event.  In determining which Units are
exchanged, Units owned directly or indirectly by any Person who caused the
Prohibited Owner Event to occur shall be exchanged before any Units not so held
are exchanged.  If similarly situated Persons exist, such exchange shall be pro
rata.  If the Company is still so disqualified as a real estate investment trust
under the Code, Units owned directly or indirectly by Persons who did not cause
the Prohibited Owner Event to occur shall be chosen by random lot and exchanged
for Excess Units until the Company is no longer so disqualified as a real estate
investment trust under the Code.

 

Prevention of Transfer.  If the Manager or its designee shall at any time
determine in good faith that a Transfer has taken place in violation of
Section 6.2 or that a Person intends to acquire or has attempted to acquire
beneficial ownership (determined without reference to any rules of attribution)
or Beneficial Ownership of any Units in violation of Section 6.2, the Manager or
its designee shall take such action as it deems advisable to refuse to give
effect to or to prevent such Transfer, including, without limitation, refusing
to give effect to such Transfer on the books of the Company or instituting
proceedings to enjoin such Transfer; provided, however, that any Transfers or
attempted Transfers in violation of paragraph (b), (c), (d), (e), (f), (g) or
(h) of Section 6.2 shall automatically result in the designation and treatment
described in Section 6.3, irrespective of any action (or non-action) by the
Manager.

 

Notice.  Any Person who acquires or attempts to acquire Units in violation of
Section 6.2, or any Person who is a transferee such that Excess Units result
under Section 6.3, shall immediately give written notice or, in the event of a
proposed or attempted Transfer, shall give at least fifteen (15) days prior
written notice to the Company of such event and shall provide to the Company
such other information as the Company may request in order to determine the
effect, if any, of such Transfer or attempted Transfer on the Company’s status
as a real estate investment trust under the Code.

 

Information for the Company.  Until the Restriction Termination Date:

 

(a)           Every Beneficial Owner of more than ½ of 1% of the number or value
of outstanding Units shall, within thirty (30) days after January 1 of each
year, give written

 

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notice to the Company stating the name and address of such Beneficial Owner, the
number of Units Beneficially Owned, a description of how such Units are held and
whether such Beneficial Owner is a U.S. Person.  Each such Beneficial Owner
shall provide to the Company such additional information as the Company may
reasonably request in order to determine the effect, if any, of such Beneficial
Ownership on the Company’s status as a real estate investment trust under the
Code.

 

(b)           Each Person who is a Beneficial Owner of Units and each Person who
is holding Units for a Beneficial Owner shall provide to the Company in writing
such information with respect to direct, indirect and constructive ownership of
Units as the Manager deems reasonably necessary to comply with the provisions of
the Code applicable to a real estate investment trust, to determine the
Company’s status as a real estate investment trust under the Code, to comply
with the requirements of any taxing authority or governmental agency or to
determine any such compliance.

 

Other Action by Manager.  Nothing contained in this Article 6 shall limit the
authority of the Manager to take such other action as it deems necessary or
advisable to protect the Company and the interests of its Members by
preservation of the Company’s status as a real estate investment trust under the
Code.

 

Ambiguities.  In the case of an ambiguity in the application of any of the
provisions of this Article 6, including, without limitation, any definition
contained in Section 6.1, the Manager shall have the power to interpret and
determine the application of the provisions of this Article 6 with respect to
any situation based on the facts known to the Manager.

 

Modification of Existing Holder Limits.  The Existing Holder Limits may be
modified as follows:

 

(a)           Subject to the limitations provided in Section 6.11, the Manager
may grant options which result in Beneficial Ownership of Units by an Existing
Holder pursuant to an option plan approved by the Manager.  Any such grant shall
increase the Existing Holder Limit for the affected Existing Holder to the
maximum extent possible under Section 6.11 to permit the Beneficial Ownership of
the Units issuable upon the exercise of such option.

 

(b)           The Manager shall reduce the Existing Holder Limit for any
Existing Holder after any Transfer permitted in this Article 6 by such Existing
Holder by the percentage of the outstanding Units so Transferred or after the
lapse (without exercise) of an option described in Section 6.9(a) by the
percentage of the Units that the option, if exercised, would have represented,
but in either case no Existing Holder Limit shall be reduced to a percentage
which is less than the Ownership Limit.

 

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Increase or Decrease in Ownership Limit.  Subject to the limitations provided in
Section 6.11, the Manager may from time to time increase or decrease the
Ownership Limit; provided, however, that any decrease may only be made
prospectively as to subsequent holders (other than a decrease as a result of a
retroactive change in existing law that would require a decrease to retain the
Company’s status as a real estate investment trust under the Code, in which case
such decrease shall be effective immediately).

 

Limitations on Changes in Existing Holder and Ownership Limits.

 

(a)                                  Neither the Ownership Limit nor any
Existing Holder Limit may be increased (nor may any additional Existing Holder
Limit be created) if, after giving effect to such increase (or creation), five
(5) Beneficial Owners of Units (including, without limitation, all of the then
Existing Holders) could Beneficially Own, in the aggregate, more than 49.9% in
number or value of the outstanding Units.

 

(b)                                 Prior to the modification of any Existing
Holder Limit or Ownership Limit pursuant to Sections 6.9 or 6.10, the Manager
may require such opinions of counsel, affidavits, undertakings or agreements as
it may deem necessary or advisable in order to determine or ensure the Company’s
status as a real estate investment trust under the Code.

 

(c)                                  No Existing Holder Limit shall be reduced
to a percentage which is less than the Ownership Limit.

 

Waivers by Manager.  The Manager, upon receipt of a ruling from the Internal
Revenue Service or an opinion of counsel or other evidence satisfactory to the
Manager and upon at least fifteen (15) days written notice from a transferee
prior to the proposed Transfer which, if consummated, would result in the
intended transferee owning Units in excess of the Ownership Limit or the
Existing Holder Limit, as the case may be, and upon such other conditions as the
Manager may direct, may waive the Ownership Limit or the Existing Holder Limit,
as the case may be, with respect to such transferee.

 

Severability.  If any provision of this Article 6 or any application of any such
provision is determined to be void, invalid or unenforceable by any court having
jurisdiction over the issue, the validity and enforceability of the remaining
provisions shall be affected only to the extent necessary to comply with the
determination of such court.

 

Trust for Excess Units.  Upon any purported Transfer that results in Excess
Units pursuant to Section 6.3, such Excess Units shall be deemed to have been
transferred to the Excess Unit Trustee, as trustee of the Excess Unit Trust for
the exclusive benefit of the

 

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Charitable Beneficiary.  Excess Units so held in trust shall be issued and
outstanding Units of the Company.  The Purported Beneficial Transferee shall
have no rights in such Excess Units except as provided in Section 6.17.

 

Distributions on Excess Units.  Any distributions (whether as dividends,
distributions upon liquidation, dissolution or winding up or otherwise) on
Excess Units shall be paid to the Excess Unit Trust for the benefit of the
Charitable Beneficiary.  Upon liquidation, dissolution or winding up, the
Purported Record Transferee shall receive the lesser of (a) the amount of any
distribution made upon liquidation, dissolution or winding up or (b) the price
paid by the Purported Record Transferee for the Units, or if the Purported
Record Transferee did not give value for the Units, the Market Price of the
Units on the day of the event causing the Units to be held in trust.  Any such
dividend paid or distribution paid to the Purported Record Transferee in excess
of the amount provided in the preceding sentence prior to the discovery by the
Company that the Units with respect to which the dividend or distribution was
made had been exchanged for Excess Units shall be repaid by the Purported Record
Transferee to the Excess Unit Trust for the benefit of the Charitable
Beneficiary.

 

Voting of Excess Units.  The Excess Unit Trustee shall be entitled to vote the
Excess Units for the benefit of the Charitable Beneficiary on any matter. 
Subject to Delaware law, any vote taken by a Purported Record Transferee prior
to the discovery by the Company that the Excess Units were held in trust shall
be rescinded ab initio.  The owner of the Excess Units shall be deemed to have
given an irrevocable proxy to the Excess Unit Trustee to vote the Excess Units
for the benefit of the Charitable Beneficiary.

 

Non-Transferability of Excess Units.  Excess Units shall be transferable only as
provided in this Section 6.17. At the direction of the Company, the Excess Unit
Trustee shall Transfer the Units held in the Excess Unit Trust to a person whose
ownership of the Units will not violate the Ownership Limit or Existing Holder
Limit and for whom such Transfer would not be wholly or partially void pursuant
to Section 6.2.  Such Transfer shall be made within sixty (60) days after the
latest of (x) the date of the Transfer which resulted in such Excess Units and
(y) the date the Manager determines in good faith that a Transfer resulting in
Excess Units has occurred, if the Company does not receive a notice of such
Transfer pursuant to Section 6.5.  If such a Transfer is made, the interest of
the Charitable Beneficiary shall terminate and proceeds of the sale shall be
payable to the Purported Record Transferee and to the Charitable Beneficiary. 
The Purported Record Transferee shall receive the lesser of the price paid by
the Purported Record Transferee for the Units or, if the Purported Record
Transferee did not give value for the Units, the Market Price of the Units on
the day of the event causing the Units to be held in trust, and the price
received by the Excess Unit Trust from the sale or other disposition of the
Units.  Any proceeds in excess of the amount payable to the Purported Record
Transferee shall be paid to the Charitable Beneficiary.  Prior to any Transfer
of any Excess Units by the Excess Unit Trustee, the Company must have waived in
writing its purchase rights under Section 6.18.  It is expressly understood that
the Purported Record Transferee may enforce the provisions of this Section 6.17
against the Charitable Beneficiary.

 

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If any of the foregoing restrictions on Transfer of Excess Units is determined
to be void, invalid or unenforceable by any court of competent jurisdiction,
then the Purported Record Transferee may be deemed, at the option of the
Company, to have acted as an agent of the Company in acquiring such Excess Units
and to hold such Excess Units on behalf of the Company.

 

Call by the Company on Excess Units.  Excess Units shall be deemed to have been
offered for sale to the Company, or its designee, at a price per Unit equal to
the lesser of the price per Unit in the transaction that created such Excess
Units (or, in the case of a devise, gift or other transaction in which no value
was given for such Excess Units, the Market Price at the time of such devise,
gift or other transaction) and the Market Price of the Units to which such
Excess Units relates on the date the Company, or its designee, accepts such
offer (the “Redemption Price”).  The Company shall have the right to accept such
offer for a period of ninety (90) days after the later of (x) the date of the
Transfer which resulted in such Excess Units and (y) the date the Manager
determines in good faith that a Transfer resulting in Excess Units has occurred,
if the Company does not receive a notice of such Transfer pursuant to
Section 6.5 but in no event later than a permitted Transfer pursuant to and in
compliance with the terms of Section 6.17.  Unless the Manager determines that
it is in the interests of the Company to make earlier payments of all of the
amount determined as the Redemption Price per Unit in accordance with the
preceding sentence, the Redemption Price may be payable at the option of the
Manager at any time up to but not later than one (1) year after the date the
Company accepts the offer to purchase the Excess Units.  In no event shall the
Company have an obligation to pay interest to the Purported Record Transferee.

 

ARTICLE 7

TRANSFERS

 

Transfer of Interests in the Company.

 

(a)                                  In addition to the limitations set forth in
Article 6, a Member shall not Transfer all or any of its interests in the
Company (or any economic interest therein), and no Transfer shall be registered
by the Company, if the Manager determines, based upon the advice of counsel,
such Transfer would or may (i) violate, or require registration or qualification
under, applicable Federal, state or foreign securities laws, (ii) result in
noncompliance with Regulation S under the Securities Act (to the extent
Regulation S is being relied upon), (iii) cause the Company to cease to qualify
as a Domestically-Controlled REIT that is not a “pension-held REIT” within the
meaning of Section 856(h)(3)(D) of the Code, or (iv) with respect to any Member
that is a U.S. Person and to the extent necessary to preserve the status of the
Company as a Domestically-Controlled REIT, cause the Transfer of such Member’s
Units to a Person that is not a U.S. Person.

 

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(b)                                 Any substituted Member admitted to the
Company shall succeed to all rights and be subject to all the obligations of the
transferring Member with respect to the interest to which such Member was
substituted.   Any transferee of an interest in the Company who is not admitted
as a substituted Member shall have the right to receive distributions pursuant
to Article 4, but shall have no other rights hereunder.

 

(c)                                  The transferor and transferee of a Member’s
interest shall be jointly and severally obligated to reimburse the Company and
the Manager for all expenses (including, without limitation, legal fees)
incurred by or on behalf of the Company and the Manager in connection with any
Transfer.  If, under applicable law, a Transfer of an interest in the Company
that does not comply with this Section 7.1 is nevertheless legally effective,
the transferor and transferee shall be jointly and severally liable to the
Company and the Manager for, and shall indemnify and hold harmless the Company
and the Manager against, any losses, damages or expenses (including, without
limitation, attorneys’ fees, judgments, fines and amounts paid in settlement)
actually and reasonably incurred by them in connection with such Transfer.

 

(d)                                 To the fullest extent permitted under
applicable law, each Member shall indemnify and hold harmless the Company, the
Manager and all other Members who were or are parties, or are threatened to be
made parties, to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of or arising from any actual or alleged misrepresentation, misstatement of
facts or omission to state facts made (or omitted to be made), noncompliance
with any agreement or failure to perform any covenant by any such Member in
connection with any Transfer of all or any portion of such Member’s interest (or
any economic interest therein) in the Company, against any losses, damages or
expenses (including, without limitation, attorneys’ fees, judgments, fines and
amounts paid in settlement) actually and reasonably incurred by it or them in
connection with such action, suit or proceeding and for which it or they have
not otherwise been reimbursed.

 

ARTICLE 8

MANAGER

 

Appointment of the Manager.  The Members delegate all their power and authority
to the Manager.  The Manager shall have continuing exclusive authority over the
management of the Company and the conduct of the Company’s affairs, subject to
the limitations and restrictions set forth in this Agreement.  Members holding a
majority of the total number of Units issued and outstanding shall have the sole
right to appoint, replace and remove the Manager and the sole right to appoint a
substitute Manager.  Members holding a majority of the total number of Units
issued and outstanding shall also have the sole right to appoint, replace and

 

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remove one or more supplemental Managers with such management rights as the
Partnership shall indicate, subject to the limitations and restrictions set
forth in this Agreement.

 

Rights, Duties and Powers of the Manager.

 

(a)                                  The Manager in its sole discretion shall
have full, complete and exclusive right, power and authority to exercise all the
powers of the Company set forth in Section 2.7 and Section 2.9 and to do all
things necessary to effectuate the purposes of the Company as set forth in
Section 2.7; provided, however, that the Manager shall not cause or permit the
Company or any Property Entity to take any of the actions or make any of the
decisions that are listed on Exhibit D (each being a Major Decision) without the
prior written consent of Members holding a majority of the total number of
Common Units issued and outstanding.  Subject to the preceding sentence, the
Manager shall exercise on behalf of the Company complete discretionary authority
for the management and the conduct of the affairs of the Company.  No Member
shall have any right to participate in, or exercise control or management power
over, the business and affairs of the Company, it being understood that said
limitation shall not affect any rights of a Member other than its rights as a
“member” (within the meaning of the Act); provided, however, that a Member shall
be entitled to exercise its voting rights in respect of Units that it holds in
accordance with the terms of this Agreement.

 

(b)                                 The Manager shall have the power and
authority, on behalf of the Company, to delegate to one or more Persons its
rights and powers to manage and control the affairs of the Company, subject to
the same limitations and restrictions that apply to the Manager under this
Agreement.  Such delegation shall be by a management agreement or other
agreement with such Persons and such delegation shall not cause the Manager to
cease to be a “manager” (within the meaning of the Act).

 

(c)                                  In dealing with the Manager acting for or
on behalf of the Company, no Person shall be required to inquire into, and
Persons dealing with the Company are entitled to rely conclusively on, the
right, power and authority of the Manager to bind the Company.

 

(d)                                 The Manager and its Affiliates shall not be
obligated to do or perform any act or thing in connection with the business of
the Company not expressly set forth in this Agreement.

 

Business with Affiliates; Other Activities.

 

(a)                                  The Company, directly or indirectly, may,
as necessary or appropriate, engage in any transaction with or employ or retain
the Manager or any of its Affiliates to

 

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provide services (including, without limitation, administration, accounting,
construction management, data processing, development, engineering,
environmental, financing, insurance brokerage, management and servicing,
leasing, legal, market research, mortgage financing, property management or
other similar services) that would otherwise be performed for the Company by the
third parties on terms (including, without limitation, the consideration to be
paid) that are determined by the Manager to be fair and reasonable to the
Company, and such Persons may receive from the Company compensation (including,
without limitation, salary, salary related employment costs and expenses of the
employees who provide such services and other overhead expenses allocable
thereto, as reasonably determined by the Manager based on the time expended by
the employees who render such services or on a project-by-project basis) in
addition to that expressly provided for in this Agreement.

 

(b)                                 Subject to the limitations imposed on the
Manager and its Affiliates pursuant to the Partnership Agreement, nothing herein
contained shall prevent or prohibit the Manager, any of its Affiliates, or any
of their respective trustees, officers, directors, members, partners, employees
or shareholders from acquiring, developing, investing in, managing, leasing or
otherwise dealing in real property of any kind or nature for its own account or
that of any of its Affiliates or third parties or from entering into, engaging
in or conducting any other activity or performing for a fee any service
(including, without limitation, engaging in any business dealing with real
property of any type or location, acting as a director, officer or employee of
any corporation, as a trustee of any trust, as a general partner of any
partnership, as a member of any limited liability company or as an
administrative official of any other Entity, or receiving compensation for
services to, or participating in profits derived from, the investments of any
such corporation, trust, partnership, limited liability company or other Entity,
regardless of whether such activities are competitive with the Company).  The
fact that the Manager or its Affiliates may encounter opportunities to purchase,
otherwise acquire, lease, sell or otherwise dispose of real or personal property
and take advantage of such opportunities themselves or introduce such
opportunities to other Persons in which it has or has not any interest, shall
not subject the Manager or its Affiliates to liability to the Company or any of
the Members on account of the lost opportunity.

 

ARTICLE 9

DISSOLUTION AND TERMINATION

 

Events of Dissolution.

 

(a)                                  In accordance with Section 18-801 of the
Act, and the provisions therein permitting this Agreement to specify the events
of the Company’s dissolution, the Company shall be dissolved and the affairs of
the Company wound up upon the occurrence of any of the following events:

 

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(i)                                     “events of bankruptcy” (as described in
Section 18-304 of the Act) or insolvency or dissolution of the Manager, absent
the Members’ decision to continue the Company within ninety (90) days following
such event;

 

(ii)                                  the dissolution of the Partnership
pursuant to terms of the Partnership Agreement;

 

(iii)                               the entry of a decree of judicial
dissolution under Section 18-802 of the Act; and

 

(iv)                              the election by the Manager, in its sole
discretion, to dissolve the Company.

 

Each Member hereby irrevocably waives any and all rights it may have to obtain a
dissolution of the Company in any way other than as specified above.

 

(b)                                 Dissolution of the Company shall be
effective on the day on which the event occurs which gives rise to the
dissolution, but the Company shall not terminate until the assets of the Company
shall have been distributed as provided herein and a certificate of cancellation
has been filed with the Secretary of State of the State of Delaware.

 

Application of Assets.

 

(a)                                  Upon dissolution of the Company, the
business and affairs of the Company shall be wound up as provided in this
Section 9.2.  The Manager shall act as the “Liquidator”; provided, that if the
Company has been dissolved pursuant to Section 9.1(a)(i), the Liquidator shall
be the same Person approved as the “Liquidating Trustee” under the Partnership
Agreement.  The Liquidator shall wind up the affairs of the Company, shall
dispose of such Company Assets in accordance with Section 9.2(b) as it deems
necessary or appropriate and shall pay and distribute the assets of the Company,
including, without limitation, the proceeds of any such disposition, as follows:

 

(i)                                     first, to creditors, including, without
limitation, Members who are creditors, to the extent otherwise permitted by law,
in satisfaction of liabilities of the REIT (whether by payment or by
establishment of reserves as determined by the Liquidator in its sole
discretion), other than distributions to Members pursuant to Article 4;

 

(ii)                                  Second, to establish any reserves,
including reserves established pursuant to Section 1.4.6 of Exhibit C, that the
Manager deems reasonably

 

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necessary for contingent or unforeseen obligations of the Company, such reserves
to be held until the expiration of such period as the Manager deems advisable;

 

(iii)                               Third, subject to Section 1.4.6 of
Exhibit C, payment to the holders of the then outstanding Preferred Units in
accordance with Section 1.4.1 of Exhibit C of this Agreement; and

 

(iv)                              Fourth, to the holders of the Common Units, in
accordance with Section ARTICLE 0.

 

(b)                                 The Liquidator shall, in its sole
discretion, determine whether to sell any Company Assets, including, without
limitation, the Owned Properties or the Property Entities, and if so, whether at
a public or private sale, for what price and on what terms.  If the Liquidator
determines to sell or otherwise dispose of any Company Asset or any interest
therein, the Liquidator shall not be required to do so promptly but shall have
full right and discretion to determine the time and manner of such sale or sales
giving due regard to the activity and condition of the relevant market and
general financial and economic conditions.  If the Liquidator determines not to
sell or otherwise dispose of any Company Asset or any interest therein, the
Liquidator shall not be required to distribute the same to the Members promptly
but shall have full right and discretion to determine the time and manner of
such distribution and distributions giving due regard to the interests of the
Members.

 

(c)                                  Each Member shall look solely to the assets
of the Company for all distributions with respect to the Company and shall have
no recourse therefor (upon dissolution or otherwise) against the Manager, the
Liquidator or any other Member (or any of their Affiliates).

 

Procedural and Other Matters.

 

(a)                                  Upon dissolution of the Company and until
the filing of a certificate of cancellation, the Liquidator may, in the name of,
and for and on behalf of, the Company, prosecute and defend suits, whether
civil, criminal or administrative, settle and close the business of the Company,
dispose of and convey the property of the Company, discharge or make reasonable
provision for the liabilities of the Company, and distribute to the Members any
remaining assets of the Company, in accordance with this Article 9 and all
without affecting the liability of Members or the Manager and without imposing
liability on the Liquidator.

 

(b)                                 The Certificate may be canceled upon the
dissolution and the completion of winding up of the Company, by any Person
authorized to cause such cancellation in connection with such dissolution and
winding up.

 

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ARTICLE 10

APPOINTMENT OF ATTORNEY-IN-FACT

 

Appointment and Powers.

 

(a)                                  Each Member hereby irrevocably constitutes
and appoints the Manager, with full power of substitution, as his, her or its
true and lawful attorney-in-fact, with full power and authority in his, her or
its name, place and stead to execute, acknowledge, deliver, swear to, file and
record at the appropriate public offices such documents, instruments and
conveyances as may be necessary or appropriate to carry out the provisions or
purposes of this Agreement.

 

(b)                                 The authority granted by this Section 10.1
is a special power of attorney coupled with an interest, is irrevocable, and
shall not be affected by the subsequent incapacity or disability of a Member,
may be exercised by a signature for each Member or by a single signature of the
Manager acting as attorney-in-fact for all of them, and shall survive the
Transfer by a Member of the whole or any portion of his, her or its interests in
the Company.

 

Presumption of Authority.  Any Person dealing with the Company may conclusively
presume and rely upon the fact that any instrument referred to above, executed
by the Manager acting as attorney-in-fact, is authorized, regular and binding,
without further inquiry.

 

ARTICLE 11

MISCELLANEOUS PROVISIONS

 

Notices.

 

(a)                                  Any notice, request, demand or other
communication shall be in writing and shall be deemed to have been duly given if
personally delivered or sent by certified, registered or overnight mail or
courier or by e-mail or facsimile transmission confirmed by letter, and shall be
deemed received, unless earlier received, (i) if sent by certified or registered
mail, return receipt requested, when actually received, (ii) if sent by
overnight mail or courier, when actually received, (iii) if sent by e-mail or
facsimile transmission, on the date sent (provided that confirmed receipt is
obtained), and (iv) if delivered by hand, on the date of receipt.

 

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(b)                                 All such notices, demands and requests shall
be addressed as follows: (i) if to the Company, to its principal place of
business, as set forth in Section 2.4 and (ii) if to a Member, to the address of
such Member listed on Exhibit A.

 

(c)                                  By giving to the other parties written
notice thereof, the parties hereto and their respective successors and assigns
shall have the right from time to time and at any time during the term of this
Agreement to change their respective addresses effective upon receipt by the
other parties of such notice and each shall have the right to specify as its
address any other address.

 

Access to Information; Books and Records.  A Member may, subject to such
reasonable standards as may be established from time to time by the Manager,
obtain from the Manager, from time to time upon reasonable demand for any
purpose reasonably related to such Member’s interest in the Company as a Member,
such information (including, without limitation, that specified in
Section 18-305 of the Act) regarding the affairs of the Company as is just and
reasonable.  The books and records of the Company shall be maintained by the
Company at its principal place of business and shall be available upon
reasonable notice for inspection by the Members at reasonable hours during any
business day.

 

Word Meanings.  The words such as “herein,” “hereinafter,” “hereof” and
“hereunder” refer to this Agreement as a whole and not merely to the subdivision
in which such words appear unless the context otherwise requires.  The singular
shall include the plural and the masculine gender shall include the feminine and
neuter, and vice versa, unless the context otherwise requires.  As used herein,
the word “or” shall not be exclusive, and the terms “includes” and “including”
and words of similar import shall be deemed to be followed by the words “without
limitation”  to the extent such words do not already follow any such term.

 

Successors.  The covenants and agreements contained herein shall be binding
upon, and inure to the benefit of, the heirs, legal representatives, successors
and permitted assigns of the respective parties hereto.

 

Amendments.  This Agreement may be amended from time to time by the Manager
acting alone, without the necessity of any approval or consent of any of the
Members.  The Manager shall provide promptly the Members with a copy of any
amendment to this Agreement made pursuant to this Section 11.5.

 

Waiver.  The waiver by any party hereto of a breach of any provisions contained
herein shall be in writing, signed by the waiving party, and shall in no way be
construed as a waiver of any succeeding breach of such provision or the waiver
of the provision itself.

 

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Applicable Law.  This Agreement shall be construed and enforced in accordance
with the laws of the State of Delaware, without regard to such state’s laws
concerning conflicts of laws.  In the event of a conflict between any provisions
of this Agreement and any nonmandatory provisions of the Act, the provision of
this Agreement shall control and take precedence.

 

Title to Company Assets.  All assets of the Company shall be deemed to be owned
by the Company as an entity, and no Member, individually or collectively, shall
have any ownership interest therein.  Each Member hereby irrevocably waives any
and all rights that it may have to maintain an action for partition of any of
the Company Assets.  Legal title to any or all Company Assets may be held in the
name of the Company, the Manager or one or more nominees or direct or indirect
subsidiaries of any of them, as the Manager shall determine.  The Manager hereby
declares and warrants that any Company Assets for which legal title is held in
the name of the Manager shall be held in trust by the Manager for the use and
benefit of the Company in accordance with the provisions of this Agreement.  All
assets of the Company shall be recorded as owned by the Company on the Company’s
books and records, irrespective of the name in which legal title to such assets
is held.

 

Severability of Provisions.  Each provision of this Agreement shall be deemed
severable, and if any part of any provision is held to be illegal, void,
voidable, invalid, nonbinding or unenforceable in its entirety or partially or
as to any party, for any reason, such provision may be changed, consistent with
the intent of the parties hereto, to the extent reasonably necessary to make the
provision, as so changed, legal, valid, binding and enforceable.  If any
provision of this Agreement is held to be illegal, void, voidable, invalid,
nonbinding or unenforceable in its entirety or partially or as to any party, for
any reason, and if such provision cannot be changed consistent with the intent
of the parties hereto to make it fully legal, valid, binding and enforceable,
then such provision shall be stricken from this Agreement, and the remaining
provisions of this Agreement shall not in any way be affected or impaired, but
shall remain in full force and effect.

 

Headings.  The headings contained in this Agreement have been inserted for the
convenience of reference only, and neither such headings nor the placement of
any term hereof under any particular heading shall in any way restrict or modify
any of the terms or provisions hereof.

 

Further Assurances.  The parties hereto shall execute and deliver all documents,
provide all information and do or refrain from doing all such further acts and
things as may be required to carry out the intent and purposes of the Company.

 

Counterparts.  This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, and all of which taken together shall
constitute one and the same instrument.

 

27

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Entire Agreement.  This Agreement (including, without limitation, all exhibits
and schedules hereto) and any subscription agreement for Units constitute the
entire agreement between the parties hereto with respect to the transactions
contemplated herein, and supersedes all prior understandings or agreements, oral
or written, among the parties.

 

Jurisdiction; Venue.  Any action or proceeding against the parties relating in
any way to this Agreement may be brought and enforced in the courts of the State
of Illinois to the extent subject matter jurisdiction exists therefor or the
United States District Court for the Northern District of Illinois, and the
parties irrevocably submit to the jurisdiction of both such courts in respect of
any such action or proceeding.  The parties irrevocably waive, to the fullest
extent permitted by law, any objection that they may now or hereafter have to
the laying of venue of any such action or proceeding in the courts of the State
of Illinois or the United States District Court for the Northern District of
Illinois and any claim that any such action or proceeding brought in any such
court has been brought in any inconvenient forum.

 

Appointment of the Paying Agent.  The holders of Preferred Units hereby
authorize REIT Funding, LLC, with an address at 100 Colony Square, Suite 2120,
1175 Peachtree Street, NE, Atlanta, Georgia 30361-6206, to act as paying agent
on behalf of the holders of Preferred Units (the “Paying Agent”).  Any
distribution payments received by the Paying Agent shall be deemed paid to the
Preferred Members on the later of the date received by the Paying Agent or the
date declared for payment.

 

[Signature Page to Follow.]

 

28

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

 

 

MEMBER:

 

 

 

INP RETAIL, L.P., a Delaware limited partnership

 

 

 

By:

INP Retail Management Company, LLC, a Delaware limited liability company

 

Its:

General Partner

 

 

 

 

By: Inland Real Estate Corporation

 

 

Its: Manager

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Its:

 

 

 

 

 

 

MANAGER:

 

 

 

 

 

INP RETAIL MANAGEMENT COMPANY, LLC, a Delaware limited liability company

 

 

 

 

By: Inland Real Estate Corporation

 

 

Its: Manager

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Its:

 

 

29

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EXHIBIT A

 

MEMBERS OF THE COMPANY

(as of                      , 2010)

 

Name and Address

 

Units (Type)

 

 

 

INP RETAIL, L.P.
2901 Butterfield Road
Oak Brook, Illinois 60523

 

           (Common Units)

 

 

 

PREFERRED UNIT OWNERS

 

           (Preferred Units)

 

A-1

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EXHIBIT B

 

DESCRIPTION OF THE OWNED PROPERTIES

 

B-1

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EXHIBIT C

 

PREFERRED UNITS

 

TERMS OF SERIES A PREFERRED MEMBERSHIP INTERESTS

 

1.1                                 Designation and Number.  In addition to the
Common Units, the Company may issue up to One Hundred and Twenty Five (125)
units of preferred membership interests, having the rights, preferences, powers
and limitations described in this Agreement including without limitation those
described in this Exhibit C (the “Preferred Units”).  The Preferred Units shall
be uncertificated.

 

1.2                                 Rank.  The Preferred Units shall, with
respect to distribution and redemption rights and rights upon liquidation,
dissolution or winding up of the Company, rank senior to the Common Units of the
Company and to all other membership interests and equity interests in the
Company (together with the Common Units, the “Junior Interests”).  The terms
“membership interests” and “equity interests” shall not include convertible debt
securities unless and until such securities are converted into equity interests
of the Company.

 

1.3                    Distributions.

 

1.3.1                        EACH HOLDER OF THE THEN OUTSTANDING PREFERRED UNITS
SHALL BE ENTITLED TO RECEIVE, WHEN AND AS AUTHORIZED BY THE MANAGER, OUT OF
FUNDS LEGALLY AVAILABLE FOR THE PAYMENT OF DISTRIBUTIONS, CUMULATIVE
PREFERENTIAL CASH DISTRIBUTIONS AT THE RATE OF 12.5% PER ANNUM OF THE TOTAL OF
$1,000.00 PER PREFERRED UNIT PLUS ALL ACCUMULATED AND UNPAID DISTRIBUTIONS
THEREON.  SUCH DISTRIBUTIONS SHALL ACCRUE ON A DAILY BASIS AND BE CUMULATIVE
FROM THE FIRST DATE ON WHICH ANY PREFERRED UNIT IS ISSUED, SUCH ISSUE DATE TO BE
CONTEMPORANEOUS WITH THE RECEIPT BY THE COMPANY OF SUBSCRIPTION FUNDS FOR THE
PREFERRED UNITS (THE “ORIGINAL ISSUE DATE”), AND SHALL BE PAYABLE SEMI-ANNUALLY
IN ARREARS ON OR BEFORE JUNE 30 AND DECEMBER 31 OF EACH YEAR OR, IF NOT A
BUSINESS DAY, THE NEXT SUCCEEDING BUSINESS DAY (EACH, A “DISTRIBUTION PAYMENT
DATE”).  ANY DISTRIBUTION PAYABLE ON THE PREFERRED UNITS FOR ANY PARTIAL
DISTRIBUTION PERIOD WILL BE COMPUTED ON THE BASIS OF A 360-DAY YEAR CONSISTING
OF TWELVE 30-DAY MONTHS.  A “DISTRIBUTION PERIOD” SHALL MEAN, WITH RESPECT TO
THE FIRST “DISTRIBUTION PERIOD,” THE PERIOD FROM AND INCLUDING THE ORIGINAL
ISSUE DATE TO AND INCLUDING THE FIRST DISTRIBUTION PAYMENT DATE, AND WITH
RESPECT TO EACH SUBSEQUENT “DISTRIBUTION PERIOD,” THE PERIOD FROM BUT EXCLUDING
A DISTRIBUTION PAYMENT DATE TO AND INCLUDING THE NEXT SUCCEEDING DISTRIBUTION
PAYMENT DATE OR OTHER DATE AS OF WHICH ACCRUED DISTRIBUTIONS ARE TO BE
CALCULATED.  DISTRIBUTIONS WILL BE PAYABLE TO HOLDERS OF RECORD AS THEY APPEAR
IN THE RECORDS OF THE COMPANY AT THE CLOSE OF BUSINESS ON THE APPLICABLE RECORD
DATE, WHICH SHALL BE THE FIFTEENTH DAY OF THE CALENDAR MONTH IN WHICH THE
APPLICABLE DISTRIBUTION PAYMENT DATE FALLS OR ON SUCH OTHER DATE DESIGNATED BY
THE MANAGER FOR THE PAYMENT OF DISTRIBUTIONS THAT IS NOT MORE THAN 30 NOR LESS
THAN 10 DAYS PRIOR TO SUCH DISTRIBUTION PAYMENT DATE (EACH, A “DISTRIBUTION
RECORD DATE”).

 

B-2

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1.3.2                        NO DISTRIBUTIONS ON PREFERRED UNITS SHALL BE
AUTHORIZED BY THE MANAGER OR PAID OR SET APART FOR PAYMENT BY THE COMPANY AT
SUCH TIME AS THE TERMS AND PROVISIONS OF ANY WRITTEN AGREEMENT BETWEEN THE
COMPANY AND ANY PARTY THAT IS NOT AN AFFILIATE OF THE COMPANY, INCLUDING ANY
AGREEMENT RELATING TO ITS INDEBTEDNESS, PROHIBIT SUCH AUTHORIZATION, PAYMENT OR
SETTING APART FOR PAYMENT OR PROVIDE THAT SUCH AUTHORIZATION, PAYMENT OR SETTING
APART FOR PAYMENT WOULD CONSTITUTE A BREACH THEREOF OR A DEFAULT THEREUNDER, OR
IF SUCH AUTHORIZATION OR PAYMENT SHALL BE RESTRICTED OR PROHIBITED BY LAW.

 

1.3.3                        NOTWITHSTANDING THE FOREGOING, DISTRIBUTIONS ON THE
PREFERRED UNITS SHALL ACCRUE WHETHER OR NOT THE TERMS AND PROVISIONS SET FORTH
IN SECTION 1.3.2 HEREOF AT ANY TIME PROHIBIT THE CURRENT PAYMENT OF
DISTRIBUTIONS, WHETHER OR NOT THE COMPANY HAS EARNINGS, WHETHER OR NOT THERE ARE
FUNDS LEGALLY AVAILABLE FOR THE PAYMENT OF SUCH DISTRIBUTIONS AND WHETHER OR NOT
SUCH DISTRIBUTIONS ARE AUTHORIZED.  FURTHERMORE, DISTRIBUTIONS WILL BE
AUTHORIZED AND PAID WHEN DUE IN ALL EVENTS TO THE FULLEST EXTENT PERMITTED BY
LAW.  ACCRUED BUT UNPAID DISTRIBUTIONS ON THE PREFERRED UNITS WILL ACCUMULATE AS
OF THE DISTRIBUTION PAYMENT DATE ON WHICH THEY FIRST BECOME PAYABLE.

 

1.3.4                        UNLESS FULL CUMULATIVE DISTRIBUTIONS ON ALL
OUTSTANDING PREFERRED UNITS HAVE BEEN OR CONTEMPORANEOUSLY ARE AUTHORIZED AND
PAID OR AUTHORIZED AND A SUM SUFFICIENT FOR THE PAYMENT THEREOF IS SET APART FOR
PAYMENT FOR ALL PAST DISTRIBUTION PERIODS, NO DISTRIBUTIONS (OTHER THAN IN UNITS
OF JUNIOR SECURITIES) SHALL BE AUTHORIZED OR PAID OR SET ASIDE FOR PAYMENT NOR
SHALL ANY OTHER DISTRIBUTION BE AUTHORIZED OR MADE UPON ANY JUNIOR INTERESTS,
NOR SHALL ANY JUNIOR INTERESTS BE REDEEMED, PURCHASED OR OTHERWISE ACQUIRED FOR
ANY CONSIDERATION (OR ANY MONEYS BE PAID TO OR MADE AVAILABLE FOR A SINKING FUND
FOR THE REDEMPTION OF ANY SUCH UNITS) BY THE COMPANY (EXCEPT BY CONVERSION INTO
OR EXCHANGE FOR OTHER UNITS OF JUNIOR INTERESTS AND EXCEPT FOR TRANSFERS MADE
PURSUANT TO THE PROVISIONS OF ARTICLE 6 OF THIS AGREEMENT.

 

1.3.5                        WHEN DISTRIBUTIONS ARE NOT PAID IN FULL (OR A SUM
SUFFICIENT FOR SUCH FULL PAYMENT IS NOT SET APART) ON THE PREFERRED UNITS, ALL
DISTRIBUTIONS AUTHORIZED FOR THE PAYMENT TO THE HOLDERS OF PREFERRED UNITS SHALL
BE AUTHORIZED AND PAID PRO RATA BASED ON THE NUMBER OF PREFERRED UNITS THEN
OUTSTANDING.

 

1.3.6                        ANY DISTRIBUTION PAYMENT MADE ON THE PREFERRED
UNITS SHALL FIRST BE CREDITED AGAINST THE EARLIEST ACCRUED BUT UNPAID
DISTRIBUTION DUE WITH RESPECT TO SUCH PREFERRED UNITS WHICH REMAINS PAYABLE. 
HOLDERS OF THE PREFERRED UNITS SHALL NOT BE ENTITLED TO ANY DISTRIBUTION,
WHETHER PAYABLE IN CASH, PROPERTY OR UNITS, IN EXCESS OF FULL CUMULATIVE
DISTRIBUTIONS ON THE PREFERRED UNITS AS DESCRIBED ABOVE.

 

1.4                    LIQUIDATION PREFERENCE.

 

1.4.1                        SUBJECT TO SECTION 1.4.6 BELOW, UPON ANY VOLUNTARY
OR INVOLUNTARY LIQUIDATION, DISSOLUTION OR WINDING UP OF THE AFFAIRS OF THE
COMPANY (EACH A “LIQUIDATION EVENT”), THE HOLDERS OF PREFERRED UNITS THEN
OUTSTANDING ARE ENTITLED TO BE PAID, OUT OF THE ASSETS OF THE COMPANY LEGALLY
AVAILABLE FOR DISTRIBUTION TO ITS MEMBERS, A PREFERENTIAL

 

B-3

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

 

LIQUIDATION DISTRIBUTION EQUAL TO THE SUM OF THE FOLLOWING (COLLECTIVELY, THE
“LIQUIDATION PREFERENCE”): (I) $1,000.00 PER PREFERRED UNIT, (II) ALL ACCRUED
AND UNPAID DISTRIBUTIONS THEREON THROUGH AND INCLUDING THE DATE OF PAYMENT, AND
(III) IF THE LIQUIDATION EVENT OCCURS BEFORE THE REDEMPTION PREMIUM (AS DEFINED
BELOW) RIGHT EXPIRES THE PER UNIT REDEMPTION PREMIUM IN EFFECT ON THE DATE OF
PAYMENT OF THE LIQUIDATION PREFERENCE, BEFORE ANY DISTRIBUTION OF ASSETS IS MADE
TO HOLDERS OF ANY JUNIOR INTERESTS.

 

1.4.2                        IF UPON ANY LIQUIDATION EVENT THE AVAILABLE ASSETS
OF THE COMPANY ARE INSUFFICIENT TO PAY THE FULL AMOUNT OF THE LIQUIDATION
PREFERENCE ON ALL OUTSTANDING PREFERRED UNITS, THE HOLDERS OF COMMON UNITS SHALL
CONTRIBUTE BACK TO THE COMPANY ANY DISTRIBUTIONS OR OTHER PAYMENTS RECEIVED FROM
THE COMPANY IN CONNECTION WITH A LIQUIDATION EVENT TO THE EXTENT NECESSARY TO
ENABLE THE COMPANY TO PAY ALL SUMS PAYABLE TO THE HOLDERS OF THE PREFERRED UNITS
PURSUANT TO THIS AGREEMENT.  IF, NOTWITHSTANDING THE FUNDS RECEIVED FROM THE
HOLDERS OF COMMON UNITS PURSUANT TO THE PREVIOUS SENTENCE, THE AVAILABLE ASSETS
OF THE COMPANY ARE STILL INSUFFICIENT TO PAY THE FULL AMOUNT PAYABLE HEREUNDER
WITH RESPECT TO ALL OUTSTANDING PREFERRED UNITS, THEN THE HOLDERS OF THE
PREFERRED UNITS SHALL SHARE RATABLY IN ANY DISTRIBUTION OF ASSETS IN PROPORTION
TO THE FULL LIQUIDATION PREFERENCE TO WHICH THEY WOULD OTHERWISE BE RESPECTIVELY
ENTITLED.

 

1.4.3                        AFTER PAYMENT OF THE FULL AMOUNT OF THE LIQUIDATION
PREFERENCE TO WHICH THEY ARE ENTITLED, THE HOLDERS OF PREFERRED UNITS WILL HAVE
NO RIGHT OR CLAIM TO ANY OF THE REMAINING ASSETS OF THE COMPANY.

 

1.4.4                        UPON THE COMPANY’S PROVISION OF WRITTEN NOTICE AS
TO THE EFFECTIVE DATE OF ANY LIQUIDATION EVENT, ACCOMPANIED BY A CHECK IN THE
AMOUNT OF THE FULL LIQUIDATION PREFERENCE TO WHICH EACH RECORD HOLDER OF THE
PREFERRED UNITS IS ENTITLED, THE PREFERRED UNITS SHALL NO LONGER BE DEEMED
OUTSTANDING MEMBERSHIP INTERESTS OF THE COMPANY AND ALL RIGHTS OF THE HOLDERS OF
SUCH PREFERRED UNITS WILL TERMINATE.  SUCH NOTICE SHALL BE GIVEN BY FIRST CLASS
MAIL, POSTAGE PRE-PAID, TO EACH RECORD HOLDER OF THE PREFERRED UNITS AT THE
RESPECTIVE MAILING ADDRESSES OF SUCH HOLDERS AS THE SAME SHALL APPEAR IN THE
RECORDS OF THE COMPANY.

 

1.4.5                        THE CONSOLIDATION OR MERGER OF THE COMPANY WITH OR
INTO ANY OTHER BUSINESS ENTERPRISE OR OF ANY OTHER BUSINESS ENTERPRISE WITH OR
INTO THE COMPANY, OR THE SALE, LEASE OR CONVEYANCE OF ALL OR SUBSTANTIALLY ALL
OF THE ASSETS OR BUSINESS OF THE COMPANY, SHALL NOT BE DEEMED TO CONSTITUTE A
LIQUIDATION EVENT; PROVIDED, HOWEVER THAT ANY SUCH TRANSACTION WHICH RESULTS IN
AN AMENDMENT, RESTATEMENT OR REPLACEMENT OF THIS AGREEMENT OR THE CERTIFICATE OF
ORGANIZATION OF THE COMPANY THAT HAS A MATERIAL ADVERSE EFFECT ON THE RIGHTS AND
PREFERENCES OF THE PREFERRED UNITS, OR THAT INCREASES THE NUMBER OF AUTHORIZED
OR ISSUED PREFERRED UNITS, SHALL BE DEEMED A LIQUIDATION EVENT FOR PURPOSES OF
DETERMINING WHETHER THE LIQUIDATION PREFERENCE IS PAYABLE UNLESS THE RIGHT TO
RECEIVE PAYMENT IS WAIVED BY HOLDERS OF A MAJORITY OF THE OUTSTANDING PREFERRED
UNITS VOTING AS A SEPARATE CLASS (EXCLUDING ANY INTERESTS THAT WERE NOT ISSUED
IN A PRIVATE PLACEMENT OF THE PREFERRED UNITS CONDUCTED BY
[                        ], LLC).

 

B-4

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1.4.6                        THE MANAGER, IN ITS SOLE DISCRETION, MAY ELECT NOT
TO PAY THE HOLDERS OF PREFERRED UNITS THE SUMS DUE PURSUANT TO SECTION 1.4.1
IMMEDIATELY UPON A LIQUIDATION EVENT BUT INSTEAD CHOOSE TO FIRST DISTRIBUTE SUCH
AMOUNTS AS MAY BE DUE TO THE HOLDERS OF THE COMMON UNITS HEREUNDER.  IF THE
MANAGER ELECTS TO EXERCISE THIS OPTION PURSUANT TO THIS SECTION, THE MANAGER
SHALL FIRST ESTABLISH A RESERVE IN AN AMOUNT EQUAL TO 200% OF ALL AMOUNTS OWED
TO THE HOLDERS OF THE PREFERRED UNITS PURSUANT TO THIS AGREEMENT.  IN THE EVENT
THAT THE SUM HELD IN THE RESERVE IS INSUFFICIENT TO PAY ALL AMOUNTS OWED TO THE
HOLDERS OF THE PREFERRED UNITS HEREUNDER, THE HOLDERS OF COMMON UNITS SHALL
CONTRIBUTE BACK TO THE COMPANY ANY DISTRIBUTIONS OR OTHER PAYMENTS RECEIVED FROM
THE COMPANY IN CONNECTION WITH A LIQUIDATION EVENT TO THE EXTENT NECESSARY TO
ENABLE THE COMPANY TO PAY ALL SUMS PAYABLE TO THE HOLDERS OF THE PREFERRED UNITS
HEREUNDER.  IN ADDITION, IN THE EVENT THAT THE COMPANY ELECTS TO ESTABLISH A
RESERVE FOR PAYMENT OF THE LIQUIDATION PREFERENCE, THE PREFERRED UNITS SHALL
REMAIN OUTSTANDING UNTIL THE HOLDERS THEREOF ARE PAID THE FULL LIQUIDATION
PREFERENCE, WHICH PAYMENT SHALL BE MADE NO LATER THAN IMMEDIATELY PRIOR TO THE
COMPANY MAKING ITS FINAL LIQUIDATING DISTRIBUTION ON THE COMMON UNITS.  IN THE
EVENT THAT THE REDEMPTION PREMIUM IN EFFECT ON THE PAYMENT DATE IS LESS THAN THE
REDEMPTION PREMIUM ON THE DATE THAT THE LIQUIDATION PREFERENCE WAS SET APART FOR
PAYMENT, THE COMPANY MAY MAKE A CORRESPONDING REDUCTION TO THE FUNDS SET APART
FOR PAYMENT OF THE LIQUIDATION PREFERENCE.

 

1.5                                 REDEMPTION.

 

1.5.1                        RIGHT OF OPTIONAL REDEMPTION.  THE COMPANY, AT ITS
OPTION, MAY REDEEM SOME OR ALL OF THE PREFERRED UNITS AT ANY TIME OR FROM TIME
TO TIME, FOR CASH AT A REDEMPTION PRICE (THE “REDEMPTION PRICE”) EQUAL TO
$1,000.00 PER UNIT PLUS ALL ACCRUED AND UNPAID DISTRIBUTIONS THEREON TO AND
INCLUDING THE DATE FIXED FOR REDEMPTION (EXCEPT AS PROVIDED IN SECTION 1.5.3
BELOW), PLUS A REDEMPTION PREMIUM PER UNIT (EACH, A “REDEMPTION PREMIUM”)
CALCULATED AS FOLLOWS BASED ON THE DATE FIXED FOR REDEMPTION: (1) UNTIL
DECEMBER 31, 2012, $200; (2) FROM JANUARY 1, 2013 TO DECEMBER 31, 2013, $150;
(3) FROM JANUARY 1, 2014 TO DECEMBER 31, 2014, $100; (4) FROM JANUARY 1, 2015 TO
DECEMBER 31, 2015, $50 AND THEREAFTER, NO REDEMPTION PREMIUM.  IF LESS THAN ALL
OF THE OUTSTANDING PREFERRED UNITS ARE TO BE REDEEMED, THE PREFERRED UNITS TO BE
REDEEMED MAY BE SELECTED BY ANY EQUITABLE METHOD DETERMINED BY THE COMPANY
PROVIDED THAT SUCH METHOD DOES NOT RESULT IN THE CREATION OF FRACTIONAL
INTERESTS.

 

1.5.2                        LIMITATIONS ON REDEMPTION.  UNLESS FULL CUMULATIVE
DISTRIBUTIONS ON ALL PREFERRED UNITS SHALL HAVE BEEN, OR CONTEMPORANEOUSLY ARE,
AUTHORIZED AND PAID OR AUTHORIZED AND A SUM SUFFICIENT FOR THE PAYMENT THEREOF
SET APART FOR PAYMENT FOR ALL PAST DISTRIBUTION PERIODS, NO PREFERRED UNITS
SHALL BE REDEEMED OR OTHERWISE ACQUIRED, DIRECTLY OR INDIRECTLY, BY THE COMPANY
UNLESS ALL OUTSTANDING PREFERRED UNITS ARE SIMULTANEOUSLY REDEEMED OR ACQUIRED,
AND THE COMPANY SHALL NOT PURCHASE OR OTHERWISE ACQUIRE, DIRECTLY OR INDIRECTLY,
ANY JUNIOR SECURITIES OF THE COMPANY (EXCEPT BY EXCHANGE FOR OTHER JUNIOR
SECURITIES); PROVIDED, HOWEVER, THAT THE FOREGOING SHALL NOT PREVENT THE
PURCHASE BY THE COMPANY OF INTERESTS TRANSFERRED TO AN EXCESS UNIT TRUST FOR THE
BENEFIT OF A CHARITABLE

 

B-5

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BENEFICIARY (AS DEFINED IN THIS AGREEMENT) PURSUANT TO ARTICLE 6 OF THIS
AGREEMENT IN ORDER TO ENSURE THAT THE COMPANY REMAINS QUALIFIED AS A REAL ESTATE
INVESTMENT TRUST FOR FEDERAL INCOME TAX PURPOSES OR THE PURCHASE OR ACQUISITION
OF PREFERRED UNITS PURSUANT TO A PURCHASE OR EXCHANGE OFFER MADE ON THE SAME
TERMS TO HOLDERS OF ALL OUTSTANDING PREFERRED UNITS.

 

1.5.3                        RIGHTS TO DISTRIBUTIONS ON UNITS CALLED FOR
REDEMPTION.  IMMEDIATELY PRIOR TO OR UPON ANY REDEMPTION OF PREFERRED UNITS, THE
COMPANY SHALL PAY, IN CASH, ANY ACCUMULATED AND UNPAID DISTRIBUTIONS TO AND
INCLUDING THE REDEMPTION DATE.

 

1.5.4                        PROCEDURES FOR REDEMPTION.

 

(A)                                  PROCEDURES FOR REDEMPTION.

 

(I)                                     UPON THE COMPANY’S PROVISION OF WRITTEN
NOTICE AS TO THE EFFECTIVE DATE OF THE REDEMPTION, ACCOMPANIED BY A CHECK IN THE
AMOUNT OF THE FULL REDEMPTION PRICE THROUGH SUCH EFFECTIVE DATE TO WHICH EACH
RECORD HOLDER OF PREFERRED UNITS IS ENTITLED, THE PREFERRED UNITS SHALL BE
REDEEMED AND SHALL NO LONGER BE DEEMED OUTSTANDING THE COMPANY AND ALL RIGHTS OF
THE HOLDERS OF SUCH UNITS WILL TERMINATE.  SUCH NOTICE SHALL BE GIVEN BY FIRST
CLASS MAIL, POSTAGE PRE-PAID, TO EACH RECORD HOLDER OF THE PREFERRED UNITS AT
THE RESPECTIVE MAILING ADDRESSES OF SUCH HOLDERS AS THE SAME SHALL APPEAR IN THE
RECORDS OF THE COMPANY.  NO FAILURE TO GIVE SUCH NOTICE OR ANY DEFECT THEREIN OR
IN THE MAILING THEREOF SHALL AFFECT THE VALIDITY OF THE PROCEEDINGS FOR THE
REDEMPTION OF ANY PREFERRED UNITS EXCEPT AS TO THE HOLDER TO WHOM NOTICE WAS
DEFECTIVE OR NOT GIVEN.

 

(II)                                  IN ADDITION TO ANY INFORMATION REQUIRED BY
LAW, SUCH NOTICE SHALL STATE: (A) THE REDEMPTION DATE; (B) THE REDEMPTION PRICE;
(C) THE NUMBER OF PREFERRED UNITS TO BE REDEEMED; AND (D) THAT DISTRIBUTIONS ON
THE UNITS TO BE REDEEMED WILL CEASE TO ACCRUE ON SUCH REDEMPTION DATE.  IF LESS
THAN ALL OF THE PREFERRED UNITS HELD BY ANY HOLDER ARE TO BE REDEEMED, THE
NOTICE MAILED TO SUCH HOLDER SHALL ALSO SPECIFY THE NUMBER OF PREFERRED UNITS
HELD BY SUCH HOLDER TO BE REDEEMED.

 

(III)                               IF NOTICE OF REDEMPTION OF ANY PREFERRED
UNITS HAS BEEN GIVEN AND IF THE FUNDS NECESSARY FOR SUCH REDEMPTION HAVE BEEN
SET ASIDE BY THE COMPANY FOR THE BENEFIT OF THE HOLDERS OF ANY PREFERRED UNITS
SO CALLED FOR REDEMPTION, THEN, FROM AND AFTER THE REDEMPTION DATE,
DISTRIBUTIONS WILL CEASE TO ACCRUE ON SUCH PREFERRED UNITS, SUCH PREFERRED UNITS
SHALL NO LONGER BE DEEMED OUTSTANDING AND ALL RIGHTS OF THE HOLDERS OF SUCH
UNITS WILL TERMINATE, EXCEPT THE RIGHT TO RECEIVE THE REDEMPTION PRICE.  SINCE
THE PREFERRED UNITS ARE UNCERTIFICATED, SUCH UNITS SHALL BE REDEEMED IN
ACCORDANCE WITH THE NOTICE AND NO FURTHER ACTION ON THE PART OF THE HOLDERS OF
SUCH UNITS SHALL BE REQUIRED.

 

B-6

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(IV)          THE DEPOSIT OF FUNDS WITH A BANK OR TRUST CORPORATION FOR THE
PURPOSE OF REDEEMING THE PREFERRED UNITS SHALL BE IRREVOCABLE EXCEPT THAT:

 

(A)          THE COMPANY SHALL BE ENTITLED TO RECEIVE FROM SUCH BANK OR TRUST
CORPORATION THE INTEREST OR OTHER EARNINGS, IF ANY, EARNED ON ANY MONEY SO
DEPOSITED IN TRUST, AND THE HOLDERS OF ANY UNITS REDEEMED SHALL HAVE NO CLAIM TO
SUCH INTEREST OR OTHER EARNINGS; AND

 

(B)           ANY BALANCE OF MONIES SO DEPOSITED BY THE COMPANY AND UNCLAIMED BY
THE HOLDERS OF THE PREFERRED UNITS ENTITLED THERETO AT THE EXPIRATION OF TWO
YEARS FROM THE APPLICABLE REDEMPTION DATES SHALL BE REPAID, TOGETHER WITH ANY
INTEREST OR OTHER EARNINGS THEREON, TO THE COMPANY, AND AFTER ANY SUCH
REPAYMENT, THE HOLDERS OF THE UNITS ENTITLED TO THE FUNDS SO REPAID TO THE
COMPANY SHALL LOOK ONLY TO THE COMPANY FOR PAYMENT OF THE REDEMPTION PRICE
WITHOUT INTEREST OR OTHER EARNINGS.

 

1.5.5        STATUS OF REDEEMED UNITS.  ANY PREFERRED UNITS THAT SHALL AT ANY
TIME HAVE BEEN REDEEMED OR OTHERWISE ACQUIRED BY THE COMPANY SHALL, AFTER SUCH
REDEMPTION OR ACQUISITION, HAVE THE STATUS OF AUTHORIZED BUT UNISSUED PREFERRED
UNITS WHICH MAY BE ISSUED BY THE BOARD OF MANAGERS FROM TIME TO TIME AT ITS
DISCRETION.

 

1.6           VOTING RIGHTS.  EXCEPT AS PROVIDED IN THIS SECTION AND IN
SECTION 8.1 OF THE AGREEMENT (RELATING TO THE RIGHT OF THE HOLDERS OF THE
PREFERRED UNITS TO VOTE IN CONNECTION WITH THE APPOINTMENT, REPLACEMENT OR
REMOVAL OF MANAGERS), THE HOLDERS OF THE PREFERRED UNITS SHALL NOT BE ENTITLED
TO VOTE ON ANY MATTER SUBMITTED TO THE MEMBERS OF THE COMPANY FOR A VOTE. 
NOTWITHSTANDING THE FOREGOING, THE CONSENT OF THE HOLDERS OF A MAJORITY OF THE
OUTSTANDING PREFERRED UNITS (EXCLUDING ANY UNITS THAT WERE NOT ISSUED IN A
PRIVATE PLACEMENT OF THE PREFERRED UNITS CONDUCTED BY [                  ],
LLC), VOTING AS A SEPARATE CLASS, SHALL BE REQUIRED FOR (A) AUTHORIZATION OR
ISSUANCE OF ANY MEMBERSHIP INTEREST OR EQUITY SECURITY OF THE COMPANY WITH ANY
RIGHTS THAT ARE SENIOR TO OR HAVE PARITY WITH THE PREFERRED UNITS, (B) ANY
AMENDMENT TO THIS AGREEMENT OR THE COMPANY’S CERTIFICATE OF ORGANIZATION WHICH
HAS A MATERIAL ADVERSE EFFECT ON THE RIGHTS AND PREFERENCES OF THE PREFERRED
UNITS OR WHICH INCREASES THE NUMBER OF AUTHORIZED OR ISSUED PREFERRED UNITS, OR
(C) ANY RECLASSIFICATION OF THE PREFERRED UNITS.

 

1.7           CONVERSION.  THE PREFERRED UNITS ARE NOT CONVERTIBLE INTO OR
EXCHANGEABLE FOR ANY OTHER PROPERTY OR SECURITIES OF THE COMPANY.

 

1.8           LIMITATION OF LIABILITY.   EXCEPT TO THE EXTENT REQUIRED BY
APPLICABLE LAW, NO HOLDER OF PREFERRED UNITS SHALL BE BOUND BY, OR BE PERSONALLY
LIABLE FOR, THE EXPENSES, LIABILITIES OR OBLIGATIONS OF THE COMPANY IN EXCESS OF
HIS OR HER INITIAL CAPITAL CONTRIBUTION MADE IN EXCHANGE FOR THE PREFERRED
UNITS.

 

B-7

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EXHIBIT D

 

MAJOR DECISIONS

 

For purposes of this Agreement, the term “Major Decisions” means each of the
following actions or decisions proposed to be taken by the Manager, the Company,
any Property Entity, any manager thereof, or any manager of an Owned Property
except to the extent such items have previously been approved by the prior
written consent of Members holding a majority of the total number of Common
Units issued and outstanding or in the annual Business Plan to the extent
applicable to the Company and the Property Entities and their Owned Properties,
including in any annual operating budgets or capital budgets.  Capitalized terms
used in this Exhibit D but not defined in this Agreement shall have the meanings
given to such terms in the Partnership Agreement.

 

1.             Any Financing or the borrowing of any money or incurring of any
indebtedness (other than trade accounts payables or other indebtedness incurred
in the ordinary course of business of less than $100,000 in the aggregate) in
any twelve month period, or any loan modifications;

 

2.             Issue any additional membership interests or other equity
securities or equity-like interests in the Company or any Property Entity or in
their respective revenues or profits;

 

3.             The admission of any additional members;

 

4.             Sell, transfer, pledge, mortgage, encumber, convey, or otherwise
dispose of, or grant options, warrants, or other rights with respect to, any
Owned Properties, Property Entities, any outlot, or any other material assets of
the Partnership;

 

5.             Approval of the Budgets (including any operating budget or
capital budget) or any annual Business Plan to the extent applicable to the
Company and the Property Entities and their Owned Properties, including at the
Owned Property level, and/or the modification of any such Budgets or annual
Business Plan resulting in a change to any item of expense or revenue in excess
of ten percent (10%) in the aggregate;

 

6.             Establish any Reserves in excess of $100,000, except for capital
expenditures approved by the prior written consent of Members holding a majority
of the total number of Common Units issued and outstanding and for Reserves for
real estate taxes;

 

7.             To the extent applicable to the Company and the Property Entities
and their Owned Properties, enter into a Qualifying Lease which is not approved
in the annual Business Plan; provided, however, that any non-Qualifying Lease
shall be approved or

 

8

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

 

disapproved by the Manager, in its sole discretion, in accordance with the
Property Management Agreement;

 

8.             Terminating or materially modifying any Qualifying Lease;

 

9.             Any plan to make, purchase, or otherwise acquire, any fixed
asset, any capital improvement or any planned redevelopment to an Owned Property
if, after giving effect to such purchase, acquisition, improvement or
development, the aggregate cost of all fixed assets purchased or otherwise
acquired and improvements or developments constructed by the Company exceeds the
greater of $50,000 in the aggregate or ten percent (10%) of any budgeted item
for a property in any Fiscal Year;

 

10.           Enter into any agreement with an Affiliate of Inland, the Manager,
or any Partner in the Partnership except as otherwise specifically authorized by
this Agreement, the Partnership Agreement or the Budgets to the extent
applicable to the Company and the Property Entities and their Owned Properties;

 

11.           Take any action that would subject any Member of the Company or
member of any Property Entity to liability for the obligations of the Company or
the Property Entity in any jurisdiction;

 

12.           Confess a judgment against the Company or any Property Entity;

 

13.           Possess property, or assign its rights in specific property, for
other than a purpose of the Company or any Property Entity;

 

14.           Take any action in contravention of this Agreement or the Act;

 

15.           File a voluntary petition of bankruptcy, make an assignment for
the benefit of creditors, admit in writing the inability to pay debts as they
mature, or otherwise invoke general laws for the protection for debtors;

 

16.           The restructuring, renegotiation, work-out or settlement of any of
the Company’s or any Property Entity’s rights and obligations under any lease,
agreement or loan documents whose execution constituted a Major Decision;

 

17.           The redemption, purchase or other acquisition by the Company of
all or any portion of the Units;

 

18.           The taking of any action by the Company or a Property Entity that
would constitute a deviation from the business purpose of the Company described
in Section 2.7 of this Agreement;

 

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19.           The institution or settlement of any material legal proceedings in
the name of or involving the Company or any Property Entity, the adjustment,
settlement or compromise of any material claim, obligation, debt, or demand by
or against the Company or any Property Entity or any material legal proceedings
by or against the Company or any Property Entity, and the confession of any
material judgment against the Company or any Property Entity or any property of
the Company or any Property Entity, specifically excluding (x) material
litigation instituted by or on behalf of the Company or any Property Entity
against a tenant of an Owned Property, and (z) those matters which are tendered
for coverage under an insurance policy obtained by the Company or any Property
Entity; provided, however, that, with respect to any of the matters described in
(x) and (z) of a material nature, including, without limitation, the institution
or defense of any material legal proceeding on behalf of the Company or any
Property Entity or their respective properties, the Manager shall use
commercially reasonable efforts to advise the Partnership and its Partners of
all material developments and shall advise the Partnership and all of its
Partners of the status of such matter at the request of any Partner;

 

20.           Dissolve and wind-up the affairs of the Company except as
otherwise provided in this Agreement or as required by the Act;

 

21.           Enter into any interest rate swap, cap or similar agreement;

 

22.           Entering into any merger, consolidation or recapitalization;

 

23.           Entering into or material modification of an agreement with and
approval of any general contractor for improvements to the Owned Properties;

 

24.           DOING ANY ACT IN CONTRAVENTION OF THIS AGREEMENT OR WHICH WOULD
MAKE IT IMPOSSIBLE TO CARRY ON THE ORDINARY BUSINESS OF THE COMPANY OR ANY
PROPERTY ENTITY;

 

25.           MAKING LOANS OF THE COMPANY’S OR ANY PROPERTY ENTITY’S FUNDS OR
ASSETS TO ANY PERSON OR ENTITY OR GUARANTEEING THE OBLIGATIONS OF ANY PERSON OR
ENTITY;

 

26.           EXPENDING OR COMMITTING COMPANY OR PROPERTY ENTITY FUNDS OR
PROPERTY FOR ANY PURPOSE EXCEPT AS EXPRESSLY PROVIDED HEREIN OR APPROVED IN THE
BUDGETS TO THE EXTENT APPLICABLE TO THE COMPANY AND THE PROPERTY ENTITIES AND
THEIR OWNED PROPERTIES;

 

27.           Making elections for income tax purposes; and

 

28.           Approval of each appraiser and auditor that may be engaged for the
Company or any Property Entity.

 

29.           The appointment of any Manager, as such term is defined in the
Property Management Agreement, to replace Inland TRS Property Management, Inc.,
other than

 

10

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Inland Commercial Property Management Inc., an Illinois corporation, or any
assignment or amendment of the Property Management Agreement.

 

11

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EXHIBIT 4-B

 

INVESTMENT GUIDELINES

 

Property Type:

 

High quality, stabilized “necessity-based”, grocery-anchored or community retail
shopping centers.

 

At least one (1) owned anchor tenant.

 

Strong demographics (no greenfields).

 

Location:

 

MSAs of Chicago, Illinois; Minneapolis, Minnesota; Milwaukee, Wisconsin;
Madison, Wisconsin; Omaha, Nebraska; Indianapolis, Indiana; and Columbus, Ohio.

 

Financing: Acquisition of Additional Properties to be financed at market terms
at the closing and described in Section 7.5, or soon after closing. 
Property-level financing amount will be agreed upon by the Limited Partners and
subject to the aggregate portfolio constraints on debt described in Section 7.5
of the Limited Partnership Agreement.  Assumption of Existing Indebtedness for
the Additional Properties will be allowed with the consent of the Limited
Partners.

 

For the avoidance of doubt, no Property that falls within the Exclusion Policy
shall be deemed to meet the Investment Guidelines.

 

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EXHIBIT 6-2B

 

FORM OF

CONTRIBUTION AGREEMENT

 

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FORM OF

 

CONTRIBUTION AGREEMENT

 

This Contribution Agreement (“Agreement”) is executed and delivered this     
day of                 , 2010 (“Effective Date”) by and among INP RETAIL, L.P.,
a Delaware limited partnership (the “Partnership”), INLAND REAL ESTATE
CORPORATION, a Maryland corporation (“Inland”) and STICHTING DEPOSITARY PGGM
PRIVATE REAL ESTATE FUND (the “Depositary”), a Dutch foundation, acting in its
capacity as depositary of and for the account and risk of PGGM PRIVATE REAL
ESTATE FUND (the “Fund”, and together with the Depositary, “PGGM PRE Fund”), a
Dutch fund for the joint account of the participants (fonds voor gemene
rekening) (PGGM PRE Fund and Inland, sometimes referred to herein as the
“Investors”, each an “Investor”).

 

RECITALS:

 

WHEREAS, as of June 3, 2010, the Investors and the Partnership entered into that
certain Limited Partnership Agreement of INP Retail, L.P. (the “Partnership
Agreement”), pursuant to which Inland became a Limited Partner of the
Partnership with a 55% Percentage Interest (as defined in the Partnership
Agreement) in the Partnership (the “Inland Partnership Interests”) and PGGM PRE
Fund became a Limited Partner of the Partnership with a 45% Percentage Interest
in the Partnership (the “PGGM PRE Fund Partnership Interests”, collectively with
the Inland Partnership Interests, the “Partnership Interests”);

 

WHEREAS, Inland is the sole member of                                , a
                     limited liability company (the “Property Entity”), sole
owner of certain property located in                      County,
[Illinois/Minnesota], commonly known as
                                                          , Illinois being an
approximately                    square foot parcel improved as a retail
shopping center commonly known as                                     , (the
“Property”).  The Property is legally described on Exhibit A (“Legal
Description”); and

 

WHEREAS, Inland has agreed to contribute to the Partnership all of Inland’s
limited liability company membership interests in the Property Entity (the
“Membership Interests”) together with cash in the amount of $                ,
(to be funded as provided in Section 2(a)) and PGGM PRE Fund has agreed to
contribute to the Partnership cash in the amount of                     .

 

NOW, THEREFORE, in consideration of the premises and the covenants and
agreements hereinafter set forth and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:

 

1.             Definitions.  The following terms used herein shall have the
following meanings:

 

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(a)           “Affiliate” means and includes any Person that directly, or
through one or more intermediaries, controls or is controlled by or is under
common control with a Partner; or any person in which such Partner has a direct,
or indirect through one or more intermediaries, controlling interest as a
partner, member, general partner, manager, principal, shareholder, beneficiary
or otherwise as an owner.

 

(b)           “Amended Operating Agreement” shall mean an amended operating
agreement for the Property Entity, to the extent necessary to consummate the
transactions contemplated by this Agreement and to replace Inland with the
Partnership as the sole member of the Property Entity, in form reasonably
agreeable to the Investors.

 

(c)           “Anchor Tenant” shall mean a tenant leasing no less than
thirty-five percent (35%) of the total leasable square footage of space with
respect to the Property.

 

(d)           “Assignment of Membership Interest” shall mean that certain
assignment, the form of which is attached hereto as Exhibit B.

 

(e)           “Capital Contribution” shall have the meaning given to such term
in the Partnership Agreement.

 

(f)            “Closing” shall mean the making of the Capital Contributions by
Inland and PGGM PRE Fund to the Partnership, in accordance with the provisions
set forth in this Agreement.

 

(g)           “Closing Date” shall mean the business day which is             
(      ) days after the Effective Date, or the date, if any, to which such time
it is extended by reason of any applicable section of this Agreement extending
the Closing Date hereinafter becoming operative unless subsequently mutually
agreed, at a location agreed to by Inland and PGGM PRE Fund.  The Closing shall
occur as of 11:59 P.M. [Chicago local time/Central time] on the Closing Date.

 

(h)           “Commissions” shall mean all leasing or sales commissions,
referral fees, and similar obligations to make payments to agents, leasing
agents, or leasing brokers under all agreements by which an Inland Party has or
may have the obligation to make such payments with respect to a Lease of any
part of the Property executed on or after the Valuation Date (as defined in
Section 9(a)(xi) below) and in existence on the Closing Date.

 

(i)            “Concessions” shall mean any discount, concession, “free rent,”
allowance, incentive, inducement, or other agreement whereby any item or
consideration of value (other than the right of occupancy of such tenant’s
demised premises) is granted to, extended to, or provided to or for the benefit
of any tenant under a Lease executed on or after the Valuation Date and in
existence on the Closing Date, including, without limitation, any obligation on
the part of the landlord under such a Lease to construct or pay for tenant
improvements, or to provide an allowance for a tenant to construct any

 

15

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improvements.

 

(j)            “Contracts” shall mean those agreements, other than Leases,
binding on and/or benefiting the Property, Property Entity or Inland and which
are reasonably deemed by Inland to have a material effect on the business,
operations, or expenses of the Property, Property Entity or Inland.

 

(k)           “Contribution Value” shall mean the agreed value of the Property
as set forth in or determined in accordance with Schedule 6.2(d) of the
Partnership Agreement, such amount being equal to
$                                      .

 

(l)            “Environmental Laws” shall mean any and all federal, state and
local laws (whether under common law, statute, rule, regulation or otherwise),
requirements under permits or other authorizations issued with respect thereto,
and other orders, decrees, judgments, directives or other requirements of any
governmental authority relating to or imposing liability or standards of conduct
(including disclosure or notification) concerning protection of human health or
the environment or Hazardous Materials or any activity involving Hazardous
Materials, all as previously and in the future to be amended.

 

(m)          “Hazardous Material” shall mean and include any substance,
chemical, material or waste (1) the presence of which causes a nuisance or
trespass of any kind; (2) which is regulated by any federal, state or local
governmental authority because of its toxic, flammable, corrosive, reactive,
carcinogenic, mutagenic, infectious, radioactive, or other hazardous property or
because of its effect on the environment, natural resources or human health and
safety, including, but not limited to, petroleum and petroleum products,
asbestos-containing materials, polychlorinated biphenyls, lead and lead-based
paint, radon, radioactive materials, flammables and explosives; or (3) which is
designated, classified, or regulated as being a hazardous or toxic substance,
material, pollutant, waste (or a similar such designation) under any federal,
state or local law, regulation or ordinance, including under any Environmental
Law such as the Comprehensive Environmental Response Compensation and Liability
Act (42 U.S.C. §9601 et seq.), the Emergency Planning and Community
Right-to-Know Act (42 U.S.C. §11001 et seq.), the Hazardous Substances
Transportation Act (49 U.S.C. §1801 et seq.), or the Clean Air Act (42 U.S.C.
§7401 et seq.).

 

(n)           “Inland Party” or “Inland Parties” shall mean Inland and Inland’s
Affiliates which shall include the Property Entity, but with respect to the
Property Entity, only prior to the contribution of its Membership Interests to
the Partnership by Inland in accordance with this Agreement.

 

(o)           “Improvements” shall mean the structures, equipment and all other
fixtures and other improvements constructed on the Property, including all
parking areas, roadways, drive aisles, fencing, curbs, sidewalks, landscaping,
sewer and other utility facilities, fixtures and equipment. Inland shall have no
obligation to make any such

 

16

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Improvements to the Property.

 

(p)                                 “Knowledge” shall mean the actual knowledge
of the party in question, after reasonable inquiry, of any fact, circumstance or
condition, and (i) in the case of matters relating to the Property, the persons
listed in Schedule 1(o)(1), (ii) in the case of the Inland Parties, Beth
Sprecher Brooks and (iii) in the case of the PGGM PRE Fund, Werner Sohier and
Steven Zeeman.

 

(q)                                 “Leases” shall mean all of the real property
leases affecting the Property and listed on the attached Schedule 5(h)-1 and any
new leases entered into by the Property Entity after the Effective Date as
provided in Section 5(h)(iv) below.

 

(r)                                    “Lease-Up Costs” shall mean the costs of
executing, delivering, and complying with the initial construction and
inducement obligations (relating to tenant occumpany, but not ongoing
obligations, such as maintenance, operations or utilities) of the landlord or
lessor under a Lease executed on or after the Valuation Date and in existence on
the Closing Date, but excluding Commissions and Concessions.

 

(s)                                  “Operating Agreement” shall mean the
existing operating agreement of the Property Entity, attached hereto as
Exhibit C.

 

(t)                                    “Permitted Exceptions” shall mean those
exceptions to the condition of title which become Permitted Exceptions as
provided in Section 3(a) below.

 

(u)                                 “Policy” shall mean a new fully paid ALTA
2006 policy or policies of title insurance issued by the Title Insurer in favor
of the Property Entity, dated as of the Closing Date and containing no
exceptions to title (printed or otherwise) other than Permitted
Exceptions(2) (as defined in Section 3(a)), which Policy shall (i) be in an
aggregate amount no less than the Contribution Value; (ii) insure the Property
Entity against loss or damage it may sustain or incur by the risks covered by an
ALTA 2006 Policy, subject only to Permitted Exceptions; (iii) contain accurate
legal descriptions of the Property conforming to that contained in the survey;
and (iv) contain the following endorsements: (I) zoning-completed structure,
(II) access and entry, (III) restrictions, encroachments and minerals-improved
land, (IV) nonimputation-additional insured (in favor of PGGM PRE Fund), (V) tax
parcel, (VI) contiguity (to the extent applicable), (VII) minerals, (VIII)
subdivision map act compliance, (IX) survey; (X) date-down; (XI) fairway(3); and
(XII) easement (to the extent applicable).

 

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(1) Schedule to name the on-site employee(s) of the property manager at or above
the grade of assistant property manager.

 

(2) Note: Exceptions relating to mortgages on properties which will not remain
subject to the lien of existing mortgages must be removed.

 

(3) Title company to confirm whether a fairway endorsement is necessary under
the ALTA 2006 Policy.

 

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(v)                                 “Property Lender”(4) shall mean the lender,
if any, holding a mortgage lien interest in and mortgage to the Property, as
security for a loan or loans extended by such lender for the acquisition or
operation of the Property.

 

(w)                               “REIT Entity” shall mean INP REIT I, LLC, a
Delaware limited liability company.

 

(x)                                   “Sub-Anchor Tenant” shall mean a tenant
leasing less than thirty-five percent (35%) of the total leasable square footage
of the Property but greater than 15,000 square feet of leased space with respect
to the Property.

 

(y)                                 “Taxes”, and, with correlative meaning,
“Taxable” and “Taxing”, means any federal, state, local or foreign taxes,
including, without limitation, income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental, customs duties, capital stock, franchise, profits, withholding,
social security (or similar), sales, use, transfer, registration, value added,
real estate, ad valorem, alternative or add-on minimum, estimated, or other Tax
of any kind whatsoever, including any interest, penalty, or addition thereto,
whether disputed or not, imposed by any United States federal, state, local or
foreign Taxing authority.

 

(z)                                   “Tax Return” means any return,
declaration, report, information return, schedule or statement with respect to
Taxes filed with any Taxing authority, including any amendments thereto.

 

(aa)                            “Title Insurer” shall mean Chicago Title
Insurance Company.

 

2.                                       Contribution.

 

(a)                                  Inland Contribution.  On the Closing Date,
Inland shall contribute to the Partnership, as a Capital Contribution, (A) all
of the Membership Interests and (B) cash in the amount of 55% of the real estate
transfer taxes payable in connection with the contribution of the Membership
Interests to the Partnership.  The cash portion of Inland’s Capital Contribution
may, as available and at the option of Inland, be funded from the PIC Funds, as
such term is described in the Partnership Agreement.  Costs and expenses
incurred in connection with the Closing shall be paid by the Partnership as
provided in Section 8(d).    The contribution shall occur as of 11:59 P.M.
[CHICAGO LOCAL TIME/CENTRAL TIME] the Closing Date, and all items of income,
gain, loss, expense and deduction derived from the Property or the Property
Entity on or prior to the Closing Date shall be reported for income tax purposes
solely by Inland and no such items shall be reported for income tax purposes by
the Partnership.

 

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(4) Only applies to properties which will be remain subject to the lien of
existing mortgages.  In all other cases, the loan is to be paid off and
discharged of record at Closing.

 

18

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(b)                                 PGGM PRE Fund Contribution.  On the Closing
Date, PGGM PRE Fund shall contribute to the Partnership, as a Capital
Contribution, an amount determined in accordance with Section 6.2(d) of the
Partnership Agreement, such amount being equal to $                    .

 

3.                                       Inland’s Deliveries, Inspection of
Property and Other Contingencies.

 

(a)                                  Title.  Inland has made available to PGGM
PRE Fund a copy of an American Land Title Association [form
(10-17-92)/(6-17-06)] owner’s title insurance policy most recently issued by the
Title Insurer to the Property Entity (the “Original Policy”).  Should a
commitment for the Policy indicate exceptions to title other than those
contained in the Policy or to which title to the Property will remain subject
pursuant to the terms of this Agreement (collectively, together with any
exceptions to title waived by PGGM PRE Fund, the “Permitted Exceptions”), then
Inland shall, prior to the Closing Date, use commercially reasonable efforts to
remove and/or cure such unpermitted exceptions to title (collectively, the
“Unpermitted Exceptions”) provided, however, that Inland shall remove and/or
cure (a) any Unpermitted Exceptions that are voluntarily created or suffered by
any of the Inland Parties, (b) judgments against the Property Entity and any
payments required thereby, and (c) any mortgages (other than mortgages set forth
in Schedule 5(m) with respect to indebtedness to which the Property is to remain
subject following the Closing(5)) or other liens against the Property and the
Property Entity that can be satisfied by the payment of a liquidated amount.  If
on the Closing Date there are any other Unpermitted Exceptions that Inland has
failed or refused to cure, PGGM PRE Fund may elect by written notice to Inland
given within fifteen (15) days following the earlier of (i) the scheduled
Closing Date and (ii) the date, if any, on which Inland notifies PGGM PRE Fund
of Inland’s refusal or inability to remove such Unpermitted Exceptions, to
either (1) waive the removal or cure of such Unpermitted Exceptions or
(2) terminate this Agreement.  If PGGM PRE Fund elects to waive the removal or
cure of such Unpermitted Exceptions, the transaction contemplated in this
Agreement shall close subject to the such Unpermitted Exceptions however Inland
shall remain liable for, indemnify the Partnership from, and pay all expenses
incurred in connection with the removal or cure of all Unpermitted Exceptions
existing as of the Closing Date.  If PGGM PRE Fund elects to terminate this
Agreement, this Agreement shall terminate and, except as otherwise set forth in
this Agreement, be of no further force or effect, and neither party hereto shall
have any further rights or obligations owed to the other hereunder except as
otherwise set forth in this Agreement.

 

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(5) Delete, if applicable.

 

19

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(b)                                 Deliveries.  Inland has delivered to PGGM
PRE Fund the following:

 

(i)             {List diligence documentation of the Property delivered to PGGM
PRE Fund};

 

(ii)                                                            ; and

 

(iii)                                                         .

 

4.                                       Partnership’s Representations and
Warranties.  As an inducement to the Investors to enter into this Agreement and
to consummate the transactions contemplated hereby, the Partnership hereby
represents and warrants to the Investors as follows:

 

(a)                                  Consents.  The execution, delivery and
performance of this Agreement by the Partnership do not require any consent or
authorization by any other person which consent has not been obtained.  This
Agreement is, and each other agreement or instrument of the Partnership
contemplated hereby will be, the legal, valid and binding agreement of the
Partnership, each enforceable in accordance with its respective terms.

 

(b)                                 Legality of Transactions.  There are no
lawsuits, claims, suits, proceedings or investigations pending or threatened
against the Partnership which questions the legality or propriety of the
transactions contemplated by this Agreement or which may have a material adverse
effect on the Partnership’s ability to perform its obligations hereunder.

 

(c)                                  Litigation; Default.  There is no lawsuit,
Tax claim or other dispute pending or threatened against the Partnership, which,
if lost, would impair the Partnership’s financial condition or ability to
satisfy its payment and performance obligations hereunder.  The Partnership
possesses all permits, memberships, franchises, contracts and licenses required
and all trademark rights, trade name rights and fictitious name rights necessary
to enable Partnership to conduct the business in which it is now engaged.  The
Partnership is not in default on any obligation for borrowed money, any purchase
money obligation or any other material lease, commitment, contract, instrument
or obligation.

 

(d)                                 Assessments.  The Partnership has no
Knowledge of any pending assessments or adjustments of its respective income
taxes for any year.

 

(e)                                  Reliance.  The Partnership acknowledges
that Investors are relying on the representations and warranties made by the
Partnership herein and thus the Partnership hereby agrees to indemnify and hold
each Investor and its successors, heirs, personal representatives, trustees,
beneficiaries, and assigns, harmless against any and all loss, damage, liability
or expense including reasonable attorneys’ fees and litigation costs, which they
or any of them may suffer, sustain or incur by reason of or in connection with

 

20

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any misrepresentation or breach of warranty or agreement made by the Partnership
herein.

 

5.                                       Inland’s Representations and
Warranties.  Inland hereby represents and warrants to PGGM PRE Fund and the
Partnership that each of its representations set forth in Section 16 of the
Partnership Agreement are true and correct as of the Effective Date.  In
addition to the foregoing, Inland hereby represents and warrants to PGGM PRE
Fund and the Partnership as follows, each of which is true and correct as of the
Effective Date:

 

(a)                                  Organization and Authority.

 

(i)             The Property Entity is duly formed or organized, validly
existing and in good standing under the law of its jurisdiction of formation or
organization and, if different than its State of organization, qualified to do
business in the State in which the Property owned by it is located.

 

(ii)          PGGM PRE Fund has been provided with true and correct copies of
the organizational documents of the Property Entity as currently in effect.

 

(iii)       Inland is the record owner of the Membership Interests and has the
full power, right and authority to grant the rights provided under this
Agreement, to cause those Membership Interests to be conveyed and to consummate
this transaction, all as herein provided.  The Membership Interests being
contributed are free and clear of all actions, liens, claims, encumbrances,
pledges, hypothecations, security interests, or any rights of any third party. 
This Section 5(a)(iii) shall survive the Closing Date and the consummation of
the transactions contemplated by this Agreement and shall not expire until the
expiration of the applicable statute(s) of limitations.

 

(b)                                 Conflicts and Pending Action.

 

(i)             Neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby will: (A) violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental agency, or
court to which Inland or any Inland Party is subject or any provision of the
bylaws or charter of Inland or the equivalent constitutional documents of any
Inland Party; or (B) except as set forth in Schedule 5(m) with respect to
indebtedness secured by the Property, conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in

 

21

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any party the right to accelerate, terminate, modify, or cancel, or require any
notice under any material agreement, Contract, Lease, license, instrument, or
other arrangement to which Inland or any Inland Party is a party or by which it
is bound or to which any of its assets is subject (or result in the imposition
of any lien upon any of its assets).

 

(ii)          Except as set forth on Schedule 5(b), there is no litigation,
action or proceeding pending, or to Inland’s Knowledge, threatened against
Inland or any Inland Party relating to the Membership Interests or the Property
which would challenge or impair Inland’s ability to perform its obligations
under this Agreement, or challenge or impair the ability of any Inland Party to
transfer its property.

 

(c)                                  Governmental Consents.  Except as set forth
in Schedule 5(c), no consent, waiver, approval or authorization of or filing,
registration, or qualification with, or notice to any federal, state or local
court or federal, state or local government bureau, department, commission or
agency, or any other entity or person whether or not governmental in character,
is required to be made, obtained, or given by Inland or any Inland Party to
execute, deliver and perform this Agreement, except such consent, waiver,
approval, authorization, filing, registration, or qualification which has
already been made, obtained or given.

 

(d)                                 Zoning and Permits.  To Inland’s Knowledge,
the Property Entity has all material permits and licenses necessary for the
ownership, management and operation of the Property.  Except as set forth on
Schedule 5(d), neither Inland nor any Inland Party has received any written, or
to Inland’s Knowledge other notices, demands or deficiency comments from any
governmental or quasi-governmental authority with regard to the Property which
has not been fully and completely corrected.  Furthermore, neither Inland nor
any Inland Party has received any notice of violations of any land use
restrictions, ordinances, regulations or applicable laws affecting or applicable
to the Property, or any notices of violations of any building, fire or health
codes in respect to the Property that have not been fully and completely
corrected and, to Inland’s and the Inland Parties’ Knowledge, no such violations
are threatened.

 

(e)                                  Environmental.  Except as expressly
disclosed and described in the Phase I Environmental Reports with respect to the
Property, (i) to the Inland Parties’ Knowledge, the Property is not in
violation, nor is it or the Property Entity currently under investigation for
violation of any federal, state or local law, ordinance or regulation relating
to Environmental Law; (ii) the Property is not subject to a deposit of any
Hazardous Material by Inland or any Inland Party; (iii) none of Inland, any
Inland Party or, to Inland’s and the Inland Parties’ Knowledge, other third
party has used, generated, manufactured, stored or disposed in, at, on, under or
about the Property or transported to or from the Property any Hazardous
Material; (iv) neither Inland nor any Inland Party has

 

22

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received any written, or to Inland’s Knowledge other notice of any discharge,
migration or release of any Hazardous Material from, into, on, under or about
the Property that has not been fully and completely remediated in accordance
with Environmental Laws; and (v) to Inland’s and the Inland Parties’ Knowledge,
there is no existing discharge, migration or release of any Hazardous Material
from, into, on, under or about the Property.  This Section 5(e) shall survive
the Closing Date and the consummation of the transactions contemplated by this
Agreement and shall not expire until the expiration of the applicable
statute(s) of limitations.

 

(f)                                    Contracts.

 

(i)             Except as set forth in Schedule 5(f)-1, neither Inland nor any
Inland Party, and to Inland’s Knowledge, no other third party, is in default in
any material respect under any Contract.

 

(ii)          To Inland’s Knowledge, except for this Agreement, the documents
delivered at the Closing pursuant hereto, the Contracts and the Leases, and as
otherwise disclosed on Schedule 5(f)-2, there are no material contracts or
agreements relating to the Property to which any Inland Party or its agents is a
party and which would be binding on PGGM PRE Fund, the Partnership or the
Property after the Closing Date.

 

(g)                                 Property Entity Organization and Authority.

 

(i)             The Property Entity is a single-purpose entity whose sole
business is to own, lease, manage and operate the Property.

 

(ii)          The legal and beneficial owner of one hundred percent (100%) of
the ownership interests in the Property Entity is Inland and Inland may validly
transfer its ownership interests in the Property Entity to the Partnership on
the terms set forth in this Agreement without the consent of any third party
that has not been obtained.

 

(iii)       The Membership Interests (A) constitute all of the issued ownership
interests of the Property Entity, (B) have been duly and validly issued and are
fully paid, (C) are not subject to any lien, claim or encumbrance (and are not
subject to any agreement arrangement or obligation to create any lien, claim or
encumbrance) in favor of any third party and, (D) except as contemplated by this
Agreement, there exists no agreement, arrangement or obligation (actual or
contingent) to issue, transfer, redeem, repay or repurchase any such ownership
interest.

 

23

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(iv)      The Operating Agreement of the Property Entity is in full force and
effect and, except as disclosed to PGGM PRE Fund, has not been amended.

 

(v)         Except with respect to customary guarantees and indemnities given by
the Property Entity to tenants, contractors, service providers or other parties
in the ordinary course of the Property Entity’s business, each of which such
guarantees and indemnities is limited to the assets of the Property Entity and
shall remain the obligation of the Property Entity and not the Partnership, to
Inland’s Knowledge, the Property Entity has not granted any guarantee, indemnity
or suretyship.

 

(vi)      Neither the Property Entity, nor any person for whose acts or defaults
the Property Entity may be vicariously liable, is a party to any civil,
criminal, arbitration, administrative or other proceeding, nor is any such
proceeding pending against the Property Entity nor, to the Knowledge of Inland,
threatened by or against the Property Entity, save and except for actions
brought by the Property Entity under Leases or Contracts, matters which have or
will be tendered to an insurer, or matters which if decided adversely should not
have a material adverse effect on the ownership, management or operation of the
Property.

 

(vii)   Except as set forth in Schedule 5(g)-7, there is no outstanding
judgment, order, decree, arbitral award or decision of a court, tribunal,
arbitration, administrative or other proceeding to which the Property Entity is
a party or that is against the Property or the Property Entity and uninsured.

 

(viii)                No order has been made, petition presented, resolution
passed or meeting convened for the winding up (or other process whereby the
business is terminated and the assets of the Property Entity are distributed
amongst the creditors and/or equity owners of the Property Entity) of the
Property Entity and there are no cases or proceedings under any applicable
insolvency, reorganization or similar laws to which the Property Entity is a
party and to the Knowledge of Inland, no such petitions, resolution, meetings,
cases or proceeding have been threatened by any party.

 

(ix)        The Property Entity is not insolvent or unable to pay its debts as
they become due, and the Property Entity is free from any suspension of payments
or a general settlement for the benefit of creditors.

 

(x)           The books and records of the Property Entity are true and correct
in

 

24

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all material respects and present fairly in all material respects the assets and
liabilities of the Property Entity and, to Inland’s Knowledge, are those
required to be kept by applicable laws.

 

(xi)        The Property Entity has no, nor has it ever had any, employees.

 

(xii)     No petition has been presented or other proceedings have been
commenced for an administration order to be made, or for the appointment of a
judicial receiver (or any other order to be made by which during the period it
is in force, the affairs, business and assets of any Property Entity are managed
by a person appointed for the purpose by a court, governmental agency or similar
body) in relation to the Property Entity, nor has any such order been made.

 

(xiii)  To Inland’s Knowledge, the Property Entity has no obligations or
liabilities that will remain as obligations or liabilities of the Property
Entity after the consummation of the transactions contemplated by this Agreement
and  that have or would have a material adverse effect on the business,
management or operations of the Property Entity other than: (A) Leases
separately disclosed and scheduled in accordance with this Agreement; (B) any
secured indebtedness described in Schedule 5(m); (C) as contemplated by
Section 5(g)(v); (D) the Contracts; (E) laws, ordinance, rules and regulations
affecting the ownership, use, occupancy and enjoyment of the Property and of the
Property Entity; (F) Permitted Exceptions; and (G) ordinary course obligations
and payables relating to the Property.

 

(h)                                 Leases.

 

(i)             Inland has provided or made available for review true and
correct copies of all Leases set forth on the attached Schedule 5(h)-1, and,
except for one or more fact sheets or lease summaries relating to the Leases or
any of the Leases prepared by or for Inland or the Property Entity, such
provided copies are complete in all material respects.  Except for the Leases
and Permitted Exceptions, the Property is not subject to any lease or other
agreement granting any person the right to possession of any portion of the
Property.

 

(ii)          Attached hereto as Schedule 5(h)-2 is a rent roll for the
Property  (the “Rent Roll”) and all information set forth on the Rent Roll is
true, correct and complete in all material respects as of the date hereof.  To
Inland’s Knowledge, other than as set forth in Schedule 5(h)-2: (A) all Leases
are in full force and effect; and (B) no party (including any tenant) is in
default in any material respect under any Lease.

 

25

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(iii)       Except as set forth on Schedule 5(h)-3, the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
will not violate any material provision of any Lease including, without
limitation, any purchase option, right of first offer, or right of first refusal
relating to the Property and afforded to any tenant under any Lease, but
excluding any purchase option, right of first offer, or right of first refusal
relating to a tenant’s right to renew or extend the term of a Lease or to lease
additional leased space.

 

(i)                                     Lender Approvals.  Except as set forth
in Schedule 5(i), no third-party lender approvals are required to be obtained by
Inland or any Inland Parties in connection with the execution and delivery of
this Agreement or the subsequent contributions of the Membership Interests to a
REIT Entity, except such third-party lender approvals which have already been
given and provided to PGGM PRE Fund.

 

(j)                                     Casualty and Condemnation.

 

(i)             Except as set forth on Schedule 5(j), during the twelve (12)
months prior to the Closing Date, neither the Property nor any parts thereof has
been destroyed or damaged by fire or other casualty, the cost of which to repair
exceeded or is expected to exceed $50,000, and which such destruction or damage
has not been remedied or mitigated.

 

(ii)          There is no pending and, to Inland’s Knowledge, there is no
threatened eminent domain, condemnation or other governmental taking of the
Property (or any parts thereof).

 

(k)                                  Taxes. This Section 5(k) shall survive the
Closing Date and the consummation of the transactions contemplated by this
Agreement and shall not expire until the expiration of the applicable
statute(s) of limitations.

 

(i)             The Property Entity is disregarded as separate from Inland for
federal income tax purposes.  There are no Tax elections under Treasury
Regulations Section 301.7701-3(c) submitted on or before the Closing Date that
would be binding on the Property Entity after the Closing Date.

 

(ii)          The Property Entity has not been required to file a federal or
state income Tax Return at any time during its existence.  The Property Entity
has timely filed all Tax Returns for all non-income Taxes, for all years and
periods, and portions thereof, that the Property Entity

 

26

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has been required to file (taking into account any valid requests for
extensions).  Each such Tax Return has been prepared in compliance with
applicable law, and all such Tax Returns are complete and correct in all
respects.

 

(iii)       All Taxes payable by, and all assessments for Taxes by a Taxing
authority against, the Property Entity have been timely paid when due.  There
are no currently due but unpaid Taxes of the Property Entity relating to or
arising out of any period (or partial period) ending on or prior to the Closing
Date.  Unless noted on Schedule 5(k)(iii)6 the Property Entity is not a party to
or bound by any Tax allocation, Tax sharing or similar agreement, and the
Property Entity has no current or potential contractual obligation to indemnify,
or any joint and several liability with, any other person with respect to Taxes.

 

(iv)      The Property Entity will not be required, as a result of a change in
method of accounting for any period (or portion thereof) ending on or before or
including the Closing Date, to include any adjustment under Section 481(c) of
the Code (or any similar or corresponding provision or requirement under any
state or local Tax law) in Taxable income for any period (or portion thereof)
ending after the Closing Date.  The Property Entity will not be required to
include any item of income in Taxable income for any Taxable period (or portion
thereof) ending after the Closing Date as a result of (A) any prepaid amount
received on or prior to the Closing Date or (B) any closing agreement as
described in Section 7121 of the Code (or any corresponding or similar provision
of state or local Tax law) executed on or prior to the Closing Date.

 

(v)         Unless noted on Schedule 5(k)(v)6, there are no Tax contests in
progress, pending or, to the Knowledge of the Inland Parties, threatened against
the Property Entity with respect to any Taxes.  No adjustment by a Taxing
authority has been proposed or made as a result of any Tax audit or Tax
proceeding involving the Property Entity.

 

(vi)      Other than with respect to Taxes incurred prior to the Closing Date
for which a Lien has attached and is to be satisfied as an Unpermitted Exception
prior to the Closing Date, or which is not yet due and payable, there are no
Liens for Taxes upon the assets of the Property Entity.

 

(vii)   No claim by a Taxing authority in a jurisdiction where the Property
Entity or Inland, with respect to the Property Entity, does not pay Tax

 

27

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or file Tax Returns, is currently pending pursuant to which the Taxing authority
claims that the Property Entity or its direct or indirect owner is or may be
subject to Taxes assessed by such jurisdiction.

 

(viii)                Neither Inland, with respect to the Property Entity, nor
the Property Entity has participated, within the meaning of Treasury Regulations
Section 1.6011-4(c), in any “reportable transaction” within the meaning of
Treasury Regulations Section 1.6011-4(b).

 

(ix)        There are no outstanding rulings of, or requests for rulings by, any
Taxing authority addressed to Inland or the Property Entity that are, or if
issued would be, binding on the Partnership, any REIT Entity, or the Property
Entity after the Closing Date.

 

(x)           Except as set forth in Schedule 5(k)(6), neither Inland nor the
Property Entity has received any grant, subsidy, rate reduction, Tax credit, or
other Tax incentive from any federal, state or local government that would be
subject to termination or recapture from the Partnership, any REIT Entity, or
any Property Entity or any of their Affiliates as a result of the contribution
of the Membership Interests to the Partnership or the Partnership’s subsequent
contribution of the Membership Interests to a REIT Entity as contemplated by the
Partnership Agreement.

 

(xi)        The Property Entity owns no equity interest in any joint venture or
other arrangement or contract that could properly be treated as a partnership or
other entity for federal income tax purposes.

 

b.              Insurance Notices.  Neither Inland nor any Inland Party has
received any written notice from any insurance carrier that there are defects or
inadequacies in the Property which would materially and adversely affect the
insurability of the same or cause the imposition of extraordinary premiums
thereof or create or be likely to create a hazard, excessive maintenance cost of
material operating deficiencies.

 

c.               Indebtedness.  Other than: (A) indebtedness disclosed on
Schedule 5(m)(7), and (B) non-recourse indebtedness owed to the Property
Entity’s trade creditors and

 

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

(6) Note:  To the extent any item is scheduled, such item will subject to a
stand-alone indemnity provision without a cap or basket.

 

(7) Note:  To the extent any indebtedness [other than mortgage indebtedness
encumbering properties that will remain subject to the lien of existing
mortgages] is scheduled and does not fall within clause (B), such indebtedness
will have to be discharged at Closing.

 

28

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incurred in the normal course of business, the Property Entity has no
indebtedness, whether or not secured by the Property.

 

d.              Prorations.  The information prepared by the Inland Parties and,
to Inland’s Knowledge, the information furnished to the Inland Parties on which
the computation of prorations is based is true, correct and complete in all
material respects.

 

e.               Governmental Obligations.  There are no written commitments by
any Inland Party to any governmental agency or third party which materially and
adversely affect the Property.

 

f.                 Survival.  The representations and warranties of Inland and
the Inland Parties as set forth in this Agreement shall survive for a period of
thirty (30) days following the delivery to the Investors as provided in
Section 8.2 of the Partnership Agreement of the final audited annual financial
statement for the fiscal year of the Partnership in which the Closing takes
place; provided, however, that the representations and warranties set forth in
Sections 5(a)(iii), 5(e) and 5(k) shall survive the Closing Date and shall not
expire until the expiration of the applicable statute(s) of limitations.

 

6.             PGGM PRE Fund’s Representations and Warranties.

 

(a)                           General.  PGGM PRE Fund hereby represents and
warrants to Inland and the Partnership that each of its representations set
forth in Section 16 of the Partnership Agreement are true and correct as of the
Effective Date.

 

(b)                Survival.  The representations and warranties of PGGM PRE
Fund as set forth in this Agreement shall survive for a period of ninety (90)
days following the Closing Date.

 

7.             Conditions Precedent.

 

(a)                 Investors’ Conditions to Closing.  The obligations of the
Investors to make their respective contributions to the Partnership at Closing
shall be contingent upon the occurrence of the following conditions precedent on
or before the Closing Date:

 

(i)                Fulfillment of Duties and Obligations.  Each Investor shall
have fulfilled all of its respective duties and obligations required to be
fulfilled under the Partnership Agreement and this Agreement, and any other
documents contemplated therein or hereby on or prior to the Closing Date.

 

(ii)               Property Lender Consent.  The Property Lender shall have
consented to the transactions contemplated by this Agreement.  All costs of

 

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obtaining Property Lender’s consent shall be the obligation of the
Partnership.(8)

 

(iii)              Expiration of Loans’ Penalty Periods.  Other than as set
forth on the attached Schedule 7(a), with respect to any loan against the
Property containing a period during which a prepayment penalty or premium is
assessed, or a lockout period, said period shall have expired.

 

(iv)              Closing Statement.  Each Investor shall deliver an executed
counterpart of a closing statement in form reasonably acceptable to the
Investors and the Partnership (the “Closing Statement”).

 

(v)               Partnership’s Representations and Warranties.  All of the
Partnership’s representations and warranties in Section 4 of this Agreement
shall be true and correct on and as of the Closing Date.

 

(b)                PGGM PRE Fund’s Conditions to Closing.  In addition to the
conditions precedent set forth in Section 7(a), the obligations of PGGM PRE Fund
to make its contributions to the Partnership at Closing shall be contingent upon
the occurrence of the following conditions precedent on or before the Closing
Date:

 

(i)             Representations and Warranties.  All of Inland’s representations
and warranties set forth in Section 5 of this Agreement shall be true and
correct on and as of the Closing Date.

 

(ii)          Secretary Certificates.

 

(A)      PGGM PRE Fund shall have received from the secretary or an assistant
secretary of Inland a certificate having attached thereto (1) Inland’s
organizational documents in effect at the time of Closing; (2) resolutions
approved by the persons or entities required to approve Inland’s entering into
of the Agreement; (3) a certificate of good standing from the State of Maryland,
and (4) specimen signatures of the persons authorized to enter into the
Agreement on behalf of Inland; provided however that a single certificate and
the attachments thereto may be delivered in connection with any other
contribution agreement by and between the Partnership and the Investors, as
contemplated by the Partnership Agreement,

 

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

(8) Only applies to properties which will be remain subject to the lien of
existing mortgages.  In all other cases, the loan is to be paid off and
discharged of record at Closing.

 

30

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and same shall satisfy the requirements of this Section 7(b)(ii).

 

(B)        PGGM PRE Fund shall have received from the [sole Member / Manager /
secretary or an assistant secretary] of the Property Entity a certificate having
attached thereto (1) such entity’s organizational documents in effect at the
time of Closing; (2) a certificate of good standing from the State under whose
laws such entity is duly formed or organized under; and (3) a certificate of
good standing from the State in which the Property is located.

 

(iii)       Title Policy and Survey.

 

(A)      The Title Insurer shall have issued the Policy.

 

(B)        Inland shall have delivered to PGGM PRE Fund a current ALTA survey of
the Property certified to the Property Entity, PGGM PRE Fund, the Partnership
and the Title Insurer, prepared by a licensed surveyor acceptable to PGGM PRE
Fund and the Title Company, and having as minimum survey requirements those
shown on the property survey dated as of                , prepared by
                 and relating to the real property located at                 
(the “Form Survey”) and such other requirements of the Title Company and showing
a state of facts acceptable to PGGM PRE Fund.

 

(iv)      Additional Documents - Inland.  Inland shall deliver, or cause to be
delivered, to a closing escrow true and correct copies of the following
documents:

 

(A)      the Assignment of Membership Interest pursuant to which the Membership
Interests shall be assigned to the Partnership;

 

(B)        an Amended Operating Agreement, to the extent applicable and
necessary;

 

(C)        such disclosures and reports as are required by applicable state and
local law in connection with the conveyance of real property (or interests
therein), including transfer tax declarations;

 

(D)       such lien and possession affidavits and any additional

 

31

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documents as the Title Insurer may reasonably require in connection with the
issuance of the Policy;

 

(E)         such evidence of authority for the transaction contemplated hereby
as shall be reasonably required by the Title Company;

 

(F)         such transfer declarations and transfer tax documents as shall be
reasonably required by the Title Company or reasonably requested by PGGM PRE
Fund; and

 

(G)        such other documents, affidavits, instruments, certifications and
confirmations which Inland is specifically required to deliver pursuant to this
Agreement or as may be otherwise reasonably required in order to consummate the
transactions contemplated hereby.

 

(v)         Additional Documents - Partnership.  The Partnership shall deliver,
or cause to be delivered, to a closing escrow true and correct copies of the
following documents:

 

(A)      the Assignment of Membership Interest;

 

(B)        an ALTA Statement (in duplicate);

 

(C)        such disclosures and reports as are required by applicable state and
local law in connection with the conveyance of real property (or interests
therein), including transfer tax declarations; and

 

(D)       such other documents, affidavits, instruments, certifications and
confirmations which the Partnership is specifically required to deliver pursuant
to this Agreement or as may be otherwise reasonably required in order to
consummate this transaction.

 

(vi)      Rent Roll.  Inland shall deliver, or cause to be delivered, the Rent
Roll for the Property current as of the Closing Date.

 

(vii)   Estoppel Certificates.  Inland shall deliver, or cause to be delivered,
executed copies of tenant’s estoppel certificates, each substantially in the
form set forth in Exhibit G, for all the Anchor Tenants, Sub-Anchor Tenants and
fifty percent (50%) by number of the remaining tenants located at the Property
with respect to the Leases listed on Schedule 5(h)-1.

 

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(viii)                FIRPTA.  Inland shall deliver, or cause to be delivered, a
statement dated as of the Closing Date that meets the requirements of Treasury
Regulations Section 1.1445-2(b)(2) executed by the appropriate Inland Parties.

 

(c)                 Inland’s Conditions to Closing.  In addition to the
conditions precedent set forth in Section 7(a), the obligations of Inland to
make its contributions to the Partnership at Closing shall be contingent upon
all of PGGM PRE Fund’s representations and warranties set forth in Section 6 of
this Agreement and in the Partnership Agreement shall be true and correct on and
as of the Closing Date;

 

(d)                Partnership’s Conditions to Closing.  The obligation of the
Partnership to perform its obligations under this Agreement at Closing shall be
contingent upon the occurrence of the following conditions precedent on or
before the Closing Date:

 

(i)             Representations and Warranties.  All of the Investors’
representations and warranties set forth in Sections 5 and 6 of this Agreement
shall be true and correct as of the Closing Date; and

 

(ii)          Performance.  The Investors shall have fully performed and
completed all of the Investors’ obligations under this Agreement.

 

(e)                 Non-Satisfaction of Condition to Close.  Should any
condition to close set forth in the foregoing Sections 7(a)-(d) remain
unsatisfied as of the Closing Date, the party whose performance is conditioned
upon the satisfaction of such unsatisfied condition to close may, at its option,
waive such condition to close, or in the alternative, the sole remedy of the
party whose performance is conditioned upon the satisfaction of such unsatisfied
condition to close shall be to terminate this Agreement.

 

(f)                 Acknowledgement.  To the maximum extent permitted by
applicable law and except for the representations and warranties of the Inland
Parties in this Agreement and the Partnership Agreement (collectively, the
“Inland Parties’ Warranties”), the contribution of the Membership Interests
pursuant to this Agreement is made without representation, covenant, or warranty
of any kind (whether express, implied or, to the maximum extent permitted by
applicable law, statutory) by the Inland Parties, or their beneficiaries,
principals, officers, employees, consultants, brokers or agents.  As a material
part of the consideration for this Agreement, each of the Partnership and PGGM
PRE Fund acknowledges and agrees that the Partnership accepts the Membership
Interests and the Property on an “as is” and “where is” basis, with all faults,
and without any representation or warranty,  all of which the Inland Parties
hereby disclaim, except for the Inland Parties’ Warranties.  Except for the
Inland Parties’ Warranties, no warranty or representation is made by the Inland
Parties including without limitation those as to

 

33

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fitness for any particular purpose, merchantability, design, quality, condition,
operation or income, compliance with drawings or specifications, absence of
defects, absence of hazardous or toxic substances, absence of faults, flooding,
other condition or lack of condition of the Property, the Property’s
development, entitlement, or those as to compliance with laws, codes and
regulations, including without limitation relating to health, safety, and the
environment, or those relating to information provided by any Inland Party
emanating from a third party.

 

8.             Closing Matters.

 

(a)           Location; Date; Deliveries.  The Closing shall occur at the
offices of the Title Insurer, on the Closing Date, to be effective as of
11:59 P.M. [CHICAGO LOCAL TIME/CENTRAL TIME] as such date.  On the Closing Date,
the Investors and the Partnership shall deliver all such documents required to
be executed and delivered pursuant to this Agreement to the Title Insurer.

 

(b)           Closing Escrow.  The transaction contemplated by this Agreement
shall be closed through an escrow with the Title Insurer (“Closing Escrow”).

 

(c)           Payments.  Any payments herein required to be made at the time of
Closing shall be by certified check, cashier’s check or wire transfer payable to
the Partnership or payable to the Title Insurer.

 

(d)           Costs.  Inland and PGGM PRE Fund agree that the Partnership shall
pay all costs and expenses incurred in connection with the Closing, whether or
not said costs or expenses are customarily paid by a seller or buyer, including,
without limitation, (i) any State of                     ,                 
County or [city/village/township/etc.] of                      real estate
transfer taxes which may be applicable to this transaction, (ii) the premium for
the Policy, (iii) all recording charges for clearing title exceptions, and
(iv) all escrow or closing fees charged by Title Insurer.

 

(e)           Policy.  At Closing, the Title Insurer shall issue the Policy.

 

9.                                       Prorations.

 

(a)           Proration Items.  All revenue and expenses of the Property or the
Property Entity allocable to periods beginning as of 12:00 A.M. [CHICAGO LOCAL
TIME/CENTRAL TIME] on the day following the Closing Date (the “Subsequent
Closing Date”(9)) shall be credited or charged, as applicable, to the REIT
Entity to which

 

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(9) Note:  In accordance with the procedure agreed in the Partnership Agreement,
the “Closing Date” and the “Subsequent Closing Date” must be successive days
that are business days, and cannot be separated by weekends or holidays.

 

34

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the Property Entity is contributed as of 12:00 A.M. [CHICAGO LOCAL TIME/CENTRAL
TIME] on the Subsequent Closing Date, and the revenue and expenses of the
Property allocable to periods ending as of the close of business on the Closing
Date shall be credited to the applicable Inland Party, or charged to the
applicable Inland Party, as applicable.  Inland and the Partnership agree to
furnish to each other and to PGGM PRE Fund such documents and other records as
each party reasonably requests in order to confirm all adjustments and proration
calculations made.

 

 

For purposes of preparing the Closing Statement, all prorations shall be made on
the basis of amounts billed and expenses accrued as of 11:59 P.M. [CHICAGO LOCAL
TIME/CENTRAL TIME] on the Closing Date and will be re-prorated and appropriate
adjustments made upon actual receipt of payment of amounts billed and payment of
such accrued expenses after the Closing Date.  The following items shall be
prorated as provided above, and the provisions of this Section shall survive
Closing hereunder:

 

(i)             Real Estate Taxes and Assessments.  Ad valorem real estate taxes
and assessments and personal property taxes with respect to the Property for the
current calendar year shall be prorated as of 11:59 P.M. [CHICAGO LOCAL
TIME/CENTRAL TIME] on the Closing Date, but only to the extent that tenants are
not obligated under Leases to reimburse Inland Parties for their allocable share
of such taxes and assessments.  The applicable Inland Party shall pay or cause
to be paid all installments of assessments levied upon the Property which are
due prior to the Closing Date; provided, that to the extent the Property Entity
or an Inland Party is entitled to reimbursement for such assessments from a
tenant, any amounts received by the Property Entity in respect thereof shall
promptly be paid over to the applicable Inland Party.  In the event that tax
bills for taxes for the year in which the Closing takes place are not available
on the Closing Date, taxes shall be prorated based upon the tax bills for the
previous year, and, in such event (or in the event of any reassessment or
re-billing thereof), Inland and the Partnership shall re-prorate the taxes when
actual tax bills for the current year are available.  All ad valorem real estate
taxes and assessments and personal property taxes with respect to the Property
for periods prior to the year in which the Closing takes place (which may become
payable in the event of any reassessment re-billing thereof, or in the event of
any failure of any tax contest maintained by an Inland Party with respect
thereto) shall remain the obligation of the applicable Inland Party (and the
applicable Inland Party shall be entitled to receive any refund or rebate on any
ad valorem real estate taxes and assessments and personal property taxes with
respect to the Property for periods prior to the year in which the Closing takes
place).

 

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(ii)          Rents.  All rental payments made under the Leases for the month in
which the Closing occurs shall be prorated as of 11:59 P.M. [CHICAGO LOCAL
TIME/CENTRAL TIME] on the Closing Date.  Any checks for rental payments received
after the Closing Date by the Inland Parties or their respective agents that
relate to periods or portions thereof after the Closing Date shall be promptly
endorsed to the Property Entity by the payee thereof and promptly transmitted to
the Partnership; if any of such rental payments belong in part to an Inland
Party and in part to the Property Entity, upon such endorsement and transmittal
(and receipt of collected funds), such checks shall be promptly deposited by the
Property Entity or its agent and the part thereof belonging to an Inland Party
shall be promptly paid to the applicable Inland Party and the balance shall be
retained by the Property Entity.  The parties agree to re-prorate all rental
payments for amounts actually received within sixty (60) days following the
receipt thereof.

 

(iii)       Past Due Rents.  Any rental payments made under the Leases which, as
of the Closing Date, are past due and unpaid and which are received subsequent
to the Closing Date by the Property Entity, an Inland Party or their respective
agents shall be applied first to pay the current portion of all rental payments
due to the Property Entity under the applicable Lease, and then to pay to the
applicable Inland Party any portion of such rental payments applicable to the
period ending as of the close of business on the Closing Date under such Lease. 
Upon any payment of such amounts to the applicable Inland Party, a proportionate
share of any costs of collection actually incurred by the Property Entity or its
Affiliates in connection therewith shall be deducted from such payment. 
Following the Closing, the Partnership, through its General Partner and on
behalf of the Property Entity, shall use commercially reasonable efforts to
collect such past due rents provided, however, that the Partnership shall not be
required to commence an action or proceeding against a tenant, guarantor or
other party or to terminate any Lease or seek any remedy against any tenant.

 

(iv)      Post-Closing Adjustment Payments and CAM Reconciliation.  To the
extent any Inland Party has received as of the close of business on the Closing
Date any monthly or periodic payments of common area maintenance charges,
property taxes, insurance and other operating cost pass-throughs payable by
tenants (collectively, “Operating Expenses”) allocable to periods subsequent to
11:59 P.M. [CHICAGO LOCAL TIME/CENTRAL TIME] on the Closing Date, the same shall
be prorated and the Property Entity shall receive a

 

36

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credit therefor at Closing.  With respect to any monthly or periodic payments of
Operating Expenses received by the Property Entity after the Closing Date
allocable to a period prior to the close of business on the Closing Date, the
Property Entity shall promptly pay or cause the same to be paid to the
applicable Inland Party (subject to Section 9(a)(iii)).

 

(v)         Inland Parties’ Collection Rights.  Except as provided in
Section 9(a)(iii) of this Agreement, from and after the Closing Date, the Inland
Parties shall have the right to collect and receive for their own accounts any
rental payments that are due and payable as of the Closing Date.  The Inland
Parties’ right of collection shall include, without limitation, the right to
commence an action or proceeding against a tenant, guarantor or other party
(provided that Inland gives the Partnership at least ten (10) days’ notice
before commencing any action or proceeding against any tenant or guarantor),
provided that (A) Inland agrees not to institute a summary disposition or
eviction action against any tenant or to terminate any Lease based on such
tenant’s non-payment of rents or any other amounts due for periods prior to the
Closing Date, and (B) Inland, on behalf of the Partnership, shall not be
entitled or seek any remedy against any tenant, including seeking a monetary
judgment against the delinquent tenant and enforcement of such judgment,
relating to any period after the Closing Date, in any event without the prior
written consent of PGGM PRE Fund.

 

(vi)      Security Deposits.  Inland shall cause to be transferred to the
account of the Property Entity at Closing an amount equal to all cash tenant
deposits then outstanding under the Leases.  With respect to non-cash tenant
deposits, a list of which is attached hereto as Schedule 9(a)-1, Inland shall,
at Inland’s expense (A) cause to be delivered to the Property Entity at the
Closing such non-cash tenant deposits, and (B) execute and deliver such other
instruments as are necessary to cause such non-cash tenant deposits to be
payable to the Property Entity upon presentation in accordance with their
terms.  If such transfer to the Property Entity’s name cannot be accomplished
simply by assignment by the applicable Inland Party at Closing, Inland shall
have such time as is reasonably necessary to deliver the necessary transfer
documents so long as the applicable Inland Party promptly commences, prior to
the Closing Date, the action necessary to accomplish such transfer and
diligently pursues it to completion.  If, prior to the date Inland properly
transfers the non-cash tenant deposits to the Property Entity, the Partnership
notifies Inland that the Property Entity requires a non-cash tenant deposit to
be drawn or

 

37

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cashed, Inland will promptly, as agent for the Property Entity, take the
required action (or cause such action to be taken) and deliver all proceeds to
the Property Entity, provided that the Partnership indemnifies Inland from any
loss on account of such action taken at the direction of the Partnership (except
where any such loss results from Inland’s gross negligence or willful
misconduct).

 

(vii)   Advance Rent.  Inland shall cause to be transferred to the account of
the Property Entity at Closing an amount equal to all rental payments made in
advance (to the extent not prorated as set forth above).

 

(viii)                Insurance Premiums.  Insurance premiums with respect to
insurance policies carried by the Inland Parties with respect to the Property
shall be prorated as of the close of business on the Closing Date.  Schedule
9(a)-2 lists the current insurance premiums for insurance policies carried by
the Inland Parties with respect to the Property, which list shall form the basis
for the proration of insurance premiums under this Section 9(a)(viii).  The
Partnership, Property Entity, or REIT Entity, or all of them, at the request of
PGGM PRE Fund, may be added to the insurance policies currently held by the
Inland Parties and the Property Entity shall pay that portion of the insurance
premiums for such policies that are attributable to the Property for the period
following the Closing Date (provided, that insurance premiums paid prior to the
close of business on the Closing Date for which an Inland Party has received
reimbursement from tenants under Leases shall not be prorated to the extent of
such reimbursement and insurance premiums paid after the close of business on
the Closing Date that relate to any period prior to 11:59 P.M. [CHICAGO LOCAL
TIME/CENTRAL TIME] on the Closing Date for which the Property Entity has
received reimbursement from tenants under Leases shall not be prorated to the
extent of such reimbursement).  The Property Entity shall pay all amounts
necessary in order to cause the insurance carrier or carriers of such policies
to endorse the policies to name the Property Entity as a named insured.

 

(ix)        Utility Deposits.  Inland shall receive a credit on the Closing Date
for the amount of any utility deposits made by an Inland Party which are not
refundable to such Inland Party by the holder thereof and which deposits are
transferred or transferable to the Property Entity at Closing.

 

(x)           Contract Payments.  Any amounts paid or payable under any Contract
that are allocable both to periods ending as of 11:59 P.M. [CHICAGO LOCAL
TIME/CENTRAL TIME] on the Closing Date

 

38

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and periods beginning as of 12:00 A.M. [CHICAGO LOCAL TIME/CENTRAL TIME] on the
Subsequent Closing Date shall be prorated so that the portion thereof allocable
to periods beginning as of 12:00 A.M. [CHICAGO LOCAL TIME/CENTRAL TIME] on the
Subsequent Closing Date shall be charged to the Property Entity and the portion
thereof allocable to periods ending as of 11:59 P.M. [CHICAGO LOCAL TIME/CENTRAL
TIME] on the Closing Date shall be charged to the applicable Inland Party. 
Following the Closing, and in any event, within ninety (90) days following
receipt of payment pursuant to the Contracts, Inland shall provide the
Partnership with a final reconciliation showing all payments made under the
Contracts and any payments made to or from Inland Parties in reconciliation of
same.

 

(xi)        Lease-Up Costs and Commissions.  Lease-Up Costs relating to Leases
executed on or after                           , 2010 (the “Valuation Date”), to
the extent not previously amortized prior to the Closing Date, shall be, from
and after the Closing Date, amortized by the Partnership.  Commissions now or
hereafter due with respect to the current term of any Lease executed on or after
the Valuation Date and in existence on the Closing Date shall be prorated so
that the portion thereof allocable to periods beginning as of 12:00 A.M.
[CHICAGO LOCAL TIME/CENTRAL TIME] on the Subsequent Closing Date shall be
charged to the Property Entity and the portion thereof allocable to periods
ending on or before 11:59 P.M. [CHICAGO LOCAL TIME/CENTRAL TIME] on the Closing
Date shall be charged to and paid by Inland.  All prepaid Commissions relating
to Leases entered into on or subsequent to the Valuation Date, to the extent not
previously amortized prior to the Closing Date and relating to periods after the
Closing Date, shall be, from and after the Closing Date, amortized by the
Property Entity.  All Lease-Up Costs and Commissions due with respect to future
or renewal terms or expansion leases following the Closing Date under any Lease
shall be paid, when due and payable, by the Partnership. Notwithstanding
anything contained in this Agreement to the contrary, the Property Entity shall
not, without PGGM PRE Fund’s approval (which approval shall be given or withheld
in accordance with the provisions of the Partnership Agreement), enter into new
Qualifying Leases which are not approved in the annual Business Plan (as such
capitalized terms are defined in the Partnership Agreement) or extend or modify
existing Qualifying Leases which are not approved in the annual Business Plan. 
The Property Entity shall have the right to enter into, extend or modify
non-Qualifying Leases provided that such non-Qualifying Lease or extension or
modification of a non-

 

39

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Qualifying Lease is approved by the Partnership in accordance with the Property
Management Agreement (as defined in the Partnership Agreement).

 

(xii)     Concessions.  All Concessions in the nature of out-of-pocket costs or
expenses now or hereafter due with respect to the current term of any Lease
entered into on or after the Valuation Date and in existence on the Closing Date
shall be prorated so that the portion thereof allocable to periods beginning as
of 12:00 A.M. [CHICAGO LOCAL TIME/CENTRAL TIME] on the Subsequent Closing Date
shall be charged to the Property Entity and the portion thereof allocable to
periods ending as of 11:59 P.M. [CHICAGO LOCAL TIME/CENTRAL TIME] on the Closing
Date shall be charged to the applicable Inland Party.  All Concessions due with
respect to future or renewal terms or expansion leases following the Closing
Date under any Lease shall be paid, when due and payable by (or the economic
cost thereof borne by), the Partnership.

 

(b)           Reprorations after Closing Date.

 

(i)             Amounts Unavailable as of Closing Date.  In the event that the
actual amounts of any of the proration items set forth in Section 9(a) of this
Agreement are unavailable as of the Closing Date, then such proration shall be
made on the basis of an amount reasonably estimated by the Partnership and
Inland on the Closing Date, and the Partnership and Inland shall thereupon
re-prorate such items at such times as the exact amounts for such proration
items become available.

 

(ii)          Year-End Adjustments.  In the event various prorations provided
for herein are inconsistent with the actual amounts reimbursed for such prorated
amounts by tenants to an Inland Party, or the Property Entity, such items shall
be re-prorated when all amounts required for accurate prorations become
available.  For example, in the event that all real estate taxes for the year
2010 are reimbursed by tenants, and the total real property tax reimbursements
from tenants that are paid to the Property Entity following the Closing for the
year 2010 result in the Property Entity receiving more, or less, than the amount
allocated to the Property Entity in the prorations at Closing, then the amounts
shall be re-prorated between Inland and the Property Entity so that the amount
prorated to the Property Entity is the same as the amount reimbursed, or
reimbursable by tenants for such real property taxes allocated to the Property
Entity in the initial proration.

 

40

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(iii)       Other Adjustments.  In the event of any other post-Closing
adjustment of prorations, including without limitation any changes resulting
from a tenant challenging the amount of common area or any other charges paid by
such tenant, or in the event that the Partnership otherwise reasonably
determines that such amounts charged to and paid by such tenant were incorrect,
Inland and the Property Entity shall pay the amount due as a result of such
adjustment based on the principles set forth herein.

 

(iv)      Limitations on Reprorations.  All reprorations shall be deemed final
unless Inland or the Partnership notifies the other within ninety (90) days
following the receipt by such party of a reproration amount and a statement in
support of same.

 

10.           Defaults and Remedies.

 

(a)           Defaults.  The following events shall be “Defaults” under this
Agreement: (i) a party’s breach of any of its covenants, representations or
warranties; or (ii) a party’s failure to perform its obligation to make its
contribution to the Partnership under circumstances where all of its conditions
to close have been satisfied.

 

(b)           Notice.  Upon learning of the occurrence of a Default, subject to
the limitations set forth in Section 11, the non-defaulting party shall provide
the defaulting party and the Partnership with notice of such Default (a “Default
Notice”) and the defaulting party shall have a period of thirty (30) days after
receipt of the Default Notice in which to cure such Default.  Should the
defaulting party fail to cure within that period, the non-defaulting party’s
remedies hereunder shall be as provided herein.

 

(c)           Default Prior to Closing Date.  If the non-defaulting party
receives knowledge of the Default prior to the Closing Date, then the
non-defaulting party’s sole remedy shall be to terminate the Agreement.  Upon
termination of this Agreement by the non-defaulting party pursuant to this
Section 10(c), the parties shall owe no further obligations or liabilities to
one another in connection with the Agreement.  If a non-defaulting party elects
to consummate the transactions contemplated by this Agreement, notwithstanding a
Default of which the non-defaulting party had knowledge as of the Closing Date,
the consummation thereof shall effect a waiver of such Default.

 

(d)           Default Upon Party’s Failure of Performance.  Should a Default
occur pursuant to Section 10(a)(ii), this Agreement shall terminate and the
parties’ rights and remedies with respect to a failure of a party to make a
Capital Contribution shall be governed solely by the Partnership Agreement.

 

(e)           Default Subsequent to Closing Date.  For any Default for breaches
of representations and warranties of which the non-defaulting party becomes
aware

 

41

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

 

subsequent to the Closing Date, the Partnership shall be entitled to monetary
damages as set forth in Section 11, below, subject to the limitations and
restrictions set forth therein.

 

11.           Damages.  {Note:  Stand-alone indemnity provisions without caps or
baskets to be added to address any items that are identified on schedules as
exceptions to the representations, such as Tax or Environmental Matters.  To be
addressed at the time the contribution agreement for an applicable Property is
prepared.}

 

(a)           Survival.  The representations and warranties of the parties shall
survive for the periods set forth in Sections 5(a)(iii), 5(e), 5(k), 5(p) and
6(b).  For convenience of reference, the date upon which any representation or
warranty contained herein shall terminate, is referred to herein as the
“Survival Date”.  No claim shall be brought under this Section 11 unless the
non-defaulting party, at any time prior to the applicable Survival Date, gives
the defaulting party the Default Notice as described in Section 10(b).

 

(b)           Limits.

 

(i)             The defaulting party shall not be liable  in respect of any
Default for breaches of representations and warranties unless and until the
aggregate damages incurred by the Partnership or the Property Entity as a result
of all such Defaults for breaches of representations and warranties exceeds an
amount equal to an amount to be agreed among Inland, PGGM PRE Fund and the
Partnership (the “Basket Amount”).

 

(ii)          The parties acknowledge and agree that the maximum aggregate
liability of the defaulting party for damages incurred by the Partnership or the
Property Entity as a result of a Default for breaches of representations and
warranties shall not exceed an amount to be agreed among Inland, PGGM PRE Fund
and the Partnership  (the “Cap Amount”).

 

(iii)       Any damages payable to the Partnership as a result of a Default
shall be decreased by  any amounts actually received by the Partnership or the
Property Entity under its own or third party insurance policies with respect to
such loss, net of any deductibles or co-payments paid by the Partnership or the
Property Entity under the relevant insurance policy, any “retro-premium”
obligations in connection with such loss and any costs incurred by the
Partnership in procuring such payment under such policy (the “Net Insurance
Proceeds”), each party agreeing (x) to use commercially reasonable efforts to
recover all available insurance proceeds and (y) to the extent that any payment
of damages under this Section has been paid by the defaulting party to or on
behalf of the Partnership or the Property Entity prior to the

 

42

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receipt, directly or indirectly, by the Partnership or the Property Entity of
any Net Insurance Proceeds under any insurance policies on account of such loss
which duplicate, in whole or in part, the payment made by the defaulting party
to or on behalf of the Partnership or the Property Entity, the Partnership or
the Property Entity shall remit to the defaulting party an amount equal to the
amount of the Net Insurance Proceeds actually received by the Partnership or the
Property Entity on account of such Loss which duplicate, in whole or in part,
the payment made by the defaulting party to or on behalf of the Partnership or
the Property Entity.

 

(iv)      Notwithstanding the foregoing, the limitations set forth in this
Section 11(b) shall not apply to any claims arising out of a breach of
representations or warranties resulting from fraud or intentional misstatement
or a breach of any representations and warranties contained in Sections
5(a)(iv) and 5(k) of this Agreement and defaulting party shall be liable for all
damages, excluding incidental and consequential damages, with respect thereto.

 

(v)         The provisions set forth in this Section 11 shall be the exclusive
remedies of the parties for any damages arising out of or related to a Default
for breaches of representations and warranties.

 

12.           Waivers.

 

(a)           PGGM PRE Fund and Inland reserve the right to waive any or all the
conditions precedent to performance of their respective obligations hereunder. 
No such waiver, modifications, amendment, discharge or change in this Agreement,
except as otherwise provided hereunder, shall be valid unless the same is in
writing and signed by the party waiving same.

 

(b)           This Agreement contains the entire agreement between the parties
relating to the transactions contemplated hereby and can only be modified by
written agreement signed by the Partnership, and both Inland and PGGM PRE Fund.

 

13.           Notice.  All notices, demands, requests and other communications
under this Agreement shall be in writing and shall be deemed properly served if
delivered by hand to the parties to whose attention it is directed or, when
received, if sent, postage prepaid, by United States Registered or Certified
mail, return receipt requested, and addressed as follows:

 

If intended for Inland or the Partnership:

 

Inland Real Estate Corporation

 

43

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2901 Butterfield Road

Oak Brook, IL  60523

Attn:  Beth Sprecher Brooks

 

With a copy to:

 

Stahl Cowen Crowley Addis LLC

55 West Monroe Street

Suite 1200

Chicago, Illinois  60603

(312) 641-0060

Attn:  Jeffrey J. Stahl, Esq.

 

If intended for PGGM PRE Fund:

 

Stichting Depositary PGGM Private Real Estate Fund, acting in its capacity as
depositary of and for the account and risk of
PGGM Private Real Estate Fund
c/o PGGM Vermogensbeheer B.V.
Kroostweg-Noord 149
P.O. Box 117
3700 AC Zeist
The Netherlands
Attention:  Steven Zeeman, CFA
Fax:  011.31.30.277 4724
Email:  steven.zeeman@pggm.nl

 

With a copy to:

 

44

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

 

Stichting Depositary PGGM Private Real Estate Fund, acting in its capacity as
depositary of and for the account and risk of

 

PGGM Private Real Estate Fund

c/o PGGM Vermogensbeheer B.V.

Kroostweg-Noord 149

P.O. Box 117

3700 AC Zeist

The Netherlands

Attention:  Werner Sohier

Fax:  011.31.30.277 4724

Email:  werner.sohier@pggm.nl

 

Or at such other or to such other party, which any party entitled to receive,
notice hereunder designates to the others in writing.

 

14.           Governing Law. The validity, meaning and effect of this Agreement
shall be determined in accordance with the laws of the State of Illinois
applicable to contracts made and to be performed in that state.

 

15.           Litigation Costs.  Each Investor acknowledges that the other
Investor acting alone or on behalf of the Partnership, shall have the right to
exercise the Partnership’s rights and remedies, at law, or in equity, under this
Agreement at the expense of the Partnership.  If any party to this Agreement
shall commence any action against another such party in order to enforce any
provision of this Agreement, or to recover damages as the result of the breach
of any of the provisions of this Agreement, the prevailing party in such action
shall be entitled to recover all reasonable costs (including reasonable
attorney’s fees and paralegal’s fees) incurred in connection therewith against
the party who has breached this Agreement.  Notwithstanding a settlement or
other resolution of any such action without the issuance of a definitive ruling
by a court, including, but not limited to, any agreement by the parties that
such settlement is not an admission of liability by either party, no such
settlement or resolution shall constitute a waiver of this Section, and each
party acknowledges and agrees that it shall be entitled to petition the court
for a determination that it is the prevailing party and entitled to recovery of
its reasonable costs hereunder.

 

45

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16.           REIT Contribution Agreement. The parties acknowledge and agree
that the Partnership shall contribute the Membership Interests to the REIT
Entity as of 12:00 A.M. Chicago local time on the business day following the
Closing Date and that, in connection with such contribution, the Partnership,
the Inland Parties and PGGM PRE Fund agree that the REIT Entity shall be a third
party beneficiary of this Agreement with the effect that the REIT Entity and/or
the Partnership may enforce this Agreement against the Inland Parties.

 

17.           Headings. The headings in this Agreement are for convenience only
and shall not be used in interpreting any of the provisions of this Agreement.

 

18.           Time of the Essence. Time is of the essence of this Agreement.

 

19.           Severability. This Agreement shall be governed by the laws of the
State of Illinois, and any provision of this Agreement which is unenforceable or
is invalid or contrary to the law of the State of Illinois shall be of no effect
and in such case, all the remaining terms and provisions of this Agreement shall
be fully effective according to the tenor of this Agreement, the same as though
no such invalid portion had ever been included.

 

[This Space Intentionally Left Blank.  Signature Page to Follow.]

 

46

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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed by
their duly authorized representatives effective as of the Effective Date.

 

 

INLAND:

 

PARTNERSHIP:

 

 

 

 

 

 

INLAND REAL ESTATE CORPORATION, a Maryland corporation

 

INP RETAIL, L.P., a Delaware limited partnership

 

 

 

 

 

 

 

 

 

By:

 

 

By:

INP Retail Management Company LLC

 

 

 

 

 

Name:

 

 

 

 

 

 

 

 

 

Its:

 

 

Its:

General Partner

 

 

 

 

 

 

 

 

By:

Inland Real Estate Corporation

PGGM PRE FUND:

 

 

 

 

 

Its:

Manager

 

 

 

 

 

 

 

STICHTING DEPOSITARY PGGM PRIVATE REAL ESTATE FUND, ACTING IN ITS CAPACITY AS
DEPOSITARY OF AND FOR THE ACCOUNT AND RISK OF PGGM PRIVATE REAL ESTATE FUND

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Its:

 

 

 

 

 

 

 

 

 

Represented by: PGGM

 

 

 

 

 

 

VERMOGENSBEHEER, B.V.

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

Name:

 

 

 

 

47

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

 

Its:

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

Its:

 

 

 

 

48

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EXHIBIT A

 

LEGAL DESCRIPTION

 

49

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EXHIBIT B

 

ASSIGNMENT OF MEMBERSHIP INTERESTS

 

For good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the undersigned Assignor does hereby transfer, convey and
assign to INP Retail, L.P., a Delaware limited partnership (“Assignee”), all
right, title and interest which the Assignor has in and to              Units of
limited liability company membership interests (the “Membership Interests”) in
[                                  ] (the “Company”), being One Hundred Percent
(100%) of all Units of limited liability company membership interests in the
Company.

 

Date:                             , 2010

 

 

ASSIGNOR:

 

Inland Real Estate Corporation, a Delaware corporation

 

By:

 

 

 

 

 

Name:

 

 

 

Its: President

 

ACCEPTANCE OF ASSIGNMENT OF MEMBERSHIP INTERESTS

 

FOR THE SAME CONSIDERATION, Assignee does hereby accept the foregoing assignment
of said                      Units of limited liability company membership
interests (the “Membership Interests”) in the Company, and hereby assumes and
agrees to perform and be bound by all of the covenants, conditions and
obligations of Assignor as a Member of said Company, in accordance with the
organizational documents of said Company and applicable law.

 

50

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This Assignment, and the acceptance hereof, shall be binding upon and shall
inure to the benefit of each of the parties hereto and their legal
representatives, heirs, successors, and assigns.

 

Date:                                     , 2010

 

 

ASSIGNEE:

 

INP RETAIL, L.P., a Delaware limited partnership

 

By:

 

 

 

Name: INP Retail Management Company, LLC

 

Its: General Partner

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Its: Manager

 

 

51

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CONSENT OF MANAGER OF

 

[                                      ]

 

Pursuant to [Section     /Article     ] of the Company’s Operating Agreement
dated as of                               , 200     (the “Operating Agreement”),
the undersigned, being the sole Manager of the Company, hereby approves the
admission of the Assignee as a Substitute Member in and of the Company, with all
rights, privileges and entitlements associated therewith, all as set forth in
the Operating Agreement.

 

Date:                                     , 20

 

 [                                                  ]

 

By:

 

 

 

 

 

Name:

 

 

 

Being the sole Manager of [                                ]

 

52

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EXHIBIT C

 

OPERATING AGREEMENT (PROPERTY ENTITY)

 

53

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List of Schedules

 

Schedule

 

Topic

 

 

 

1(o)

 

Property Knowledge Parties

 

 

 

5(b)

 

Litigation (Inland)

 

 

 

5(c)

 

Government Consents (Inland)

 

 

 

5(d)

 

Zoning and Permits

 

 

 

5(f)-1

 

Contract Defaults

 

 

 

5(f)-2

 

Additional Material Contracts

 

 

 

5(h)-1

 

Leases

 

 

 

5(h)-2

 

Rent Roll

 

 

 

5(h)-3

 

Violation of Major Lease Occasioned by Contribution Agreement

 

 

 

5(i)

 

Lender Approvals

 

 

 

5(j)

 

Casualty and Condemnation

 

 

 

5(k)

 

Grants, Subsidies, Rate Reductions, Etc.

 

 

 

5(l)

 

Tax Contests

 

 

 

5(m)

 

Indebtedness

 

 

 

6(b)

 

Litigation (PGGM PRE Fund)

 

 

 

6(c)

 

Government Consents (PGM PRE Fund)

 

 

 

7(a)

 

Loan Penalty Periods

 

 

 

9(a)-1

 

Non-Cash Tenant Deposits

 

 

 

9(a)-2

 

Insurance Premiums

 

54

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

 

EXHIBIT 8

FINANCIAL STATEMENTS

 

See attached

 

55

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

 

PGGM

 

ANNEX A ACCOUNTS, REPORTS and INFORMATION (last updated 09 December 2009)

 

A.  Annual Accounts

 

1                  The manager shall prepare audited annual accounts in respect
of each financial year, preferably ending on 31 December, in conformity with
International Financial Reporting Standards, US GAAP or other recognised
financial reporting standards. The manager shall send a copy of the audited
annual accounts including the auditor’s management letter to PGGM within
forty-five (45) days from the approval of the annual accounts by an independent
auditor. and not later than within one hundred twenty (120) days from the end of
the financial year to which the annual accounts relate.

 

2                  The audited annual report shall comprise:

 

·                  a balance sheet of the fund as at the end of the relevant
financial year;

·                  the fair value of the fund whereby investments, derivatives,
debt and deferred tax should be valued at fair value -preferred method of
valuation according to INREV- as at the end of the relevant financial year;

·                  a reconciliation of reported NAV to fair value of the fund;

·                  a profit and loss account of the fund during the relevant
financial year;

·                  a cash flow statement of the fund during the relevant
financial year;

·                  a statement of changes in equity of the fund during the
relevant financial year;

·                  relevant notes to the balance sheet and profit and loss
account;

·                  the accounting principles applied in the annual accounts;

·                  such further information as the manager deems to be
appropriate

 

3                  The annual accounts shall be audited by a recognised firm of
independent auditors.

 

4                  As a part of the audit procedures, the auditor shall be
instructed to review and report on the procedures applied by the manager in
preparing the annual accounts, review the calculation of the performance fee and
shall inspect the underlying documentation as deemed necessary.

 

5                  The annual accounts should include an explanation regarding
Fund’s ESG policy and annual results in this field. Specific for the
Environmental component we expect to get insight in the environmental metrics
(i) energy consumption (GWh), (ii) water consumption (K litres), (iii) waste
collected (tonnes), (iv) waste recycled (tonnes) and (v) C02 emissions (tonnes).
This information does not need to be audited.

 

56

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

 

B  Quarterly Management reports

 

6                  Within forty-five (45) days of the end of each calendar
quarter — for the avoidance of doubt the calendar quarters ending on 3 1 March,
30 June, 30 September and 31 December of each year —, the manager shall prepare
and send to PGGM a report including(10):

 

·                  a completed PGGM client statement (see Annex B client
statement);

·                  an un-audited profit and loss account and balance sheet of
the fund for the preceding calendar quarter;

·                  an overview of the investments of the fund at cost and at
fair value as at the end of the relevant financial year;

·                  Market outlook, strategy and property specific information;

·                  overview of transactions with affiliates and related parties,
material dead deal cost and organizational expenses;

·                  information on acquisitions and dispositions;

·                  information on the fund portfolio in relation to the
investment restrictions and limitations;

·                  information on debt product(s) used by manager;

·                  overview of material pending litigation and other material
contingent liabilities;

·                  commitments entered into by manager on behalf of the fund;

·                  information on changes in relevant (tax) legislation;

·                  Information on organizational and employee changes;

·                  Information on participants in the fund and their commitments

 

C     Others

 

7                  All stabilized investments of the fund shall be valued by an
independent expert -preferably RICS or MAI based- each year as from the final
closing date. The independent expert shall be appointed by the manager after
consulting the advisory committee.

 

8                  Not later than five (5) business days after each calendar
quarter, the manager shall prepare and send to PGGM a preliminary estimate of
the net asset value of the fund as at the end of such year

 

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

(10) Managers dealing with accounting years starting after 31 March (e.g. Japan)
or 30 June (e.g. Australia) can use the start of their accounting years as a
basis for interpretation of the guidelines

 

57

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

 

quarter, such estimates being based on the fair value of the investments and
debt held by the fund. This preliminary estimate should also demonstrate the
units held and percentage interest in the fund.

 

9                  Not later than ten (10) business days before each calendar
quarter, the manager shall prepare and send to PGGM an overview of expected
drawdowns and distributions for the following quarter.

 

10            The manager shall give PGGM access to all financial information,
valuations and other relevant information of the fund.

 

11            At the occasion of a drawdown, the manager shall provide PGGM ten
(10) business days before the date of the capital call with a drawdown notice,
including:

 

·                  wiring instructions;

·                  a breakdown of investor’s share of the call, amount,
units/shares and percentage of total interest;

·                  how much investor has funded to date, how much of investor’s
commitment is remaining and the amount of interest/carry due;

·                  a explanation for the use of capital;

 

12            At the occasion of a distribution, the manager shall provide P0GM
one (1) business days before the date of the distribution with a distribution
notice, including:

 

·                  a breakdown of the distribution in ordinary income, capital
gain return, capital repayment and unreturned capital;

·                  an overview of the amount, units / shares and percentage of
total interest.

 

All accounts, reports and information to be provided to PGGM shall be in the
Dutch or English language and sent to the contact person/investment manager of
PGGM, borealestate@pggm.nl and forealestate@pggm.nl.

 

58

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

 

Annex B - Client Statement

 

 

Fund

 

 

 

 

 

Fund name

 

 

 

 

 

Fund manager

 

 

 

 

 

Fund currency

 

 

 

 

 

Contact person (Name / Tel)

 

 

 

 

 

Start Fund / Closing PGGM PRE Fund / End Investment P. / Termination Date Fund

 

 

 

 

 

Portfolio Name

 

 

 

 

 

SI-number

 

 

 

 

 

Year

2010

 

 

 

 

* All information should be based on the current portfolio and quarterly reports
at the end of each quarter.

* All amounts should be stated in full and in local currency (e.g. correct is
10000, incorrect is 10k). If not applicable use 0 or leave empty.

* If possible please use proportionate consolidation for determining the
numbers.

* Please email this client statement to contact person / investment manager of
PGGM, FORealEstate@pggm.nl and BORealEstate@pggm.nl

 

 

 

Fund level

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Value

 

Q1 (jan-feb-mar)

 

Q2 (apr-may-jun)

 

Q3 (jul-aug-sep)

 

Q4 (oct-nov-dec)

1

 

Gross Asset Value of fund (incl pro rata share in joint ventures)

 

 

 

 

 

 

 

 

2

 

Net Asset Value of fund as reported by the manager

 

 

 

 

 

 

 

 

3

 

Capital invested

 

 

 

 

 

 

 

 

4

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

5

 

Total number of outstanding shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation from reported NAV to Fair Value (according to INREV)

 

Q1 (jan-feb-mar)

 

Q2 (apr-may-jun)

 

Q3 (jul-aug-sep)

 

Q4 (oct-nov-dec)

 

 

NAV (intrinsic value) of fund as per the financial statements (2)

 

—

 

—

 

—

 

—

I

 

Effect of exercise of options, convertibles and other equity interests

 

 

 

 

 

 

 

 

II

 

Effect of not yet distributed dividend recorded as a liability (not included in
equity)

 

 

 

 

 

 

 

 

 

 

Diluted NAV

 

—

 

—

 

—

 

—

a

 

Revaluation to fair value of investment properties

 

 

 

 

 

 

 

 

b

 

Revaluation to fair value of self-constructed or developed investment property

 

 

 

 

 

 

 

 

c

 

Revaluation to fair value of property intended for sale

 

 

 

 

 

 

 

 

d

 

Fair value of property that is leased to tenants under a financial lease

 

 

 

 

 

 

 

 

e

 

Transfer taxes and purchasers’ costs

 

 

 

 

 

 

 

 

f

 

Revaluation to fair value of fixed rate debt

 

 

 

 

 

 

 

 

g

 

Deferred tax

 

 

 

 

 

 

 

 

h

 

Set-up costs

 

 

 

 

 

 

 

 

i

 

Acquisition expenses

 

 

 

 

 

 

 

 

j

 

Contractual fees

 

 

 

 

 

 

 

 

k

 

Tax effect of the adjustments

 

 

 

 

 

 

 

 

l

 

Minority interest effects on the above adjustments

 

 

 

 

 

 

 

 

m

 

Revaluation to fair value of derivative financial instruments held for hedging

 

 

 

 

 

 

 

 

6

 

Fair value of fund according to PGGM reporting guidelines (INREV)

 

—

 

—

 

—

 

—

 

 

 

PGGM PRE Fund

 

 

 

 

 

 

 

 

 

 

 

Value & Ownership

 

Q1 (jan-feb-mar)

 

Q2 (apr-may-jun)

 

Q3 (jul-aug-sep)

 

Q4 (oct-nov-dec)

7

 

Name of PGGM PRE Fund’s share class

 

 

 

 

 

 

 

 

8

 

Interest of PGGM PRE Fund in fund (%)

 

 

 

 

 

 

 

 

9

 

Fair value of PGGM PRE Fund according to PGGM reporting guidelines (INREV)

 

 

 

 

 

 

 

 

10

 

Shareholders loans / deposits directly owned by PGGM PRE Fund

 

 

 

 

 

 

 

 

11

 

Number of shares owned by PGGM PRE Fund

 

 

 

 

 

 

 

 

12

 

Fair value of PGGM PRE Fund according to PGGM reporting guidelines per share

 

#DIV/0!

 

#DIV/0!

 

#DIV/0!

 

#DIV/0!

 

 

 

 

 

 

 

 

 

 

 

 

 

Payments during quarter

 

Q1 (jan-feb-mar)

 

Q2 (apr-may-jun)

 

Q3 (jul-aug-sep)

 

Q4 (oct-nov-dec)

13

 

Dividends distributed (gross)

 

 

 

 

 

 

 

 

14

 

Tax withheld on dividend distribution

 

 

 

 

 

 

 

 

15

 

Interest on shareholders loans / deposits directly owned by PGGM PRE Fund

 

 

 

 

 

 

 

 

16

 

Interest compensation received by PGGM PRE Fund

 

 

 

 

 

 

 

 

17

 

Repayment of capital / Redemptions (excluding interest compensation)

 

 

 

 

 

 

 

 

18

 

Number of shares issued to PGGM PRE Fund

 

 

 

 

 

 

 

 

 

59

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

 

 

 

Capital Contributions during quarter

 

Q1 (jan-feb-mar)

 

Q2 (apr-may-jun)

 

Q3 (jul-aug-sep)

 

Q4 (oct-nov-dec)

19

 

Total Capital Commitment PGGM PRE Fund (contract)

 

 

 

 

 

 

 

 

20

 

Capital Contributed by PGGM PRE Fund during Quarter

 

 

 

 

 

 

 

 

21

 

Interest compensation paid by PGGM PRE Fund

 

 

 

 

 

 

 

 

22

 

Remaining total capital commitment of PGGM PRE Fund

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fees to the manager and affiliates (paid and accrued)

 

Q1 (jan-feb-mar)

 

Q2 (apr-may-jun)

 

Q3 (jul-aug-sep)

 

Q4 (oct-nov-dec)

23

 

Fund management fee

 

 

 

 

 

 

 

 

24

 

Asset management fee

 

 

 

 

 

 

 

 

25

 

Performance fee

 

 

 

 

 

 

 

 

26

 

Property management fee

 

 

 

 

 

 

 

 

27

 

Acquisition and disposition fee

 

 

 

 

 

 

 

 

28

 

Development fee

 

 

 

 

 

 

 

 

29

 

Financing fee

 

 

 

 

 

 

 

 

30

 

Other fees

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fund level

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarterly result of fund (excluding depreciation)

 

Q1 (jan-feb-mar)

 

Q2 (apr-may-jun)

 

Q3 (jul-aug-sep)

 

Q4 (oct-nov-dec)

31

 

Net operating Income (NOI)

 

 

 

 

 

 

 

 

32

 

Other net income

 

 

 

 

 

 

 

 

33

 

Operational result

 

—

 

—

 

—

 

—

34

 

Net financing cost

 

 

 

 

 

 

 

 

35

 

Fund level expenses

 

 

 

 

 

 

 

 

36

 

Fund level fees

 

 

 

 

 

 

 

 

37

 

Capital gain/loss (Realised & Unrealised)

 

 

 

 

 

 

 

 

38

 

Tax

 

 

 

 

 

 

 

 

39

 

Total Net Result (including capital gain/loss)

 

—

 

—

 

—

 

—

 

 

 

Financing (on a partially consolidated basis at the Fund level)

 

Q1 (jan-feb-mar)

 

Q2 (apr-may-jun)

 

Q3 (jul-aug-sep)

 

Q4 (oct-nov-dec)

40

 

Nominal value of debt excluding shareholders loans

 

 

 

 

 

 

 

 

41

 

Fair value of debt excluding shareholders loans

 

 

 

 

 

 

 

 

42

 

Fair value of derivatives

 

 

 

 

 

 

 

 

43

 

Loan-to-Cost

 

 

 

 

 

 

 

 

44

 

Property level Loan-to-Value

 

#DIV/0!

 

#DIV/0!

 

#DIV/0!

 

#DIV/0!

45

 

Fund level Loan-to-Value

 

#DIV/0!

 

#DIV/0!

 

#DIV/0!

 

#DIV/0!

46

 

Weighted Average Cost of Debt excluding shareholders loans (%)

 

 

 

 

 

 

 

 

47

 

Market interest rate of debt excluding shareholders loans

 

 

 

 

 

 

 

 

48

 

Weighted Average Maturity of Debt excluding shareholders loans (years)

 

 

 

 

 

 

 

 

49

 

Total debt maturities in < 2 year

 

 

 

 

 

 

 

 

50

 

Interest Service Coverage ratio

 

#DIV/0!

 

#DIV/0!

 

#DIV/0!

 

#DIV/0!

51

 

Debt Service Coverage ratio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance

 

Q1 (jan-feb-mar)

 

Q2 (apr-may-jun)

 

Q3 (jul-aug-sep)

 

Q4 (oct-nov-dec)

52

 

IRR since inception gross of fees to investor

 

 

 

 

 

 

 

 

53

 

IRR since inception net to investor

 

 

 

 

 

 

 

 

54

 

Dividend (Distribution) yield

 

 

 

 

 

 

 

 

55

 

Equity Multiple (Gross of Fees)

 

 

 

 

 

 

 

 

56

 

Equity Multiple (Net of Fees)

 

 

 

 

 

 

 

 

57

 

Total return net to investor for the current quarter

 

0.0%

 

0.0%

 

0.0%

 

0.0%

58

 

Income return

 

 

 

 

 

 

 

 

59

 

Capital gain/loss assets (Realised + Unrealized)

 

 

 

 

 

 

 

 

60

 

Capital gain/loss Debt and Derivatives (Realised + Unrealized)

 

 

 

 

 

 

 

 

61

 

Total return for the current quarter (Net and Unlevered)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment activity on a cash basis

 

Q1 (jan-feb-mar)

 

Q2 (apr-may-jun)

 

Q3 (jul-aug-sep)

 

Q4 (oct-nov-dec)

62

 

Acquisitions

 

 

 

 

 

 

 

 

63

 

Dispositions

 

 

 

 

 

 

 

 

 

60

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

 

 

 

Portfolio information

 

Q1 (jan-feb-mar)

 

Q2 (apr-may-jun)

 

Q3 (jul-aug-sep)

 

Q4 (oct-nov-dec)

64

 

Total fair value of investment & Development portfolio

 

—

 

—

 

—

 

—

65

 

Fair value of Investment Portfolio

 

 

 

 

 

 

 

 

66

 

Net yield of investment Portfolio

 

#DIV/0!

 

#DIV/0!

 

#DIV/0!

 

#DIV/0!

67

 

Vacancy (based on floor space)

 

 

 

 

 

 

 

 

68

 

Vacancy (based on estimated rental value)

 

 

 

 

 

 

 

 

69

 

Lease expire < 2 years

 

 

 

 

 

 

 

 

70

 

Weighted average lease expiry

 

 

 

 

 

 

 

 

71

 

Fair value of Development Portfolio

 

 

 

 

 

 

 

 

72

 

Cost of Development Portfolio

 

 

 

 

 

 

 

 

73

 

Pre-leased % of development portfolio (based on estimated rental value)

 

 

 

 

 

 

 

 

74

 

Sectors (% of total value)

 

Total ≠ 100%

 

Total ≠ 100%

 

Total ≠ 100%

 

Total ≠ 100%

 

 

Residential

 

 

 

 

 

 

 

 

 

 

Retail

 

 

 

 

 

 

 

 

 

 

Office

 

 

 

 

 

 

 

 

 

 

Industrial

 

 

 

 

 

 

 

 

 

 

Hotels

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

75

 

Countries / Regions (% of total value)

 

Total ≠ 100%

 

Total ≠ 100%

 

Total ≠ 100%

 

Total ≠ 100%

 

 

Brasil

 

 

 

 

 

 

 

 

 

 

Canada

 

 

 

 

 

 

 

 

 

 

Mexico

 

 

 

 

 

 

 

 

 

 

USA Northeast

 

 

 

 

 

 

 

 

 

 

USA Mideast

 

 

 

 

 

 

 

 

 

 

USA Southeast

 

 

 

 

 

 

 

 

 

 

USA Southwest

 

 

 

 

 

 

 

 

 

 

USA East N Central

 

 

 

 

 

 

 

 

 

 

USA West N Central

 

 

 

 

 

 

 

 

 

 

USA Mountain

 

 

 

 

 

 

 

 

 

 

USA Pacific

 

 

 

 

 

 

 

 

 

Various remarks

 

61

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

 

No.

 

Description

 

Explanation

 

 

 

 

 

1

 

Gross Asset Value of fund (incl pro rata share in joint ventures)

 

The Gross asset value of a fund is the gross property value plus the value of
any further assets at market value as per the chosen valuation principles

 

 

 

 

 

2

 

Net Asset Value of fund as reported by the manager

 

The Net asset value of a fund is its GAV less all liabilities as per the chosen
valuation principles

 

 

 

 

 

3

 

Capital invested

 

Capital contributed in fund -/- returned to investor

 

 

 

 

 

4

 

Cash and cash equivalents

 

All highly liquid short-term investments purchased with a maturity of 90 days or
less are considered to be cash equivalents

 

 

 

 

 

5

 

Total number of outstanding shares

 

 

 

 

 

 

 

 

 

(a - m) Corrections should only be made if local GAAP is not in line with INREV
valuation principles

 

 

 

 

 

I

 

Effect of exercise of options, convertibles and other equity interests

 

For the determination of the INREV NAV any dilution following the exercise of
options, convertibles and other equity interest should be included in the
calculation

 

 

 

 

 

II

 

Effect of not yet distributed dividend recorded as a liability (not included in
equity)

 

Under certain circumstances not yet distributed dividends are recorded as a
liability. For the determination of the INREV NAV these not yet distributed
dividends should be included in the calculation

 

 

 

 

 

a

 

Revaluation to fair value of investment properties

 

If a real estate fund uses the option to account for investment properties under
the cost mode, the adjustment represents the impact on NAV of the revaluation of
the investment property to fair value. The effect of straight lining of lease
incentives, rent guarantees, insurance claims (for damages, lost rent, etc.)
should be taken into account when valuing the property at fair value to ensure
that any asset is not double counted in the NAV

 

 

 

 

 

b

 

Revaluation to fair value of self-constructed or developed investment property

 

If a real estate fund measures their self-constructed or developed investment
property at cost until the construction or development is complete, the
adjustment represents the impact on NAV of the step up or increase from cost at
completion to fair value. The fair value of forward commitments should also be
taken into account.

 

 

 

 

 

c

 

Revaluation to fair value of property intended for sale

 

Property under this category is generally measured at the lower of cost or net
realisable value in the financial statements. The adjustment represents the
impact on NAV of the revaluation of the property intended for sale, measured at
cost, to fair value

 

62

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

 

d

 

Fair value of property that is leased to tenants under a financial lease

 

Property that is leased to tenants under a finance lease is initially measured
at the net investment and subsequently based on a pattern reflecting the
constant rate of return. The adjustment represents the impact on NAV of the
revaluation of the finance leases to fair value

 

 

 

 

 

e

 

Transfer taxes and purchasers’ costs

 

The effect of a possible sale of shares of a property vehicle might be taken
into account when determining the deduction of transfer taxes and purchasers
costs (if this will lower the actual transfer tax and/or purchasers costs to be
paid upon sale by the seller). The adjustment represents the positive impact on
NAV of the possible reduction on the transfer taxes and purchasers costs for the
seller based on the expected sale via the sale of shares. Disclosure should be
given on how the fund manger expects to utilise this additional value based on
the current structure and market circumstances

 

 

 

 

 

f

 

Revaluation to fair value of fixed rate debt

 

Debt is generally initially recognised at fair value net of transaction costs
and subsequently measured at amortised cost using the effective interest method
in the financial statements. The adjustment represents the impact on NAV of the
measurement of all debt and related re-financing expenses to the fair value
after first time measurement as at balance sheet date

 

 

 

 

 

g

 

Deferred tax

 

Under GAAP deferred tax (assets and liabilities) can be measured at the nominal
statutory tax rate. The manner in which the fund expects to settle deferred tax
is generally not taken into consideration. The adjustment represents the impact
on NAV of the deferred tax for properties or derivative financial instruments
based on the expected manner of settlement i.e. when tax structures have been
applied to reduce tax on capital gains or allowances, this should be taken into
consideration. Where goodwill is included in the balance sheet as the result of
a deferred tax liability that is eliminated as a result of the above adjustment,
the goodwill related to this deferred tax should be excluded from the INREV NAV.
Since the tax structure of funds differs from fund to fund and no general market
practice is currently available, no recommendation on the calculation
methodology for this adjustment is included in this section.

 

 

 

 

 

h

 

Set-up costs

 

Under GAAP set-up costs can be charged immediately to income after the
start/inception of a fund. The adjustment represents the impact on NAV of the
capitalisation and amortisation of set-up costs over the first 5 years of the
term of the fund. If a fund manager wants to deviate from the amortisation
period to be more in line with the investment strategy of the fund, another
amortisation period could be taken into account

 

 

 

 

 

i

 

Acquisition expenses

 

Under the fair value model, acquisition expenses of investment property might be
partly charged to income as fair value changes at the first subsequent
measurement date after acquisition. This is when the fair value at the moment of
measurement is lower than the total amount of the purchase value of the property
and the acquisition expenses. The adjustment represents the impact on NAV of the
capitalisation and amortisation of acquisition expenses over the first 5 years
after acquisition of the property. If a fund manager wants to deviate from the
amortisation period to be more in line with the investment strategy of the fund,
another amortisation period could be taken into account

 

 

 

 

 

j

 

Contractual fees

 

A liability represents a present obligation. A fee payable at the end of the
life time of the fund or any other moment during the life time of the fund may
not meet the criteria for recognition of a provision or liability in accordance
with GAAP at the moment the accounts are prepared. Examples of such fees include
performance fees, disposal fees, liquidation fees, representing a present
obligation from contractual arrangements. For these contractual fees, the
adjustment represents the impact on NAV of the deferred liability for the
estimated contractual fee payable based on the current NAV of the fund if these
fees are not already recognised

 

 

 

 

 

k

 

Tax effect of the adjustments

 

This adjustment represents the tax impact on NAV of the above mentioned
adjustments if not already taken into account in the adjustment of deferred
taxes

 

 

 

 

 

l

 

Minority interest effects on the above adjustments

 

This adjustment represents the impact on NAV of the combined effect of the
recognition of minority interest on all the above adjustments (the INREV NAV is
net of minority interest)

 

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m

 

Revaluation to fair value of derivative financial instruments held for hedging

 

The adjustment represents the impact on NAV of the recognition of derivative
financial instruments measured at fair value

 

 

 

 

 

6

 

Fair value of fund according to PGGM reporting guidelines (INREV)

 

= 2 + sum(a:m)

 

 

 

 

 

7

 

Name of PGGM PRE Fund’s share class

 

 

 

 

 

 

 

8

 

Interest of PGGM PRE Fund in fund (%)

 

Percentage interest of PGGM PRE Fund in fund

 

 

 

 

 

9

 

Fair value of PGGM PRE Fund according to PGGM reporting guidelines (INREV)

 

= 6 * 8

 

 

 

 

 

10

 

Shareholders loans / deposits directly owned by PGGM PRE Fund

 

Nominal value of loan provided by PGGM PRE Fund

 

 

 

 

 

11

 

Number of shares owned by PGGM PRE Fund

 

 

 

 

 

 

 

12

 

Fair value of PGGM PRE Fund according to PGGM reporting guidelines per share

 

= 9 / 11

 

 

 

 

 

13

 

Dividends distributed (gross)

 

Dividends after deduction of potential management fee and before witholding tax

 

 

 

 

 

14

 

Tax withheld on dividend distribution

 

Tax witheld on dividend

 

 

 

 

 

15

 

Interest on shareholders loans / deposits directly owned by PGGM PRE Fund

 

 

 

 

 

 

 

16

 

Interest compensation received by PGGM PRE Fund

 

Interest compensation might arise when other shareholders close in the fund at a
later stage

 

 

 

 

 

17

 

Repayment of capital / Redemptions (excluding interest compensation)

 

All cash receivables excluding dividends, interest (16)

 

 

 

 

 

18

 

Number of shares issued to PGGM PRE Fund

 

Number of shares issued to PGGM PRE Fund as a result of stockdividend or stock
distributed as part of Dividend Reinvestment Plan (DRP)

 

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19

 

Total Capital Commitment PGGM PRE Fund (contract)

 

Commitment as mentioned in the subscription agreement

 

 

 

 

 

20

 

Capital Contributed by PGGM PRE Fund during Quarter

 

 

 

 

 

 

 

21

 

Interest compensation paid by PGGM PRE Fund

 

Interest compensation paid by PGGM PRE Fund during Quarter (if participated in a
follow-on closing)

 

 

 

 

 

22

 

Remaining total capital commitment of PGGM PRE Fund

 

Total capital commitment -/- all capital contributions to date + all repayments
of capital that can be reinvested

 

 

 

 

 

 

 

(23 - 30) Only include fees paid to the fundmanager, related parties and
affiliates

 

 

 

 

 

 

 

23

 

Fund management fee

 

A charge paid to a fund’s manager for their fund management services to the
fund.

 

 

 

 

 

24

 

Asset management fee

 

A charge paid to the fund’s manager for their services to manage the assets on
behalf of the fund

 

 

 

 

 

25

 

Performance fee

 

A performance fee is the fee payable out of the returns achieved by the fund to
the fund manager where the fee is calculated, either during the life of the fund
or at the termination of the fund, as a percentage of the fund’s performance
over a designated hurdle rate

 

 

 

 

 

26

 

Property management fee

 

A charge paid to a property manager for managing the operations of individual
assets within a fund

 

 

 

 

 

27

 

Acquisition and disposition fee

 

Acquisition and disposal fees are the fees that are charged to a fund on the
acquisition and disposal of assets

 

 

 

 

 

28

 

Development fee

 

Fee paid to a fund manager for its services in supervising/project managing the
development of a property. Fees may be a proportion of total development
cost/capital expenditure

 

 

 

 

 

29

 

Financing fee

 

Fee paid for arranging external financing of a fund. Commitment or facility fees
paid to lenders or finance brokers may be borne out of this amount

 

 

 

 

 

30

 

Other fees

 

Any fees not mentioned under previous fee categories

 

65

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31

 

Net operating Income (NOI)

 

Net operating income or NOI is the annual gross income of all investment
properties less operating expenses. Gross income includes both rental income and
income such as parking fees, laundry and vending receipts, etc (i.e. all income
associated with a property). Operating expenses are costs incurred during the
operation of a property such as repairs and maintenance, insurance, management
fees, utilities, supplies, property taxes, etc. Note the following are not
operating expenses: interest on and amortisation of financing arrangements,
capital expenditure, depreciation and income taxes.

 

 

 

 

 

32

 

Other net income

 

Other net income results from subtraction of related operating expenses from
revenu of development projects and non rental revenue

 

 

 

 

 

33

 

Operational result

 

= 31 + 32

 

 

 

 

 

34

 

Net financing cost

 

All costs related to debt (e.g. interest expenses, extension fees). Excluding
amortisation costs

 

 

 

 

 

35

 

Fund level expenses

 

Non operating expenses at fund level excluding fees

 

 

 

 

 

36

 

Fund level fees

 

Fees paid by the fund (e.g. asset management fee, financing fee). Property
management fees should be included in NOI

 

 

 

 

 

37

 

Capital gain/loss (Realised & Unrealised)

 

All realised and unrealised capital gains / losses on all fund assets and
liabilities

 

 

 

 

 

38

 

Tax

 

All taxes paid

 

 

 

 

 

39

 

Total Net Result (including capital gain/loss)

 

= sum (31:38)

 

 

 

 

 

40

 

Nominal value of debt excluding shareholders loans

 

 

 

 

 

 

 

41

 

Fair value of debt excluding shareholders loans

 

 

 

 

 

 

 

42

 

Fair value of derivatives

 

 

 

 

 

 

 

43

 

Loan-to-Cost

 

Loan to cost is the consolidated total external leverage at the fund level as a
percentage of the cost of the fund

 

 

 

 

 

44

 

Property level Loan-to-Value

 

= 40 / 64

 

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45

 

Fund level Loan-to-Value

 

= 40 / 1

 

 

 

 

 

46

 

Weighted Average Cost of Debt excluding shareholders loans (%)

 

The weighted average cost of debt is the interest rate on each external debt
instrument in the fund weighted by the size of such instruments

 

 

 

 

 

47

 

Market interest rate of debt excluding shareholders loans

 

The market interest rate for the current debt portfolio if refinanced today for
the weighted average remaining term of the current debt portfolio

 

 

 

 

 

48

 

Weighted Average Maturity of Debt excluding shareholders loans (years)

 

The weighted average maturity of debt is the maturity on each external debt
instrument in the fund weighted by the size of such instruments

 

 

 

 

 

49

 

Total debt maturities in < 2 year

 

Nominal value of debt maturing within 2 years

 

 

 

 

 

50

 

Interest Service Coverage ratio

 

=31 / 34

 

 

 

 

 

51

 

Debt Service Coverage ratio

 

= 31 / (34 + repayment of principal)

 

 

 

 

 

52

 

IRR since inception gross of fees to investor

 

IRR is the annual rate of return based on the present value of a capital
investment over a holding period expressed as a percentage of the investment.
Gross IRR is the absolute IRR of the property portfolio before any fund level
fees are deducted (Money weighted)

 

 

 

 

 

53

 

IRR since inception net to investor

 

Net IRR is the absolute leveraged IRR of the property portfolio after all fund
level fees are deducted (Money weighted)

 

 

 

 

 

54

 

Dividend (Distribution) yield

 

Dividend yield is the amount of income the fund distributes to investors as a
percentage of the current NAV

 

 

 

 

 

55

 

Equity Multiple (Gross of Fees)

 

The ratio of total value achieved to capital invested, without consideration of
the time that such capital has been invested

 

 

 

 

 

56

 

Equity Multiple (Net of Fees)

 

The ratio of total value achieved to capital invested, without consideration of
the time that such capital has been invested

 

 

 

 

 

57

 

Total return net to investor for the current quarter

 

=58+59+60

 

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58

 

Income return

 

= Income during quarter / weighted average NAV (time weighted per day)

 

 

 

 

 

59

 

Capital gain/loss assets (Realised + Unrealized)

 

= Realised and unrealised capital gain/loss on assets during quarter / weighted
average NAV (time weighted)

 

 

 

 

 

60

 

Capital gain/loss Debt and Derivatives (Realised + Unrealized)

 

= Realised and unrealised capital gain/loss on debt and derivatives during
quarter / weighted average NAV (time weighted)

 

 

 

 

 

61

 

Total return for the current quarter (Net and Unlevered)

 

Time weighted net and unlevered return for the quarter

 

 

 

 

 

62

 

Acquisitions

 

Total value of acquisitions including acquisition costs (cash based)

 

 

 

 

 

63

 

Dispositions

 

Total value of dispositions including disposition costs or net sales proceeds.
(Cash based)

 

 

 

 

 

64

 

Total fair value of Investment & Development portfolio

 

=65+71

 

 

 

 

 

65

 

Fair value of Investment Portfolio

 

Fair value of investment properties and properties intended for sale (properties
that are stabilised and in lease-up)

 

 

 

 

 

66

 

Net yield of investment Portfolio

 

=31 times four/65

 

 

 

 

 

67

 

Vacancy (based on floor space)

 

The vacancy rate is a measure of the level of vacant ‘space’, which is
calculated, based on floor space.

 

 

 

 

 

68

 

Vacancy (based on estimated rental value)

 

= theoretical rental income of vacant space / (contractual rental income of
occupied space + theoretical rental income of vacant space)

 

 

 

 

 

69

 

Lease expire < 2 years

 

=Annual rent amount of leases that expire within 2 years divided by annual rent
amount of all leases

 

 

 

 

 

70

 

Weighted average lease expiry

 

Weighted average duration of lease contracts

 

 

 

 

 

71

 

Fair value of Development Portfolio

 

Fair value of self constructed and developed investment properties. Properties
should be allocated to investment portfolio upon completion

 

68

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72

 

Cost of Development Portfolio

 

All costs paid in relation to all assets under development

 

 

 

 

 

73

 

Pre-leased % of development portfolio (based on estimated rental value)

 

=contractual rental income of pre-leased space / theoretical rental income of
development portfolio

 

 

 

 

 

74

 

Sectors (% of total value)

 

Distribution of Investment and Development portfolio over real estate sectors

 

 

 

 

 

75

 

Countries / Regions (% of total value)

 

Distribution of Investment and Development portfolio over Countries / Regions

 

69

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EXHIBIT 10-A

MAJOR DECISIONS

 

For purposes of this Agreement, the term “Major Decisions” means each of the
following actions or decisions proposed to be taken by the General Partner or
the Partnership, regardless of whether the same is proposed by the General
Partner or by any Partner, except to the extent such items have previously been
approved by the Partners or in the annual Business Plan to the extent applicable
to the Partnership, including in any annual operating budgets or capital
budgets.

 

1.             Any decision regarding the manner in which the Partnership’s
“Common Units” (as defined in the applicable REIT Agreement) in any REIT Entity
will be voted in connection with a vote required by the REIT Entity’s REIT
Agreement, it being understood and agreed that all of the Partnership’s “Common
Units” in any REIT Entity will be voted in the same manner.

 

2.             Any Financing or the borrowing of any money or incurring of any
indebtedness (other than trade accounts payables or other indebtedness incurred
in the ordinary course of business of less than $100,000 in the aggregate) in
any twelve month period, or any loan modifications;

 

3.             Issue any additional interests in the Partnership or other equity
securities or equity-like interests in the Partnership or its revenues or
profits;

 

4.             The admission of any additional Partners;

 

5.             Sell, transfer, pledge, mortgage, encumber, convey, or otherwise
dispose of, or grant options, warrants, or other rights with respect to, any
interest in any REIT Entity or any other material assets of the Partnership;

 

6.             Approval of the Budgets (including any operating budget or
capital budget) or any annual Business Plan to the extent applicable to the
Partnership  and/or the modification of any such Budgets or annual Business Plan
resulting in a change to any item of expense or revenue in excess of ten percent
(10%) in the aggregate;

 

7.             Establish any Reserves in excess of $100,000;

 

8.             Enter into any agreement with an Affiliate of the General Partner
or any Partner except as otherwise specifically authorized by this Agreement or
the Budgets to the extent applicable to the Partnership;

 

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9.             Approval of the independent certified accountants retained to
prepare the audited financial statements for the Partnership;

 

10.           Take any action that would subject any Partner to liability for
the obligations of the Partnership in any jurisdiction;

 

11.           Confess a judgment against the Partnership;

 

12.           Possess property, or assign its rights in specific property, for
other than a purpose of the Partnership;

 

13.           Take any action in contravention of this Agreement or the Act;

 

14.           File a voluntary petition of bankruptcy, make an assignment for
the benefit of creditors, admit in writing the inability to pay debts as they
mature, or otherwise invoke general laws for the protection for debtors;

 

15.           The restructuring, renegotiation, work-out or settlement of any of
the Partnership’s rights and obligations under any lease, agreement or loan
documents whose execution constituted a Major Decision, unless otherwise
provided in this Agreement;

 

16.           The redemption, purchase or other acquisition by the Partnership
of all or any portion of any Interest;

 

17.           The taking of any action by the Partnership that would constitute
a deviation from the business purpose of the Partnership described in ARTICLE 4;

 

18.           The institution or settlement of any material legal proceedings in
the name of or involving the Partnership, the adjustment, settlement or
compromise of any material claim, obligation, debt, or demand by or against the
Partnership or any material legal proceedings by or against the Partnership,
specifically excluding (x) material litigation instituted by or on behalf of the
Partnership against a tenant of an Owned Property, and (z) the confession of any
material judgment against the Partnership or any property of the Partnership,
except for those matters which are tendered for coverage under an insurance
policy obtained by the Partnership, provided, however, that, with respect to any
of the foregoing of a material nature, including, without limitation, the
institution or defense of any material legal proceeding on behalf of the
Partnership or its property, the General Partner shall use commercially
reasonable efforts to advise the Partners of all material developments and shall
advise all Partners of the status of such matter at the request of the Partners;

 

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19.           Dissolve and wind-up the affairs of the Partnership except as
otherwise provided in this Agreement or as required by the Act;

 

20.           Take any action to modify, waive, amend or otherwise change the
format or frequency of the financial statements and other reports required to be
delivered hereunder and under the Property Management Agreement, to materially
modify or waive the insurance requirements or any requirements regarding cash
management contained in the Property Management Agreement, or to otherwise
materially modify the Property Management Agreement or Leasing Agreement;

 

21.           Enter into any interest rate swap, cap or similar agreement;

 

22.           Entering into any merger, consolidation or recapitalization;

 

23.           Doing any act in contravention of this Agreement or which would
make it impossible to carry on the ordinary business of the Partnership;

 

24.           Making loans of the Partnership’s funds or assets to any person or
entity or guaranteeing the obligations of any person or entity;

 

25.           Expending or committing Partnership funds or property for any
purpose except as expressly provided herein or approved in the Budgets to the
extent applicable to the Partnership;

 

26.           Making elections for income tax purposes; and

 

28.           Approval of each appraiser and auditor that may be engaged for the
Partnership.

 

72

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EXHIBIT 10-B

 

FORM OF

 

PROPERTY MANAGEMENT AGREEMENT

 

73

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

 

FORM OF

 

PROPERTY MANAGEMENT AGREEMENT

 

IN CONSIDERATION of the mutual covenants and agreements herein contained,
                                                        , L.L.C., a
                       limited liability company (“OWNER”) and Inland TRS
Property Management, Inc., an Illinois corporation (“MANAGER”), agree as
follows:

 

1.             OWNER hereby employs the MANAGER exclusively to rent, lease,
operate and manage the property commonly known as     shopping center
name                               located at     shopping center
address                        ,    City    ,     State   , and legally
described on Exhibit “A” attached hereto and made a part hereof (the
“Premises”), upon the terms and conditions hereinafter set forth, for a term
beginning on   Purchase closing date  , and ending on December 31, same year and
thereafter for successive three year renewal periods, commencing on January 1,
  calendar year following purchase closing date  , continuing until the Premises
is sold.  In addition, and notwithstanding the foregoing, OWNER may terminate
this Agreement at any time upon delivery of written notice to MANAGER not less
than thirty (30) days prior to the effective date of termination, in the event
of (and only in the event of) a showing by OWNER of willful misconduct, gross
negligence, fraud or deliberate malfeasance by MANAGER in the performance of
MANAGER’S duties hereunder (“Cause”).  In addition, the general partner of INP
Retail, L.P. may terminate this Agreement for any reason upon thirty (30) days
prior written

 

74

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

 

notice to Manager.  In the event this Agreement is terminated for any reason
prior to the expiration of its original term or any renewal term, the OWNER
shall indemnify, protect, defend, save and hold the MANAGER and all of its
shareholders, officers, directors, employees, managers, successors and permitted
assigns (collectively, “Manager Indemnified Parties”) harmless from and against
any and all claims, causes of action, demands, suits, proceedings, loss,
judgments, damage, awards, liens, fines, costs, attorney’s fees and expenses, of
every kind and nature whatsoever (collectively, “Losses”), which may be imposed
on or incurred by the MANAGER by reason of the willful misconduct, gross
negligence and/or unlawful acts (such unlawfulness having been adjudicated by a
court of proper jurisdiction) of OWNER.

 

2.             THE MANAGER AGREES:

 

2.1           To accept the management of the Premises, to the extent, for the
period, and upon the terms herein provided and agrees to furnish the services of
its organization for the rental, leasing, operation and management of the
Premises, and, without limiting the generality of the foregoing, the MANAGER
agrees to be responsible for those specific duties and functions set forth in
Section 3 hereof.  MANAGER shall at all times manage the Premises diligently and
in accordance with the reasonable criteria established from time to time by
Owner, in each case using the same standard of care, devotion of time, diligence
and prudence used by MANAGER in the conduct of business for its own and its
affiliates account.  The management services to be performed by MANAGER under
this Agreement shall be of a scope and quality equivalent to or

 

75

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exceeding the performance of professional managers of similar commercial
properties of comparable class and size in the greater metropolitan area in
which the Premises is located.  MANAGER agrees to operate and maintain the
Premises as a high quality, first-class property in an efficient, economical and
business-like manner consistent with the goal of maximizing both the value of
the Premises and Owner’s profits from the Premises.  Manager shall, during the
term and subject to any limitations imposed by the approved budget, perform
Owner’s obligations with respect to the Premises, use its commercially
reasonable efforts to maintain the highest occupancy at the highest rents for
each space comprising the Premises, and agrees that it shall in good faith in
accordance with generally accepted management standards in the shopping center
industry consistent with other properties managed by the MANAGER, perform its
obligations and duties hereunder. MANAGER shall make available to OWNER the full
benefit of the judgment, experience and advice of the officers and employees of
MANAGER.  MANAGER shall perform such other services as may be reasonably
requested by OWNER that are consistent with the standard of performance
discussed in this Section 2.1 in managing, operating, leasing, supervising and
maintaining the Premises.

 

2.2           To render monthly reports for the Premises to the OWNER, to the
attention of the individual and address as directed by the OWNER from time to
time, and to remit to the OWNER the excess of Gross Income (as defined in
Section 3.3 hereof) over expenses paid per Section 3.4 hereof (“Net Proceeds”)
for each month on or before the 15th day of the following month.  MANAGER will
remit the Net Proceeds to the OWNER at the address as stated in

 

76

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Section 6.1 hereof.  The reports to be submitted shall consist of the MANAGER’S
Commercial Income Report and Budget Variance Report, (samples of which are
attached as “Exhibit B”) and such other monthly, quarterly and annual reports as
are customary in commercial property management relationships and as reasonably
requested by OWNER in writing from time to time.

 

2.3           In case the expenses paid per Section 3.4 hereof shall be in
excess of the Gross Income for any monthly period, MANAGER shall notify OWNER
of  same and OWNER agrees to pay such excess immediately upon request from the
MANAGER, but nothing herein contained shall obligate the MANAGER to advance its
own funds on behalf of the OWNER.  All advances by MANAGER on behalf of OWNER
shall be paid to MANAGER by OWNER within ten (10) days after request.

 

2.4           To prepare and submit same to the OWNER for approval proposed
detailed annualized capital and operating budgets for the Premises.  Such
budgets shall be for planning and informational purposes only, and the MANAGER
shall have no liability to the OWNER for any failure to meet any such budget
except as a result of the willful misconduct, gross negligence and/or unlawful
acts of the MANAGER.  However, MANAGER will use its commercially reasonable
efforts to operate the Premises within the approved budget.  The parties
acknowledge that the first such budget has been prepared and approved for the
year commencing   Purchase closing date and ending on December 31, calendar year
in which Purchase closing date takes place.  Notwithstanding the period covered
by the first budget, all subsequent annual budgets

 

77

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shall cover the period from January 1st of each year through December 31st of
such year.  The proposed annual budget for each calendar year shall be submitted
by MANAGER to the OWNER by November 1st of the year preceding the year for which
it applies, together with sufficient backup, in reasonable detail, for projected
income, costs and expenses set forth therein.  OWNER shall notify MANAGER no
later than November 10th as to whether OWNER has approved the proposed annual
budget or not.  If the OWNER disapproves the proposed budget, the OWNER shall
notify the MANAGER of what, specifically, OWNER disapproves of, and the OWNER
and MANAGER shall make the necessary amendments to the annual budget.  During
the time OWNER and MANAGER are preparing these amendments, MANAGER will continue
to operate the Premises according to the last approved budget.  The OWNER’S
approval of the annual budget shall constitute approval for the MANAGER to
expend sums for all budgeted expenditures, without the necessity to obtain
additional approval of the OWNER under any other expenditure limitations as set
forth elsewhere in this Agreement.

 

2.5           Subject to the limitations of this Agreement, to comply with and
perform all of Owner’s obligations:

 

(i) as landlord under all present and future leases, subleases, licenses or
operating agreements or concessionaire agreements affecting all or any portion
of the Premises (collectively, the “Leases”);

 

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(ii) as a party to, or subject to, any and all present and future easements,
restrictions, covenants, conditions, mortgages, and agreements affecting the
Premises (collectively, the “Basic Documents”); and

 

(iii) as a party to any and all trade and service contracts affecting the
Premises.

 

2.6           To require compliance with the covenants and obligations of:

 

(i) tenants under each and all of the Leases;

 

(ii)other parties to, or subject to, the Basic Documents;

 

(iii) trade and service providers under contracts affecting the Premises.

 

3.             THE OWNER AGREES:

 

And does hereby give the MANAGER the following exclusive authority and powers
(all of which shall be exercised in the name of MANAGER, as MANAGER for the
OWNER) and the OWNER agrees to assume all expenses in connection therewith,
provided that all such expenses shall be in accordance with the approved budget:

 

3.1           To advertise the Premises or any part thereof and to display signs
thereon, as permitted by law; and to rent the same; to pay all expenses of
leasing the Premises, including but not limited to, newspaper and other
advertising, signage, banners, brochures, referral commissions, leasing
commissions, finder’s fees and salaries, bonuses and other compensation of

 

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leasing personnel responsible for the leasing of the Premises; to cause
references of prospective tenants to be investigated, it being understood and
agreed by the parties hereto that the MANAGER does not guarantee the credit
worthiness or collectibility of accounts receivable from tenants, users or
lessees; and to negotiate new leases and modifications, renewals and
cancellations of existing leases which shall be subject to the MANAGER obtaining
OWNER’S approval.  The MANAGER may collect from tenants all or any of the
following:  a late rent administrative charge, a non-negotiable check charge,
credit report fee, a subleasing administrative charge and/or broker’s commission
and need not account for such charges and/or commission to the OWNER; to sign
and serve in the name of the OWNER of the Premises such notices as are deemed
necessary by the MANAGER; with OWNER’S authorization to institute and prosecute
actions to evict tenants and to recover possession of the Premises or portions
thereof; with the OWNER’S authorization, to sue for in the name of the OWNER of
the Premises and recover rent and other sums due and to terminate tenancies;
and, with the OWNER’S authorization, to settle, compromise, and release such
actions or suits, or reinstate such tenancies.  All expenses of litigation
including, but not limited to, outside attorneys’ fees (as opposed to those
performed by the Manager or its affiliates), filing fees, and court costs which
MANAGER shall incur in connection with the collecting of rent and other sums, or
to recover possession of the Premises or any portion thereof shall be deemed to
be an operational expense of the Premises.  MANAGER and OWNER shall concur on
the selection of the outside attorney

 

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to handle such litigation.  The institution or settlement of any material
litigation relating to the )Premises shall be subject to the MANAGER’S obtaining
OWNER’S prior approval.

 

3.2           To hire, supervise, discharge, and pay all labor required for the
operation and maintenance of the Premises including but not limited to on site
personnel, managers, assistant managers, leasing consultants, engineers,
janitors, maintenance supervisors and other employees required for the operation
and maintenance of the Premises, including personnel spending a portion of their
working hours (to be charged on a pro rata basis) at the Premises (all of whom
shall be deemed employees of the Premises, not of the MANAGER).  All expenses of
such employment shall be deemed operational expenses of the Premises.  To make
or cause to be made all ordinary repairs and replacements necessary to preserve
the Premises in its present condition and for the operating efficiency thereof
and all alterations required to comply with lease requirements, and to do
decorating on the Premises; provided that entering into or a material
modification of an agreement with, and the appointment of, any general
contractor for improvements to the Premises shall be subject to MANAGER’S
obtaining the prior approval of OWNER; to negotiate and enter into, as MANAGER
of the OWNER of the Premises, contracts for all items on budgets that have been
approved by OWNER, any emergency services or repairs for items not exceeding
$5,000.00 without OWNER approval if feasible (if not feasible, use good faith
judgment in taking emergency action), appropriate service agreements and labor
agreements for normal operation of the Premises, which have terms not to exceed
three (3) years, and agreements for all budgeted maintenance, minor alterations,
and utility services, including,

 

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but not limited to, electricity, gas, fuel, water, telephone, window washing,
scavenger service, landscaping, snow removal, pest  exterminating, decorating
and legal services in connection with the leases and service agreements relating
to the Premises, and other services or such of them as the MANAGER may consider
appropriate; and to purchase supplies and pay all bills.  MANAGER shall use its
best efforts to obtain the foregoing services and utilities for the Premises
from qualified suppliers and vendors at the most economical costs and terms
available to MANAGER.  The OWNER hereby appoints MANAGER as OWNER’S authorized
MANAGER for the purpose of executing, as managing MANAGER for said OWNER, all
such contracts.  In addition, the OWNER agrees to specifically assume in writing
all obligations under all such contracts so entered into by the MANAGER, on
behalf of the OWNER of the Premises, upon the termination of this Agreement and
the OWNER shall indemnify, protect, save, defend and hold the MANAGER
Indemnified Parties harmless from and against any and all claims, causes of
action, demands, suits, proceedings, loss, judgments, damage, awards, liens,
fines, costs, attorney’s fees and expenses, of every kind and nature whatsoever,
resulting from, arising out of or in any way related to such contracts and which
relate to or concern matters occurring after termination of this Agreement, but
excluding matters arising out of MANAGER’S willful misconduct, gross negligence
and/or unlawful acts.

 

3.3           MANAGER shall secure the approval of, and execution of appropriate
contracts by, the OWNER for any non-budgeted and non-emergency/contingency
capital items, alterations or other expenditures in excess of (i) $25,000.00 for
any one item, or (ii) if any such item would

 

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cause the aggregate cost of all capital items or alterations in any one-year
period (as defined by the Owner) to exceed the greater of (a) $50,000 or (b) 10%
of any budgeted item; securing for each item at least three (3) written bids, if
practicable, or providing evidence satisfactory to OWNER that the contract
amount is lower than industry standard pricing, from responsible contractors. 
Subject to obtaining prior approval from OWNER, MANAGER from time to time during
the term hereof, may contract with and make purchases from subsidiaries and
Affiliates of the MANAGER.  The MANAGER may at any time and from time to time
request and receive the prior written authorization of the OWNER of the Premises
of any one or more purchases or other expenditures, notwithstanding that the
MANAGER may otherwise be authorized hereunder to make such purchase or
expenditures.

 

3.4           To collect rents and/or assessments and other items, including but
not limited to tenant payments for real estate taxes, property liability and
other insurance, damages and repairs, common area maintenance, tax reduction
fees and all other tenant reimbursements, administrative charges, proceeds of
rental interruption insurance, parking fees, income from coin operated machines
and other miscellaneous income, due or to become due (all such items being
referred to herein as “Gross Income”) and give receipts therefor and to deposit
all such Gross Income collected hereunder in the MANAGER’S custodial account
which the MANAGER will open and maintain, in a state or national bank of the
MANAGER’S choice and whose deposits are insured by the Federal Deposit Insurance
Corporation, exclusively for the Premises and any other properties owned by
OWNER (or any entity that is owned or controlled by the general

 

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partner of the OWNER) and managed by MANAGER.  OWNER agrees that MANAGER shall
be authorized to maintain a reasonable minimum balance (to be determined jointly
from time to time) in such account.  MANAGER may endorse any and all checks
received in connection with the operation of the Premises and drawn to the order
of the OWNER and the OWNER shall, upon request, furnish the MANAGER’S depository
with an appropriate authorization for the MANAGER to make such endorsement.

 

3.5           To pay all expenses of the Premises from the Gross Income
collected in accordance with 3.4 above, from the MANAGER’S custodial account. 
It is understood that the Gross Income will be used first to pay the
compensation to the MANAGER as contained in Paragraph 5 below, then operational
expenses and then any mortgage indebtedness, including real estate tax and
insurance impounds, but only as directed by the OWNER in writing and only if
sufficient Gross Income is available for such  payments.

 

3.6           Nothing in this Agreement shall be interpreted in such a manner as
to obligate the MANAGER to pay from Gross Income, any expenses incurred by OWNER
prior to the commencement of this Agreement, except to the extent the OWNER
advances additional funds to pay such expenses.

 

3.7           To collect and handle tenants’ security deposits, including the
right to apply such security deposits to unpaid rent, and to comply, on behalf
of the OWNER of the Premises, with applicable state or local laws concerning
security deposits and interest thereon, if any.

 

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3.8           The MANAGER shall not be required to advance any monies for the
care or management of the Premises, and the OWNER agrees to advance all monies
necessary therefor.  If the MANAGER shall elect to advance any money in
connection with the Premises, the OWNER agrees to reimburse the MANAGER
forthwith and hereby authorizes the MANAGER to deduct such advances from any
monies due the OWNER.

 

3.9           In connection with any insured losses or damages, to handle all
steps necessary regarding any such claim; provided that the MANAGER will not
make any adjustments or settlements in excess of $25,000.00 without the OWNER’S
prior written consent.

 

3.10         Notwithstanding anything to the contrary contained in this
Agreement, OWNER acknowledges and agrees that any or all of the duties of
MANAGER as contained herein may be delegated by MANAGER and performed by a
person or entity (“Submanager”) with whom MANAGER contracts for the purpose of
performing such duties.  OWNER specifically grants MANAGER the authority to
enter into such a contract with a Submanager; provided that OWNER shall have no
liability or responsibility to any such Submanager for the payment of the
Submanager’s fee or for reimbursement to the Submanager of its expenses or to
indemnify the Submanager in any manner for any matter, none of which shall be
treated as expenses of the Premises; and provided further that MANAGER shall
require such Submanager to agree, in the written agreement setting forth the
duties and obligations of such Submanager, to indemnify the OWNER for all loss,
damage or claims incurred by OWNER as a result of the willful

 

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misconduct, gross negligence and/or unlawful acts of the Submanager.  This
Agreement and all rights hereunder shall not be assigned by either party hereto.

 

4.             THE OWNER FURTHER AGREES:

 

4.1           To indemnify, defend, protect, save and hold the MANAGER
Indemnified Parties harmless from any and all claims, causes of action, demands,
suits, proceedings, loss, judgments, damage, awards, liens, fines, costs,
attorney’s fees and expenses, of every kind and nature whatsoever (collectively,
“Losses”) in connection with or in any way related to the Premises and from
liability for damage to the Premises and injuries to or death of any person
whomsoever, and damage to property; provided, however,  that such
indemnification shall not extend to any such Losses arising out of  the willful
misconduct, gross negligence and/or unlawful acts (such unlawfulness having been
adjudicated by a court of proper jurisdiction) of MANAGER or any  of the other
Indemnified Parties.  OWNER agrees to either procure and carry at its own
expense, or require the MANAGER to procure at Owner’s expense, Public Liability
Insurance, Fire and Extended Coverage Insurance, Burglary and Theft Insurance,
Rental Interruption Insurance, and such other insurance as OWNER deems
appropriate including flood, terrorism, earthquake, wind and boiler, naming the
OWNER and the MANAGER, and such other parties as OWNER may reasonable require,
as insureds and adequate to protect their interests and in form, substance, and
amounts reasonably satisfactory to the OWNER, and to furnish to the MANAGER
certificates and policies evidencing the existence of such insurance.  The
premiums for all such insurance

 

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maintained by the OWNER shall be paid by either the OWNER directly or, provided
sufficient Gross Income is available, by the MANAGER from such Gross Income. 
MANAGER acknowledges OWNER may include the Premises under its existing umbrella
insurance coverage.  Unless the OWNER shall provide such insurance and furnish
such certificate and policy within ten (l0) days from the date of this
Agreement, the MANAGER may, in its sole discretion, but shall not be obligated
to, place said insurance and charge the cost thereof to the account of the
OWNER.  All such insurance policies shall provide that the MANAGER and OWNER
shall receive thirty (30) days’ written notice prior to cancellation of the
policy.  MANAGER shall not be liable for any error of judgment or for any
mistake of fact or law, or for any thing which it may do or refrain from doing,
except in cases of willful misconduct, gross negligence and/or unlawful acts
(such unlawfulness having been adjudicated by a court of proper jurisdiction).

 

4.2           OWNER hereby warrants and represents to MANAGER that to the best
of OWNER’S knowledge, neither the Premises, nor any part thereof, has 
previously been or is presently being used to treat, deposit, store, dispose of
or place any hazardous substance, that may subject MANAGER to liability or
claims under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (42 U.S.C.A. Section 9607) or any constitutional
provision, statute, ordinance, law, or regulation of any governmental body or of
any order or ruling of any public authority or official thereof, having or
claiming to have jurisdiction thereover.  Furthermore, OWNER agrees to
indemnify, protect, defend, save and

 

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hold the MANAGER Indemnified Parties harmless from any and all claims, causes of
action, demands, suits, proceedings, loss, judgments, damage, awards, liens,
fines, costs, attorney’s fees and expenses, of every kind and nature whatsoever,
involving, concerning or in any way related to any past, current or future
allegations regarding treatment, depositing, storage, disposal or placement by
any party other than MANAGER of hazardous substances on the Premises.

 

4.3           To give adequate advance written notice to the MANAGER if the
OWNER desires that the MANAGER make payment, out of Gross Income, to the extent
funds are available after the payment of the MANAGER’S compensation as contained
in Paragraph 5 and all operational expenses, of mortgage indebtedness, general
taxes, special assessments, or fire, boiler or any other insurance premiums.  In
no event shall the MANAGER be required to advance its own money in payment of
any such indebtedness, taxes, assessments or premiums.

 

5.             THE OWNER AGREES TO PAY THE MANAGER, AS A MONTHLY MANAGEMENT FEE
HEREUNDER, an amount no greater than
                                                
                                                           (“Management Fee”),
which shall be deducted monthly by the MANAGER and retained by the MANAGER from
Gross Income prior to payment to OWNER of Net Proceeds.  Such Management Fee
shall be compensation for those services specified herein.  Any services beyond
those specified herein, such as sales brokerage, loan origination and servicing,
shall be performed by MANAGER and compensated by OWNER only if the parties agree
on the scope of such work and provided that the compensation to be paid

 

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therefore will not exceed ninety percent (90%) of that which would be paid to
unrelated parties providing such services and provided further that all such
compensation must be approved by a majority of the independent directors of
OWNER.  OWNER acknowledges and agrees that MANAGER may pay or assign all or any
portion of its Management Fee to a Submanager as described in section
Section 3.9 hereof.  Manager will perform all administration, accounting,
property related in-house tax and legal activities, risk management services,
property tax reduction, and construction management as an included service at no
additional cost to OWNER.  Costs of third party providers shall be an OWNER
cost.

 

5.1           MANAGER shall retain all administrative charges actually collected
from tenants in connection with annual common area maintenance reconciliations
and tenant chargebacks as same relates to the Management Fee, provided MANAGER
shall in no event receive consideration in excess of the Management Fee for
services provided under this Agreement.

 

6.             IT IS MUTUALLY AGREED THAT:

 

6.l            OWNER shall designate one (1) person to serve as OWNER’S
Representative in all dealings with MANAGER hereunder.  Whenever the
notification and reporting to OWNER or the approval, consent or other action of
OWNER is called for hereunder, any such notification and reporting if sent to or
specified in writing to the OWNER’S Representative, and any such approval,
consent or action if executed by OWNER’S Representative, shall be binding on
OWNER.  The OWNER’S Representative shall be:

 

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Name

 

Address

 

 

 

Mark Zalatoris

 

2901 Butterfield Road

 

 

Oak Brook, Illinois 60523

 

The OWNER’S Representative may be changed at the discretion of the OWNER, at any
time and from time to time, and shall be effective upon MANAGER’S receipt of
written notice of the new OWNER’S Representative.

 

6.2           The OWNER expressly withholds from the MANAGER any power or
authority to make any structural changes in any building or to make any other
major alterations or additions in or to any such building or equipment therein,
or to incur any expense chargeable to the OWNER, other than expenses related to
exercising the express powers above vested in the MANAGER that are in accordance
with the approved budget, without the prior written direction of the OWNER’S
Representative, except such emergency repairs  as may be required to ensure the
safety of persons or property or which are immediately necessary for the
preservation and safety of the Premises or the safety of the tenants and
occupants thereof or are required to avoid the suspension of any necessary
service to the Premises.  The person identified above as the OWNER’S
Representative (and any designated successor or successors to such OWNER’S
Representative) shall be the OWNER’S exclusive representative for all purposes
hereof, and the MANAGER shall have the absolute right to rely upon all
decisions, approvals and directions of

 

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such person.  Such representative shall have the right to designate a successor
representative by written notice to the MANAGER.

 

6.3           The MANAGER shall be responsible for notifying OWNER in the event
it receives notice that any building on the Premises or any equipment therein
does not comply with the requirements of any statute, ordinance, law or
regulation of any governmental body or of any public authority or official
thereof having or claiming to have jurisdiction thereover.  MANAGER shall
promptly forward to the OWNER any complaints, warnings, notices or summonses
received by it relating to such matters.  The OWNER represents that to the best
of its knowledge the Premises and such equipment comply with all such
requirements and authorizes the MANAGER to disclose the OWNER of the Premises to
any such officials and agrees to indemnify, protect, defend, save and hold the
MANAGER and the other Indemnified Parties harmless of and from any and all
Losses which may be imposed on them or any of them by reason of the failure of
OWNER to correct any present or future violation or alleged violation of any and
all present or future laws, ordinances, statutes, or regulations of any public
authority or official thereof, having or claiming to have jurisdiction
thereover, of which it has actual notice.

 

6.4           In the event it is alleged or charged that any building on the
Premises or any equipment therein or any act or failure to act by the OWNER with
respect to the Premises or the sale, rental, or other disposition thereof fails
to comply with, or is in violation of, any of the requirements of any
constitutional provision, statute, ordinance, law, or regulation of any

 

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governmental body or any order or ruling of any public authority or official
thereof having or claiming to have jurisdiction thereover, and the MANAGER, in
its sole and absolute discretion, considers that the action or position of the
OWNER, with respect thereto may result in damage or liability to the MANAGER,
the MANAGER shall have the right to cancel this Agreement at any time by written
notice to the OWNER of its election so to do, which cancellation shall be
effective upon the service of such notice.  Such notice may be served personally
or by registered mail, on or to the person named to receive the MANAGER’S
monthly statement at the address designated for such person as provided in
Paragraph 6.1 above, and if served by mail shall be deemed to have been served
when deposited in the mails.  Such cancellation shall not release the
indemnities of the OWNER set forth in this Agreement, including, but not limited
to, those set forth in Paragraphs 1, 3.2, 4.1, 4.2 and 6.3 above and shall not
terminate any liability or obligation of the OWNER to the MANAGER for any
payment, reimbursement, or other sum of money then due and payable to the
MANAGER hereunder.

 

6.5           All personnel expenses, including but not limited to, wages,
salaries, insurance, fringe benefits, employment related taxes and other
governmental charges, shall be charges incurred in connection with the Premises
for purposes of Paragraph 3.5 hereof, to the extent such expenses are
apportioned by the MANAGER to services rendered for the benefit of the
Premises.  The number and classification of employees serving the Premises shall
be as determined by the MANAGER to be appropriate for the proper operation of
the Premises; provided that the OWNER may request changes in the number and/or
classifications of employees, and the

 

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MANAGER shall make such changes unless in its judgment the resulting level of
operation and/or maintenance of the Premises will be inadequate.  The MANAGER
shall honor any collective bargaining contract covering employment at the
Premises which is in effect upon the date of execution of this Agreement;
provided that the MANAGER shall not assume or otherwise become a party to such
contract for any purpose whatsoever and all personnel subject to such contract
shall be considered the employees of the Premises and not the MANAGER.

 

6.6           The MANAGER shall not institute or settle any material litigation
involving the Premises or Owner without the Owner’s Consent.

 

7.             The OWNER shall pay or reimburse the MANAGER for any sums of
money due it under this Agreement for services and advances prior to termination
of this Agreement.  All provisions of this Agreement that require the OWNER to
have insured, or to protect, defend, save, hold and indemnify or to reimburse
the MANAGER shall survive any expiration or termination of this Agreement and,
if MANAGER is or becomes involved in any claim, proceeding or litigation by
reason of having been the MANAGER of the OWNER, such provisions shall apply as
if this Agreement were still in effect.  The parties understand and agree that
the MANAGER may withhold funds for sixty (60) days after the end of the month in
which this Agreement is terminated in an amount not to exceed that reasonably
necessary to pay bills previously incurred but not yet invoiced and to close
accounts.  Should the funds withheld be insufficient to meet the obligation of
the MANAGER to pay bills previously incurred, the

 

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OWNER will upon demand advance sufficient funds to the MANAGER to ensure
fulfillment of MANAGER’S obligation to do so, within ten (10) days of receipt of
notice and an itemization of such unpaid bills.

 

8.             Nothing contained herein shall be construed as creating any
rights in third parties who are not the parties to this Agreement, save and
except that the general partner of INP Retail, L.P. (“Partnership”) acting under
its authority under, or the limited partner of the Partnership acting pursuant
to the ruling of an arbitrator that the general partner has failed to act as
provided for in, the Partnership Agreement of the Partnership, shall have the
right to exercise the OWNER’S rights and remedies hereunder in the event of a
Manager Event, as defined herein.  Nothing contained herein shall be construed
to impose any liability upon OWNER or MANAGER for the performance by the OWNER
or MANAGER under any other agreement they have entered into or may in the future
enter into, without the express written consent of the other having been
obtained.  Nothing contained in this Agreement shall be deemed or construed to
create a partnership or joint venture between OWNER and MANAGER or to cause
either party to be responsible in any way for the debts or obligations of the
other or any other party (but nothing contained herein shall affect MANAGER’S
responsibility to transmit payments for the account of OWNER as provided
herein), it being the intention of the parties that the only relationship
hereunder is that of MANAGER and principal.

 

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9.             Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited or invalid under such
law, such provision shall be ineffective only to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.  This Agreement, its validity,
performance and enforcement shall be construed in accordance with, and governed
by, the laws of the State in which the Premises are located.

 

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

 

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

 

12.           The failure of either party to this Agreement to, in any one or
more instances, insist upon the performance of any of the terms, covenants or
conditions of this Agreement, or to exercise any rights or privileges conferred
in this Agreement, shall not be construed as thereafter

 

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waiving any such terms, covenants, conditions, rights or privileges, but the
same shall continue in full force and effect as if no such forbearance or waiver
had occurred.

 

13.           During the performance of this Agreement, MANAGER shall not
discriminate unlawfully against any employee or applicant for employment because
of race, religion, color, national origin, ancestry, physical handicap, mental
disability, medical condition, marital status, age or sex.  MANAGER shall insure
that the evaluation and treatment of employees and applicants for employment are
free of such discrimination.  MANAGER shall comply with the provisions of all
applicable Federal and the laws of the state in which the Property is located
with respect to fair employment and leasing statutes and all regulations
promulgated thereunder.  MANAGER shall include the nondiscrimination and
compliance provisions of this clause in any agreements with contractors and
subcontractors engaged by MANAGER to perform work under this Agreement.

 

14.           MANAGER shall indemnify, protect, defend, save and hold the OWNER
and all of its members, shareholders, officers, directors, employees, managers,
successors and permitted assigns (collectively, “Owner Indemnified Parties”)
harmless from and against any and all loss, liability, injury, damage and
expense (including attorneys’ fees and expenses of litigation) that an Owner
Indemnified Party may incur or suffer by reason of (i) MANAGER’S material breach
of the terms of this Agreement, (ii) MANAGER’S material adverse actions taken
outside the scope of MANAGER’S authority hereunder; (iii) any intentional
misrepresentation of material

 

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facts by MANAGER during the term of this Agreement, and (iv) the gross
negligence, fraud, willful misconduct and/or unlawful acts (such unlawfulness
having been adjudicated by a court of proper jurisdiction) of MANAGER, its
officers, employees or agents (“Manager Event”).

 

15.           This Agreement is deemed to have been drafted jointly by the
parties, and any uncertainty or ambiguity shall not be construed for or against
either party as an attribution of drafting to either party.

 

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

 

FOR OWNER:

 

ATTN:  General Counsel

 

Inland Real Estate Corporation

 

2901 Butterfield Road

 

Oak Brook, Illinois  60523

 

Fax: #630/218-7350

 

With A Copy To:

 

ATTN.:  Chief Operations Officer

 

Inland Real Estate Corporation

 

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2901 Butterfield Road

 

Oak Brook, Illinois  60523

 

Fax: #630/218-7357

 

FOR MANAGER:

 

Inland TRS Property Management, Inc.

 

ATTN: D. Scott Carr, President

 

2901 Butterfield Road

 

Oak Brook, Illinois  60523

 

Fax: #630/218-5270

 

(Signatures Continued on Next Page)

 

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IN WITNESS WHEREOF, the parties hereto have affixed or caused to be affixed
their respective signatures as of the            day of
                            ,             .

 

 

OWNER:

 

 

 

                                                      , L.L.C.,

 

 

 

 

By:

Inland Real Estate Corporation,

 

 

a Maryland corporation, its sole member

 

 

 

 

 

 

 

By:

 

 

Name:

Mark Zalatoris

 

Its:

Executive Vice President

 

 

 

 

 

 

MANAGER:

 

 

 

 

Inland TRS Property Management, Inc.

 

an Illinois corporation

 

 

 

 

 

 

 

By:

 

 

Name:

D. Scott Carr

 

Its:

President

 

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EXHIBIT “A”

 

Legal Description

 

See attached

 

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EXHIBIT “B”

 

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

 

EXHIBIT 10-C

 

FORM OF

 

LEASING AGREEMENT

 

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FORM OF

 

LEASING AGREEMENT

 

THIS LEASING AGREEMENT (“Agreement”) is made as of this          day of
                        , 2010 by and between Inland TRS Property
Management, Inc., as Managing Agent for
                                                                  , a(n)
                                               , (“Owner”) and
                                                              ,
a(n)                                                            (the “Leasing
Agent”).

 

W I T N E S S E T H

 

A.            Owner owns certain real estate commonly known as
                                                          
                                                                                    (“Property”).

 

B.            Owner desires to retain Leasing Agent and have the Leasing Agent
serve as exclusive leasing agent for the Property as Owner’s leasing agent and
Leasing Agent desires to perform such services.

 

NOW, THEREFORE, in consideration of the mutual promises herein contained, and
for other good and valuable consideration, the parties covenant and agree as
follows:

 

ARTICLE ONE

 

APPOINTMENT; TERM; ACCEPTANCE

 

1.1           Appointment; Term.  Owner hereby retains and appoints Leasing
Agent, as Owner’s sole and exclusive agent to procure tenants and lease the
Property, for the period commencing on
                                           (“Commencement Date”) and continuing
until the Property is sold, exchanged or otherwise transferred unless sooner
terminated pursuant to the terms of Article 6 hereof.

 

1.2           Acceptance Appointment.  Leasing Agent hereby accepts the
appointment as Owner’s agent and agrees to use good business efforts, skill and
judgment to procure tenants and lease the the space in the Subject Property
which currently is available for lease and such other space in the Property as
may become available for lease during the term of this Agreement, subject to the
terms, conditions and limitations contained in this Agreement.  Leasing Agent
shall deal at arm’s length with all third parties and Leasing Agent shall serve
Owner’s interests at all times; provided, however, that Leasing Agent shall not
be required to devote itself exclusively to the leasing of the Property.

 

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ARTICLE TWO

 

LEASING AGENT’S SPECIFIC DUTIES;

 

LIMITATIONS ON LEASING AGENT’S AUTHORITY

 

2.1           Operating Budgets; Reports.  Leasing Agent shall prepare and
submit to Owner a proposed leasing projection for the budget (the “Operating
Budget”) of the Property, for the forthcoming calendar year, and annually
thereafter within ninety (90) days prior to the start of the succeeding year.
Leasing Agent shall prepare and submit to Owner a written quarterly report
listing all persons with whom Leasing Agent has communicated regarding the lease
of available space or to whom Leasing Agent has submitted the available space. 
Leasing Agent shall meet with Owner upon the request of Owner to discuss Leasing
Agent’s progress in procuring a tenant or tenants for the available space.

 

2.2           Leases.  Leasing Agent acknowledges its receipt of an abstract of
each lease for each existing tenant of the Property .  Leasing Agent shall use
its continued and good business efforts to procure tenants and to negotiate on
behalf of Owner new leases with prospective tenants.  All new leases must be
subject to Owner’s review and approval which may be withheld in Owner’s sole
discretion.  Such leases may only be executed by Owner and not by Leasing Agent.

 

2.3           Compliance With Laws, Etc.  Leasing Agent shall fully comply with
any and all federal, state and municipal laws, ordinances, rules, regulations
and orders collectively “Laws” relative to the leasing of the Property and
hereby agrees to save, defend, indemnify and hold Owner and Inland Commercial
Property Management, Inc., and all of their respective officers, agents,
partners, members, employees, directors, shareholders, insurers, land trustees
and affiliated companies and all of their respective successors and assigns
(“Indemnified Parties”) harmless from any and all loss, liabilities, claims,
fines, judgments, penalties, awards, liens, settlements, causes of action,
damages, injury and expenses (including attorney’s fees) of every kind and
nature whatsoever resulting from, arising out of, or in any way related to,
directly or indirectly, any violation of any Laws by Leasing Agent.

 

2.4           Site Data Preparation.  Within thirty (30) days from the date
hereof, Leasing Agent agrees, at its cost, to inspect the Premises, compile site
data and other written information, obtain photographs and prepare brochures. 
In addition, Leasing Agent shall prepare and submit to Owner a detailed lease
synopsis for prospective leases and credit checks on prospective tenants and an
evaluation of the financial condition and ability of such tenants to pay rent.
Leasing Agent shall cooperate with other licensed real estate brokers and
furnish them lease information.

 

2.5           Records.  Leasing Agent shall maintain any and all ledgers, books
of account, invoices, vouchers and canceled checks, as well as all other records
or documents evidencing or relating to charges for services, expenditures or
disbursements charged to Owner for a minimum period of three (3) years, or for
any longer period required by law, from the date of termination

 

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or completion of this Agreement.  Leasing Agent shall also maintain all
documents and records which demonstrate performance under this Agreement for a
minimum period of three (3) years, or for any longer period required by law,
from the date of termination or completion of this Agreement.  All such records
or documents required to be maintained pursuant to this Agreement shall be made
available for inspection or audit, at any time, during Leasing Agent’s regular
business hours, upon written request by Owner.  On termination, Leasing Agent
shall immediately deliver to Owner all files and documents in Leasing Agent’s
possession relating to the Property and existing and prospective tenants of the
Property.

 

ARTICLE THREE

 

INSURANCE

 

3.1           Insurance.  Leasing Agent shall be responsible for maintaining all
statutory workmen’s compensation insurance.

 

ARTICLE FOUR

 

PAYMENT OF EXPENSES

 

4.1           Payment of Expenses.  Leasing Agent shall be paid the following
expenses directly from the Owner, subject to the restrictions outlined in
Article 2:

 

a)             property sign subject to Owner approval;

 

b)            leasing commissions for the Property to be calculated as provided
in Article 5;

 

c)             costs of Owner-approved advertising, public relations and other
marketing costs related to the Property;

 

d)            any and all other costs incurred by Leasing Agent and related to
the Leasing of the Property, provided same have been preapproved by Owner.

 

4.2           Attorneys’ Fees. In the event either Owner or Leasing Agent shall
commence any legal action or any arbitration or any other legal proceedings for
the purpose of enforcing any provision or condition of this Agreement, or
because of an alleged dispute, breach, default or misrepresentation arising
under the provisions hereof, then the successful or prevailing party in such
proceeding shall be entitled to recover reasonable attorneys’ fees and other
costs incurred in that action or proceeding, in addition to any other relief to
which it may be entitled.  For the purposes of this Agreement, the term
“prevailing party” shall mean the party who obtains substantially the relief
desired, whether by dismissal, default, summary judgment, settlement or
otherwise.

 

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ARTICLE FIVE

 

COMPENSATION

 

5.1           Leasing Fee.  Owner covenants and agrees to pay to Leasing Agent
leasing commissions (“Commissions”) for the Properties to be calculated as
follows:

 

a)             As to new leases, the Commission shall be calculated on the
following basis:

 

SIZE SPACE

 

RATE P.S.F.

0 - 2,500 sq. ft.

 

 

$4.00 p.s.f.

2,501 – 5,000 sq. ft.

 

 

$3.50 p.s.f.

5,001 – 10,000 sq. ft.

 

 

$3.00 p.s.f.

10,001 - 20,000 sq. ft.

 

 

$2.50 p.s.f.

Over 20,000 sq. ft.

 

 

$2.00 p.s.f.

 

As to renewal leases and lease extensions, the Commission shall be one-half of
the commission payable as to new leases, calculated as provided above.

 

The Commission, if earned, shall be the sole compensation deemed earned or
payable to Leasing Agent in connection with the leasing of space at the
Property.

 

b)            Leasing Agent will cooperate with all outside brokers in all
leases involving third party brokers.  In that event, Leasing Agent shall be
entitled to receive a Commission calculated at seventy-five percent (75%) of the
above rates.  In addition, Owner shall be responsible for all fees and charges
of any outside broker, which sums may or may not exceed those paid to Leasing
Agent.

 

c)             Commissions shall be due and payable one half (1/2) upon full
execution of a lease by both tenant and landlord and satisfaction of all
contingencies (such as delivery of non-disturbance agreements from the maker of
any financing), and one half (1/2) upon tenant opening for business.

 

d)            It is understood that no Commissions will be due or payable to
Leasing Agent as a result of Owner or Inland Commercial Property
Management, Inc. entering into leases with the prospective tenants listed on
Exhibit A attached hereto and made a part hereof.

 

e)             Leasing Agent shall save, defend, indemnify and hold all Owner
Indemnified Parties harmless from any and all loss, liabilities, claims, fines,
judgments,

 

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penalties, awards, liens, settlements, causes of action, damages, injury and
expenses (including attorney’s fees) of every kind and nature whatsoever
resulting from, arising out of, or in any way related to, directly or
indirectly, any assertion by any other broker with respect to any commission,
brokerage fee or other compensation claimed to be due to such other broker
relating to leases at the Property.

 

ARTICLE SIX

 

TERMINATION

 

6.1           Termination.  During the Term of this Agreement, either party
shall have the right to terminate this Agreement at any time and, only for cause
as noted below, upon fifteen (15) days’ prior written notice to the other
party.  For purposes hereof, “Cause” is defined as:

 

(a)           If Leasing Agent fails to reasonably cooperate with Owner or any
brokers which are a party to a proposed transaction in connection with the
leasing of space in the Property or the sale of the Property or in the granting
of a mortgage secured by the Property; or

 

(b)           If Leasing Agent commingles any funds derived from the leasing of
the Property with any other funds of Leasing Agent or an Affiliate; or

 

(c)           If a court having jurisdiction over Leasing Agent shall (i) enter
a decree or order for relief in respect of Leasing Agent in an involuntary case
under the federal bankruptcy laws, as now or hereafter constituted, or any other
applicable federal or state bankruptcy, insolvency or other similar law, or
(ii) appoint a receiver, liquidator, assignee, custodian, trustee or
sequestrator (or similar official) of Leasing Agent, or for the winding-up or
liquidation of its affairs, which continues to be in effect ninety (90) days
after the entry of such decree or order or the making of such appointment; or

 

(d)           If Leasing Agent shall (i) commence a voluntary case or action
under the federal bankruptcy laws, as now or hereafter constituted, or any other
applicable federal or state bankruptcy insolvency or other similar law, or
(ii) consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrate (or other similar
official) of Leasing Agent, or (iii) make any assignment for the benefit of
creditors, or (iv) fail generally to pay its debts as such debts become due, or
take action in furtherance of any of the foregoing; or

 

(e)           If Leasing Agent shall fail to observe or perform any of its
obligations under this Agreement, which failure is not cured within thirty (30)
days after written notice by the Owner to the Leasing Agent specifying the
nature of the failure, provided, however, if the Leasing Agent has commenced to
cure the failure, but is not completed within such thirty (30) day period,
Leasing Agent shall have such additional period of time as shall be reasonably
necessary for such cure to be completed; or

 

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(f)            If any fraud, crime, malfeasance or misfeasance is perpetrated by
Leasing Agent or any employee, officer of agent of Leasing Agent in connection
with the performance of the the Services provided that, in the case of any such
action by an employee or agent of Leasing Agent (but not by an officer of
Leasing Agent), Leasing Agent shall have the right to cure said default by
compensating Owner in full for all consequences of said fraud, crime,
malfeasance or misfeasance within thirty (30) days after any officer of Leasing
Agent becomes aware of said occurrence; provided; however, if the Leasing Agent
has commenced to cure the failure, but is not completed within such thirty (30)
day period, Leasing Agent shall have such additional period of time as shall be
reasonably necessary for such cure to be completed; or

 

(g)           In the event of a casualty which damages all or a material portion
of the Property; or

 

(h)           In the event of a condemnation affecting all or a material portion
of the Property; or

 

(i)            If Leasing Agent’s real estate brokerage license shall be
suspended or revoked; or

 

In the event of a termination of this Agreement pursuant to this Section 6.1, or
pursuant to Sections 6.2 or 6.3 below, Leasing Agent shall be entitled to
receive only the Leasing Commissions earned to the effective date of termination
as set forth in 6.1 hereof, but no other consideration, compensation, payment or
damages.

 

6.2           Termination on Sale.  This Agreement shall terminate, at the
option of the Owner, by Owner giving ten (10) days’ written notice to Leasing
Agent upon sale of the Property by Owner.

 

6.3           Termination by General Partner.  The general partner of INP
Retail, L.P., a Delaware limited partnership, may terminate this Agreement for
any reason upon thirty (30) days prior written notice to the Leasing Agent.

 

6.4           Final Accounting.  Upon termination of this Agreement for any
reason, Leasing Agent shall deliver to Owner the following with respect to the
Property:

 

a)             All records, contracts, and other papers or documents which
pertain to the Property.  Upon such termination Owner will assume responsibility
for payment of all Owner-approved or authorized unpaid bills and commissions.

 

b)            The names, addresses and telephone numbers of all prospective
tenants with whom Leasing Agent has been conducting negotiations for the rental
of space at the Property.  If Owner enters into a lease with any such listed
prospective tenants within one hundred and twenty (120) days after termination
of this Agreement, Owner will pay to Leasing Agent the Commission set forth in
subsection 5.1(a) hereof.

 

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ARTICLE SEVEN

 

ADDITIONAL SERVICES

 

It is expressly acknowledged and agreed by Owner that, unless contained in a
rider or addendum hereto or otherwise subsequently agreed by Owner and Leasing
Agent, Agent’s responsibilities hereunder do not include responsibilities
related to (a) services performed for Owner in connection with facilitating a
sale of a Property, such as preparation of disposition studies; (b) the
oversight or management of construction activities at the Property related to
initial improvement or reconstruction of tenant spaces or extraordinary repairs,
replacements, or improvements to the Property or its component parts or systems;
or (c) market forecasting or like studies other than the making of assumptions
related to same in connection with the preparation of annual Operating Budgets. 
In the event Owner desires that Leasing Agent undertake any of the
responsibilities above mentioned, Owner shall notify Leasing Agent in writing of
such desire and, upon the execution of a separate agreement or rider or addendum
hereto, which document shall contain terms and conditions acceptable to Owner
and Leasing Agent, including a provision providing agent compensation for such
services.  Leasing Agent shall provide the requested services.

 

ARTICLE EIGHT

 

MISCELLANEOUS

 

8.1           Notices.  All notices, elections, offers, acceptances, demands,
consents and reports (collectively the “Notice”) provided for herein shall be in
writing and shall be given to Owner and Leasing Agent at such address as each
may hereafter specify in writing.  Such Notices may be mailed by United States
registered or certified mail, return receipt requested, postage prepaid and may
be deposited in a United States Post Office or a depository for the receipt of
mail regularly maintained by the United States Post Office, or sent by Federal
Express or another nationally recognized overnight courier.  Such Notices may
also be delivered by hand or by any other method or means permitted by law.  For
purposes of this Agreement, notices will be deemed to have been “given” upon
personal delivery thereof or, if deposited in the United States mail, as
provided above two (2) days after mailing or next business day if sent by
overnight courier.

 

 

If to Owner:

[OWNER]

 

 

 

2901 Butterfield Road

 

 

 

Oak Brook, Illinois 60523

 

 

 

 

 

 

 

and

 

 

 

 

 

 

 

Inland TRS Property Management, Inc.

 

 

 

2901 Butterfield Road

 

 

 

Oak Brook, Illinois 60523

 

 

 

 

 

 

If to Leasing Agent:

 

 

 

 

 

 

 

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8.2           No Assignment.  This Agreement and all rights hereunder shall not
be assigned by either party hereto.

 

8.3           Amendments.  Except as otherwise herein provided, any and all
amendments, additions or deletions to this Agreement shall be null and void
unless approved by the parties in writing.

 

8.4           Complete Agreement.  This Agreement supersedes and takes the place
of any and all previous management agreements entered into between the parties
hereto relating to the Property covered by this Agreement. Owner and Leasing
Agent agree that there are no statements, representations, inducements or
promises made or relied upon by one or the other, except as expressly stated in
this Agreement.

 

8.5           Subordination to Financing.  This Agreement and the rights of the
Leasing Agent hereunder shall be and remain junior and subordinate in all
respects to the lien of any mortgage, trust deed or any other security
instrument now or hereafter affecting the Property.  Leasing Agent agrees to
execute any document required by the maker of such financing to evidence the
foregoing subordination.

 

8.6           Recording.  This Agreement shall not be recorded against the
Property or any portion thereof.

 

8.7           Invalid Provisions.  This Agreement shall be construed in
accordance with the laws in the State of Illinois.  If any term, condition or
provision of this Agreement shall be declared invalid or unenforceable, the
remainder of this Agreement other than such term, condition or provision, shall
not be affected thereby and shall remain in full force and effect and shall be
valid and enforceable to the fullest extent permitted by law.

 

8.8           Attribution of Drafting.  This Agreement shall be deemed to have
been drafted jointly by the parties and any uncertainty or ambiguity shall not
be construed for or against either party as an attribution of drafting of either
party.

 

8.9           Licenses and Permits.  Leasing Agent represents and warrants that
it and its personnel hold all broker’s and real estate licenses necessary or
desirable for the performance of its obligations under this Agreement and shall,
at Owner’s request, provide Owner with evidence that such licenses are current
and in good standing.  Leasing Agent represents that it has obtained all other
permits, certificates and licenses required by federal, state or local laws,
ordinances, rules or regulations necessary to perform all of Leasing Agent’s
activities prior to the Commencement Date.

 

8.10         Employees.  Leasing Agent is solely responsible for the supervision
and control of all persons working for Leasing Agent.  Leasing Agent assumes
full responsibility and liability for the training and continuing education of
its personnel.  The employees of Leasing

 

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Agent shall not, under any circumstances, be considered employees of Owner or
Inland Commercial Property Management, Inc. No person working for Leasing Agent
shall be entitled to any commission or compensation except out of the
Commission, if any, payable by Owner in accordance with the terms of this
Agreement.

 

8.11         Dual Representation.  Owner acknowledges that Leasing Agent is a
national brokerage firm and that in some cases it may represent prospective
purchasers and tenants.  Owner desires that the Property be presented to such
persons or entities and consents to the dual representation created thereby. 
Leasing Agent shall not disclose the confidential information of one principal
to the other.

 

8.12         Nondiscrimination.  During the performance of this Agreement,
Leasing Agent shall not discriminate unlawfully against any employee or
applicant for employment because of race, religion, color, national origin,
ancestry, physical handicap, mental disability, medical condition, marital
status, age or sex.  Leasing Agent shall insure that the evaluation and
treatment of employees and applicants for employment are free of such
discrimination.  Leasing Agent shall comply with the provisions of all
applicable Federal and the laws of the state in which the Property is located
with respect to fair employment and leasing statues and all regulations
promulgated thereunder.  Leasing Agent shall include the nondiscrimination and
compliance provisions of this clause in any agreements with contractors and
subcontractors engaged by Leasing Agent to perform work under this Agreement.

 

8.13         Governing Law.  This Agreement shall be governed by and construed
in accordance with the laws of the State in which the Property is located
without regard to principles of conflicts of laws.

 

8.14         No Third Party Beneficiaries.  Nothing in this Agreement, express
or implied, is intended to confer any rights or remedies under or by reason of
this Agreement on any person other than the parties to it and their respective
permitted successors and assigns, nor is anything in this Agreement intended to
relieve or discharge any obligation of any third person to any party hereto or
give any third person any right of subrogation or action over against any party
to this Agreement.

 

8.15         Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  This Agreement may be
executed and delivered by the exchange of facsimile, pdf or other electronic
image file copies of the executed counterpart signature pages, which shall be
considered the equivalent of ink signature pages for all purposes.  Signature
pages may be detached from the counterparts and attached to a single copy of
this Agreement to physically form one document.

 

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[Signatures Continued on Next Page]

 

112

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

 

 

OWNER:

 

Inland TRS Property Management, Inc.,

as Managing Agent for the Owner,

Inland Real Estate

a                            limited liability company

 

 

By:

 

 

 

 

 

Its:

 

 

 

 

 

 

 

LEASING AGENT:

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

Its:

 

 

 

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EXHIBIT A

 

EXCLUDED PROSPECTIVE TENANTS

 

Name of Shopping Center

 

 

NONE

 

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EXHIBIT 10-D

 

FEES AND SERVICES SCHEDULE

 

Venture Management Fee (General Partner): The “Venture Management Fee” is a
quarterly fee equal to ten (10) basis points multiplied by the average annual
Total Equity Capitalization of the Partnership (as determined pursuant to the
formula value set forth in paragraph 3 of Schedule 6.2(e)) for the preceding
quarter, adjusted pro rata for any period that is not a full calendar quarter..

 

Leasing Fee (Inland Affiliate): The “Leasing Fee” shall be a market standard
leasing commission based on a sliding scale ranging from $4.00/sf for leases
below 2,500 square fee, to $2.00/sf for leased of 20,000 square feet or more for
new tenants.  Commissions for renewing tenants will be 50% of the above.  A
market standard 50% override will be paid to the Inland Affiliate in the event
that a cooperating broker represents the tenant and is paid a market full
commission.  The Leasing Fee shall be more particularly set forth in the Leasing
Agreement.

 

Property Management Fee (Inland Affiliate): The “Property Management Fee” shall
be on annual fee equal to 4.5% of gross collected revenues, some portion of
which is to be reimbursed by each Property’s tenants via common area maintenance
pass-through billings.  The Inland Affiliate will not charge the Partnership
additional fees for administration, accounting, property related in-house tax
and legal activities or construction management.  Any third party
“out-of-pocket” legal or other consulting fees incurred in the normal course of
managing the properties will be expenses of the Partnership.  The Property
Management Fee shall be more particularly set forth in the Property Management
Agreement.

 

Acquisition Fee (Inland): The “Acquisition Fee” shall be equal to twenty-five
(25) basis points multiplied by the equity portion of the purchase price of the
Additional Property, to be paid at closing of the purchase of each Additional
Property, which, for the avoidance of doubt, does not include Four Flaggs.

 

Financing Fee (Inland, Inland Affiliate):  The “Financing Fee” shall be equal to
twenty-five (25) basis points multiplied by the amount of the Financing, for any
new mortgage loans that such party arranges for an Owned Property; provided
however, that if at any time prior to the 2-year anniversary of the acquisition
of such Additional Property the Partnership obtains post-acquisition Financing
with respect to such Additional Property (“Post-Acquisition Financing”) then,
should Inland or an Inland Affiliate otherwise be entitled to a Financing Fee
with respect to such Post-Acquisition Financing, said Financing Fee will not be
due from the Partnership; save and except to the extent that such
Post-Acquisition Financing replaces Financing in existence as of or created as
of the acquisition of the Additional Property for which Inland or an Inland
Affiliate did not receive a Financing Fee.  Should the Partnership be obligated
to pay a fee to an unaffiliated third party for procuring such Post-Acquisition
Financing during said 2-year period (a “Third Party Fee”), then provided (i) the
amount financed by such Post-Acquisition Financing exceeds the amount of
Financing for which a Financing Fee has previously been paid, if any (“Excess
Financing”); and (ii) the Financing is not a financing of property value greater
than the purchase price paid at the closing of the acquisition of the Additional
Property, then as to the portion of the Third Party Fee related to the Excess
Financing (“Rebated Third Party

 

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

 

Fee”), Inland or an Inland Affiliate shall rebate to the Partnership an amount
in cash equal to the lesser of: (x) the Rebated Third Party Fee, or (y) the
Acquisition Fee previously paid to Inland or an Inland Affiliate with respect to
such Additional Property within 10 Business Days of the closing of such
Post-Acquisition Financing.

 

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EXHIBIT 11.5-A

 

APPRAISALS

 

1.             The following capitalized terms shall have the meaning specified
in this EXHIBIT 11.5-A:

 

“Appraisal” shall mean a self-contained appraisal report prepared by an
Appraiser in accordance with this EXHIBIT 11.5-A and, to the extent not
inconsistent herewith, in accordance with then prevailing Uniform Standards of
Professional Appraisal Practice.

 

“Appraiser” shall mean a fit and impartial MAI designated, licensed appraiser
person having not less than fifteen (15) years’ experience as an appraiser of
Qualified Properties.  The Appraisers shall be rotated every three years.

 

“Fair Market Value” means the sum of (i) the appraised value of all Owned
Properties, (ii) the fair value of debt instruments owned and held as determined
by discounting the future contractual cash flows to the present value using
current market interest rates and anticipated returns a market participant would
incur with similar risk and terms, and (iii) the fair market value of all other
Partnership assets, all as determined as determined by Appraisal in accordance
with the procedures set forth below.

 

2.             The General Partner shall obtain and submit to the Partners
annually Appraisals of each Owned Property, with approximately 25% of the
portfolio of Owned Properties to be appraised each calendar quarter. For
internal use only, the General Partner shall update the Appraisals on at least a
quarterly basis based on changes in factors such as occupancy levels, lease
rates, overall market conditions, capital improvements and financial and leasing
updates provided by property and asset management and submit such updates to the
Partners. No appraisal will be required prior to the closing of each new
investment.  Prior to its first appraisal, an acquired Property will be valued
at cost plus capital expenditures less liabilities.  The Appraiser preparing
such annual and quarterly Appraisals shall be selected by the General Partner
with the consent and approval of Limited Partners as a Major Decision, and the
cost of obtaining such Appraisals shall be a Partnership Expense.

 

3.             If (A) either Inland or PGGM PRE Fund (i) notifies the other and
the General Partner that it disagrees with the NAV set forth in the quarterly
reports and Financial Statements delivered pursuant to Section 8.2, as described
in Section 11.5(c)(i), or (ii) exercises a Put Option pursuant to
Section 11.5(d), or (B) Inland requests in kind distributions as described in
Section 13.4, Inland and PGGM PRE Fund shall make a good faith attempt to
mutually appoint an Appraiser to determine the Fair Market Value through an
Appraisal.  If Inland and PGGM PRE Fund are unable to agree upon a single
Appraiser, then each of the parties shall, within 10 Business Days after the
exercise of an Option pursuant to Section 11.5 or Inland’s request pursuant to
Section 13.14, select an Appraiser.  The two (2) Appraisers so appointed shall,
within fifteen (15) days after their

 

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

 

appointment, appoint a third Appraiser, who shall determine the Fair Market
Value by an Appraisal.  The determination of the single Appraiser or of third
Appraiser shall be made within thirty (30) days after such Appraiser’s
appointment.  The determination of the Fair Market Value by such Appraiser shall
be binding upon, the Partnership, the General Partner, Inland and PGGM PRE Fund
and such Fair Market Value shall be the “Fair Market Value” for purposes of
Section 13.4 and be the basis for determination of the Purchase Price for
purposes of Section 11.5.  If either Inland or PGGM PRE Fund fails to appoint an
Appraiser within the time period specified above, the Appraiser appointed by one
of them shall determine the Fair Market Value, and such determination shall be
binding upon, the Partnership, the General Partner, Inland and PGGM PRE Fund. 
The cost of the Appraisers and the Appraisal shall be a Partnership Expense.

 

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EXHIBIT 11.5-B

 

FORM OF

 

SUBSCRIPTION AND LOCK-UP AGREEMENT

 

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

 

 

FORM OF

 

SUBSCRIPTION AND LOCK-UP AGREEMENT

 

FOR

 

COMMON STOCK OF

 

INLAND REAL ESTATE CORPORATION

 

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

 

INLAND REAL ESTATE CORPORATION

 

SUBSCRIPTION AND LOCK-UP AGREEMENT

 

This Subscription and Lock-Up Agreement (this “Agreement”), dated as of
                , 20    , is entered into by and between Inland Real Estate
Corporation, a Maryland corporation (the “Company”), and the investor identified
on the signature page hereto (the “Investor”) in connection with the Investor’s
acquisition of shares of common stock of the Company, par value $     per share
(the “Common Stock”), pursuant to the terms of that certain Limited Partnership
Agreement of INP Retail, L.P., a Delaware limited partnership (the
“Partnership”), dated as of June 3, 2010 (the “Partnership Agreement”).

 

The Company and the Investor hereby agree as follows:

 

1.             Subscription.  The Company hereby issues to the Investor and the
Investor hereby subscribes for                shares of Common Stock (the
“Subscribed Shares”), which number of Subscribed Shares is equal to the Purchase
Price, as defined and determined in accordance with Section 11.5(c)(i) of the
Partnership Agreement, divided by the Price Per Share, as defined in
Section 11.5(c)(iii) of the Partnership Agreement.

 

2.             Transfer of Partnership Interests.  In consideration for the
Company’s issuance of the Subscribed Shares to the Investor, the Investor agrees
to transfer and assign to the Company a        percent (        %) Partnership
Interest in the Partnership (the “Transferred Partnership Interest”).  Such
transfer of the Transferred Partnership Interest shall be made pursuant to an
Assignment of Partnership Interest (the “Assignment”) in substantially the form
attached hereto as Exhibit A.

 

3.             Closing; Conditions to Closing.

 

(a)           Closing. Unless otherwise determined by the mutual agreement of
the parties hereto, the closing of the transactions contemplated hereby (the
“Closing”) shall take place on               , 20     (the “Closing Date”) at
the offices of                 , or at such other location as the parties may
mutually agree.  {Note:  The Closing Date is the 5th Business Day after the
Purchase Price is determined}

 

(b)           Company’s Conditions to Closing. The Company’s obligations
hereunder are subject to conditions, prior to or at the Closing, that (i) the
representations and warranties of the Investor contained in this Agreement shall
be true and correct on the date of this Agreement and at the Closing Date,
(ii) all proceedings in connection with the transactions contemplated hereby and
all documents and instruments necessary to such transactions shall be reasonably
satisfactory in substance and form to the Company and its legal counsel, and
(iii) the Company and its counsel shall have received all such counterpart
originals or certified or other copies of such documents as the Company may
reasonably require from the Investor, including the deliverables set forth in
Section 4(b) hereof.

 

(c)           Investor’s Conditions to Closing.  The Investor’s obligations
hereunder are subject to the condition, prior to or at the Closing, that (i) the
representations and warranties of the Company contained in this Agreement shall
be true and correct on the date of this Agreement and at the Closing Date,
(ii) all proceedings in connection with the transactions contemplated hereby and
all documents and instruments necessary to such transactions shall be reasonably
satisfactory in substance and form to the Investor and its legal counsel, and
(iii) the Investor and its counsel shall have received all such

 

CMI, 6/8/2010

 

2010 03 03 exclusionlist PGGM

 

General Page

 

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

 

counterpart originals or certified or other copies of such documents as the
Investor may reasonably require from the Company, including the deliverables set
forth in Section 4(a).

 

4.             Deliveries.

 

(a)           Company’s Deliveries.  At the Closing, the Company shall deliver
to the Investor:

 

(i)            A certificate or certificates representing the Subscribed Shares
duly issued to the Investor(11);

 

(ii)           A duly executed signature page of this Agreement; and

 

(iii)          Such other documents and instruments as the Investor may
reasonably request to otherwise carry out the intentions of the parties as
memorialized in this Agreement.

 

(b)           Investor’s Deliveries.  At the Closing, the Investor shall deliver
to the Company:

 

(i)            A duly executed signature page of the Assignment;

 

(ii)           A duly executed signature page of this Agreement; and

 

(iii)          Such other documents and instruments as the Company may
reasonably request to otherwise carry out the intentions of the parties as
memorialized in this Agreement.

 

5.             Registered Securities.  The Subscribed Shares shall be registered
under the Securities Act of 1933 (the “Securities Act”) and applicable state
securities laws and, except as limited in Section 8 hereof, may be freely
transferred immediately upon issuance thereof to the Investor, without
limitation, by the Investor and/or its Affiliates (as defined in the Partnership
Agreement), and their respective transferees.

 

6.             Company’s Representations and Warranties.  The Company hereby
represents and warrants to the Investor as follows:

 

(a)           Organization and Authority.  The Company is duly formed and is
validly existing and in good standing under the laws of the State of Maryland,
with the requisite power and authority to own and use its properties and assets
and to carry out its business as currently conducted.  The Company is not in
violation or default of any provision of its certificate or articles of
incorporation or bylaws or other organizational or charter documents (the 
“Company Organizational Documents”).

 

(b)           Subscribed Shares.  The Subscribed Shares are duly authorized and,
when issued in accordance with this Agreement, will be validly issued, fully
paid, and non-assessable and, subject to Section 8 hereof, may be freely
transferred immediately upon issuance thereof to the Investor, without
limitation by the Investor and/or its Affiliates (as defined in the Partnership
Agreement), and their respective transferees.

 

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

(11) Parties to confirm that a physical stock certificate will be cut rather
than issuing shares in book entry through DTC.

 

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

 

(c)           Listing and Maintenance Requirements.  The Common Stock is
registered pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and the Company has taken no action designed to,
or which to its knowledge is likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act during the one year
period after the date of this Agreement, nor has the Company received any
notification that the SEC is contemplating terminating such registration.  The
Subscribed Shares are listed for trading on the New York Stock Exchange (the
“NYSE”).  The Company has not, in the preceding twelve (12) months received
notice from the NYSE that the Company is not in compliance with its listing or
maintenance requirements and the Company is currently in compliance with all
such requirements.

 

(d)           Liens.  The  Subscribed Shares will be issued to Investor free and
clear of all liens, claims, security interests, pledges, encumbrances and
equities of every kind.  The issuance of the Subscribed Shares by the Company to
the Investor in accordance with this Agreement will vest title to the Subscribed
Shares in the Investor, free and clear of all liens, security interests,
pledges, encumbrances, claims and equities of every kind, except as specifically
set forth in this Agreement.

 

(e)           No Conflicts; Authority.  The Company has the requisite corporate
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby and to otherwise carry out its obligations
hereunder.  This Agreement has been duly authorized by all necessary action on
the part of the Company and no further consent or action is required by the
Company.  This Agreement has been duly executed by the Company, and constitutes
the legal, valid and binding agreement of the Company, enforceable in accordance
with its terms.  The execution, delivery and performance by the Company of this
Agreement and the issuance and sale of the Subscribed Shares and the
consummation by the Company of the transactions contemplated hereby do not
(i) conflict with or violate any provision of the Company Organizational
Documents, (ii) conflict with or result in violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any
court or governmental authority to which the Company is subject, or
(iii) materially conflict with or result in the material violation of the terms
of any agreement to which the Company is party or by which it is bound.

 

(f)            Filings, Consents and Approvals.  The Company is not required to
obtain any consent, waiver, authorization or order of, or to give any notice to
or make any filing or registration, except for the Registration Statement
(defined below), with the SEC or any court or any other federal, state, local or
other governmental authority or other person in connection with the execution,
delivery and performance by the Company of this Agreement.

 

(g)           SEC Reports; Financial Statements.  The Company has filed the SEC
Reports (as defined below) on a timely basis.  As of their respective dates, the
SEC Reports complied in all material respects with the requirements of the
Securities Act and the Exchange Act, as applicable, and the respective rules and
regulations promulgated thereunder, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the SEC Reports
complied in all material respects with applicable accounting requirements and
the rules and regulations of the SEC with respect thereto as in effect at the
time of filing.  Such financial statements were prepared in accordance with
generally accepted accounting principles as consistently applied in the United
Stated (“GAAP”), except as may be otherwise specified in such financial
statements or the notes thereto and except that

 

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

 

unaudited financial statements may not contain all footnotes required by GAAP,
and fairly presented in all material respects the financial position of the
Company and its consolidated subsidiaries as of and for the dates thereof and
the results of operations and cash flows for the periods then ended, subject, in
the case of unaudited statements, to normal, immaterial, year-end audit
adjustments.  “SEC Reports” as used herein, means the registration statement
filed by the Company on             , 20     to register the issuance and resale
of the Subscribed Shares (File No.               ) and the prospectus contained
therein (the “Registration Statement”), and all filings required to be made by
the Company with the SEC for the two years preceding the date hereof.

 

(h)           Legality of Transactions.  No suit, action, claim, investigation
or other proceeding is pending, or, to the knowledge of the Company, is
threatened against the Company which questions the validity of this Agreement,
the issuance of the Subscribed Shares hereunder, or any other action taken or to
be taken pursuant to this Agreement, or which may have a material adverse effect
on the Company’s ability to perform its obligations hereunder.

 

(i)            Litigation; Default.  There is no lawsuit, tax claim or other
dispute pending or, to the knowledge of the Company, threatened against the
Company, which, if lost, would impair the Company’s financial condition or
ability to satisfy its obligations hereunder.  The Company possesses all
permits, memberships, franchises, contracts and licenses required and all
trademark rights, trade name rights and fictitious name rights necessary to
enable the Company to conduct the business in which it is now engaged.  The
Company is not in default on any obligation for borrowed money, any purchase
money obligation or any other material lease, commitment, contract, instrument
or obligation.

 

(j)            Reliance.  The Company acknowledges that Investor is relying on
the representations and warranties made by the Company herein and thus the
Company hereby agrees to indemnify and hold Investor and its successors,
directors, officers, agents, trustees, beneficiaries, and assigns, harmless
against any and all loss, damage, liability or expense including reasonable
attorneys’ fees and litigation costs, which they or any of them may suffer,
sustain or incur by reason of or in connection with any misrepresentation or
breach of warranty or agreement made by the Company herein.

 

7.             Investor’s Representations and Warranties.  The Investor hereby
represents and warrants to the Company as follows:

 

(a)           Authorization.  The Investor has full power and authority to enter
into this Agreement and to perform its obligations hereunder.  This Agreement
creates a valid and binding obligation of the Investor and is enforceable
against the Investor in accordance with its terms, except as enforcement may be
limited by applicable bankruptcy, insolvency, reorganization, arrangement,
moratorium or other similar laws affecting creditors’ rights, and subject to
general equity principles and to limitations on availability of equitable
relief, including specific performance.

 

(b)           Organization.  The Investor is a Dutch fund for the joint account
of the participants (Fonds voor gemene rekening) duly formed and validly
existing under the laws of the Netherlands.

 

(c)           Litigation.  No suit, action, claim, investigation or other
proceeding is pending, or, to the

 

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

 

knowledge of the Investor, is threatened against the Investor which questions
the validity of this Agreement or any action taken or to be taken pursuant to
this Agreement, for which may have a material adverse effect on the Investor’s
ability to perform its obligations hereunder.

 

(d)           No Violation.  The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and the performance of the
Investor’s obligations hereunder do not conflict with and will not result in any
violation of or default under any provision of any other agreement or instrument
to which the Investor is a party or any license, permit, franchise, judgment,
order, writ or decree, or any statute, rule or regulation, applicable to the
Investor, in each case, other than such as would not have a material adverse
effect on the Investor.

 

(e)           Disclosure.  The Investor has received and has had the opportunity
to review the SEC Reports.  There have been no other representations or
information (whether oral or written) from the Company, or any officer, advisor
or agent, or any other person representing the Company other than as set forth
in this Agreement or the SEC Reports regarding the Subscribed Shares or an
investment therein.  The Investor has read and understands the risk factors
contained in the SEC Reports.  Specifically, the Investor acknowledges that
although the Subscribed Shares will be registered pursuant to the Securities
Act, the Company makes no representation or warranty that the Subscribed Shares
may actually be sold in the open market or in a private sale.

 

(f)            Reliance.  Investor acknowledges that the Company is relying on
the representations and warranties made by the Investor herein and thus Investor
hereby agrees to indemnify and hold the Company, its successors, assigns,
directors, officers and agents, harmless against any and all loss, damage,
liability or expense including reasonable attorneys’ fees and litigation costs,
which they or any of them may suffer, sustain or incur by reason of or in
connection with any misrepresentation or breach of warranty or agreement made by
Investor herein.

 

8.             Lock-Up Agreement.

 

(a)           Lock-Up Period.  The Investor agrees that, during the period
beginning on the Closing Date until and including the one-year anniversary of
the date of this Agreement (the “Lock-Up Period”), the Investor will not, during
any single Business Day (as defined in the Partnership Agreement), offer, sell,
contract to sell, pledge, grant any option to purchase, make any short sale or
otherwise dispose of more than one-tenth of the Company’s outstanding capital
stock on such date.

 

(b)           Hedging.  The foregoing restriction is expressly agreed to
preclude the Investor from engaging in any hedging or other transaction which is
designed to or reasonably expected to lead to, or result in, a sale or
disposition of the Subscribed Shares even if the Subscribed Shares would be
disposed of by someone other than the Investor.  Such prohibited hedging or
other transactions would include without limitation any short sale (whether or
not against the box) or any purchase, sale or grant of any

 

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

 

right (including without limitation any put or call option) with respect to any
of the Subscribed Shares or with respect to any security that includes, relates
to, or derives any significant part of its value from the Subscribed Shares. 
Notwithstanding the foregoing, nothing in this Agreement shall prohibit (i) the
exercise of options to purchase Common Stock pursuant to Section 11.5 of the
Partnership Agreement or (ii) the conversion of any equity security held by the
Investor into shares of Common Stock.

 

(c)           Investor Action Affecting Subscribed Shares.  The Investor further
represents and agrees that the Investor has not taken and will not take,
directly or indirectly, any action which is designed to or which has constituted
or which would reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Subscribed Shares, or which has otherwise constituted or will
constitute any prohibited bid for or purchase of the Subscribed Shares or any
related securities.

 

(d)           Termination.  Notwithstanding anything contained herein to the
contrary, the provisions of this Section 8 shall terminate and be of no further
force or effect upon the expiration of the Lock-Up Period.

 

(e)           Company’s Reliance; Binding Nature.  The Investor understands that
the Company is relying upon Investor’s agreements pursuant to this Section 8 in
issuing the Subscribed Shares.  The Investor further understands that the
provisions of this Section 8 are irrevocable and shall be binding upon the
Investor’s legal representatives, successors and assigns.

 

9.             Miscellaneous.

 

(a)           No Broker’s Commission.  Neither of the parties has employed or
retained any person, firm, or company as a broker, dealer, or sales agent to
bring about or to represent any of them in the transactions contemplated by this
Agreement.

 

(b)           Governing Law.  This Agreement shall be construed in conformity
with the laws of the State of Delaware, as applied to agreements whose only
parties are residents of such state and which are to be performed entirely
within such state.

 

(c)           Entire Understanding.  This Agreement constitutes the entire
understanding of the parties and supersedes any prior understanding and/or
written or oral agreements among them with respect to the subject matter hereof.

 

(d)           Construction.  This Agreement was negotiated by the parties with
the benefit of legal representation, and any rule of construction or
interpretation otherwise requiring this Agreement to be construed or interpreted
against any party shall not apply to any construction or interpretation thereof.

 

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

 

(e)           Costs.  Each party shall be solely responsible for its attorneys’
and other fees and costs incurred in the drafting, negotiation, preparation and
performance of this Agreement.

 

(f)            Survival of Agreements, Representations and Warranties.  All
agreements, representations and warranties contained herein or made in writing
by or on behalf of the Investor or the Company in connection with the
transactions contemplated by this Agreement shall survive the execution of this
Agreement, any investigation at any time made by the Investor, the Company or on
behalf of any of them and the issuance of the Subscribed Shares and payment
therefor.

 

(g)           Assignment.  This Agreement shall be binding upon and inure to the
benefit of the Company, the Investor, and their respective successors and
permitted assigns.  Neither party may assign this Agreement without the prior
written consent of the other party, provided, however, that Investor may assign
this Agreement to its Affiliates.

 

(h)           Interpretation.  In case any one or more of the provisions
contained in this Agreement shall, for any reason, be held invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision of this Agreement, and this Agreement shall
be construed as if such invalid, illegal or unenforceable provision had never
been contained herein.

 

(i)            Counterparts.  This Agreement may be executed in counterparts,
each of which shall be an original, and all of which shall constitute one and
the same instrument.

 

(j)            Pronouns and Headings.  As used herein, all pronouns shall
include the masculine, feminine, neuter, singular and plural thereof wherever
the context and facts require such construction.  The headings, titles and
subtitles herein are inserted for convenience of reference only and are to be
ignored in any construction of the provisions hereof.

 

(k)           Amendments.  This Agreement may not be changed, waived, discharged
or terminated, except by a written instrument executed by the Investor and the
Company.

 

[Signature Page to Follow.]

 

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

 

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

 

 

 

INVESTOR:

 

 

 

 

 

STICHTING DEPOSITARY PGGM PRIVATE REAL ESTATE FUND, ACTING IN ITS CAPACITY AS
DEPOSITARY OF AND FOR THE ACCOUNT AND RISK OF PGGM PRIVATE REAL ESTATE FUND

 

 

 

By: PGGM VERMOGENSBEHEER, B.V.

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Its:

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Its:

 

 

 

ACCEPTANCE

 

The undersigned hereby accepts the foregoing subscription this          day of
                    , 20    .  This subscription shall not be binding until
accepted by the Company and shall become effective as of the date of such
acceptance, subject to the fulfillment of the conditions precedent described
herein.

 

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

 

 

COMPANY:

 

 

 

 

 

INLAND REAL ESTATE CORPORATION, a Maryland corporation

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Its:

 

 

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

 

 

EXHIBIT A

 

ASSIGNMENT OF PARTNERSHIP INTEREST

 

For good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the undersigned Assignor does hereby transfer, convey and
assign to Inland Real Estate Corporation, a Maryland corporation (“Assignee”),
all right, title and interest which the Assignor has in and to a        percent
(    %) Partnership Interest (the “Partnership Interest”) in INP Retail, L.P., a
Delaware limited partnership (the “Partnership”).

 

Date:                             , 20

 

ASSIGNOR:

 

STICHTING DEPOSITARY PGGM PRIVATE REAL

ESTATE FUND, ACTING IN ITS CAPACITY AS

DEPOSITARY OF AND FOR THE ACCOUNT

AND RISK OF PGGM PRIVATE REAL ESTATE FUND

By:  PGGM VERMOGENSBEHEER, B.V.

 

By:

 

 

Name:

 

 

Its:

 

 

 

 

 

By:

 

 

Name:

 

 

Its:

 

 

 

ACCEPTANCE OF ASSIGNMENT OF PARTNERSHIP INTEREST

 

FOR THE SAME CONSIDERATION, Assignee does hereby accept the foregoing assignment
of said                  percent (    %) Partnership Interest (the “Partnership
Interest”) in the Partnership, and hereby assumes and agrees to perform and be
bound by all of the covenants, conditions and obligations of Assignor as a
Limited Partner of said Partnership, in accordance with the organizational
documents of said Partnership and applicable law.

 

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

 

This Assignment, and the acceptance hereof, shall be binding upon and shall
inure to the benefit of each of the parties hereto and their legal
representatives, heirs, successors, and assigns.

 

Date:                                     , 20

 

ASSIGNEE:

 

INLAND REAL ESTATE CORPORATION, a Maryland corporation

 

By:

 

 

Name:

 

 

Its:

 

 

 

CONSENT OF GENERAL PARTNER OF

 

INP RETAIL, L.P.

 

Pursuant to Sections 11.2 and 11.5 of the Partnership’s Partnership Agreement
dated as of                               , 2010 (the “Partnership Agreement”),
the undersigned, being the General Partner of the Partnership, hereby approves
the admission of the Assignee as a Limited Partner to the extent of the
Partnership Interest assigned pursuant hereto in and of the Partnership, with
all rights, privileges and entitlements associated therewith, all as set forth
in the Partnership Agreement.

 

Date:                                     , 20

 

INP RETAIL MANAGEMENT COMPANY,

LLC, a Delaware limited liability company

 

By: Inland Real Estate Corporation

Its: Manager

 

By:

 

 

Name:

 

 

Its:

 

 

 

Being the General Partner of INP Retail, L.P.

 

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

 

EXHIBIT 17.18-A

 

EXCLUSION POLICIES

 

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

 

Restricted list PGGM Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Version

3/3/2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

This version replaces version dated

31-12-2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tab

1

Weapon Industry

 

 

 

 

 

 

 

2

Human Rights

 

 

 

 

 

 

 

3

Government Bonds

 

 

 

 

 

 

 

4

Australia

 

 

 

 

 

 

 

5

American REIT’s

 

 

 

 

 

 

 

 

 

 

 

 

 

Amendments in this version

 

 

 

 

 

 

 

 

 

 

 

 

 

latest version

 

3-3-2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tab

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

NA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2

NA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

NA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

Added

Country

 

Company

 

Bloomberg Ticker

 

 

 

 

 

 

 

Australia

 

Goodman Australië Industrial Fund

 

PRIVATE

 

 

 

 

 

 

 

Australia

 

GPT Wholesale Shopping Fund 1&2

 

PRIVATE

 

 

 

 

 

 

 

Australia

 

GPT Wholesale Office Fund 1&2

 

PRIVATE

 

 

 

 

 

 

 

Australia

 

Investa Commercial Property Fund

 

PRIVATE

 

 

 

 

 

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

 

 

 

 

Australia

 

QIC Shopping Centre Fund

 

PRIVATE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5

Deleted

 

 

 

 

 

 

 

 

 

 

 

 

Country

 

Company

 

Bloomberg Ticker

 

Sedol

 

ISIN

 

 

 

US

 

Brandywine Rlty

 

BDN US Equity

 

2518954

 

US1053682035

 

 

 

US

 

CEDAR SHOPPING CENTERS INC

 

CDR US Equity

 

2033242

 

US1506022094

 

 

 

US

 

Douglas Emmett

 

DEI US Equity

 

B1G3M58

 

US25960P1093

 

 

 

US

 

GLIMCHER REALTY TRUST

 

GRT US Equity

 

2371696

 

US3793021029

 

 

 

US

 

MAGUIRE PROPERTIES INC

 

MPG US Equity

 

2086848

 

US5597751016

 

 

 

US

 

PARKWAY PROPERTIES INC

 

PKY US Equity

 

2667168

 

US70159Q1040

 

 

 

US

 

SUN COMMUNITIES INC

 

SUI US Equity

 

2860257

 

US8666741041

 

 

Added

US

 

ACADIA REALTY TRUST

 

AKR US Equity

 

2566522

 

US0042391096

 

 

 

US

 

AMB PROPERTY CORP

 

AMB US Equity

 

2127855

 

US00163T1097

 

 

 

US

 

AMERICAN CAMPUS COMMUNITIES

 

ACC US Equity

 

B02H871

 

US0248351001

 

 

 

US

 

DEVELOPERS DIVERSIFIED RLTY

 

DDRPRG US Equity

 

2259060

 

US2515911038

 

 

 

US

 

DIAMONDROCK HOSPITALITY CO

 

DRH US Equity

 

B090B96

 

US2527843013

 

 

 

US

 

EQUITY RESIDENTIAL

 

EQR US Equity

 

2319157

 

US29476L1070

 

 

 

US

 

EXTRA SPACE STORAGE INC

 

EXR US Equity

 

B02HWR9

 

US30225T1025

 

 

 

US

 

HOST HOTELS & RESORTS INC

 

HST US Equity

 

2567503

 

US44107P1049

 

 

 

US

 

MEDICAL PROPERTIES TRUST INC

 

MPW US Equity

 

B0JL5L9

 

US58463J3041

 

 

 

US

 

PROLOGIS

 

PLD US Equity

 

2790611

 

US7434101025

 

 

 

US

 

SUNSTONE HOTEL INVESTORS INC

 

SHO US Equity

 

B034LG1

 

US8678921011

 

 

 

US

 

UDR INC

 

UDR US Equity

 

2727910

 

US9026531049

 

 

 

US

 

VENTAS INC

 

VTR US Equity

 

2927925

 

US92276F1003

 

 

 

US

 

VORNADO REALTY TRUST

 

VNO US Equity

 

2933632

 

US9290421091

 

 

 

US

 

WEINGARTEN REALTY INVESTORS

 

WRI US Equity

 

2946618

 

US9487411038

 

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

 

These restrictions apply for all portfolios, except for the exclusions mentioned
in the tab Australia and American Reit’s.

 

These two tabs do not apply for real estate portfolios, managed by PGGM
Investments

 

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

 

Exclusions List Weapons

 

N.B. It is not allowed to invest the Portfolio in the companies below,
regardless the kind of investment.  The tickers, sedols and ISIN are supplied to
help you to find the companies involved.

 

Country

 

Company

 

Bloomberg Ticker

 

Sedol

 

ISIN

Canada

 

Magellan Aerospace

 

MAL CN Equity

 

2556987

 

CA5589122004

France

 

Safran

 

SAF FP Equity

 

B058TZ6

 

FR0000073272

France

 

Thales

 

HO FP equity

 

4162791

 

FR0000121329

France

 

ZODIAC AEROSPACE SA

 

ZC FP Equity

 

B28NB12

 

FR0000125684

India

 

Larsen & Toubro

 

LT IN Equity

 

B0166K8

 

INE018A01030

Italy

 

Finmeccanica SpA

 

FNC IM Equity

 

B0DJNG0

 

IT0003856405

Netherlands

 

EADS

 

EAD FP Equity

 

4012250

 

NL0000235190

Romania

 

Aerostar

 

ARS RO Equity

 

7063921

 

ROAEROACNOR5

Singapore

 

Singapore Technologies Engineering Ltd

 

STE SP Equity

 

6043214

 

SG1F60858221

South Korea

 

Hanwha Corporation

 

000880 KS Equity

 

6496755

 

KR7000880005

South Korea

 

Poongsan

 

005810 KS Equity

 

6694474

 

KR7005810007

Sweden

 

Saab AB

 

SAABB SS equity

 

5469554

 

SE0000112385

UK

 

BAE SYSTEMS plc

 

BA/ LN equity

 

0263494

 

GB0002634946

UK

 

Cobham

 

COB LN Equity

 

B07KD36

 

GB00B07KD360

UK

 

Serco Group Plc

 

SRP LN Equity

 

0797379

 

GB0007973794

US

 

Alliant Techsystems Inc.

 

ATK US equity

 

2017677

 

US0188041042

US

 

Boeing

 

BA US Equity

 

2108601

 

US0970231058

US

 

GenCorp Inc

 

GY US Equity

 

2366959

 

US3686821006

US

 

General Dynamics Corp.

 

GD US equity

 

2365161

 

US3695501086

US

 

Goodrich Corporation

 

GR US Equity

 

2377809

 

US3823881061

US

 

Honeywell

 

HON US Equity

 

2020459

 

US4385161066

US

 

ITT Corporation

 

ITT US Equity

 

2465760

 

US4509111021

US

 

Jacobs Engineering Group Inc

 

JEC US Equity

 

2469052

 

US4698141078

 

CMI, 6/8/2010

 

2010 03 03 exclusionlist PGGM

 

Human Rights (tab 2)

 

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

 

US

 

Kaman Corp

 

KAMN US Equity

 

2483223

 

US4835481031

US

 

L-3 Communications Holding

 

LLL US equity

 

2247366

 

US5024241045

US

 

Lockheed Martin

 

LMT US Equity

 

2522096

 

US5398301094

US

 

McDermott International

 

MDR US Equity

 

2550310

 

PA5800371096

US

 

MOOG Inc

 

MOG/A US Equity

 

2601218

 

US6153942023

US

 

Northrop Grumman Corp.

 

NOC US equity

 

2648806

 

US6668071029

US

 

Raytheon Co.

 

RTN US equity

 

2758051

 

US7551115071

US

 

Rockwell Collins

 

COL US Equity

 

2767228

 

US7743411016

US

 

Textron

 

TXT US Equity

 

2885937

 

US8832031012

 

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

 

Exclusions List Human Rights

 

N.B.  It is not allowed to invest the Portfolio in the companies below,
regardless the kind of investment.  The tickers, sedols and ISIN are supplied to
help you to find the companies involved.

 

Country

 

Company

 

Bloomberg Ticker

 

Sedol

 

ISIN

China

 

PetroChina Company Ltd.

 

857 HK Equity

PC6A GR Equity

PTR US Equity

 

6226576

4633327

2568841

 

CNE1000003W8

US71646E1001

US71646E1001

 

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

 

Exclusions list Government Bonds

 

N.B.  It is not allowed to invest the Portfolio in any government bonds
(including inflation linked government bonds and other debt, issued by central
and lower governments) of the countries listed below

 

Country

Democratic People’s Republic of Korea

Islamic Republic of Iran

Myanmar

Somalia

Sudan

 

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

 

Exclusions List Australia

 

N.B.  It is not allowed to invest the Portfolio in the companies below,
regardless the kind of investment.  The tickers, sedols and ISIN are supplied to
help you to find the companies involved.

 

Country

 

Company

 

Bloomberg Ticker

 

Sedol

 

ISIN

Australia

 

Abacus Property

 

ABP AU  equity

 

6565707

 

AU000000ABP9

Australia

 

ALE Property Group

 

LEP AU equity

 

6713528

 

AU000000LEP0

Australia

 

APN European Retail Property Group

 

AEZ AU equity

 

B0FLLH1

 

AU000000AEZ2

Australia

 

Aspen Property

 

APZ AU equity

 

6361057

 

AU000000APZ8

Australia

 

Aurora Buy-Write Income Trust

 

ABW AU equity

 

B1454S3

 

AU000000ABW5

Australia

 

Aurora Infrastructure Buy-write Income trust

 

AIB AU equity

 

B29KW31

 

AU000000AIB4

Australia

 

Aurora Property Buy-Write Income Trust

 

AUP AU equity

 

B23K5K5

 

AU000000AUP9

Australia

 

Aurora Sandringham Dividend Income Trust

 

AOD AU equity

 

B0NH9L1

 

AU000000AOD8

Australia

 

Australand Property Group

 

ALZ AU equity

 

6003467

 

AU000000ALZ7

Australia

 

Australian commercial property trust

 

ARN AU equity

 

6671251

 

AU000000ARN0

Australia

 

Australian Education Trust

 

AEU AU equity

 

6616315

 

AU000000AEU3

Australia

 

Australian Enhanced Income Fund

 

AYF AU equity

 

B1FRCB7

 

AU000000AYF2

Australia

 

Australian Infrastructure Fund

 

AIX AU equity

 

6070193

 

AU000000AIX8

Australia

 

Babcock & Brown Capital

 

BCM AU equity

 

B05MrD7

 

AU000000BCM2

Australia

 

Babcock & Brown Infrastructure Group

 

BBI AU equity

 

6617404

 

AU000000BBI2

Australia

 

Babcock & Brown Japan

 

BJT AU equity

 

B06HD83

 

AU000000BJT2

Australia

 

Babcock & Brown Wind Partners

 

BBW AU equity

 

B0LN825

 

AU000000BBW3

Australia

 

Bunnings Warehouse

 

BWP AU equity

 

6127453

 

AU000000BWP3

Australia

 

Carindale property

 

CDP AU equity

 

6162841

 

AU000000CDP1

Australia

 

Centro Properties

 

CNP AU equity

 

6037745

 

AU000000CNP0

Australia

 

Centro Retail Group

 

CER AU equity

 

B0D9Q49

 

AU000000CER5

Australia

 

CFS Retail Property Trust

 

CFX AU equity

 

6361370

 

AU000000CFX0

Australia

 

Challenger Diversified Property Group

 

CDI AU equity

 

B1FH0M4

 

AU000000CDI6

Australia

 

Challenger Infrastructure Group

 

CIF AU equity

 

B1BKR60

 

AU000000CIF1

 

CMI, 6/8/2010

 

2010 03 03 exclusionlist PGGM

 

Australia (tab 4)

 

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

 

Exclusions List Australia

 

N.B.  It is not allowed to invest the Portfolio in the companies below,
regardless the kind of investment.  The tickers, sedols and ISIN are supplied to
help you to find the companies involved.

 

Country

 

Company

 

Bloomberg Ticker

 

Sedol

 

ISIN

Australia

 

Challenger Kenedix Japan Trust

 

CKT AU Equity

 

B2NV4G7

 

AU000000CKT8

Australia

 

Challenger Wine Trust

 

CWT AU equity

 

6161912

 

AU000000CWT3

Australia

 

Charter Hall Group

 

CHC AU equity

 

B15F6S6

 

AU000000CHC0

Australia

 

Cheviot Kirribilly Vineyard Property Group

 

CKP AU equity

 

B131CF5

 

AU000000CKP6

Australia

 

Commonwealth Property Office Fund

 

CPA AU equity

 

6150664

 

AU000000CPA7

Australia

 

Compass Hotel Group

 

CXH AU equity

 

B2N6LP0

 

AU000000CXH6

Australia

 

ConnectEast Group

 

CEU AU equity

 

B04C8F2

 

AU000000CEU9

Australia

 

Credit Suisse GP 100 Australia trust

 

CSJ AU equity

 

B3B1WG2

 

AU000000CSJ2

Australia

 

Dexus property group

 

DXS AU equity

 

B033YN6

 

AU000000DXS1

Australia

 

Duet Group

 

DUE AU equity

 

B01WT63

 

AU000000DUE7

Australia

 

Emerging Leaders Investments

 

ELI AU equity

 

B15WL04

 

AU000000ELI5

Australia

 

Emerging markets infrastructure Development trust

 

CSU AU equity

 

B28QG50

 

AU000000CSU9

Australia

 

Envestra Ltd

 

ENV AU equity

 

6037079

 

AU000000ENV4

Australia

 

Esplanade Property Fund

 

EPF AU Equity

 

6345084

 

AU000000EPF2

Australia

 

Everest Babcock & Brown

 

EBI AU equity

 

B1B0GT6

 

AU000000EBI6

Australia

 

Galileo Japan Trust

 

GJT AU equity

 

B1KN9P3

 

AU000000GJT1

Australia

 

General Property Trust

 

GPT AU equity

 

6365866

 

AU000000GPT8

Australia

 

GEO Property Group Limited

 

GPM AU equity

 

6706454

 

AU000000GPM3

Australia

 

Global Masters Fund

 

GFL AU equity

 

B1J89W6

 

AU000000GFL6

Australia

 

Goodman Group

 

GMG AU equity

 

B03FYZ4

 

AU000000GMG2

Australia

 

Hastings Diversified Utilities Fund  

 

HDF AU equity

 

B04D4R9

 

AU000000HDF1

Australia

 

Hastings High Yield Fund  

 

HHY AU equity

 

B17RQ80

 

AU000000HHY3

Australia

 

Headly Leisure and Gaming Property Fund

 

HLG AU equity

 

B23D4P2

 

AU000000HLG2

Australia

 

India Equities Fund Ltd

 

INES AU equity

 

N/A

 

AU00000INES8

 

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

 

Exclusions List Australia

 

N.B.  It is not allowed to invest the Portfolio in the companies below,
regardless the kind of investment.  The tickers, sedols and ISIN are supplied to
help you to find the companies involved.

 

Country

 

Company

 

Bloomberg Ticker

 

Sedol

 

ISIN

Australia

 

ING Industrial Fund

 

IIF AU equity

 

6419558

 

AU000000IIF8

Australia

 

ING Office Fund

 

IOF AU equity

 

6205694

 

AU000000IOF6

Australia

 

ING Private Equity Access

 

IPE AU equity

 

B03B1X9

 

AU000000IPE6

Australia

 

ING Real estate community living

 

ILF AU equity

 

B01FJV7

 

AU000000ILF2

Australia

 

ING Real Estate Healthcare Fund

 

IHF AU equity

 

B1524B6

 

AU000000IHF0

Australia

 

ING Real EstateEntertainment Fund

 

IEF AU equity

 

B01PVQ6

 

AU000000IEF7

Australia

 

KFM Diversified Infrastructure and Logistics Fund

 

KIL AU equity

 

B1L4BC6

 

AU000000KIL2

Australia

 

LinQ Resources Fund  

 

LRF AU equity

 

B03KW99

 

AU000000LRF3

Australia

 

Living & leisure Australia group

 

LLA AU equity

 

6153511

 

AU000000LLA7

Australia

 

MacarthurCook Asian Real Estate Securities Fund

 

MSA AU equity

 

B2QH9N4

 

AU000000MSA0

Australia

 

MacarthurCook Property securities fund

 

MPS AU equity

 

B04LVB6

 

AU000000MPS8

Australia

 

Macquarie Airports

 

MAP AU equity

 

6543628

 

AU000000MAP6

Australia

 

Macquarie Communications Infrastructure Group

 

MCG AU equity

 

6541860

 

AU000000MCG1

Australia

 

Macquarie Countrywide

 

MCW AU equity

 

6225595

 

AU000000MCW8

Australia

 

Macquarie DDR

 

MDT AU equity

 

6712343

 

AU000000MDT2

Australia

 

Macquarie Infrastructure Group

 

MIG AU equity

 

6456942

 

AU000000MIG8

Australia

 

Macquarie Leisure

 

MLE AU equity

 

6117960

 

AU000000MLE7

Australia

 

Macquarie Media group

 

MMG AU equity

 

B1FQWB4

 

AU000000MMG0

Australia

 

Macquarie Office

 

MOF AU equity

 

6703994

 

AU000000MOF8

Australia

 

Macquarie Winton Global Opportunities

 

MWG AU equity

 

B0NZTQ0

 

AU000000MWG9

Australia

 

Mariner Pipeline Income Fund

 

MIT AU equity

 

B1CNB22

 

AU000000MIT1

Australia

 

Mirvac Group

 

MGR AU equity

 

6161978

 

AU000000MGR9

Australia

 

Mirvac Industrial Trust

 

MIX AU equity

 

B0WMLM2

 

AU000000MIX3

Australia

 

Mirvac Real Estate Investment

 

MRZ AU equity

 

6581480

 

AU000000MRZ9

 

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

 

Exclusions List Australia

 

N.B.  It is not allowed to invest the Portfolio in the companies below,
regardless the kind of investment.  The tickers, sedols and ISIN are supplied to
help you to find the companies involved.

 

Country

 

Company

 

Bloomberg Ticker

 

Sedol

 

ISIN

Australia

 

Multiplex Acumen Prime Property Fund

 

MAFCA AU equity

 

B1DYPT9

 

AU0000MAFCA1

Australia

 

Multiplex Acumen Property Fund

 

MPF AU equity

 

6649344

 

AU000000MPF5

Australia

 

Multiplex European Property fund

 

MUE AU equity

 

B1YBWP4

 

AU000000MUE8

Australia

 

Octaviar ltd

 

OCV AU equity

 

6215422

 

AU000000OCV6

Australia

 

Orchard Industrial Property Fund

 

OIF AU equity

 

B1Y9BC8

 

AU000000OIF6

Australia

 

Pelorus property group ltd

 

PPI AU equity

 

B198DF7

 

AU000000PPI2

Australia

 

Prime Retirement and Aged Care Property Trust

 

PTN AU equity

 

B236T56

 

AU000000PTN4

Australia

 

Real estate capital partners USA property trust

 

RCU AU equity

 

B0QH554

 

AU00000RCU1

Australia

 

Reckson New York Property Trust

 

RNY AU equity

 

B0JK495

 

AU000000RNY0

Australia

 

Record Realty

 

RRT AU equity

 

6574963

 

AU000000RRT1

Australia

 

Rubicon America Trust

 

RAT AU equity

 

B0424D2

 

AU000000RAT7

Australia

 

Rubicon Europe Trust Group

 

REU AU equity

 

B0S5Z12

 

AU000000REU7

Australia

 

Rubicon Japan Trust

 

RJT AU equity

 

B1G3FN7

 

AU000000RJT8

Australia

 

SP AusNet

 

SPN AU equity

 

B0RF609

 

AU000000SPN6

Australia

 

Spark Infrastructure Group

 

SKI AU equity

 

B0T9JZ5

 

AU000000SKI7

Australia

 

SPDR 200

 

STW AU equity

 

6397353

 

AU000000STW9

Australia

 

SPDR 200 Property

 

SLF AU equity

 

6507516

 

AU000000SLF1

Australia

 

SPDR 50

 

SFY AU equity

 

6397342

 

AU000000SFY4

Australia

 

Stockland

 

SGP AU equity

 

6850856

 

AU000000SGP0

Australia

 

Thakral Holdings Group

 

THG AU equity

 

6889043

 

AU000000THG5

Australia

 

Timbercorp Primary Infrastructure Fund

 

TPF AU equity

 

B1L3QV7

 

AU000000TPF0

Australia

 

Tishman Speyer Office Fund

 

TSO AU equity

 

B04NW19

 

AU000000TSO6

Australia

 

Trafalgar Corporate

 

TGP AU equity

 

B0CMCK7

 

AU000000TGP8

Australia

 

Transfield Services Infrastructure Fund

 

TSI AU equity

 

B1WVSX6

 

AU000000TSI8

 

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

 

Exclusions List Australia

 

N.B.  It is not allowed to invest the Portfolio in the companies below,
regardless the kind of investment.  The tickers, sedols and ISIN are supplied to
help you to find the companies involved.

 

Country

 

Company

 

Bloomberg Ticker

 

Sedol

 

ISIN

Australia

 

Transurban Group

 

TCL AU equity

 

6200882

 

AU000000TCL6

Australia

 

Trinity limited

 

TCQ AU equity

 

B046NS2

 

AU000000TCQ5

Australia

 

Valad Property Group

 

VPG AU equity

 

6570121

 

AU000000VPG4

Australia

 

van Eyk Blueprint Alternatives Plus

 

VBP AU equity

 

B1GDYK7

 

AU000000VBP5

Australia

 

Viridis Clean Energy Group

 

VIR AU equity

 

B0H72K7

 

AU000000VIR6

Australia

 

Westfield Group

 

WDC AU equity

 

B01BTX7

 

AU000000WDC7

Australia

 

Westpac Office Trust

 

WOT AU equity

 

B04SFL5

 

AU000000WOT8

Australia

 

Goodman Australië Industrial Fund

 

PRIVATE

 

 

 

 

Australia

 

GPT Wholesale Shopping Fund 1&2

 

PRIVATE

 

 

 

 

Australia

 

GPT Wholesale Office Fund 1&2

 

PRIVATE

 

 

 

 

Australia

 

Investa Commercial Property Fund

 

PRIVATE

 

 

 

 

Australia

 

QIC Shopping Centre Fund

 

PRIVATE

 

 

 

 

 

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

 

Exclusions List American REIT’s

 

N.B.  It is not allowed to invest the Portfolio in the companies below,
regardless the kind of investment.  The tickers, sedols and ISIN are supplied to
help you to find the companies involved.

 

Country

 

Company

 

Bloomberg Ticker

 

Sedol

 

ISIN

US

 

ACADIA REALTY TRUST

 

AKR US Equity

 

2566522

 

US0042391096

US

 

AMB PROPERTY CORP

 

AMB US Equity

 

2127855

 

US00163T1097

US

 

AMERICAN CAMPUS COMMUNITIES

 

ACC US Equity

 

B02H871

 

US0248351001

US

 

AVALONBAY COMMUNITIES INC

 

AVB US Equity

 

2131179

 

US0534841012

US

 

BioMed Realty Trust

 

BMR US Equity

 

B02GMQ5

 

US09063H1077

US

 

BRE PROPERTIES  –CL A

 

BRE US Equity

 

2075426

 

US05564E1064

US

 

Camden Property

 

CPT US Equity

 

2166320

 

US1331311027

US

 

CBL & Associates Properties

 

CBL US Equity

 

2167475

 

US1248301004

US

 

DEVELOPERS DIVERSIFIED RLTY

 

DDRPRG US Equity

 

2259060

 

US2515911038

US

 

DIAMONDROCK HOSPITALITY CO

 

DRH US Equity

 

B090B96

 

US2527843013

US

 

Digital Realty Trust

 

DLR US Equity

 

B03GQS4

 

US2538681030

US

 

Duke Realty Corp

 

DRE US Equity

 

2284084

 

US2644115055

US

 

EQUITY RESIDENTIAL

 

EQR US Equity

 

2319157

 

US29476L1070

US

 

Essex Prop Trust

 

ESS US Equity

 

2316619

 

US2971781057

US

 

EXTRA SPACE STORAGE INC

 

EXR US Equity

 

B02HWR9

 

US30225T1025

US

 

HOST HOTELS & RESORTS INC

 

HST US Equity

 

2567503

 

US44107P1049

US

 

Kilroy Realty

 

KRC US Equity

 

2495529

 

US49427F1084

US

 

Macerich

 

MAC US Equity

 

2543967

 

US5543821012

US

 

MEDICAL PROPERTIES TRUST INC

 

MPW US Equity

 

B0JL5L9

 

US58463J3041

US

 

POST PROPERTIES INC

 

PPS US Equity

 

2705262

 

US7374641071

US

 

PROLOGIS

 

PLD US Equity

 

2790611

 

US7434101025

US

 

RAMCO-GERSHENSON PROPERTIES

 

RPT US Equity

 

2722777

 

US7514522025

US

 

SIMON PROPERTY GROUP INC

 

SPG US Equity

 

2812452

 

US8288061091

US

 

SL GREEN REALTY CORP

 

SLG US Equity

 

2096847

 

US78440X1019

US

 

SUNSTONE HOTEL INVESTORS INC

 

SHO US Equity

 

B034LG1

 

US8678921011

US

 

TAUBMAN CENTERS INC

 

TCO US Equity

 

2872252

 

US8766641034

US

 

UDR INC

 

UDR US Equity

 

2727910

 

US9026531049

US

 

VENTAS INC

 

VTR US Equity

 

2927925

 

US92276F1003

US

 

VORNADO REALTY TRUST

 

VNO US Equity

 

2933632

 

US9290421091

US

 

WEINGARTEN REALTY INVESTORS

 

WRI US Equity

 

2946618

 

US9487411038

 

[g117811kg59i001.jpg]

 

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

 

EXHIBIT 17.19-A

 

RIRE

 

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

 

Responsible Investment

policy for Real Estate (RIRE)

 

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

 

Introduction

 

On behalf of its clients, PGGM Investments manages several real estate
investment portfolios structured around listed real estate and private real
estate. PGGM Investments recognizes the impact real estate has on the
environment as well as on societal systems, for instance with regard to CO2
emissions. This document addresses PGGM Investments’ policy on integrating
material environmental, social and governance (ESG) issues into our real estate
investments. The scope of this policy covers both the listed and the private
real estate portfolios. There are differences between the two types of portfolio
in terms of the implementation of this policy and its implications.

 

These are addressed in the second part of this document. The Responsible
Investment policy for Real Estate (RIRE) will be effective as of June 24th 2009
and the implementation of the policy will start after that date. We will report
periodically on the progress made.

 

The RIRE is part of PGGM Investments’ Responsible Investment policy and as such
it falls hierarchically under this overall policy. In addition, PGGM
Investments’ Exclusions policy is applicable to our real estate portfolios, and
the Listed Equity Ownership Policy (LEOP) is applicable to our Listed Real
Estate Portfolio. Both policies are described in separate documents and are not
detailed further in the RIRE. All in all, PGGM Investments will live up to the
spirit of this policy, implement it, be transparent about the process and will
report accordingly. The policy will evolve over time. PGGM Investments follows
relevant developments closely and will update the RIRE when necessary. This
policy does not confer any rights to any third parties.

 

Vision and strategy

 

It is our vision that ESG issues will change the market dynamics of the real
estate sector. We believe that ESG factors have a material impact on the
financial performance of our real estate portfolios and that it is our
responsibility to capture the value and mitigate the risks related to ESG
factors. Responsible investment is incorporated in the heart of PGGM
Investments’ investment philosophy: ‘responsible investing pays off’ is one of
the investment beliefs.

 

It is our strategy to (i) structurally integrate ESG factors into our investment
processes, (ii) realize strong governance of our investments, and (iii) strive
for better ESG performance by the assets that are part of our real estate
portfolios. This means, among other things, that we integrate ESG factors into
our decision-making process before selecting an investment, engage with real
estate companies and funds with the aim of improving the ESG performance of
underlying assets and set minimum ESG requirements for our investments. We
believe that a better ESG performance leads to a better real estate investment
performance. We actively encourage real estate companies and funds to improve
the ESG performance of their assets and, when choosing between comparable
investments, we select the investment with the better ESG performance. We will
not invest in companies or funds that do not disclose the energy consumption
performance of their real estate.

 

148

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

 

Material ESG factors in real estate

 

In the implementation of our strategy we focus on the following ESG factors:

 

Environmental: For us this means that we focus on climate change. We believe
that climate change issues are very important and that climate change (related)
policy will lead to more focus on, for instance, energy efficiency and urban
regeneration and that it will lead to shifting tenant and investor preferences;

 

Social: For us this means that we focus on human rights and work conditions. In
the development, construction and operation phase of property, issues regarding
human rights and work conditions are liable to arise. This may result in
financial and/or reputational risk for the property in question and for the
ultimate investor in the asset.

 

Governance: For us this means that we focus on good corporate governance and
fund governance. We believe that good governance (e.g. transparency,
accountability) in real estate reduces the investment risk.

 

Implications for Private Real Estate

 

(i) We structurally integrate ESG factors into our investment process. We
believe that integrating ESG factors into our investment process contributes to
the generation of a high and stable return by the Private Real Estate
portfolios. As we manage indirect private real estate portfolios (i.e. we do not
invest in the underlying property directly, but indirectly via non-listed real
estate funds) the implementation of our RIRE will impact both new and current
fund managers of our private real estate investments.

 

Selection: Before selecting a private real estate fund, we need to understand
the extent to which the fund manager is able to incorporate our RIRE into its
own operations. In this context, we require fund managers to have at least a
clear vision and policy regarding the ESG issues that we focus on, and when
necessary we set further minimum requirements. ESG issues are a separate section
in our due diligence and decision-making frameworks.

 

Monitoring: On a structural basis we monitor the funds we invest in and
periodically meet with the management of these funds. ESG is part of the
reporting requirements for our fund managers and part of the periodic review
meetings.

 

(ii) We strive for strong fund governance.

 

We expect our fund managers to be fully transparent. This means that all
relevant information regarding the investment should be public and available to
all investors.

 

(iii) We strive for a better ESG performance by the assets that are part of the
funds in our Private Real Estate portfolios.

 

We will actively explain our RIRE policy to the fund managers and require
managers to actively improve the ESG performance of the assets that they manage
and to report on improvements.

 

This also applies to the (re-)development of assets in the fund. This policy
will not only be applied to new investments; our existing portfolio will also be
impacted. While respecting existing contracts with fund managers, we will engage
with the fund managers in order to have this policy implemented in their
day-to-day work. We realize that this will be a gradual process.

 

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Implications for Listed Real Estate

 

(i) We structurally integrate ESG factors into our investment process.

 

We manage Listed Real Estate portfolios (i.e. we do not invest in the underlying
property directly, but indirectly via real estate companies that are listed on
stock exchanges). It is our view that the integration of ESG factors into our
investment process contributes to the generation of outperformance by our listed
real estate portfolios against their benchmark.

 

Selection: We systematically include ESG information in our investment
decision-making framework and weigh these factors together with other –
financial and non-financial — factors in constructing the investment portfolio.
ESG factors are translated into our expectations with regard to rents and
valuations. In this way, ESG factors impact our price targets, which in turn
affect the composition of our portfolio.

 

Monitoring: On a structural basis we monitor the companies we invest in and
periodically meet with the management of these companies. Before meeting with
the management, we determine the relevant subjects for discussion. In doing so
we will structurally consider ESG issues and such issues will be discussed in
company meetings where appropriate.

 

(ii) We strive for strong governance. We expect good corporate governance of the
companies we invest in with regard to matters such as shareholders’ rights,
independence of board members and financial reporting. We expect companies to
meet all disclosure requirements and to be fully transparent with regard to
strategy. All relevant information should be public and available to all
shareholders. In those cases where the level of corporate governance is
substandard, we will engage with the management to improve the corporate
governance. In cases where management provides insufficient disclosure with
regard to strategy and/or other aspects we deem relevant, we may give a zero
allocation to the company, irrespective of its benchmark weight.

 

(iii) We strive for a better ESG performance by the assets that are part of our
portfolio.

 

We engage with companies in order to improve the ESG performance of the
underlying assets. We will actively explain our RIRE policy to the management
and discuss our transparency needs regarding ESG issues on the company and asset
level.

 

 

PGGM Investments

 

Kroostweg-Noord 149

 

P.O. Box 117, 3700 AC Zeist, The Netherlands

www.pggm.com

 

K.v.K. 41179049

 

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For more information on PGGM Investments’ Responsible Investment policy please
contact our Responsible Investment department, +31 30 277 10 49 or visit our
website www.pggm.com

 

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Schedule 6.2(a)-1

 

Initial Inland Properties

 

 

Shannon Square

 

 

 

Woodland Commons

 

 

 

Mallard Crossing

 

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Schedule 6.2(a)-2

 

Additional Inland Properties

 

 

Riverdale Commons

 

 

 

The Quarry

 

 

 

Stuart’s Crossing

 

 

 

Byerly’s Burnsville

 

 

 

Plymouth Town Center

 

 

 

Woodfield Plaza

 

 

 

Village Ten Center

 

 

 

Caton Crossing

 

 

 

Four Flaggs

 

2

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Schedule 6.2(d)

Values

 

{The Contribution Values for the Initial Inland Properties are set forth in
Annex A attached to this Schedule 6.2(d)}

 

1.             The Contribution Value with respect to all Inland Properties
other than Four Flaggs shall be equal to an initial capitalization rate to be
agreed to by the Limited Partners applied to the agreed upon in place trailing
three month net operating income of such Inland Property as of a valuation date
agreed to by the Limited Partners multiplied by 4, corrected for seasonal
influences, recently signed leases adjusted for tenant improvements and lease
incentives, contractual 2010 rent set-ups that are effective as of the initial
capitalization of the Partnership, and known impending move-outs (for which
Inland will provide list to PGGM and its tax advisor).

 

2.             The Contribution Value with respect to Four Flaggs shall be equal
to an initial capitalization rate to be agreed to by the Limited Partners
applied to the agreed upon estimated net operating income of Four Flaggs for the
calendar month following the proposed contribution date multiplied by 12,
corrected for seasonal influences, recently signed leases adjusted for tenant
improvements and lease incentives, contractual rent set-ups that are effective
as of the date of such proposed contribution, and known impending move-outs (for
which Inland will provide list to PGGM PRE Fund and its tax advisor).

 

3.             The Total Equity Capitalization shall be equal to the sum of the
Contribution Value of the Inland Properties less the remaining indebtedness
secured by such Inland Properties and the aggregate purchase price less
Financing for each Additional Property; provided however that upon the sale of
an Owned Property, such Owned Property will not be considered for the purposes
of the calculation of the Total Equity Contribution for the portion of the year
after the date of sale, and provided further that if an Owned Property is
impaired for more than 50% of its fair market value, the equity value allocated
to such Owned Property shall be the net asset value of the Owned Property for
such time the fair market value is below 50% of the original equity invested.

 

3

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Annex A to Schedule 6.2(d)

 

Initial Inland Properties

 

Initial Inland Property

 

Contribution Value

 

Shannon Square

 

$

15,823,541

 

Woodland Commons

 

$

23,340,443

 

Mallard Crossing

 

$

6,162,873

 

 

4

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Schedule 14.4

 

Existing Inland JV’s

 

1.

 

New York State Teachers Retirement System

2.

 

Inland  Real Estate Exchange Corporation

3.

 

TMK Development (Development JV)

4.

 

North American Real Estate (Development JV)

5.

 

Paradise Group (Development JV)

6.

 

Pine Tree Institutional Realty LLC (Development JV)

7.

 

Tucker Development Corporation (Development JV)

 

5

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