Exhibit 10.1


 


LIMITED PARTNERSHIP
AGREEMENT


 


OF


 


INP
RETAIL, L.P.


 

















 


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


 

















 


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.


 

















 


“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.


 

















 


“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.


 

















 


“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 


 

















 


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 


 

















 


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;


 

















 


(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;


 

















 


(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.


 






 














 


“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.


 

















 


“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 


 

















 


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”.


 

















 


“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;


 

















 


(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.


 

















 


“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;


 

















 


(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.


 

















 


“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.


 

















 


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 


 

















 


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.


 






 














 


(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


 

















 


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


 

















 


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


 

















 


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


 

















 


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.


 

















 


(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


 

















 


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,


 

















 


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


 

















 


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:


 


















 


(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.


 

















 


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


 

















 


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


 

















 


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


 

















 


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


 

















 


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


 

















 


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


 

















 


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


 

















 


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


 

















 


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


 


















 


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


 

















 


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


 

















 


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


 

















 


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


 

















 


(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


 

















 


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.


 

















 


(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.


 

















 


(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


 

















 


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.


 

















 


(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;


 


















 


(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.


 

















 


(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, 


 

















 


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 


 

















 


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.


 

















 


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 


 

















 


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 


 

















 


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 


 

















 


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;


 

















 


(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.


 

















 


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


 


















 


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 


 

















 


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 


 

















 


“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 


 

















 


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:


 

















 


(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”).


 

















 


(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 


 

















 


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 


 

















 


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.


 





















 


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.


 

















 


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


 


















 


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 


 

















 


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 


 

















 


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.


 

















 


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.


 






 


 














 


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.


 


3

















 


“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).


 


4

















 


“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.


 


5

















 


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;


 


6


















 


(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;


 


7

















 


(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.


 


8

















 


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.


 


9

















 


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.


 


10

















 


(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.


 


11

















 


“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.


 


12

















 


“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.


 


13

















 


(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 


 


14

















 


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 1⁄2
of 1% of the number or value of outstanding Units shall, within thirty (30)
days after January 1 of each year, give written 


 


15

















 


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.


 


16


















 


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 


 


17

















 


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.


 


18

















 


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.


 


19

















 


(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


 


20

















 


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 


 


21

















 


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:


 


22

















 


(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 


 


23

















 


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.


 


24

















 


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.


 


25

















 


(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.


 


26


















 


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

















 


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

















 


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

















 


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

















 


EXHIBIT B


 


DESCRIPTION OF THE OWNED
PROPERTIES


 


B-1

















 


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

















 


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

















 


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

















 


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


















 


(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

















 


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;


 


9

















 


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

















 


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


 


11

















 


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.


 


12

















 


EXHIBIT 6-2B


 


FORM OF


CONTRIBUTION AGREEMENT


 


13

















 


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:


 


14

















 


(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

















 


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


















 


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).


 






(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.


 


17

















 


(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.


 






(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

















 


(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.


 






(5) Delete, if applicable.


 


19

















 


(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

















 


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

















 


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

















 


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

















 


(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

















 


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

















 


(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


















 


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

















 


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

















 


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


 


29

















 


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

















 


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

















 


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.


 


32

















 


(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

















 


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


 






(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

















 


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).


 


35

















 


(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


















 


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

















 


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

















 


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

















 


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

















 


(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

















 


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

















 


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

















 


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


















 


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

















 


EXHIBIT A


 


LEGAL DESCRIPTION


 


49

















 


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

















 


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

















 


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

















 


EXHIBIT C


 


OPERATING AGREEMENT (PROPERTY
ENTITY)


 


53

















 


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)

  



 


63

















 


	
  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)

  



 


64

















 


	
  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

















 


	
  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

  



 


66

















 


	
  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

  



 


67

















 


	
  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

















 


	
  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


















 


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;


 


70

















 


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;


 


71

















 


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

















 


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

















 


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

















 


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

















 


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,



 


81

















 


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 


 


82

















 


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 


 


83

















 


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 


 


85

















 


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 


 


86

















 


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 


 


87

















 


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 


 


88

















 


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:


 


89






 














 




	
  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 


 


90

















 


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 


 


91

















 


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 


 


92

















 


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 


 


93

















 


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.


 


94

















 


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 


 


95

















 


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 


 


96

















 


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


 


97

















 


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)


 


98

















 


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

  



 


99






 














 


EXHIBIT “A”


 


Legal Description


 


See attached


 


100

















 


EXHIBIT “B”


 


101

















 


EXHIBIT 10-C


 


FORM OF


 


LEASING AGREEMENT


 


102

















 


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.


 


103

















 


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 


 


104

















 


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.


 


105

















 


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, 


 


106

















 


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


 


107

















 


(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.


 


108

















 


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:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


109


















 


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 


 


110

















 


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.


 


111

















 


[Signatures Continued on Next Page]


 


112

















 


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:

  	
   

  	
   

  



 


113

















 


EXHIBIT A


 


EXCLUDED PROSPECTIVE TENANTS


 


Name of Shopping Center


 


 


NONE


 

















 


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.


 

















 


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.


 

















 


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

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
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  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

  



 





 

















 


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.


 


149

















 


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


 

















 


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


 


















 


Schedule 6.2(a)-1


 


Initial Inland Properties


 


	
   

  	
  Shannon Square

  
	
   

  	
   

  
	
   

  	
  Woodland Commons

  
	
   

  	
   

  
	
   

  	
  Mallard Crossing

  



 

















 


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

















 


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

















 


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

















 


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