Exhibit 10.87


 




 





 


INLAND AMERICAN CERUZZI CUMBERLAND MEMBER, L.L.C.


 


LIMITED LIABILITY COMPANY AGREEMENT


 


 


Dated as of June 8, 2006


 




 





 


i

















 


LIMITED LIABILITY COMPANY AGREEMENT


OF


INLAND AMERICAN CERUZZI CUMBERLAND MEMBER, L.L.C.


 


THIS LIMITED LIABILITY COMPANY AGREEMENT
(this “Agreement”) dated as of June 8, 2006,
is made by and between Inland American Cumberland Member II, L.L.C., a Delaware
limited liability company (“Inland”), and
CE Investment Associates 2001 L.L.C. (the “Initial  Investor”).


 


Preliminary Statements


 


WHEREAS, Inland Real Estate Acquisitions, Inc.
(“IREA”) and the Investor entered into that certain Agreement of Contribution,
dated February 24, 2006 (the “Contribution
Agreement”), providing for the contribution by the Investor of
certain real property therein described (the “Property”) to Inland American Cumberland, L.L.C., a newly
formed single purpose entity the sole member of which is Inland American
Ceruzzi Cumberland Member, L.L.C., in exchange for a non-managing membership
interest in such entity;


 


WHEREAS, IREA, as
the contribution of Inland to the Company, assigned its rights and obligations
under the Contribution Agreement to Inland American Cumberland, L.L.C. by
Assignment dated June           ,
2006; and


 


WHEREAS, the parties hereto now
desire to enter into this Limited Liability Company Agreement in order to (i) reflect
the admission of the Members as the sole Members of the Company, (ii) establish
the manner in which the business and affairs of the Company shall be managed
and (iii) determine the respective rights, duties and obligations of the
Members with respect to the Company and each other.


 


NOW THEREFORE, the parties hereto, in consideration of
the foregoing premises and the mutual covenants and agreements contained
herein, hereby agree as follows:


 


ARTICLE I


 


DEFINED TERMS


 


The following terms shall have the following meanings
when used herein:


 


Adjusted
Capital Account Deficit:  With respect to any Member, the deficit
balance, if any, in such Member’s Capital Account as of the end of the relevant
Allocation Year, after giving effect to the following adjustments:  (i) credit to such Capital Account any
amount that such Member is obligated to restore pursuant to any provision of this
Agreement, is otherwise treated as being obligated to restore under Treasury
Regulation Section 1.704-1(b)(2)(ii)(c), or is deemed to be obligated to
restore pursuant to the penultimate sentences of Treasury Regulation Sections
1.704-2(g)(1) and 1.704-2(i)(5); and (ii) debit to such Capital
Account the items described in Treasury Regulations Sections
1.704-1(b)(2)(ii)(d)(4), (5) and (6). The foregoing definition of Adjusted
Capital Account Deficit is intended to comply with the provisions of Treasury
Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.


 

















 


Affiliate:  With respect to any Person, (i) any
Person directly or indirectly controlled by, controlling or under common
control with such Person, (ii) any officer, director, general partner or
manager of such Person, or (iii) any Person which owns, directly or
indirectly, ten percent (10%) or more of any class of voting securities of
such Person or which exercises control over the management of such Person. For
the purposes of this Agreement, “control” when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities or other beneficial interests, by contract or otherwise; and the
term “controls”, “controlling” and “controlled” have the meanings correlative
to the foregoing.


 


Allocation Year:  Means (i) the period commencing on the
Closing Date and ending on December 31, 2006, (ii) any subsequent
period commencing on January 1 and ending on the following December 31,
or (iii) any portion of the period described in clause (ii) for which
the Company is required to allocate Profits, Losses and other items of Company
income, gain, loss or deduction pursuant to Article V.


 


Business Day:  Any day other than Saturday, Sunday or any
other day on which commercial banks are required or authorized by law to close
in Chicago, Illinois.


 


Capital Account:  The Capital Account maintained for each
Member pursuant to Section 3.5.


 


Capital Contribution:  With respect to any Member, the amount of
money and the initial Gross Asset Value of any property contributed by such
Member to the Company (net of any liabilities secured by such property or to
which such property is otherwise subject).


 


Capital Expenditures:  For any period, the amount expended for items
capitalized under generally accepted accounting principles, consistently
applied, except for such items as are otherwise classified under this
Agreement.


 


Capital Transaction:  Any of the following: (a) a sale,
exchange, transfer, assignment or other disposition of all or a portion of any material
asset of the Company (or Owner LLC) other than tangible personal property that
is not sold or transferred in connection with the sale or transfer of real
property or a leasehold interest in real property; (b) any condemnation or
deeding in lieu of condemnation of all or a portion of any material asset of
the Company (or Owner LLC); and (c) any fire or other casualty to the Property
or any other material asset of the Company (or Owner LLC).


 


Cash Shortfall:  For any period, the excess, if any, of (a) Operating
Expenses over (b) Gross Receipts.


 


Cash Shortfall Loan:  A loan made by a Member (or Affiliate or
other Person designated by a Member) to the Company pursuant to Section 3.3.A
hereof, on the terms set forth in Section 3.3.B hereof.


 


Certificate:  The Certificate of Formation for the Company
filed with the Secretary of State, pursuant to Section 18-201 of the LLC
Act (as hereinafter defined), as the same may be amended and restated from
time to time.


 


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Class A Member:  The Members of the Company that hold Class A
Units.


 


Class A Units:  The Units of the Company that are characterized
as Class A Units and listed on Schedule A
attached hereto.


 


Class B Units:  The Units of the Company that are
characterized as Class B Units and listed on Schedule A
attached hereto.


 


Closing Date:  Means the date of this Agreement.


 


Code:  The Internal Revenue Code of 1986, as
amended, or any corresponding provision or provisions of prior or succeeding
law.


 


Company:  Inland American Ceruzzi Cumberland Member,
L.L.C., a limited liability company formed under the laws of the State of
Delaware, and any successor limited liability company.


 


Company Minimum Gain:  Has the meaning given to the term “partnership
minimum gain” set forth in Treasury Regulations §1.704-2(d).


 


Contribution Agreement:  Has the meaning set forth in the Preliminary
Statements to this Agreement.


 


Depreciation:  For each Allocation Year, an amount equal to
the depreciation, amortization, or other cost recovery deduction allowable with
respect to an asset for such Allocation Year, except that if the Gross Asset
Value of an asset differs from its adjusted basis for federal income tax
purposes at the beginning of such Allocation Year, Depreciation shall be an
amount which bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization, or other cost recovery deduction
for such Allocation Year bears to such beginning adjusted tax basis. If any
asset shall have a zero adjusted basis for federal income tax purposes,
Depreciation shall be determined utilizing any reasonable method selected by
the Manager.


 


80% Owned Affiliate:  With respect to any Person, an Affiliate
of such Person of which 80% or more of the capital stock (or its equivalent in
the case of Persons other than corporations) is owned beneficially by such
Person directly, or indirectly through one or more 80% Owned Affiliates, or by
a Person who, directly or indirectly, owns beneficially 80% or more of the
equity interest (or its equivalent in the case of Persons other than
corporations) of such Person; provided that, for purposes of determining the
ownership of the equity interests of any Person, de minimis
amounts of stock held by directors, nominees and similar Persons pursuant to
statutory or regulatory requirements shall not be taken into account.


 


Event of Bankruptcy:  With respect to any Member, if such Member (i) makes
an assignment for the benefit of creditors, (ii) files a voluntary
petition in bankruptcy, (iii) is adjudged a bankrupt or insolvent, or has
entered against it an order for relief, in any bankruptcy or insolvency
proceeding, (iv) files a petition or answer seeking for itself any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any statute, law or regulation, (v) files  an answer or other pleading admitting or
failing to contest the


 


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material allegations of a petition filed against the Member in any
proceeding of this nature, (vi) seeks, consents to or acquiesces in the
appointment of a trustee, receiver or liquidator of the Member or of all or any
substantial part of its properties, or (vii) 120 days after the
commencement of any proceeding against the Member seeking reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any statute, law or regulation, if the proceeding has not been
dismissed, or if within 90 days after the appointment without such Member’s
consent or acquiescence of a trustee, receiver or liquidator of such Member or
of all or any substantial part of its properties, the appointment is not
vacated or stayed, or within 90 days after the expiration of any such stay, the
appointment is not vacated. With respect to a Member, the foregoing definition
of “Event of Bankruptcy” is intended to replace and shall supersede and replace
the definition of “Bankruptcy” set forth in Sections 18-101(1) and 18-304
of the LLC Act.


 


Fiscal Year:  Means (i) the period commencing on the
date hereof and ending on December 31, 2006, and (ii) any subsequent
period commencing on January 1 and ending on the earlier to occur of (A) the
following December 31, or (B) the date on which all of the assets of
the Company are distributed pursuant to Section 9.2 and the Certificate
has been cancelled pursuant to the LLC Act.


 


Gross Asset Value:
With respect to any asset, the asset’s adjusted basis for federal income tax
purposes, except as follows:


 


(a)                                  The
initial Gross Asset Value of any asset contributed by or credited to a Member
to the Company shall be the gross fair market value of such asset, as
determined by the Manager;


 


(b)                                 The
Gross Asset Values of all assets of the Company and Owner LLC shall be adjusted
to equal their respective gross fair market values, as determined by the
Manager, as of the following times: (i) the acquisition of an interest or
an additional interest in the Company by any new or existing Member in exchange
for more than a de minimis Capital Contribution; (ii) the distribution by
the Company or Owner LLC to a Member of more than a de minimis amount of
property or money as consideration for an interest in the Company; (iii) the
liquidation of the Company within the meaning of Treasury
Regulations §1.704-l(b)(2)(ii)(g); and (iv) whenever otherwise
permitted under Treasury Regulations §1.704-l(b)(2)(iv)(f); provided,
however, that adjustments pursuant to clause (i) above shall be made only
if the Manager determines that such adjustments are necessary or appropriate to
reflect the relative economic interests of the Members;


 


(c)                                  The
Gross Asset Value of any asset of the Company or Owner LLC distributed to a
Member shall be the gross fair market value of such asset on the date of
distribution as determined in accordance with the provisions hereof;


 


(d)                                 The
Gross Asset Values of the assets of the Company or Owner LLC shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only
to the extent that such adjustments are taken into account in determining
Capital Accounts pursuant to Treasury Regulations §1.704-l(b)(2)(iv)(m)
and subparagraph (vi) of the definition of Profit and


 


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Losses; provided, however,
that Gross Asset Values shall not be adjusted pursuant to this paragraph (d) to
the extent the Manager determines that an adjustment pursuant to paragraph (b) hereof
is necessary or appropriate in connection with a transaction that would
otherwise result in an adjustment pursuant to this paragraph (d); and


 


(e)                                  If
the Gross Asset Value of an asset has been determined or adjusted pursuant to
paragraphs (a), (b), or (d), such Gross Asset Value shall thereafter be
adjusted by the Depreciation taken into account with respect to such asset for
purposes of computing Profits and Losses.


 


(f)                                    The
Members agree that, as of the date hereof, the Gross Asset Value of the
Property is $19,544,605.00.


 


Gross Receipts:  For any period, all cash receipts and
revenues of the Company and/or Owner LLC of any kind calculated on a cash basis,
including, without duplication (i) all Rents received by the Company
and/or Owner LLC, (ii) all payments received by the Company and/or Owner
LLC from the operators of any licensed facilities or concessions, (iii) all
other forms of rent, revenue, income, proceeds, royalties, profits and other
benefits paid to the Company from using, leasing, licensing, processing,
operating from or in, or otherwise enjoying all or any portion of the Property,
(iv) all payments under business interruption insurance policies or
proceeds payable under any policy of insurance covering loss of Rents, (v) any
utility or other deposits returned to the Company and/or Owner LLC or other
refunds accruing to the Company and/or Owner LLC, (vi) any interest earned
on security deposits held by the Company and/or Owner LLC to the extent
retained by the Company and/or Owner LLC, and interest earned on operating and
other accounts of the Company and/or Owner LLC, (vii) all amounts received
by the Company and/or Owner LLC from tenants at the Property in connection with
the surrender of such tenants’ leases and (viii) all refunds, rebates and
other recoveries of items previously charged as Operating Expenses, but
excluding, (a) Capital Contributions to the Company, (b) Net Proceeds
of a Capital Transaction and Net Proceeds of a Financing, (c) sums held by
the Company and/or Owner LLC as security deposits under leases for space at the
Property unless and until applied to the satisfaction of tenants’ obligations
under such leases (to the extent permitted under applicable leases and law) and
(d) non-cash charges accruing to the Company and/or Owner LLC in the
nature of depreciation and amortization of the Property.


 


Impositions:  With respect to the Property, all taxes
(including sales and use taxes), assessments (including all assessments for
public improvements or benefits, whether or not commenced or completed prior to
the date hereof), water, sewer or other rents, rates and charges, excises,
levies, license fees, permit fees, inspection fees and other authorization fees
and other charges, in each case whether general or special, ordinary or
extraordinary, of every character (including all interest and penalties
thereon), which at any time may be assessed, levied, confirmed or imposed
by any governmental or quasi-governmental authority having jurisdiction over
the Property on or in respect of or be a lien upon (i) the Property or any
estate or interest therein, (ii) any occupancy, use or possession of, or
activity conducted on, the Property, or (iii) the Rents from the Property
or the use or occupancy thereof.


 


Inland Parent:  Inland American Real Estate Trust, Inc.,
a Maryland corporation.


 


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Inland Preferred Return:  A per annum rate equal to (x) 15% per annum, compounded monthly, for the period beginning on
the date hereof and ending on the date that is five (5) years after the
date hereof and (y) 20% per annum, compounded monthly, from and after the date
that is five (5) years after the date hereof, on Inland’s Invested Capital as adjusted from time to time, provided,
however, that such rate shall be pro rated for each Fiscal Year of the Company
which is less than twelve (12) full months.


 


Invested Capital:  With respect to each Member, the amount set
forth opposite such Member’s name on Schedule A attached hereto, as
increased, from to time, by any Capital Contributions (other than Initial
Capital Contributions) made or deemed made by such Member pursuant to the terms
of this Agreement following the date hereof, and as reduced from time to time,
but not below zero, by distributions made to such Member under Section 4.2(ii) in
the case of each Investor, and Section 4.2(iv) in the case of Inland,
until such time as the Invested Capital of such Member has been reduced to zero.
Notwithstanding the foregoing, in the event that an Investor exchanges a
portion of its Class B Units pursuant to the terms of Article X
hereof, the Invested Capital of such Investor shall be reduced by a fraction,
the numerator of which shall be equal to the Tendered Units of such Investor at
such time and the denominator of which shall be equal to all of the outstanding
Class B Units held by such Investor at such time.


 


Investor:  The Initial Investor and, following the
Transfer of the Investor LLC Interest to the members of the Initial Investor in
accordance with the terms of Section 8.2.D hereof, each  of the parties identified on Schedule B-1
attached hereto.


 


Investor LLC Interest (or LLC
Interest of the Investor):  With respect to each Investor, the entire LLC
Interest in the Company held directly or indirectly by such Investor, any
Affiliate of such Investor and any and all successors and permitted assignees
of such Investor and/or any Affiliate of such Investor. For the avoidance of
doubt the “Investor LLC Interest” of an Investor shall include all of the Class A
Units and Class B Units held by such Investor, any Affiliate of such
Investor and any and all successors and permitted assignees of such Investor
and/or any Affiliate of such Investor.


 


Investor Preferred Return:  With respect to each Investor, a per annum
rate equal to five and one-half percent (5.5%) per
annum on such Investor’s Invested Capital as adjusted from time to time,
provided, however, that such rate shall be pro rated for each Fiscal Year of
the Company which is less than twelve (12) full months.


 


LLC Interest:  As to any Member, all of the interest of that
Member in the Company including, without limitation, such Member’s (i) right
to a distributive share of the Profits and Losses and cash flow of the Company,
(ii) right to a distributive share of the assets of the Company and (iii) right
to participate in the management of the business and affairs of the Company, as
provided in this Agreement.


 


Manager. Means
the Person in whom the management of the Company is vested to the extent so
provided in this Agreement. Pursuant to the terms of Section 6.1 of this
Agreement, the Manager is Inland.


 


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Member:  At any time, any Person admitted and
remaining as a member of the Company pursuant to the terms of this Agreement. As
of the date of this Agreement, the Members of the Company are Inland and the
Initial Investor.


 


Member Nonrecourse Debt:  Has the meaning given to the term “partner
nonrecourse debt” set forth in Treasury Regulations §1.704-2(b)(4).


 


Member Nonrecourse Debt Minimum
Gain:  An amount,
with respect to each Member Nonrecourse Debt, equal to the Company Minimum Gain
that would result if such Member Nonrecourse Debt were treated as a Nonrecourse
Liability, determined in accordance with Treasury Regulations §1.704-2(i)(2) and
(3).


 


Member Nonrecourse Deductions:   Has the meaning given to the term “partner
nonrecourse deductions” set forth in Treasury Regulations §1.704-2(i)(2). For
any Allocation Year, the amount of Member Nonrecourse Deductions with respect
to a Member Nonrecourse Debt equals the excess, if any, of the net increase, if
any, in the amount of the Member Nonrecourse Debt Minimum Gain attributable to
such Member Nonrecourse Debt over the aggregate amount of any distributions
during such Allocation Year to the Member that bears the economic risk of loss
for such Member Nonrecourse Debt to the extent such distributions are from
proceeds of such Member Nonrecourse Debt and are allocable to an increase in
Member Nonrecourse Debt Minimum Gain, determined according to the provisions of
Treasury Regulations §1.704-2(i)(2).


 


Net Cash Flow:  For any period, the excess of (a) Gross
Receipts plus any amount, as reasonably determined by the Manager, taken out of
any general reserve account established by the Company and/or Owner LLC over (b) Operating
Expenses plus any amount, as reasonably determined by the Manager, added during
such period to any such general reserve account.


 


Net Proceeds of a Capital
Transaction:  With
respect to the Property, the net cash proceeds from a Capital Transaction less
any portion thereof used to (i) establish reserves as reasonably
determined by the Manager, (ii) repay any debts or other obligations of
the Company and/or Owner LLC (including Cash Shortfall Loans), or (iii) restore
the Property following a casualty or condemnation. “Net Proceeds of a Capital
Transaction” shall include all
principal, interest and other payments as and when received with respect to any
note or other obligation received by the Company in connection with a Capital
Transaction and shall expressly exclude Net
Proceeds of a Financing.


 


Net Proceeds of a Financing:  With respect to the Property, the net cash
proceeds from any financing transaction less any portion thereof used to (i) establish
reserves as reasonably determined by the Manager, or (ii) repay any debts
or other obligations of the Company and/or Owner LLC (including Cash Shortfall
Loans).


 


Nonrecourse Deductions:   Has the meaning set forth in Treasury
Regulations §1.704-2(b)(1). The amount of Nonrecourse Deductions for an
Allocation Year equals the excess, if any, of the net increase, if any, in the
amount of Company Minimum Gain during that Allocation Year, over the aggregate
amount of any distributions during that Allocation Year of proceeds of


 


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a Nonrecourse Liability that are allocable to an increase in Company
Minimum Gain, determined according to the provisions of Treasury
Regulations §1 .704-2(c).


 


Nonrecourse Liability:  Has the meaning set forth in Treasury
Regulations §1.704-2(b)(3).


 


Operating Expenses:  For any period and with respect to the
Property, all expenses incurred by the Company and/or Owner LLC during such
period, calculated on a cash basis, including, without duplication (subject to
the exclusions described below): (i) current operating expenses and taxes
incurred by the Company and/or Owner LLC including (without duplication)
utility charges, costs of materials, normal repair and maintenance costs,
Impositions and other business taxes applicable to the Property (except as
excluded below), license fees, costs of complying with any encumbrance upon the
Property, premiums for insurance, fees of the Company’s and/or Owner LLC’s counsel,
the accounting fees, the costs of any audits and appraisals performed by the
Company and/or Owner LLC and any other reasonable costs which are paid for by
the Company and/or Owner LLC, (ii) the management fee and leasing
commissions paid to a property manager by the Company and/or Owner LLC pursuant
to a management agreement or leasing commission agreement, (iii) Capital
Expenditures incurred in accordance with the provisions hereof or as mandated
by law or necessitated by an emergency for improvements to space at the Property
leased to tenants, inducements granted to such tenants and leasing expenses
(including leasing commissions), and (iv) payments of fees, interest and
scheduled amortization of principal on any financing affecting the Property or
the assets of the Company and/or Owner LLC, but excluding without duplication: (A) expenditures
paid or to be paid from insurance proceeds or condemnation awards available for
restoration of the Property; (B) any non-cash charges from depreciation or
amortization of property; (C) any expenses or costs incurred in connection
with a Capital Transaction that would not have been incurred but for such
Capital Transaction; and (D) any payments on Cash Shortfall Loans.


 


Owner LLC:  Inland American Cumberland, L.L.C., a
Delaware limited liability company, that shall hold fee title to the Property
and the sole member of which shall be the Company.


 


Person:  Any individual, corporation, partnership,
limited liability company, association, trust or other entity or organization.


 


Profits and Losses:  For any Allocation Year, the taxable income
or loss of the Company for federal income tax purposes for such Allocation
Year, as determined by the Manager, in accordance with Code Section 703(a) (for
this purpose, all items of income, gain, loss or deduction required to be
separately stated pursuant to Code Section 703(a)(1) shall be
included in taxable income or loss), with the following adjustments:


 


(i)                                     Any
income of the Company that is exempt from federal income tax and not otherwise
taken into account in computing Profits or Losses hereunder shall be added to
such taxable income or loss;


 


(ii)                                  Any
expenditures of the Company described in Code Section 705(a)(2)(B), or treated
as Code Section 705(a)(2)(B) expenditures pursuant to Treasury


 


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Regulations §1.704-1(b)(2)(iv)(i) and not
otherwise taken into account in computing Profits or Losses hereunder shall be
subtracted from such taxable income or loss.


 


(iii)                               In
the event the Gross Asset Value of any Company asset is adjusted pursuant to
the provisions of this Agreement, the amount of such adjustment shall be taken
into account as gain or loss from the disposition of such asset for purposes of
computing Profits or Losses;


 


(iv)                              Gain
or loss resulting from any disposition of property with respect to which gain
or loss is recognized for federal income tax purposes shall be computed with
reference to the Gross Asset Value of the property disposed of, notwithstanding
that the adjusted tax basis of such property differs from its Gross Asset
Value;


 


(v)                                 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 Year; and


 


(vi)                              To
the extent an adjustment to the adjusted tax basis of any Company asset
pursuant to Code Section 734(b) is required pursuant to Treasury
Regulations §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 Member’s LLC Interest, the amount of such adjustment shall be
treated as an item of gain (if the adjustment increases the basis of the asset)
or loss (if the adjustment decreases the basis of the asset) from the
disposition of the asset and shall be taken into account for purposes of
computing Profits and Losses.


 


The amount of the items of Company income, gain, loss or deduction
available to be specially allocated pursuant to Section 5.2 hereof
shall be determined by applying rules analogous to those set forth in
subparagraphs (i) through (vi) above.


 


Property:  Has the meaning set forth in the Preliminary
Statements hereof.


 


Rents:  Collectively, all fixed, base, minimum,
guaranteed, additional, retroactive, percentage, participation or escalation
rents, operating cost pass-throughs, utility charges, common area maintenance
or management charges, administrative charges, parking, maintenance, tax and
insurance contributions payable under any lease for space at the Property,
deficiency rents and liquidated damages following default by any tenant at the
Property, premiums payable by any tenant at the Property upon the exercise of a
cancellation privilege originally provided in any lease for space at the
Property, and any rights and claims of any kind which the Company may have
against any tenant at the Property.


 


Special Return: 
Means with respect to Inland an amount equal to two hundred percent
(200%) of the Invested Capital of Inland as of the date hereof.


 


Tax Matters Member.
Has the meaning set forth in Section 7.4.


 


Transfer:  Any sale, assignment, gift, pledge,
hypothecation or other transfer, direct or indirect, by operation of law or
otherwise, of a Member’s LLC Interest, provided that
an


 


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exchange or redemption of Units pursuant to the terms of Article X
hereof shall not constitute a “Transfer” for the purposes of this Agreement.


 


Treasury Regulations:  The Income Tax Regulations promulgated under
the Code as such regulations may be amended from time to time (including
Temporary Regulations).


 


Unpaid Inland Preferred Return: As
of any given date, the Inland
Preferred Return accrued to such date less distributions made by the Company to
Inland pursuant to the
provisions of Sections 4.1(ii) and 4.2(iii) hereof as of such date.


 


Unpaid Investor Preferred Return:
With respect to each Investor, as of any given date, the Investor
Preferred Return of such Investor accrued to such date less distributions made
by the Company to such Investor pursuant to the provisions of Sections 4.1(i) and
4.2(i) hereof as of such date. Notwithstanding the foregoing, in the event
that an Investor exchanges a portion of its Class B Units pursuant to the
terms of Article X hereof, the Unpaid Investor Preferred Return shall be
reduced by a fraction, the numerator of which shall be equal to the Tendered
Units of such Investor at such time and the denominator of which shall be equal
to all of the outstanding Class B Units held by such Investor at such
time.


 


Unpaid Special Return:  With
respect to Inland means as of any date, an amount equal to Inland’s Special
Return reduced, but not below zero, by any and all distributions received by
Inland prior to such date pursuant to the provisions of Section 4.2(iv) hereof.


 


ARTICLE II


 


FORMATION; NAME; PRINCIPAL OFFICE; PURPOSE; TERM


 


SECTION 2.1.                                          Formation.


 


A.                                   The
Company has been formed as a limited liability company pursuant to the
provisions of the Delaware Limited Liability Company Act, Title 6 of the
Delaware Code, Section 18-101 et seq. (the “LLC Act”).
To the extent permitted by the LLC Act, the provisions of this Agreement shall
override the provisions of the LLC Act in the event of any inconsistency
between them.


 


B.                                     In
order to maintain the Company as a limited liability company under the laws of
the State of Delaware, the Manager shall, from time to time, take appropriate
action, including the preparation and filing of such amendments to the
Certificate and such other assumed name certificates, documents, instruments
and publications as may be required by or desirable under law, including,
without limitation, action to reflect:


 


(i)                                     any
change in the Company name; or


 


(ii)                                  any
correction of false or erroneous statements in the Certificate or the desire of
the Members to make a change in any statement therein in order that it shall
accurately represent the agreement among the Members.


 


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C.                                     Each
Member shall further execute, to the extent necessary, and the Company shall
file and record (or cause to be filed and recorded) and shall publish, if
required by law, such other and further certificates, statements or other
instruments as may be necessary or desirable under the laws of the State
of Delaware or the state in which the Property is located in connection with
the formation of the Company and the commencement and carrying on of its
business.


 


SECTION 2.2.                                          Name,
Registered Office, and Resident Agent; Principal Place of  Business.


 


A.                                   The
name of the Company shall be “Inland American Ceruzzi Cumberland Member, L.L.C.”


 


B.                                     The
principal place of business and office of the Company shall be located at c/o
Inland American Real Estate Trust, Inc., 2901 Butterfield Road Oak Brook,
Illinois  60523 or at such other places
or within the county in which the Property is located as the Manager may from
time to time designate. The Company may have such additional offices and
places of business as may be established at such other locations as may be
determined from time to time by the Manager.


 


C.                                     The
present address of the registered office of the Company in the State of
Delaware and its resident agent for service of process in the State of Delaware
are as set forth in the Certificate.


 


SECTION 2.3.                                          Purpose.


 


A.                                   The
purpose and business of the Company are solely to:


 


(i)                                     Acquire,
own, finance (using special purpose entities or otherwise), develop, redevelop,
operate, lease, manage, control, sell, transfer, exchange or otherwise dispose
of the Property; and


 


(ii)                                  To
do and perform all acts necessary or desirable to carry out the foregoing
purpose.


 


B.                                     Nothing
in this Agreement shall be deemed to create a mutual agency between the Members
with respect to any activities of the Company or the Members whatsoever. Except
as expressly provided herein, no Member shall be deemed to be the agent of any
other Member for any purposes and no Member shall have any authority to bind
any other Member.


 


C.                                     The
Members hereby acknowledge and agree that it is the intent of the Members that
fee title to the Property shall be held by Owner LLC, a newly formed single
purpose Delaware limited liability company that is wholly owned by the Company.
For the avoidance of doubt, for all purposes of this Agreement, to the extent
applicable, (x) references in this Agreement to the Company’s interest in the
Property shall refer to the Company’s indirect interest in the Property through
its interest in Owner LLC and (y) references in this Agreement to the
management and control of the Property (by the Company and/or the Manager)
shall refer to


 


11

















 


the Company’s right (and, indirectly, the Manager’s right), as the sole
member of Owner LLC, to manage and control the Property.


 


SECTION 2.4.                  Term.


 


The Company shall have perpetual existence beginning
on the date that the Certificate was filed with the Office of the Secretary of
State of the State of Delaware; provided that
the Company may be dissolved in accordance with Section 9.1 hereof.


 


SECTION 2.5.                                          Classification of the Company for
Tax Purposes.


 


The Members hereby acknowledge their intention that
the Company be classified, for federal and state income tax purposes, as a
partnership and not as an association taxable as a corporation pursuant to Section 7701(a)(2) of
the Code and the Regulations promulgated thereunder, and hereby agree that the
provisions of this Agreement shall be applied and construed in a manner to give
full effect to such intent. Accordingly, each Member, by its execution or
acceptance of this Agreement, covenants and agrees that (i) it will not
cause the Company to make an election under Regulations Section 301.7701-3(b) to
be taxed as a corporation for federal income tax purposes (ii) it will
file its own federal and state income tax returns in a manner that is
consistent with tax classification of the Company as a partnership and (iii) it
will not take any action which is inconsistent with such classification.


 


SECTION 2.6.                                          Liability of the Members.


 


No Member shall be liable under a judgment, decree or
order of a court, or in any other manner for the debts or any other obligations
or liabilities of the Company solely by reason of being a Member of the Company.
Except as expressly provided under the terms of this Agreement, each Member
shall not be required to lend any funds to the Company or to make any future
contributions, assessments or payments to the Company. No Member shall have any
personal liability for any repayment of any Capital Contribution of any Member.


 


SECTION 2.7.                                          Ownership and Waiver of Partition
and Valuation.


 


The LLC Interests of each Member in the Company shall
be personal property for all purposes. All property and interests in property,
real or personal, owned (directly or indirectly) by the Company shall be deemed
owned (directly or indirectly) by the Company as an entity, and no Member,
individually, shall have any ownership of or interest in such property or
interest owned (directly or indirectly) by the Company except as a Member of
the Company. To avoid irreparable damage to the Company, each Member, on behalf
of itself and its successors, representatives, heirs, and assigns hereby
irrevocably, unconditionally and completely waives, renounces and releases each
and all of the following rights that it has or may have, if any, by virtue
of holding LLC Interests in the Company: 
(i) any right of partition or any right to take any other action
that otherwise might be available to such Member for the purpose of severing
its relationship with the Company or such Member’s interest in the assets held
by the Company from the interest of the other Members; and (ii) any right
to valuation and payment with respect to such Member’s LLC Interests or any
portion thereof, except to the extent specifically set forth herein. Notwithstanding
any provision herein to the contrary, each Member hereby acknowledges and
agrees that, pursuant to the provisions of Section 10.8.D hereof, in the
event


 


12

















 


that an Investor seeks, or attempts to seek, to take any action in
violation or inconsistent with the foregoing, Inland shall be permitted at any
time, in its sole and absolute discretion, to deliver a Redemption Notice (as
defined below) to such Investor and to thereupon immediately cause the Company
to purchase the Investor LLC Interest of such Investor pursuant to the terms of
Article X hereof.


 


SECTION 2.8.                                          Waiver of Right to Judicial
Dissolution.


 


The Members agree that irreparable damage would be
done to the good will and reputation of the Company if any Member should bring
an action in court to dissolve the Company. Accordingly, to avoid irreparable
damage to the Company each Member hereby irrevocably, unconditionally and
completely waives, renounces and releases its right to seek a court decree of
dissolution or to seek the appointment by a court of a liquidator for the
Company. Notwithstanding any provision herein to the contrary, each Member
hereby acknowledges and agrees that, pursuant to the provisions of Section 10.8.D
hereof, in the event that an Investor seeks, or attempts to seek, to take any
action in violation or inconsistent with the foregoing, Inland shall be
permitted at any time, in its sole and absolute discretion, to deliver a
Redemption Notice (as defined below) to such Investor and to thereupon
immediately cause the Company to purchase the Investor LLC Interest of such
Investor pursuant to the terms of Article X hereof.


 


ARTICLE III


 


MEMBERS; COMPANY CAPITAL; UNITS


 


SECTION 3.1.                                          Members.


 


A.                                   The
Members’ ownership interest in the Company shall be represented by units of
membership interest (“Units”). An
unlimited number of Units are hereby authorized. The Units of the Company shall
be of two (2) classes; “Class A Unit,” and “Class B Units.”  Except
as otherwise set forth in this Agreement, each Member’s share of the profits
and losses of the Company and right to receive distributions from the Company
(prior to its termination and dissolution) shall be determined by and shall be
in proportion to the class and number of Units held by that Member.


 


B.                                     The
respective names, addresses for notice, class and number of Units and
initial Capital Contributions of the Members are as set forth on Schedule A attached hereto. Upon execution of this Agreement, each
Person listed on Schedule A hereto shall be admitted to the Company
as a Member and the Company hereby issues to each such Member the number and class of
Units set forth opposite such Member’s name on Schedule A hereto. Schedule A
shall be amended from time to time by the Manager to reflect any changes of
address, the admission of additional or substitute Members or any change to the
information set forth thereon.


 


C.                                     Concurrently
with the execution and delivery of this Agreement, and in accordance with the
terms of the Contribution Agreement, each Member has made (or shall be deemed
to have made) a Capital Contribution to the Company of an amount equal to the
amount set forth opposite such Member’s name on Schedule A attached
hereto (the “Initial Capital Contribution”).


 


13

















 


D.                                    Subject
to the provisions of Section 8.2.D hereof, one or more Persons may be
admitted to the Company as additional Members from time to time only with the
unanimous written consent of the Members, provided, however, that the admission
of transferees permitted pursuant to Article VIII hereof shall not require
the consent of the Manager or the Members.


 


E.                                      In
addition to any other requirements set forth in this Agreement, no Person shall
be admitted to the Company as an additional or substitute Member unless and
until such Person has accepted and agreed to all the provisions of this
Agreement by executing a counterpart signature page hereto or an
amendment to this Agreement.


 


SECTION 3.2.                                          Additional Capital Contributions.


 


A.                                   Other
than the Capital Contributions of the Members required under Section 3.1,
and as otherwise provided in this Agreement, no Member shall (i) be
required to make any further Capital Contributions or (ii) be required to
lend any funds to the Company.


 


B.                                     No
Member shall have any obligation to make additional Capital Contributions to
restore a deficit balance in its Capital Account.


 


SECTION 3.3.                                          Funding of Additional Cash
Requirements.


 


A.                                   If,
at any time or from time to time, the Manager determines that the Company
requires additional funds, the Manager, in its sole but reasonable discretion,
may:


 


(i)                                     Cause
the Company to borrow, at market rates, the required additional funds from any
third-party lender;


 


(ii)                                  Cause
the Company to borrow the required additional funds from one or more Members
(or any of their respective affiliates) willing to make such loans as “Cash Shortfall Loans” in accordance with Section 3.3.B;
and/or


 


(iii)                               Cause
the Company to issue additional Units.


 


B.                                     Cash
Shortfall Loans, if any, made pursuant to this Section 3.3 shall:  (i) be evidenced by a written promissory
note containing customary terms and conditions and having a final maturity date
of not less than six (6) months after the date of issue, (ii) bear
interest at a floating rate equal to 2% above the prime rate as announced from
time to time by the Bank of America, adjusted monthly, (iii) if required
by the lending Member, but subject in all respects to the terms of any existing
loans of the Company, be secured by a lien on and a security interest in all of
the property and assets of the Company and (iv) be repaid prior to any
distribution to the Members.


 


C.                                     Any
Member who makes or proposes to make a Cash Shortfall Loan shall have the right
at any time and from time to time to cause the Company to replace the Cash
Shortfall Loan with a loan from a third party on terms and conditions that are
no worse to the Company than the terms of such Cash Shortfall Loan. The
Company, acting through the Manager shall have the right at any time and from
time to time to repay any Cash Shortfall Loan and replace it


 


14

















 


with a loan from a third party. Any Cash Shortfall Loan may be
repaid at any time without prepayment penalty.


 


D.                                    The
Members hereby covenant and agree to structure any Cash Shortfall Loans made
pursuant to the terms of this Agreement so that such loans satisfy the “Straight
Debt Safe Harbor” under Code Section 856(m) and the Treasury Regulations
promulgated thereunder.


 


E.                                      If
any Member shall lend any money to the Company, the amount of any such loan
shall not be considered a Capital Contribution to the Company, increase its
Capital Account or affect in any way its share of the Profits, Losses, other
items of income, gain, loss or deduction or distributions of the Company.


 


SECTION 3.4.                                          No Third Party Beneficiaries.


 


The obligations of the Members hereunder shall not
confer upon any creditor or other third party having dealings with the Company
any right, claim or other benefit, including the right to require any Cash
Shortfall Loans.


 


SECTION 3.5.                                          Capital Accounts.


 


A.                                   The
Company shall establish and maintain a separate Capital Account for each Member
in accordance with the provisions of this Section 3.5. To each Member’s
Capital Account there shall be credited such Member’s Capital Contributions,
such Member’s allocable share of Profits, and any items in the nature of income
or gain that are specially allocated to such Member under this Agreement.


 


B.                                     To
each Member’s Capital Account there shall be debited the amount of cash and the
Gross Asset Value of any Company property distributed to such Member pursuant
to any provision of this Agreement (net of liabilities secured by such
distributed property that such Member is considered to assume or take subject
to under Code Section 752), such Member’s allocable share of Losses, and
any items in the nature of expenses or losses that are specially allocated to
such Member under this Agreement.


 


C.                                     In
the event any interest in the Company is transferred in accordance with the
terms of this Agreement (i.e., Article VIII hereof), the transferee shall
succeed to the Capital Account of the transferor to the extent it relates to
the transferred interest. In the case of a sale or exchange of an interest in
the Company at a time when an election under Code Section 754 is in
effect, the Capital Account of the transferee Member shall not be adjusted to
reflect the adjustments to the adjusted tax bases of Company property required
under Code Sections 754 and 743, except as otherwise permitted by Treasury
Regulations §1.704-l(b)(2)(iv)(m).


 


D.                                    In
determining the amount of any liability for purposes of Section 3.5.B
above, there shall be taken into account Code Section 752(c) and the
Treasury Regulations promulgated thereunder, and any other applicable
provisions of the Code and Regulations.


 


E.                                      The
foregoing provisions and the other provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Treasury
Regulations §1.704-l(b)


 


15

















 


and 1.704-2, and shall be interpreted and applied in a manner
consistent with such Regulations.


 


SECTION 3.6.                                          Return of Capital.


 


Except as provided in Article X or as otherwise
agreed by the Members, no Member shall have the right to withdraw or receive
any return of its Capital Contributions. Except as provided in Article X
or as otherwise agreed by the Members, no Member shall have any right to demand
or receive property (other than cash) in return of its Capital Contributions.


 


ARTICLE IV


 


DISTRIBUTIONS


 


SECTION 4.1.                                          Distributions of Net Cash Flow.


 


Prior to the dissolution and termination of the
Company, Net Cash Flow of the Company for any Fiscal Year shall be distributed quarterly
(if and to the extent available) by the Company in the following order of
priority:


 


(i)                                     First,
pro rata among the Investors in accordance with the Unpaid Investor Preferred
Return of each Investor at such time, until such time as the Unpaid Investor Preferred
Return of each Investor has been reduced to zero;


 


(ii)                                  Second,
to Inland, until such time as the Unpaid Inland Preferred Return has been
reduced to zero; and


 


(iii)                               Third,
the balance, to the Class A Members, in proportion to their respective Class A
Units in the Company.


 


SECTION 4.2.                                          Net Proceeds of a Capital
Transaction.


 


Prior to the dissolution and termination of the
Company, Net Proceeds of a Capital Transaction shall be distributed by the
Company, from time to time, in the following order of priority:


 


(i)                                     First,
pro rata among the Investors in accordance with the Unpaid Investor Preferred
Return of each Investor at such time, until such time as the Unpaid Investor
Preferred Return of each Investor has been reduced to zero;


 


(ii)                                  Second,
pro rata among the Investors in accordance with the Invested Capital of each
Investor at such time, until such time as the Invested Capital of each Investor
has been reduced to zero;


 


(iii)                               Third,
to Inland, until such time as the Unpaid Inland Preferred Return has been
reduced to zero;


 


16

















 


(iv)                              Fourth,
to Inland, in an amount equal to Inland’s Unpaid Special Return at such time;
and


 


(v)                                 Fifth,
the balance, to the Class A Members, in proportion to their respective Class A
Units in the Company.


 


SECTION 4.3.                  Net Proceeds of a Financing.


 


Net Proceeds of a Financing may be distributed by
the Company from time to time in the sole and absolute discretion of the
Manager, solely to Inland.


 


SECTION 4.4.                                          Other Distribution Rules.


 


Subject to the provisions of Section 3.3,
distributions in respect of an LLC Interest shall be made only to the Person or
Persons that, according to the Company’s books and records, are the holders of
record of the LLC Interests in respect of which such distributions are made on
the actual date of distribution. Neither the Company nor the Manager shall
incur any liability for making distributions in accordance with the provisions
of the preceding sentence, whether or not the Company or the Manager has
knowledge or notice of any Transfer or purported Transfer of ownership of any
LLC Interest.


 


SECTION 4.5.                                          Withholding.


 


The Members hereby authorize the Company to withhold
from or pay on behalf of or with respect to such Member any amount of federal,
state, local, or foreign taxes that the Manager reasonably determines that the
Company is required to withhold or pay with respect to any amount distributable
or allocable to the Members pursuant to this Agreement, including any taxes
required to be withheld or paid by the Company pursuant to Section 1441,
1442, 1445 or 1446 of the Code. The Manager shall give prompt notice to the
Members with respect to which withholding is effected in accordance with this Section 4.5
and shall provide such Member with a written explanation of the basis for its
determination so to withhold or pay (a “Withholding Notice”).
Any amount paid on behalf of or with respect to a Member pursuant to the
provisions hereof shall constitute a loan by the Company to such Member, which
loan shall be repaid by such Member within fifteen (15) days after notice from
the Manager that such payment must be made, unless the Company withheld such
payment from a distribution which would otherwise be made to such Member in
accordance with the provision hereof. Any amounts so withheld shall be treated
as having been distributed to such Member and shall be promptly paid, solely
out of funds from the Company, by the Manager to the appropriate taxing
authority. In the event that a Member fails to pay any amounts owed to the Company
pursuant to this Section 4.5 when due, the Manager may, in its sole and
absolute discretion, elect to make the payment to the Company on behalf of such
defaulting Member, and in such event shall be deemed to have loaned such amount
to such defaulting Member. For the avoidance of doubt, any distributions which
would have otherwise been distributed to a Member, but are retained by the
Company in accordance with this Section 4.5, shall, for all other purposes
of this Agreement, be deemed to have been distributed to such Member.


 


17

















 


ARTICLE V


 


ALLOCATION OF PROFITS AND LOSSES


 


SECTION 5.1.                                          Profits and Losses.


 


A.                                   Profits.                                                         After
giving effect to the allocations under Section 5.2 hereof, Profits for any
Allocation Year shall be allocated to the Members in the following order of
priority:


 


(i)                                     Profits
other than from a Capital Transaction (and except as otherwise provided under Section 5.1.A(iii) hereof)
shall be allocated:


 


(a)                                  First,
to each Investor, in the amount necessary to cause the aggregate amount of
Profits allocated to such Investor under this Section 5.1.A(i)(a) from
the current Fiscal Year and all prior Fiscal Years to equal the actual amounts
distributed to such Investor pursuant to Section 4.1(i) for the
current Fiscal Year and all prior Fiscal Years; and


 


(b)                                 Second,
to Inland, in the amount necessary to cause the aggregate amount of Profits
allocated to Inland under this Section 5.1.A(i)(b) from the current
Fiscal Year and all prior Fiscal Years to equal the amounts distributable to
Inland pursuant to Section 4.1(ii) for the current Fiscal Year and
all prior Fiscal Years; and


 


(c)                                  Third,
the balance, to the Class A Members, in proportion to their respective Class A
Units in the Company.


 


(ii)                                  Profits
from a Capital Transaction (except as otherwise provided under Section 5.1.A(iii) hereof)
shall be allocated:


 


(a)                                  First,
to each Member in an amount equal to the amount necessary to increase each such
Member’s Capital Account to the amount distributable to such Member pursuant to
Section 4.2 hereof; and


 


(b)                                 Second,
the balance, to the Class A Members, in proportion to their respective Class A
Units in the Company.


 


(iii)                               Profits
arising from any Capital Transaction (including a hypothetical sale in
connection with an in-kind distribution upon liquidation of the Company)
occurring upon or resulting in the liquidation (within the meaning of Treasury
Regulations §1.704-l(b)(2)(ii)(g)) of the Company shall be allocated:


 


(a)                                  First,
to each Investor, until the Capital Account balance of such Investor equals the
sum of (1) the Unpaid Investor Preferred Return of such Investor plus (2) the
Invested Capital of such Investor at such time;


 


18

















 


(b)                                 Second,
to Inland, until the Capital Account balance of Inland equals the sum of (1) the
Unpaid Inland Preferred Return plus (2) the Unpaid Special Return of Inland
at such time; and


 


(c)                                  Third,
the balance, to the Class A Members, in proportion to their respective Class A
Units in the Company.


 


B.                                     Losses. After giving effect to the
allocations under Section 5.2 hereof, Loss for any Allocation Year shall
be allocated to the Members in the following order of priority:


 


(i)                                     Losses
other than as provided in Section 5.1.B(ii) hereof shall be allocated:


 


(a)                                  First,
to Inland, to the extent that the allocation of such Losses does not cause
Inland to have an Adjusted Capital Account Deficit;


 


(b)                                 Second,
to each Investor, to the extent that the allocation of such Losses does not
cause such Investor to have an Adjusted Capital Account Deficit; and


 


(c)                                  Third,
the balance, to the Class A Members, in proportion to their respective Class A
Units in the Company.


 


(ii)                                  Losses
arising from any Capital Transaction (including a hypothetical sale in
connection with an in-kind distribution upon liquidation of the Company)
occurring upon or resulting in the liquidation (within the meaning of Treasury
Regulations §1.704-l(b)(2)(ii)(g)) of the Company shall be allocated:


 


(a)                                  First,
to each Investor, until the Capital Account balance of such Investor equals the
sum of (1) the Unpaid Investor Preferred Return of such Investor plus (2) the
Invested Capital of such Investor at such time;


 


(b)                                 Second,
to Inland, the maximum amount that can be allocated without causing Inland to
have an Adjusted Capital Account Deficit;


 


(c)                                  Third,
to each Investor, in the maximum amount that can be allocated without causing such
Investor to have an Adjusted Capital Account Deficit; and


 


(d)                                 Fourth,
the balance, to the Class A Members, in proportion to their respective Class A
Units in the Company.


 


SECTION 5.2.                                          Regulatory and Special
Allocations.


 


Notwithstanding any other provisions of this Article V,
the special allocations provisions set forth on Schedule 5.2, which
are hereby incorporated into this Section 5.2 by this reference as if set
forth in their entirety, shall apply prior to any other allocations of Profits
and Losses (and any items of income, gain, loss or deduction).


 


19

















 


SECTION 5.3.                                          Other Allocation Rules.


 


A.                                   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, as reasonably determined by the Manager using
any permissible method under Code Section 706 and the Treasury Regulations
thereunder.


 


B.                                     Except
as otherwise provided in this Agreement, all items of Company income, gain,
loss, deduction, and any other allocations not otherwise provided for shall be
divided among the Members for tax purposes in the same proportions as they
share Profits or Losses, as the case may be, for the Allocation Year.


 


C.                                     The
Members are aware of the income tax consequences of the allocations made by
this Article V and hereby agree to be bound by the provisions of this Article V
in reporting their shares of Company income and loss for income tax purposes.


 


D.                                    Profits,
Losses and any other items of income, gain, loss or deduction shall be
allocated to the Members pursuant to this Article V as of the last day of
each Fiscal Year, provided that Profits, Losses and such other items shall also
be allocated at such times as the Gross Asset Values of the assets of the
Company are adjusted pursuant to subparagraph (b) of the definition of “Gross
Asset Value” in Article I.


 


SECTION 5.4.                                          Tax Allocations: Code Section 704(c).


 


A.                                   In
accordance with Code Section 704(c) and the Treasury Regulations
thereunder, income, gain, loss, and deduction with respect to the Property, and
any other property contributed to the capital of the Company shall, solely for
tax purposes, be allocated among the Members, in any manner permitted by the
Treasury Regulations and determined by the Manager in its sole and absolute
discretion, so as to take account of any variation between the adjusted basis
of such property to the Company for federal income tax purposes and its initial
Gross Asset Value.


 


B.                                     In
the event the Gross Asset Value of any Company property is adjusted pursuant to
paragraph (b) of the definition of Gross Asset Value, subsequent
allocations of income, gain, loss, 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 Gross Asset Value in a manner permitted
under Code Section 704(c) and the Treasury Regulations thereunder, as
determined by the Manager in its sole and absolute discretion.


 


C.                                     Any
elections or other decisions relating to such allocations shall be made by the
Manager, in any manner that reasonably reflects the purpose and intention of
this Agreement.


 


20

















 


ARTICLE VI


 


GOVERNANCE AND ADMINISTRATIVE
PROVISIONS


 


SECTION 6.1.                                          Management of Business and
Affairs.


 


A.                                   Except
as otherwise expressly provided in this Agreement, the business and affairs of
the Company shall be exclusively and solely vested in the Manager. Except as
otherwise expressly provided in this Agreement, no Member, other than the
Manager, shall be an agent of the Company or have any authority to bind or take
action on behalf of the Company.


 


B.                                     The
Members hereby designate and appoint Inland to serve as the Manager of the
Company. Subject to the approval of the Members for Major Decisions, the
management of the Property shall rest with and remain the sole and absolute
right, and responsibility of the Manager. Each Investor agrees to cooperate
with the Manager by executing any consents or certificates of the Company
necessary to demonstrate to a lender, tenant or other service provider to the Company
that the Manager has the power and authority set forth in this Section 6.1.
Without limiting the generality of the foregoing, but subject to the express
provisions of this Agreement to the contrary, the Manager shall have the full
power and authority to do all things deemed necessary or desirable by it in its
sole and absolute discretion to conduct the business of the Company (and to
cause the Company to conduct the business of Owner LLC through the Company’s
interest in Owner LLC) and to effectuate the purposes set forth in Section 2.3
hereof, including, without limitation:


 


(i)                                     the
making of any expenditures, the lending or borrowing of money (subject to the
provisions of Section 6.1.D(v) hereof), the assumption or guarantee
of, or other contracting for, indebtedness and other liabilities, the issuance
of evidences of indebtedness (including securing of same by deed to secure
debt, mortgage, deed of trust or other lien or encumbrance of the Company’s
assets) and incurring of any obligations that it deems necessary for the
conduct of the activities of the Company;


 


(ii)                                  the
acquisition, sale, transfer, exchange or other disposition of any assets of the
Company (including, but not limited to, the exercise or grant of any
conversion, option, privilege, or subscription right or any other right
available in connection with any assets at any time held by the Company);


 


(iii)                               the
mortgage, pledge, encumbrance or hypothecation of any assets of the Company
(including, without limitation, the Property), the use of the assets of the
Company (including, without limitation, cash on hand) for any purpose consistent
with the terms of this Agreement which the Manager believes will directly
benefit the Company and on any terms that the Manager sees fit, the lending of
funds to other Persons and the repayment of obligations of the Company;


 


(iv)                              the
management, operation, leasing (including the amendment and/or termination of
any lease), landscaping, repair, alteration, demolition, replacement or
improvement of any Property;


 


21

















 


(v)                                 the
negotiation, execution and performance of any contracts, leases, conveyances or
other instruments that the Manager considers useful or necessary to the conduct
of the Company’s operations or the implementation of the Manager’s powers under
this Agreement, including contracting with property managers, contractors,
developers, consultants, accountants, legal counsel, other professional
advisors and other agents (including Inland Parent service providers and
property managers provided  that
the terms and conditions of any agreement or contract with such service
providers and property managers shall be on terms no less favorable to the
Company than terms available from unrelated parties) and the payment of their
expenses and compensation out of the Company’s assets;


 


(vi)                              the
distribution of Company cash and other Company assets in accordance with this
Agreement and the holding, management, investment, and reinvestment of cash and
other assets of the Company;


 


(vii)                           the
selection and dismissal of employees of the Company (including, without limitation,
employees having the title or holding the office of “president,” “vice
president,” “secretary” or “treasurer”), and agents, outside attorneys,
accountants, consultants and contractors of the Company and the determination
of their compensation and other terms of employment or hiring;


 


(viii)                        the
maintenance of such insurance for the benefit of the Company and the Members as
it deems necessary or appropriate including casualty, liability and other
insurance on the Property and other assets of the Company, which insurance may be
obtained by a blanket insurance policy obtained by Inland Parent service
providers and property managers;


 


(ix)                                the
control of any matters affecting the rights and obligations of the Company,
including the settlement, compromise, submission to arbitration or any other form of
dispute resolution, or abandonment of any claim, cause of action, liability,
debt or damages due or owing to or from the Company, the commencement or
defense of suits, legal proceedings, administrative proceedings, arbitrations
or other forms of dispute resolutions, and the representation of the Company in
all suits or legal proceedings, administrative proceedings, arbitrations or
other forms of dispute resolutions, the incurring of legal expenses and the indemnification
of any Person against liabilities and contingencies to the extent permitted by
law;


 


(x)                                   holding,
managing, investing and reinvesting cash and other assets of the Company;


 


(xi)                                the
collection and receipt of rents, revenues and income of the Company;


 


(xii)                             in
addition to working capital and/or reserves required to be maintained under
this Agreement, the maintenance of working capital and other reserves in such
amounts as the Manager deems appropriate and reasonable from time to time;


 


(xiii)                          the
making, execution and delivery of any and all deeds, leases, notes, deeds to
secure debt, mortgages, deeds of trust, security agreements, conveyances,


 


22

















 


contracts, guarantees, warranties, indemnities, waivers,
releases or legal instruments or agreements in writing necessary or appropriate
in the judgment of the Manager for the accomplishment of any of the powers of
the Manager enumerated in this Agreement; and


 


(xiv)                         causing
the Company to take any of the foregoing actions on behalf of Owner LLC through
the Company’s interest in Owner LLC.


 


C.                                     In
addition to and without limiting the duties and obligations of the Manager as
set forth above, the Manager shall use commercially reasonable efforts (on
behalf of the Company and, indirectly to the extent applicable, on behalf of
Owner LLC) to:


 


(i)                                     cause
the Company, directly or through its agents, at all times to perform and
comply with the provisions of any loan commitment, agreement, mortgage, deed of
trust, lease, construction contract or other contract, instrument or agreement
to which the Company is a party or which affects the Property or the operation
thereof;


 


(ii)                                  keep
and maintain at least such insurance coverage as may be required by the
holder of any mortgage or deed of trust encumbering all or any portion of any
Property;


 


(iii)                               open
and maintain bank accounts for funds of the Company;


 


(iv)                              employ
contractors for the ordinary maintenance and repair of the Property, including
installation of tenant improvements as required by leases on the Property;


 


(v)                                 retain
or engage real estate brokers licensed to do business in the states in which
the Property, or any part thereof, is located;


 


(vii)                           use
reasonable efforts to enter into leases of space and other occupancy agreements
on the Property on market terms and conditions, and in accordance with the
requirements of any applicable loan;


 


(viii)                        employ
such managing or other agents necessary for the operation, management and
leasing of the Property including, without limitation, a property manager;


 


(ix)                                retain
or engage attorneys and accountants, to the extent such professional services
are required during the term of the Company; and


 


(x)                                   do
any act which is necessary or desirable to carry out any of the foregoing.


 


D.                                    Notwithstanding
the provisions of Section 6.1.B and 6.1.C, neither the Manager nor any
other Member shall have any authority, in the name of or on behalf of the
Company, to take any of the following actions or make any of the following
decisions without the prior written consent or approval of the Investors (each,
a “Major Decision”):


 


23

















 


(i)                                     prior
to December 31, 2008 and except with respect to a tax deferred exchange
under Section 1031 of the Code or a reinvestment under Section 1033
of the Code, or other transaction in which the Company defers gain recognition
or recognizes a de  minimis (i.e., less
than 1% of the selling price) gain, sell, transfer, assign, convey, exchange or
otherwise dispose of or transfer all or any material portion of the Property;


 


(ii)                                  except
as provided in Article VIII, admit any Person as an additional Member of
the Company;


 


(iii)                               assign
all or substantially all of the assets of the Company in trust for creditors or
file on behalf of the Company a voluntary petition for relief under the
bankruptcy laws or similar voluntary petition under state laws;


 


(iv)                              cause
the Company to become a party to any merger, consolidation or share exchange
with any other entity or person, or dissolve or terminate the Company if any
such transaction would have a material adverse effect on the Investors;


 


(v)                                 cause
the Company to enter into a loan or loans to be secured by the Property which
loans exceed in the aggregate sixty percent (60%) of the appraised value on the
Property at the time such financing is obtained; or


 


(vi)                              cause
the Company to cause the Owner LLC to take any of the foregoing actions, to the
extent applicable.


 


E.                                      The
Manager shall cause the Company (or Owner LLC) to arrange and maintain
property, casualty and liability insurance with respect to the Property in
amounts and on terms that it deems necessary or appropriate and that are
consistent with the amounts that may be required by the holder of any
mortgage or deed of trust encumbering all or any portion of the Property.


 


F.                                      Whenever
a Member (“Requesting Member”) requests that
the other Member (the “Requested Member”)
consent to any action required of the Requested Member under the provisions of
this Agreement, notice shall be delivered by the Requesting Member to the
Requested Member pursuant to the provisions of Section 11.2 hereof, which
notice shall be in writing and shall include (a) a summary of the terms
and conditions of the actions requested to be taken by the Requesting Member, (b) a
copy of any proposed documentation, including any document to be executed by
the Company or the Requested Member in connection therewith, and (c) a
notice that conspicuously states that “THIS NOTICE IS BEING PROVIDED TO YOU IN
ACCORDANCE WITH THE TERMS OF THE LIMITED LIABILITY COMPANY AGREEMENT OF INLAND
AMERICAN CERUZZI CUMBERLAND MEMBER, L.L.C. IF YOU DO NOT GIVE YOUR APPROVAL OR
DISAPPROVAL OF THE ACTION PROPOSED IN THIS NOTICE TO BE TAKEN WITHIN TEN (10) BUSINESS
DAYS AFTER THE DATE OF THIS REQUEST FOR APPROVAL, YOUR APPROVAL OF THE PROPOSED
ACTION WILL BE DEEMED GIVEN.”  If the
Requested Member does not respond to the Requesting Member within ten (10) Business
Days of its receipt (or deemed receipt) of such notice (determined in the
manner provided under Section 11.2 hereof), the Requested Member shall be
deemed to have approved the action requested by the Requesting


 


24

















 


Member. Notwithstanding the inference from the foregoing provisions to
the contrary, the foregoing provisions of this Section 6.1.F shall not be
deemed to reduce any specific time periods for notice otherwise expressly set
forth in this Agreement.


 


G.                                     Notwithstanding
any provision of this Article VI to the contrary, the Manager hereby
covenants and agrees not to cause the Company to enter into any agreement or
take any action, that, to the knowledge of the Manager, would (i) limit
the ability of the Investors to exercise their Exchange Rights under Section 10.2
of this Agreement or (ii) interfere with or jeopardize the ability of the
Company to perform or fulfill its obligations under Article X of this
Agreement.


 


SECTION 6.2.                                          Duties and Conflicts.


 


A.                                   The
Members, in connection with their respective duties and responsibilities
hereunder, shall at all times act in good faith and, except as expressly set
forth herein, any decision or exercise of right of approval, consent,
disapproval or deferral of approval by a Member (including the Manager) is to
be made by such Member pursuant to the terms of this Agreement in good faith,
but recognizing that each Member may act in its own economic self interest
and in accordance with such tax and business objectives as it deems appropriate
or desirable for such Member. Except as otherwise agreed to in writing by the
Members, no Member (including the Manager) or any partner, officer, shareholder
or employee of any Member shall receive any salary or other remuneration for
its services rendered pursuant to this Agreement. Notwithstanding the
foregoing, Inland Parent service providers and property managers may manage
the Property pursuant to a separate management agreement the execution by the
Company of which shall expressly not require the consent of the Investors; provided, however, that the
terms and conditions of any such agreement or contract shall be on terms no
less favorable to the Company than terms available from unrelated parties.


 


B.                                     Each
Member recognizes that the other Members (including the Manager) have or may have
other business interests, activities and investments, some of which may be
in conflict or competition with the business of the Company and that such other
Member (including the Manager) is entitled to carry on such other business
interests, activities and investments. No Member (including the Manager) shall
be obligated to devote all or any particular part of its time and effort
to the Company and its affairs.


 


C.                                     The
Manager shall not be liable to the Company or to any other Member for any error
in judgment, mistake or law or fact or for any other act or thing which it may do
or refrain from doing in connection with the business and affairs of the
Company, except in the case of an intentional breach of any provision of this
Agreement (after written notice to the Manager and a reasonable time to cure)
or its willful misconduct, gross negligence or bad faith.


 


SECTION 6.3.                                          Exculpation and Indemnification.


 


A.                                   The
Company shall indemnify any Person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit, proceeding
or investigation, whether civil, criminal, investigative or administrative, and
whether external or internal to the Company (other than an action or suit
brought by or in the right of the Company),


 


25

















 


by reason of the fact that such person is or was a Manager, Member,
employee or trustee of the Company, or that, such person is or was an Affiliate
of a Manager, Member, employee or trustee of the Company, against expenses
(including attorneys’ fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Person in connection with such action,
suit or proceeding, or any appeal therein, if such Person acted in good faith
and in a manner he, she, or it reasonably believed to be in or not opposed to
the best interests of the Company, and with respect to any criminal action or
proceeding, had no reasonable cause to believe such conduct was unlawful. The
termination of any action, suit or proceeding whether by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent
shall not, of itself, create a presumption that the Person did not act in good
faith and in a manner which he, she or it reasonably believed to be in or not
opposed to the best interests of the Company, and, with respect to any criminal
action or proceeding, that such Person had reasonable cause to believe that
his, her or its conduct was unlawful.


 


B.                                     The
Company shall indemnify any Person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit brought by
or in the right of the Company to procure a judgment in its favor by reason of
the fact that he, she or it is or was a Manager, Member, employee or trustee of
the Company or is or was an Affiliate of a Manager, Member, employee or trustee
of the Company against expenses (including attorneys’ fees) actually and
reasonably incurred by such Person in connection with the defense, settlement
or appeal of such action or suit if such Person acted in good faith and in a
manner such Person reasonably believed to be in or not opposed to the best
interests of the Company, except that no indemnification shall be made in
respect of any claim, issue or matter as to which such Person shall have been
adjudicated to be liable for gross negligence or willful misconduct in the
performance of his, her or its duty to the Company unless and only to the
extent that the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such Person is fairly and reasonably entitled to
be indemnified for such expenses which the court shall deem proper.


 


C.                                     Any
indemnification under Sections 6.3.A or 6.3.B hereof (unless ordered by a
court) shall be made by the Company only as authorized in the specific case
upon a determination that the indemnification of the Person in question is
proper in the circumstances because that Person has met the applicable
standards of conduct set forth in Sections 6.3.A or 6.3.B hereof. Such
determination shall be made by the Manager.


 


D.                                    To
the extent that any Person referred to in Sections 6.3.A or 6.3.B hereof has
been successful on the merits or otherwise in defense of any action, suit,
proceeding or investigation, or any appeal or in defense of any claim, issue or
matter therein, or on appeal from any such proceeding, action, suit, claim or
matter, such Person shall be indemnified against all expenses (including
attorney’s fees) incurred in connection therewith.


 


E.                                      Expenses
incurred in any action, suit, proceeding or investigation or any appeal
therefrom may be paid by the Company in advance of the final disposition
of such matter, as authorized by the Manager, upon receipt of an acceptable
undertaking by or on behalf of such Person to repay such amount, unless it
shall ultimately be determined, as provided herein, that such Person is
entitled to indemnification.


 


26






 













 


F.                                      The
indemnification provided by this Section 6.3 shall not be deemed exclusive
of, and shall not affect, any other rights to which any Person seeking
indemnification may be entitled under any law, agreement, or otherwise,
and shall continue and inure to the benefit of the heirs, executors and
administrators of such a Person.


 


G.                                     The
Company may purchase and maintain insurance on behalf of any Person who is
or was a Manager, Member, employee or trustee of the Company against any
liability asserted against such Person and incurred by him, her or it in any
such capacity, or arising out of his, her or its status as such, whether or not
the Company would have the power to indemnify such Person against such
liability under the provisions of this Section. Such insurance may include
“tail” coverage for periods after termination of service in such capacity or
after liquidation, merger, consolidation or other change in the Company.


 


H.                                    The
Company shall, at its cost and expense, defend with counsel of the Company’s
choice or approval, any Person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding
or investigation, whether civil, criminal or administrative, and whether
external or internal to the Company by reason of the fact that he, she or it or
was acting in any capacity described in Sections 6.3.A or 6.3.B hereof if he,
she or it acted in good faith and in a manner reasonably believed to be in or
not opposed to the best interests of the Company and with respect to any
criminal action or proceeding, had no reasonable cause to believe such conduct
was unlawful.


 


SECTION 6.4                                             Compliance with Certain
Requirements.


 


Notwithstanding any other provision of this Agreement
or any other document governing the management and operation of the Property,
the Manager shall have the right to cause the Company to take any reasonable
action or to refrain from taking any action (including but not limited to using
a protective trust to own assets) to (i) preserve the continued
qualification of Inland Parent as a real estate investment trust under Section 856
of the Code (a “REIT”), (ii) preserve the
continued qualification of any Affiliates of Inland Parent as taxable REIT
subsidiaries and (iii) avoid the imposition of additional taxes on Inland
Parent under Section 857 of the Code or Section 4981 of the Code and
the Treasury Regulations promulgated thereunder (collectively the “REIT Rules”). The Members agree that in the event that the
Manager proposes to take any action (or cause the Company to take any action)
to ensure the continued qualification of Inland Parent as a REIT or to avoid
the imposition of additional taxes under the REIT Rules on Inland Parent,
the Manager shall not have liability to any other Member for monetary damages
or otherwise for losses sustained or liabilities incurred in connection with
such actions.


 


ARTICLE VII


 


BOOKS AND RECORDS; RESERVES


 


SECTION 7.1.                                          Bank Accounts.


 


The Manager shall have authority to open bank accounts
and designate signatories with respect thereto on behalf of the Company and may authorize
property managers to open such


 


27

















 


bank accounts as it shall deem necessary or desirable for the
management and operation of the Property and the conduct of Company business.


 


SECTION 7.2.                                          Books of Account.


 


The Company shall keep accurate and complete books of
account and records showing the assets and liabilities, operations,
transactions and financial condition of the Company and the Property. All such
books of account and records may be inspected by any Member, its designees
or representatives from time to time and upon reasonable prior notice at the
office of the Company or other person maintaining the same. The Manager shall
cause to be prepared quarterly operating statements of the Company in
accordance with generally acceptable accounting principles and shall provide
each Member with copies thereof, along with all other reports, studies, budgets
and other material documents prepared by the Company.


 


SECTION 7.3.                                          Operating Statements.


 


A.                                   As
and when prepared or received by the Manager, the Manager shall promptly
provide each Member with copies of all reports, studies, operating statements,
budgets and other material documents received by the Company.


 


B.                                     Upon
the request of any Member and solely to the extent that such information and
reports are available to, and have been prepared or received by, the Manager,
the Manager shall promptly provide such requesting Member with (i) a Net
Cash Flow statement, (ii) unaudited financial statements of the Company,
including statements of profit and loss for the applicable quarter, prepared in
accordance with generally accepted accounting principles applied on a
consistent basis, (iii) a revised projection of income and expenses of the
Company for the remainder of the current Fiscal Year, (iv) in the event a
Capital Transaction has occurred, a statement of the Net Proceeds of a Capital
Transaction for such Capital Transaction. Upon the request of any Member and as
promptly as practical after the end of each calendar year, the Manager shall
forward to such requesting Member the same statements described in the
preceding sentence for the preceding calendar year.


 


C.                                     As
soon as practicable, but within seventy-five (75) days after the end of the
Fiscal Year, and only after the written approval thereof by the Manager, the
Tax Matters Member shall, as a Company expense, furnish the Members with all
necessary tax reporting information required by the Members for the preparation
of their respective federal, state and local income tax returns, including each
Member’s pro rata share of income, gain, loss, deductions and credits for such
Fiscal Year.


 


D.                                    As
soon as practicable, but in no event later than seventy-five (75) days after
the end of the Fiscal Year, the Tax Matters Member shall, as a Company expense,
furnish each Member with copies of the Company’s federal partnership Return of
Income and other income tax returns, together with each Member’s Schedule K-1
or analogous schedule, which returns shall be signed by the Tax Matters Member
on behalf of the Company and co-signed by the Company’s accountant as preparer.


 


E.                                      Except
as otherwise provided in this Agreement, all decisions as to accounting principles,
whether for the Company’s books or for income tax purposes (and such decisions


 


28

















 


may be different for each such purpose) and all elections
available to the Company under applicable tax law shall be made by the Manager.


 


F.                                      Each
Member shall promptly provide the Manager and/or the Tax Matters Member, as
applicable, with the information necessary in order to enable the Manager
and/or the Tax Matters Member to furnish the information, reports and/or statements
called for pursuant to this Section 7.3. The Manager’s and/or the Tax
Matters Member’s obligations to provide reports, information and filings, shall
be contingent upon the receipt of the relevant information from the Members.


 


SECTION 7.4.                                          Tax Matters Member.


 


A.                                   Inland
is hereby designated to act as the “Tax Matters Member” under Code section 6231(a)(7).
To the extent provided in Code Sections 6221 through 6231 and subject to the
provisions hereof, the Tax Matters Member shall represent the Company and the
Members in their capacities as Members before taxing authorities or courts of
competent jurisdiction in tax matters affecting the Company or the Members in
their capacities as Members, and, subject to the limitations set forth in this
Agreement, shall file any tax returns and execute any agreements or other documents
on behalf of the Company.


 


B.                                     Subject
to the limitations set forth in this Agreement, the Tax Matters Member is
authorized to make any and all elections for federal, state, and local tax
purposes, including, without limitation, any election, if permitted by
applicable law: (i) to adjust the basis of the assets of the Company pursuant
to Code sections 754, 734(b), and 743(b), or comparable provisions of state or
local income tax law, in connection with Transfers of LLC Interests and Company
distributions and (ii) to treat the Company as a partnership for income
tax purposes (or the functional equivalent thereof under applicable state
and/or local income tax law).


 


C.                                     To
the extent that such matters would have a material adverse effect on any
Member, the Tax Matters Member shall obtain the consent of the other Members
before it can (i) extend the statute of limitations for assessment of tax
deficiencies against the Members with respect to adjustments to the Company’s
federal, state, or local income tax returns, or (ii) execute any
settlement agreement that binds the Members or otherwise affects the rights of
the Company and the Members.


 


D.                                    Prior
to the taking of any action and/or the making of any election by the Tax
Matters Member (including all such actions and/or elections specifically
referred to in this Agreement) which has a material adverse effect on the other
Member, the Tax Matters Member shall provide prompt written notice of such
intended action and/or election to the other Member. If the other Member sends
the Tax Matters Member a written objection within thirty (30) business days of
receiving the notice (or such shorter time as may be required to take such
action or to make such election), the Tax Matters Member and the other Member
shall confer about the intended action or election, as applicable. If agreement
cannot be reached within sixty (60) business days after the receipt by the Tax
Matters Member of the other Member’s written objection (or such shorter time as
may be required to take such action or to make such election), the Tax
Matters Member shall take the action or make the election, as applicable as
originally proposed unless the other Member provides an opinion from the other
Member’s regular outside


 


29

















 


legal tax counsel, or, at the option of the other Member, another
nationally recognized law firm that is reasonably acceptable to the Tax Matters
Member, in either case at the other Member’s sole expense, that the action or
election, as applicable as proposed would more likely than not have an adverse
tax consequence to the other Member. In making such determination, the other
Member’s counsel (or such other law firm selected by it in accordance with the
foregoing) shall be instructed to give effect to the provisions of Articles III
and IV hereof. Any dispute regarding any action to be taken under this Section 7.4.D
shall be submitted to arbitration in accordance with the provisions of Section 7.4.F
hereof.


 


E.                                      Within
five (5) business days of its receipt, the Tax Matters Member shall give
written notice to the other Member of the receipt of any written notice
relating to a controversy or related proceeding which has a material adverse
effect on the other Member with the Internal Revenue Service or any state or
local taxing authority, including, without limitation, (A) written notice
that the Internal Revenue Service or any state or local taxing authority
intends to examine the Company’s income tax returns for any year; (B) written
notice of commencement of an administrative proceeding at the Company level
related to the Company under section 6223 of the Code; (C) written
notice of any final Company administrative adjustment relating to the Company
pursuant to a proceeding under section 6223 of the Code; (D) any
request from the Internal Revenue Service or any comparable state or local
taxing agency for waiver of any applicable statute of limitations with respect
to the filing of any tax return by the Company; (E) any information
document requests from the Internal Revenue Service or any other taxing
authority, and (F) any Form 5701 or comparable state or local audit
adjustment notices. Within ninety (90) days after receipt of notice of a final
Company administrative adjustment, the Tax Matters Member shall notify each
Member if it does not intend to file for judicial review with respect to such
adjustment.


 


F.                                      The
Tax Matters Member shall keep the other Member fully and promptly informed
about the status of any tax controversy or related proceeding involving the
Company which could have a material adverse effect on the other Member. If, as
a result of a notice provided by the Tax Matters Member under Section 7.4.E
or otherwise, the other Member believes, based upon the nature of the
government inquiry, that the government could be considering an adjustment that
would have an adverse effect upon the other Member, then other Member shall
have the right to hire and retain counsel of its choice, reasonably acceptable
to the Tax Matters Member, to represent the Company in connection with such
issue, shall have the right to control the contest of such issue, and shall
participate in such contest to the maximum extent allowable by law, but shall
keep the Tax Matters Member fully informed. If the Tax Matters Member does not
agree that the government could be considering an adjustment that would have an
adverse effect upon the other Member, then this dispute shall be promptly
submitted to a senior tax partner at a nationally recognized law firm (other
than the other Member’s regular outside tax counsel) selected by the other
Member and reasonably acceptable to the Tax Matters Member (the “Arbitrator”). The Arbitrator so selected shall be instructed
to give effect to the provisions of this Agreement in determining whether the
adjustment could have an adverse effect on the other Member. The Arbitrator’s
determination shall be final and binding on the parties and if the
determination is that the adjustment could have an adverse effect on the other
Member, then the other Member shall have the rights set forth in this Section 7.4.F.
All information provided to the Arbitrator by the Company or either Member
shall be kept strictly confidential by the Arbitrator.


 


30

















 


G.                                     All
expenses incurred by the Tax Matters Member (including the expenses of counsel
retained by the other Member to represent the Company under section 7.4.F)
in connection with any tax controversy or related proceeding of the Company
will be borne by the Company. Nothing herein shall be construed to restrict the
Tax Matters Member from engaging an accounting or law firm to assist the Tax
Matters Member in discharging its duties hereunder, so long as the compensation
paid by the Company for such services is customary.


 


ARTICLE VIII


 


TRANSFER OF LLC INTERESTS


 


SECTION 8.1.                                          No Transfer.


 


A.                                   Except
as provided in this Article VIII, no Member may Transfer any LLC
Interest, except as hereinafter set forth in this Article VIII or upon
prior written consent of all of the other Members, which consent may be
granted or withheld in the sole and absolute discretion of the other Members. Any
Transfer of an LLC Interest in contravention of this Article VIII shall be
null and void and shall be deemed a material breach of, and a default under,
this Agreement, and the other Members shall have all the rights and remedies
available under this Agreement.


 


B.                                     For
the purposes of this Article VIII the rules applicable to the
Transfer of an LLC Interest shall apply in the same manner to transfers of
interest in the Members; provided, however, that the following transfers shall not be subject
to this Section 8.1: (i) transfers of an interest in Inland to a
Person who, as of the date hereof, is a member of such entity, or (ii) transfers
of an interest in Inland if an Affiliate of Inland Parent retains at least a
20% interest, or (iii) transfers of an interest in Inland in connection
with a sale or transfer by Inland Parent, of all or substantially all of their
assets.


 


SECTION 8.2.                                          Permitted Transfers.


 


A.                                   The
restrictions on Transfers under Section 8.1 shall not apply to any (i) Transfer
(for any consideration or no consideration) by Inland of all or any part of
its LLC Interest to any 80% Owned Affiliate of Inland Parent, (ii) Transfer
to any other Member and (iii) Transfer by a Member to the immediately
family members of such Member.


 


B.                                     Subject
to the provisions of Section 8.2.D hereof, a permitted transferee of a Member
pursuant to Section 8.1.A or 8.2.A hereof that acquires the LLC Interest
of a Member shall not be recognized by the Company as a Member and shall have
only the rights of an assignee of the transferor Member’s LLC Interest, except
upon compliance with the terms of Section 8.2.C. A Member who assigns all
of its LLC Interest to a permitted transferee (other than one of the other
Members) in accordance with the provisions of this Agreement shall nevertheless
remain a Member of the Company subject to all the duties and obligations
imposed on it under this Agreement until such time as the transferee of such
LLC Interest is admitted to the Company as a substitute Member in accordance
with Section 8.2.C. Upon any permitted assignment of an LLC Interest
pursuant to Section 8.2, the transferor and transferee shall file with the
Company an executed or authenticated copy of the written instrument of
assignment or transfer.


 


31

















 


C.                                     No
transferee of the whole or a portion of a Member’s LLC Interest shall have the
right to become a substituted Member in place of its transferor unless and
until all of the following conditions are satisfied:


 


(i)                                     the
transferor and transferee have executed and acknowledged such instruments as
the Manager may reasonably deem necessary or desirable to effect such
Transfer;


 


(ii)                                  a
duly executed and acknowledged written instrument of transfer has been filed
with the Company setting forth the intention of the transferor that the
transferee become a substituted Member in its place;


 


(iii)                               the
transferee accepts and agrees to be bound by all the provisions of this
Agreement by executing and delivering a counterpart signature page hereto;


 


(iv)                              the
transfer would not materially and adversely affect the treatment of the Company
for tax purposes under the Code or the tax laws of any state in which the
Company does business; and


 


(v)                                 the
transferee demonstrates and agrees, to the satisfaction of the Manager
determined in its sole and absolute discretion, that it has complied and shall
comply with the provisions of the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001 (the USA Patriot Act), as amended from time to time.


 


D.                                    Notwithstanding
the provisions of Section 8.1 hereof to the contrary, the Initial Investor
shall be permitted, without the consent of the Manager or the other Member, to
make a one-time Transfer of its Investor LLC Interest to the members of the
Initial Investor identified on Schedule B-1. Immediately following the
Transfer permitted under the preceding sentence, the Initial Capital
Contribution, Invested Capital, Unpaid Investor Preferred Return and Capital
Account of the Initial Investor shall be divided among each of such members, as
applicable in accordance with the manner provided to the Manager by the Initial
Investor prior to such Transfer, the Initial Investor shall resign and withdraw
as a Member of the Company and each of such members shall be admitted to the
Company as an “Investor” for all purposes of this Agreement.


 


SECTION 8.3.                                          Succession by Operation of Law.


 


A.                                   In
the event of an Event of Bankruptcy with respect to a Member or the merger,
consolidation, dissolution or liquidation of a Member, all of such Member’s
rights to distributions and allocations by the Company, shall pass to such
Member’s legal successor, but such legal successor shall not become a Member of
the Company without the prior written consent of the Manager, which consent may be
granted or withheld in all of the sole and absolute discretion of the Manager,
and the compliance with the provisions of clauses (ii), (iii), (iv) and (v) of
Section 8.2.C hereof.


 


B.                                     Upon
occurrence of an Event of Bankruptcy of a Member, or any other event that causes
a Member to cease to be a member of the Company, the business of the Company
shall


 


32

















 


continue without dissolution. Notwithstanding any other provision of
this Agreement, each Member waives any right that it might have under Section 18-801(b) of
the Act to agree in writing to dissolve the Company upon the occurrence an
Event of Bankruptcy or any other such event.


 


SECTION 8.4.                                          Additional Restrictions on
Transfers.


 


The LLC Interests described in this Agreement have not
been registered under the Securities Act of 1933, as amended (the “1933 Act”) or under the securities laws of the State of
Delaware or any other jurisdiction (the “State Acts”). Consequently,
in addition to any and all other restrictions on transferability set forth
herein, the LLC Interests may not be sold, assigned, pledged, hypothecated
or otherwise disposed of or Transferred, except in accordance with the
provisions of the 1933 Act and the State Acts.


 


ARTICLE IX


 


DISSOLUTION AND TERMINATION OF
THE COMPANY


 


SECTION 9.1.                                          Dissolution.


 


The Company shall be dissolved and commence winding up
and liquidating only upon the first to occur of any of the following:


 


A.                                   The
sale, condemnation or other disposition of all of the Property and the receipt
of all consideration therefor;


 


B.                                     At
any time that there are no Members; or


 


C.                                     The
written election of all the Members to dissolve, wind up and liquidate the
Company.


 


SECTION 9.2.                                          Termination.


 


Notwithstanding any other provision of this Agreement,
in all cases of valid, voluntary dissolution of the Company (the parties
acknowledging that the right of a Member to cause an involuntary dissolution of
the Company or a partition of the Company has been expressly waived, renounced
and released under Sections 2.7 and 2.8 hereof), the business of the Company
shall be wound up and the Company terminated as promptly as practicable
thereafter, and each of the following shall be accomplished:


 


A.                                   The
Manager shall cause to be prepared a statement setting forth the assets and
liabilities of the Company as of the date of dissolution, a copy of which
statement shall be furnished to all of the Members.


 


B.                                     The
property and assets of the Company shall be liquidated by the Manager as
promptly as possible, but in an orderly and businesslike and commercially
reasonable manner. The Manager may, in the exercise of its business judgment
and if commercially reasonable, determine to defer the sale of all or any
portion of the property and assets of the Company if


 


33

















 


deemed necessary or appropriate to realize the fair market value of any
such property or assets. The proceeds of any liquidation shall be distributed
to the Members, to the extent remaining after funding all Company expenses and
adequate reserves, in accordance with the positive Capital Account balances of
the Members (as adjusted immediately prior to such distribution in accordance
with the terms of Section 5.1 hereof).


 


SECTION 9.3.                                          Liquidating Member.


 


Upon the dissolution of the Company, the Manager shall
act as the liquidating member (in such capacity, the “Liquidating
Member”). The Liquidating Member shall, upon the dissolution and
upon completion of the winding up of the affairs of the Company, file appropriate
certificate(s) to such effect in the proper governmental office or offices
under the LLC Act as then in effect. Notwithstanding the foregoing, each
Member, upon the request of the Liquidating Member, shall promptly execute,
acknowledge and deliver all such documents, certificates and other instruments
as the Liquidating Member shall reasonably request to effectuate the proper
dissolution and termination of the Company, including the winding up of the
business of the Company. Any tax matters that are continuing as of the time of
such liquidation and dissolution and/or that arise after such liquidation and
dissolution (if such liquidation and dissolution should ever occur) shall be
governed by the provisions of Section 7.4 hereof, and the provisions of
this sentence shall survive any such liquidation and/or dissolution of the
Company.


 


ARTICLE X


 


CONVERSION ; REDEMPTION


 


SECTION 10.1.                                   Definitions.


 


The following terms and phrases shall, for purposes of
this Article X of this Agreement, have the meanings set forth below:


 


“Closing Price” on any date shall mean the last
sale price, regular way of the Common Stock, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on
the New York Stock Exchange or, if the Common Stock is not listed or admitted
to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Common Stock is listed
or admitted to trading or, if the Common Stock is not listed or admitted to
trading on any national securities exchange, the last quoted price, or if not
so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotations System or, if such system is no longer
in use, the principal other automated quotations system that may then be
in use or, if the Common Stock is not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Common Stock as such person is selected
from time to time by Inland Parent.


 


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“Common Stock” shall mean the shares of Common
Stock of Inland Parent, par value $10.


 


“Computation Date” shall mean the date on which
an Exchange Notice is delivered to Inland.


 


“Current Per Share Market Price” on any date
shall mean the average of the Closing Price for the five consecutive Trading
Days ending on such date.


 


“Exchange Factor” shall mean 100%; provided
that such factor shall be adjusted in accordance with the Antidilution
Provisions of Section 10.5 hereof.


 


“Purchase Price” shall mean the Cash Purchase
Price or the Stock Purchase Price.


 


“Trading Day” shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday, other than any day which securities are not
traded on such exchange or in such market and the term “ex date”, when used in
respect of any issuance or distribution, shall mean the first date on which the
shares trade regular way on such exchange or in such market without the right
to receive such issuance or distribution.


 


SECTION 10.2.                                   Grant of Right.


 


A.                                   Each
Investor shall have the right, but not the obligation, to require the Company
to either (i) exchange all or a portion of such Investor’s Class B
Units for shares of Common Stock of Inland Parent (the “Exchange
Option”) or (ii) redeem all or a portion of such Investor’s Class B
Units for the Investor Liquidation Amount of such Investor (as determined under
Section 10.10 hereof) (the “Redemption Option”),
if a written notice (the “Exercise Notice”)
is delivered by such Investor to the Manager and the other Investors at any
time or times from and after December 15, 2010 (the “Exchange
Right”). Following the delivery of the Exercise Notice under this Section 10.2.A,
the closing of such exchange shall be in accordance with the provisions of Section 10.9
hereof. For all purposes of this Article X, the Class B Units that
are the subject of an Exercise Notice shall be referred to as the “Tendered Units”; provided, however, that in the event that the Tendered Units include
all of the outstanding Class B Units held by an Investor at such time,
then for all purposes of this Article X the “Tendered Units” shall be
deemed to include the applicable Investor’s entire Investor LLC Interest such
that following the closing of the exchange of such Tendered Units, neither the
applicable Investor nor any Affiliate of the applicable Investor shall have any
rights with respect to the Company or the assets of the Company.


 


B.                                     Notwithstanding
the provisions of Section 10.2.A hereof to the contrary, each Investor
shall not have the right to deliver an Exercise Notice more often the one time
in any six (6) month period.


 


35

















 


SECTION 10.3.                                   Exchange Option - Computation of
Purchase Price/Form of Payment.


 


In the event that an Investor delivers an Exercise
Notice to the Manager in which such Investor elects the Exchange Option, the
Purchase Price payable by the Company to such Investor for the Tendered Units
shall be payable by the issuance by Inland Parent of the number of shares of
its Common Stock equal to the product, expressed as a whole number, of (i) the
Tendered Units, multiplied by (ii) the Exchange Factor (the “Stock Purchase Price”). At the election of the Manager, the
Purchase Price may be paid in whole (but not in part) in cash rather than
in Common Stock (the “Cash Purchase Price”).
The Cash Purchase Price shall mean, an amount of cash (in immediately available
funds) equal to (i) the number of shares of Inland Parent’s Common Stock
that would be issued to such Investor if the Stock Purchase Price were paid for
the Tendered Units (taking into account the adjustments required pursuant to
the definition of “Exchange Factor”) multiplied by (ii) the Current Per
Share Market Price computed as of the Computation Date. The Cash Purchase Price
shall, in the sole and absolute discretion of the Manager, be paid in the form of
cash, or cashier’s or certified check, or by wire transfer of immediately
available funds to the Investor’s designated account.


 


SECTION 10.4.                                   Covenants of Inland.


 


A.                                   In
the event that an Investor delivers an Exercise Notice to the Manager in which
such Investor elects the Exchange Option, and Inland Parent is either unable or
unwilling to deliver Common Stock in the amount of the Stock Purchase Price to
such Investor (whether due to the fact that the issuance of such Common Stock
would disqualify Inland Parent from being characterized as a REIT, the issuance
of such Common Stock would cause Inland Parent to incur substantial
registration fees or otherwise), the Company shall be required to pay the Cash
Purchase Price to such Investor


 


B.                                     In
the event that the Common Stock of Inland Parent is listed or admitted for
trading on a national securities exchange, Inland shall use reasonable efforts
to provide written notice to each Investor of the fact that such Common Stock
has become so listed or admitted; provided, however, that (x) the obligation of Inland to provide
written notice under this Section 10.4.B shall only apply after such
Common Stock has become so listed or admitted and then only to the extent
permitted under any and all applicable state and federal securities laws and
(y) the provisions of this Section 10.4.B shall not be deemed in any
manner to constitute a representation as to whether or not the Common Stock of
Inland Parent will in fact be listed or admitted on a national securities
exchange in the future.


 


SECTION 10.5.                                   Antidilution Provisions.


 


A.                                   The
Exchange Factor shall be subject to adjustment from time to time effective upon
the occurrence of the following events and shall be expressed as a percentage,
calculated to the nearest one-thousandth of one percent (.001%):


 


(i)                                     In
case Inland Parent shall pay or make a dividend or other distribution in shares
of Common Stock to all holders of the Common Stock, the Exchange Factor in
effect at the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution shall be increased


 


36

















 


in proportion to the increase in outstanding shares of
Common Stock resulting from such dividend or other distribution, such increase
to become effective immediately after the opening of business on the day
following the record date fixed for such dividend or other distribution.


 


(ii)                                  In
case outstanding shares of Common Stock shall be subdivided into a greater
number of shares, the Exchange Factor in effect at the opening of business on
the day following the day upon which such subdivision becomes effective shall
be proportionately increased, and, conversely, in case the outstanding shares
of Common Stock shall be combined into a smaller number of shares, the Exchange
Factor in effect at the opening of business on the day following the day upon
which such combination becomes effective shall be proportionately reduced, such
increase or reduction, as the case may be, to become effective immediately
after the opening of business on the day following the day upon which such
subdivision or combination becomes effective.


 


B.                                     In
case the shares of Common Stock shall be changed into the same or a different
number of shares of any class or classes of stock, whether by capital
reorganization, reclassification, or otherwise (other than subdivision or
combination of shares or a stock dividend described in subparagraph (ii) of
Section 10.5.A) then and in each such event the Investors, upon the
delivery of an Exchange Notice, shall have the right thereafter to convert the
Tendered Units into the kind and amount of shares and other securities and
property which would have been received upon such reorganization,
reclassification or other change by holders of the number of shares into which
the Tendered Units might have been converted immediately prior to such
reorganization, reclassification or change.


 


SECTION 10.6.                                   Fractions of Shares.


 


No fractional shares shall be issued upon conversion
of Class B Units. Instead of any fractional share of Common Stock which
would otherwise be issuable upon conversion of the Class B Units of an
Investor, the Company shall pay a cash adjustment in respect of such fraction
in an amount equal to the same fraction of the current market price per share
at the close of business on the day of the Closing (or, if such day is not a
Trading Day, on the Trading Day immediately preceding such day).


 


SECTION 10.7.                                   Provisions
in Case of Consolidation, Merger or Sale of Assets.


 


In case of any consolidation of Inland Parent with, or
merger of Inland Parent into, any other Person, any merger or consolidation of
another Person into Inland Parent (other than a merger which does not result in
any reclassification, conversion, exchange or cancellation of outstanding
shares of Common Stock of Inland Parent), or any sale or transfer of all or
substantially all of the assets of Inland Parent, the Person formed by such
consolidation or resulting from such merger or which acquires such assets of
Inland Parent, as the case may be, shall execute and deliver to the
Investors an agreement providing that the Investors shall have the right
thereafter, during the period such Exchange Rights shall be exercisable as
specified herein, to require the conversion of the Class B Units of the
Investors for the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer by a holder of the
number of shares of Common Stock into which the Class B Units of the


 


37

















 


Investors might have been converted immediately prior to such
consolidation, merger, sale or transfer. Such agreement shall provide for
adjustments which, for events subsequent to the effective date of such
agreement, shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article X. The above provisions of this Section 10.8
shall similarly apply to successive consolidations, mergers, sales or
transfers.


 


SECTION 10.8.                                   Redemption.


 


A.                                   Inland
shall have the continuing right, but not the obligation, to require the Company
to purchase and redeem all, but not less than all, and the applicable Investor
shall be required to assign all, of an Investor’s LLC Interests for the higher
of (i) the Investor Liquidation Amount (as defined below) of such Investor
or (ii) the Stock Purchase Price of such Investor (which, at the election
of the Manager, may be paid in the form of the Cash Purchase Price of
such Investor determined in the manner set forth in Section 10.3 hereof),
if (except as provided in Section 10.8.D hereof) an Exchange Notice is not
delivered by such Investor prior to the date that is seven (7) years after
the date hereof. Inland’s rights under this Section 10.8.A shall be
applied on an Investor-by-Investor basis (i.e., Inland may exercise its
rights under this Section 10.8.A with respect to one or more Investors
without exercising such rights with respect to each of the Investors).


 


B.                                     In
order to exercise the rights to require the Company to purchase and completely
redeem an Investor’s Investor LLC Interests under this Section 10.8,
Inland shall deliver to the applicable Investor, to the other Investors and to
the Company written notice (the “Redemption Notice”)
of the exercise of such right, which notice shall state Inland’s computation of
such Investor’s Investor Liquidation Amount, Stock Purchase Price or Cash
Purchase Price, as applicable. The delivery of the Redemption Notice by Inland
shall constitute an irrevocable commitment by the applicable Investor to
transfer and deliver, and the Company to purchase and redeem, all of such
Investor’s Investor LLC Interests for the higher of the Investor Liquidation
Amount or Stock Purchase Price (or, at the election of the Manager, the Cash
Purchase Price) of such Investor. Closing on the purchase and redemption of such
Investor’s Investor LLC Interests shall take place in accordance with Section 10.9
hereof.


 


C.                                     Upon
the delivery of the Redemption Notice by Inland, the applicable Investor shall
thereupon only be entitled to receive its Investor Liquidation Amount, Stock
Purchase Price or Cash Purchase Price, as applicable, and Inland shall have
sole authority to act on behalf of the Company to obtain at Closing the funds required
to completely redeem such Investor’s Investor LLC Interests, including
borrowing money from third-party lenders, Members or Affiliates and seeking
Capital Contributions from additional Members to be admitted to the Company,
subject to the provisions of Section 3.1.D hereof.


 


D.                                    Notwithstanding
any provision of this Section 10.8 and this Article X to the
contrary, and specifically notwithstanding the time after which Inland is
permitted to deliver a Redemption Notice under Section 10.8.A hereof, Inland
shall have the right, but not the obligation, in its sole and absolute
discretion, to deliver a Redemption Notice to an Investor and to cause the
purchase and redemption of all of such Investor’s Investor LLC Interests
pursuant to the terms of this Article X, at any time if such Investor breaches
any of the provisions of Sections 2.7 or 2.8 hereof.


 


38

















 


SECTION 10.9.                                   Closing.


 


A.                                   The
closing of the exchange of an Investor’s Tendered Units by the Company pursuant
to Section 10.2.A (whether such Investor elected the Exchange Option or
the Redemption Option) and the closing of the redemption of an Investor’s
Investor LLC Interests by the Company pursuant to Section 10.8 (in either
case, the “Closing”) shall be held at the
principal offices of the Company and, subject to any other specific time
periods for the Closing stated in this Agreement, shall occur on the date
specified in the Exchange Notice or Redemption Notice, as applicable, which
date shall be no sooner than thirty (30) days and no later than one hundred
twenty (120) days following the delivery of the Exchange Notice or Redemption
Notice, as applicable, to the applicable Investor, Inland and/or the Company,
as applicable.


 


B.                                     At
the Closing, the applicable Investor shall transfer and assign its Tendered
Units or Investor LLC Interests, as applicable, to the Company free and clear
of any liens, encumbrances or any interests of any third party and shall
execute or cause to be executed any and all documents required to transfer
fully good and clear title to the LLC Interests being transferred, including,
but not limited to, any and all documents necessary to evidence such transfer. In
the event that the applicable Investor does not timely execute any and all
documents necessary to evidence and effect such transfer of its Tendered Units
or entire Investor LLC Interest, as applicable, at the Closing, then the
Manager is hereby appointed the attorney-in-fact of, and is hereby authorized
on behalf of, such Investor, to execute, acknowledge and deliver all such
documents and take all such other actions as may be required to evidence
and effect such transfer of such Investor’s Tendered Units or entire Investor
LLC Interest, as applicable. Such appointment and authorization are coupled
with an interest and are irrevocable. The failure by an Investor to execute any
document shall not delay the Closing or cause the Closing to be ineffective.


 


C.                                     At
the Closing, (i) in the case that the Exchange Option was elected under Section 10.2.A
hereof, or in the case that Inland delivers a Redemption Notice in accordance
with Section 10.8.A hereof and, pursuant to the terms of Section 10.8.A
hereof, the consideration for such redemption is the Stock Purchase Price or
the Cash Purchase Price, Inland shall cause the Company or Inland Parent to
either deliver the Stock Purchase Price or the Cash Purchase Price to the
applicable Investor and (ii) in the case that the Redemption Option was
elected under Section 10.2.A hereof or in the case that Inland delivers a
Redemption Notice in accordance with Section 10.8.A hereof and, pursuant
to the terms of Section 10.8.A hereof, the consideration for such
redemption Inland is the Investor Liquidation Amount, Inland shall cause the
Company to distribute to the applicable Investor, the Investor Liquidation
Amount of such Investor. If any consents from lenders or otherwise are required
in order to carry out any provision of this Agreement, the parties hereby agree
to cooperate in good faith and will proceed promptly and diligently to obtain
all such consents; provided, however, that the failure to obtain any such consent may be
waived by Inland in its sole and absolute discretion. Each party hereby
covenants and agrees that following the payment of the Investor Liquidation
Amount, Stock Purchase Price or Cash Purchase Price, as applicable, for either (i) all
of the Class B Units held by an Investor at such time or (ii) the
applicable Investor’s entire Investor LLC Interest, neither the applicable Investor
nor any Affiliate of the applicable Investor shall have any rights with respect
to the Company or the assets of the Company either as owner, lender or
otherwise and neither such Investor nor any Affiliate of such Investor shall
have any right to receive any further


 


39

















 


payments or distributions from the Company under the terms of this
Agreement or otherwise, specifically including, but not limited to, such
Investor’s Unpaid Investor Preferred Return, if any, such Investor’s Capital
Account and such Investor’s Invested Capital.


 


SECTION 10.10.                            Investor Liquidation Amount.


 


In the event that an Investor elects the Redemption
Option under Section 10.2.A hereof or in the event that Inland delivers a
Redemption Notice in accordance with Section 10.8.A hereof and, pursuant
to the terms of Section 10.8.A hereof, the consideration for such
redemption is such Investor’s Investor Liquidation Amount, the entire purchase
price payable by the Company to an Investor (or its Affiliates) for such
Investor’s Investor LLC Interest (the “Investor
Liquidation Amount”) shall be an amount equal to the sum of the
following:


 


(i)                                     the
Unpaid Investor Preferred Return of such Investor as of the date of the Closing
as reasonably determined by the Company’s accountant at such time, plus


 


(ii)                                  such
Investor’s Invested Capital as of the date of the Closing.


 


For all purposes of this Article X, in the event that an Investor
elects the Redemption Option under Section 10.2.A hereof for less than all
of its outstanding Class B Units at such time, then the Investor
Liquidation Amount applicable to the Tendered Units of such Investor shall
equal such Investor’s Investor Liquidation Amount as determined under this Section 10.10
multiplied by a fraction, the numerator of which shall be equal to the Tendered
Units and the denominator of which shall be equal to all of the outstanding Class B
Units held by such Investor at such time.


 


SECTION 10.11.                            Deemed Redemption.


 


Notwithstanding any provision of this Agreement to the
contrary, in the event that an Investor receives a distribution with respect to
its Invested Capital under Section 4.2(ii) hereof, such distribution
shall be treated for all purposes of this Agreement (specifically including,
but not limited to, the provisions of this Article X) as a redemption by
the Company of a portion of the Class B Units held by such Investor at
such time. The number of Class B Units that are deemed to be redeemed by
the Company in accordance with the provisions of this Section 10.11, shall
be determined by multiplying an amount equal to all of the Class B Units
held by such Investor immediately prior to such distribution by a fraction, the
numerator of which shall be equal to the applicable distribution made to such
Investor at such time with respect to its Invested Capital under Section 4.2(ii) hereof
and the denominator of which shall be equal to the Invested Capital of such
Investor immediately prior to such distribution.


 


ARTICLE XI


 


MISCELLANEOUS


 


SECTION 11.1.                                   Further Assurances.


 


Each Member agrees to execute, acknowledge, deliver,
file, record and publish such further certificates, amendments to certificates,
instruments and documents, and do all such other


 


40

















 


acts and things as may be required by law, or as may be
required to carry out the intent and purposes of this Agreement.


 


SECTION 11.2.                                   Notices.


 


All notices, requests or demands to be given under
this Agreement from one party to the other (collectively, “Notices”)
shall be in writing and shall be given by personal delivery, or by overnight
courier service for next Business Day delivery at the other party’s address set
forth below, or by telecopy transmission at the other party’s facsimile
telephone number set forth below (with a copy of such telecopy transmission
being given to receiving party by deposit, on the day of such transmission,
with an overnight courier service for next Business Day delivery to the
receiving party). Notices given by personal delivery (i.e. by the sending party
or a messenger) shall be deemed given on the date of delivery, Notices given by
overnight courier service shall be deemed given upon deposit with the overnight
courier service and Notices given by telecopy transmission shall be deemed
given on the date of transmission provided such transmission is completed by
5:00 p.m. (sending party’s local time) on a Business Day, otherwise such
delivery shall be deemed to occur on the next succeeding Business Day. If any
party’s address is a business, receipt by a receptionist, or by any person in
the employ of such party, shall be deemed actual receipt by the party of
Notices. Notices may be issued by an attorney for a party and in such case
such Notices shall be deemed given by such party. Until further notice, notices
and other communications under this Agreement shall be addressed to the parties
listed below as follows:


 


(i)                                     If
to the Investor, to:


 


CE Investment Associates
2001 LLC


1720 Post Road


Fairfield, CT 06824


Attention: Louis L.
Ceruzzi, Jr.


 


With a copy (which shall be for informational purposes
only) to:


 


Ceruzzi Holdings, LLC


1720 Post Road


Fairfield, CT


Attention:  Arthur W. Hooper, Jr., Esq.


 


(ii)                                  If
to the Company or Inland, to:


 


c/o Inland American
Ceruzzi Cumberland Member, L.L.C.


2901 Butterfield Road


Oak Brook, Illinois  60523


 


Attention:  Chief Financial Officer


 


and with copies (which shall be for informational
purposes only) to:


 


c/o The Inland Real
Estate Group, Inc.


2901 Butterfield Road


Oak Brook, Illinois  60523


Attention:  General Counsel


 


41

















 


and to:


 


Stephen L. Owen


DLA Piper Rudnick Gray
Cary US LLP


6225 Smith Avenue


Baltimore, Maryland 21209


Tel:  410-580-4230


Fax:  410-580-3230


 


Any Member may designate another addressee (and/or change its
address) for Notices hereunder by a Notice given pursuant to this Section. Copies
of Notices are for informational purposes only, and a failure to give or
receive copies of any Notice shall not be deemed a failure to give notice, and
shall in no way adversely affect the effectiveness of such Notice given to the
addressee party.


 


SECTION 11.3.                                   Independent
Representation.


 


Inland hereby acknowledges and agrees that it has
consulted its independent counsel with respect to the tax and non-tax
consequences of its investment in the Company, and that neither the Investors
nor any Affiliate of the Investors shall have any liability to Inland or its
Affiliates as a result of any adverse consequences to Inland, or any direct or
indirect partner (or other equity owner) of Inland, as a result of Inland’s
investment in the Company or Inland’s ownership of an LLC Interest in the
Company. Each Investor hereby acknowledges and agrees that it has consulted its
independent counsel with respect to the tax and non-tax consequences of its
investment in the Company, and that neither Inland nor any Inland Affiliate
shall have any liability to the Investors or any Affiliate of the Investors as
a result of any adverse consequences to the Investors or any Affiliate of the
Investors as a result of the Investors’ investment in the Company, the Investors’
ownership of an LLC Interest in the Company or the Investors’ possible
withdrawal from the Company. The foregoing provision is not intended to and
shall not operate to diminish or limit the liability of either Member resulting
from such Member’s breach of or default under any provision of this Agreement.


 


SECTION 11.4.                                   Governing
Law.


 


This Agreement, the rights and obligations of the
parties hereto, and any claims or disputes relating thereto shall be governed
by and construed in accordance with the laws of the State of Delaware (but not
including the choice of law rules thereof).


 


SECTION 11.5.                                   Captions.


 


All titles or captions contained in this Agreement are
inserted only as a matter of convenience and for reference and in no way
define, limit, extend, or describe the scope of this Agreement or the intent of
any provision hereof.


 


SECTION 11.6.                                   Pronouns.


 


All pronouns and any variations thereof shall be deemed
to refer to the masculine, feminine, and neuter, singular and plural, as the
identity of the party or parties may require.


 


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SECTION 11.7.                                   Successors
and Assigns.


 


This Agreement shall be binding upon the parties
hereto and their respective executors, administrators, legal representatives,
heirs, successors and permitted assigns, and shall inure to the benefit of the
parties hereto and, except as otherwise provided herein, their respective
executors, administrators, legal representatives, heirs, successors and
permitted assigns.


 


SECTION 11.8.                                   Extension
Not a Waiver.


 


No delay or omission in the exercise of any power,
remedy or right herein provided or otherwise available to a Member or the
Company shall impair or affect the right of such Member or the Company
thereafter to exercise the same. Any extension of time or other indulgence
granted to a Member hereunder shall not otherwise alter or affect any power,
remedy or right of any other Member or of the Company, or the obligations of
the Member to whom such extension or indulgence is granted.


 


SECTION 11.9.                                   Construction.


 


None of the provisions of this Agreement shall be for
the benefit of or enforceable by any creditor of the Company or any third party.
No Member shall be obligated personally for any debt, obligation or liability
of the Company solely by being a Member of the Company.


 


SECTION 11.10.                            Severability.


 


In case any one or more of the provisions contained in
this Agreement or any application thereof shall be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and other application thereof shall not
in any way be effected or impaired thereby.


 


SECTION 11.11.                            Consents.


 


Unless otherwise provided in this Agreement to the
contrary, any consent or approval to any act or matter required under this
Agreement must be in writing and shall apply only with respect to the
particular act or matter to which such consent or approval is given, and shall
not relieve any Member from the obligation to obtain the consent or approval,
as applicable, wherever required under this Agreement to any other act or
matter.


 


SECTION 11.12.                            Entire
Agreement.


 


This Agreement, together with the Contribution
Agreement and any other agreement ancillary or related hereto or thereto,
contains the entire agreement among the parties hereto relating to the subject
matter hereof and all prior agreements relative hereto which are not contained
herein are terminated. Amendments, variations, modifications or changes herein may be
made effective and binding upon the parties by, and only by, the setting forth
of same in a document duly executed by each party, and any alleged amendment,
variation, modification or change herein which is not so documented shall not
be effective as to any party.


 


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SECTION 11.13.                            Rules of
Construction.


 


Unless the context clearly indicates to the contrary,
the following rules apply to the construction of this Agreement:


 


(i)                                     Words
importing the singular number include the plural number and words importing the
plural number include the singular number.


 


(ii)                                  Words
of the masculine gender include correlative words of the feminine and neuter
genders.


 


(iii)                               The
table of contents and the headings or captions used in this Agreement are for
convenience of reference and do not constitute a part of this Agreement,
nor affect its meaning, construction, or effect.


 


(iv)                              Words
importing persons include any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization or government or agency or political subdivision
thereof.


 


(v)                                 Any
reference in this Agreement to a particular “Article,” “Section” or other
subdivision shall be to such Article, Section or subdivision of this
Agreement unless the context shall otherwise require.


 


(vi)                              Each
reference in this Agreement to an agreement or contract shall include all amendments,
modifications, and supplements to such agreement or contract unless the context
shall otherwise require.


 


(vii)                           When
any reference is made in this document or any of the schedules or exhibits
attached hereto to the Agreement, it shall mean this Agreement, together with
all other schedules and exhibits attached hereto, as though one document.


 


SECTION 11.14.                            Counterparts.


 


This Agreement may be executed in any number of
counterparts, and each such counterpart will for all purposes be deemed an
original, and all such counterparts shall constitute one and the same
instrument.


 


[SIGNATURES ON NEXT PAGE]


 


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WHEREFORE, the parties
hereto have duly executed this Limited Liability Company Agreement of INLAND
AMERICAN CERUZZI CUMBERLAND MEMBER, L.L.C. under seal as of the day and year
first above written.


 


	
   

  	
  INLAND AMERICAN CUMBERLAND

  MEMBER II, L.L.C.,

  
	
   

  	
   

  
	
   

  	
  By:    Inland American Real
  Estate Trust,

  Inc., a Maryland corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Its:

  
	
   

  	
   

  
	
   

  	
  CE INVESTMENT ASSOCIATES 2001

  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Its:

  



 


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