Exhibit 10.81


 




 


 





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


 


 


LIMITED
LIABILITY COMPANY AGREEMENT


 


 






Dated as of June 8, 2006






 




 





 


i


 

















 


LIMITED
LIABILITY COMPANY AGREEMENT


OF


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


 


THIS
LIMITED LIABILITY COMPANY AGREEMENT (this “Agreement”) dated as of June 8, 2006, is
made by and between Inland American Swampscott 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 Swampscott,
L.L.C., a newly formed single purpose entity the sole member of which is Inland
American Ceruzzi Swampscott 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 Swampscott,
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.


 


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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 Swampscott 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 $18,756,741.00


 


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 Swampscott, 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 Swampscott 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 SWAMPSCOTT 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.


 


34

















 


“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 Swampscott 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.


 


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


 


 


	
   

  	
  INLAND AMERICAN SWAMPSCOTT

  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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