Common use of Incentive Distributions Clause in Contracts

Incentive Distributions. After the aggregate of distributions of Net Ordinary Cash Flow and Net Extraordinary Cash Flow have caused each Member’s internal rate of return as defined herein to equal or exceed 13%, Inland shall be entitled to an incentive distribution (the “Incentive Distribution“) equal to 20% (the “Incentive Distribution Percentage”) of all amounts that would otherwise be available for distribution to the Members pursuant to Section 7.4(c). The calculation of the internal rate of return (“IRR”) shall take into account the amount and timing of all Capital Contributions and distributions made hereunder shall be determined in accordance with EXHIBIT 7-C attached hereto. For purposes of determining whether the IRR has been met hereunder, if any Member hereafter acquires a Property from the Company in accordance with the terms of this Agreement, or otherwise, any distributions made by the Company to the Members as a result of such transaction, whether in cash or in-kind, shall be deemed to have been a distribution of Net Extraordinary Cash Flow to the Members. The Incentive Distribution shall first be calculated within 10 days after the Company (directly or through its Subsidiaries) has sold all of its Properties, and shall be paid to Inland by the Company out of the next distribution of Net Extraordinary Cash Flow to be paid to Members hereunder within 10 days after the calculation of the Incentive Distribution. Under no circumstances shall the Incentive Distribution be payable during any period of time in which the Company or any Subsidiary owns any Property. The Incentive Distribution shall be paid to Inland after distributions to satisfy Company Loans, but before distributions to Members in accordance with their Percentage Interests. In the event that the aggregate amount of the Incentive Distribution to be paid to Inland is greater than the amount of Net Extraordinary Cash Flow which is available to satisfy the Incentive Distribution, each Member shall repay to the Company upon demand on a pro rata basis such portion of the distributions previously made by the Company to such Member as shall be necessary to permit the Company to pay the Incentive Distribution which is due to Inland hereunder. After the payment of the Incentive Distribution, any amounts remaining shall be distributed to the Members in accordance with their Percentage Interests. By way of example, suppose (i) the Net Extraordinary Proceeds from the sale of the last Property owned by the Company are $200, (ii) there are no Company Loans and no Default Contributions have been made, (iii) the Members’ Unreturned Capital is $70 which will be distributed pursuant to Section 7.4(c)(i), (ii) and (iii), as applicable, and (iv) after an additional $30 is distributed to the Members under Section 7.4(c)(iv), each Member will have achieved a 13% IRR. Then, the next $100 would be distributed as follows: $20 would be distributed to Inland as an Incentive Distribution, and the remaining $80 would be distributed to NYSTRS and Inland in accordance with their respective Percentage Interests. See also the illustration in EXHIBIT 7-B. No amount paid by the Company to Inland as Incentive Distribution is intended to constitute a fee or other remuneration for services.

Incentive Distributions. (i) After the aggregate of distributions of Net Ordinary Cash Flow and Net Extraordinary Cash Flow have caused each Member’s internal rate of return as defined herein to equal or exceed 13%, Inland shall be entitled to an incentive distribution (the “Incentive Distribution“”) equal to 20% (the “Incentive Distribution Percentage”) of all amounts that would otherwise be available for distribution to the Members pursuant to Section 7.4(c). The calculation of the internal rate of return (“IRR”) shall take into account the amount and timing of all Capital Contributions and distributions made hereunder shall be determined in accordance with EXHIBIT 7-C attached hereto. For purposes of determining whether the IRR has been met hereunder, if any Member hereafter acquires a Property from the Company in accordance with the terms of this Agreement, or otherwise, any distributions made by the Company to the Members as a result of such transaction, whether in cash or in-kind, shall be deemed to have been a distribution of Net Extraordinary Cash Flow to the Members. . (ii) The Incentive Distribution shall first be calculated within 10 days after the Company (directly or through its Subsidiaries) has sold all of its Properties, and shall be paid to Inland by the Company out of the next distribution of Net Extraordinary Cash Flow to be paid to Members hereunder within 10 days after the calculation of the Incentive Distribution. Under no circumstances shall the Incentive Distribution be payable during any period of time in which the Company or any Subsidiary owns any Property. The Incentive Distribution shall be paid to Inland after distributions to satisfy Company Loans, but before distributions to Members in accordance with their Percentage Interests. In the event that the aggregate amount of the Incentive Distribution to be paid to Inland is greater than the amount of Net Extraordinary Cash Flow which is available to satisfy the Incentive Distribution, each Member shall repay to the Company upon demand on a pro rata basis such portion of the distributions previously made by the Company to such Member as shall be necessary to permit the Company to pay the Incentive Distribution which is due to Inland hereunder. After the payment of the Incentive Distribution, any amounts remaining shall be distributed to the Members in accordance with their Percentage Interests. By way of example, suppose (i) the Net Extraordinary Proceeds from the sale of the last Property owned by the Company are $200, (ii) there are no Company Loans and no Default Contributions have been made, (iii) the Members’ Unreturned Capital is $70 which will be distributed pursuant to Section 7.4(c)(i), (ii) and (iii), as applicable, and (iv) after an additional $30 is distributed to the Members under Section 7.4(c)(iv), each Member will have achieved a 13% IRR. Then, the next $100 would be distributed as follows: $20 would be distributed to Inland as an Incentive Distribution, and the remaining $80 would be distributed to NYSTRS and Inland in accordance with their respective Percentage Interests. See also the illustration in EXHIBIT 7-B. No amount paid by the Company to Inland as Incentive Distribution is intended to constitute a fee or other remuneration for services. (iii) If at the time at which the Incentive Distribution is to be paid to Inland, the aggregate of the Capital Contributions which have been made by Inland and NYSTRS are not each 50% as the result of the contribution by either party of a Default Contribution, the Incentive Distribution Percentage to be paid to Inland hereunder shall be reduced or increased by the change in Inland’s Percentage Interest from 50%. By way of example, if as a result of a Default Contribution, the Percentage Interest of Inland has been reduced from 50% to 45% (a 10% reduction), then the Incentive Distribution percentage would be reduced by 10%, from 20% to 18%; however, if the Percentage Interest of Inland has been increased from 50% to 60% (a 20% increase), then the Incentive Distribution percentage would be increased by 20%, from 20% to 24%.

Incentive Distributions. (i) After the aggregate of distributions of Net Ordinary Cash Flow and Net Extraordinary Cash Flow have caused each Member’s internal rate of return as defined herein to equal or exceed 13%, 12% Inland shall be entitled to an incentive distribution (the “Incentive Distribution“) equal to 20% (the “Incentive Distribution Percentage”) of all amounts that would otherwise be available for distribution to the Members pursuant to Section 7.4(c). The calculation of the internal rate of return (“IRR”) shall take into account the amount and timing of all Capital Contributions and distributions made hereunder shall be determined in accordance with EXHIBIT 7-C B attached hereto. For purposes of determining whether the IRR has been met hereunder, if any Member hereafter acquires a Property from the Company in accordance with the terms of this Agreement, or otherwise, any distributions made by the Company to the Members as a result of such transaction, whether in cash or in-kind, shall be deemed to have been a distribution of Net Extraordinary Cash Flow to the Members. . (ii) The Incentive Distribution shall first be calculated within 10 days after the Company (directly or through its Subsidiaries) has sold all of its Properties, and shall be paid to Inland by the Company out of the next distribution of Net Extraordinary Cash Flow to be paid to Members hereunder within 10 days after the calculation of the Incentive Distribution. Under no circumstances shall the Incentive Distribution be payable during any period of time in which the Company or any Subsidiary owns any Property. The Incentive Distribution shall be paid to Inland after distributions to satisfy Company Loans, but before distributions to Members in accordance with their Percentage Interests. In the event that the aggregate amount of the Incentive Distribution to be paid to Inland is greater than the amount of Net Extraordinary Cash Flow which is available to satisfy the Incentive Distribution, each Member shall repay to the Company upon demand on a pro rata basis such portion of the distributions previously made by the Company to such Member as shall be necessary to permit the Company to pay the Incentive Distribution which is due to Inland hereunder. After the payment of the Incentive Distribution, any amounts remaining shall be distributed to the Members in accordance with their Percentage Interests. By way of example, suppose (i) the Net Extraordinary Proceeds from the sale of the last Property owned by the Company are $200, (ii) there are no Company Loans and no Default Contributions have been made, (iii) the Members’ Unreturned Capital is $70 which will be distributed pursuant to Section 7.4(c)(i), (ii) and (iii), as applicable, and (iv) after an additional $30 is distributed to the Members under Section 7.4(c)(iv), each Member will have achieved a 1312% IRR. Then, the next $100 would be distributed as follows: $20 would be distributed to Inland as an Incentive Distribution, and the remaining $80 would be distributed to NYSTRS and to Inland in accordance with their respective Percentage Interests. See also the illustration in EXHIBIT 7-B. A. No amount paid by the Company to Inland as Incentive Distribution is intended to constitute a fee or other remuneration for services. (iii) If at the time at which the Incentive Distribution is to be paid to Inland, the aggregate of the Capital Contributions which have been made by Inland and NYSTRS are not 20% and 80% respectively as the result of the contribution by either party of a Default Contribution, the Incentive Distribution Percentage to be paid to Inland hereunder shall be reduced or increased by the change in Inland’s Percentage Interest from 20%. By way of example, if as a result of a Default Contribution, the Percentage Interest of Inland has been reduced from 20% to 15% (a 25% reduction), then the Incentive Distribution percentage would be reduced by 25%, from 20% to 15%; however, if the Percentage Interest of Inland has been increased from 20% to 25% (a 25% increase), then the Incentive Distribution percentage would be increased by 25%, from 20% to 25%.