Common use of Initial Properties Clause in Contracts

Initial Properties. Within 10 days after a Major Capital Event as to an Initial Property by the Company (or one of its Subsidiaries), and the determination of the amount of Net Extraordinary Cash Flow from such Initial Property which is distributable to each Member with respect to such Property, the Manager shall cause each Member’s cumulative internal rate of return (“IRR”) as to Initial Properties to be calculated taking into account the amount and timing of all Capital Contributions with respect to the Initial Properties, and all distributions made hereunder with respect to the Initial Properties prior to such Major Capital Event in accordance with EXHIBIT 7-A attached. Inland shall be entitled to an incentive distribution (the “Initial Property Incentive Distribution“) set forth below depending upon the IRR of the Members and as reflected in Section 7.4(c)(i)(C) and (D): Members’ Internal Rate of Return (“IRR”) applicable to Properties Purchased Using Capital Contributions made pursuant to Initial Capital Commitments (The calculation of the IRR shall take into account the amount and timing of all Capital Contributions of and distributions to Members with respect to Initial Properties and shall be determined in accordance with the rules contained in EXHIBIT 7-A.) Initial Property Incentive Distribution to Inland By way of example, suppose (i) the net proceeds from the sale of a Property that was purchased using Capital Contributions made pursuant to Initial Capital Commitments and owned by the Company are $200, (ii) there are no Company Loans and no Default Contributions have been made, (iii) the Members’ Unreturned Capital from Initial Capital Commitments is $70 which will be distributed pursuant to Section 7.4(c)(i)(A), and (iv) after an additional $30 is distributed to the Members under Section 7.4(c)(i)(B), each Member will have achieved a cumulative IRR as to all Initial Properties of greater than 11%, but less than 13%. Then, the next $100 would be distributed as follows: $5 would be distributed to Inland as an Initial Property Incentive Distribution, and the remaining $95 would be distributed $76 to SAU and $19 to Inland in accordance with their respective Percentage Interests. (See EXHIBIT 7-B). For purposes of determining whether the IRR has been met hereunder, no Member shall be deemed to have received the amount of the Initial Property Incentive Distributions paid to Inland hereunder. No amount paid by the Company to Inland as Initial Property Incentive Distribution is intended to constitute a fee or other remuneration for services.