Exhibit 10.8

SECURITY AGREEMENT

This SECURITY AGREEMENT dated as of September 30, 2015 (the “Security
Agreement”), is executed by IRESI FREDERICK MARKET SQUARE, L.L.C., a Delaware
limited liability company (“Debtor”), having its chief executive office at 2901
Butterfield Road, Oak Brook, IL 60523 and Parkway Bank and Trust Company, an
Illinois banking corporation (the “Bank”), whose address is 4800 N. Harlem
Avenue, Harwood Heights, Illinois 60706.

R E C I T A L S:

WHEREAS, Debtor desires to borrow funds and obtain other financial
accommodations from Bank pursuant to that certain Loan Agreement of even date
herewith by and between Debtor and Bank (the “Loan Agreement”).

NOW THEREFORE, in consideration of the premises, and the mutual covenants and
agreements set forth herein, Debtor and Bank hereby agree as follows:

A G R E E M E N T S:

Section 1           DEFINITIONS.

1.1           Defined Terms. Capitalized terms used but not otherwise defined in
this Security Agreement (including the Recitals) shall have the meanings
ascribed to them in the Loan Agreement. For the purposes of this Security
Agreement, the following capitalized words and phrases shall have the meanings
set forth below.

“Bank Product Agreements” shall mean those certain cash management service or
other agreements entered into from time to time by Debtor with Bank or any
Affiliate of Bank concerning Bank Products.

“Bank Product Obligations” shall mean all obligations, liabilities, contingent
reimbursement obligations, fees, and expenses owing by the Debtor or any
Subsidiary to the Bank or any Affiliate of the Bank pursuant to or evidenced by
the Bank Product Agreements and irrespective of whether for the payment of
money, whether direct or indirect, absolute or contingent, due or to become due,
now existing or hereafter arising.

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“Capital Securities” shall mean, with respect to any Person, all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person’s capital, whether now outstanding or
issued or acquired after the date hereof, including common shares, preferred
shares, membership interests in a limited liability company, limited or general
partnership interests in a partnership or any other equivalent of such ownership
interest.

“Collateral” shall have the meaning set forth in Section 2.1 hereof.

“Hedging Agreements” shall mean any interest rate, currency or commodity swap
agreement, cap agreement or collar agreement, and any other agreement or
arrangement designed to protect a Person against fluctuations in interest rates,
currency exchange rates or commodity prices.

“Hedging Obligation” shall mean, with respect to any Person, any liability of
such Person under any Hedging Agreement.

“Note” shall mean the Secured Promissory Note of even date herewith, in the
original principal amount of Forty-Five Million Seven Hundred Fifty Thousand and
00/100 Dollars ($45,750,000.00) made by Debtor payable to Bank, together with
all renewals, extensions, modifications, refinancings, consolidations, and
substitutions thereof.

 

“Obligations” means all loans, advances and other financial accommodations, all
interest accrued thereon (including interest which would be payable as
post-petition in connection with any bankruptcy or similar proceeding, whether
or not permitted as a claim thereunder) and any fees due Bank under the Loan
Agreement, the Note or the other Loan Documents, and any expenses incurred by
Bank under the Loan Agreement, Note or the other Loan Documents, and any and all
other liabilities and obligations of Debtor to Bank, including any reimbursement
obligations of Debtor in respect of Letters of Credit and surety bonds, all
Hedging Obligations of Debtor which are owed to Bank or any Affiliate of Bank,
and all Bank Product Obligations of Debtor, all in each case howsoever created,
arising or evidenced, whether direct or indirect, absolute or contingent, now or
hereafter existing, or due or to become due, together with any and all renewals
or extensions thereof.

“Obligor” shall mean Debtor or any other party liable with respect to the
Obligations.

“Organizational Identification Number” means the organizational identification
number assigned to Debtor by the applicable governmental unit or agency of the
jurisdiction of organization of Debtor, if any.

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“Taxes” shall mean any and all present and future taxes, duties, levies,
imposts, deductions, assessments, charges or withholdings, and any and all
liabilities (including interest and penalties and other additions to taxes) with
respect to the foregoing.

1.2           Other Terms Defined in UCC. All other capitalized words and
phrases used herein and not otherwise specifically defined herein or in the Loan
Agreement shall have the respective meanings assigned to such terms in the UCC,
to the extent the same are used or defined therein.

1.3 Other Interpretive Provisions.

(a) The meanings of defined terms are equally applicable to the singular and
plural forms of the defined terms. Whenever the context so requires, the neuter
gender includes the masculine and feminine, the single number includes the
plural, and vice versa, and in particular the word “Debtor” shall be so
construed.

(b) Section and Schedule references are to this Security Agreement unless
otherwise specified. The words “hereof”, “herein” and “hereunder” and words of
similar import when used in this Security Agreement shall refer to this Security
Agreement as a whole and not to any particular provision of this Security
Agreement.

(c) The term “including” is not limiting, and means “including, without
limitation”.

(d) In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including”; the words “to” and
“until” each mean “to but excluding”, and the word “through” means “to and
including”.

(e) Unless otherwise expressly provided herein, (i) references to agreements
(including this Security Agreement and the other Loan Documents) and other
contractual instruments shall be deemed to include all subsequent amendments,
restatements, supplements and other modifications thereto, but only to the
extent such amendments, restatements, supplements and other modifications are
not prohibited by the terms of any Loan Document, and (ii) references to any
statute or regulation shall be construed as including all statutory and
regulatory provisions amending, replacing, supplementing or interpreting such
statute or regulation.

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(f) This Security Agreement and the other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and each
shall be performed in accordance with its terms.

Section 2           SECURITY FOR THE OBLIGATIONS.

2.1           Security for Obligations. As security for the payment and
performance of the Obligations, Debtor does hereby pledge, assign, transfer,
hypothecate, deliver and grant to Bank, for its own benefit and as agent for its
Affiliates, a continuing and unconditional first priority security interest in
and to any and all property of Debtor, of any kind or description, tangible or
intangible, wheresoever located and whether now existing or hereafter arising or
acquired, including the following (all of which property of Debtor, along with
the products and proceeds therefrom, are individually and collectively referred
to as the “Collateral”):

(a)            all property of, or for the account of, Debtor now or hereafter
coming into the possession, control or custody of, or in transit to, Bank or any
agent or bailee for Bank or any parent, affiliate or subsidiary of Bank or any
participant with Bank in the Obligations (whether for safekeeping, deposit,
collection, custody, pledge, transmission or otherwise), including all earnings,
dividends, interest, or other rights in connection therewith and the products
and proceeds therefrom, including the proceeds of insurance thereon; and

(b)            the additional property of Debtor, whether now existing or
hereafter arising or acquired, and wherever now or hereafter located, together
with all additions and accessions thereto, substitutions, betterments and
replacements therefor, products and Proceeds therefrom, and all of Debtor’s
books and records and recorded data relating thereto (regardless of the medium
of recording or storage), together with all of Debtor’s right, title and
interest in and to all computer software required to utilize, create, maintain
and process any such records or data on electronic media, identified and set
forth as follows:

(i)              All Accounts and all Goods whose sale, lease or other
disposition by Debtor has given rise to Accounts and have been returned to, or
repossessed or stopped in transit by, Debtor, or rejected or refused by any
Account Debtor;

(ii)             All Inventory, including raw materials, work-in-process and
finished goods;

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(iii)            All Goods (other than Inventory), including embedded software,
Equipment, vehicles, furniture and Fixtures;

(iv)           All Software and computer programs;

(v)            All Securities, Investment Property, Financial Assets and Deposit
Accounts;

(vi)           All Chattel Paper, Electronic Chattel Paper, Instruments,
Documents, Letter of Credit Rights, all proceeds of letters of credit,
Health-Care-Insurance Receivables, Supporting Obligations, notes secured by real
estate, Commercial Tort Claims and General Intangibles, including Payment
Intangibles; and

(vii)          All Proceeds (whether Cash Proceeds or Noncash Proceeds) of the
foregoing property, including all insurance policies and proceeds of insurance
payable by reason of loss or damage to the foregoing property, including
unearned premiums, and of eminent domain or condemnation awards, subject to the
rights of any tenant under its lease.

2.2           Possession and Transfer of Collateral. Until an Event of Default
has occurred hereunder, Debtor shall be entitled to possession or use of the
Collateral (other than Instruments or Documents (including Tangible Chattel
Paper and Investment Property consisting of certificated securities) and other
Collateral required to be delivered to Bank pursuant to this Section 2. The
cancellation or surrender of any promissory note evidencing an Obligation, upon
payment or otherwise, shall not affect the right of Bank to retain the
Collateral for any other of the Obligations except upon payment in full of the
Obligations. Debtor shall not sell, assign (by operation of law or otherwise),
license, lease or otherwise dispose of, or grant any option with respect to any
of the Collateral, except as permitted pursuant to the Loan Agreement.

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2.3           Financing Statements. Debtor shall, at Bank’s request, at any time
and from time to time, deliver to Bank such financing statements, amendments and
other documents and do such acts as Bank deems necessary in order to establish
and maintain valid, attached and perfected first priority security interests in
the Collateral in favor of Bank, for its own benefit and as agent for its
Affiliates, free and clear of all Liens and claims and rights of third parties
whatsoever, except Permitted Encumbrances. Debtor hereby irrevocably authorizes
Bank at any time, and from time to time, to file in any jurisdiction any initial
financing statements and amendments thereto without the signature of Debtor that
(a) indicate the Collateral (i) is comprised of all assets of Debtor or words of
similar effect, regardless of whether any particular asset comprising a part of
the Collateral falls within the scope of Article 9 of the UCC of the
jurisdiction wherein such financing statement or amendment is filed, or (ii) as
being of an equal or lesser scope or within greater detail as the grant of the
security interest set forth herein, and (b) contain any other information
required by Section 5 of Article 9 of the UCC of the jurisdiction wherein such
financing statement or amendment is filed regarding the sufficiency or filing
office acceptance of any financing statement or amendment, including (i) whether
Debtor is an organization, the type of organization and any Organizational
Identification Number issued to Debtor, and (ii) in the case of a financing
statement filed as a fixture filing or indicating Collateral as as-extracted
collateral or timber to be cut, a sufficient description of the real property to
which the Collateral relates. Debtor hereby agrees that a photostatic or other
reproduction of this Security Agreement is sufficient for filing as a financing
statement and Debtor authorizes Bank to file this Security Agreement as a
financing statement in any jurisdiction. Debtor agrees to furnish any such
information to Bank promptly upon request. In addition, Debtor shall make
appropriate entries on its books and records disclosing the security interests
of Bank, for its own benefit and as agent for its Affiliates, in the Collateral.

2.4           Preservation of the Collateral. The Bank may, but is not required
to, take such actions from time to time as Bank deems appropriate to maintain or
protect the Collateral. The Bank shall have exercised reasonable care in the
custody and preservation of the Collateral if Bank takes such action as Debtor
shall reasonably request in writing which is not inconsistent with Bank’s status
as a secured party, but the failure of Bank to comply with any such request
shall not be deemed a failure to exercise reasonable care; provided, however,
Bank’s responsibility for the safekeeping of the Collateral shall (i) be deemed
reasonable if such Collateral is accorded treatment substantially equal to that
which Bank accords its own property, and (ii) not extend to matters beyond the
control of Bank, including acts of God, war, insurrection, riot or governmental
actions. In addition, any failure of Bank to preserve or protect any rights with
respect to the Collateral against prior or third parties, or to do any act with
respect to preservation of the Collateral, not so requested by Debtor, shall not
be deemed a failure to exercise reasonable care in the custody or preservation
of the Collateral. Debtor shall have the sole responsibility for taking such
action as may be necessary,

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from time to time, to preserve all rights of Debtor and Bank in the applicable
Collateral against prior or third parties, except the filing of continuation
statements for UCC filings on the Collateral. Without limiting the generality of
the foregoing, where Collateral consists in whole or in part of securities,
Debtor represents to, and covenants with, Bank that Debtor has made arrangements
for keeping informed of changes or potential changes affecting the securities
(including rights to convert or subscribe, payment of dividends, reorganization
or other exchanges, tender offers and voting rights), and Debtor agrees that
Bank shall have no responsibility or liability for informing Debtor of any such
or other changes or potential changes or for taking any action or omitting to
take any action with respect thereto.

2.5           Other Actions as to any and all Collateral. Debtor further agrees
to take any other action reasonably requested by Bank to ensure the attachment,
perfection and first priority of, and the ability of Bank to enforce, the
security interest of Bank, for its own benefit and as agent for its Affiliates,
in any and all of the Collateral including (a) causing Bank’s name to be noted
as secured party on any certificate of title for a titled good if such notation
is a condition to attachment, perfection or priority of, or ability of the bank
to enforce, the security interest of Bank, for its own benefit and as agent for
its Affiliates, in such Collateral, (b) complying with any provision of any
statute, regulation or treaty of the United States as to any material portion of
the Collateral as soon as possible but not more than forty-five (45) days after
such request if compliance with such provision is a condition to attachment,
perfection or priority of, or ability of Bank to enforce, the security interest
of Bank, for its own benefit and as agent for its Affiliates, in such
Collateral, (c) obtaining governmental and other third party consents and
approvals, including without limitation any consent of any licensor, lessor or
other Person with authority or control over or an interest in any material
portion of the Collateral as soon as possible but not more than forty-five (45)
days after such request, (d) obtaining waivers from mortgagees and landlords in
form and substance reasonably satisfactory to Bank which affect any material
portion of the Collateral as soon as possible but not more than forty-five (45)
days after such request, and (e) taking all actions required by the UCC in
effect from time to time or by other law, as applicable in any relevant UCC
jurisdiction, or by other law as applicable in any foreign jurisdiction. Debtor
further agrees to indemnify and hold Bank harmless against claims of any Persons
not a party to this Security Agreement concerning disputes arising over the
Collateral except to the extent resulting from the gross negligence or willful
misconduct of Bank or its Affiliates.

2.6           Collateral in the Possession of a Warehouseman or Bailee. If any
material portion of the Collateral at any time is in the possession of a
warehouseman or bailee, Debtor shall promptly notify Bank thereof, and, as soon
as possible but not more than forty-five (45) days later, shall obtain a
Collateral Access Agreement in form and substance reasonably satisfactory to
Bank from such warehouseman or bailee.

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2.7           Letter-of-Credit Rights. If Debtor at any time is a beneficiary
under a letter of credit now or hereafter issued in favor of Debtor, Debtor
shall promptly notify Bank thereof and, at the request and option of Bank,
Debtor shall, pursuant to an agreement in form and substance reasonably
satisfactory to Bank, either (i) arrange for the issuer and any confirmer of
such letter of credit to consent to an assignment to Bank, for its own benefit
and as agent for its Affiliates, of the proceeds of any drawing under the letter
of credit, or (ii) arrange for Bank, for its own benefit and as agent for its
Affiliates, to become the transferee beneficiary of the letter of credit, with
Bank agreeing, in each case, that the proceeds of any drawing under the letter
of credit are to be applied as provided in the Loan Agreement.

2.8           Commercial Tort Claims. If Debtor shall at any time hold or
acquire a Commercial Tort Claim, Debtor shall promptly notify Bank in writing
signed by Debtor of the details thereof and grant to Bank, for its own benefit
and as agent for its Affiliates, in such writing a security interest therein and
in the proceeds thereof, all upon the terms of this Security Agreement, in each
case in form and substance reasonably satisfactory to Bank, and shall execute
any amendments hereto deemed reasonably necessary by Bank to perfect the
security interest of Bank, for its own benefit and as agent for its Affiliates,
in such Commercial Tort Claim.

2.9           Electronic Chattel Paper and Transferable Records. If Debtor at
any time holds or acquires an interest in any electronic chattel paper or any
“transferable record”, as that term is defined in Section 201 of the federal
Electronic Signatures in Global and National Commerce Act, or in Section 16 of
the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction, Debtor shall promptly notify Bank thereof and, at the request of
Bank, shall take such action as Bank may reasonably request to vest in Bank
control under Section 9-105 of the UCC of such electronic chattel paper or
control under Section 201 of the federal Electronic Signatures in Global and
National Commerce Act or, as the case may be, Section 16 of the Uniform
Electronic Transactions Act, as so in effect in such jurisdiction, of such
transferable record. The Bank agrees with Debtor that Bank will arrange,
pursuant to procedures reasonably satisfactory to Bank and so long as such
procedures will not result in Bank’s loss of control, for Debtor to make
alterations to the electronic chattel paper or transferable record permitted
under Section 9-105 of the UCC or, as the case may be, Section 201 of the
federal Electronic Signatures in Global and National Commerce Act or Section 16
of the Uniform Electronic Transactions Act for a party in control to make
without loss of control.

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Section 3           REPRESENTATIONS AND WARRANTIES.

Debtor makes the following representations and warranties to Bank:

3.1           Debtor Organization and Name. Debtor is a limited liability
company duly organized, existing and in good standing under the laws of the
State of Delaware, with full and adequate power to carry on and conduct its
business as presently conducted, duly licensed or qualified in all foreign
jurisdictions wherein the nature of its activities requires such qualification
or licensing. The exact legal name of Debtor is as set forth in the first
paragraph of this Security Agreement, and Debtor currently does not conduct, nor
has it during the last five (5) years conducted, business under any other name
or trade name.

3.2           Authorization. Debtor has full right, power and authority to enter
into this Security Agreement and to perform all of its duties and obligations
under this Security Agreement. The execution and delivery of this Security
Agreement and the other Loan Documents will not, nor will the observance or
performance of any of the matters and things herein or therein set forth,
violate or contravene any provision of law or of the certificate of trust and
organization of Debtor or the trust or operating agreement of Debtor. All
necessary and appropriate action has been taken on the part of Debtor to
authorize the execution and delivery of this Security Agreement.

3.3           Validity and Binding Nature. This Security Agreement is the legal,
valid and binding obligation of Debtor, enforceable against Debtor in accordance
with its terms, subject to bankruptcy, insolvency and similar laws affecting the
enforceability of creditors’ rights generally and to general principles of
equity.

3.4           Consent; Absence of Breach. The execution, delivery and
performance of this Security Agreement and any other documents or instruments to
be executed and delivered by Debtor in connection herewith, do not and will not
(a) require any consent, approval, authorization, or filings with, notice to or
other act by or in respect of, any governmental authority or any other Person
(other than any consent or approval which has been obtained and is in full force
and effect); (b) conflict with (i) any provision of law or any applicable
regulation, order, writ, injunction or decree of any court or governmental
authority except for such conflicts which would not result in a Material Adverse
Effect, (ii) the trust or operating agreement or any other organic document of
Debtor or (iii) any material agreement, indenture, instrument or other document,
or any judgment, order or decree, which is binding upon Debtor or any of its
properties or assets except for such conflicts which would not result in a
Material Adverse Effect; or (c) require, or result in, the creation or
imposition of any Lien on any asset of Debtor, other than Liens in favor of Bank
created pursuant to this Security Agreement and Permitted Encumbrances.

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3.5           Ownership of Collateral; Liens. Debtor is the sole owner all of
its Collateral, free and clear of all Liens, charges and claims (including
infringement claims with respect to patents, trademarks, service marks,
copyrights and the like), other than Permitted Encumbrances.

3.6           Adverse Circumstances. No condition, circumstance, event,
agreement, document, instrument, restriction, litigation or proceeding (or
threatened litigation or proceeding or basis therefor) exists which (a) would
have a Material Adverse Effect upon Debtor, or (b) would constitute an Event of
Default.

3.7           Security Interest. This Security Agreement creates a valid
security interest in favor of Bank in the Collateral and, when properly
perfected by filing in the appropriate jurisdictions, or by possession or
Control of such Collateral by Bank or delivery of such Collateral to Bank, shall
constitute a valid, perfected, first-priority security interest in such
Collateral.

3.8           Place of Business. The principal place of business and books and
records of Debtor is set forth in the preamble to this Security Agreement, and
the location of all Collateral, if other than at such principal place of
business, as set forth on Schedule 3.8 attached hereto and made a part hereof,
and Debtor shall promptly notify Bank of any change in such locations. Debtor
will not remove or permit the Collateral to be removed from such location
without the prior written consent of Bank, except as permitted pursuant to the
Loan Agreement.

3.9           Complete Information. This Security Agreement and all financial
statements, schedules, certificates, confirmations, agreements, contracts, and
other materials and information heretofore or contemporaneously herewith
furnished in writing by Debtor to Bank for purposes of, or in connection with,
this Security Agreement and the transactions contemplated hereby is, and all
written information hereafter furnished by or on behalf of Debtor to Bank
pursuant hereto or in connection herewith will be, true and accurate in every
material respect on the date as of which such information is dated or certified,
and none of such information is or will be incomplete by omitting to state any
material fact necessary to make such information not misleading in light of the
circumstances under which made (it being recognized by Bank that any projections
and forecasts provided by Debtor are based on good faith estimates and
assumptions believed by Debtor to be reasonable as of the date of the applicable
projections or assumptions and that actual results during the period or periods
covered by any such projections and forecasts may differ from projected or
forecasted results); and provided that with respect to any document provided by
a seller of any part of the Premises to Debtor and delivered to Bank by Debtor,
the forgoing representations are to Debtor’s knowledge.

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Section 4           REMEDIES.

Upon the occurrence of any default in the payment or performance of any of the
covenants, conditions and agreements contained in this Security Agreement or any
other Event of Default, Bank shall have all rights, powers and remedies set
forth in this Security Agreement or the other Loan Documents or in any other
written agreement or instrument relating to any of the Obligations or any
security therefor, as a secured party under the UCC or as otherwise provided at
law or in equity. Without limiting the generality of the foregoing, Bank may, at
its option upon the occurrence of an Event of Default, declare its commitments
to Debtor to be terminated and all Obligations to be immediately due and
payable, or, if provided in the Loan Documents, all commitments of Bank to
Debtor shall immediately terminate and all Obligations shall be automatically
due and payable, all without demand, notice or further action of any kind
required on the part of Bank. Debtor hereby waives any and all presentment,
demand, notice of dishonor, protest, and all other notices and demands in
connection with the enforcement of Bank’s rights under the Loan Documents, and
hereby consents to, and waives notice of release, with or without consideration,
of any Collateral, notwithstanding anything contained herein or in the Loan
Documents to the contrary. In addition to the foregoing:

4.1           Possession and Assembly of Collateral. The Bank may, without
notice, demand or legal process of any kind, take possession of any or all of
the Collateral (in addition to Collateral of which Bank already has possession),
wherever it may be found, and for that purpose may pursue the same wherever it
may be found, and may at any time enter into any of Debtor’s premises where any
of the Collateral may be or is supposed to be, and search for, take possession
of, remove, keep and store any of the Collateral until the same shall be sold or
otherwise disposed of and Bank shall have the right to store and conduct a sale
of the same in any of Debtor’s premises without cost to Bank. At Bank’s request,
Debtor will, at Debtor’s sole expense, assemble the Collateral and make it
available to Bank at a place or places to be designated by Bank which is
reasonably convenient to Bank and Debtor.

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4.2           Sale of Collateral. The Bank may sell any or all of the Collateral
at public or private sale, upon such terms and conditions as Bank may deem
proper, and Bank may purchase any or all of the Collateral at any such sale.
Debtor acknowledges that Bank may be unable to effect a public sale of all or
any portion of the Collateral because of certain legal and/or practical
restrictions and provisions which may be applicable to the Collateral and,
therefore, may be compelled to resort to one or more private sales to a
restricted group of offerees and purchasers. Debtor consents to any such private
sale so made even though at places and upon terms less favorable than if the
Collateral was sold at public sale. The Bank shall have no obligation to
clean-up or otherwise prepare the Collateral for sale. The Bank may apply the
net proceeds, after deducting all costs, expenses, reasonable attorneys’ and
paralegals’ fees incurred or paid at any time in the collection, protection and
sale of the Collateral and the Obligations, to the payment of the Obligations,
returning the excess proceeds, if any, to Debtor. Debtor shall remain liable for
any amount remaining unpaid after such application, with interest at the Default
Rate. Any notification of intended disposition of the Collateral required by law
shall be conclusively deemed reasonably and properly given if given by Bank at
least ten (10) calendar days before the date of such disposition. Debtor hereby
confirms, approves and ratifies all acts and deeds of Bank relating to the
foregoing, and each part thereof, and expressly waives any and all claims of any
nature, kind or description which it has or may hereafter have against Bank or
its representatives, by reason of taking, selling or collecting any portion of
the Collateral. Debtor consents to releases of the Collateral at any time
(including prior to default) and to sales of the Collateral in groups, parcels
or portions, or as an entirety, as Bank shall deem appropriate. Debtor expressly
absolves Bank from any loss or decline in market value of any Collateral by
reason of delay in the enforcement or assertion or nonenforcement of any rights
or remedies under this Security Agreement.

4.3           Standards for Exercising Remedies. To the extent that applicable
law imposes duties on Bank to exercise remedies in a commercially reasonable
manner, Debtor acknowledges and agrees that it is not commercially unreasonable
for Bank (a) to fail to incur expenses reasonably deemed significant by Bank to
prepare Collateral for disposition or otherwise to complete raw material or
work-in-process into finished goods or other finished products for disposition,
(b) to fail to obtain third party consents for access to Collateral to be
disposed of, or to obtain or, if not required by other law, to fail to obtain
governmental or third party consents for the collection or disposition of
Collateral to be collected or disposed of, (c) to fail to exercise collection
remedies against Account Debtors or other Persons obligated on Collateral or to
remove liens or encumbrances on or any adverse claims against Collateral, (d) to
exercise collection remedies against Account Debtors and other Persons obligated
on Collateral directly or through the use of collection agencies and other
collection specialists, (e) to advertise dispositions of Collateral through
publications or media of general circulation, whether or not the Collateral is
of a specialized nature, (f) to contact other Persons, whether or not in the
same business as Debtor, for expressions of interest in acquiring all or any
portion of the Collateral, (g) to hire one or more professional auctioneers to
assist in the disposition of Collateral, whether or not the collateral is of a
specialized nature, (h) to dispose of

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Collateral by utilizing internet sites that provide for the auction of assets of
the types included in the Collateral or that have the reasonable capability of
doing so, or that match buyers and sellers of assets, (i) to dispose of assets
in wholesale rather than retail markets, (j) to disclaim disposition warranties,
including any warranties of title, (k) to purchase insurance or credit
enhancements to insure Bank against risks of loss, collection or disposition of
Collateral or to provide to Bank a guaranteed return from the collection or
disposition of Collateral, or (l) to the extent deemed appropriate by Bank, to
obtain the services of other brokers, investment bankers, consultants and other
professionals to assist Bank in the collection or disposition of any of the
Collateral. Debtor acknowledges that the purpose of this section is to provide
non-exhaustive indications of what actions or omissions by Bank would not be
commercially unreasonable in Bank’s exercise of remedies against the Collateral
and that other actions or omissions by Bank shall not be deemed commercially
unreasonable solely on account of not being indicated in this Section. Without
limitation upon the foregoing, nothing contained in this Section shall be
construed to grant any rights to Debtor or to impose any duties on Bank that
would not have been granted or imposed by this Security Agreement or by
applicable law in the absence of this Section.

4.4           UCC and Offset Rights. The Bank may exercise, from time to time,
any and all rights and remedies available to it under the UCC or under any other
applicable law in addition to, and not in lieu of, any rights and remedies
expressly granted in this Security Agreement or in any other agreements between
any Obligor and Bank, and may, without demand or notice of any kind, appropriate
and apply toward the payment of such of the Obligations, whether matured or
unmatured, including costs of collection and reasonable attorneys’ and
paralegals’ fees, and in such order of application as Bank may, from time to
time, elect, any indebtedness of Bank to any Obligor, however created or
arising, including balances, credits, deposits, accounts or moneys of such
Obligor in the possession, control or custody of, or in transit to Bank. Debtor,
on behalf of itself and any Obligor, hereby waives the benefit of any law that
would otherwise restrict or limit Bank in the exercise of its right, which is
hereby acknowledged, to appropriate at any time hereafter any such indebtedness
owing from Bank to any Obligor.

4.5           Additional Remedies. Upon the occurrence of an Event of Default,
Bank shall have the right and power to:

(a)            instruct Debtor, at its own expense, to notify any parties
obligated on any of the Collateral, including any Account Debtors, to make
payment directly to Bank of any amounts due or to become due thereunder, or Bank
may directly notify such obligors of the security interest of Bank, and/or of
the assignment to Bank of the Collateral and direct such obligors to make
payment to Bank of any amounts due or to become due with respect thereto, and
thereafter, collect any such amounts due on the Collateral directly from such
Persons obligated thereon;

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(b)            enforce collection of any of the Collateral, including any
Accounts, by suit or otherwise, or make any compromise or settlement with
respect to any of the Collateral, or surrender, release or exchange all or any
part thereof, or compromise, extend or renew for any period (whether or not
longer than the original period) any indebtedness thereunder;

(c)            take possession or control of any proceeds and products of any of
the Collateral, including the proceeds of insurance thereon;

(d)            extend, renew or modify for one or more periods (whether or not
longer than the original period) the Obligations or any obligation of any nature
of any other obligor with respect to the Obligations;

(e)            grant releases, compromises or indulgences with respect to the
Obligations, any extension or renewal of any of the Obligations, any security
therefor, or to any other obligor with respect to the Obligations;

(f)              transfer the whole or any part of securities which may
constitute Collateral into the name of Bank or Bank’s nominee without
disclosing, if Bank so desires, that such securities so transferred are subject
to the security interest of Bank, and any corporation, association, or any of
the managers or trustees of any trust issuing any of such securities, or any
transfer agent, shall not be bound to inquire, in the event that Bank or such
nominee makes any further transfer of such securities, or any portion thereof,
as to whether Bank or such nominee has the right to make such further transfer,
and shall not be liable for transferring the same;

(g)            vote the Collateral;

(h)            make an election with respect to the Collateral under Section
1111 of Bankruptcy Code or take action under Section 364 or any other section of
Bankruptcy Code; provided, however, that any such action of Bank as set forth
herein shall not, in any manner whatsoever, impair or affect the liability of
Debtor hereunder, nor prejudice, waive, nor be construed to impair, affect,
prejudice or waive Bank’s rights and remedies at law, in equity or by statute,
nor release, discharge, nor be construed to release or discharge Debtor or other
Person liable to Bank for the Obligations; and

(i)              at any time, and from time to time, accept additions to,
releases, reductions, exchanges or substitution of the Collateral, without in
any way altering, impairing, diminishing or affecting the provisions of this
Security Agreement, the Loan Documents, or any of the other Obligations, or
Bank’s rights hereunder, under the Obligations.

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Debtor hereby ratifies and confirms whatever Bank may do with respect to the
Collateral and agrees that Bank shall not be liable for any error of judgment or
mistakes of fact or law with respect to actions taken in connection with the
Collateral except to the extent resulting from Bank’s gross negligence or
willful misconduct.

4.6           Attorney-in-Fact. Debtor hereby irrevocably makes, constitutes and
appoints Bank (and any officer of Bank or any Person designated by Bank for that
purpose) as Debtor’s true and lawful proxy and attorney-in-fact (and
agent-in-fact), effective upon the occurrence and during the continuance of any
Event of Default, in Debtor’s name, place and stead, with full power of
substitution, to (i) take such actions as are permitted in this Security
Agreement, (ii) execute such financing statements and other documents and to do
such other acts as Bank may require to perfect and preserve Bank’s security
interest in, and to enforce such interests in the Collateral, and (iii) upon the
occurrence of an Event of Default, carry out any remedy provided for in this
Security Agreement, including endorsing Debtor’s name to checks, drafts,
instruments and other items of payment, and proceeds of the Collateral,
executing change of address forms with the postmaster of the United States Post
Office serving the address of Debtor, changing the address of Debtor to that of
Bank, opening all envelopes addressed to Debtor and applying any payments
contained therein to the Obligations. Debtor hereby acknowledges that the
constitution and appointment of such proxy and attorney-in-fact are coupled with
an interest and are irrevocable. Debtor hereby ratifies and confirms all that
such attorney-in-fact may do or cause to be done by virtue of any provision of
this Security Agreement.

4.7           No Marshaling. The Bank shall not be required to marshal any
present or future collateral security (including this Security Agreement and the
Collateral) for, or other assurances of payment of, the Obligations or any of
them or to resort to such collateral security or other assurances of payment in
any particular order. To the extent that it lawfully may, Debtor hereby agrees
that it will not invoke any law relating to the marshaling of collateral which
might cause delay in or impede the enforcement of Bank’s rights under this
Security Agreement or under any other instrument creating or evidencing any of
the Obligations or under which any of the Obligations is outstanding or by which
any of the Obligations is secured or payment thereof is otherwise assured, and,
to the extent that it lawfully may, Debtor hereby irrevocably waives the
benefits of all such laws.

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4.8           No Waiver. No Event of Default shall be waived by Bank except in
writing. No failure or delay on the part of Bank in exercising any right, power
or remedy hereunder shall operate as a waiver of the exercise of the same or any
other right at any other time; nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy hereunder. There shall be no
obligation on the part of Bank to exercise any remedy available to Bank in any
order. The remedies provided for herein are cumulative and not exclusive of any
remedies provided at law or in equity. Debtor agrees that in the event that
Debtor fail to perform, observe or discharge any of its Obligations or
liabilities under this Security Agreement or any other agreements with Bank, no
remedy of law will provide adequate relief to Bank, and further agrees that Bank
shall be entitled to temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages.

4.9           Application of Proceeds. The Bank will within three (3) Business
Days after receipt of cash or solvent credits from collection of items of
payment, proceeds of Collateral or any other source, apply the whole or any part
thereof against the Obligations secured hereby. The Bank shall further have the
exclusive right to determine how, when and what application of such payments and
such credits shall be made on the Obligations, and such determination shall be
conclusive upon the Debtor. Any proceeds of any disposition by the Bank of all
or any part of the Collateral may be first applied by the Bank to the payment of
expenses incurred by the Bank in connection with the Collateral, including
reasonable attorneys’ fees and legal expenses as provided for in Section 5.13
hereof.

Section 5           MISCELLANEOUS.

5.1           Entire Agreement. This Security Agreement and the other Loan
Documents (i) are valid, binding and enforceable against Debtor and Bank in
accordance with their respective provisions and no conditions exist as to their
legal effectiveness; (ii) constitute the entire agreement between the parties
with respect to the subject matter hereof and thereof; and (iii) are the final
expression of the intentions of Debtor and Bank. No promises, either expressed
or implied, exist between Debtor and Bank, unless contained herein or therein.
This Security Agreement, together with the other Loan Documents, supersedes all
negotiations, representations, warranties, commitments, term sheets,
discussions, negotiations, offers or contracts (of any kind or nature, whether
oral or written) prior to or contemporaneous with the execution hereof with
respect to any matter, directly or indirectly related to the terms of this
Security Agreement and the other Loan Documents. This Security Agreement and the
other Loan Documents are the result of negotiations among Bank, Debtor and the
other parties thereto, and have been reviewed (or have had the opportunity to be
reviewed) by counsel to all such parties, and are the products of all parties.
Accordingly, this Security Agreement and the other Loan Documents shall not be
construed more strictly against Bank merely because of Bank’s involvement in
their preparation.

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5.2           Amendments; Waivers. No delay on the part of Bank in the exercise
of any right, power or remedy shall operate as a waiver thereof, nor shall any
single or partial exercise by Bank of any right, power or remedy preclude other
or further exercise thereof, or the exercise of any other right, power or
remedy. No amendment, modification or waiver of, or consent with respect to, any
provision of this Security Agreement or the other Loan Documents shall in any
event be effective unless the same shall be in writing and acknowledged by Bank,
and then any such amendment, modification, waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.

5.3           WAIVER OF DEFENSES. DEBTOR WAIVES EVERY PRESENT AND FUTURE
DEFENSE, CAUSE OF ACTION, COUNTERCLAIM OR SETOFF WHICH DEBTOR MAY NOW HAVE OR
HEREAFTER MAY HAVE TO ANY ACTION BY BANK IN ENFORCING THIS SECURITY AGREEMENT.
PROVIDED BANK ACTS IN GOOD FAITH, DEBTOR RATIFIES AND CONFIRMS WHATEVER BANK MAY
DO PURSUANT TO THE TERMS OF THIS SECURITY AGREEMENT. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR BANK GRANTING ANY FINANCIAL ACCOMMODATION TO DEBTOR.

5.4           FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS SECURITY AGREEMENT
OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE
COURTS HAVING THEIR SITUS IN THE CITY OF CHICAGO, ILLINOIS OR IN THE UNITED
STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS; PROVIDED THAT
NOTHING IN THIS SECURITY AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE BANK
FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION.
DEBTOR AND BANK HEREBY EXPRESSLY AND IRREVOCABLY SUBMIT TO THE JURISDICTION OF
THE COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR
THE NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET
FORTH ABOVE. DEBTOR AND BANK FURTHER IRREVOCABLY CONSENT TO THE SERVICE OF
PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR
WITHOUT THE STATE OF ILLINOIS. DEBTOR AND BANK HEREBY EXPRESSLY AND IRREVOCABLY
WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH
COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM.

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5.5           WAIVER OF JURY TRIAL. BANK AND DEBTOR, AFTER CONSULTING OR HAVING
HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE IRREVOCABLY, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS SECURITY AGREEMENT, ANY
NOTE, ANY OTHER LOAN DOCUMENT, ANY OF THE OTHER OBLIGATIONS, THE COLLATERAL, OR
ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY
LENDING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, OR ANY
COURSE OF CONDUCT OR COURSE OF DEALING IN WHICH BANK AND DEBTOR ARE ADVERSE
PARTIES, AND EACH AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY. THIS PROVISION IS A MATERIAL INDUCEMENT
FOR BANK GRANTING ANY FINANCIAL ACCOMMODATION TO DEBTOR.

5.6           Assignability. The Bank, prior to the occurrence of an Event of
Default and with the consent of Debtor, which consent will not be unreasonably
withheld, and after the occurrence of an Event of Default without consent from
or notice to anyone, may at any time assign Bank’s rights in this Security
Agreement, the other Loan Documents, the Obligations, or any part thereof and
transfer Bank’s rights in any or all of the Collateral, and Bank thereafter
shall be relieved from all liability with respect to such Collateral. This
Security Agreement shall be binding upon Bank and Debtor and each of their
respective legal representatives and successors. All references herein to Debtor
shall be deemed to include any successors, whether immediate or remote. In the
case of a joint venture or partnership, the term “Debtor” shall be deemed to
include all joint venturers or partners thereof, who shall be jointly and
severally liable hereunder.

5.7           Binding Effect. This Security Agreement shall become effective
upon execution by Debtor and Bank.

5.8           Governing Law. This Security Agreement shall be delivered and
accepted in and shall be deemed to be a contract made under and governed by the
internal laws of the State of Illinois (but giving effect to federal laws
applicable to national banks) applicable to contracts made and to be performed
entirely within such state, without regard to conflict of laws principles.

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5.9           Enforceability. Wherever possible, each provision of this Security
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Security Agreement shall be
prohibited by, unenforceable or invalid under any jurisdiction, such provision
shall as to such jurisdiction, be severable and be ineffective to the extent of
such prohibition or invalidity, without invalidating the remaining provisions of
this Security Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.

5.10       Time of Essence. Time is of the essence in making payments of all
amounts due Bank under this Security Agreement and in the performance and
observance by Debtor of each covenant, agreement, provision and term of this
Security Agreement.

5.11       Counterparts; Facsimile Signatures. This Security Agreement may be
executed in any number of counterparts and by the different parties hereto on
separate counterparts and each such counterpart shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same Security Agreement. Receipt of an executed signature page to this Security
Agreement by facsimile or other electronic transmission shall constitute
effective delivery thereof. Electronic records of executed Loan Documents
maintained by Bank shall be deemed to be originals thereof.

5.12 Notices. Except as otherwise provided herein, Debtor waives all notices and
demands in connection with the enforcement of Bank’s rights hereunder. All
notices, requests, demands and other communications provided for hereunder shall
be made in accordance with the terms of the Loan Agreement.

 

5.13 Costs, Fees and Expenses. Debtor shall pay or reimburse Bank for all
reasonable costs, fees and expenses incurred by Bank or for which Bank becomes
obligated in connection with the enforcement of this Security Agreement,
including reasonable attorneys’ fees and time charges of counsel to Bank, which
shall also include reasonable attorneys’ fees and time charges of attorneys who
may be employees of Bank or any Affiliate of Bank, plus costs and expenses of
such attorneys or of Bank; search fees, costs and expenses; and all taxes
payable in connection with this Security Agreement. In furtherance of the
foregoing, Debtor shall pay any and all stamp and other taxes, UCC search fees,
filing fees and other costs and expenses in connection with the execution and
delivery of this Security Agreement and the other Loan Documents to be delivered
hereunder, and agree to save and hold Bank harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or omission to
pay such costs and expenses. That portion of the Obligations consisting of
costs, expenses or advances to be reimbursed by Debtor to Bank pursuant to this
Security Agreement or the other Loan Documents which are not paid on or prior to
the date hereof shall be payable by Debtor to Bank on demand. If at any time or
times hereafter Bank: (a) employs counsel for advice or other representation
(i) with respect to this Security Agreement or the other Loan Documents, (ii) to

19 

 

represent Bank in any litigation, contest, dispute, suit or proceeding or to
commence, defend, or intervene or to take any other action in or with respect to
any litigation, contest, dispute, suit, or proceeding (whether instituted by
Bank, Debtor, or any other Person) in any way or respect relating to this
Security Agreement, or (iii) to enforce any rights of Bank against Debtor or any
other Person under of this Security Agreement; (b) takes any action to protect,
collect, sell, liquidate, or otherwise dispose of any of the Collateral; and/or
(c) attempts to or enforces any of Bank’s rights or remedies under this Security
Agreement, the costs and expenses incurred by Bank in any manner or way with
respect to the foregoing, shall be part of the Obligations, payable by Debtor to
Bank on demand.

5.14 Termination. This Security Agreement and the Liens and security interests
granted hereunder shall not terminate until the termination of the Loan
Agreement and the commitments to make the Loan thereunder and the full and
complete performance and satisfaction and payment in full of all the Obligations
(other than contingent indemnification obligations to the extent no claim giving
rise thereto has been asserted). Upon termination of this Security Agreement,
Bank shall also deliver to Debtor (at the sole expense of Debtor) such UCC
termination statements, certificates for terminating the liens on the Motor
Vehicles (if any) and such other documentation, without recourse, warranty or
representation whatsoever, as shall be reasonably requested by Debtor to effect
the termination and release of the Liens and security interests in favor of Bank
affecting the Collateral.

5.15 Reinstatement.  This Security Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
Debtor for liquidation or reorganization, should Debtor become insolvent or make
an assignment for the benefit of any creditor or creditors or should a receiver
or trustee be appointed for all or any significant part of Debtor’s assets, and
shall continue to be effective or be reinstated, as the case may be, if at any
time payment and performance of the Obligations, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of the Obligations, whether as a “voidable
preference,” “fraudulent conveyance,” or otherwise, all as though such payment
or performance had not been made.  In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.

[SIGNATURE PAGE FOLLOWS]

20 

 

IN WITNESS WHEREOF, Debtor and Bank have executed this Security Agreement as of
the date first above written.

 

 

Debtor:

 

IRESI Frederick Market Square, L.L.C.,
a Delaware limited liability company

          By:

Inland Residential Operating Partnership, L.P.,

a Delaware limited partnership,

its sole member

            By:

Inland Residential Properties Trust, Inc.,

a Maryland corporation,

its general partner

                By: /s/ David Z. Lichterman       Name: David Z. Lichterman    
  Its: Vice President, Treasurer & CAO

 

 

Agreed and accepted:

 

Bank:

 

PARKWAY BANK AND TRUST COMPANY,

an Illinois banking corporation

        By: /s/ Marianne L. Wagener   Name: Marianne L. Wagener   Title: Senior
Vice President  

 

21 

 

Schedule 3.8

Collateral Locations/Places of Business

 

Collateral Location:

300 Cormorant Place, Frederick, Maryland

Chief executive office:

2901 Butterfield Road, Oak Brook, IL 60523