Exhibit 10.4

 

 

 

 

LOAN AGREEMENT

 

 

 

 

SANTANDER BANK, N.A.

 

 

and

 

IREIT SHREWSBURY WHITE CITY, L.L.C.

 

 

 

 

 

 

April 7, 2015

 

1

 

LOAN AGREEMENT

This Loan Agreement (this “Agreement”) dated as of April 7, 2015 is made by and
between IREIT SHREWSBURY WHITE CITY, L.L.C., a Delaware limited liability
company having an address of c/o Inland Real Estate Income Trust, Inc., 2901
Butterfield Road, Oak Brook, IL 60523 (the “Borrower” which term shall include
its successors and assigns), and SANTANDER BANK, N.A. having a place of business
at 75 State Street, Boston, MA 02109 (the “Lender” which term shall include its
successors and assigns).

1.               The Loan.

1.1            Lender has made a loan to Borrower in the principal amount of
$49,400,000.00 (the “Loan”).

1.2            The Loan is payable as provided in a certain Term Note of even
date in the original principal amount of $49,400,000.00 from Borrower in favor
of Lender (the “Note” which term shall include all modifications, extensions,
renewals and replacements thereof).

1.3            The proceeds of the Loan shall be used by Borrower to acquire
20-50, 70, 84, 88-120 Boston Turnpike and 21 South Quinsigamond Avenue,
Shrewsbury, MA (the “Property”).

1.4            To secure Borrower’s obligations under the Loan, Borrower has
executed and delivered to Lender a certain Mortgage and Security Agreement and
Financing Statement of even date covering the Property (the “Mortgage” which
term shall include all modifications, extensions, renewals and replacements
thereof).

1.5            The Loan is guaranteed by INLAND REAL ESTATE INCOME TRUST, INC.
(the “Guarantor”) pursuant to a Guaranty of even date (the “Guaranty” and
together with this Agreement, the Note, the Mortgage, the Hedging Contract (as
defined in the Note), and any and all other documents, instruments and
agreements entered into in connection with the Loan shall hereinafter be
referred to collectively as the “Loan Documents” which term shall include all
modifications, extensions, renewals and replacements thereof).

2.               Representations and Warranties. To induce Lender to make the
Loan, Borrower makes the following representations and warranties:

2.1            Borrower has the requisite power and authority to execute and
deliver, and to perform all of its obligations under this Agreement and all
instruments and other documents executed and delivered by Borrower in connection
herewith.

2.2            The execution, delivery and performance of this Agreement by
Borrower has been duly authorized by all necessary action on its part and does
not and will not require any consent or approval of any other person that has
not been obtained, or violate any provision of Borrower’s organization or
governance documents.

2

 

 

2.3            The Borrower has good and marketable title in fee to the Property
subject to no mortgage, pledge, lien, charge, security interests or other
encumbrance, except those set forth in Lender’s title insurance policy issued in
connection herewith.

2.4            The Borrower is duly organized and validly existing and in good
standing under the laws of the State of Delaware, and qualified to do business
and in good standing in every other state requiring qualification, with full
power and authority to consummate the transactions contemplated hereby.

2.5            The Loan Documents have been duly authorized, executed and
delivered and are the valid and binding obligations of each party thereto
enforceable by Lender according to their terms, subject only to bankruptcy,
insolvency and similar laws of general application affecting the rights and
remedies of creditors generally and, with respect to the availability of the
remedy of specific performance, subject to the discretion of the court before
which such proceeding is brought.

2.6            All financial statements and projections delivered to Lender at
any time relating to the Property, Borrower or any Guarantor are to the best of
their knowledge, true and correct in all material respects, have been prepared
in accordance with generally accepted accounting practice except as noted and
fairly present the respective financial conditions of the subjects thereof as of
the respective dates thereof, no material adverse change has occurred in the
financial conditions reflected therein since the respective dates thereof and no
additional borrowings have been made by Borrower or any Guarantor since the date
thereof other than the borrowing contemplated hereby or borrowings approved in
writing by Lender. Notwithstanding, the Borrower makes no representation
regarding financial information prepared and received by Seller and submitted to
Lender concerning the Property prior to the date Borrower obtained title.

2.7            There are no actions, suits or proceedings pending, or to the
knowledge of Borrower threatened, against or affecting Borrower or any aspect of
the Property which would have a material adverse effect on Borrower’s ability to
perform its obligations under the Loan Documents or any Guarantor or involving
the validity, or enforceability of any Loan Document, at law or in equity, or
before or by any governmental authority, and to Borrower’s knowledge neither
Borrower nor any Guarantor are in default with respect to any judgment,
decision, order writ, injunction, decree or demand of any court or any
governmental authority.

2.8            The consummation and performance of the transaction hereby
contemplated and performance of this Agreement, the Note, and each other Loan
Document will not result in any breach of, or constitute a default under, any
mortgage, deed of trust, lease, loan or credit agreement, corporate charter,
by-law or other instrument to which Borrower or any Guarantor is a party or by
which any of them may be bound or affected. The Borrower has not guaranteed
(including being an accommodation party on an instrument) or assumed any
indebtedness of any other party except guarantees and endorsements made in
connection with the deposit of items for collection or credit in the ordinary
course of business.

3

 

 

2.9            Neither Borrower, nor any Guarantor nor anyone on behalf thereof
has dealt with any broker, finder or other person or entity who or which may be
entitled to a broker's or finder's fee, or other compensation, payable in
connection with the Loan.

3.               Affirmative Covenants. The Borrower agrees that, while any part
of the Loan is unpaid:

3.1            Borrower shall provide or cause to be provided to Lender: (i)
within one hundred twenty (120) days after the end of its fiscal year,
Borrower’s management or internally prepared annual financial statements
covering the Property certified by an Officer of the Guarantor and prepared in
accordance with generally accepted accounting principles consistently applied,
except as noted, throughout the periods involved, which statements shall
include, at minimum, the balance sheet for the Borrower and a profit and loss
statement for the Borrower and Property indicating in reasonable detail all
expenses and sources of income for the Property for the previous fiscal year, in
form and substance reasonably satisfactory to Lender; (ii) within one hundred
twenty (120) days after the end of its fiscal year, annual audited financial
statement of Guarantor prepared by a CPA in accordance with generally accepted
accounting principles consistently applied, except as noted, throughout the
periods involved, for the previous fiscal year, in form and substance reasonably
satisfactory to Lender. If the Guarantor’s Form 10-K filed with the SEC includes
audited financial statements, then such filing will be deemed to satisfy the
provisions of this Section 3.1(ii) if such Form 10-K is filed on or before the
date required by the SEC and applicable law; (iii) within forty-five (45) days
after the end of each half year (commencing June 30, 2016), trailing twelve
month operating statements prepared by management; (iv) a semi-annual Debt Yield
compliance certificate within forty-five (45) days of each test date (with the
first test date being December 31, 2015) setting forth Borrower's compliance
with the Debt Yield requirements set forth herein along with a financial
statement for the prior six (6) month period in accordance with Section 3.7; and
(v) such other information respecting the financial condition, operations and
collateral of Borrower, the Guarantor or the Property as Lender may from time to
time reasonably request.

3.2            Borrower shall provide to Lender from time to time on request,
and at least semi-annually, within forty-five (45) days of calendar half year
end (June 30th), a current rent roll setting forth the name, term, rental
amount, security deposit and like obligations of each tenant of the Property,
any defaults and arrearages outstanding with respect to any such tenant and any
other information which Lender may from time to time reasonably request,
certified by Borrower or by an appropriate officer of Borrower to be true and
complete.

3.3            The Borrower agrees to indemnify and hold Lender harmless from
and against any and all claims, liabilities, damages, penalties, reasonable
costs and expenses, including without limitation, any brokerage or finder’s fees
in respect of the Loan and any reasonable attorneys’ fees and costs incurred in
preparing for and conducting litigation arising out of any breach by Borrower or
any Guarantor of any covenant, warranty, representation or agreement under any
one or more of the Loan Documents, other than such claims, liabilities, damages,
penalties, costs and expenses incurred due to Lender’s gross negligence or
intentional misconduct.

4

 

 

3.4            The Borrower agrees to maintain its legal existence in good
standing according to the laws of the State of Delaware.

3.5            Borrower shall at all times provide and maintain the following
insurance coverages with respect to the Property and the other collateral
securing the Loan issued by companies qualified to do business in the
Commonwealth of Massachusetts, having a Best’s Rating of not less than A-/VII
and otherwise acceptable to Lender in its sole discretion:

(i)              physical insurance on an all-risk basis without exception
(including, without limitation, flood required if property is in a "Special
Flood Hazard Area" A or V), vandalism and malicious mischief, earthquake,
collapse, boiler explosion, sprinkler coverage, cost of demolition, increased
costs of construction and the value of the undamaged portion of the building and
soft costs coverage) covering all the real estate, fixtures and personal
property to the extent of the full insurable value thereof having replacement
cost and agreed amount endorsements (with deductibles not in excess of it of
insurable value);

The "All Risk" coverage must equal or exceed the replacement cost of the
property. It is permitted for the property coverage to be less than replacement
cost but in excess of the loan amount, provided that the loan documents require
the borrower to satisfy the loan from the insurance proceeds if there are
insufficient funds to restore the property in the event of casualty.

The property must be insured for windstorm separately in the event that the "All
Risk" policy includes an exclusion for any wind-related event. The required
coverage is identical to the "All Risk Policy" Requirements.

(ii)            rent loss or business interruption insurance in an amount equal
to one year's projected rentals or gross revenues;

(iii)          public liability insurance, with underlying and umbrella
coverages totaling not less than $1,000,000.00 per occurrence and $5,000,000.00
in the aggregate or such other amounts as may be determined by Lender from time
to time; and

(iv)          such other insurance coverages in such amounts as Lender may
request consistent with the customary practices of prudent developers and owners
of similar properties.

An actual insurance policy or certified copy thereof, or a binder, certificate
of insurance, or other evidence of property coverage in the form of Acord 27
(Evidence of Property Coverage), Acord 25 (Certificate of Insurance), or a
30-day binder in form acceptable to Lender with an unconditional undertaking to
deliver the policy or a certified copy within thirty (30) days, shall be
delivered at closing of the Loan.

5

 

 

Flood insurance shall be provided if the Property or the collateral is located
in a flood zone, flood risk or flood hazard area as designated pursuant to the
Federal Flood Disaster Protection Act of 1973, as amended, and the Regulations
thereunder, or if otherwise reasonably required by Lender.

Lender shall be named as first mortgagee on policies of all-risk-type insurance
on the Property, as loss payee on the Collateral and its contents, and as first
mortgagee on rent-loss or business interruption coverages related thereto.

SANTANDER BANK, N.A., its successors and assigns as their interests may appear,
as loss payee, additional insured, and mortgagee.

Except with respect to public liability insurance, as to which Lender shall be
named as an additional insured with respect to the Property or the Collateral,
all other required insurance coverages shall have a so-called "Mortgagee's
endorsement" or "Lender's loss-payable endorsement" which shall provide in
substance as follows:

3.5.2       Loss or damage, if any, under the policy shall be paid to Lender and
its successors and assigns ("Lender") in whatever form or capacity its interest
may appear and whether said interest be vested in said Lender in its individual
or in its disclosed or undisclosed fiduciary or representative capacity, or
otherwise, or vested in a nominee or trustee of said Lender.

3.5.3       The insurance under the policy, or under any rider or endorsement
attached thereto, as to the interest only of Lender, its successors and assigns,
shall not be invalidated nor suspended:

(1)            by any error, omission or change respecting the ownership,
description, possession or location of the subject of the insurance or the
interests therein or the title thereto; or

(2)            by the commencement of foreclosure or similar proceedings or the
giving of notice of sale of any of the property covered by the policy by virtue
of any mortgage, deed of trust, or security interest; or

(3)            by any breach of warranty, act, omission, neglect, or
noncompliance with any provisions of the policy by the named insured, or anyone
else, whether before or after a loss, which under the provisions of the policy
of insurance, would invalidate or suspend the insurance as to the named insured,
excluding, however, any acts or omissions of Lender while exercising active
control and management of the insured property.

6

 

3.5.4       Insurer shall provide Lender with not less than thirty (30) days,
prior written notice of cancellation of the policy (for non-payment or any other
reason) or of the non-renewal thereof.

3.5.5       The insurer reserves the right to cancel the policy at any time, but
only as provided by its terms. However, in such case this policy shall continue
in force for the benefit of Lender for thirty (30) days after written notice of
such cancellation is received by Lender and shall then cease.

3.5.6       Should legal title to and beneficial ownership of any of the
property covered under the policy become vested in Lender or its agents,
successors or assigns, insurance under the policy shall continue for the term
thereof for the benefit of Lender.

3.5.7       All notices herein provided to be given by the insurer to Lender in
connection with this policy and Lender's loss payable endorsement shall be
mailed to or delivered to Lender by certified or registered mail, return receipt
requested, as follows:

 

Santander Bank, N.A.

Insurance Department, 8th Floor

601 Penn Street

Mail Code 10-6438-CO8

Reading, PA 19601

 

 

 

3.6            The Borrower shall, with reasonable promptness, but in all events
within five (5) days after it has actual knowledge thereof, notify Lender in
writing of the occurrence of any act, event or condition which constitutes a
default under any of the Loan Documents. Such notification shall include a
written statement of any remedial or curative actions which it proposes to
undertake to cure or remedy such default.

3.7            Debt Yield. As of the date hereof, Lender acknowledges that the
Debt Yield is approximately thirteen and thirty one hundredths (13.30%) percent.
Borrower shall maintain a minimum Debt Yield of six (6%) percent to be tested
semi-annually with the first test to be at December 31, 2015 (and thereafter at
each June 30 and December 31). Debt Yield is defined as “net operating income”
for the forward looking twelve month period divided by the Principal balance of
the Loan at that time. Net Operating Income is defined as contractual gross
revenues (including cash reimbursements by tenants for their share of operating
expenses but excluding rent abatements) less (i) all operating expenses
utilizing a management fee of three and ninety one hundredths percent (3.9%),
plus actually incurred construction oversight and leasing fees at market rates;
and (ii) a reserve of $.10 per sq. ft. This calculation shall not include leases
expiring within three (3) months of the date of the test, if, in the case of
leases containing a renewal option, the Tenant thereunder has not provided
Landlord with a notice of renewal but shall include new leases which will
commence during the test period (adjusted by Lender for free rent periods, if
any).

7

 

 

3.8            Additional Debt Yield Requirements. If the Debt Yield declines to
eight and one-half (8.5%) percent or less at any semi-annual test, then Borrower
shall deposit all "excess cash flow" from the Property into a deposit account
opened on or about the date hereof maintained with and pledged to Lender (the
“Cash Sweep Account”) until the actual minimum Debt Yield is ten (10%) percent
(at the time of the annual test) at which time amounts in the Cash Sweep Account
shall be released to the Borrower. Amounts in the Cash Sweep Account may be
utilized by Borrower, upon Lender's consent, such consent not to be unreasonably
withheld, for tenant improvements, leasing commissions and capital expenditures.
"Excess Cash Flow" is defined as actual gross revenues (including cash
reimbursements by tenants for their share of operating expenses but excluding
rent abatements) less (i) all operating expenses utilizing a management fee of
three and ninety one hundredths percent (3.9%), plus actually incurred
construction oversight fees and leasing fees at market rates; (ii) a reserve of
$.10 per sq. ft. and (iii) debt service under the Loan; (i), (ii) and (iii) to
be reasonably calculated by Lender for the six (6) month period preceding the
Debt Yield test. In the event the Debt Yield declines to six (6%) percent or
less, then Borrower must either (i) prepay the Note in part, or (ii) post cash
collateral or provide a letter of credit, in either case ((i) or (ii) in an
amount equal to that amount that would have to be paid in order to achieve a
Loan to Value Ratio (defined as the outstanding principal balance of the Loan
divided by the value of the Property as determined by an appraisal ordered by
Lender at Borrower's cost) of fifty (50%) percent or less or, if prepaid, in an
amount necessary to achieve a Loan to Value Ratio of fifty (50%) percent or
less. If the Note is prepaid, such prepayment shall be subject to the imposition
of any early termination fees, breakage costs or the like imposed under any
Hedging Contract. In addition to the foregoing requirement, if the Debt Yield
declines to six (6%) percent or less, the Borrower shall also escrow with Lender
an amount equal to one (1) year's cash flow shortfall.

3.9            The Borrower shall notify Lender promptly of any lien,
encumbrance or security interest existing, arising or asserted against the
Property or any interest therein and to maintain the Collateral free and clear
of all liens, encumbrances and security interests, except taxes not yet due and
payable, unless the same have been approved in writing by Lender. With respect
to security interest thus approved by Lender, Borrower agrees to make all
payments that become due to any secured party holding such interest. Borrower
further agrees that if Borrower shall default in making any such payments,
Lender may, without obligation to do so and without waiving any right or remedy
for default hereunder, make such payment or may pay the entire balance due to
such secured party. Borrower shall reimburse Lender for any amount thus expended
promptly upon demand, and such amount, until paid, shall be added to the
principal amount of the debt secured hereby and shall bear interest at the rate
from time to time charged with respect thereto.

3.10         Borrower shall also complete the "Immediate Action" repairs set
forth in a Property Condition Assessment dated March 18, 2015 prepared by Reeves
Consulting, Inc. within twenty-four (24) months from the date hereof. Borrower
shall notify the Lender in writing when all of said work is complete.

8

 

 

 

4.               Negative Covenants. The Borrower agrees that, while there is a
commitment to make the Loan or while any part of the Loan is unpaid, it will
not, without Lender’s prior written consent, directly or indirectly do or suffer
to be done any of the following:

4.1            Create, incur, assume or permit to continue any indebtedness,
except operational indebtedness in the ordinary course.

4.2            Single Purpose Entity Status. The Borrower shall not:

(1)            engage in any business or activity other than the ownership and
operation of the Property;

(2)            acquire or own any material assets other than the Property or
leases affecting the Property, and such incidental personal property as may be
necessary for the operation of the Property;

(3)            fail to preserve its existence as an entity duly organized,
validly existing and in good standing (if applicable) under the laws of the
jurisdiction of its organization or formation, or without the prior written
consent of Lender, materially amend, modify, terminate or fail to comply with
the provisions of its organizational documents as same may be further amended or
supplemented;

(4)            comingle its assets with the assets of any of its members,
constituents, principals or affiliated entities, except that revenue for the
Property may be deposited in trust into the Manager’s custodial account provided
it maintains books and records sufficient to segregate such deposits from other
funds of Manager;

(5)            fail to maintain its records, books of account and Lender
accounts separate and apart from those of the members, constituents, principals
and affiliated entities; and

(6)            make any loans or advances to any third party, including any
member, constituent, principal or affiliate of it, or of any other entity or
individual.

9

 

 

 

4.3            No Sale/Encumbrance.

(a) Without the prior written consent of Lender, Borrower shall not cause or
permit (i) a Sale or Pledge of the Property or any part thereof or any legal or
beneficial interest therein, (ii) a Sale or Pledge of an interest in any
Restricted Party or (iii) any change in Control of Borrower, Guarantor, any
Affiliated Manager, or any change in Control of the day-to-day operations of the
Property (collectively, a "Prohibited Transfer"), other than pursuant to (x)
leases of space in the Property to tenants in accordance with the terms hereof
and Section 4.11 of the Mortgage and Section 3.2 of the Collateral Assignment of
Lessor's Interest in Leases, Rents and Profits, any Permitted Encumbrances, and
(z) any equipment leases entered into in the ordinary course.

(b) A Prohibited Transfer shall include, but not be limited to, (i) an
installment sales agreement wherein Borrower agrees to sell the Property or any
part thereof for a price to be paid in installments; (ii) an agreement by
Borrower leasing all or a substantial part of the Property for other than actual
occupancy by a Tenant thereunder or a sale, assignment or other transfer of, or
the grant of a security interest in, Borrower's right, title and interest in and
to (A) any leases or any rents or (B) any material agreements; (iii) any action
for partition of the Property (or any portion thereof or interest therein) or
any similar action instituted or prosecuted by Borrower or by any other person
or entity, pursuant to any contractual agreement or other instrument or under
applicable law (including, without limitation, common law); (iv) any other
action instituted by (or at the behest of) Borrower or its affiliates or
consented to or acquiesced in by Borrower or its affiliates which results in a
termination of any material agreements; (v) if a Restricted Party is a
corporation, any merger, consolidation or sale or pledge of such corporation's
stock or the creation or issuance of new stock in one or a series of
transactions; (vi) if a Restricted Party is a limited or general partnership or
joint venture, any merger or consolidation or the change, removal, resignation
or addition of a general partner or the sale or pledge of the partnership
interest of any general or limited partner or any profits or proceeds relating
to such partnership interests or the creation or issuance of new limited
partnership interests; (vii) if a Restricted Party is a limited liability
company, any merger or consolidation or the change, removal, resignation or
addition of a managing member or non-member manager (or if no managing member,
any member) or the sale or pledge of the membership interest of any member or
any profits or proceeds relating to such membership interest; (viii) if a
Restricted Party is a trust or nominee trust, any merger, consolidation or the
sale or pledge of the legal or beneficial interest in a Restricted Party or the
creation or issuance of new legal or beneficial interests; or (ix) the removal
or the resignation of Manager (including, without limitation, an Affiliated
Manager) other than in accordance with the terms hereof.

10

 

 

Notwithstanding the foregoing, for purposes hereof, a Prohibited Transfer shall
not include Permitted Transfers as hereinafter set forth.

(a) Notwithstanding the restrictions contained in this Section 4.3, the
following equity transfers shall be permitted without Lender's consent (each, a
"Permitted Equity Transfer"): any transfer, directly as a result of the death of
a natural person, of stock, membership interests, partnership interests,
beneficial interests or other ownership interests previously held by the
decedent in question to the person or persons lawfully entitled thereto (b) any
sale of stock in IREIT and (c) any transfer, directly as a result of the legal
incapacity of a natural person, of stock, membership interests, partnership
interests, beneficial interests or other ownership interests previously held by
such natural person to the person or persons lawfully entitled thereto.

 

(b) Notwithstanding anything contained in this Section 4.3, Lender shall not
withhold its consent to a transfer of the entire Property or all of the
outstanding ownership interests in Borrower in a single transaction to one
newly-formed single purpose entity which shall be a wholly owned subsidiary of
IREIT ("Permitted Affiliate Transferee") which shall be approved by Lender in
its reasonable discretion ("Permitted Affiliate Transfer"), provided (1) no
Event of Default shall have occurred and be continuing, (2) the creditworthiness
of IREIT, as applicable, has not materially deteriorated, in the sole, but
reasonable, discretion of Lender, from the date hereof to the date of the
proposed transfer and, (3) Borrower shall have paid all reasonable and customary
third party expenses (including reasonable attorneys' fees and disbursements)
actually incurred by Lender in connection with such transfer (but not any
assumption or processing fee.

 

(c) Notwithstanding anything contained in this Section 4.3 Lender shall not
withhold its consent to a transfer of all of the outstanding ownership interests
in Borrower in a single transaction to an Identified Affiliate, provided that
Lender receives thirty (30) days' prior written notice of such transfer and
further provided that the following additional requirements are satisfied:

 

(i) no Event of Default shall have occurred and be continuing and no Default or
Event of Default shall otherwise occur as a result of such transfer;

 

(ii) the Identified Affiliate shall, as of the date of such transfer, have an
aggregate net worth and liquidity not worse than its net worth and liquidity as
of the date hereof (provided, however, that with respect to IREIT only, IREIT
shall be required to have an aggregate net worth and liquidity of at least
$100,000,000.00) or an aggregate net worth and liquidity otherwise reasonably
acceptable to Lender;

11

 

 

(iii) the Identified Affiliate and all other entities which may be owned or
Controlled directly or indirectly by the Identified Affiliate ("Identified
Affiliate Related Entities") must not have been party to any bankruptcy
proceedings, voluntary or involuntary, made an assignment for the benefit of
creditors or taken advantage of any insolvency act, or any act for the benefit
of debtors within seven (7) years prior to the date of the proposed transfer;

 

(iv) there shall be no material litigation or regulatory action pending or
threatened against the Identified Affiliate or Identified Affiliate Related
Entities which is not reasonably acceptable to Lender and, if requested by
Lender, Borrower shall deliver, prior to such transfer and at Borrower's sole
cost and expense, customary searches (credit, judgment, lien, bankruptcy, etc.)
reasonably acceptable to Lender with respect to the Identified Affiliate and any
of the Identified Affiliate Related Entities that will own twenty percent (20%)
or more of the direct or indirect interests in Borrower immediately following
such transfer;

 

(v) the Property shall continue to be managed by the current manager or be
managed by a manager reasonably acceptable to Lender;

 

(vi) upon the Permitted Affiliate Transferee acquiring all of the outstanding
ownership interests in Borrower, the Identified Affiliate, at its sole cost and
expense, shall deliver opinions regarding existence, authority and
enforceability, which opinions may be relied upon by Lender, and their
respective counsel, agents and representatives with respect to the proposed
transaction;

 

(vii) the Identified Affiliate shall deliver (A) all organizational
documentation reasonably requested by Lender, which shall be reasonably
acceptable to Lender, and (B) all certificates, agreements and covenants
reasonably required by Lender, which shall include an Officer's Certificate
regarding existence, authority and enforceability with respect to the proposed
transaction;

 

(viii) upon the Permitted Affiliate Transferee acquiring all of the outstanding
ownership interests in Borrower, prior to any release of Guarantor, (i) the
Identified Affiliate shall have assumed all of the liabilities and obligations
of Guarantor under the Guaranty and Environmental Indemnity executed by
Guarantor or shall have executed a replacement guaranty and environmental
indemnity reasonably satisfactory to Lender and (ii) the Identified Affiliate,
at its sole cost and expense, shall have delivered opinions regarding existence,
authority and enforceability, which opinions may be relied upon by Lender, and
their respective counsel, agents and representatives with respect to the
proposed transaction;

12

 

 

(ix) Borrower shall pay all of Lender's reasonable and customary third party
expenses (including reasonable attorneys' fees and disbursements) actually
incurred by Lender in connection with such transfer, pursuant to clause (vi)
above; and

 

(x) prior to acquiring Guarantor's ownership interest in Borrower, the Permitted
Affiliate Transferee shall have acquired all of the ownership interests in
Borrower not owned by Guarantor.

 

(d) Notwithstanding anything contained in this Section 4.3, Lender's consent
shall not be required with respect to the merger of IREIT with any other
Identified Affiliate; provided that (i) Lender shall receive not less than
thirty (30) days prior written notice of any such proposed merger, (ii) no Event
of Default shall have occurred and be continuing, (iii) the net worth of the
entity surviving such merger shall equal or exceed the net worth of IREIT
immediately prior to such merger, (iv) if requested by Lender, Borrower shall
deliver, prior to such transfer and at Borrower's sole cost and expense,
customary searches (credit, judgment, lien, bankruptcy, etc.) reasonably
acceptable to Lender with respect to such Identified Affiliate, and (v)
immediately following such merger, the entity surviving the merger shall be
publicly registered with the Securities and Exchange Commission.

 

(e) Notwithstanding anything contained in this Section 4.3, Lender's consent
shall not be required in connection with the acquisition by IREIT of any entity
whether by merger, stock purchase, asset purchase or any other manner; provided
that: (i) Lender shall receive not less than thirty (30) days prior written
notice of any such proposed transaction, (ii) no Event of Default shall have
occurred and be continuing, (iii) IREIT is the surviving entity following such a
transaction, (iv) if requested by Lender, Borrower shall deliver, prior to such
transfer and at Borrower’s sole cost and expense, customary searches (credit,
judgment, lien, bankruptcy, etc.) reasonably acceptable to Lender with respect
to such acquired entity, and (v) the net worth of IREIT after the transaction
shall equal or exceed the net worth of IREIT immediately prior to such a
transaction.

13

 

 

(f) Notwithstanding anything contained in this Section 4.3, Lender's consent
shall not be required in connection with one or a series of transfers, of up to
forty-nine percent (49%) of the stock, limited partnership interests or
membership interests (as the case may be) in a Restricted Party; provided,
however, no such transfer shall result in the change of Control in such
Restricted Party, and as a condition to each such transfer, (x) Lender shall
receive not less than thirty (30) days prior written notice of such proposed
transfer and (y) if requested by Lender, Borrower shall deliver, prior to such
transfer and at Borrower's sole cost and expense, customary searches (credit,
judgment, lien, bankruptcy, etc.) reasonably acceptable to Lender with respect
to any such transferee that will own twenty percent (20%) or more of the direct
or indirect interests in Borrower immediately following such transfer. In
addition, at all times, IREIT must continue to (i) Control the applicable
Restricted Party, and (ii) own, directly or indirectly, not less than fifty-one
percent (51%) of the legal and beneficial interest in the applicable Restricted
Party.

 

(g) Notwithstanding anything to the contrary contained in this Section 4.3,
Lender’s consent shall not be required if IREIT is acquired by either another
public non-traded real estate investment trust or a publicly traded real estate
investment trust whether by merger, stock purchase, asset purchase or any other
manner; provided that (i) Lender shall receive not less than thirty (30) days
prior written notice of any such proposed transaction, (ii) no Event of Default
shall have occurred, and be continuing, (iii) the surviving entity has at least
$400,000,000.00 of assets, a net worth of at least $250,000,000.00 with a
liquidity of at least $100,000,000.00 and with leverage of less than 40% and, if
the surviving real estate investment trust is publicly traded (iv) it shall have
a debt rating of at least BBB- by Standard and Poors or an equivalent rating
from Moodys, and (v) if requested by Lender, Borrower shall deliver, prior to
such transfer and at Borrower’s sole cost and expense, customary searches
(credit, judgment, lien, bankruptcy, etc.) reasonably acceptable to Lender with
respect to such acquiring entity.

 

(h) For purposes of this Section 4.3, the following definitions shall apply:

 

"Affiliate" shall mean, as to any Person, any other Person that, directly or
indirectly, owns more than twenty percent (20%) of, is in Control of, is
Controlled by or is under common ownership or Control with such Person or is a
director or officer of such Person or of an Affiliate of such Person.

 

"Affiliated Manager" shall mean any managing agent of the Property in which
Borrower, Guarantor, any SPE Component Entity (if any) or any Affiliate of such
entities has, directly or indirectly, any legal, beneficial or economic
interest.

 

"Borrower" shall have the meaning set forth in the introductory paragraph
hereof.

14

 

 

"Constituent Members" shall have the meaning set forth in Section 5.2(b).

 

"Control" shall mean the power to direct the management and policies of an
entity, directly or indirectly, whether through the ownership of voting
securities or other beneficial interests, by contract or otherwise.

 

“Guarantor" shall mean IREIT.

 

"Identified Affiliate" shall mean (i) Inland Real Estate Corporation, a Maryland
corporation, (ii) Inland Real Estate Investment Corporation, a Delaware
corporation, (iii) Retail Properties of America, Inc. (formerly known as Inland
Western Retail Real Estate Trust, Inc.), a Maryland corporation, (iv) Inland
American Real Estate Trust, Inc., a Maryland corporation, (iv) IREIT, (v) any
other real estate investment entity sponsored by Inland Real Estate Investment
Corporation, or (vii) any other entity composed entirely of any of the
foregoing, by merger or other business combination.

 

"IREIT" shall mean INLAND REAL ESTATE INCOME TRUST, INC., a Maryland
Corporation.

 

"Permitted Transfer" shall mean (i) a Permitted Equity Transfer, (ii) a transfer
entered into pursuant to the terms of Section 4.3 hereof, (iii) a Lease entered
into in accordance with the terms hereof, (iv) any Permitted Encumbrances, (v)
any Permitted Equipment Leases, (vi) any public issuance of interests in IREIT,
(vii) any private sale or transfer of non-controlling interests in IREIT not
affiliated with IREIT, and/or (viii) issuances of membership interests in
Manager to employees or other Persons affiliated with The Inland Group of
Companies, Inc. or Manager pursuant to employee compensation programs.

 

"Restricted Party" shall mean, collectively, (a) Borrower, any SPE component
entity, and any Guarantor, or (b) any shareholder, partner, member, non-member
manager, any direct or indirect legal or beneficial owner of, Borrower, any SPE
component entity, or any Guarantor (other than any shareholder or any other
direct or indirect legal or beneficial owner of interests in IREIT and other
than Persons that are indirect legal or beneficial owners of Borrower or
Principal solely by being a shareholder of IREIT; provided, however, that any
shareholder or any other direct or indirect legal or beneficial owner of
interests in IREIT that owns nine and nine-tenths percent (9.9%) or more of the
outstanding stock of IREIT is deemed to be a Restricted Party);

 

"Sale or Pledge" shall mean a voluntary or involuntary sale, conveyance,
mortgage, grant, bargain, lien, encumbrance, pledge, assignment, grant of any
options with respect to, or any other transfer or disposition of (directly or
indirectly, voluntarily or involuntarily, by operation of law or otherwise, and
whether or not for consideration or of record) a legal or beneficial interest.

15

 

 

5.               Application of Deposits and Proceeds.

5.1            Application of Deposits. If an Event of Default shall occur
Lender may hold, dispose of and apply towards satisfaction of the obligations of
Borrower under the Loan any deposit or any other sum at any time held to the
credit of Borrower and any other property of Borrower at any time in Lender’s
possession without first having recourse to any other rights or security which
Lender may have or hold.

5.2            Insurance Proceeds. If the Property or any part thereof shall be
damaged or destroyed by fire or other insured casualty, the amounts recovered
pursuant to any insurance coverage in effect with respect thereto are hereby
assigned and shall be paid to Lender and shall, at Lender’s election, be applied
towards reconstruction, repair or replacement of the Property, in which event,
Lender shall release such proceeds from time to time for such purposes, at such
times and upon such terms and conditions as Lender deems appropriate, or may be
applied by Lender in satisfaction of the obligations of Borrower under the Loan
then remaining unsatisfied, whether or not then due and in such order as Lender
determines, and for the foregoing purposes, Borrower hereby appoints Lender its
attorney-in-fact to negotiate, settle and collect any such proceeds (including
without limitation the right to participate in any proceedings relating thereto)
without, however, imposing on Lender any obligation to do so. Notwithstanding
the foregoing, so long as no Event of Default exists, the damage does not exceed
$5,000,000.00 in Lender's reasonable judgment, the proceeds are sufficient to
rebuild (along with specifically identified Borrower funds) and the Property can
be legally rebuilt within six (6) months prior to maturity, then the proceeds
shall be advanced by Lender from time to time pursuant to its standard
construction loan disbursement procedures.

5.3            Eminent Domain Proceeds. If the Property or any part thereof
shall be taken by eminent domain or by other act of any public authority, any
damages in connection therewith are hereby assigned and shall be paid to Lender
and shall, at Lender’s election, be applied towards reconstruction, repair or
replacement of the Property, in which event, Lender shall release such proceeds
from time to time for such purposes, at such times and upon such terms and
conditions as Lender deems appropriate, or may be applied by Lender in
satisfaction of the obligations of Borrower under the Loan then remaining
outstanding, whether or not then due and in such order as Lender determines and
for the foregoing purposes, Borrower hereby appoints Lender as its
attorney-in-fact to negotiate, settle and collect such proceeds (including
without limitation the right to participate in any proceedings relating thereto)
without, however, imposing upon Lender any obligation to do so. Notwithstanding
the foregoing, so long as no Event of Default exists, the damage does not exceed
$5,000,000.00 in Lender's reasonable judgment, the proceeds are sufficient to
rebuild (along with specifically identified Borrower funds) and the Property can
be legally rebuilt within six (6) months prior to maturity, then the proceeds
shall be advanced by Lender from time to time pursuant to its standard
construction loan disbursement procedures.

6.               Appraisals. Lender shall have the right to order updated
appraisals at Borrower’s sole cost and expense, but not more than twice during
the Loan term and otherwise for cause or if required by regulatory authorities.

16

 

 

7.               Events of Default. The occurrence of any one or more of the
following events continuing beyond applicable notice and cure periods set forth
below shall constitute an Event of Default under this Agreement and all other
Loan Documents:

(1)            Borrower shall fail to pay on or before the 10th day after the
date due any installment of principal or interest or any fee payable hereunder,
under the Note or any other Loan Document.

(2)            Borrower shall fail to observe or perform any obligation to be
observed or performed by it under this Agreement or any other Loan Document.

(3)            Any representation or warranty made in writing by or on behalf of
Borrower in this Agreement, in any Loan Documents, or in any certificate or
other document delivered pursuant hereto or thereto or otherwise in connection
with any of the transactions contemplated hereby, shall prove to have been
false, misleading or incorrect in any material respect when made or deemed made.

(4)            Borrower shall admit its inability to pay its debts as they
mature in an insolvency proceeding, shall fail generally to pay its debts as
they become due, or shall make an assignment for the benefit of its or any of
its creditors.

(5)            Proceedings in bankruptcy or for reorganization of Borrower or
any Guarantor or for the readjustment, arrangement, composition or adjustment of
any of Borrower's or any Guarantor’s debts under the federal bankruptcy act, as
amended, or any part thereof, or under any other laws, whether state or federal,
for the relief of debtors, now or hereafter existing, (i) shall be commenced by
Borrower, or (ii) shall be commenced against Borrower and shall not be
discharged, vacated, dismissed, or stayed within one hundred twenty (120)
calendar days of their commencement against Borrower.

(6)            A receiver, liquidator or trustee shall be appointed for Borrower
or any Guarantor or for any substantial part of Borrower's or any Guarantor’s
assets, or any proceedings shall be instituted for the dissolution or the full
or partial liquidation of Borrower or any Guarantor and such receiver,
liquidator or trustee shall not be discharged within one hundred twenty (120)
calendar days of his or her appointment, or such proceedings shall not be
dismissed or stayed within one hundred twenty (120) calendar days of their
commencement, or its business.

(7)            A receiver, liquidator or trustee shall be appointed by Borrower
or for Borrower for any substantial part of the assets of Borrower, or any
proceedings shall be instituted by Borrower for the dissolution or the full or
partial liquidation of Borrower, or Borrower shall discontinue its business or
materially change the nature of its business.

17

 

 

(8)            A receiver, liquidator or trustee shall be appointed by any
Guarantor or for any Guarantor for any substantial part of the assets of any
Guarantor, or any proceedings shall be instituted by any Guarantor for the
dissolution or the full or partial liquidation of that Guarantor, or any
Guarantor, if an entity, shall discontinue its business or materially change the
nature of its business.

(9)            Borrower or any Guarantor shall suffer final judgments for
payment of money aggregating in excess of $1,000,000.00 with respect to the
Borrower and $2,000,000.00 with respect to the Guarantor, and the same shall not
be discharged within a period of thirty (30) calendar days unless, pending
further proceedings, execution has not been commenced or if commenced has been
effectively stayed or bonded.

(10)         A judgment creditor of Borrower shall obtain possession of all or
any material portion of the Property by any means, including attachment, levy,
distraint, replevin or self-help, which shall not be released within sixty (60)
calendar days of the date of such attachment, levy, distraint, replevin or
self-help.

(11)         The sale, transfer, assignment or other disposition of or change by
action of law or otherwise in title to the Property or any part thereof or in
any equity, beneficial or other ownership interest in Borrower, including
without limitation by action of law or merger of ownership entities, without
first and in each instance having disclosed to Lender the full particulars of
any such transfer proposed and obtained from Lender its written consent thereto,
if required by the terms of the Loan Agreement.

(12)         The service of process upon Lender seeking to attach or garnish by
mesne or trustee process any funds of Borrower or Guarantor in excess of
$100,000 which are on deposit with Lender.

(13)         The Guarantor shall revoke or attempt to revoke the Guaranty, the
Guarantor dies, or the Guaranty is terminated for any reason whatsoever.

(14)         A payment default by Borrower or any other material default
resulting in acceleration, under any indebtedness for borrowed money from any
other party.

(15)         The occurrence of an event of default under any other agreement
between Lender and Borrower or Lender and Guarantor.

(16)         An event of default beyond any applicable cure period on early
termination event occurs under any Hedging Contract.

18

 

 

 

7.2            Cure Periods. Borrower shall have the right: (1) to cure monetary
defaults under the Note or under any instrument, document or undertaking given
or entered into in connection therewith within ten (10) calendar days after the
default without notice from Lender; and (2) to cure nonmonetary defaults
hereunder or under any such instrument, document or undertaking within thirty
(30) calendar days after written notice from Lender, provided however, if the
nonmonetary default is not susceptible of cure within said thirty (30) day
period, then so long as Borrower is diligently pursuing cure, Borrower shall
have an additional forty-five (45) day period, not to exceed a total of
seventy-five (75) days within which to effectuate cure in which event, the Note
and the Loan shall be reinstated if not otherwise in default and additional
interest accrued due to imposition of the Default Rate as set forth in the Note
shall be deemed waived. The time periods provided herein for cure shall be
concurrent with and not consecutive to any other grace periods which may be
provided in or with respect to any obligation having the benefit of this
provision. Notwithstanding the foregoing, there shall be no notice or cure
period for the events described in Section 7(4), (5), (6), (7), (8), (10) and
(11) above.

7.3            Remedies. Upon an Event of Default, Lender may accelerate all
amounts due under the Loan and may proceed under all other rights and remedies
set forth in the Loan Documents.

8.               Notices. Any notice or demand which by any provision of this
Agreement is required or provided to be given shall be deemed to have been
sufficiently given or served for all purposes by being sent certified mail,
postage and registration charges prepaid, or by recognized overnight carrier to
the following addresses:

If to Borrower, to it at:

IREIT SHREWSBURY WHITE CITY, L.L.C.

c/o Inland Real Estate Income Trust, Inc.

2901 Butterfield Road

Oak Brook, IL 60523

Attn: Chief Financial Officer or President

 

or to such other address as Borrower may designate by written notice to Lender,
with a copy to:

 

The Inland Real Estate Group

2901 Butterfield Road

Oak Brook, IL 60523

Attn: General Counsel

Fax: 630-218-4900

 

19

 

 

 

If to Lender, to it at:

 

SANTANDER BANK, N.A.

75 State Street

Boston, MA 02109

Attn: James St. Thomas, Senior Vice President

 

or to such other address as Lender may designate by written notice to Borrower,
with a copy to:

Robinson & Cole LLP

One Boston Place, 25th Floor

Boston, MA 02108

Attn: Matthew A. Kameron, Esq.

 

9.               Execution and Counterparts. This Agreement may be executed by
the parties hereto individually or in any combination of the parties hereto in
several separate counterparts, each of which shall be an original and all of
which taken together shall constitute one and the same agreement.

10.            Amendments, Waivers. No failure or delay on Lender’s part in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy hereunder. No amendment, modification or waiver of any provision of this
Agreement, or of the Note nor consent to any departure by Borrower therefrom
shall in any event be effective unless the same shall be in writing and signed
and delivered by Lender, and then such modification, waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on Borrower in any case shall entitle Borrower to any other
or further notice or demand in similar or other circumstances.

11.            Financial and Accounting Terms. Whenever financial or accounting
terms are used in this Agreement, they shall, except to the extent expressly
defined differently herein, mean as determined in accordance with generally
accepted accounting principles as in effect on the date of this Agreement or in
effect on dates future financial information is due, consistently applied.

12.            Successors and Assigns. The terms and provisions of this
Agreement shall inure to the benefit of any assignee or transferee of or
successor to the Note, and in the event of such transfer or assignment, the
rights and privileges herein conferred upon the assigning, transferring, or
succeeded Lender shall automatically extend to and be vested in the transferee,
assignee, or successor of such Lender, all subject to the terms and conditions
hereof. The Borrower may not assign or transfer any of its rights or obligations
hereunder without Lender’s prior written consent.

20

 

 

13.            Representations and Warranties. All covenants, agreements,
representations and warranties made herein or in other documents delivered by or
on behalf of Borrower pursuant to or in connection herewith are material and
shall be deemed to have been relied upon by Lender, notwithstanding any
investigation heretofore or hereafter made by Lender, and shall survive the
making of the Loan as herein contemplated, and shall continue in full force and
effect so long as the Loan or other amount due under this Agreement remains
outstanding and unpaid. All statements contained in any certificate or other
paper delivered to Lender at any time by or on behalf of Borrower pursuant
hereto shall constitute representations and warranties by Borrower hereunder.

14.            Application of Proceeds. The proceeds of any collection, sale or
disposition of the any collateral securing the Loan shall be applied against the
Borrower’s obligation under the Loan in such order and manner as Lender
determines in its sole discretion, any statute, custom or usage to the contrary
notwithstanding and the balance, if any, shall be paid to the Borrower. The
Borrower shall remain liable to the Lender for any deficiency remaining
following such application.

15.            Waiver of Jury Trial. THE PARTIES HERETO HEREBY WAIVE, TO THE
EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER OF ANY KIND WHATSOEVER IN ANY WAY
ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT
RELATED HERETO OR THE RELATIONSHIPS ESTABLISHED HEREUNDER OR THEREUNDER.

16.            Consent to Jurisdiction. The Borrower agrees that any suit for
the enforcement of this Agreement may be brought in the courts of the
Commonwealth of Massachusetts or any Federal Court sitting therein and consents
to the non-exclusive jurisdiction of such court and to service of process in any
such suit being made upon Borrower by mail at the address specified herein. The
Borrower hereby waives any objection that it may now or hereafter have to the
venue of any such suit or any such court or based on such suit having been
brought in an inconvenient court.

17.            Severability. In case any one or more provisions of this
Agreement shall be found by a court or other tribunal of competent jurisdiction
to be invalid or unenforceable for any reason or in any respect or circumstance,
such invalidity or unenforceability shall not limit or impair the validity or
enforcement of any other provision hereof or affect the validity or enforcement
of the provisions of this Agreement under any other circumstances.

18.            Governing Law. This Agreement, the Note, and the Loan Documents
and all rights and obligations thereunder, including matters of construction,
validity and performance, shall be governed by the laws of the Commonwealth of
Massachusetts and shall take effect as instruments under seal.

21

 

 

19.            Capital Requirements. If, after the date hereof, Lender
reasonably determines that (i) the adoption of or change in any law, rule,
regulation or guideline having the force of law regarding capital requirements
for Lenders or Lender holding companies, or any change in the interpretation or
application thereof by any Governmental Authority charged with the
administration thereof, or (ii) compliance by Lender or its parent Lender
holding company with any guideline, request, or directive of any such entity
regarding capital adequacy ( having the force of law), the effect of reducing
the return on Lender’s or such holding company’s capital as a consequence of
Lender’s commitments hereunder to a level below that which Lender or such
holding company could have achieved but for such adoption, change, or compliance
(taking into consideration Lender’s or such holding company’s then existing
policies with respect to capital adequacy and assuming the full utilization of
such entity’s capital) by any amount reasonably deemed by Lender to be material,
then Lender may notify Borrower thereof. Following receipt of such notice,
Borrower agrees to pay such Lender on demand the amount of such reduction of
return of capital as and when such reduction is determined, payable within
ninety (90) days after presentation by Lender of a statement of such amount and
setting forth in reasonable detail Lender’s calculation thereof and the
assumptions upon which such calculation was based (which statement shall be
deemed true and correct absent manifest error). In determining such amount
Lender may use any reasonable averaging and attribution methods. “Governmental
Authority” means any federal, state, local, or other governmental or
administrative body, instrumentality, department, or agency or any court,
tribunal, administrative hearing body, arbitration panel, commission, or other
similar dispute-resolving panel or body.

20.            Pledge of Loan. The Lender may at any time pledge, endorse,
assign, or transfer all or any portion of its rights under the Loan Documents
including any portion of the Loan to any of the twelve (12) Federal Reserve
Lenders organized under Section 4 of the Federal Reserve Act. 12.U.S.C. Section
341. No such pledge or enforcement thereof shall release Lender from its
obligations under any of the Loan Documents.

22

 

 

21.            Syndications. The Lender shall have the unrestricted right at any
time or from time to time, and without Borrower’s consent and at no cost to
Borrower or Guarantor (other than any legal fees incurred on their behalf) or
changing the essential terms of the Loan Documents, , to sell, assign, endorse,
or transfer all or any portion of its rights and obligations hereunder to one or
more Lenders or other entities (each, an “Assignee”) and, Borrower agrees that
it shall execute, or cause to be executed such documents including without
limitation, amendments to the Note and to any other documents, instruments and
agreements executed in connection herewith as Lender shall reasonably deem
necessary to effect the foregoing. In addition, at the request of Lender and any
such Assignee, Borrower shall issue one or more new promissory notes, as
applicable, to any such Assignee and, if Lender has retained any of its rights
and obligations hereunder following such assignment, to Lender, which new
promissory notes shall be issued in replacement of, but not in discharge of, the
liability evidenced by the note held by Lender prior to such assignment and
shall reflect the amount of the respective commitments and loans held by such
Assignee and Lender after giving effect to such assignment. Upon the execution
and delivery of appropriate assignment documentation, amendments and any other
documentation required by Lender in connection with such assignment, and the
payment by Assignee of the purchase price agreed to by Lender and such Assignee,
such Assignee shall be a party to this Note and shall have all of the rights and
obligations of Lender hereunder (and under any and all other guaranties,
documents, instruments and agreements executed in connection herewith) to the
extent that such rights and obligations have been assigned by Lender pursuant to
the assignment documentation between Lender and Assignee, and Lender shall be
released from its obligations hereunder and thereunder to a corresponding
extent.

22.            Participations. The Lender shall have the unrestricted right at
any time and from time to time, and without the consent of or notice to Borrower
and at no cost to Borrower or Guarantor (other than any legal fees incurred on
their behalf), to grant to one or more institutions or other persons (each a
“Participant”) participating interests in Lender’s obligations to lend hereunder
and/or any or all of the loans held by Lender hereunder. In the event of any
such grant by Lender of a participating interest to a Participant, whether or
not upon notice to Borrower, Lender shall remain responsible for the performance
of its obligations hereunder and Borrower shall continue to deal solely and
directly with Lender in connection with Lender’s rights and obligations
hereunder. The Lender may furnish any information concerning Borrower in its
possession from time to time to any prospective assignees and Participants,
provided that Lender shall require any such prospective assignee or Participant
to maintain the confidentiality of such information.

23

 

 

23.            Withholding. Lender, and any of its successors, assigns or
participants that are entitled to an exemption from or reduction of withholding
tax (including, without limitation, any withholding tax imposed under any of
Sections 1441 through 1446 of the Code, Sections 1471 through 1474 of the Code,
and/or Sections 3401 through 3406 of the Code) under the law of the United
States, or an applicable treaty to which such jurisdiction is a party, with
respect to payments under the Loan Documents shall deliver to Borrower, at the
time or times prescribed by applicable law and at any times reasonably requested
by Borrower, such properly completed and executed documentation prescribed by
applicable law or reasonably requested by the Borrower as will permit such
payments to be made without withholding or at a reduced rate.

24.            Reimbursement of Costs and Expenses. Unless otherwise noted, the
Borrower shall reimburse Lender for all reasonable attorneys’ fees, costs, and
expenses incurred by Lender in connection with the preparation of the Loan
Documents, closing the transaction described in the Loan Documents, and
enforcing its rights with respect to the Loan Documents or any collateral for
the Loan.

25.            Compliance with Anti-Terrorism Regulations.

(a) None of Borrower, any transferee under a permitted transfer or any
affiliated party of any of the foregoing (collectively, the “Related Persons”)
will be included in, owned by, controlled by, act for or on behalf of, provide
assistance, support, sponsorship, or services of any kind to, or otherwise
associate with any of the persons referred to or described in any list of
persons, entities, and governments issued by the Office of Foreign Assets
Control of the United States Department of the Treasury (“OFAC”) pursuant to
Executive Order 13224 – Blocking Property and Prohibiting Transactions with
Persons Who Commit, Threaten to Commit, or Support Terrorism, as amended
(“Executive Order 13224”), or any similar list issued by OFAC or any other
department or agency of the United States of America (collectively, the “OFAC
Lists”).

(b) Borrower will comply at all times with the requirements of Executive Order
13224; the International Emergency Economic Powers Act, 50 U.S.C. Sections
1701-06; the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56 (the
"PATRIOT Act"); the Iraqi Sanctions Act, Pub. L. 101-513, 104 Stat. 2047-55; the
United Nations Participation Act, 22 U.S.C. Section 287c; the Antiterrorism and
Effective Death Penalty Act, (enacting 8 U.S.C. Section 219, 18 U.S.C. Section
2332d, and 18 U.S.C. Section 2339b); the International Security and Development
Cooperation Act, 22 U.S.C. Section 2349 aa 9; the Terrorism Sanctions
Regulations, 31 C.F.R. Part 595; the Terrorism List Governments Sanctions
Regulations, 31 C.F.R. Part 596; the Foreign Terrorist Organizations Sanctions
Regulations, 31 C.F.R. Part 597; the Bank Secrecy Act, Pub. L. 91-508, 84 Stat.
1114, 1118; the Trading with the Enemy Act, 50 U.S.C. App. Section 1 et seq.;
the laws relating to prevention and detection of money laundering in 18 U.S.C.
Sections 1956 and 1957 and any similar laws or regulations currently in force or
hereafter enacted (collectively, the “Anti-Terrorism Regulations”).

24

 

 

(c) If Borrower becomes aware or receives any notice that any of the Related
Persons are named on any of the OFAC Lists (such occurrence, an “OFAC
Violation”), Borrower will immediately comply with all laws applicable to such
OFAC Violation (regardless of whether the party included on any of the OFAC
Lists is located within the jurisdiction of the United States of America),
including, without limitation, the Anti-Terrorism Regulations, and Borrower will
take any and all steps necessary to comply with all Laws applicable to any such
OFAC Violation, including, without limitation, the requirements of the
Anti-Terrorism Regulations (including the “freezing” and/or “blocking” of
assets).

(d) In satisfaction of Borrower’s obligations under Section 4107(d)(2) of the
Small Business Jobs Act of 2010 (the “Jobs Act”), Borrower hereby certifies to
Lender that none of the principals of Borrower and its affiliates has been
convicted of, or pleaded nolo contendere to, any crime (excluding traffic
violations and minor misdemeanors not covered by Section 4107(d)(2) of the Jobs
Act). As used in the immediately preceding sentence, the term “principal” means
(i) if Borrower is a sole proprietorship, the proprietor; (ii) if Borrower is a
partnership, each managing partner and each partner who is a natural person and
holds a 20% or more ownership interest in the partnership; and (iii) if Borrower
is a corporation, limited liability company, association or development company,
each director, each of the five most highly compensated executives or officers
of the entity, and each natural person who is a direct or indirect holder of 20%
of the ownership stock or stock equivalent of the entity.

 

[signature page follows this page]

25

 

IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Loan
Agreement UNDER SEAL to be effective as of the date first set forth above.

BORROWER:

 

IREIT SHREWSBURY WHITE CITY, L.L.C.

 

By:   INLAND REAL ESTATE INCOME TRUST, INC.

Its:   Sole Member

 

 

By:   /s/ Marcia Grant

        Marcia Grant

Its:    Assistant Secretary

 

lender:

 

SANTANDER BANK, N.A.

 

 

By:   /s/ James St. Thomas

        James St. Thomas

Its:   Senior Vice President

 

 

 

[signatures continue on next page]

 

26

 

 

The undersigned each execute this Agreement with respect to the provisions of
this Agreement concerning the Guarantor.

 

GUARANTOR:

 

INLAND REAL ESTATE INCOME TRUST, INC.

 

 

By:    /s/ Marcia Grant

         Marcia Grant

Its:    Assistant Secretary

 

 

 

 

 

 

[Signature page of Loan Agreement]