Exhibit 10.23

 

SECURITY AGREEMENT

 

THIS SECURITY AGREEMENT is made and entered into as of December 27, 2012, by and
between Inland Real Estate Investment Corporation, a Delaware corporation
(whether one or more, "Debtor"), whose address is 2901Butterfield Road, Oak
Brook, Illinois 60523, and BANK OF THE OZARKS ("Lender"), whose address is
8201 Preston Road, Suite 700, Dallas, Texas  75225.

WITNESSETH :

WHEREAS, arrangements have been made between the Debtor and the Lender for the
extension of credit by the Lender to the Debtor of up to $4,658,496.00 which
credit is evidenced by a Promissory Note, executed by Debtor and payable to
Lender (the "Note") and a Blocked Account Control Agreement (the "Account
Control Agreement") between Debtor and Lender, each dated as of the date of this
Agreement; and

WHEREAS, Debtor and Lender is unwilling to make the loan unless the Debtor
secures its obligations and all other obligations to Lender, whether now
existing or later arising related to the loan evidenced by the Note (the "Loan")
(said obligations are hereinafter collectively referred to as "Obligations").
All definitions for capitalized words contained in the Note, as amended or
modified from time to time, shall have the same meaning when used herein.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
promises herein contained, the parties hereto agree as follows:

1.                  Grant of Security Interest. As collateral security for the
payment and satisfaction of all Obligations, Debtor hereby grants to Lender a
continuing security interest in and to all of the following property of the
Debtor, whether now owned or existing or hereafter acquired or arising
(collectively, the "Collateral"): (a) Account Number __________________ with
Lender, as depository (the "Deposit Account"); (b) all interest accruing to the
Deposit Account; (c) all monies now or hereafter deposited into the Deposit
Account; (d) all proceeds of the Deposit Account; (e) all rights of Debtor under
the Account Control Agreement; and (f) any related deposit or linked account or
subaccount held by Lender or any affiliate of Lender or any entity as clearing
broker for any of the accounts established pursuant to the Account Control
Agreement.

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2.                  Maintenance of Security Interest: No Removal of Collateral.
Debtor will, from time to time, upon the request of the Lender, deliver specific
assignments of Collateral, together with such other instruments and documents,
amendments thereto, assignments or other writings as the Lender may reasonably
request to carry out the terms of this Security Agreement or to protect or
enforce the Lender's security interest in the Collateral. With respect to any
and all Collateral to be secured and conveyed under this Security Agreement,
Debtor agrees to do and cause to be done all things necessary to perfect and
keep in full force the security interest granted in favor of the Lender,
including, but not limited to, the prompt payment of all fees and expenses
incurred in connection with any filings made to perfect a security interest in
the Collateral in favor of the Lender. Debtor agrees to make appropriate entries
upon its financial statements and its books and records disclosing the Lender's
security interest in the Collateral.

3.                  Representations and Warranties. Debtor hereby represents and
warrants the following to Lender:

(A) Authority. The execution, delivery and performance of this Agreement and all
of the other Loan Documents by Debtor have been duly authorized by all necessary
corporate action of Debtor.

(B) Accuracy of Information. All information heretofore, herein or hereafter
supplied to Lender by or on behalf of Debtor with respect to the Collateral is
true and correct. The exact legal name and organization number of Debtor is
correctly shown above.

(C) Enforceability. This Agreement and the other Loan Documents constitute
legal, valid and binding obligations of Debtor, enforceable in accordance with
their respective terms, except as limited as to enforcement of remedies by
applicable debtor relief laws and except to the extent specific remedies may
generally be limited by equitable principles.

(D) Ownership and Liens. Debtor has good and marketable title to the Collateral
free and clear of all liens, security interests, encumbrances or adverse claims,
except for the security interest created by this Agreement and the other Loan
Documents. No dispute, right of setoff, counterclaim or defense exists with
respect to all or any part of the Collateral. Debtor has not executed any other
security agreement currently affecting the Collateral and no financing statement
or other instrument similar in effect covering all or any part of the Collateral
is on file in any recording office except as may have been executed or filed in
favor of Lender. Debtor will defend the Collateral and any products and proceeds
thereof against all claims and demands of all persons at any time claiming the
same or any interest therein adverse to Lender.

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(E) Security Interest. Debtor has and will have at all times full right, power
and authority to grant a security interest in the Collateral to Lender in the
manner provided herein, free and clear of any lien, security interest or other
charge or encumbrance. This Agreement creates a legal, valid and binding
security interest in favor of Lender in the Collateral. Upon control by Lender
of each deposit account included in the Collateral, the security interest
granted by this Agreement shall be perfected and prior to all other liens and
security interests.

(F) Solvency of Debtor. As of the date hereof, and after giving effect to this
Agreement and the completion of all other transactions contemplated by Debtor at
the time of the execution of this Agreement, (i) Debtor is and will be solvent,
(ii) the fair saleable value of Debtor’s assets exceeds and will continue to
exceed Debtor’s liabilities (both fixed and contingent), (iii) Debtor is paying
and will continue to be able to pay its debts as they mature, and (iv) Debtor
has and will have sufficient capital to carry on Debtor’s businesses and all
businesses in which Debtor is about to engage.

4.                  Covenants of Debtor. Debtor will comply with the covenants
contained in this Section at all times during the period of time this Agreement
is effective unless Lender shall otherwise consent in writing.

(A) Ownership and Liens. Debtor will maintain good and marketable title to all
Collateral free and clear of all liens, security interests, encumbrances or
adverse claims, except for the security interest created by this Agreement and
the security interests and other encumbrances expressly permitted by the other
Loan Documents. Debtor will not permit any dispute, right of setoff,
counterclaim or defense to exist with respect to all or any part of the
Collateral. Debtor will cause any financing statement or other security
instrument with respect to the Collateral to be terminated, except as may exist
or as may have been filed in favor of Lender. Debtor hereby irrevocably appoints
Lender as Debtor’s attorney-in-fact, such power of attorney being coupled with
an interest, with full authority in the place and stead of Debtor and in the
name of Debtor or otherwise, for the purpose of terminating any financing
statements currently filed with respect to the Collateral. Debtor will defend at
its expense Lender’s right, title and security interest in and to the Collateral
against the claims of any third party.

(B) Inspection of Books and Records. Debtor will keep adequate records
concerning the Collateral and will permit Lender and all representatives and
agents appointed by Lender to inspect Debtor’s books and records of or relating
to the Collateral at any time during normal business hours, to make and take
away photocopies, photographs and printouts thereof and to write down and record
any such information.

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(C) Adverse Claim. Debtor covenants and agrees to promptly notify Lender of any
claim, action or proceeding affecting title to the Collateral, or any part
thereof, or the security interest created hereunder and, at Debtor’s expense,
defend Lender’s security interest in the Collateral against the claims of any
third party. Debtor also covenants and agrees to promptly deliver to Lender a
copy of all written notices received by Debtor with respect to the Collateral.

(D) Further Assurances. Debtor will contemporaneously with the execution hereof
and from time to time thereafter at its expense promptly execute and deliver all
further instruments and documents and take all further action necessary or
appropriate or that Lender may request in order (i) to perfect and protect the
security interest created or purported to be created hereby and the first
priority of such security interest, (ii) to enable Lender to exercise and
enforce its rights and remedies hereunder in respect of the Collateral, and
(iii) to otherwise effect the purposes of this Agreement.

(E) Transfer or Encumbrance. Debtor will not (i) sell, assign (by operation of
law or otherwise) or transfer Debtor’s rights in any of the Collateral,
(ii) withdraw any cash from any deposit account included in Collateral,
(iii) grant a lien or security interest in or execute, authorize, file or record
any financing statement or other security instrument with respect to the
Collateral to any party other than Lender, or (iv) deliver actual or
constructive possession of any certificate, instrument or document evidencing
and/or representing any of the Collateral to any party other than Lender.

(F) Impairment of Security Interest. Debtor will not take or fail to take any
action which would in any manner impair the value or enforceability of Lender’s
security interest in any Collateral.

(G) Location of Collateral and Debtor's Places of Doing Business. The location
of the Collateral, the location of the Debtor's Chief Executive Office, and
principal place of business and the location of all other places of business of
the Debtor are described on Exhibit A attached to this Agreement.

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5.                  Events of Default. It is understood and agreed that the
occurrence of any one or more of the following shall constitute an "Event of
Default" hereunder and shall entitle Lender to take such actions as are
elsewhere provided in this Security Agreement: (a) an "Event of Default" as
defined in the Note, or any loan document given in connection with the Note or
any other note executed in favor of the Lender shall have occurred; or (b) any
representation, warranty or covenant made by Debtor herein, or in any other
existing or future agreement with Lender shall prove to have been false in any
material respect when made or is breached, violated, or not complied with; or
(c) any loss or theft of any of the Collateral shall occur which shall
materially adversely affect the value of the Collateral as a whole. For purposes
of this Security Agreement, the term "Default" shall mean any event which
constitutes an Event of Default or which but for the lapse of time or giving of
notice, or both, would constitute an Event of Default.

6.                  Rights and Remedies Upon Default. Upon and after an Event of
Default, the Lender shall have the following rights and remedies, all of which
may be exercised with or without notice to Debtor:

(A) To exercise all rights and remedies provided to Lender under the Note upon
the occurrence of an "Event of Default" thereunder, including the right to
declare all the Obligations, and have the same become, immediately due and
payable;

(B) All of the rights and remedies of a secured party under the Uniform
Commercial Code of the state where such rights and remedies are asserted, or
under other applicable law, all of which rights and remedies shall be
cumulative, and none of which shall be exclusive in addition to any other rights
and remedies contained in this Security Agreement, the Note, or any other
documents, certificates or agreements delivered by Debtor in connection with the
Loan (collectively, the "Loan Documents"); and

(C) The right to pursue any other remedies at law or equity which the Lender
deems appropriate.

7.                  Rights and Remedies Cumulative; Non-Waiver; Etc. The
enumeration of Lender's rights and remedies set forth in this Security Agreement
is not intended to be exhaustive and the exercise by Lender of any right or
remedy shall not preclude the exercise of any other rights or remedies, all of
which shall be cumulative, and shall be in addition to any other right or remedy
given hereunder, or under any other agreement between Debtor or Lender or which
may now or hereafter exist in law or in equity or by suit or otherwise. No delay
or failure to take action on the part of Lender in exercising any right, power
or privilege shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or privilege preclude other or further
exercise thereof or the exercise of any other right, power or privilege or shall
be construed to be a waiver of any Event of Default.

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8.                  Notices. All notices or other communications required or
permitted to be given pursuant to this Agreement shall be in writing and shall
be considered as properly given (i) if mailed by first class United States mail,
postage prepaid, registered or certified with return receipt requested; (ii) by
delivering same in person to the intended addressee; or (iii) by delivery to a
reputable independent third party commercial delivery service for same day or
next day delivery and providing for evidence of receipt at the office of the
intended addressee. Notice so mailed shall be effective upon its deposit with
the United States Postal Service or any successor thereto; notice given by
personal delivery shall be effective only if and when received by the addressee;
notice sent by a commercial delivery service shall be effective upon delivery to
such commercial delivery service; and notice given by other means shall be
effective only if and when received at the designated address of the intended
addressee. For purposes of notice, the addresses of the parties shall be as set
forth below:

If to Lender:              Bank of the Ozarks
8201 Preston Road
Suite 700
Dallas, Texas 75225
Attn: Dan Thomas

With a copy to:          Bank of the Ozarks
6th and Commercial
P.O. Box 196
Ozark, Arkansas 72949
Attn: Robert Lloyd

With a copy to:          Winstead PC
500 Winstead Building
2728 N. Harwood Street
Dallas, Texas 75201
Attn: Kevin Sullivan

If to Debtor:               ___________________________________
c/o Inland American Real Estate Trust, Inc.
2901 Butterfield Road
Oak Brook, Illinois 60523
Attn: President

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With a copy to:          Inland Real Estate Group
2901 Butterfield Road
Oak Brook, Illinois 60523
Attn: General Counsel

Any of the foregoing parties shall have the right to change its address for
notice hereunder to any other location within the continental United States by
the giving of thirty (30) days' notice to the other party in the manner set
forth herein

9.                  Supplemental Documentation. At Lender's request, Debtor
shall execute and deliver to Lender, at any time or times hereafter, all
documents, instruments and other written matter that Lender may reasonably
request to perfect and maintain perfected Lender's security interest in the
Collateral in form and substance acceptable to Lender, and pay all charges,
expenses and fees Lender may reasonably incur in filing any of such documents,
and all taxes relating thereto.

10.              Definitions and Applicable Law. All terms used herein shall be
defined in accordance with the appropriate definitions given in this Security
Agreement, provided if no definition is given herein, then as defined in the
other Loan Documents, provided if not defined in the Loan Documents, then as
defined by the Uniform Commercial Code as in force in the State of Texas
(provided that the term "instrument" shall be used herein as it is defined in
Article 9 of the Uniform Commercial Code rather than in Article 3), and such
definitions are hereby incorporated herein by reference and made a part hereof.
This Security Agreement shall be governed in all respects by, and construed in
accordance with, the laws of the State of Texas, including without limitation
the Uniform Commercial Code of the State of Texas. The parties to this Security
Agreement hereby consent to the jurisdiction of the state and federal courts
located within Dallas County, Texas.

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IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement to be
duly executed by authority duly given as of the day and year first above
written.

 

 

 

DEBTOR:

 

INLAND REAL ESTATE INVESTMENT CORPORATION,
a Delaware corporation

By: /s/ Catherine L. Lynch
Name: Catherine L. Lynch
Title: CFO

 

 

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LENDER:

BANK OF THE OZARKS

By: /s/ Dan Thomas
Name: Dan Thomas
Title: President – Real Estate Specialties Group

 

 

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EXHIBIT A TO SECURITY AGREEMENT FROM DEBTOR IN FAVOR OF BANK OF THE OZARKS
Additional Representations of Debtor

 

 

 

 

1.                  The exact legal name of the Debtor is:

2.                  The Debtor's Federal Employer I.D. Number is:
_______________

3.                  If the Debtor has changed its name since it was formed, its
past legal names and last dates such names were used are as follows:

4.                  The Debtor uses in its business and has rights to use the
following trade names:

5.                  The Debtor was organized on under the laws of the State of
and is in good standing under those laws.

6.                  The Debtor is qualified to transact business in the
following states: .

7.                  The Debtor has its chief executive office and principal
place of business at:

8.                  Debtor maintains all of its records at that address, except
as follows:

9.                  The Debtor also has places of business at:

(a)

(b)

10.              In the past five years the Debtor has never maintained its
chief executive office or principal place of business or records with respect to
Receivables, nor owned personal property, at any locations except those set
forth above and except as follows: None

11.              The following entities (a) have been merged into the Debtor,
(b) have sold substantially all of their assets to the Debtor or (c) have sold
assets to the Debtor outside the ordinary course of their business since the
Debtor was incorporated: None

12.              The Debtor does not have any subsidiaries, or own stock in any
other corporations, or own an interest in any partnerships, limited liability
companies, or joint ventures, except as follows: None

13.              The Debtor is not the owner of any business interruption
insurance policies except as follows: None

By:

Title: