Document:

Exhibit 10.13

 

GUARANTY OF PAYMENT

 

1.                                      The Guaranty.

 

1.1                               Guarantor’s Agreement.  IN RETAIL FUND, L.L.C., a Delaware limited liability company having its principal place of business at c/o Inland Real Estate Corporation, 2901 Butterfield Road, Oak Brook, Illinois 60523 (“Guarantor”), hereby unconditionally and irrevocably guarantees to TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA, 730 Third Avenue, New York, New York 10017 (“Lender”) to pay and perform when due the Liabilities (defined below) and to pay on demand the Expenses (defined below). This Guaranty of Payment (the “Guaranty”) is absolute, independent and continuing under all circumstances, and is a guaranty of payment and performance, not of collection. Guarantor acknowledges that the Lender has given sufficient consideration for this Guaranty by agreeing to consent to the assumption by IN RETAIL FUND ALGONQUIN COMMONS, L.L.C., an Illinois limited liability company (“Borrower”), of that certain loan (the “Loan”) to ALGONQUIN COMMONS, LLC, an Illinois limited liability company, ALGONQUIN PHASE II ASSOCIATES LLC, an Illinois limited liability company, JRA ANDERSON OFFICE PARK, LLC, an Ohio limited liability company, JRA BEECHMONT TWINS, LLC, an Ohio limited liability company, JRA FAMILY LIMITED LIABILITY COMPANY, an Ohio limited liability company, MFF ASSOCIATES, LLC, an Ohio limited liability company, and TGH ASSOCIATES, LLC, an Ohio limited liability company (collectively, “Prior Owner”), which is evidenced by that certain Promissory Note dated December 16, 2004, in the original principal amount of $21,000,000.00 made by Prior Owner in favor of Lender (as the same may from time to time be amended, modified or restated, the “Note”) and under which there is now due and owing the principal sum of $20,948,300.87, and acknowledges that the Lender is agreeing to consent to the assumption of the Loan in reliance on each of the terms of this Guaranty.

 

1.2                               Liabilities.  For all purposes of this Guaranty, the term “Liabilities” shall mean all obligations of the Borrower to the Lender of any kind whatsoever, howsoever created, arising or evidenced, whether pursuant to a covenant, representation, warranty, indemnity or other agreement of any kind, whether direct or indirect, absolute or contingent, “recourse” or “non-recourse”, or now or hereafter existing, or due or to become due, under that certain Construction Loan Disbursement Agreement dated December 16, 2004, by and between Prior Owner and Lender (the “Loan Agreement”), the Note, the Mortgage or any other Loan Document. The “Mortgage” shall mean, collectively, (i) that certain Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing Statement dated December 16, 2004, executed by Prior Owner for the benefit of Lender, and (ii) that certain Second Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing Statement dated December 16, 2004, executed by Prior Owner for the benefit of Lender. The “Loan Documents” shall mean the Loan Agreement, the Mortgage, the Note, and all guaranties, security agreements and other documents defined as “Loan Documents” under the Loan Agreement or which are furnished at any time to the Lender pursuant to the Loan Agreement. Liabilities under the Loan Documents shall include the obligation to pay interest under the Note, including any interest at the post-maturity or default

 

 

rate set forth in the Note (the “Default Rate”) (whether or not such obligations survive payment in full of the Note). Each Guarantor acknowledges that the amount of the Liabilities may exceed the amount necessary to pay in full the Note and all Expenses.

 

Notwithstanding the foregoing, it is acknowledged and agreed that the obligations of the Guarantor on account of principal under the Loan shall be determined without reference to the fact that the Phase II Property also serves as collateral for the Phase I Loan.

 

Notwithstanding the foregoing, upon the satisfaction of all conditions to Release of Guaranty (as expressed below in Section 1.4 hereof) the Guarantor shall have no further liability under this Guaranty and this Guaranty shall be of no further force and effect. Upon request from the Guarantor, Lender shall promptly certify that the Guarantor has no further obligations under this Guaranty, if such be the case.

 

1.3                               Expenses.  For all purposes of this Guaranty, the term “Expenses” shall mean all attorneys’ fees, court costs, and other legal expenses and all other costs and expenses of any kind which the Lender may at any time reasonably pay or incur in attempting to collect, compromise or enforce in any respect the Liabilities or this Guaranty, whether or not suit is ever filed, and whether or not in connection with any insolvency, bankruptcy, reorganization, arrangement or other similar proceeding involving any Guarantor provided Lender is successful in the action for which such costs were incurred. If the Lender pays any such cost or expense, “Expenses” shall also include interest at the Default Rate on any such payment from the date thereof until repayment of the Lender in full.

 

1.4                               Release of Guaranty.  Lender has also agreed to consent to the assumption by Borrower of that certain loan (the “Phase I Loan”) to Algonquin Commons, LLC and Algonquin Phase I Associates LLC (collectively, the “Phase I Prior Owner”), which is evidenced by that certain Promissory Note dated October 29, 2004, in the original principal amount of $77,300,000.00 made by the Phase I Prior Owner to the Lender (the “Phase I Note”) and is further evidenced and secured by various “Loan Documents” as defined in the Phase I Note (all such documents being referred to herein as the “Phase I Loan Documents”). The Phase I Loan is secured by, among other things, (i) that certain Open-End Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing Statement dated October 29, 2004, executed by Phase I Prior Owner for the benefit of Lender, and (ii) that certain Second Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing Statement dated December 16, 2004, executed by Phase I Prior Owner for the benefit of Lender, encumbering real property that is contiguous to property encumbered by the Mortgage (the “Phase I Property”).

 

This Guaranty shall cease and determine at such date, if any, as (i) 95% of the rentable square footage of the improvements to be constructed upon and included within the real property encumbered by the Mortgage (the “Phase II Property”), including any improvements erected on any portion of the Phase II Property ground leased to a third party, is leased with tenants in occupancy and actually paying rent and (ii) the annual rents (excluding security deposits) under leases (including ground leases) in effect on such date are providing debt service coverage for the annual Debt Service Payments of 1.44 after payment of annual Insurance Premiums, Impositions (each such term as defined in the Mortgage, but with reference to the combined

 

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Phase I Property and Phase II Property) and operating expenses of the Property (including ground rent, if any payable by the Borrower). As used herein, the terms “Debt Service Payments” shall have the meaning given such term in the Mortgage (but determined with reference to the Phase I Loan and the Loan combined).

 

Without limiting the obligations of the Guarantor hereunder, it is understood and agreed that (i) the indebtedness and Debt Service Payments under the Loan shall be measured, and the foregoing debt service coverage test applied after giving effect to any prepayment of the Loan made pursuant to Section 6.8 of the Loan Agreement, and (ii) the 95% rentable square footage shall be measured, and the associated test applied with reference to such of the improvements constructed upon the Phase II Property with the proceeds of the Loan as to which construction shall have been commenced as of the Completion Date (as defined in the Loan Agreement).

 

1.5                               Guarantor.  For all purposes of this Guaranty, the term “Guarantor” shall mean the Guarantor named in Section 1.1 above and any other party which hereafter guarantees any portion of the Liabilities.

 

2.                                      Representations and Warranties.  Guarantor hereby represents and warrants to the Lender as follows:

 

2.1                               Review of Guaranty and Loan Documents.  Guarantor has reviewed with the benefit of its legal counsel the terms of this Guaranty, the Mortgage, the Note and each other of the loan documents relating to the Loan and the Phase I Loan;

 

2.2                               Financial Benefit to Guarantor.  Guarantor is deriving a material financial benefit from the assumption of the Loan by Borrower;

 

2.3                               Organization; Authorization.  Intentionally omitted;

 

2.4                               Enforceability.  Each obligation under this Guaranty is legal, valid, binding and enforceable against Guarantor in accordance with its terms;

 

2.5                               Intentionally left blank;

 

2.6                               No Existing Defaults and No Litigation.  Guarantor is not in default under any agreement, the effect of which could materially adversely affect performance of its obligations under this Guaranty. There are no actions, suits or proceedings pending or, to the best of its knowledge, threatened against Guarantor before any court or any other governmental authority of any kind which could materially adversely affect performance of its obligations under this Guaranty;

 

2.7                               Guaranty Will Cause No Violations of Law or Other Defaults.  Neither the execution and delivery of this Guaranty nor compliance with its terms will violate any presently existing law, regulation, order, writ, injunction or decree of any court or other governmental authority of any kind, or result in any default by Guarantor under any other document or agreement of any kind;

 

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2.8                               No Misstatements or Omissions.  To the best of Guarantor’s knowledge, this Guaranty does not contain any untrue statement of fact;

 

2.9                               ERISA.  Guarantor is not an “employee benefit plan” (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended from time to time (“ERISA”)) to which ERISA applies and Guarantor’s assets do not constitute assets of any such plan; and

 

2.10                        Solvency.  Guarantor (i) is solvent on the date hereof and will not become insolvent as a result of the obligations incurred under this Guaranty; (ii) is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which the property of Guarantor is an unreasonably small capital; and (iii) has not intended to incur, does not intend to incur, and does not believe that it is incurring, obligations that would be beyond Guarantor’s ability to pay as such obligations mature.

 

3.                                      Agreements.  Guarantor agrees as follows:

 

3.1                               Intentionally left blank.

 

3.2                               Intentionally left blank.

 

3.3                               Rescinded, Avoided or Returned Payments.  If at any time any part of any payment previously applied by the Lender to any of the Liabilities is rescinded, avoided or returned by the Lender for any reason, including the insolvency, bankruptcy or reorganization of any Guarantor or any other party, such Liabilities shall be deemed to have continued in existence to the extent that such payment is rescinded, avoided or returned, and this Guaranty shall be reinstated as to such Liabilities as though such prior application by the Lender had not been made.

 

3.4                               Certain Permitted Actions of the Lender.  The Lender may from time to time, in its sole discretion and without notice to any Guarantor, take any of the following actions without in any way affecting the obligations of any Guarantor: (a) obtain a security interest in any property of Guarantor to secure any of the Liabilities or any obligation hereunder; (b) obtain the primary or secondary obligation of any additional obligor or obligors with respect to any of the Liabilities; (c) extend, modify, subordinate, exchange or release any of the Liabilities; (d) modify, subordinate, exchange or release its security interest in any part of any property securing any of the Liabilities or any obligation hereunder, or extend, modify, subordinate, exchange or release any obligations of any obligor with respect to any such property; (e) alter the manner or place of payment of the Liabilities; (f) enforce this Guaranty against Guarantor for payment of any of the Liabilities, whether or not the Lender shall have (i) proceeded against any other Guarantor or any other party primarily or secondarily obligated with respect to any of the Liabilities or (ii) resorted to or exhausted any other remedy or any other security or collateral; (g) foreclose on, take possession of or sell any of the collateral or security for the Liabilities or enforce any other rights under the Note, the Mortgage or any of the other Loan Documents, and (h) any of the foregoing actions with respect to the Phase I Loan or the Phase I Loan Documents.

 

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3.5                               Lender’s Option to Release Any Guarantor.  The Lender may from time to time in its sole discretion release any Guarantor from any of its obligations hereunder or release any other obligor from any of the Liabilities without notice to any other Guarantor or any other party and without in any way releasing or affecting the liability of the other Guarantor.

 

3.6                               Application of Payments.  The Lender may apply any payment made on account of the Liabilities toward such of the Liabilities, and in such order, as the Lender may from time to time elect in its sole discretion.

 

3.7                               Intentionally left blank.

 

3.8                               Certain Events Not Affecting Obligations of Guarantor.  The obligations of the Guarantor hereunder shall not be affected by any of the following: (a) the release or discharge of any other Guarantor in any creditors’, receivership, bankruptcy, reorganization, insolvency, or other proceeding; (b) the rejection or disaffirmance in any such proceeding of any of the Liabilities; (c) the impairment or modification of any of the Liabilities, or of any remedy for the enforcement thereof, or of the estate of any other Guarantor in bankruptcy, resulting from any present or future federal or state bankruptcy law or any other law of any kind or from the decision or order of any court or other governmental authority; (d) any disability or defense of any other Guarantor; (e) the cessation of the liability of any other Guarantor for any cause whatsoever; (f) any sale, assignment, transfer or other conveyance (including any conveyance in lieu of foreclosure or any collateral sale pursuant to the Uniform Commercial Code) of any of the security for any of the Liabilities, regardless of the amount received by the Lender in connection therewith; or (g) any disability or defense of any kind now existing of any Guarantor with respect to any provision of this Guaranty. However, in the event of a sale of the Property conforming with the provisions of Section 12.3 of the Mortgage, this Guaranty shall be released as to liability first arising after such a sale.

 

3.9                               No Obligation of Lender Regarding Security Interest.  The Lender shall have no obligation to obtain, perfect or retain a security interest in any property to secure any of the Liabilities or this Guaranty, or to protect or insure any such property.

 

3.10                        Filing of Certain Claims.  Guarantor shall promptly file in any bankruptcy or other proceeding in which the filing of claims is required by law all claims and proofs of such claims which Guarantor may have against any other Guarantor, and will collaterally assign to the Lender or its nominee all rights of Guarantor thereunder. If any Guarantor does not so file, Guarantor hereby irrevocably authorizes the Lender or its nominee to do so, either (in the Lender’s discretion) as attorney-in-fact for Guarantor, or in the name of the Lender or the Lender’s nominee. In all such cases, any party authorized to pay such claim shall pay to the Lender or its nominee the full amount thereof.

 

3.11                        ERISA.  For so long as this Guaranty shall be continuing pursuant to Paragraph 5.1 hereof, Guarantor hereby covenants to the Lender that, for the duration of the term of this Guaranty, Guarantor will not be an “employee benefit plan” (within the meaning of Section 3(3) of ERISA) to which ERISA applies and Guarantor’s assets will not constitute assets of any such plan.

 

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4.                                      Waivers.  Guarantor hereby expressly waives:

 

4.1                               Notices.  Notice of the acceptance by the Lender of this Guaranty, notice of the existence or creation of any of the Liabilities, presentment, demand, notice of dishonor, protest, notice of protest, notice of acceleration, notice of intent to accelerate, under this Guaranty and all other notices except any specifically required by this Guaranty;

 

4.2                               Disclosures About Any Other Guarantor.  Guarantor hereby waives any obligation the Lender may have to disclose to Guarantor any facts the Lender now or hereafter may know or have reasonably available to it regarding any other Guarantor or its financial condition, whether or not the Lender has a reasonable opportunity to communicate such facts or has reason to believe that any such facts are unknown to Guarantor or materially increase the risk to Guarantor beyond the risk Guarantor intends to assume hereunder. Guarantor shall be fully responsible for keeping informed of the financial condition of each and every other Guarantor and of all other circumstances bearing on the risk of non-payment or non-performance of the Liabilities;

 

4.3                               Diligence in Collection.  All diligence in collection of any of the Liabilities, any obligation hereunder, or any guaranty or other security for any of the foregoing;

 

4.4                               Benefit of Certain Laws.  The benefit of all appraisement, valuation, marshalling, forbearance, stay, extension, redemption, homestead, exemption and moratorium laws now or hereafter in effect;

 

4.5                               Certain Defenses.  Any defense based on the incapacity, lack of authority, death or disability of any other person or entity or the failure of the Lender to file or enforce a claim against the estate of any other person or entity in any administrative, bankruptcy or other proceeding;

 

4.6                               Election of Remedies Defense.  Any defense based on an election of remedies by the Lender, whether or not such election may affect in any way the recourse, subrogation or other rights of Guarantor against any other Guarantor or any other person in connection with the Liabilities;

 

4.7                               Defenses Relating to Collateral Sale.  Any defense based on the failure of the Lender to (a) provide notice to the Guarantor of a sale or other disposition (including any collateral sale pursuant to the Uniform Commercial Code) of any of the security for any of the Liabilities, or (b) conduct such a sale or disposition in a commercially reasonable manner;

 

4.8                               Defenses Relating to Loan Administration.  Any defense based on the negligence of the Lender in administering the Loan or the Phase I Loan, or taking or failing to take any action in connection therewith; and

 

4.9                               Rights of Subrogation, Contribution, Etc.  Until payment by Guarantor of all amounts claimed under this Guaranty by Lender, any rights arising because of Guarantor’s payment of any of the Liabilities (a) against any other Guarantor, by way of subrogation of the

 

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rights of the Lender or otherwise, or (b) against any other Guarantor or any other party obligated to pay any of the Liabilities, by way of contribution or reimbursement or otherwise.

 

Nothing in this Section 4 shall be construed as Guarantor’s waiver of any affirmative defense of Lender’s misapplication of Borrower’s payments.

 

5.                                      Miscellaneous.

 

5.1                               Continuing Guaranty.  Subject to the provisions of Section 1.4 of this Guaranty, this Guaranty shall in all respects be a continuing guaranty, remaining in full force and effect until all of the following have occurred: (a) all of the Liabilities have been satisfied in full, (b) all of the Guarantor’s obligations hereunder have been satisfied in full, and (c) the Loan has been repaid in full. No notice of discontinuance or revocation shall affect any of the obligations of Guarantor hereunder or any other obligor under any of the Liabilities. The Lender shall not be obligated to accept at any time any deed in lieu of foreclosure, and all obligations of Guarantor hereunder shall survive any foreclosure, reinstatement, period of redemption or any deed in lieu of foreclosure which the Lender may accept, to the extent any of the Liabilities remain unsatisfied or otherwise survive. Lender shall acknowledge that there is no further obligation under this Guaranty where (a), (b) and (c) above have occurred.

 

5.2                               Joint and Several Obligations; Successors and Assigns.  All obligations under this Guaranty are joint and several to any other party which hereafter guarantees any portion of the Liabilities, and shall be binding upon each of them and their respective heirs, legal representatives, successors and assigns.

 

5.3                               Assignment by the Lender.  The Lender may from time to time, without notice to any Guarantor, assign or transfer any interest in any of the Liabilities by loan participation or otherwise, and notwithstanding such assignment or transfer, such Liabilities shall remain Liabilities for purposes of this Guaranty. Each immediate and successive assignee or transferee of any interest in any of the Liabilities and this Guaranty shall, to the extent of such interest, be entitled to the benefits of this Guaranty to the same extent as if such assignee or transferee were the Lender. The Lender may deliver to any such assignee or transferee any financial statements delivered by any Guarantor in connection with this Guaranty.

 

5.4                               Legal Tender of United States.  All payments hereunder shall be made in coin or currency which at the time of payment is legal tender in the United States of America for public and private debts.

 

5.5                               Time of Essence.  Time is of the essence of this Guaranty.

 

5.6                               Definitions; Captions; Gender.  Any capitalized term not defined herein but defined in the Note shall have the same meaning herein as it has in the Note. With respect to any reference in this Guaranty to any defined term: (a) if such defined term refers to a person, or a trust, corporation, partnership or other entity, then it shall also mean all heirs, personal representatives, successors and assigns of such person or entity; and (b) if such defined term refers to a document, instrument or agreement, then it shall also include any replacement,

 

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extension or other modification thereof. Captions contained in this Guaranty in no way define, limit or extend the scope or intent of their respective provisions. Use of the masculine, feminine or neuter gender and of singular and plural shall not be given the effect of any exclusion or limitation herein.

 

5.7                               Including Means Without Limitation.  The use in this Guaranty of the term “including”, and related terms such as “include”, shall in all cases mean “without limitation”.

 

5.8                               Notices.  Any notice or demand provided for in this instrument shall be in writing, addressed as provided below, and shall be delivered personally, sent by certified mail, return receipt requested or sent by reputable, national overnight delivery service, charges prepaid. Notice is deemed given on the earlier of (i) actual receipt; or (ii) three days after mailing if mailed or one day after delivery to the overnight service if a service is used. All notices and demands must include reference to the application number and the mortgage number referred to in this instrument.

 

	
If to Guarantor
    	
IN Retail Fund Algonquin Commons, L.L.C.
    
	
 
    	
c/o Inland Real Estate Corporation
    
	
 
    	
2901 Butterfield Road
    
	
 
    	
Oak Brook, Illinois 60523
    
	
 
    	
Attention:  Mark Zalatoris and   David Kayner
    
	
 
    	
Application No.: AAA-4489
    
	
 
    	
Authorization ID # 000595600
    
	
 
    	
 
    
	
with a copy to:
    	
Levenfeld Pearlstein, LLC
    
	
 
    	
Two N. LaSalle Street, Suite 1300
    
	
 
    	
Chicago, Illinois 60602
    
	
 
    	
Attention:  Marc S. Joseph, Esq.
    
	
 
    	
Application No.: AAA-4489
    
	
 
    	
Authorization ID # 000595600
    
	
 
    	
 
    
	
 
    	
and
    
	
 
    	
 
    
	
 
    	
Morgan Stanley Real Estate Investments
    
	
 
    	
US RE Investing Division
    
	
 
    	
One Financial Place
    
	
 
    	
440 S. LaSalle Street, 37th Floor
    
	
 
    	
Chicago, Illinois 60605
    
	
 
    	
Attention:  Mr. Brian Lantz
    
	
 
    	
 
    
	
If to Lender:
    	
Teachers Insurance and Annuity Association of America
    
	
 
    	
730 Third Avenue
    
	
 
    	
New York, New York 10017
    
	
 
    	
Attention:
    	
Managing Director/Portfolio
    
	
 
    	
 
    	
Mortgage and Real Estate Division
    
	
 
    	
Region:
    	
Midwest/Southwest
    

 

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Application No.: AAA-4489
    
	
 
    	
Authorization ID # 000595600
    
	
 
    	
 
    
	
with a copy to:
    	
Teachers Insurance and Annuity Association of America
    
	
 
    	
730 Third Avenue
    
	
 
    	
New York, New York 10017
    
	
 
    	
Attention: 
    	
Managing Counsel – New York
    
	
 
    	
 
    	
Investment Management Law
    
	
 
    	
Application No.: AAA-4489
    
	
 
    	
Authorization ID # 000595600
    

 

5.9                               Entire Agreement.  This Guaranty constitutes the entire agreement of the Guarantor for the benefit of the Lender and supersedes any prior agreements with respect to the subject matter hereof.

 

5.10                        No Modification Without Writing.  This Guaranty may not be terminated or modified in any way nor can any right of the Lender or any obligation of any Guarantor be waived or modified, except by a writing signed by the Lender and Guarantor.

 

5.11                        Independent Obligations.  The obligations of Guarantor hereunder are independent of the obligations of any other Guarantor. In the event of any default hereunder, the Lender may institute a separate action against any Guarantor with or without joining or instituting a separate action against any other Guarantor or other obligor.

 

5.12                        Severability.  Each provision of this Guaranty shall be interpreted so as to be effective and valid under applicable law, but if any provision of this Guaranty shall in any respect be ineffective or invalid under such law, such ineffectiveness or invalidity shall not affect the remainder of such provision or the remaining provisions of this Guaranty.

 

5.13                        Cumulative.  The obligations of Guarantor hereunder are in addition to any other obligations it may now or hereafter have to the Lender, and shall not be affected in any way by the delivery to the Lender by Guarantor or any other guarantor of any other guaranty, or any combination thereof. All rights and remedies of the Lender and all obligations of Guarantor under this Guaranty are cumulative. In addition, the Lender shall have all rights and remedies available to it in law or equity for the enforcement of this Guaranty.

 

5.14                        Effect of Lender’s Delay or Action.  No delay by the Lender in the exercise of any right or remedy shall operate as a waiver thereof, and no single or partial exercise by the Lender of any right or remedy shall preclude any other exercise thereof or the exercise of any other right or remedy. No action of the Lender permitted hereunder shall in any way impair or otherwise affect any right of the Lender or obligation of Guarantor under this Guaranty. The Lender shall not be liable in any way for any decrease in the value or marketability of any property securing any of the Liabilities which may result from any action or omission of the Lender in enforcing any part of this Guaranty, the Note, the Mortgage or any other of the Loan Documents.

 

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5.15                        Governing Law.  THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF ILLINOIS WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.

 

5.16                        ENTIRE AGREEMENT.  THIS GUARANTY, TOGETHER WITH THE NOTE, MORTGAGE, AND THE OTHER LOAN DOCUMENTS, REPRESENTS THE ENTIRE FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREIN AND CANNOT BE MODIFIED, SUPPLEMENTED, AMENDED, RESCINDED OR CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES, EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES HERETO.

 

5.17                        WAIVER OF JURY TRIAL.  GUARANTOR AND THE LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THAT GUARANTOR OR LENDER MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION WITH THIS GUARANTY, THE NOTE, THE MORTGAGE OR ANY OF THE OTHER LOAN DOCUMENTS EXECUTED BY GUARANTOR, OR IN CONNECTION WITH ANY OTHER STATEMENTS OR ACTIONS OF THE LENDER OR GUARANTOR.

 

5.18                        Counterparts.  This Guaranty may be executed in one or more counterparts, each of which shall be deemed to be a duplicate original.

 

[SIGNATURE ON FOLLOWING PAGE]

 

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IN WITNESS WHEREOF, the undersigned has executed this Guaranty as of this 15th day of February, 2006.

 

 

	
 
    	
GUARANTOR:
    
	
 
    	
 
    
	
 
    	
IN RETAIL FUND, L.L.C.,
    
	
 
    	
a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
By:
    	
IN Retail Manager, L.L.C.,
    
	
 
    	
 
    	
a Delaware limited liability company,
    
	
 
    	
 
    	
its Manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
Inland Real Estate Corporation,
    
	
 
    	
 
    	
 
    	
a Maryland corporation, its Manager
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
/s/ Mark Zalatoris
    
	
 
    	
 
    	
 
    	
Name:
    	
Mark Zalatoris
    
	
 
    	
 
    	
 
    	
Title:
    	
Executive Vice President
    

 

11Exhibit 10.14

 

LOAN ASSUMPTION AGREEMENT

 

by and between

 

ALGONQUIN PHASE I ASSOCIATES LLC AND ALGONQUIN COMMONS, LLC

as Prior Owner

 

and

 

JEFFREY R. ANDERSON

as Prior Guarantor

 

and

 

IN RETAIL FUND ALGONQUIN COMMONS, L.L.C.

as Borrower

 

and

 

IN RETAIL FUND, L.L.C.

as New Guarantor

 

and

 

TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA

as Lender

 

Property Known As

ALGONQUIN COMMONS

1520 Randall Road

Algonquin, Illinois 60102

 

	
THIS INSTRUMENT WAS PREPARED BY
    	
Cross   References:
    
	
AND UPON RECORDING RETURN TO:
    	
Document   2004K145149
    
	
 
    	
Document   2004K145150
    
	
Susan E. Wood, Esq.
    	
Document   2004K163572
    
	
Sutherland Asbill & Brennan LLP
    	
Document   2004K163573
    
	
999 Peachtree Street, N.E.
    	
Kane   County, Illinois Records
    
	
Atlanta, Georgia 30309
    	
Authorization   #  000576200
    

 

 

LOAN ASSUMPTION AGREEMENT

 

THIS LOAN ASSUMPTION AGREEMENT (this “Agreement”) is made and entered into as of February 15, 2006 (the “Effective Date”) by and between ALGONQUIN PHASE I ASSOCIATES LLC and ALGONQUIN COMMONS, LLC, each an Illinois limited liability company having its principal place of business at Rookwood Tower, 3805 Edwards Road, Suite 700, Cincinnati, Ohio 45209 (collectively, “Prior Owner”); JEFFREY R. ANDERSON, an individual, having an office c/o Jeffrey R. Anderson Real Estate, Inc., Rookwood Tower, 3805 Edwards Road, Suite 700, Cincinnati, Ohio 45209 (“Prior Guarantor”); IN RETAIL FUND ALGONQUIN COMMONS, L.L.C., an Illinois limited liability company having its principal place of business at c/o Inland Real Estate Corporation, 2901 Butterfield Road, Oak Brook, Illinois 60523 (“Borrower”); IN RETAIL FUND, L.L.C., a Delaware limited liability company having its principal place of business at c/o Inland Real Estate Corporation, 2901 Butterfield Road, Oak Brook, Illinois 60523 (“New Guarantor”); and TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA, a New York corporation, having an office at 730 Third Avenue, New York, New York 10017 (“Lender”).

 

RECITALS

 

A.            Prior Owner was the maker of that certain Promissory Note (the “Note”) dated October 29, 2004, in the original principal amount of Seventy-Seven Million Three Hundred Thousand and 00/100 Dollars ($77,300,000.00) and payable to the order of Lender. The loan evidenced by the Note is herein referred to as the “Loan.”

 

B.            The Note is secured by (i) that certain Open-End Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing Statement dated October 29, 2004, executed by Prior Owner for the benefit of Lender, and recorded November 5, 2004, as Document 2004K145149 of the Official Records of Kane County, Illinois (the “Public Records”), as amended by that certain Amendment to Mortgage dated December 16, 2004, recorded December 22, 2004, as Document 2004K163571 of the Public Records, and (ii) that certain Second Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing Statement, dated December 16, 2004, executed by Prior Owner for the benefit of Lender, and recorded December 22, 2004 as Document 2004K163572 of the Public Records (collectively, the “Mortgage”). The Mortgage encumbers certain real property described on Exhibit A attached hereto and by this reference incorporated herein (together with all other property, real and personal, encumbered by the Mortgage, the “Property”).

 

C.            The Loan is further secured by (i) that certain Assignment of Leases and Rents dated October 29, 2004, executed by Prior Owner for the benefit of Lender and recorded November 5, 2004, as Document 2004K145150 of the Public Records, and (ii) that certain Second Assignment of Leases and Rents, dated December 16, 2004, executed by Prior Owner for the benefit of Lender, and recorded December 22, 2004, as Document 2004K163573 of the Public Records (collectively, the “ALR”).

 

D.            In connection with the Loan, Prior Owner also delivered, or caused to be delivered, the following documents to Lender:

 

(1)           those certain UCC Financing Statements (i) recorded as Documents 2004K132537, 2004K145152 and 2004K145153 of the Public Records, and (ii) filed as Instruments 9272089, 9272097, 9272100, 9374620, 9272119, 9272127 and 9272135 with the Secretary of State of Illinois (collectively, the “Prior UCC”) naming either Algonquin Phase I Associates LLC or Algonquin Commons, LLC as Debtor and Lender as Secured Party therein;

 

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(2)           that certain Environmental Indemnity (the “Prior Environmental Indemnity”) dated October 29, 2004, executed by Prior Guarantor for the benefit of Lender;

 

(3)           that certain Non Recourse Carve-Out Guaranty (the “Prior Guaranty”) dated October 29, 2004, executed by Prior Guarantor for the benefit of Lender;

 

(4)           that certain Guaranty of Phase II Loan Obligations (the “Phase II Guaranty”) dated December 16, 2004, executed by Prior Owner for the benefit of Lender;

 

(5)           that certain Real Estate Tax Pledge and Security Agreement (the “Real Estate Tax Pledge”) dated October 29, 2004, executed by and among Lender, Prior Owner, and Capstone Realty Advisors LLC as Pledge Agent;

 

(6)           that certain Leasing Reserve and Security Agreement (the “Leasing Reserve”) dated October 29, 2004, executed by and among Lender, Prior Owner, and Capstone Realty Advisors LLC as Pledge Agent; and

 

(7)           that certain Outstanding Tenant Improvement Pledge and Security Agreement (the “Outstanding Tenant Improvement Agreement”) dated October 29, 2004, executed by and among Lender, Prior Owner and Capstone Realty Advisors as Pledge Agent.

 

(The Prior UCC, the Prior Environmental Indemnity and the Prior Guaranty are hereinafter referred to collectively as the “Prior Owner’s Loan Documents.”)

 

E.             Upon the Effective Date, Borrower is executing and delivering, or is causing to be delivered, to Lender the following documents:

 

(1)           those certain UCC Financing Statements (collectively, the “UCC”) naming Borrower as Debtor and Lender as Secured Party therein, to be filed in the Public Records and in the Office of the Secretary of State of Illinois with respect to both the mortgages constituting the Mortgage;

 

(2)           that certain Environmental Indemnity (the “Environmental Indemnity”) dated as of the Effective Date, executed by New Guarantor for the benefit of Lender;

 

(3)           that certain Non Recourse Carve-Out Guaranty (the “Guaranty”) dated as of the Effective Date, executed by New Guarantor for the benefit of Lender; and

 

(4)           that certain Agreement of Manager (the “Agreement of Manager”) dated as of the Effective Date, executed by Borrower, Lender and Jeffrey R. Anderson Real Estate, Inc., an Ohio corporation, as Manager.

 

(The Note, the Mortgage, the ALR, the Phase II Guaranty, the Real Estate Tax Pledge, the Leasing Reserve, the Outstanding Tenant Improvement Agreement, the UCC, the Environmental Indemnity, the Guaranty, the Agreement of Manager and this Agreement, together with all other documents evidencing, securing or otherwise pertaining to the Loan (other than the Prior Owner’s Loan Documents) are hereinafter referred to collectively as the “Loan Documents”, and singularly as a “Loan Document”.)

 

F.             The Property is being conveyed by Prior Owner to Borrower as of the Effective Date, and as part of the consideration for such conveyance, Borrower agrees to assume all the obligations under the

 

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Loan Documents from and after the Effective Date and comply with all covenants and obligations contained in the Loan Documents from and after the Effective Date.

 

G.            Prior Owner and Borrower have requested that Lender consent to the assumption of the Loan and waive the due on sale restrictions of the Mortgage to permit the conveyance of the Property to Borrower.

 

H.            Lender is willing to consent to the transfer of the Property by Prior Owner to Borrower and the assumption of the Loan by Borrower, subject to the terms and conditions set forth herein.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the sum of Ten and No/100 Dollars ($10.00) cash in hand paid by the parties hereto each to the other and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

1.             Loan Information.  Lender advises that the principal balance outstanding under the Note as of the Effective Date is $77,024,472.69. Principal and interest on the Loan has been paid through February 1, 2006 in accordance with the terms of the Note. All escrow deposits held by or on behalf of Lender in connection with the Loan Documents shall, from and after the Effective Date, be for the account of Borrower. To the actual knowledge of Lender as of the Effective Date, no Event of Default (as defined in the Mortgage) under the Loan Documents has occurred and is continuing, nor, to the actual knowledge of Lender, have there been any conditions which with the giving of notice or passage of time or both may constitute a default by Prior Owner under the Loan Documents. Lender reserves the right to declare any existing default which subsequently comes to the attention of Lender.

 

2.             Organization and Authority of Borrower.  Borrower represents and warrants to Lender as follows:

 

(a)           Borrower is a limited liability company, duly formed and validly existing under the laws of the state of Illinois, and duly qualified to transact business under the laws of the state in which the Property is located. The taxpayer identification number of the Borrower is 20-3773203. The Illinois organizational identification number of the Borrower is 01676768. On or prior to the date hereof, Borrower has delivered to Lender a fully executed IRS form W-9.

 

(b)           No proceeding is pending for the dissolution or annulment of Borrower, and all license and franchise taxes due and payable by Borrower have been paid in full.

 

(c)           Borrower has the full power and authority to enter into and perform this Agreement and to assume the Loan. The execution, delivery and performance of this Agreement and the other documents contemplated herein by Borrower (1) has been duly and validly authorized by all necessary action on the part of Borrower, (2) does not conflict with or result in a violation of Borrower’s organizational documents or any judgment, order or decree of any court or arbiter in any proceeding to which Borrower is a party, and (3) does not conflict with, or constitute a material breach of, or constitute a material default under, any contract, agreement or other instrument by which Borrower is bound or to which Borrower is a party.

 

3.             Consent of Lender.  Lender hereby consents to the sale of the Property by Prior Owner to Borrower and agrees that such sale shall not constitute a default under the Loan Documents. Notwithstanding the foregoing, this consent to the transfer of the Property shall not be deemed to be a waiver of the right of Lender under the Mortgage or the Loan Documents to prohibit any future transfers

 

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of the Property or any interest therein, or of the right of the Lender to deny consent to any such transaction in the future in accordance with the provisions of the Mortgage. Notwithstanding the foregoing consent by Lender, Lender agrees that the sale of the Property by Prior Owner to Borrower, together with the assumption of the Loan by Borrower, does not constitute the exercise of Prior Owner’s one-time right to a Permitted Loan Assumption (as defined in Section 12.3 of the Mortgage), and Lender confirms that Section 12.3 of the Mortgage remains in full force or effect, as modified as set forth in Section 26 below. From and after the Effective Date, references in the Loan Documents to “Maker,” “Mortgagor,” “Debtor,” “Borrower,” or other similar references that prior to the Effective Date referred to Prior Owner shall refer to Borrower, and references in the Loan Documents to “Guarantor” or other similar references that prior to the Effective Date referred to Prior Guarantor shall refer to New Guarantor.

 

4.             Assumption and Ratification.  Borrower hereby assumes and agrees to comply with all covenants and obligations contained in the Loan Documents and henceforth shall be bound by all the terms thereof from and after the Effective Date. Without limiting the foregoing, from and after the Effective Date, Borrower hereby assumes and agrees to pay in full as and when due all payments, the obligations and other indebtedness evidenced by the Note first arising after the Effective Date. As assumed hereby, the Loan Documents shall remain in full force and effect, except as otherwise provided in Section 26 below. Borrower hereby authorizes Lender to file any and all UCC financing statements as Lender may deem necessary including, without limitation, financing statements containing the description “all assets of Borrower” or “all personal property of Borrower” or similar language. The Borrower hereby adopts, ratifies and confirms as of the Effective Date all of the representations, warranties and covenants of Prior Owner contained in the Loan Documents, except to the extent modified in Section 26 below.

 

5.             Representations and Warranties.  Borrower hereby represents and warrants to Lender as follows:

 

(a)           To the best of Borrower’s knowledge, as of the Effective Date, there is no Event of Default (as defined in the Mortgage) or event which with the passage of time or the giving of notice, or both, would constitute an Event of Default under the Loan Documents;

 

(b)           Borrower has thoroughly read and reviewed the terms and provisions of this Agreement and the Loan Documents and is familiar with same, and Borrower has entered into this Agreement voluntarily, without duress or undue influence of any kind, and with the advice and representation of legal counsel, if any, selected by Borrower;

 

(c)           The assumption of the Loan by Borrower will not result in a violation of any of the covenants contained in Section 8.3 of the Mortgage entitled “ERISA Compliance” or Section 8.4 of the Mortgage entitled “Anti-Terrorism”;

 

(d)           Borrower is not opposing and has not opposed Lender in a pending or threatened action, claim or litigation before a legal, equitable or administrative tribunal; and

 

(e)           Borrower and its constituent entities are free from bankruptcy.

 

Borrower acknowledges that Lender is relying upon the foregoing representations and warranties as a material inducement to Lender’s execution of this Agreement.

 

6.             Release of Claims.  Prior Owner, Prior Guarantor, Borrower and New Guarantor (collectively and individually, “Borrower Parties”), hereby jointly and severally, unconditionally and

 

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irrevocably, finally and completely RELEASE AND FOREVER DISCHARGE Lender, and its respective successors, assigns, affiliates, subsidiaries, parents, officers, shareholders, directors, employees, attorneys and agents, past, present and future (collectively and individually, “Lender Parties”), of and from any and all claims, controversies, disputes, liabilities, obligations, demands, damages, debts, liens, actions and causes of action of any and every nature whatsoever, known or unknown, whether at law, by statute or in equity, in contract or in tort, under state or federal jurisdiction, and whether or not the economic effects of such alleged matters arise or are discovered in the future, which Borrower Parties have as of the Effective Date or may claim to have against Lender Parties arising out of or with respect to any and all transactions relating to the Loan, the Prior Owner’s Loan Documents or the Loan Documents occurring on or before the Effective Date, including any loss, cost or damage of any kind or character arising out of or in any way connected with or in any way resulting from the acts, actions or omissions of Lender Parties occurring on or before the Effective Date. The foregoing release is intended to be, and is, a full, complete and general release in favor of Lender Parties with respect to all claims, demands, actions, causes of action and other matters described therein, including specifically, without limitation, any claims, demands or causes of action based upon allegations of breach of fiduciary duty, breach of any alleged duty of fair dealing in good faith, economic coercion, usury, or any other theory, cause of action, occurrence, matter or thing which might result in liability upon Lender Parties arising or occurring on or before the Effective Date. Each of Prior Owner and Prior Guarantor represents and warrants to Lender that Prior Owner or Prior Guarantor, as applicable, has not previously assigned or transferred to any person or entity any matter released hereunder, and each of Prior Owner and Prior Guarantor agrees to indemnify, protect and hold the Lender Parties harmless from and against any and all claims based on or arising out of any such assignment or transfer. Each of Borrower and New Guarantor represents and warrants to Lender that Borrower or New Guarantor, as applicable, has not previously assigned or transferred to any person or entity any matter released hereunder, and each of Borrower and New Guarantor agrees to indemnify, protect and hold the Lender Parties harmless from and against any and all claims based on or arising out of any such assignment or transfer.

 

7.             Default.  Any (i) default by Borrower in the performance of its obligations herein contained, or (ii) any material inaccuracy in the representations and warranties made by Borrower herein, which have not been cured on or before the expiration of any applicable cure periods set forth in the Loan Documents, shall constitute a default under the Loan Documents and shall entitle Lender to exercise all of its rights and remedies set forth in the Loan Documents.

 

8.             Lift of Bankruptcy Stay.  Notwithstanding any provision in the Loan Documents to the contrary, in the event Borrower shall make application for or seek relief or protection under any of the sections or chapters of the United States Bankruptcy Code (the “Code”), or in the event that any involuntary petition is filed against Borrower under any section of the Code, Borrower will not oppose Lender’s application for immediate relief from any automatic stay imposed by Sec. 362 of the Code, or otherwise, or on or against the exercise of the rights and remedies otherwise available to Lender pursuant to the Loan Documents and as otherwise provided by law.

 

9.             Fees.  Borrower and Lender have agreed that, simultaneously with the execution hereof, all fees, costs, and charges arising in connection with the execution of this Agreement, including without limitation, all reasonable attorneys’ fees, title company fees, title insurance premiums, recording costs, and other closing costs incurred by Lender in connection with this Agreement, will be paid by Borrower as of the Effective Date, and that Lender shall have no obligation whatsoever for payment thereof.

 

10.          No Offsets or Defenses.  Borrower hereby acknowledges, confirms and warrants to Lender that as of the Effective Date, Borrower neither has nor claims any offset, defense, claim, right of set-off or counterclaim against Lender under, arising out of or in connection with this Agreement, the

 

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Note, the Mortgage or any other Loan Document. Borrower covenants and agrees with Lender that if any offset, defense, claim, right of set-off or counterclaim exists as of the Effective Date, Borrower does hereby irrevocably and expressly waive the right to assert such matter. Borrower understands and agrees that the foregoing release is in consideration for the agreements of Lender contained herein, and Borrower will receive no further consideration for such release.

 

11.          Confirmation.  Except as specifically set forth herein, all other terms and conditions of the Loan Documents shall remain unmodified and in full force and effect, the same being confirmed and republished hereby; and except as otherwise specifically set forth herein, Borrower hereby assumes, affirms, reaffirms and republishes all of the warranties, covenants and agreements as set forth in the Loan Documents.

 

12.          Usury Savings Clause.  Notwithstanding anything to the contrary contained elsewhere in this Agreement, Borrower and Lender hereby agree that all agreements between them with respect to the Loan, including but not limited to the Loan Documents, whether now existing or hereafter arising are expressly limited so that in no contingency or event whatsoever shall the amount paid, or agreed to be paid, to Lender for the use, forbearance, or detention of the money loaned to Borrower, or for the performance or payment of any covenant or obligation contained herein or therein, exceed the maximum rate of interest under applicable law (the “Maximum Rate”). If from any circumstance whatsoever, fulfillment of any provisions of this Agreement or the Loan Documents at the time performance of such provisions shall be due would involve transcending the limit of validity prescribed by law, then, automatically, the obligation to be fulfilled shall be reduced to the limit of such validity, and if from any circumstance Lender should ever receive anything of value deemed interest by applicable law which would exceed the Maximum Rate, such excessive interest shall be applied to the reduction of the principal amount owing with respect to the Loan or on account of the other indebtedness secured by the Loan Documents or Borrower’s Loan Documents and not to the payment of interest, or if such excessive interest exceeds the unpaid principal balance of the Loan and such other indebtedness, such excess shall be refunded to Borrower. All sums paid or agreed to be paid to Lender for the use, forbearance or detention of the Loan and other indebtedness of Borrower to Lender shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full term of such indebtedness until payment in full so that the actual rate of interest on account of all such indebtedness is uniform throughout the actual term of the Loan and does not exceed the Maximum Rate throughout the entire term of the Loan, as appropriate. The terms and provisions of this Section 12 shall control every other provision of this Agreement and all other agreements between Borrower and Lender.

 

13.          Modifications, Waiver.  No waiver, modification, amendment, discharge, or change of any of the Loan Documents shall be valid unless the same is in writing and signed by the party against which the enforcement of such modification, waiver, amendment, discharge, or change is sought.

 

14.          No Novation.  THE PARTIES DO NOT INTEND THIS AGREEMENT NOR THE TRANSACTIONS CONTEMPLATED HEREBY TO BE, AND THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL NOT BE CONSTRUED TO BE, A NOVATION OF ANY OF THE OBLIGATIONS OWING BY THE BORROWER UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS. FURTHER, THE PARTIES DO NOT INTEND THIS AGREEMENT NOR THE TRANSACTIONS CONTEMPLATED HEREBY TO AFFECT THE PRIORITY OF ANY OF THE LENDER’S LIENS IN ANY OF THE COLLATERAL SECURING THE EXISTING NOTE IN ANY WAY, INCLUDING, BUT NOT LIMITED TO, THE LIENS, SECURITY INTERESTS AND ENCUMBRANCES CREATED BY THE MORTGAGE.

 

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15.          Recitals True.  Prior Owner, Prior Guarantor, Borrower, New Guarantor and Lender each hereby approve the recitations set forth in the preamble of this Agreement and agree that said recitations are true and correct in all respects.

 

16.          Notices.  Lender and Borrower agree that Notices (as that term is defined in Section 17.1 of the Mortgage) shall be given in the manner set forth in Section 17.1 of the Mortgage. Lender and Borrower further agree that all notice provisions contained in the Loan Documents are hereby modified to amend the notice address for Borrower, and that from and after the Effective Date the notice address for Borrower is as follows:

 

If to Borrower:

 

IN Retail Fund Algonquin Commons, L.L.C.

c/o Inland Real Estate Corporation

2901 Butterfield Road

Oak Brook, Illinois 60523

Attention: Mark Zalatoris and David Kayner

 

with a courtesy copy to:

 

Levenfeld Pearstein, LLC

Two N. LaSalle Street, Suite 1300

Chicago, Illinois 60602

Attention: Marc S. Joseph, Esq.

 

and

 

Morgan Stanley Real Estate Investments

US RE Investing Division

One Financial Place

440 S. LaSalle Street, 37th Floor

Chicago, Illinois 60605

Attention: Mr. Brian Lantz

 

Each party to this Agreement may designate a further change of address by notice given as required in the Mortgage.

 

17.          Severability.  If all or any portion of any provision of this Agreement shall be held to be invalid, illegal or unenforceable in any respect, then such invalidity, illegality or unenforceability shall not affect any other provision hereof or thereof, and such provision shall be limited and construed in such jurisdiction as if such invalid, illegal or unenforceable provision or portion thereof were not contained herein or therein.

 

18.          Counterpart.  This Agreement may be executed in any number of counterparts with the same effect as if all parties hereto had signed the same document. All such counterparts shall be construed together and shall constitute one instrument, but in making proof hereof it shall only be necessary to produce one such counterpart.

 

19.          Governing Law.  The terms and conditions of this Agreement shall be governed by the applicable laws of the state in which the Property is located.

 

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20.          Interpretation.  Within this Agreement, words of any gender shall be held and construed to include any other gender, and words in the singular number shall be held and construed to include the plural, unless the context otherwise requires. The section headings used herein are intended for reference purposes only and shall not be considered in the interpretation of the terms and conditions hereof. The parties acknowledge that the parties and their counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any exhibits or amendments hereto.

 

21.          Amendment.  The terms and conditions hereof may not be modified, altered or otherwise amended except by an instrument in writing executed by Borrower and Lender.

 

22.          Entire Agreement.  This Agreement contains the entire agreement between the parties hereto with respect to the modification of the Loan and fully supersedes all prior agreements and understanding between the parties pertaining to such subject matter.

 

23.          Successors and Assigns.  The terms and conditions of this Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their successors and permitted assigns.

 

24.          TRIAL BY JURY WAIVER.  BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, AND LENDER BY ITS ACCEPTANCE OF THIS AGREEMENT IRREVOCABLY AND UNCONDITIONALLY WAIVES, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR COUNTERCLAIM ARISING IN CONNECTION WITH, OUT OF OR OTHERWISE RELATING TO THE LOAN, THIS AGREEMENT OR THE LOAN DOCUMENTS.

 

25.          Release.  Lender hereby forever releases and discharges Prior Owner, Prior Guarantor and their respective affiliates, subsidiaries, parents, officers, shareholders, directors, members, partners, employees, attorneys and agents, past, present and future, of and from any and all claims, controversies, disputes, liabilities, obligations, demands, damages, debts, liens, actions, causes of action, or duties under the Loan Documents and the Prior Owner’s Loan Documents of any nature whatsoever, known or unknown, whether at law, by statute or in equity, in contract or in tort, under state or federal jurisdiction, first arising from and after the Effective Date; provided, however, that Prior Owner, Prior Guarantor and their respective affiliates, subsidiaries, parents, officers, shareholders, directors, members, partners, employees, attorneys and agents, past, present and future, are not released or discharged from any claims, controversies, disputes, liabilities, obligations, demands, damages, debts, liens, actions, causes of action, or duties under the Loan Documents or the Prior Owner’s Loan Documents of any nature whatsoever, known or unknown, whether at law, by statute or in equity, in contract or in tort, under state or federal jurisdiction, arising prior to the Effective Date. Notwithstanding the foregoing, Prior Owner acknowledges its obligation to Lender under Section 27 below and agrees that the release and discharge set forth in this Section 25 as to Prior Owner does not constitute a release or discharge of Prior Owner’s obligation under Section 27 below.

 

26.          Modification of Mortgage.  From and after the Effective Date, the Mortgage is modified as follows:

 

(a)           Sections 2.3(b)(i) and (v) of the Mortgage are hereby deleted in their entirety and the following new Sections are inserted in lieu thereof:

 

“(i)          The Exact Legal Name and Address of Debtor is:

 

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IN Retail Fund Algonquin Commons, L.L.C.

c/o Inland Real Estate Corporation

2901 Butterfield Road

Oak Brook, Illinois 60523

Attention: Mark Zalatoris and David Kayner

 

“(v)         Federal Identification Number of Debtor: 20-3773203”

 

(b)           Section 7.4(i) of the Mortgage is deleted in its entirety and the following new Section 7.4(i) inserted in lieu thereof:

 

“(i)          IN Retail Fund Algonquin Commons, L.L.C., or the transferee under a Permitted Transfer, if any, continues to be Borrower at the time of the Destruction Event and at all times thereafter until the Proceeds have been fully disbursed;”

 

(c)           Section 12.1(a) of the Mortgage is supplemented by adding the following sentence at the end of Section 12.1(a):

 

“Notwithstanding the foregoing to the contrary, a Transfer shall not include space leases to tenants at the Property in compliance with the Loan Documents.”

 

(d)           Section 12.1(b) of the Mortgage is deleted in its entirety and the following new Section 12.1(b) is inserted in lieu thereof:

 

“(b)         Borrower represents, warrants and covenants that:

 

“(i)          Borrower is an Illinois limited liability company. The manager of Borrower is IN Retail Fund, L.L.C., a Delaware limited liability company (“IN Retail Fund”). The manager of IN Retail Fund is IN Retail Manager, L.L.C., a Delaware limited liability company (“IN Retail Manager”). The manager of IN Retail Manager is Inland Real Estate Corporation, a Maryland corporation (“Inland”).

 

“(ii)                            The membership interests in IN Retail Fund are as follows:

 

(A)                              Inland, 50%; and

 

(B)                                The New York State Teachers Retirement System (“NYSTRS”), 50%.

 

“(iii)                         The membership interests in IN Retail Manager are as follows:

 

Inland, 100%.

 

“(iv)                        Inland is a publicly held company traded on the New York Stock Exchange.

 

“The members described above are referred to as the ‘Existing Members’.”

 

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(e)                                  Section 12.2(b) of the Mortgage is deleted in its entirety and the following new Section 12.2(b) is inserted in lieu thereof:

 

“(b)                           Upon compliance with the conditions set forth in the preceding subsection, the following Transfers (the ‘Permitted Transfers’)  may occur without Lender’s prior consent: transfers of direct or indirect interests in Borrower, provided that subsequent to the Transfer, either Inland or NYSTRS controls (directly or indirectly) the Property and retains (directly or indirectly) not less than a 15% equity interest in the Property.”

 

(f)                                    Section 12.3(iii) of the Mortgage is deleted in its entirety and the following new Section 12.3(iii) is inserted in lieu thereof:

 

“(iii)                         Borrower pays to Lender, or causes payment to Lender of, a transfer fee of one and one quarter percent (1.25%) of the outstanding principal balance of the Loan.”

 

(g)                                 The Mortgage is also amended to provide that Lender acknowledges and agrees that direct or indirect transfers of membership interests in IN Retail Fund to either The New York State Teachers’ Retirement System or Inland Real Estate Corporation, pursuant to Section 10.5, 10.6, 10.7, 10.9 or 10.13 of the Operating Agreement of the IN Retail Fund, a copy of which has been furnished to Lender (the “Operating Agreement”), as set forth in the copy of the Operating Agreement furnished to Lender by Borrower, shall not constitute Transfers and shall be permitted under the Loan Documents so long as, subsequent to any such transfer (i) Jeffrey R. Anderson Real Estate, Inc., Inland Commercial Property Management, Inc., or such other property manager of first-class commercial real estate comparable to the Property for not less than 10 years and having a reputation in the industry at least equal to that of Jeffrey R. Anderson Real Estate, Inc. or Inland Commercial Property Management, Inc. and otherwise reasonably satisfactory to Lender, continues to manage the Property, and (ii) either Inland or NYSTRS controls (directly or indirectly) the Property and retains (directly or indirectly) not less than a 15% equity interest in the Property. Lender hereby acknowledges and agrees that any loan assumption fees as set forth in the Loan Documents or otherwise shall not apply to any transfer described in this Section 26(g).

 

27.                               Annual Financial Statement for 2005.  On or before March 31, 2006, Prior Owner shall provide to Lender, or cause to be provided to Lender, the Annual Financial Statement for 2005, as described in Section 10.1(a) of the Mortgage.

 

28.                               Letter of Credit Agreement.  Lender acknowledges and agrees that the terms and conditions of that certain Letter of Credit Agreement dated October 29, 2004, by and between Prior Owner and Lender (the “LC Agreement”) have been fully satisfied by Prior Owner, and Lender has returned the Letter of Credit (as defined in the LC Agreement) to Prior Owner. Accordingly, as of the Effective Date, the LC Agreement shall be terminated and shall be of no further force or effect, and any and all references to the LC Agreement or the Letter of Credit in the Loan Documents shall be deleted in their entirety and shall be of no further force or effect.

 

[SIGNATURES BEGIN ON FOLLOWING PAGE]

 

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IN WITNESS WHEREOF, the parties hereby have all executed this Agreement under seal as of the day and year first hereinabove written.

 

	
 
    	
 
    	
BORROWER:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
IN RETAIL FUND ALGONQUIN COMMONS, L.L.C.
    
	
 
    	
 
    	
an Illinois limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
IN Retail Fund, L.L.C.,
    
	
 
    	
 
    	
 
    	
a Delaware limited liability company,
    
	
 
    	
 
    	
 
    	
its Manager
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
IN Retail Manager, L.L.C.,
    
	
 
    	
 
    	
 
    	
 
    	
a Delaware limited liability company,
    
	
 
    	
 
    	
 
    	
 
    	
its Manager
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
By:
    	
Inland Real Estate Corporation,
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
a Maryland corporation, its Manager
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
By:
    	
/s/ Mark Zalatoris
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
Name:
    	
Mark Zalatoris
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
Title:
    	
Executive Vice President
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
STATE OF Illinois
    	
)
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
) ss.
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
COUNTY OF Dupage
    	
)
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

Before me, the undersigned authority, a Notary in and for said State, on this day personally appeared Mark Zalatoris, known to me as the person whose name is subscribed to the foregoing instrument and known to me to be the Executive V.P. of Inland Real Estate Corporation, a Maryland corporation, the Manager of IN Retail Manager, L.L.C., a Delaware limited liability company, the Manager of IN Retail Fund, L.L.C., a Delaware limited liability company, the Manager of IN Retail Fund Algonquin Commons, L.L.C., an Illinois limited liability company, and that said instrument was signed and sealed in behalf of said corporation by authority of its Board of Directors, and acknowledged that he/she executed the said instrument for the uses, purposes and consideration therein expressed on behalf of said IN Retail Fund Algonquin Commons, L.L.C.

 

Given under my hand and seal of office this 2nd day of February, 2006.

 

 

	
 
    	
/s/ Jennifer R. Helmick
    
	
OFFICIAL SEAL
    	
Printed Name:
    	
Jennifer R. Helmick
    
	
JENNIFER R. HELMICK
    	
Notary Public for the State of Illinois
    
	
NOTARY PUBLIC, STATE OF   ILLINOIS
    	
My Commission Expires: 04/26/09
    
	
MY COMMISSION EXPIRES 04/26/09
    	
 
    
	
 
    	
Affix Notary Seal
    

 

12

 

	
 
    	
NEW GUARANTOR:
    
	
 
    	
 
    
	
 
    	
IN RETAIL FUND, L.L.C.,
    
	
 
    	
a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
By:
    	
IN Retail Manager, L.L.C.,
    
	
 
    	
 
    	
a Delaware limited liability company,
    
	
 
    	
 
    	
its Manager
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Inland Real Estate Corporation,
    
	
 
    	
 
    	
a Maryland corporation, its Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Mark Zalatoris
    
	
 
    	
 
    	
Name:
    	
Mark Zalatoris
    
	
 
    	
 
    	
Title:
    	
Executive Vice President
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
STATE OF Illinois
    	
)
    
	
 
    	
) ss.
    
	
COUNTY OF Dupage
    	
)
    
						

 

Before me, the undersigned authority, a Notary in and for said State, on this day personally appeared Mark Zalatoris, known to me as the person whose name is subscribed to the foregoing instrument and known to me to be the Executive V.P of Inland Real Estate Corporation, a Maryland corporation, the Manager of IN Retail Manager, L.L.C., a Delaware limited liability company, the Manager of IN Retail Fund, L.L.C., a Delaware limited liability company, and that said instrument was signed and sealed in behalf of said corporation by authority of its Board of Directors, and acknowledged that he/she executed the said instrument for the uses, purposes and consideration therein expressed on behalf of said IN Retail Fund, L.L.C.

 

Given under my hand and seal of office this 2nd day of February, 2006.

 

 

	
 
    	
/s/ Jennifer R. Helmick
    
	
 
    	
Printed Name:
    	
Jennifer R. Helmick
    
	
OFFICIAL SEAL
    	
Notary Public for the State of Illinois
    
	
JENNIFER R. HELMICK
    	
My Commission Expires: 04/26/09
    
	
NOTARY PUBLIC, STATE OF   ILLINOIS
    	
 
    
	
MY COMMISSION EXPIRES   04/26/09
    	
Affix Notary Seal
    

 

13

 

	
 
    	
PRIOR OWNER:
    
	
 
    	
 
    
	
 
    	
ALGONQUIN PHASE I ASSOCIATES LLC, an
    
	
 
    	
Illinois limited liability company
    
	
 
    	
 
    
	
 
    	
By:
    	
Jeffrey R. Anderson Real Estate, Inc., an
    
	
 
    	
 
    	
Ohio corporation and its authorized agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Jeffrey R. Anderson
    
	
 
    	
 
    	
 
    	
Jeffrey R. Anderson, President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
ALGONQUIN COMMONS, LLC, an
    
	
 
    	
Illinois limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Jeffrey R. Anderson Real Estate, Inc., an
    
	
 
    	
 
    	
Ohio corporation and its authorized agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Jeffrey R. Anderson,
    
	
 
    	
 
    	
 
    	
Jeffrey R. Anderson, President
    

 

 

[Acknowledgements on Following Page]

 

14

 

	
STATE OF Ohio
    	
)
    
	
 
    	
) ss.
    
	
COUNTY OF Hamilton
    	
)
    

 

Before me, the undersigned authority, a Notary in and for said State, on this day personally appeared Jeffrey R. Anderson, known to me as the person whose name is subscribed to the foregoing instrument and known to me to be the President of Jeffrey R. Anderson Real Estate, Inc., authorized agent for Algonquin Phase I Associates LLC, an Illinois limited liability company, and that said instrument was signed and sealed in behalf of said corporation by authority of its Board of Directors, and acknowledged that he/she executed the said instrument for the uses, purposes and consideration therein expressed on behalf of said Algonquin Phase I Associates, LLC.

 

Given under my hand and seal of office this 2 day of February, 2006.

 

	

    	
KIMBERLEA RAMSEY
    	
 
    
	
Notary Public
    	
/s/ Kimberlea Ramsey
    
	
In and for the State of   Ohio
    	
Printed Name: 
    	
Kimberlea Ramsey
    
	
My Commission Expires
    	
Notary Public for the State of Ohio
    
	
November 11, 2007
    	
My Commission Expires: 11-11-2007
    
	
 
    	
 
    
	
 
    	
Affix Notary Seal
    

 

 

	
STATE OF Ohio 
    	
)
    
	
 
    	
) ss.
    
	
COUNTY OF Hamilton 
    	
)
    

 

Before me, the undersigned authority, a Notary in and for said State, on this day personally appeared Jeffrey R. Anderson, known to me as the person whose name is subscribed to the foregoing instrument and known to me to be the President of Jeffrey R. Anderson Real Estate, Inc., authorized agent for Algonquin Commons, LLC, an Illinois limited liability company, and that said instrument was signed and sealed in behalf of said corporation by authority of its Board of Directors, and acknowledged that he/she executed the said instrument for the uses, purposes and consideration therein expressed on behalf of said Algonquin Commons, LLC.

 

Given under my hand and seal of office this 2 day of February, 2006.

 

	

    	
KIMBERLEA RAMSEY
    	
 
    
	
Notary Public
    	
/s/ Kimberlea Ramsey
    
	
In and for the State of   Ohio
    	
Printed Name:
    	
Kimberlea Ramsey
    
	
My Commission Expires
    	
Notary Public for the State of Ohio
    
	
November 11, 2007
    	
My Commission Expires: 11-11-2007
    
	
 
    	
 
    
	
 
    	
Affix Notary Seal
    

 

15

 

	
 
    	
PRIOR GUARANTOR:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Jeffrey R. Anderson
    
	
 
    	
JEFFREY R. ANDERSON, an   individual
    

 

 

	
STATE OF Ohio 
    	
)
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
) ss.
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
COUNTY OF Hamilton 
    	
)
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

Before me, the undersigned authority, a Notary in and for said State, on this day personally appeared Jeffrey R. Anderson, an individual, known to me as the person whose name is subscribed to the foregoing instrument, and acknowledged that he executed the said instrument for the uses, purposes and consideration therein expressed.

 

Given under my hand and seal of office this 2 day of February, 2006.

 

 

	

    	
 
    	
/s/ Kimberlea Ramsey
    
	
KIMBERLEA RAMSEY
    	
Printed Name:
    	
Kimberlea Ramsey
    
	
Notary Public
    	
Notary Public for the State of Ohio
    
	
In and for the State of   Ohio
    	
My Commission Expires: 11-11-2007
    
	
My Commission Expires
    	
 
    
	
November 11, 2007
    	
Affix Notary Seal
    
	
 
    	
 
    

 

16

 

	
 
    	
LENDER:
    
	
 
    	
 
    
	
 
    	
TEACHERS INSURANCE AND ANNUITY
    
	
 
    	
ASSOCIATION OF AMERICA,
    
	
 
    	
a New York corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Kelly West
    
	
 
    	
Name:
    	
Kelly West
    
	
 
    	
Title:
    	
Director
    

 

 

	
STATE OF New York
    	
)
    	
 
    
	
 
    	
) ss.
    	
 
    
	
COUNTY OF New York
    	
)
    	
 
    

 

Before me, the undersigned authority, a Notary in and for said State, on this day personally appeared Kelly West, known to me as the person whose name is subscribed to the foregoing instrument and known to me to be Director of Teachers Insurance and Annuity Association of America, a New York corporation, and that said instrument was signed and sealed in behalf of said corporation by authority of its Board of Directors, and acknowledged that he/she executed the said instrument for the uses, purposes and consideration therein expressed on behalf of said Teachers Insurance and Annuity Association of America.

 

Given under my hand and seal of office this 6 day of February, 2006.

 

 

	
 
    	
/s/ Loretta M. Monahan
    
	
 
    	
Printed Name:
    	
LORETTA M. MONAHAN
    
	
 
    	
Notary Public for the State of Ny
    
	
 
    	
My Commission Expires: 1/12/2010
    
	
 
    	
 
    
	
 
    	
Affix Notary Seal
    
	
 
    	
LORETTAM.MONAHAN
    	
 
    
	
 
    	
Notary Public, State of   N.Y.
    	
 
    
	
 
    	
No.01M06001475
    	
 
    
	
 
    	
Commission Expires   1/12/2010
    	
 
    
				

 

17

 

EXHIBIT A

 

LEGAL DESCRIPTION

 

PARCEL 1:

 

LOT 1 IN ALGONQUIN COMMONS, BEING A SUBDIVISION OF PART OF FRACTIONAL SECTION 6, TOWNSHIP 42 NORTH, RANGE 8 EAST OF THE THIRD PRINCIPAL MERIDIAN, ACCORDING TO THE PLAT THEREOF RECORDED JANUARY 19, 2006 AS DOCUMENT NUMBER 2006K007237, IN KANE COUNTY, ILLINOIS.

 

PARCEL 2:

 

EASEMENTS FOR ROADWAYS, WATERMAIN, SANITARY SEWER, STORM SEWER AND DETENTION FACILITY FOR THE BENEFIT OF PARCEL 1 AS SET FORTH AND DEFINED IN AMENDED AND RESTATED DECLARATION OF EASEMENTS, RESTRICTIONS AND MAINTENANCE AGREEMENT FOR ALGONQUIN COMMONS LIFESTYLE CENTER RECORDED OCTOBER 12, 2004 AS DOCUMENT 2004K132533.

 

18

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