Document:

Exhibit 10.8

WHEN RECORDED RETURN TO:

 

Janet Wagner, Esq.

LATIMER LEVAY FYOCK LLC

55 W. Monroe Street, Suite 1100

Chicago, IL 60603

(LLF File No. 72001-381)

 

Property Address:

1255 Town Center Road

Vernon Hills, Illinois

(Lake County)

 

PIN(s): 15-15-313-003

 

ASSIGNMENT OF LEASES AND RENTS

 

 

A.       THIS
ASSIGNMENT OF LEASES AND RENTS (as the same may from time to time hereafter be modified, supplemented or amended, this “Assignment
of Leases”), made as of May 3, 2017 by IRESI VERNON HILLS COMMONS, L.L.C., a Delaware limited liability company
(“Assignor”), having a mailing address at 2901 Butterfield Road, Oak Brook, Illinois 60523, to PARKWAY BANK
AND TRUST COMPANY, an Illinois banking corporation, having a principal place of business and mailing address at 4800 N. Harlem
Avenue, Harwood Heights, IL 60706, (“Lender”).

 

W I T N E S S E T H THAT:

 

B.       WHEREAS,
Assignor is justly indebted to Lender for money borrowed (the “Loan”) in the original principal sum of Thirteen
Million Eight Hundred Thousand and 00/100 Dollars ($13,800,000.00) (the “Loan Amount”). To evidence and secure
the Loan, Assignor has made and delivered to Lender that certain Loan Agreement of even date herewith (as may be modified, amended,
supplemented, extended or consolidated in writing, the “Loan Agreement”), that certain Secured Promissory Note
of even date herewith (as may be modified, amended, supplemented, extended or consolidated in writing, and any note(s) issued in
exchange therefor or replacement thereof, the “Note”) in the Loan Amount, payable as provided for in the Note,
with interest as therein expressed, and Assignor has executed and delivered a Mortgage, Security Agreement, Assignment of Rents
and Fixture Filing (the “Mortgage”) bearing the aforesaid date to secure the Note and creating a lien on Assignor’s
interest in certain real estate in the County of Lake, State of Illinois, more particularly described in Exhibit A attached
hereto and made a part hereof, including but not limited to the Improvements now or hereafter thereon and the easements, rights
and appurtenances thereunto belonging, all as more particularly described in the Mortgage and hereinafter called the “Premises”.

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C.       WHEREAS,
Assignor is the lessor or successor in interest to the lessor under those certain written leases covering the Premises and Assignor
may hereafter make other leases of the Premises or parts thereof.

 

D.       WHEREAS,
Lender has required the assignment hereafter made as a condition to making the Loan.

 

NOW, THEREFORE, for good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged:

 

		1.	Assignor does hereby absolutely and directly
(and not merely collaterally) assign, bargain, sell, transfer, convey, hypothecate, set over and deliver unto Lender, all rights
of the lessor under the leases described above and all other leases, tenancies, rental arrangements, subleases, and guarantees
of the performance or obligations of any tenants thereunder affecting the Premises, or any part thereof, now existing or which
may be executed at any time in the future during the life of this Assignment of Leases, and all amendments, extensions and renewals
of said leases, subleases, and guarantees and any of them, all of which are hereinafter called the “Leases,”
and all rents or other income or payments, regardless of type or source of payment (including but not limited to common area maintenance
charges, lease termination payments, purchase option payments, refunds of any type, prepayment of rents, settlements of litigation,
or settlements of past due rents) which may now or hereafter be or become due or owing under the Leases, and any of them, or on
account of the use of the Premises, all of which are hereinafter called the “Rents”. It is intended hereby to
establish a present and complete transfer and direct and absolute assignment of all the Leases and all rights of the lessor thereunder
and all the Rents unto Lender, with the right, but without the obligation, to collect all of said Rents, which may become due during
the life of this Assignment of Leases. Assignor agrees to deposit with Lender copies of all Leases of all or any portion of the
Premises.

 

		2.	Assignor hereby appoints Lender the true
and lawful attorney of Assignor with full power of substitution and with power for it and in its name, place and stead, to demand,
collect, give receipts and releases for any and all Rents herein assigned which may be or become due and payable by the lessees
and other occupants of the Premises, and at its discretion to file any claim or take any other action or proceeding and make any
settlement of any claims, either in its own name or in the name of Assignor or otherwise, which Lender may deem necessary or desirable
in order to collect and enforce the payment of any and all Rents. Lessees of the Premises, or any part thereof, are hereby expressly
authorized and directed to pay all Rents herein assigned to Lender or such nominee as Lender may designate in writing delivered
to and received by such lessees who are expressly relieved of any and all duty, liability or obligation to Assignor in respect
of all payments so made.

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Lender is hereby
vested with full power to use all measures, legal and equitable, whether in person, by agent or by a receiver deemed by it necessary
or proper to enforce this Assignment of Leases, including the right, subject to the rights of tenants under the Leases or any subleases,
to enter upon the Premises, or any part thereof and take possession thereof forthwith to effect the cure of any default on the
part of Assignor as lessor in any of the Leases or with or without taking possession of the Premises, to collect the Rents assigned
hereunder all without regard to the adequacy of any security for the Indebtedness secured by the Loan Documents.

 

		3.	Assignor hereby grants full power and authority
to Lender to exercise all rights, privileges and powers herein granted at any and all times hereafter, without notice to Assignor,
with full power to use and apply all of the Rents assigned hereunder as specified in the Loan Documents.

 

		4.	Notwithstanding any provision herein to
the contrary, prior to an Event of Default, Lender hereby grants to Assignor the license to enforce all provisions contained in
the Leases and collect and use (subject to the terms and conditions of the Loan Documents), all Rents, as the same become due and
payable, but in any event for not more than one calendar month in advance. Assignor shall render such accounts of collections as
Lender may reasonably require. The license herein granted to Assignor shall terminate immediately and automatically, without further
action or documentation, upon an Event of Default; and upon written Notice of Assignor’s Event of Default at any time hereafter
given by Lender to any lessee, all Rents thereafter payable and all agreements and covenants thereafter to be performed by any
such lessee shall be paid and performed by such lessee directly to Lender in the same manner as if the above license had not been
granted, without prosecution of any legal or equitable remedies under the Mortgage. Any lessee of the Premises or any part thereof
is authorized and directed to pay to Assignor any Rent herein assigned currently for not more than one calendar month in advance,
and any payment so made prior to receipt by such lessee of the aforementioned notice shall constitute a full acquittance to lessee
therefor. 

 

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		5.	Lender shall be under no obligation to
enforce any of the rights or claims assigned to it hereunder or to perform or carry out any of the obligations of the lessor under
any of the Leases and does not assume any of the liabilities in connection with or arising out of the covenants and agreements
of Assignor in the Leases; and Assignor covenants and agrees that it will faithfully perform all of the obligations imposed under
any and all of the Leases. All Security Deposits collected by Assignor shall be maintained in accordance with all applicable legal
requirements and, if cash, shall be deposited by Assignor at a federally insured institution reasonably satisfactory to Lender.
Except to the extent that the same is caused solely as a result of Lender’s gross negligence or willful misconduct, should
Lender incur any liability, loss or damage under the Leases or under or by reason of this Assignment of Leases, or in the defense
of any claims and demands whatsoever which may be asserted against Lender by reason of any alleged obligations or undertakings
on its part to perform or discharge any of the terms, covenants or agreements contained in any of the Leases, the amount thereof,
including costs, expenses and reasonable attorneys’ fees and costs, including reasonable attorneys’ fees and costs
on appeal, shall be added to the Indebtedness secured by the Mortgage. Nothing herein contained shall be construed as constituting
Lender a “mortgagee in possession” in the absence of the taking of actual possession. 

 

		6.	This Assignment of Leases shall not operate
to place responsibility for the control, care, management or repair of the Premises, or parts thereof, upon Lender nor shall it
operate to make Lender liable for the carrying out of any of the terms and conditions of any of the Leases, or for any waste of
the Premises by the lessees under any of the Leases or any other party, or for any dangerous or defective condition of the Premises
or for any negligence in the management, upkeep, repair or control thereof resulting in loss or injury or death to any lessee,
licensee, employee or stranger.

 

		7.	Provided there has been no Event of Default
under the Loan Documents, any amounts collected hereunder by Lender which are in excess of those applied to pay in full the aforesaid
liabilities and Indebtedness at the time due shall be promptly paid to Assignor.

 

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		8.	Assignor covenants not to make any transfer
or assignment of the Leases and Rents or other amounts payable thereunder, or attempt to pledge, assign or encumber any of the
Leases or Rents or other amounts payable thereunder other than to Lender hereunder, or convey or transfer or suffer a conveyance
or transfer of the Premises or of any interest therein so as to effect, directly or indirectly, a merger of the estates and rights
of, or a termination or diminution of the obligations of any lessee thereunder. Assignor further covenants to deliver to Lender,
promptly upon receipt thereof, copies of any and all demands, claims and notices of default received by Assignor from any lessee
under any of the Leases assigned herein. Assignor shall keep and perform all terms, conditions and covenants required to be performed
by Assignor under the Leases, and shall enforce the Leases and all remedies available to Assignor against the lessees thereunder
in case of default under the Leases by lessees. 

 

		9.	Upon payment in full of the principal sum,
interest and other Indebtedness secured hereby, and by any other documents which secure the Note, this Assignment of Leases shall
be and become null and void; otherwise, it shall remain in full force and effect as herein provided and, with the covenants, warranties
and power of attorney herein contained, shall inure to the benefit of the heirs, successors and assigns of Lender, and shall be
binding upon Assignor, and its heirs and permitted successors and assigns.

 

		10.	Following the occurrence of an Event of
Default, Lender may as attorney-in-fact or agent of Assignor or in its own name as Lender and under the powers granted herein and
in the Mortgage extend, modify, or terminate (to the extent permitted by law or the terms of the specific Lease) any then existing
Leases or subleases and make new Leases, which extensions, modifications or new Leases may provide for terms to expire, or for
options to lessees to extend or renew terms to expire, beyond the Maturity Date and the issuance of a deed or deeds to a purchaser
or purchasers at a foreclosure sale, it being understood and agreed that any such Leases, and the options or other such provisions
to be contained therein, shall be binding upon Assignor and all persons whose interests in the Premises are subject to the lien
of the Mortgage and shall be binding also upon the purchaser or purchasers at any foreclosure sale, notwithstanding any redemption
from sale, discharge of the Indebtedness secured by the Mortgage, satisfaction of any foreclosure decree, or issuance of any certificate
of sale or deed to any purchaser

 

		11.	It is understood and agreed that this Assignment
of Leases shall become effective concurrently with the Note and the Mortgage. 

 

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		12.	THE LOAN DOCUMENTS AND THE PARTIES’
RIGHTS AND OBLIGATIONS THEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF ILLINOIS (WITHOUT GIVING EFFECT TO ILLINOIS’ PRINCIPLES OF CONFLICTS OF LAW), EXCEPT TO THE EXTENT (A) OF
PROCEDURAL AND SUBSTANTIVE MATTERS RELATING ONLY TO THE CREATION AND PERFECTION OF SECURITY INTERESTS AND THE ENFORCEMENT OF LENDER’S
REMEDIES WITH RESPECT THERETO, WHICH MATTERS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF MARYLAND, AND (B) THAT THE LAWS
OF THE UNITED STATES OF AMERICA AND ANY RULES, REGULATIONS, OR ORDERS ISSUED OR PROMULGATED THEREUNDER, APPLICABLE TO THE AFFAIRS
AND TRANSACTIONS ENTERED INTO BY LENDER, OTHERWISE PREEMPT THE LAWS OF THE STATE OF MARYLAND OR ILLINOIS LAW; IN WHICH EVENT SUCH
FEDERAL LAW SHALL CONTROL.

 

		13.	It is the intention of Lender and Assignor
that the assignment effectuated by this Assignment of Leases with respect to the Rents and other amounts due under the Leases shall
be a direct, absolute and currently effective assignment and shall not constitute merely the granting of a lien, collateral assignment
or a security interest or pledge for the purpose of securing the Indebtedness secured by the Mortgage and is effective whether
or not a default occurs hereunder or under the Loan Documents. In the event that a court of competent jurisdiction determines that,
notwithstanding such expressed intent of the parties, Lender’s interest in the Rents or other amounts payable under the Leases
constitutes a lien on or security interest in or pledge thereof, it is agreed and understood that the forwarding of a notice to
Assignor after the occurrence of an Event of Default, advising Assignor of the revocation of Assignor’s license to collect
such Rents shall be sufficient action by Lender to (i) perfect such lien on or security interest in or pledge of the Rents, (ii) take
possession thereof and (iii) entitle Lender to immediate and direct payment of the Rents for application as provided in the
Loan Documents, all without the necessity of any further action by Lender, including, without limitation, any action to obtain
possession of the Land, Improvements or any other portion of the Premises. Notwithstanding the direct and absolute assignment of
the Rents, there shall be no pro tanto reduction of any portion of the Indebtedness secured by the Mortgage except
with respect to Rents actually received by Lender and applied by Lender toward payment of such Indebtedness. Any assignment of
a security interest in Security Deposits is subject to the rights of tenants in such Security Deposits as provided under the terms
of the Leases. 

 

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		14.	Without limitation of the absolute nature
of the assignment of the Rents hereunder, Assignor and Lender agree that (i) this Assignment of Leases shall constitute a “security
agreement” for purposes of 11 U.S.C. Section 552(b), (ii) the security interest created by this Assignment of Leases extends
to property of Assignor acquired before the commencement of a case in bankruptcy and to all amounts paid as Rents and (iii) such
security interest shall extend to all Rents acquired by the estate after the commencement of any case in bankruptcy. Without limitation
of the absolute nature of the assignment of the Rents, to the extent Assignor (or Assignor’s bankruptcy estate) shall be
deemed to hold any interest in the Rents after the commencement of a voluntary or involuntary bankruptcy case, Assignor hereby
acknowledges and agrees that such Rents are and shall be deemed to be “cash collateral” under Section 363 of the Bankruptcy
Code. Assignor may not use the cash collateral without the consent of Lender and/or an order of any bankruptcy court pursuant to
11 U.S.C. 363(c)(2), and Assignor hereby waives any right it may have to assert that such Rents do not constitute cash collateral.
No consent by Lender to the use of cash collateral by Assignor shall be deemed to constitute Lender’s approval, as the case
may be, of the purpose for which such cash collateral was expended.

 

		15.	Assignor acknowledges and agrees that,
upon recordation of this Assignment of Leases, Lender’s interest in the Rents shall be deemed to be fully perfected, “choate”
and enforced as to Assignor and all third parties, including, without limitation, any subsequently appointed trustee in any case
under the Bankruptcy Code, without the necessity of (i) commencing a foreclosure action with respect to this Assignment of Leases,
(ii) furnishing notice to Assignor or tenants under the Leases, (iii) making formal demand for the Rents, (iv) taking possession
of the Premises as a lender-in-possession, (v) obtaining the appointment of a receiver of the Rents and profits of the Premises,
(vi) sequestering or impounding the Rents, or (vii) taking any other affirmative action.

 

		16.	Notwithstanding anything in this Assignment
of Leases to the contrary, Lender may, upon written Notice to Assignor, elect to (i) exclude from the assignment provided
in this Assignment of Leases any of the Leases as specified in such notice so that the interest under such indicated Lease is not
assigned to Lender, (ii) subordinate the lien and other terms and provisions of the Mortgage to any of the Leases as indicated
in said notice and/or (iii) require Assignor to use best efforts to obtain a non-disturbance and attornment agreement, in form
and substance approved by Lender, from any of the lessees under any of the Leases as indicated in said notice.

 

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		17.	The rights and remedies of Lender hereunder
are cumulative and are not in lieu of, but are in addition to, any rights or remedies which Lender shall have under the Note, Mortgage
or any other instrument or document or under applicable law, and the exercise by Lender of any rights and remedies herein contained
shall not be deemed a waiver of any other rights or remedies of Lender, whether arising under the Loan Agreement, the Note, the
Mortgage or otherwise, each and all of which may be exercised whenever Lender deems it in its interest to do so. 

 

		18.	Each Notice which any party hereto may
desire or be required to give to the other shall be given in accordance with the provisions of the Loan Agreement.

 

		19.	If this Assignment of Leases is executed
by more than one Person as Assignor, all obligations and agreements of Assignor are joint and several.

 

		20.	Capitalized terms used herein and not otherwise
defined shall have those meanings given to them in the Loan Agreement.

 

		21.	AFTER CONSULTING WITH COUNSEL AND CAREFUL
CONSIDERATION, ASSIGNOR AND LENDER (BY ITS ACCEPTANCE HEREOF) KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE THE RIGHT EITHER
OF THEM MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION ARISING OUT OF THIS ASSIGNMENT OF LEASES OR ANY OTHER INSTRUMENT
OR AGREEMENT BY WHICH THIS ASSIGNMENT OF LEASES IS, OR MAY HEREAFTER BE, SECURED, OR OUT OF ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (ORAL OR WRITTEN), OR ACTIONS OF ASSIGNOR OR LENDER. THIS WAIVER IS A MATERIAL INDUCEMENT TO THE LENDER'S ACCEPTANCE
OF THIS ASSIGNMENT OF LEASES.

 

(Signature on next page)

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IN WITNESS WHEREOF, Assignor
has caused this Assignment of Leases and Rents to be duly executed and delivered as of the date first hereinabove written.

 

 

	
         

         

         
	
        IRESI VERNON HILLS COMMONS, L.L.C.,
        a Delaware limited liability company

         

        By:       Inland Residential
        Operating Partnership, L.P.,

            a Delaware limited partnership, its sole member

         

        By:       Inland Residential
        Properties Trust, Inc.,

            a Delaware corporation, its general partner

         

        By:        /s/ David Z. Lichterman

        Name:  David Z. Lichterman

        Its:        Chief Accounting Officer,

                     Treasurer and Vice President

         

	 	 

 

The State of Illinois}

County of DuPage }

 

I, Susan Metzler, a Notary
Public in and for said County in said State, hereby certify that David Z. Lichterman, who is the Chief Accounting Officer, Treasurer
and Vice President of Inland Residential Properties Trust, Inc., a Delaware corporation, being the general partner of Inland Residential
Operating Partnership, L.P., a Delaware limited partnership, as the sole member of IRESI Vernon Hills Commons, L.L.C., a Delaware
limited liability company, who has signed to the foregoing conveyance and who is known to me, acknowledged before me on this day
that, being informed of the contents of the conveyance, he/she, as such officer and with full authority, executed the same voluntarily
for and as the act of said corporation as the general partner of said limited partnership as the sole member of said limited liability
company.

 

Given under my
hand this 25th day of April, 2017.

 

/s/ Susan Metzler

Notary Public

 

My Commission Expires:

    5/5/19  

 

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EXHIBIT A

 

LEGAL DESCRIPTION

 

 

 

PARCEL 1

LOT 10 IN THE FIRST RESUBDIVISION OF VERNON
HILLS TOWN CENTER, BEING ARESUBDIVISION OF PART OF THE SOUTH HALF OF SECTION 15, TOWNSHIP 43 NORTH,RANGE11, EAST OF THE
THIRD PRINCIPAL MERIDIAN, ACCORDING TO THE FINAL PLAT OFSUBDIVISION RECORDED FEBRUARY 2, 2011 AS DOCUMENT NUMBER 6705452, IN
LAKE COUNTY,ILLINOIS.

 

PARCEL 2:

NON-EXCLUSIVE EASEMENT FOR THE BENEFIT OF PARCEL
1 AS CREATED BY THE DECLARATIONOF EASEMENTS AND OPERATING AGREEMENT DATED APRIL 1, 2009 ANDRECORDED JUNE 22, 2009 AS DOCUMENT
NUMBER 6488478 MADE AND ENTERED INTO BY VHTC, LLC, AN ILLINOIS LIMITED LIABILITY COMPANY AND PTD PROPERTIES, LLC, AN ILLINOIS LIMITED
LIABILITY COMPANY, FOR THE PURPOSE OF (I) INGRESS, EGRESS AND PARKING BY VEHICULAR TRAFFIC, (II) THE PASSAGE AND ACCOMMODATION
OF PEDESTRIANS, (III) INSTALLATION, OPERATION, MAINTENANCE, REPAIR AND REPLACEMENT OF THE COMMON UTILITY LINES AND (IV) THE INSTALLATION,
REPAIR,REPLACEMENT AND MAINTENANCE OF AN IRRIGATION SYSTEM AND GRASS LANDSCAPING, AMENDED BY AMENDED AND RESTATED DECLARATION OF
EASEMENTS AND OPERATING AGREEMENT DATED NOVEMBER 1, 2010 AND RECORDED FEBRUARY 2, 2011 AS DOCUMENT NUMBER 6705457 MADE AND ENTERED
INTO BY VHTC, LLC, AN ILLINOIS LIMITED LIABILITY COMPANY, VHTC LOT 3 LLC, AN ILLINOIS LIMITED LIABILITY COMPANY, AND PTD PROPERTIES,
LLC, AN ILLINOIS LIMITED LIABILITY

 

 

Property Address: 1255 Town Center Road, Vernon Hills, Illinois

 

PIN(s): 15-15-313-003Exhibit 10.9

SECURITY AGREEMENT

This SECURITY AGREEMENT
dated as of May 3, 2017 (the “Security Agreement”), is executed by IRESI VERNON HILLS COMMONS, L.L.C., a Delaware limited
liability company (“Debtor”), having its chief executive office at 2901 Butterfield Road, Oak Brook, IL 60523 and Parkway
Bank and Trust Company, an Illinois banking corporation (the “Bank”), whose address is 4800 N. Harlem Avenue,
Harwood Heights, Illinois 60706.

R
E C I T A L S:

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

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

A
G R E E M E N T S:

Section
1        
DEFINITIONS.

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

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

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

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

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

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

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

“Note”
shall mean the Secured Promissory Note of even date herewith, in the original principal amount of Thirteen Million Eight Hundred
Thousand and 00/100 Dollars ($13,800,000.00) made by Debtor payable to Bank, together with all renewals, extensions, modifications,
refinancings, consolidations, and substitutions thereof.

 

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

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

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

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

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

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1.3        
Other Interpretive Provisions.

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

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

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

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

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

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

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Section
2        
SECURITY FOR THE OBLIGATIONS.

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

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

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

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

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

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

(iv)        
All Software and computer programs;

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

    4 

     

    

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

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

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

2.3        
Financing Statements. Debtor shall, at Bank’s request,
at any time and from time to time, deliver to Bank such financing statements, amendments and other documents and do such acts as
Bank deems necessary in order to establish and maintain valid, attached and perfected first priority security interests in the
Collateral in favor of Bank, for its own benefit and as agent for its Affiliates, free and clear of all Liens and claims and rights
of third parties whatsoever, except Permitted Encumbrances. Debtor hereby irrevocably authorizes Bank at any time, and from time
to time, to file in any jurisdiction any initial financing statements and amendments thereto without the signature of Debtor that
(a) indicate the Collateral (i) is comprised of all assets of Debtor or words of similar effect, regardless of whether any particular
asset comprising a part of the Collateral falls within the scope of Article 9 of the UCC of the jurisdiction wherein such financing
statement or amendment is filed, or (ii) as being of an equal or lesser scope or within greater detail as the grant of the security
interest set forth herein, and (b) contain any other information required by Section 5 of Article 9 of the UCC of the jurisdiction
wherein such financing statement or amendment is filed regarding the sufficiency or filing office acceptance of any financing
statement or amendment, including (i) whether Debtor is an organization, the type of organization and any Organizational

    5 

     

    

 Identification Number issued to Debtor, and (ii) in the case of a financing statement filed as a fixture filing or indicating Collateral
as as-extracted collateral or timber to be cut, a sufficient description of the real property to which the Collateral relates.
Debtor hereby agrees that a photostatic or other reproduction of this Security Agreement is sufficient
for filing as a financing statement and Debtor authorizes Bank to file this Security Agreement as a financing statement in any
jurisdiction. Debtor agrees to furnish any such information to Bank promptly upon request. In addition, Debtor shall make
appropriate entries on its books and records disclosing the security interests of Bank, for its own benefit and as agent for its
Affiliates, in the Collateral.

2.4        
Preservation of the Collateral. The Bank may, but is not
required to, take such actions from time to time as Bank deems appropriate to maintain or protect the Collateral. The Bank shall
have exercised reasonable care in the custody and preservation of the Collateral if Bank takes such action as Debtor shall reasonably
request in writing which is not inconsistent with Bank’s status as a secured party, but the failure of Bank to comply with
any such request shall not be deemed a failure to exercise reasonable care; provided, however, Bank’s responsibility
for the safekeeping of the Collateral shall (i) be deemed reasonable if such Collateral is accorded treatment substantially equal
to that which Bank accords its own property, and (ii) not extend to matters beyond the control of Bank, including acts of God,
war, insurrection, riot or governmental actions. In addition, any failure of Bank to preserve or protect any rights with respect
to the Collateral against prior or third parties, or to do any act with respect to preservation of the Collateral, not so requested
by Debtor, shall not be deemed a failure to exercise reasonable care in the custody or preservation of the Collateral. Debtor shall
have the sole responsibility for taking such action as may be necessary, from time to time, to preserve all rights of Debtor and
Bank in the applicable Collateral against prior or third parties, except the filing of continuation statements for UCC filings
on the Collateral. Without limiting the generality of the foregoing, where Collateral consists in whole or in part of securities,
Debtor represents to, and covenants with, Bank that Debtor has made arrangements for keeping informed of changes or potential changes
affecting the securities (including rights to convert or subscribe, payment of dividends, reorganization or other exchanges, tender
offers and voting rights), and Debtor agrees that Bank shall have no responsibility or liability for informing Debtor of any such
or other changes or potential changes or for taking any action or omitting to take any action with respect thereto.

    6 

     

    

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

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

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

    7 

     

    

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

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

Section
3        
REPRESENTATIONS AND WARRANTIES.

Debtor makes the
following representations and warranties to Bank:

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

    8 

     

    

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

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

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

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

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

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

    9 

     

    

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

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

Section
4        
REMEDIES.

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

    10 

     

    

 

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

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

    11 

     

    

4.3        
Standards for Exercising Remedies. To the extent that applicable
law imposes duties on Bank to exercise remedies in a commercially reasonable manner, Debtor acknowledges and agrees that it is
not commercially unreasonable for Bank (a) to fail to incur expenses reasonably deemed significant by Bank to prepare Collateral
for disposition or otherwise to complete raw material or work-in-process into finished goods or other finished products for disposition,
(b) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other
law, to fail to obtain governmental or third party consents for the collection or disposition of Collateral to be collected or
disposed of, (c) to fail to exercise collection remedies against Account Debtors or other Persons obligated on Collateral or to
remove liens or encumbrances on or any adverse claims against Collateral, (d) to exercise collection remedies against Account Debtors
and other Persons obligated on Collateral directly or through the use of collection agencies and other collection specialists,
(e) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral
is of a specialized nature, (f) to contact other Persons, whether or not in the same business as Debtor, for expressions of interest
in acquiring all or any portion of the Collateral, (g) to hire one or more professional auctioneers to assist in the disposition
of Collateral, whether or not the collateral is of a specialized nature, (h) to dispose of Collateral by utilizing internet sites
that provide for the auction of assets of the types included in the Collateral or that have the reasonable capability of doing
so, or that match buyers and sellers of assets, (i) to dispose of assets in wholesale rather than retail markets, (j) to disclaim
disposition warranties, including any warranties of title, (k) to purchase insurance or credit enhancements to insure Bank against
risks of loss, collection or disposition of Collateral or to provide to Bank a guaranteed return from the collection or disposition
of Collateral, or (l) to the extent deemed appropriate by Bank, to obtain the services of other brokers, investment bankers, consultants
and other professionals to assist Bank in the collection or disposition of any of the Collateral. Debtor acknowledges that the
purpose of this section is to provide non-exhaustive indications of what actions or omissions by Bank would not be commercially
unreasonable in Bank’s exercise of remedies against the Collateral and that other actions or omissions by Bank shall not
be deemed commercially unreasonable solely on account of not being indicated in this Section. Without limitation upon the foregoing,
nothing contained in this Section shall be construed to grant any rights to Debtor or to impose any duties on Bank that would not
have been granted or imposed by this Security Agreement or by applicable law in the absence of this Section.

    12 

     

    

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

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

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

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

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

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

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

    13 

     

    

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

(g)         
vote the Collateral;

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

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

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

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

    14 

     

    

envelopes addressed to Debtor
and applying any payments contained therein to the Obligations. Debtor hereby acknowledges that the constitution and appointment
of such proxy and attorney-in-fact are coupled with an interest and are irrevocable. Debtor hereby ratifies and confirms all that
such attorney-in-fact may do or cause to be done by virtue of any provision of this Security Agreement.

 

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

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

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

    15 

     

    

Section
5        
MISCELLANEOUS.

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

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

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

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

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

    17 

     

    

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

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

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

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

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

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

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

    18 

     

    

5.13       Costs,
Fees and Expenses. Debtor shall pay or reimburse Bank for all reasonable costs, fees and expenses incurred by Bank or for which
Bank becomes obligated in connection with the enforcement of this Security Agreement, including reasonable attorneys’ fees
and time charges of counsel to Bank, which shall also include reasonable attorneys’ fees and time charges of attorneys who
may be employees of Bank or any Affiliate of Bank, plus costs and expenses of such attorneys or of Bank; search fees, costs and
expenses; and all taxes payable in connection with this Security Agreement. In furtherance of the foregoing, Debtor shall pay any
and all stamp and other taxes, UCC search fees, filing fees and other costs and expenses in connection with the execution and delivery
of this Security Agreement and the other Loan Documents to be delivered hereunder, and agree to save and hold Bank harmless from
and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such costs and expenses.
That portion of the Obligations consisting of costs, expenses or advances to be reimbursed by Debtor to Bank pursuant to this Security
Agreement or the other Loan Documents which are not paid on or prior to the date hereof shall be payable by Debtor to Bank on demand.
If at any time or times hereafter Bank: (a) employs counsel for advice or other representation (i) with respect to this
Security Agreement or the other Loan Documents, (ii) to represent Bank in any litigation, contest, dispute, suit or proceeding
or to commence, defend, or intervene or to take any other action in or with respect to any litigation, contest, dispute, suit,
or proceeding (whether instituted by Bank, Debtor, or any other Person) in any way or respect relating to this Security Agreement,
or (iii) to enforce any rights of Bank against Debtor or any other Person under of this Security Agreement; (b) takes
any action to protect, collect, sell, liquidate, or otherwise dispose of any of the Collateral; and/or (c) attempts to or
enforces any of Bank’s rights or remedies under this Security Agreement, the costs and expenses incurred by Bank in any manner
or way with respect to the foregoing, shall be part of the Obligations, payable by Debtor to Bank on demand.

 

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

    19 

     

    

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

[SIGNATURE PAGE FOLLOWS]

    20 

     

    

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

Debtor:

IRESI VERNON HILLS COMMONS, L.L.C.,

a Delaware limited liability company

		By:	Inland Residential Operating Partnership, L.P., a Delaware limited partnership,
its sole member

By:        Inland
Residential Properties Trust, Inc., a Maryland corporation, its general partner

By:           
/s/ David Z. Lichterman               

Name:      David Z. Lichterman

Its:            Chief Accounting Officer,

      Treasurer
and Vice President

 

Agreed and accepted:

 

Bank:

 

Parkway Bank
and Trust Company,

an Illinois banking corporation

 

By:          /s/
Marianne L. Wagener               

Name:    Marianne
L. Wagener

Title:       Senior
Vice President

 

 

    21 

     

    

Schedule
3.8 

Collateral
Locations/Places of Business

 

Collateral Location:

1255 Town Center
Road, Vernon Hills, Illinois

Chief executive office:

2901 Butterfield
Road, Oak Brook, IL 60523

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