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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______to _______

Commission File Number 001-37420

SERITAGE GROWTH PROPERTIES

(Exact name of registrant as specified in its charter)


Maryland	38-3976287
(State of Incorporation)	(I.R.S. Employer Identification No.)


500 Fifth Avenue, Suite 1530, New York, New York	10110
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 355-7800

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbols	Name of each exchange on which registered
Class A common shares of beneficial interest, par value $0.01 per share	SRG	New York Stock Exchange
7.00% Series A cumulative redeemable preferred shares of beneficial interest, par value $0.01 per share	SRG-PA	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 13, 2026, the registrant had the following common shares outstanding:


Class	Shares Outstanding
Class A common shares of beneficial interest, par value $0.01 per share	56,324,607
Class B common shares of beneficial interest, par value $0.01 per share	0
Class C common shares of beneficial interest, par value $0.01 per share	0

SERITAGE GROWTH PROPERTIES

QUARTERLY REPORT ON FORM 10-Q

QUARTER ENDED JUNE 30, 2026

TABLE OF CONTENTS


PART I.	FINANCIAL INFORMATION
		Page

Item 1.	Condensed Consolidated Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025	3
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2026 and 2025	4
	Condensed Consolidated Statements of Equity for the three and six months ended June 30, 2026 and 2025	5
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and 2025	6
	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36

Item 4.	Controls and Procedures	36

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	37

Item 1A.	Risk Factors	37

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37

Item 3.	Defaults upon Senior Securities	37

Item 4.	Mine Safety Disclosures	37

Item 5.	Other Information	38

Item 6.	Exhibits	39

SIGNATURES		40

PART I. FINANCIAL INFORMATION

Item 1. Unaudited Condensed Consolidated Financial Statements

SERITAGE GROWTH PROPERTIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, amounts in thousands, except share and per share amounts)


	June 30, 2026			December 31, 2025
ASSETS
Investment in real estate
Land	$	19,754		$	25,406
Buildings and improvements		124,834			134,946
Accumulated depreciation		(15,455	)		(14,908	)
		129,133			145,444
Construction in progress		-			629
Net investment in real estate		129,133			146,073
Real estate held for sale		2,281			8,692
Investment in unconsolidated entities		143,326			156,242
Cash and cash equivalents		48,426			48,088
Restricted cash		14,435			14,197
Tenant and other receivables, net		3,372			3,665
Lease intangible assets, net		-			171
Prepaid expenses, deferred expenses and other assets, net		12,606			16,651
Total assets (1)	$	353,579		$	393,779

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Term loan facility, net	$	49,660		$	47,677
Accounts payable, accrued expenses and other liabilities		11,043			13,302
Liabilities related to real estate held for sale		659			-
Total liabilities (1)		61,362			60,979

Commitments and Contingencies (Note 9)

Shareholders' Equity
Class A common shares $0.01 par value; 100,000,000 shares authorized; 56,324,607 shares issued and outstanding as of June 30, 2026 and December 31, 2025		562			562
Series A preferred shares $0.01 par value; 10,000,000 shares authorized; 2,800,000 shares issued and outstanding as of June 30, 2026 and December 31, 2025; liquidation preference of $70,000		28			28
Additional paid-in capital		1,362,028			1,362,719
Accumulated deficit		(1,070,401	)		(1,031,893	)
Total shareholders' equity		292,217			331,416
Non-controlling interests		-			1,384
Total equity		292,217			332,800
Total liabilities and equity	$	353,579		$	393,779
(1) The Company's condensed consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs"). See Note 2. As of June 30, 2026, the Company no longer holds any consolidated VIEs. The consolidated balance sheets, as of December 31, 2025, include the following amounts related to our consolidated VIEs: $8.7 million included in real estate held for sale, $9.9 thousand of cash, $9.5 thousand of tenant and other receivables and $74.5 thousand of accounts payable, accrued expenses and other liabilities.

The accompanying notes are an integral part of these condensed consolidated financial statements.

- 3 -

SERITAGE GROWTH PROPERTIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, amounts in thousands, except per share amounts)


	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2026			2025			2026			2025
REVENUE
Rental income	$	1,760		$	4,526		$	3,669		$	8,983
Management and other fee income		114			127			255			269
Total revenue		1,874			4,653			3,924			9,252
EXPENSES
Property operating		761			3,237			2,222			6,145
Real estate taxes		384			692			717			1,645
Depreciation and amortization		390			2,040			790			4,115
General and administrative		5,096			6,172			10,388			21,865
Total expenses		6,631			12,141			14,117			33,770
Gain on sale of real estate		35			1,967			35			8,903
Loss on sale of interests in unconsolidated entities		—			(1,417	)		—			(1,417	)
Impairment of real estate assets		—			(18,000	)		(15,183	)		(18,000	)
Equity in income (loss) of unconsolidated entities		508			756			(6,659	)		(7,172	)
Interest and other income (expense), net		1,022			930			1,393			1,790
Interest expense		(2,936	)		(5,139	)		(5,839	)		(10,369	)
Loss before income taxes		(6,128	)		(28,391	)		(36,446	)		(50,783	)
Benefit (provision) from income taxes		—			(115	)		—			75
Net loss		(6,128	)		(28,506	)		(36,446	)		(50,708	)
Preferred dividends		(1,225	)		(1,225	)		(2,450	)		(2,450	)
Net loss attributable to Seritage common shareholders	$	(7,353	)	$	(29,731	)	$	(38,896	)	$	(53,158	)

Net loss per share attributable to Seritage Class A common shareholders - Basic	$	(0.13	)	$	(0.53	)	$	(0.69	)	$	(0.94	)
Net loss per share attributable to Seritage Class A common shareholders - Diluted	$	(0.13	)	$	(0.53	)	$	(0.69	)	$	(0.94	)
Weighted-average Class A common shares outstanding - Basic		56,324			56,324			56,324			56,304
Weighted-average Class A common shares outstanding - Diluted		56,324			56,324			56,324			56,304

The accompanying notes are an integral part of these condensed consolidated financial statements.

- 4 -

SERITAGE GROWTH PROPERTIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited, amounts in thousands, except per share amounts)


	Class A Common					Series A Preferred				Additional Paid-In			Accumulated			Non- Controlling			Total
	Shares			Amount		Shares		Amount		Capital			Deficit			Interests			Equity
Balance at January 1, 2026		56,324		$	562		2,800	$	28	$	1,362,719		$	(1,031,893	)	$	1,384		$	332,800
Net loss		—			—		—		—		—			(36,446	)		—			(36,446	)
Preferred dividends declared ($0.875 per share)		—			—		—		—		—			(2,450	)		—			(2,450	)
Contributions to consolidated VIEs		—			—		—		—		—			—			54			54
Distributions from consolidated VIEs		—			—		—		—		(691	)		388			(1,438	)		(1,741	)
Balance at June 30, 2026		56,324		$	562		2,800	$	28	$	1,362,028		$	(1,070,401	)	$	-		$	292,217

Balance at January 1, 2025		56,274		$	562		2,800	$	28	$	1,362,644		$	(958,778	)	$	1,347		$	405,803
Net loss		—			—		—		—		—			(50,708	)		—			(50,708	)
Preferred dividends declared ($0.875 per share)		—			—		—		—		—			(2,450	)		—			(2,450	)
Vesting of restricted share units		88			—		—		—		—			—			—			—
Restricted stock withholdings		(38	)		—		—		—		(127	)		—			—			(127	)
Share-based compensation		—			—		—		—		201			—			—			201
Contributions to consolidated VIEs		—			—		—		—		—			—			18			18
Balance at June 30, 2025		56,324		$	562		2,800	$	28	$	1,362,718		$	(1,011,936	)	$	1,365		$	352,737


	Class A Common				Series A Preferred				Additional Paid-In			Accumulated			Non- Controlling			Total
	Shares		Amount		Shares		Amount		Capital			Deficit			Interests			Equity
Balance at April 1, 2026		56,324	$	562		2,800	$	28	$	1,362,719		$	(1,063,436	)	$	1,438		$	301,311
Net loss		—		—		—		—		—			(6,128	)		—			(6,128	)
Preferred dividends declared ($0.4375 per share)		—		—		—		—		—			(1,225	)		—			(1,225	)
Distributions from consolidated VIEs		—		—		—		—		(691	)		388			(1,438	)		(1,741	)
Balance at June 30, 2026		56,324	$	562		2,800	$	28	$	1,362,028		$	(1,070,401	)	$	-		$	292,217

Balance at April 1, 2025		56,324	$	562		2,800	$	28	$	1,362,718		$	(982,205	)	$	1,347		$	382,450
Net loss		—		—		—		—		—			(28,506	)		—			(28,506	)
Preferred dividends declared ($0.4375 per share)		—		—		—		—		—			(1,225	)		—			(1,225	)
Contributions to consolidated VIEs		—		—		—		—		—			—			18			18
Balance at June 30, 2025		56,324	$	562		2,800	$	28	$	1,362,718		$	(1,011,936	)	$	1,365		$	352,737

The accompanying notes are an integral part of these condensed consolidated financial statements.

- 5 -

SERITAGE GROWTH PROPERTIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, amounts in thousands)


	Six Months Ended June 30,
	2026			2025
CASH FLOW FROM OPERATING ACTIVITIES
Net loss	$	(36,446	)	$	(50,708	)
Adjustments to reconcile net loss to net cash used in operating activities:
Equity in loss of unconsolidated entities		6,659			7,172
Loss on sale of interests in unconsolidated entities		—			1,417
Distributions from unconsolidated entities		2,346			2,605
Gain on sale of real estate		(35	)		(8,903	)
Impairment of real estate assets		15,183			18,000
Share-based compensation		—			201
Depreciation and amortization		790			4,115
Amortization of deferred financing costs		1,983			—
Amortization of above and below market leases, net		82			87
Straight-line rent adjustment		(5	)		225
Non-cash lease expense		1			875
Change in operating assets and liabilities
Tenant and other receivables		298			470
Prepaid expenses, deferred expenses and other assets		3,766			970
Accounts payable, accrued expenses and other liabilities		(1,913	)		2,240
Net cash used in operating activities		(7,291	)		(21,234	)
CASH FLOW FROM INVESTING ACTIVITIES
Investment in unconsolidated entities		(2,519	)		(362	)
Distributions from unconsolidated entities		6,430			4,838
Net proceeds from sale of interests in unconsolidated entities		—			8,092
Net proceeds from sale of real estate		8,989			51,560
Development of real estate		(896	)		(18,041	)
Net cash provided by investing activities		12,004			46,087
CASH FLOW FROM FINANCING ACTIVITIES
Repayment of term loan		—			(40,000	)
Preferred dividends paid		(2,450	)		(2,450	)
Contributions from non-controlling member of consolidated variable interest entities		54			18
Distributions to non-controlling member of consolidated variable interest entities		(1,741	)		—
Net cash used in financing activities		(4,137	)		(42,432	)
Net increase (decrease) in cash and cash equivalents, and restricted cash		576			(17,579	)
Cash and cash equivalents, and restricted cash, beginning of period		62,285			97,709
Cash and cash equivalents, and restricted cash, end of period	$	62,861		$	80,130

The accompanying notes are an integral part of these condensed consolidated financial statements.

- 6 -

SERITAGE GROWTH PROPERTIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Unaudited, amounts in thousands)


	Six Months Ended June 30,
	2026		2025
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents at beginning of period	$	48,088	$	85,206
Restricted cash at beginning of period		14,197		12,503
Cash and cash equivalents and restricted cash at beginning of period	$	62,285	$	97,709

Cash and cash equivalents at end of period	$	48,426	$	71,802
Restricted cash at end of period		14,435		8,328
Cash and cash equivalents and restricted cash at end of period	$	62,861	$	80,130


	Six Months Ended June 30,
	2026		2025
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash payments for interest	$	3,774	$	10,536
Income taxes paid		—		128
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Accounts payable related to development of real estate	$	332	$	6,220
Preferred dividends declared and unpaid		1,225		1,225

The accompanying notes are an integral part of these condensed consolidated financial statements.

- 7 -

SERITAGE GROWTH PROPERTIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 – Organization

Seritage Growth Properties (“Seritage”) (NYSE: SRG), was formed as a Maryland real estate investment trust on June 3, 2015, operated as a fully integrated, self-administered and self-managed real estate investment trust (“REIT”) as defined under Section 856(c) of the Internal Revenue Code (the “Code”) from formation through December 31, 2021. On March 31, 2022, Seritage revoked its REIT election and became a taxable C Corporation effective January 1, 2022. Seritage’s assets are held by and its operations are primarily conducted, directly or indirectly, through Seritage Growth Properties, L.P., a Delaware limited partnership (the “Operating Partnership”). Under the partnership agreement of the Operating Partnership, Seritage, as the sole general partner, has exclusive responsibility and discretion in the management and control of the Operating Partnership. Unless otherwise expressly stated or the context otherwise requires, the “Company” and “Seritage” refer to Seritage, the Operating Partnership and its owned and controlled subsidiaries.

Prior to the adoption of the Company’s Plan of Sale (defined below), Seritage was principally engaged in the ownership, development, redevelopment, management, sale and leasing of diversified retail and mixed-use properties throughout the United States. As of June 30, 2026, the Company’s portfolio consisted of interests in nine properties comprised of approximately 0.8 million square feet of gross leasable area (“GLA”) or build-to-suit leased area and 139 acres of land. The portfolio encompasses four consolidated properties consisting of approximately 0.3 million square feet of GLA and 56 acres (such properties, the “Consolidated Properties”) and five unconsolidated entities consisting of approximately 0.5 million square feet of GLA and 83 acres (such properties, the “Unconsolidated Properties”).

The Company commenced operations on July 7, 2015 following a rights offering to the shareholders of Sears Holdings Corporation (“Sears Holdings” or “Sears”) to purchase common shares of Seritage in order to fund, in part, the $2.7 billion acquisition of certain of Sears Holdings’ owned properties and its 50% interests in three joint ventures which were simultaneously leased back to Sears Holdings under a master lease agreement (the “Original Master Lease” and the “Original JV Master Leases,” respectively).

On March 1, 2022, the Company announced that its Board of Trustees had commenced a process to review a broad range of strategic alternatives. The Board of Trustees created a Special Committee (the “Special Committee”) of the Company’s Board of Trustees to oversee the process. The Special Committee retained Barclays Capital, Inc. (“Barclays”) as its financial advisor. The agreement with Barclays expired in August 2023. The Company’s strategic review process remains ongoing as the Company executes sales pursuant to the Plan of Sale, and the Company remains open minded to pursuing value maximizing alternatives, including a potential sale of the Company. There can be no assurance that the review process will result in any transaction or that the Company will be successful in fully executing the Plan of Sale. The Board of Trustees is currently overseeing the Plan of Sale.

On March 31, 2022, the Company announced that its Board of Trustees, with the recommendation of the Special Committee, approved a plan to terminate the Company’s REIT status and become a taxable C Corporation, effective for the year ended December 31, 2022. As a result, the Company is no longer required to operate under REIT rules, including the requirement to distribute at least 90% of REIT taxable income to its shareholders, which provides the Company with greater flexibility to use its free cash flow. Effective January 1, 2022, the Company is subject to federal and state income taxes on its taxable income at applicable tax rates and is no longer entitled to a tax deduction for dividends paid. The Company operated as a REIT since inception and through the 2021 tax year, and existing REIT requirements and limitations, including those established by the Company’s organizational documents, remained in place until December 31, 2021.

As a result of the Company’s change in corporate structure to a taxable C Corporation effective January 1, 2022, the Company incurred a one-time, non-cash deferred tax benefit of approximately $161.3 million during the quarter ended March 31, 2022. The Company also recorded a full valuation allowance against the deferred tax asset pursuant to ASC 740, Income Taxes, as discussed in more detail below.

The Company sought a shareholder vote to approve a proposed plan of sale of the Company’s assets and dissolution (the “Plan of Sale”) that would allow the Board of Trustees to sell all of the Company’s assets, distribute the net proceeds to shareholders and dissolve the Company. The Plan of Sale is expected to increase the universe of potential buyers by allowing Seritage and potential buyers to enter into and complete value maximizing transactions without subjecting any such transaction to the delay and conditionality associated with having to seek and obtain shareholder approval. On July 6, 2022, Edward Lampert, the Company’s former Chairman, entered into a Voting and Support Agreement under which he exchanged his equity interest in the Operating Partnership for Class A common shares and agreed to vote his shares in favor of the Plan of Sale. As of June 30, 2026, Mr. Lampert owns approximately 23.8% of the Company’s outstanding Class A common shares, and Seritage, including its consolidated subsidiaries, is the sole owner of all outstanding Operating Partnership interests.

- 8 -

The affirmative vote of at least two-thirds of all outstanding common shares of the Company was required to approve the Plan of Sale. The 2022 Annual Meeting of Shareholders occurred on October 24, 2022, following the Company's filing of a final proxy statement with the SEC on September 14, 2022. During the meeting, the Plan of Sale was approved by the shareholders. The strategic review process remains ongoing as the Company executes the Plan of Sale, and the Company remains open minded to pursuing value maximizing alternatives, including a potential sale of the Company. There can be no assurance that the review process will result in any transaction or that the Company will be successful in fully executing on the Plan of Sale. See “Item 1A. Risk Factors — Risks Related to Our Business and Operations — There can be no assurance that we will be able to complete any transaction or any strategic change on terms satisfactory to the Board of Trustees.” included in our Annual Report on Form 10-K, (the “Annual Report”) for the year ended December 31, 2025.

Liquidity

The Company’s primary uses of cash include the payment of property operating and other expenses, including general and administrative expenses and debt service (collectively, “Obligations”), and certain development expenditures. Property rental income, which is the Company’s primary source of operating cash flow, did not fully fund Obligations during the six months ended June 30, 2026, and the Company recorded net operating cash outflows of $7.3 million. Additionally, the Company generated net investing cash inflows of $12.0 million during the six months ended June 30, 2026, which were driven by distributions from unconsolidated entities and real estate sales and partially offset by development expenditures and investments in unconsolidated entities.

Obligations are projected to continue to exceed property rental income and the Company expects to fund such costs with a combination of capital sources including, but not limited to, cash on hand, sales of Consolidated Properties and sales of Unconsolidated Properties. During the six months ended June 30, 2026, the Company sold one Consolidated Property for gross proceeds of $11.0 million and received a distribution from an unconsolidated joint venture of $5.7 million due to the sale of a portion of an Unconsolidated Property. The Company did not make any paydowns on the Term Loan Facility during the six months ended June 30, 2026, however it paid off the Term Loan Facility subsequent to period end and entered into a new revolving loan facility as described further below and in Note 6, Debt.

Going Concern

In accordance with ASC 205-40, Presentation of Financial Statements - Going Concern, for each annual and interim reporting period, management evaluates whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. As part of this evaluation, the Company takes into consideration all Obligations and certain development expenditures due within the subsequent 12 months, as well as cash on hand and expected cash receipts, plus drawdowns from our new revolving loan facility as described below.

In the prior period ended March 31, 2026, and the year ended December 31, 2025, the Company concluded that management’s plans did not alleviate substantial doubt about its ability to continue as a going concern because anticipated proceeds from asset sales and cash on hand were insufficient to meet its obligations, including the Term Loan Facility that was scheduled to mature on July 31, 2026.

Subsequent to June 30, 2026, the Company sold one Consolidated Property for gross proceeds of $3.0 million and received a distribution from an unconsolidated joint venture of $8.9 million due to the sale of a portion of an Unconsolidated Property. Additionally, on July 24, 2026, the Company entered into (i) a Loan and Security Agreement (the “Real Estate Loan”) providing for a $15.0 million term loan and (ii) a Business Loan Agreement (the “Revolver”), as amended by an omnibus agreement, providing for a $25.0 million revolving loan. At closing of the Revolver, the Company drew $15.0 million, and has $10.0 million available and unfunded. The Company used the proceeds from the closing of the Real Estate Loan and the initial draw under the Revolver, together with cash on hand, to fully repay the $50.0 million outstanding balance on the existing term loan facility that was scheduled to mature on July 31, 2026. The Real Estate Loan is collateralized by the Company’s interest in three Consolidated Properties and bears interest at an annual rate of one-month SOFR plus 2.75% which interest rate shall be reduced to one-month SOFR plus 2.25% if the outstanding balance is reduced to $10.0 million or less. The Revolver is collateralized by $25.0 million of cash held in a restricted account with the lender. Drawn amounts under the Revolver bear interest at an annual rate equal to a spread of 2.0% above the money market rate on the cash collateral which is currently 3.5% for 12 months from closing and thereafter resets annually. Both the Real Estate Loan and the Revolver mature on July 24, 2028 and have a one-year extension option, subject to the adherence of certain conditions defined in the Real Estate Loan and Revolver.

The Company does not currently have any assets under contract with closings that are deemed probable within the 12 month period. As the outstanding balance of the new term loan facility and the revolving loan facility is not due within the one year after the date that the financial statements are issued, they are not factored into the Company’s analysis as current obligations.

- 9 -

Management estimates existing cash on hand, the ability to draw on the remaining unfunded Revolver, and expected rental income would allow the Company to fund its Obligations and certain development expenditures. As a result, the Company has concluded that management’s plans alleviate substantial doubt about the Company’s ability to continue as a going concern as of June 30, 2026.

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

These condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K, (the “Annual Report”), for the year ended December 31, 2025. Certain footnote disclosures which would substantially duplicate those contained in our Annual Report have been condensed or omitted from this quarterly report. In the opinion of management, all adjustments necessary for a fair presentation (which include only normal recurring adjustments) have been included in this quarterly report. Operating results for the three and six months ended June 30, 2026 may not be indicative of the results that may be expected for any other interim period or for the year ending December 31, 2026. Capitalized terms used, but not defined in this quarterly report, have the same meanings as set forth in our Annual Report.

The accompanying condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The condensed consolidated financial statements include the accounts of the Company, the Operating Partnership, each of their consolidated properties, and all other entities in which they have a controlling financial interest. For entities that meet the definition of a variable interest entity (“VIE”), the Company consolidates such entities when the Company is the primary beneficiary of the entity. The Company is determined to be the primary beneficiary when it possesses both the unilateral power to direct activities that most significantly impact the economic performance of the VIE and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. The Company continually evaluates whether it qualifies as the primary beneficiary and reconsiders its determination of whether an entity is a VIE upon reconsideration events. As of December 31, 2025, the Company consolidated one VIE in which we were considered the primary beneficiary, as the Company had the power to direct the activities of the entity. As of June 30, 2026, the Company does not have investments in any consolidated VIEs. As of June 30, 2026 and December 31, 2025, the Company has investments in five unconsolidated VIEs and does not consolidate these entities because the Company is not the primary beneficiary. All intercompany accounts and transactions have been eliminated.

To the extent such variable interests are in entities that are not evaluated under the VIE model, the Company evaluates its interests using the voting interest entity model.

As of June 30, 2026, the Company, and its wholly owned subsidiaries, holds a 100% interest in the Operating Partnership and is the sole general partner which gives the Company exclusive and complete responsibility for the day-to-day management, authority to make decisions, and control of the Operating Partnership.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The most significant assumptions and estimates relate to real estate impairment assessments and assessing the recoverability of accounts receivable. These estimates are based on historical experience and other assumptions which management believes are reasonable under the circumstances. Management evaluates its estimates on an ongoing basis and makes revisions to these estimates and related disclosures as experience develops or new information becomes known. Actual results could differ from these estimates.

Segment Reporting

Given the continued decline in size of the portfolio and the continued progression of the Plan of Sale, the Company has concluded that they have one operating segment and one reportable segment as the Company is assessing performance and making operating decisions on an aggregated single segment basis. The Company currently operates in a single reportable segment which includes the ownership, development, redevelopment, management, sale and leasing of real estate properties. The Company’s chief operating decision maker (“CODM”), Adam Metz (the principal executive officer), assesses and measures the operating and financial results on an aggregated basis and does not allocate resources or make resource decisions based on individual properties’ operating results, geographies, sizes, or types. All revenue has been generated and all tangible assets are held in the United States.

Real Estate

- 10 -

Real estate assets are recorded at cost, less accumulated depreciation and amortization.

Expenditures for ordinary repairs and maintenance will be expensed as incurred. Significant renovations which improve the property or extend the useful life of the assets are capitalized. To the extent any real estate is undergoing redevelopment activities, all amounts directly associated with and attributable to the project, including planning, development and construction costs, interest costs, personnel costs of employees directly involved, and other miscellaneous costs incurred during the period of redevelopment, are capitalized and classified as construction in progress. The capitalization period begins when redevelopment activities are underway and ends when the project is substantially complete. Capitalized costs remain in construction in progress until such time as the project is completed and placed in service, the project is abandoned, the asset is classified as held for sale or the asset is sold.

Depreciation of real estate assets, excluding land, is recognized on a straight-line basis over their estimated useful lives which generally range between:


Building and building improvements:	25 – 40 years
Land improvements:	0 – 15 years
Tenant improvements:	shorter of the estimated useful life or non-cancelable term of lease

The Company amortizes identified intangibles that have finite lives over the period they are expected to contribute directly or indirectly to the future cash flows of the property or business acquired, generally the remaining non-cancelable term of a related lease.

The Company, on a periodic basis, assesses whether there are indicators that the value of the real estate assets may be impaired. If an indicator is identified, management will estimate the real estate asset recoverability based on projected operating cash flows (undiscounted and unleveraged), taking into account the anticipated holding period and capitalization rates, to determine if the undiscounted cash flows are less than a real estate asset’s carrying value. In estimating the fair value of an asset, various factors are considered, including expected future operating income, trends and leasing prospects, including the effects of demand, competition, and other economic factors, such as discount rates and market comparables. If the carrying value of an asset exceeds the undiscounted cash flows, an analysis is performed to determine the estimated fair value of the real estate asset. Changes in any estimates and/or assumptions, including the anticipated holding period, could have a material impact on the projected cash flows. If management determines that the carrying value of a real estate asset is impaired, a loss will be recorded for the excess of its carrying amount over its estimated fair value. The Company recognized impairment losses of $15.2 million during the six months ended June 30, 2026. The Company did not recognize an impairment loss during the three months ended June 30, 2026. The Company recognized an impairment loss of $18.0 million during the three and six months ended June 30, 2025.

Real Estate Dispositions

When the Company disposes of all or a portion of a real estate asset, it recognizes a gain or loss on sale of real estate as the difference between the carrying value and consideration received. Consideration consists of cash proceeds received and in certain circumstances, non-cash consideration when a property is contributed to an investment in unconsolidated entity. Gains and losses from the disposition of real estate are recorded as gain (loss) on sale of real estate on the Company’s condensed consolidated statements of operations. Refer to Note 4 for more information on the Company’s unconsolidated entity transactions.

The following table summarizes the Company’s gain on sale of real estate during the three and six months ended June 30, 2026 and 2025 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Dispositions to third parties
Cash proceeds	$	8,989	$	23,000	$	8,989	$	52,639
Gain on sale of real estate		35		1,967		35		8,938

Real Estate Held for Sale

When a real estate asset is identified by management as held for sale, the Company ceases depreciation of the asset and estimates its fair value, net of estimated costs to sell. If the estimated fair value, net of estimated costs to sell, of an asset is less than its net carrying value, an adjustment is recorded to reflect the estimated fair value. Properties classified as real estate held for sale generally represent properties that are under contract for sale and are expected to close within a year.

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In evaluating whether a property meets the held for sale criteria, the Company makes a determination as to the point in time that it is probable that a sale will be consummated. Given the nature of all real estate sales contracts, it is not unusual for such contracts to allow potential buyers a period of time to evaluate the property prior to formal acceptance of the contract. In addition, certain other matters critical to the final sale, such as financing arrangements, often remain pending even upon contract acceptance. As a result, properties under contract may not close within the expected time period or at all.

As of June 30, 2026, one property was classified as held for sale with assets of $2.3 million and liabilities of $0.7 million. As of December 31, 2025, one property was classified as held for sale with assets of $8.7 million and no liabilities. Subsequent to June 30, 2026, the Company sold one Consolidated Property for gross proceeds of $3.0 million and received a distribution from an unconsolidated joint venture of $8.9 million due to the sale of a portion of an Unconsolidated Property.

Investments in Unconsolidated Entities

The Company accounts for its investments in Unconsolidated Entities using the equity method of accounting as the Company exercises significant influence but does not have a controlling financial interest. These investments are initially recorded at cost and are subsequently adjusted for cash contributions, cash distributions, and earnings and losses which are recognized in accordance with the terms of the applicable agreement.

On a periodic basis, management assesses whether there are indicators, including the operating performance of the underlying real estate and general market conditions which include macroeconomic conditions, that the value of the Company’s investments in unconsolidated entities may be impaired. An investment’s value is impaired if management’s estimate of the fair value of the Company’s investment is less than its carrying value and such difference is deemed to be other-than-temporary. To the extent impairment has occurred, the loss is measured as the excess of the carrying amount of the investment over its estimated fair value.

The Company did not record an other-than-temporary impairment loss for the three months ended June 30, 2026 and the Company recorded $5.2 million in other-than-temporary impairment loss for the six months ended June 30, 2026. The Company did not record an other-than-temporary impairment losses for the three months ended June 30, 2025 and the Company recorded $8.5 million in other-than-temporary impairment losses in investments in unconsolidated entities for the six months ended June 30, 2025.

Cash and Cash Equivalents

The Company considers instruments with an original maturity of three months or less to be cash and cash equivalents. Cash and cash equivalent balances may, at a limited number of banks and financial institutions, exceed insurable amounts. The Company believes it mitigates this risk by investing in or through major financial institutions.

Restricted Cash

As of June 30, 2026 and December 31, 2025, restricted cash represents cash collateral for letters of credit.

Rental Revenue Recognition and Tenant Receivables

Rental income is comprised of base rent and reimbursements of property operating expenses. The Company commences rental revenue recognition when the lessee takes control of the physical use of the leased asset based on an evaluation of several factors. Base rent is recognized on a straight-line basis over the non-cancelable terms of the related leases. For leases that have fixed and measurable base rent escalations, the difference between such rental income earned and the cash rent due under the provisions of the lease is recorded as straight-line rent receivable and included as a component of tenant and other receivables on the condensed consolidated balance sheets. Reimbursement of property operating expenses arises from tenant leases which provide for the recovery of all or a portion of the operating expenses and real estate taxes of the respective property. This revenue is accrued in the same periods as the expenses are incurred.

The Company periodically reviews its receivables for collectability, taking into consideration changes in factors such as the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates, and economic conditions in the area where the property is located. Tenant receivables, including receivables arising from the straight-lining of rents, are written-off directly when management deems that the collectability of substantially all future lease payments from a specified lease is not probable of collection, at which point, the Company will begin recognizing revenue on a cash basis, based on actual amounts received. Any receivables that are deemed to be uncollectible are recognized as a reduction to rental income in the Company’s condensed consolidated statements of operations. If future circumstances change such that the Company believes that it is reasonably certain that the Company will collect all rental income remaining on such leases, the Company will resume accruing rental income and recognize a cumulative catch up for previously written-off receivables.

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In leasing tenant space, the Company may provide funding to the lessee through a tenant allowance. In accounting for a tenant allowance, the Company will determine whether the allowance represents funding for the construction of leasehold improvements and evaluate the ownership of such improvements. If the Company is considered the owner of the improvements for accounting purposes, the Company will capitalize the amount of the tenant allowance and depreciate it over the shorter of the useful life of the improvements or the related lease term. If the tenant allowance represents a payment for a purpose other than funding leasehold improvements, or in the event the Company is not considered the owner of the improvements for accounting purposes, the allowance is considered a lease incentive and is recognized over the lease term as a reduction of rental revenue on a straight-line basis.

Tenant and Other Receivables

Tenant and other receivables includes unpaid amounts billed to tenants, accrued revenues for future billings to tenants for property expenses, and amounts arising from the straight-lining of rent, as discussed above. Tenant and other receivables also includes management fees receivable for services performed for the benefit of certain unconsolidated entities. In the event that the collectability of a management fee receivable is in doubt, a provision for uncollectible amounts will be established or a direct write-off of the specific receivable will be made.

Management and Other Fee Income

Management and other fee income represents property management, construction, leasing and development fees for services performed for the benefit of certain unconsolidated entities.

Property management fee income is reported at 100% of the revenue earned from such Unconsolidated Properties in management and other fee income on the condensed consolidated statements of operations. The Company’s share of management expenses incurred by the unconsolidated entities is reported in equity in loss of unconsolidated entities on the condensed consolidated statements of operations and in other expenses in the combined financial data in Note 4.

Leasing and development fees are initially reported at the portion of revenue earned attributable to outside ownership of the related unconsolidated entities. The Company’s share in leasing and development fee income is recognized over the useful life of the associated development project, in the case of development fees, or lease term, in the case of leasing fees, as the associated asset is depreciated over the same term and included in equity in loss of unconsolidated entities on the condensed consolidated statements of operations and in other expenses in the combined financial data in Note 4.

Management determined that property and asset management and construction and development management services each represent a series of stand-ready performance obligations satisfied over time with each day of service being a distinct performance obligation. For property and asset management services, the Company is typically compensated for its services through a monthly management fee earned based on a specified percentage of monthly rental income or rental receipts generated from the property under management. For construction and development services, the Company is typically compensated for planning, administering and monitoring the design and construction of projects within our unconsolidated entities based on a percentage of project costs or a fixed fee. Revenues from such management contracts are recognized over the life of the applicable contract.

Conversely, leasing services are considered to be performance obligations, satisfied as of a point in time. The Company’s leasing fee is typically paid upon the occurrence of certain contractual event(s) that may be contingent and the pattern of revenue recognition may differ from the timing of payment. For these services, the obligations are typically satisfied at lease execution and tenant opening date, and revenue is recognized in accordance with the related agreement at the point in time when the obligation has been satisfied.

Concentration of Credit Risk

Concentrations of credit risk arise when a number of operators, tenants, or obligors related to the Company’s investments are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to the Company, to be similarly affected by changes in economic conditions. As of June 30, 2026, the Company has two tenants that comprise 45.1% and 33.3%, respectively, of annualized base rent, with no other tenants exceeding 10.0% of annualized base rent. The Company’s portfolio of four Consolidated Properties and five Unconsolidated Properties was diversified by location across six states. For the six months ended June 30, 2026, of the four consolidated properties, approximately 87.2% of our total rental income was concentrated in Pennsylvania.

Earnings (Loss) per Share

The Company has three classes of common stock. The rights, including the liquidation and dividend rights, of the holders of the Company’s Class A common shares and Class C non-voting common shares are identical, except with respect to voting. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis. The net earnings (loss) per share amounts are the same for Class A and Class C common shares because the holders of each class are legally entitled to equal

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per share distributions whether through dividends or in liquidation. Since August 29, 2018, all outstanding Class C common shares had been exchanged for Class A common shares and there are currently no Class C common shares outstanding.

Class B non-economic common shares are excluded from earnings per share computations as they do not have economic rights. As of December 31, 2020, all outstanding Class B common shares had been surrendered and there are currently no Class B common shares outstanding.

Recently Issued Accounting Pronouncements

In January 2025, the FASB issued ASU 2025-01, “Clarifying the Effective Date” as an update to ASU 2024-03, “Disaggregation of Income Statement Expenses” (“ASU 2024-03”). ASU 2024-03 requires enhanced disclosures regarding income statement expenses, including disaggregation of significant categories such as depreciation and amortization of real estate assets, property operating expenses and employee compensation, within relevant expense captions presented in the income statement. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 31, 2027. The Company is currently evaluating the impact on its financial statement disclosures.

In December 2025, the FASB issued ASU 2025-11, “Interim Reporting (Topic 270): Narrow Scope Improvements” (“ASU 2025-11”), which amends the guidance in ASC 270, Interim Reporting. The update enhances interim disclosure requirements by clarifying the information that must be presented in quarterly periods, including improved transparency regarding significant events, accounting policy updates and material developments that occur between annual reporting dates. ASU 2025-11 also aligns certain interim reporting requirements more closely with annual disclosure objectives to promote consistency and comparability. The amendments are effective for interim periods beginning after December 15, 2027. The Company is currently evaluating the impact on its financial statement disclosures.

Note 3 – Lease Intangible Assets and Liabilities

The following table summarizes the Company’s lease intangible assets (acquired in-place leases and above-market leases) and liabilities (acquired below-market lease, which is included in accounts payable, accrued expenses and other liabilities on the condensed consolidated balance sheets), net of accumulated amortization, as of December 31, 2025 (in thousands):


December 31, 2025
	Gross			Accumulated
Lease Intangible Assets	Asset			Amortization			Balance
In-place leases, net	$	294		$	(123	)	$	171
Total	$	294		$	(123	)	$	171

	Gross			Accumulated
Lease Intangible Liabilities	Liability			Amortization			Balance
Below-market leases, net	$	(1,168	)	$	489		$	(679	)
Total	$	(1,168	)	$	489		$	(679	)

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Amortization of acquired below-market leases, net of acquired above-market leases, resulted in additional rental income of $7.8 thousand and $7.3 thousand for the three months ended June 30, 2026 and 2025, respectively, and $19.4 thousand and $14.6 thousand for the six months ended June 30, 2026 and 2025, respectively.

Amortization of acquired in-place leases resulted in additional depreciation and amortization expense of $2.0 thousand and $48.3 thousand for the three months ended June 30, 2026 and 2025, respectively, and $4.9 thousand and $96.7 thousand for the six months ended June 30, 2026 and 2025, respectively.

There were no acquired in-place leases or below-market leases as of June 30, 2026.

Amortization of an acquired below-market ground lease resulted in additional property expense of $50.7 thousand for the three months ended June 30, 2026 and 2025, respectively and $101.4 thousand for the six months ended June 30, 2026 and 2025, respectively.

Future amortization of these lease intangibles is set forth below (in thousands):


	Below Market Ground Lease
Remainder of 2026	$	101
2027		203
2028		203
2029		203
2030		203
2031		203
Thereafter		8,419

Note 4 – Investments in Unconsolidated Entities

The Company conducts a portion of its property rental activities through investments in unconsolidated entities. The Company’s partners in these unconsolidated entities are unrelated real estate entities or commercial enterprises. The Company and its partners in these unconsolidated entities make initial and/or ongoing capital contributions to these unconsolidated entities. The obligations to make capital contributions are governed by each unconsolidated entity’s respective operating agreement and related governing documents.

As of June 30, 2026, the Company has investments in five unconsolidated entities as follows:


		Seritage %	# of	Total
Unconsolidated Entities	Entity Partner(s)	Ownership	Properties	GLA
GS Portfolio Holdings (2017) LLC ("GGP II JV")	Brookfield Properties Retail (formerly GGP Inc.)	50.0%	1		93,500
Mark 302 JV LLC ("Mark 302 JV")	An investment fund managed by Invesco Real Estate	50.0%	1		51,500
SI UTC LLC ("UTC JV")	A separate account advised by Invesco Real Estate	50.0%	1		106,200
Tech Ridge JV Holding LLC ("Tech Ridge JV")	An affiliate of RD Management	50.0%	1		—
Landmark Land Holdings, LLC ("Landmark JV")	The Howard Hughes Corporation and Foulger-Pratt	31.3%	1		—
			5		251,200

In certain circumstances, when the Company has contributed properties to unconsolidated entities in exchange for equity interests in those unconsolidated entities, the transaction price attributed to the property at the closing (the “Contribution Value”) is subject to revaluation as defined in the respective unconsolidated entity agreements, which may result in an adjustment to the gain or loss recognized. If the Contribution Value is subject to revaluation, the Company initially recognizes the gain or loss at the value that is the expected amount within the range of possible outcomes and will re-evaluate the expected amount on a quarterly basis through the final determination date.

Upon revaluation, the primary inputs in determining the Contribution Value will be updated for actual results and may result in a cash settlement or capital account adjustment between the unconsolidated entity partners, as well as an adjustment to the initial gain or loss.

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Each reporting period, the Company re-analyzes the primary inputs that determine the Contribution Value and the gain or loss for those unconsolidated entities subject to a revaluation. As of June 30, 2026, the Company has one remaining instance where the Contribution Value is subject to a revaluation under certain conditions. The Company did not recognize any gains or loss on revaluation during the six months ended June 30, 2026 and 2025.

Summarized Financial Information for Unconsolidated Entities

The following tables present summarized financial data for UTC JV (in thousands):


	June 30, 2026			December 31, 2025
ASSETS
Investment in real estate
Land	$	27,992		$	27,992
Buildings and improvements		149,373			149,373
Accumulated depreciation		(19,983	)		(17,324	)
		157,382			160,041
Construction in progress		3,640			3,521
Net investment in real estate		161,022			163,562
Cash and cash equivalents		1,202			1,642
Tenant and other receivables, net		11,570			11,780
Other assets, net		10,121			10,236
Total assets	$	183,915		$	187,220

LIABILITIES AND MEMBERS' INTERESTS
Accounts payable, accrued expenses and other liabilities		5,372			6,026
Total liabilities		5,372			6,026

Members' Interest
Total members' interest		178,543			181,194
Total liabilities and members' interest	$	183,915		$	187,220
Carrying value of Company's investments in unconsolidated entities	$	94,220		$	95,475


	Three Months Ended June 30,						Six Months Ended June 30,
	2026			2025			2026			2025
Total revenue	$	4,183		$	5,052		$	8,335		$	9,834
Property operating expenses		(834	)		(641	)		(1,567	)		(1,289	)
Depreciation and amortization		(1,557	)		(1,692	)		(3,115	)		(3,257	)
Operating income		1,792			2,719			3,653			5,288
Other income (expenses)		(37	)		(134	)		(59	)		(293	)
Net income	$	1,755		$	2,585		$	3,594		$	4,995
Equity in income of unconsolidated entities (1)	$	913		$	1,328		$	1,868		$	2,606

(1)

Equity in income (loss) of unconsolidated entities on the condensed consolidated statements of operations includes basis difference adjustments.

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The following tables present combined condensed financial data for all of the Company’s Unconsolidated Entities, excluding UTC JV (in thousands):


	June 30, 2026			December 31, 2025
ASSETS
Investment in real estate
Land	$	56,828		$	60,931
Buildings and improvements		30,991			30,991
Accumulated depreciation		(11,106	)		(10,466	)
		76,713			81,456
Construction in progress		50,106			70,207
Net investment in real estate		126,819			151,663
Cash and cash equivalents		12,401			7,817
Tenant and other receivables, net		15,285			345
Other assets, net		326			15,625
Total assets	$	154,831		$	175,450

LIABILITIES AND MEMBERS' INTERESTS
Liabilities
Accounts payable, accrued expenses and other liabilities		11,467			12,076
Total liabilities		11,467			12,076

Members' Interest
Total members' interest		143,364			163,374
Total liabilities and members' interest	$	154,831		$	175,450
Carrying value of Company's investments in unconsolidated entities	$	49,106		$	60,767


	Three Months Ended June 30,						Six Months Ended June 30,
	2026			2025			2026			2025
Total revenue	$	141		$	695		$	703		$	984
Property operating expenses		(688	)		(1,053	)		(1,381	)		(1,889	)
Depreciation and amortization		(321	)		(754	)		(640	)		(1,696	)
Operating loss		(868	)		(1,112	)		(1,318	)		(2,601	)
Other income (expenses)		42			22			132			157
Gain (loss) on sale		74			-			(8,512	)		-
Net loss	$	(752	)	$	(1,090	)	$	(9,698	)	$	(2,444	)
Equity in loss of unconsolidated entities (1)	$	(405	)	$	(572	)	$	(8,527	)	$	(9,778	)

(1)

Equity in (loss) of unconsolidated entities on the condensed consolidated statements of operations includes basis difference adjustments.

The Company shares in the profits and losses of these unconsolidated entities generally in accordance with the Company’s respective equity interests. In some instances, the Company may recognize profits and losses related to investment in an unconsolidated entity that differ from the Company’s equity interest in the unconsolidated entity. This may arise from impairments that the Company recognizes related to its investment that differ from the impairments the unconsolidated entity recognizes with respect to its assets, differences between the Company’s basis in assets it has transferred to the unconsolidated entity and the unconsolidated entity’s basis in those assets or other items. The Company utilizes appraisals and third-party prepared fair value estimates as well as negotiated offers to sell the investments for the impairment analysis. The Company did not record an other-than-temporary loss for the three months ended June 30, 2026 or for the three months ended June 30, 2025. The Company recorded $5.2 million and $8.5 million in other-than-temporary impairment losses in investments in unconsolidated entities for the six months ended June 30, 2026 and 2025, respectively, which is included in equity in income (loss) of unconsolidated entities within the condensed consolidated statements of operations.

As of June 30, 2026, the Company has put rights for one asset in one of its unconsolidated entities, however, since this property is vacant, the 50% occupancy threshold to exercise this put right has not been met.

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Unconsolidated Entity Management and Related Fees

The Company acts as the operating partner and day-to-day manager for the Mark 302 JV, the UTC JV, and Tech Ridge JV. The Company is entitled to receive certain fees for providing management, leasing, and construction supervision services to certain of its unconsolidated entities. Refer to Note 2 for the Company’s accounting policies. The Company earned $0.1 million from these services for the three months ended June 30, 2026 and 2025, and $0.3 million and $0.2 million from these services for the six months ended June 30, 2026 and 2025, respectively.

Note 5 – Leases

Lessor Disclosures

Future minimum rental receipts, excluding variable payments and tenant reimbursements of expenses, and rents related to tenants in default, under non-cancelable operating leases executed as of June 30, 2026 is approximately as follows (in thousands):


	June 30, 2026
Remainder of 2026	$	2,498
2027		4,934
2028		2,178
2029		397
2030		414
2031		414
Thereafter		1,000
Total	$	11,835

The components of rental revenues for the three and six months ended June 30, 2026 and 2025 were as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Fixed rental revenues	$	1,459	$	2,848	$	3,013	$	6,098
Variable rental revenues		292		1,636		632		3,095
Total rental revenues	$	1,751	$	4,484	$	3,645	$	9,193

Lessee Disclosures

As of June 30, 2026 and December 31, 2025, the Company has one ground lease which is classified as an operating lease. As of June 30, 2026, and December 31, 2025, the outstanding amount of right of use (“ROU”) assets was $10.1 million and $10.2 million, respectively, which is included in prepaid expenses, deferred expenses and other assets, net on the condensed consolidated balance sheets. As of June 30, 2026, and December 31, 2025, respectively, the outstanding lease liabilities was $0.6 million, which is included in accounts payable, accrued expenses and other liabilities on the condensed consolidated balance sheets.

The Company recorded rent expense related to leased corporate office space of $56.6 thousand and $0.5 million for the three months ended June 30, 2026 and 2025, respectively, and $0.1 million and $0.9 million for the six months ended June 30, 2026 and 2025, respectively. Such rent expense is classified within general and administrative expenses on the condensed consolidated statements of operations.

On July 28, 2025, the Company entered into a one year extension for a portion of its office space at a cost of $19.0 thousand per month. The Company elected a short term lease exemption permissible under ASC 842 as the lease has no options to additionally extend and there are no costs associated with the end of the lease.

On July 27, 2026, the Company entered into an amendment to its office lease which provides for a one year extension of its office space at a cost of $20.2 thousand per month. The Company elected a short term lease exemption permissible under ASC 842 as the lease has no options to additionally extend and there are no costs associated with the end of the lease.

In addition, the Company recorded ground rent expense of approximately $11.2 thousand for the three months ended June 30, 2026 and 2025, respectively, and $22.5 thousand for the six months ended June 30, 2026 and 2025, respectively. Such ground rent expense is

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classified within property operating expenses on the condensed consolidated statements of operations. The ground lease requires the Company to make fixed annual rental payments and expires in 2073 assuming all extension options are exercised.

As of June 30, 2026, the Company expects to make cash payments on operating leases of $41.3 thousand in 2026, $45.0 thousand in 2027, $45.0 thousand in 2028, $45.0 thousand in 2029, $45.0 thousand in 2030, $45.0 thousand in 2031, and $1.9 million for the periods thereafter. The present value discount is ($0.6) million.

The following table sets forth information related to the measurement of our lease liabilities as of June 30, 2026:


	June 30, 2026
Weighted-average remaining lease term (in years)		47.5
Weighted-average discount rate		7.52	%
Cash paid for operating leases (in thousands)	$	135

Note 6 – Debt

Term Loan Facility

On July 31, 2018, the Operating Partnership, as borrower, and the Company, as guarantor, entered into a Senior Secured Term Loan Agreement (the “Term Loan Agreement”) providing for a $2.0 billion term loan facility (the “Term Loan Facility”) with Berkshire Hathaway Life Insurance Company of Nebraska (“Berkshire Hathaway”) as lender and Berkshire Hathaway as administrative agent. The Term Loan Facility provided for an initial funding of $1.6 billion at closing (the “Initial Funding”) and includes a $400 million incremental funding facility (the “Incremental Funding Facility”) subject to certain conditions described below. On February 2, 2023, the Company made a $230 million voluntary prepayment, reducing the unpaid principal balance to $800 million, and the debt maturity was extended for two years to July 31, 2025. On July 30, 2025, the Company paid a 2% extension fee equal to $4.0 million extending the maturity date to July 31, 2026, as further described below. At June 30, 2026, the unpaid principal balance was $50 million. As described below, subsequent to June 30, 2026, the Company repaid the Term Loan Facility in full.

Funded amounts under the Term Loan Facility bear interest at an annual rate of 7.0% and unfunded amounts under the Incremental Funding Facility are subject to an annual fee of 1.0% until drawn. The Company prepays the annual fee and amortizes the expense to interest expense on the condensed consolidated statements of operations.

The Term Loan Facility is guaranteed by the Company and, subject to certain exceptions, is required to be guaranteed by all existing and future subsidiaries of the Operating Partnership. The Term Loan Facility is secured on a first lien basis by a pledge of the capital stock of the direct subsidiaries of the Operating Partnership and the guarantors, including its joint venture interests, except as prohibited by the organizational documents of such entities or any joint venture agreements applicable to such entities, and contains a requirement to provide mortgages and other customary collateral upon the breach of certain financial metrics described below, the occurrence and continuation of an event of default and certain other conditions set forth in the Term Loan Agreement. As of June 30, 2026, mortgages were recorded on three Consolidated Properties.

The Term Loan Facility includes certain financial metrics to govern springing collateral requirements and certain covenant exceptions set forth in the Term Loan Agreement, including: (i) a total fixed charge coverage ratio of not less than 1.20 to 1.00 for each fiscal quarter; (ii) an unencumbered fixed charge coverage ratio of not less than 1.30 to 1.00 for each fiscal quarter; (iii) a total leverage ratio of not more than 65%; (iv) an unencumbered ratio of not more than 60%; and (v) a minimum net worth of at least $1.2 billion. Any failure to satisfy any of these financial metrics limits the Company's ability to dispose of assets via sale or joint venture and triggers the springing mortgage and collateral requirements but will not result in an event of default. The Term Loan Facility also includes certain limitations relating to, among other activities, the Company’s ability to: sell assets or merge, consolidate or transfer all or substantially all of its assets; incur additional debt; incur certain liens; enter into, terminate or modify certain material leases and/or the material agreements for the Company’s properties; make certain investments (including limitations on joint ventures) and other restricted payments; pay distributions on or repurchase the Company’s capital stock; and enter into certain transactions with affiliates.

The Term Loan Facility contains customary events of default, including (subject to certain materiality thresholds and grace periods) payment default, material inaccuracy of representations or warranties, and bankruptcy or insolvency proceedings. If there is an event of default, the lenders may declare all or any portion of the outstanding indebtedness to be immediately due and payable, exercise any rights they might have under any of the Term Loan Facility documents, and require the Company to pay a default interest rate on overdue amounts equal to 2.0% in excess of the then applicable interest rate.

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As of June 30, 2026, the Company was not in compliance with certain of the financial metrics described above. As a result, the Company was previously required to receive the consent of Berkshire Hathaway to dispose of assets via sale or contribution to another entity and as of June 16, 2022, Berkshire Hathaway had provided such consent for all such transactions submitted for approval. The Third Term Loan Amendment (defined below), executed on June 16, 2022, eliminates this requirement. The Company believes it is in compliance with all other terms and conditions of the Term Loan Agreement.

On May 5, 2020, the Operating Partnership and Berkshire Hathaway entered into an amendment (the “Term Loan Amendment”) to the Term Loan Agreement by and among the Operating Partnership and Berkshire Hathaway as initial lender and administrative agent that permits the deferral of payment of interest under the Term Loan Agreement if, as of the first day of each applicable month, (x) the amount of unrestricted and unencumbered (other than liens created under the Term Loan Agreement) cash on hand of the Operating Partnership and its subsidiaries, minus (y) the aggregate amount of anticipated necessary expenditures for such period (such sum, “Available Cash”) is equal to or less than $30.0 million. In such instances, for each interest period, the Operating Partnership is obligated to make payments of interest in an amount equal to the difference between (i) Available Cash and (ii) $20.0 million (provided that such payment shall not exceed the amount of current interest otherwise due under the Term Loan Agreement). Any deferred interest shall accrue interest at 2.0% in excess of the then applicable interest rate and shall be due and payable on the Term Loan maturity date; provided, that the Operating Partnership is required to pay any deferred interest from Available Cash in excess of $30.0 million (unless otherwise agreed to by the administrative agent under the Term Loan Agreement in its sole discretion). In addition, repayment of any outstanding deferred interest is a condition to any borrowings under the $400.0 million incremental funding facility under the Term Loan Agreement. The Company has paid all interest due under the Term Loan Agreement and has not deferred any interest as permitted under the Term Loan Amendment.

Additionally, the Term Loan Amendment provides that the administrative agent and the lenders express their continued support for asset dispositions, subject to the administrative agent’s right to approve the terms of individual transactions due to the occurrence of a Financial Metric Trigger Event, as such term is defined under the Term Loan Agreement.

On November 24, 2021, the Operating Partnership, the Company and Berkshire Hathaway entered into an amendment (the “Second Term Loan Amendment”) to the Term Loan Agreement by and among the Operating Partnership, the Company and Berkshire Hathaway to which the Operating Partnership, the Company and Berkshire Hathaway mutually agreed that (i) the “make whole” provision in the Senior Secured Term Loan Agreement shall not be applicable to prepayments of principal; and (ii) the Senior Secured Term Loan Agreement, as amended for (i) above, may at the Operating Partnership's election be extended for two years from July 31, 2023 to July 31, 2025 (the “Maturity Date”) if its principal has been reduced to $800 million by July 31, 2023. The outstanding principal balance was reduced to $800 million on February 2, 2023, and the Maturity Date was extended to July 31, 2025. In all other respects, the Senior Secured Term Loan Agreement remained unchanged.

On June 16, 2022, the Operating Partnership, the Company and Berkshire Hathaway entered into an amendment (the “Third Term Loan Amendment”) to the Term Loan Agreement by and among the Operating Partnership, the Company and Berkshire Hathaway to which the Operating Partnership, the Company and Berkshire Hathaway mutually agreed that notwithstanding anything to the contrary in the asset sale covenant, the parent, borrower, and their respective subsidiaries will be permitted without the consent of the administrative agent to sell, transfer, or otherwise dispose of properties (including but not limited to properties or equity interests of any subsidiary) to unaffiliated third parties for no less than fair market value, provided that the borrower deposits all net proceeds received into a controlled account and the use of such net proceeds will be subject to the terms and conditions of the Term Loan Agreement, including but not limited to the restricted payments and investments/loans covenants.

On November 20, 2024, the Operating Partnership, the Company and Berkshire Hathaway entered into an amendment (the “Fourth Term Loan Amendment”) to the Term Loan Agreement by and among the Operating Partnership, the Company and Berkshire Hathaway pursuant to which the Operating Partnership, the Company and Berkshire Hathaway mutually agreed that the Term Loan Agreement may, at the Operating Partnership’s election, be extended for one year from the Maturity Date to July 31, 2026 if the Operating Partnership pays a 2% extension fee on the then outstanding principal balance as of the Maturity Date. On July 28, 2025, the Company exercised its extension option and on July 30, 2025, the Company paid a 2% extension fee equal to $4.0 million extending the maturity date to July 31, 2026. The Company also paid an incremental facility fee of $4.0 million. All other terms under the Term Loan Agreement shall remain unchanged during the extension period including the interest rate and the incremental facility fee in accordance with the Term Loan Agreement.

The extension fees paid were recorded as a direct deduction from the carrying amount of the Term Loan Facility and amortized over the remaining term of the Term Loan Agreement. As of June 30, 2026, the unamortized balance of the Company’s extension fees was $0.3 million.

As of June 30, 2026, the Company has paid down $1.55 billion towards the Term Loan Facility’s unpaid principal balance. The aggregate principal amount outstanding under the Term Loan Facility as of June 30, 2026 was $50.0 million.

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Real Estate Loan / Revolver

On July 24, 2026, certain affiliates of the Company entered into a Real Estate Loan providing for a $15.0 million term loan and a Revolver providing for a $25.0 million revolving loan. At closing, the Company drew $15.0 million under the Revolver and has $10.0 million available and unfunded. The Company used the proceeds of the Real Estate Loan and the Revolver together with cash on hand to repay the $50.0 million outstanding balance of the Term Loan Facility and to pay transaction and related costs. The Real Estate Loan is collateralized by the Company’s interest in three Consolidated Properties and bears interest at an annual rate of one-month SOFR plus 2.75% which interest rate shall be reduced to one-month SOFR plus 2.25% if the outstanding balance is reduced to $10.0 million or less. The Revolver is collateralized by $25.0 million of cash held in a restricted account with the lender. Drawn amounts under the Revolver bear interest at an annual rate equal to a spread of 2.0% above the money market rate on the cash collateral which is currently 3.5% for 12 months from closing and thereafter resets annually. Both the Real Estate Loan and the Revolver mature on July 24, 2028 and have a one-year extension option.

Note 7 – Income Taxes

As a result of the Company’s revocation of its REIT status in fiscal year 2022, the Company incurred a one-time, non-cash deferred tax benefit of approximately $161.3 million during the three months ended March 31, 2022. As a result of ongoing operations and sales activity, the Company recognized a deferred tax benefit of $3.5 million and $6.6 million for the three months ended June 30, 2026 and 2025, respectively, and $10.4 million and $11.3 million for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, the Company has recorded a full valuation allowance of $264.8 million against the deferred tax asset (the “DTA”) pursuant to ASC 740, as discussed in more detail below. While the Company has recorded a full valuation allowance against its DTAs due to the uncertainty that it will be able to utilize them, if the Company is able to sell assets at prices above its tax basis, the DTAs will be utilized to offset any taxes due on those gains to the extent of the DTAs.

The Company’s effective tax rate of 0% differs from the U.S. statutory rate of 21% in 2026 primarily due to changes in the valuation allowance on its deferred tax assets.

The significant components of the Company’s deferred tax assets of $264.8 million as of June 30, 2026 consist of book to tax basis differences, net operating losses, and carryover net operating losses. As discussed below, the Company has recorded a full valuation allowance on the deferred tax assets as of June 30, 2026 and December 31, 2025, respectively.

Valuation allowances are recorded related to deferred tax assets based on the “more likely than not” criteria. ASC 740 states that deferred tax assets shall be reduced by a valuation allowance if there is insufficient objectively verifiable evidence to support that it is more likely than not that they will be realized. This evaluation requires significant judgment which should be weighted commensurate with the extent to which the evidence can be objectively verified. Additionally, under ASC 740, forming a conclusion that a valuation allowance is not needed is difficult when there is negative evidence such as cumulative losses in recent years. Given the Company’s history of cumulative losses combined with the fact that the Company’s utilization of deferred tax assets is highly dependent on the outcome of the review of a broad range of strategic alternatives announced by its Board of Trustees and the uncertainty in timing and volume of future property sales, we have deemed that their realization, at this time, cannot be objectively verified. The Company has therefore recorded a full valuation allowance against the Company’s deferred tax assets as of June 30, 2026. The Company will evaluate this position each quarter as verifiable positive evidence becomes available, such as the execution of asset sales, to support the future utilization of the deferred tax assets.

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Note 8 – Fair Value Measurements

ASC 820, Fair Value Measurement, defines fair value and establishes a framework for measuring fair value. The objective of fair value is to determine the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the “exit price”). ASC 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels:

Level 1 - quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities

Level 2 - observable prices based on inputs not quoted in active markets, but corroborated by market data

Level 3 - unobservable inputs used when little or no market data is available

The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company also considers counterparty credit risk in its assessment of fair value.

Assets Measured at Fair Value on a Nonrecurring Basis

The following tables present the Company's assets measured at fair value on a non-recurring basis as of June 30, 2026 and December 31, 2025 (in thousands), aggregated by the level in the fair value hierarchy within which those measurements fall:


	Balance		Fair Value Measurements Using
Description	June 30, 2026		(Level 1)		(Level 2)		(Level 3)
Impaired real estate assets	$	49,696	$	-	$	49,696	$	-
Other-than-temporary impaired investments in unconsolidated entities	$	18,576	$	-	$	18,576	$	-

	Balance		Fair Value Measurements Using
Description	December 31, 2025		(Level 1)		(Level 2)		(Level 3)
Other-than-temporary impaired investments in unconsolidated entities	$	31,075	$	31,075	$	-	$	-

In accordance with ASC 360-10, Property, Plant and Equipment, the Company reviews the carrying value of its real estate assets at each reporting period. .The Company did not record an impairment loss during the three months ended June 30, 2026. The Company recorded impairment losses of $18.0 million for the three months ended June 30, 2025, and $15.2 million and $18.0 million for the six months ended June 30, 2026 and 2025, respectively, on real estate assets which is included in impairment on real estate assets within the condensed consolidated statements of operations. We continue to evaluate our portfolio, including our development plans and holding periods, which may result in additional impairments in future periods on our consolidated properties.

In accordance with ASC 323, Equity Method and Joint Ventures, the Company reviews the carrying value of its investments in unconsolidated entities at each reporting period. The Company did not record any other-than-temporary losses for the three months ended June 30, 2026 and 2025, respectively. The Company recorded $5.2 million and $8.5 million in other-than-temporary impairment losses in investments in unconsolidated entities for the six months ended June 30, 2026 and 2025, respectively.

Financial Assets and Liabilities Not Measured at Fair Value

Financial assets and liabilities that are not measured at fair value on the condensed consolidated balance sheets include cash equivalents and the Term Loan Facility. The fair value of the Term Loan Facility is classified as Level 2. Cash equivalents and restricted cash are carried at cost, which approximates fair value. The fair value of debt obligations is calculated by discounting the future contractual cash flows of these instruments using current risk-adjusted rates available to borrowers with similar credit ratings. As of June 30, 2026 and December 31, 2025, the estimated fair values of the Company’s debt obligations were $49.8 million and $50.0 million, respectively, which approximated the carrying value at such dates as the current rate approximates the stated rates on the Company’s debt obligations.

Note 9 – Commitments and Contingencies

Insurance

The Company maintains general liability insurance and all-risk property and rental value, with sub-limits for certain perils such as floods and earthquakes on each of the Company’s properties. The Company also maintains coverage for terrorism acts as defined by Terrorism Risk Insurance Program Reauthorization Act, which expires in December 2027.

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Insurance premiums are charged directly to each of the properties. The Company will be responsible for deductibles and losses in excess of insurance coverage, which could be material. The Company continues to monitor the state of the insurance market and the scope and costs of coverage for acts of terrorism. However, the Company cannot anticipate what coverage will be available on commercially reasonable terms in the future.

Environmental Matters

Under various federal, state and local laws, ordinances and regulations, the Company may be considered an owner or operator of real property or may have arranged for the disposal or treatment of hazardous or toxic substances. As a result, the Company may be liable for certain costs including removal, remediation, government fines and injuries to persons and property.

Litigation and Other Matters

In accordance with accounting standards regarding loss contingencies, the Company accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated, and the Company discloses the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued or discloses the fact that such a range of loss cannot be estimated. The Company does not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated, or when the liability is believed to be only reasonably possible or remote.

On July 1, 2024, a purported shareholder of the Company filed a class action lawsuit in the U.S. District Court for the Southern District of New York, captioned Zhengxu He, Trustee of the He & Fang 2005 Revocable Living Trust v. Seritage Growth Properties, Case No. 1:24:CV:05007, alleging that the Company, the Company’s Chief Executive Officer, and the Company’s Chief Financial Officer violated the federal securities laws (the “Securities Action”). The complaint seeks to bring a class action on behalf of all persons and entities that purchased or otherwise acquired Company securities between July 7, 2022 and May 10, 2024. The complaint alleges that the defendants violated federal securities laws by issuing false, misleading, and/or omissive disclosures concerning the Company’s alleged lack of effective internal controls regarding the identification and review of impairment indicators for investments in real estate and the Company’s value and projected gross proceeds of certain real estate assets. The complaint seeks compensatory damages in an unspecified amount to be proven at trial, an award of reasonable costs and expenses to the plaintiff and class counsel, and such other and further relief as the court may deem just and proper. On or around January 15, 2025, another purported shareholder of the Company filed a derivative lawsuit in the U.S. District Court for the District of Maryland, captioned Paul Sidhu v. Seritage Growth Properties, Case No. 1:25-cv-00152 (the “Sidhu Derivative Action”). On or around January 20, 2025, another purported shareholder of the Company filed a derivative lawsuit in the U.S. District Court for the District of Maryland, captioned James Wallen v. Seritage Growth Properties, Case No. 1:25-cv-00190 (the “Wallen Derivative Action”). On or around May 8, 2025, another purported shareholder of the Company filed a derivative lawsuit in the U.S. District Court for the Southern District of New York, captioned Derrick Cheroti v. Seritage Growth Properties, Case No. 1:25-vc-00152 (the “Cheroti Derivative Action”). The derivative actions allege the same or similar claimed acts and omissions underlying the Securities Action, assert breach of fiduciary duty and other claims against the Company’s Chief Executive Officer, the Company’s Chief Financial Officer, and current and former members of the Company’s Board of Trustees, and name the Company as a nominal defendant. The complaint in each of the derivative actions seeks compensatory damages in an unspecified amount to be proven at trial, an order directing the Company and the individual defendants to reform and improve the Company’s corporate governance and internal procedures, restitution from the individual defendants, an award of costs and expenses to the plaintiff and reasonable attorneys’ and experts’ fees, costs, and expenses, and such other and further relief as the court may deem just and proper. The complaint in the Cheroti Derivative Action also seeks an award of punitive damages, an order directing the individual defendants to account for all damages caused by them and all profits and special benefits and unjust enrichment obtained, and the imposition of a constructive trust. On September 2, 2025, the court in the Cheroti Derivative Action stayed the Cheroti Derivative Action until resolution of the anticipated motion to dismiss in the Securities Action. On November 5, 2025, the court in the District of Maryland proceedings consolidated the Sidhu Derivative Action and the Wallen Derivative Action (the “Consolidated Derivative Action”) and appointed lead counsel. On November 12, 2025, the court in the Consolidated Derivative Action stayed the Consolidated Derivative Action until resolution of the anticipated motion to dismiss in the Securities Action. The Company intends to vigorously defend itself against the allegations in these lawsuits.

In addition to the litigation described above, the Company is subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business and due to the current environment. While the resolution of such matters cannot be predicted with certainty, management believes, based on currently available information, that the final outcome of such matters will not have a material effect on the consolidated financial position, results of operations, cash flows or liquidity of the Company.

Note 10 – Related Party Disclosure

Edward S. Lampert

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Edward S. Lampert is the Chairman and Chief Executive Officer of ESL, which owns Holdco, and was Chairman of Sears Holdings. Mr. Lampert was also the Chairman of Seritage prior to his retirement effective March 1, 2022.

On July 6, 2022, Mr. Lampert converted all of his remaining Operating Partnership Units (“OP Units”) to Class A common shares. As a result, he no longer holds a direct interest in the Operating Partnership and he owns approximately 23.8% of the outstanding Class A shares as of June 30, 2026.

Winthrop Capital Advisors

On December 29, 2021, the Company entered into a Services Agreement with Winthrop Capital Advisors LLC to provide additional staffing to the Company. On January 7, 2022, the Company announced that John Garilli, an employee of Winthrop, has been appointed interim chief financial officer on a full-time basis, effective January 14, 2022. The Company pays Winthrop a monthly fee of $0.1 million and reimbursement for certain employee expenses. The Company paid Winthrop $0.6 million and $0.7 million during the three months ended June 30, 2026 and 2025, respectively. The Company paid Winthrop $1.4 million and $1.7 million during the six months ended June 30, 2026 and 2025, respectively.

Unconsolidated Entities

Certain unconsolidated entities have engaged the Company to provide management, leasing, construction supervision and development services at the properties owned by the unconsolidated entities. Refer to Note 2 for the Company’s significant accounting policies.

At June 30, 2026 and December 31, 2025, there was $1.9 million and $1.8 million, respectively, in receivables from unconsolidated entities for reimbursable costs and is included in tenant and other receivables on the condensed consolidated balance sheets. In addition, during the year ended December 31, 2025, the Company advanced $1.7 million to one of its joint venture partners pursuant to its joint venture agreement and is included in tenant and other receivables, net. This receivable is to be repaid by preferred distributions from the joint venture. The balance of the receivable was $1.4 million at June 30, 2026 and December 31, 2025, respectively. At June 30, 2026 and December 31, 2025, there was $20.5 thousand and $24.2 thousand, respectively, in payables to unconsolidated entities and is included in accounts payable, accrued expenses and other liabilities on the condensed consolidated balance sheets.

At June 30, 2026, the Company had a put right on one property held by one unconsolidated entity, which may require the Company’s partner to buy out the Company’s investment in such property. During the three and six months ended June 30, 2026 and 2025, the Company did not exercise any put rights. As of June 30, 2026, the threshold to exercise this put right had not been met.

Note 11 – Shareholders’ Equity

Class A Common Shares

As of June 30, 2026, 56,324,607 Class A common shares were issued and outstanding. Class A shares have a par value of $0.01 per share.

Class B Non-Economic Common Shares

As of June 30, 2026, there were no Class B non-economic common shares issued or outstanding.

Series A Preferred Shares

In December 2017, the Company issued 2,800,000 7.00% Series A Cumulative Redeemable Preferred Shares (the “Series A Preferred Shares”) in a public offering at $25.00 per share. The Company received net proceeds from the offering of approximately $66.4 million, after deducting payment of the underwriting discount and offering expenses.

On and after December 14, 2022, the Company may redeem any or all of the Series A Preferred Shares at $25.00 per share plus any accrued and unpaid dividends. The Series A Preferred Shares have no stated maturity, are not subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless the Company redeems or otherwise repurchases them or they are converted.

Dividends and Distributions

The Company’s Board of Trustees has not declared dividends on the Company’s Class A common shares during 2026 or 2025. The last dividend on the Company’s Class A and C common shares that the Board of Trustees declared was on February 25, 2019, which was paid on April 11, 2019 to shareholders of record on March 29, 2019.

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Our Board of Trustees will determine future distributions following the pay down of the Term Loan Facility.

The Company’s Board of Trustees also declared the following dividends on preferred shares during 2026 and 2025:


			Series A
Declaration Date	Record Date	Payment Date	Preferred Share
2026
July 28	September 30	October 15	$	0.43750
April 20	June 30	July 15		0.43750
February 25	March 31	April 15		0.43750
2025
October 29	December 31	January 15, 2026	$	0.43750
July 23	September 30	October 15		0.43750
May 8	June 30	July 15		0.43750
February 26	March 31	April 15		0.43750

Note 12 – Earnings (Loss) per Share

The table below provides a reconciliation of net loss and the number of common shares used in the computations of “basic” earnings per share (“EPS”), which utilizes the weighted-average number of common shares outstanding without regard to dilutive potential common shares, and “diluted” EPS, which includes all such shares.


(in thousands except per share amounts)	Three Months Ended June 30,						Six Months Ended June 30,
	2026			2025			2026			2025
Numerator - Basic and Diluted
Net loss	$	(6,128	)	$	(28,506	)	$	(36,446	)	$	(50,708	)
Preferred dividends		(1,225	)		(1,225	)		(2,450	)		(2,450	)
Net loss attributable to common shareholders - Basic and Diluted	$	(7,353	)	$	(29,731	)	$	(38,896	)	$	(53,158	)

Denominator - Basic and Diluted
Weighted-average Class A common shares outstanding		56,324			56,324			56,324			56,304
Weighted-average Class A common shares outstanding - Basic		56,324			56,324			56,324			56,304
Weighted-average Class A common shares outstanding - Diluted		56,324			56,324			56,324			56,304

Loss per share attributable to Class A common shareholders - Basic	$	(0.13	)	$	(0.53	)	$	(0.69	)	$	(0.94	)
Loss per share attributable to Class A common shareholders - Diluted	$	(0.13	)	$	(0.53	)	$	(0.69	)	$	(0.94	)

No adjustments were made to the numerator for the three and six months ended June 30, 2026 and 2025, respectively, because the Company generated a net loss. During periods of net loss, undistributed losses are not allocated to the participating securities as they are not required to absorb losses.

No adjustments were made to the denominator for the three and six months ended June 30, 2026 and 2025, respectively, as there were no outstanding non-vested restricted shares.

Note 13 – Share-Based Compensation

On July 7, 2015, the Company adopted the Seritage Growth Properties 2015 Share Plan (the “Plan”). The number of shares of common stock reserved for issuance under the Plan is 3,250,000. The Plan provides for grants of restricted shares, share units, other share-based awards, options, and share appreciation rights, each as defined in the Plan (collectively, the “Awards”). Directors, officers, other employees, and consultants of the Company and its subsidiaries and affiliates are eligible for Awards.

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Restricted Shares and Share Units

Pursuant to the Plan, the Company periodically made grants of restricted shares or share units. The vesting terms of these grants were specific to the individual grant and varied in that a portion of the restricted shares and share units vested in equal annual amounts over the subsequent three years (time-based vesting) and a portion of the restricted shares and share units vested on the third, and in some instances, the fourth anniversary of the grants subject to the achievement of certain performance criteria (performance-based and market-based vesting).

In general, participating employees were required to remain employed for vesting to occur (subject to certain limited exceptions). Restricted shares and share units that did not vest were forfeited. Dividends on restricted shares and share units with time-based vesting were paid to holders of such shares and share units and were not returnable, even if the underlying shares or share units did not ultimately vest. Dividends on restricted shares and share units with performance-based vesting were accrued when declared and paid to holders of such shares on the third, and in some instances, the fourth anniversary of the initial grant subject to the vesting of the underlying shares.

As of March 31, 2025, all restricted shares were fully vested. The Company recognized $0.2 million in share-based compensation expense related to the restricted shares for the six months ended June 30, 2025. There was no share-based compensation expense related to the restricted shares for the three and six months ended June 30, 2026, or for the three months ended June 30, 2025, respectively. Compensation expenses related to the restricted shares are included in general and administrative expenses on the Company’s condensed consolidated statements of operations.

Note 14 – Segment Reporting

The Company currently operates in a single reportable segment which includes the ownership, development, redevelopment, management, sale and leasing of real estate properties. Substantially all of our revenues are derived from contractual rents and tenant expense reimbursements as outlined within lease agreements. The Company’s CODM, who is our chief executive officer, assesses and measures the operating and financial results on an aggregated basis and does not allocate resources or make decisions distinguishing between individual properties, geographies, sizes, or types. All revenue has been generated and all tangible assets are held in the United States.

The Company’s CODM regularly reviews the operating results of the Company to determine how to best allocate resources. The Company’s measure of segment profitability is consolidated net loss. The CODM uses consolidated net loss when deciding whether to market a property for sale, make an investment in a property to improve its marketability, or reduce general and administrative expenses. Consolidated net loss is also used to monitor budgeted versus actual results. The measure of segment assets is reported on the condensed consolidated balance sheets as Total assets.

The table below reconciles total segment revenues to consolidated net loss and includes the significant segment expenses regularly provided to and reviewed by the CODM as part of their decision making process (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,
	2026			2025			2026			2025
Total revenue	$	1,874		$	4,653		$	3,924		$	9,252
Real estate taxes		(384	)		(692	)		(717	)		(1,645	)
Common area maintenance		(591	)		(1,459	)		(1,596	)		(3,118	)
Property insurance		9			(1,454	)		(262	)		(2,387	)
Personnel expenses (1)		(3,063	)		(3,641	)		(6,010	)		(16,404	)
Interest expense		(2,936	)		(5,139	)		(5,839	)		(10,369	)
Other segment items (2)		(1,037	)		(20,659	)		(25,946	)		(26,112	)
Loss before income taxes	$	(6,128	)	$	(28,391	)	$	(36,446	)	$	(50,783	)

(1)

Personnel expenses include expenses related to employee base compensation, bonuses, cash payments in lieu of equity, share-based compensation and third-party consulting fees.

(2)

Other segment items include expenses included in the measure of segment loss that are not considered significant. Items that are not considered significant include the following: property utilities, audit and tax fees, office expenses, trustee fees, information and technology costs, legal fees, corporate insurance and other miscellaneous expenses. Other segment items also include the following: depreciation and amortization, gain on sale of real estate, impairment of real estate assets and equity in loss of unconsolidated entities, interest and other income.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Certain statements contained herein constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of future performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “projects,” “would,” “may,” “will,” “continue to,” “pro forma” or the opposite of these words and phrases or other similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters in this Quarterly Report on Form 10-Q. Many of the factors that will determine the outcome of these and our other forward-looking statements are beyond our ability to control or predict. For further discussion of factors that could materially affect the outcome of our forward-looking statements, see “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q. The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto included in Part 1 of this Quarterly Report.

Overview

Prior to our adoption of the Plan of Sale, we were principally engaged in the ownership, development, redevelopment, management, sale and leasing of diversified retail and mixed-use properties throughout the United States. As of June 30, 2026, our portfolio consisted of interests in nine properties comprised of approximately 0.8 million square feet of gross leasable area (“GLA”) or build-to-suit leased area and 139 acres of land. The portfolio encompasses four consolidated properties consisting of approximately 0.3 million square feet of GLA and 56 acres and five unconsolidated entities consisting of approximately 0.5 million square feet of GLA and 83 acres.

Review of Strategic Alternatives

On March 1, 2022, the Company announced that its Board of Trustees commenced a process to review a broad range of strategic alternatives to enhance shareholder value. The Board of Trustees created a special committee of the Board of Trustees (the “Special Committee”) to oversee the process. The Special Committee retained Barclays as its financial advisor from March 2022 to August 2023 to assist with the strategic review. The Company sought a shareholder vote to approve a proposed plan of sale of our assets and dissolution (the “Plan of Sale”) that would allow our Board of Trustees to sell all of our assets, distribute the net proceeds to shareholders and dissolve the Company.

The 2022 Annual Meeting of Shareholders occurred on October 24, 2022, at which time the Plan of Sale was approved by the shareholders, following our filing of a final proxy statement with the SEC on September 14, 2022. See Note 1 – Organization of the Notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information about the Plan of Sale. The strategic review process remains ongoing as the Company executes the Plan of Sale, and the Company remains open minded to pursuing value maximizing alternatives, including a potential sale of the Company. There can be no assurance that the review process will result in any transaction or that the Company will be successful in fully executing on the Plan of Sale. The Board of Trustees is currently overseeing the Plan of Sale.

Impairment of Real Estate Assets and Investments in Unconsolidated Entities

We did not recognize any impairment losses for the three months ended June 30, 2026. For the six months ended June 30, 2026, we recognized a total of $15.2 million of impairment losses due to a marketed process that resulted in receiving offers below carrying value, which are included in impairment of real estate assets within the condensed consolidated statements of operations. In addition, we recognized $5.2 million in other-than-temporary impairment losses on our investments in unconsolidated entities during the six months ended June 30, 2026, which is included in equity in income (loss) of unconsolidated entities within the condensed consolidated statements of operations. We continue to evaluate our portfolio, including our development plans, hold periods and, if applicable, offers received, which may result in additional impairments in future periods on our consolidated properties and investments in unconsolidated entities.

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REIT Qualification

On March 31, 2022, the Company announced that its Board of Trustees, with the recommendation of the Special Committee, approved a plan to terminate the Company's REIT status and become a taxable C Corporation effective January 1, 2022. As a result, the Company is no longer required to operate under REIT rules, including the requirement to distribute at least 90% of REIT taxable income to its shareholders, which provides the Company with greater flexibility to use its free cash flow. Effective January 1, 2022, the Company is subject to federal and state income taxes on its taxable income at applicable tax rates and is no longer entitled to a tax deduction for dividends paid. The Company operated as a REIT for the 2021 tax year and prior tax years, and existing REIT requirements and limitations, including those established by the Company’s organizational documents, remained in place through December 31, 2021. Refer to Note 7 – Income Taxes of the Notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Market Update

The Company continues to face challenging market conditions such as elevated interest rates and the availability of debt and equity capital, and it continues to assess other potential macroeconomic impacts including supply chain issues, international conflicts associated with tariffs, potential labor issues, and uncertainty caused by wars. While interest rates have started to decline, they remain high relative to interest rates in 2022. Additionally, raising equity capital for land development deals remains challenging. These conditions could apply downward pricing pressures on our remaining assets. In making decisions regarding whether and when to transact on each of the Company’s remaining assets, the Company considers various factors including, but not limited to, the breadth of the buyer universe, macroeconomic conditions, the availability and cost of financing, as well as corporate, operating and other capital expenses required to carry the asset. If these challenging market conditions persist, then we expect that they will continue to adversely impact the Plan of Sale proceeds from our assets and the amounts and timing of distributions to shareholders.

Business Strategies

The Company’s primary objective is to create value for its shareholders through the monetization of the Company's assets through the Plan of Sale, which can be suspended by the Board of Trustees. We look to enhance sale value through leasing our built footprint, densification of our sites, achievement of entitlements and modification of agreements that govern our properties. We continue to position all remaining assets for sale.

Results of Operations

We derive substantially all of our revenue from rents received from tenants under existing leases at each of our properties. This revenue generally includes fixed base rents and recoveries of expenses that we have incurred and that we pass through to the individual tenants, in each case as provided in the respective leases.

Our primary cash expenses consist of our property operating expenses, general and administrative expenses, interest expense, and construction and development related costs. Property operating expenses include: real estate taxes, repairs and maintenance, management fees, insurance, ground lease costs and utilities; general and administrative expenses include payroll, office expenses, professional fees, and other administrative expenses; and interest expense includes interest on our Term Loan Facility. In addition, we incur substantial non-cash charges for depreciation of our properties and amortization of intangible assets and liabilities.

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Comparison of the Three Months Ended June 30, 2026 to the Three Months Ended June 30, 2025

The following table presents selected data on comparative results from the Company’s condensed consolidated statements of operations for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025 (in thousands):


	Three Months Ended June 30,
	2026			2025			$ Change
Revenue
Rental income	$	1,760		$	4,526		$	(2,766	)
Expenses
Property operating		(761	)		(3,237	)		2,476
Real estate taxes		(384	)		(692	)		308
Depreciation and amortization		(390	)		(2,040	)		1,650
General and administrative		(5,096	)		(6,172	)		1,076
Gain on sale of real estate		35			1,967			(1,932	)
Loss on sale of interests in unconsolidated entities		—			(1,417	)		1,417
Impairment of real estate assets		—			(18,000	)		18,000
Equity in loss of unconsolidated entities		508			756			(248	)
Interest and other income (expense), net		1,022			930			92
Interest expense		(2,936	)		(5,139	)		2,203

Rental Income

Rental income decreased by $2.8 million for the three months ended June 30, 2026, primarily due to property sales.

Property Operating Expenses

Property operating expenses decreased by $2.5 million primarily due to sales. The largest decreases were in common area maintenance, utilities, and insurance.

Real Estate Taxes

Real estate taxes decreased by approximately $0.3 million for the three months ended June 30, 2026 due to property sales.

Depreciation and Amortization Expenses

The decrease of $1.7 million in depreciation and amortization expenses for the three months ended June 30, 2026 was primarily due to property sales.

General and Administrative Expenses

General and administrative expenses consist of personnel costs, including share-based compensation and third-party consulting fees, professional fees, office expenses and overhead expenses.

The decrease of $1.1 million for the three months ended June 30, 2026 was primarily driven by a decrease of $0.5 million in personnel costs, $0.4 million in office and ground rent, and $0.2 million in legal fees.

Gain on Sale of Real Estate

During the three months ended June 30, 2026, the company sold one property for $11.0 million and recorded a gain totaling $35.2 thousand, which is included in the gain on sale of real estate within the condensed consolidated statements of operations.

During the three months ended June 30, 2025, the Company sold one property for $23.0 million and recorded a gain totaling $2.0 million which is included in gain on sale of real estate within the condensed consolidated statements of operations.

Loss on Sale of Interests in Unconsolidated Entities

There were no sales of interest in Unconsolidated entities during the three months ended June 30, 2026.

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During the three months ended June 30, 2025, the Company sold its remaining interest in the SPS Portfolio Holdings II LLC joint venture to an affiliate of its joint venture partner and recognized a loss of $1.4 million on the sale.

Impairment of Real Estate Assets

The Company did not recognize any impairment charges during the three months ended June 30, 2026.

During the three months ended June 30, 2025, the Company recognized an $18.0 million impairment of real estate assets as a result of the Company agreeing to sell one property at an amount below book value.

Equity in Loss of Unconsolidated Entities

During the three months ended June 30, 2026, equity in loss of Unconsolidated Entities decreased by ($0.2) million due an increase in income of $0.4 million from the Company’s investment in the UTC JV offset by an increase of losses of $0.2 million related to the Company’s other investments.

Interest and Other Income (Expense), Net

For the three months ended June 30, 2026, interest and other income (expense), net increased by $92.0 thousand primarily due to large legal refunds partially offset by a decrease in interest income as a result of maintaining lower cash balances.

Interest Expense

The decrease of $2.2 million in interest expense for the three months ended June 30, 2026 was driven by the partial Term Loan Facility paydowns subsequent to June 30, 2025, partially offset by an increase in amortization expense of deferred financing costs.

Comparison of the Six Months Ended June 30, 2026 to the Six Months Ended June 30, 2025

The following table presents selected data on comparative results from the Company’s condensed consolidated statements of operations for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025 (in thousands):


	Six Months Ended June 30,
	2026			2025			$ Change
Revenue
Rental income	$	3,669		$	8,983		$	(5,314	)
Expenses
Property operating		(2,222	)		(6,145	)		3,923
Real estate taxes		(717	)		(1,645	)		928
Depreciation and amortization		(790	)		(4,115	)		3,325
General and administrative		(10,388	)		(21,865	)		11,477
Gain on sale of real estate		35			8,903			(8,868	)
Loss on sale of interests in unconsolidated entities		—			(1,417	)		1,417
Impairment of real estate assets		(15,183	)		(18,000	)		2,817
Equity in income (loss) of unconsolidated entities		(6,659	)		(7,172	)		513
Interest and other income (expense), net		1,393			1,790			(397	)
Interest expense		(5,839	)		(10,369	)		4,530

Rental Income

Rental income decreased by $5.3 million primarily due to property sales.

Property Operating Expenses

Property operating expenses decreased by $3.9 million primarily due to sales. The largest decreases were in common area maintenance, utilities, and insurance.

Real Estate Taxes

Real estate taxes decreased by $0.9 million primarily due to sales. Additionally, during the six months ended June 30, 2026, there were no real estate tax reduction fees and therefore no real estate tax refunds.

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Depreciation and Amortization Expenses

The decrease of $3.3 million in depreciation and amortization during the six months ended June 30, 2026 was primarily due to property sales.

General and Administrative Expenses

General and administrative expenses consist of personnel costs, including share-based compensation and third-party consulting fees, professional fees, office expenses and overhead expenses.

The decrease of $11.5 million was partially driven by the recognition of severance expense of $6.5 million for the six months ended June 30, 2025. Other decreasing costs include $3.1 million in personnel costs, $0.8 million office and ground rent, and $0.4 million in legal fees.

Gain on Sale of Real Estate

During the six months ended June 30, 2026, the company sold one property for $11.0 million and recorded a gain totaling $35.2 thousand, which is included in the gain on sale of real estate within the condensed consolidated statements of operations.

During the six months ended June 30, 2025, the Company sold two properties for $52.6 million and recorded a gain totaling $8.9 million which is included in gain on sale of real estate within the condensed consolidated statements of operations.

Loss on Sale of Interests in Unconsolidated Entities

There were no sales of interests in Unconsolidated entities for the six months ended June 30, 2026.

During the six months ended June 30, 2025, the Company sold its remaining interest in the SPS Portfolio Holdings II LLC joint venture to an affiliate of its joint venture partner and recognized a loss of $1.4 million on the sale.

Impairment of Real Estate Assets

During the six months ended June 30, 2026 the Company recognized a $15.2 million impairment of real estate assets due to a marketed process that resulted in receiving offers below carrying value.

During the six months ended June 30, 2025, the Company recognized an $18.0 million impairment of real estate assets as a result of the Company agreeing to sell one property at an amount below book value.

Equity in Income (Loss) of Unconsolidated Entities

During the six months ended June 30, 2026, $5.2 million of other-than-temporary impairment losses and a $2.7 million loss on sale of a portion of an Unconsolidated Property were recorded, compared to an $8.5 million other-than-temporary impairment loss recorded during the six months ended June 30, 2025. These factors resulted in a decrease in loss of $0.5 million.

Interest and Other Income (Expense), Net

For the six months ended June 30, 2026, interest and other income decreased by $0.4 million primarily due to holding lower cash balances.

Interest Expense

The decrease of $4.5 million in interest expense for the six months ended June 30, 2026 was driven by the $150.0 million of Term Loan Facility paydowns made since June 30, 2025.

Liquidity and Capital Resources

Our primary uses of cash include the payment of property operating and other expenses, including general and administrative expenses and debt service (collectively, “Obligations”), and certain development expenditures. Property rental income, which is the Company’s primary source of operating cash flow, did not fully fund Obligations during the six months ended June 30, 2026 and the Company recorded net operating cash outflows of $7.3 million. Additionally, the Company generated net investing cash inflows of $12.0 million during the six months ended June 30, 2026, which were driven by distributions from unconsolidated entities and sales of real estate partially offset by development expenditures and investments in unconsolidated entities.

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Obligations are projected to continue to exceed property rental income and we expect to fund such Obligations and any development expenditures with cash on hand and a combination of capital sources including, but not limited to, sales of Consolidated Properties, sales of interests in Unconsolidated Properties and financing transactions, subject to any approvals that may be required under the loan agreements. Below is our sales activity since we began our capital recycling program:

•

Sales of Consolidated Properties. We began our capital recycling program in July 2017 and have been monetizing assets since. In March of 2022, we elected to terminate our REIT status effective January 1, 2022 in order to remove any restrictions around asset sales. On October 24, 2022, we received shareholder approval of the Plan of Sale.

We sold 90 Consolidated Properties, and additional outparcels at certain properties, and generated approximately $986.8 million of gross proceeds from the beginning of our capital recycling program in July 2017 through the date our REIT status terminated on December 31, 2021;

We sold 40 Consolidated Properties, and additional outparcels at certain properties, and generated approximately $438.1 million of gross proceeds from December 31, 2021, the date we terminated our REIT status, through the approval of the Plan of Sale on October 24, 2022;

From the approval of the Plan of Sale on October 24, 2022 through June 30, 2026, we sold 95 Consolidated Properties, and additional outparcels at certain properties, and generated approximately $1.3 billion of gross proceeds.

•

Sales of interests in Unconsolidated Properties. Certain of our unconsolidated entity agreements also include rights that allow us to sell our interests in select Unconsolidated Properties to our partners at fair market value;

We sold our interests in 15 Unconsolidated Properties and generated approximately $278.1 million of gross proceeds from the beginning of our capital recycling program in July 2017 through the date our REIT status terminated on December 31, 2021;

We sold our interests in 8 Unconsolidated Properties and generated approximately $84.8 million of gross proceeds since we terminated our REIT status on December 31, 2021, through the approval of the Plan of Sale on October 24, 2022;

From the approval of the Plan of Sale on October 24, 2022 through June 30, 2026, we sold our interests in 12 Unconsolidated Properties and generated approximately $165.3 million of gross proceeds.

•

Unconsolidated Properties. We had contributed interests in 12 properties to unconsolidated entities, which generated approximately $242.4 million of gross proceeds from July 2017 through June 30, 2026. In addition to generating liquidity upon closing, these entities also reduce our development expenditures by the amount of our partners’ interests in the unconsolidated entities.

Subsequent to June 30, 2026, we sold one Consolidated Property for gross proceeds of $3.0 million and received a distribution of $8.9 million from an Unconsolidated Property as a result of the sale of a portion of the underlying property. The Company has entered into an option purchase and sale agreement (the “PSA”) to sell one vacant non-income producing premier asset in Dallas, Texas for anticipated gross proceeds of $50.8 million before applicable credits and costs. The sale is subject to customary closing conditions and is also cross-conditioned and cross-defaulted with an option purchase and sale agreement between the buyer and unaffiliated owners of a neighboring parcel. The buyer made an initial option payment of $169,200, then (i) commencing on July 1, 2026, and each month thereafter that the PSA remains in effect through December 1, 2026, the Company shall receive an option payment equal to $126,900 and (ii) commencing on January 1, 2027, and each month thereafter that the PSA remains in effect through January 1, 2028, the Company shall receive an option payment equal to $274,950. All option payments are incremental to the purchase price and are non-refundable except as otherwise provided for in the PSA. There can be no assurances that the buyer will exercise the option to purchase the property.

Term Loan Facility / Incremental Funding Facility

As previously disclosed, on May 5, 2020, the Operating Partnership and Berkshire Hathaway entered into an amendment (the “Term Loan Amendment”) to the Term Loan Agreement by and among the Operating Partnership and Berkshire Hathaway as initial lender and administrative agent that permitted the deferral of payment of interest under the Term Loan Agreement if, as of the first day of each applicable month, (x) the amount of unrestricted and unencumbered (other than liens created under the Term Loan Agreement) cash on hand of the Operating Partnership and its subsidiaries, minus (y) the aggregate amount of anticipated necessary expenditures for such period (such sum, “Available Cash”) was equal to or less than $30.0 million. In such instances, for each interest period, the Operating Partnership was obligated to make payments of interest in an amount equal to the difference between (i) Available Cash and (ii) $20.0 million (provided that such payment should not exceed the amount of current interest otherwise due under the Term Loan Agreement). Any deferred interest should accrue interest at 2.0% in excess of the then applicable interest rate and should be due and

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payable on July 31, 2023; provided, that the Operating Partnership was required to pay any deferred interest from Available Cash in excess of $30.0 million (unless otherwise agreed to by the administrative agent under the Term Loan Agreement in its sole discretion). In addition, repayment of any outstanding deferred interest was a condition to any borrowings under the $400.0 million incremental funding facility under the Term Loan Agreement (the “Incremental Funding Facility”).

Additionally, the Term Loan Amendment provided that the administrative agent and the lenders expressed their continued support for asset dispositions, subject to the administrative agent’s right to approve the terms of individual transactions due to the occurrence of a Financial Metric Trigger Event, as such term is defined under the Term Loan Agreement. The Third Term Loan Amendment (as defined in Note 6 – Debt of the Notes to the condensed consolidated financial statements included in Part I, Item I of this Quarterly Report on Form 10-Q) executed on June 16, 2022 provided exceptions to this right.

On July 28, 2025, the Company exercised its extension option pursuant to the Fourth Term Loan Amendment (as defined in Note 6 – Debt of the Notes to the condensed consolidated financial statements included in Part I, Item I of this Quarterly Report on Form 10-Q) and on July 30, 2025, the Company paid a 2% extension fee equal to $4.0 million extending the maturity date to July 31, 2026. The Company also paid the incremental facility fee of $4.0 million. All other terms under the Term Loan Agreement should remain unchanged during the extension period including the interest rate and the incremental facility fee in accordance with the Term Loan Agreement.

During the six months ended June 30, 2026, we did not make any payments against the principal of the Term Loan Facility. Our outstanding balance as of June 30, 2026, is $50.0 million.

Real Estate Loan / Revolver

On July 24, 2026, certain affiliates of the Company the Company entered into (i) a Loan and Security Agreement (the “Real Estate Loan”) providing for a $15.0 million term loan and (ii) a Business Loan Agreement (the “Revolver”), as amended by an omnibus agreement, providing for a $25.0 million revolving loan. At closing of the Revolver, the Company drew $15.0 million, and has $10.0 million available and unfunded. The Company used the proceeds from the closing of the Real Estate Loan and the initial draw under the Revolver, together with cash on hand, to fully repay the $50.0 million outstanding balance on the existing Term Loan Facility and to pay transaction and related costs. The Real Estate Loan is collateralized by the Company’s interest in three Consolidated Properties and bears interest at an annual rate of one-month SOFR plus 2.75% which interest rate shall be reduced to one-month SOFR plus 2.25% if the outstanding balance is reduced to $10.0 million or less. The Revolver is collateralized by $25.0 million of cash held in a restricted account with the lender. Drawn amounts under the Revolver bear interest at an annual rate equal to a spread of 2.0% above the money market rate on the cash collateral which is currently 3.5% for 12 months from closing and thereafter resets annually. Both the Real Estate Loan and the Revolver mature on July 24, 2028 and have a one-year extension option.

See Note 1 – Organization of the Notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion of liquidity and going concern.

Cash Flows for the Six Months Ended June 30, 2026 Compared to the Six Months Ended June 30, 2025

The following table summarizes the Company’s cash flow activities for the six months ended June 30, 2026 and 2025, respectively (in thousands):


	Six Months Ended June 30,
	2026			2025			$ Change
Net cash used in operating activities	$	(7,291	)	$	(21,234	)	$	13,943
Net cash provided by investing activities		12,004			46,087			(34,083	)
Net cash used in financing activities		(4,137	)		(42,432	)		38,295

Cash Flows from Operating Activities

Our primary uses of cash include the payment of property operating and other expenses, including general and administrative expenses. Rental revenues are not sufficient to cover these expenses.

Significant components of net cash used in operating activities included:

•

In 2026, a decrease in operating cash, partially offset by an increase to tenant and other receivables and in prepaid expenses, deferred expenses, and other assets.

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•

In 2025, a decrease in operating cash, partially offset by an increase to tenant and other receivables and an increase to accounts payable, accrued expenses and other liabilities.

Cash Flows from Investing Activities

Significant components of net cash provided by investing activities include:

•

In 2026, $6.4 million distributions from unconsolidated joint ventures, $9.0 million of net proceeds from the sale of real estate, offset by $2.5 million of investment in consolidated joint ventures and $0.9 of development of real estate; and

•

In 2025, $51.6 million of net proceeds from the sale of real estate, $8.1 million of net proceeds from the sale of interests in unconsolidated entities and $4.9 of distributions from unconsolidated entities offset by development of real estate of $18.0 million.

Cash Flows from Financing Activities

Significant components of net cash used in financing activities include:

•

In 2026, $2.5 million cash payments of preferred dividends and a distribution to non-controlling interest of $1.7 million; and

•

In 2025, $40.0 million cash repayment of Term Loan Facility principal and cash payments of preferred dividends of $2.5 million.

Dividends and Distributions

The Company’s Board of Trustees did not declare dividends on the Company’s Class A common shares during the six months ended June 30, 2026 and 2025, respectively. The last dividend on the Company’s Class A and C common shares that the Board of Trustees declared was on February 25, 2019, which was paid on April 11, 2019 to shareholders of record on March 29, 2019.

The Company’s Board of Trustees also declared the following dividends on the Company’s Series A Preferred Shares during 2026 and 2025:


			Series A
Declaration Date	Record Date	Payment Date	Preferred Share
2026
July 28	September 30	October 15	$	0.43750
April 20	June 30	July 15		0.43750
February 25	March 31	April 15		0.43750
2025
October 29	December 31	January 15, 2026	$	0.43750
July 23	September 30	October 15		0.43750
May 8	June 30	July 15		0.43750
February 26	March 31	April 15		0.43750

Off-Balance Sheet Arrangements

The Company accounts for its investments in entities that it does not have a controlling interest in but exercises significant influence under the equity method of accounting and those investments are reflected on the condensed consolidated balance sheets of the Company as investments in unconsolidated entities. As of June 30, 2026 and December 31, 2025, we did not have any off balance sheet financing arrangements.

Contractual Obligations

There have been no significant changes in the contractual obligations disclosed in our Form 10-K for the year ended December 31, 2025.

Capital Expenditures

During the three and six months ended June 30, 2026, the Company invested $0.8 million and $0.9 million, respectively, in our consolidated properties. The Company also invested $0.1 million and $2.5 million in our unconsolidated joint ventures during three and six months ended June 30, 2026, respectively.

During the three and six months ended June 30, 2025, the Company invested $4.6 million and $17.9 million, respectively, in our consolidated properties. The Company also invested $0.4 million in our unconsolidated joint ventures during the three and six months ended June 30, 2025.

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Litigation and Other Matters

In accordance with accounting standards regarding loss contingencies, we accrue an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated, and we disclose the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued or disclose the fact that such a range of loss cannot be estimated. We do not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated, or when the liability is believed to be only reasonably possible or remote. In such cases, we disclose the nature of the material contingency, and an estimate of the possible loss, range of loss, or disclose the fact that an estimate cannot be made.

On July 1, 2024, a purported shareholder of the Company filed a class action lawsuit in the U.S. District Court for the Southern District of New York, captioned Zhengxu He, Trustee of the He & Fang 2005 Revocable Living Trust v. Seritage Growth Properties, Case No. 1:24:CV:05007, alleging that the Company, the Company’s Chief Executive Officer, and the Company’s Chief Financial Officer violated the federal securities laws. The complaint seeks to bring a class action on behalf of all persons and entities that purchased or otherwise acquired Company securities between July 7, 2022 and May 10, 2024. The complaint alleges that the defendants violated federal securities laws by issuing false, misleading, and/or omissive disclosures concerning the Company’s alleged lack of effective internal controls regarding the identification and review of impairment indicators for investments in real estate and the Company’s value and projected gross proceeds of certain real estate assets. The complaint seeks compensatory damages in an unspecified amount to be proven at trial, an award of reasonable costs and expenses to the plaintiff and class counsel, and such other and further relief as the court may deem just and proper. On or around January 15, 2025, another purported shareholder of the Company filed a derivative lawsuit in the U.S. District Court for the District of Maryland, captioned Paul Sidhu v. Seritage Growth Properties, Case No. 1:25-cv-00152. On or around January 20, 2025, another purported shareholder of the Company filed a derivative lawsuit in the U.S. District Court for the District of Maryland, captioned James Wallen v. Seritage Growth Properties, Case No. 1:25-cv-00190. On or around May 8, 2025, another purported shareholder of the Company filed a derivative lawsuit in the U.S. District Court for the Southern District of New York, captioned Derrick Cheroti v. Seritage Growth Properties, Case No. 1:25-vc-00152. The derivative actions allege the same or similar claimed acts and omissions underlying the Securities Action, assert breach of fiduciary duty and other claims against the Company’s Chief Executive Officer, the Company’s Chief Financial Officer, and current and former members of the Company’s Board of Trustees, and name the Company as a nominal defendant. The complaint in each of the derivative actions seeks compensatory damages in an unspecified amount to be proven at trial, an order directing the Company and the individual defendants to reform and improve the Company’s corporate governance and internal procedures, restitution from the individual defendants, an award of costs and expenses to the plaintiff and reasonable attorneys’ and experts’ fees, costs, and expenses, and such other and further relief as the court may deem just and proper. The complaint in the Cheroti Derivative Action also seeks an award of punitive damages, an order directing the individual defendants to account for all damages caused by them and all profits and special benefits and unjust enrichment obtained, and the imposition of a constructive trust. On September 2, 2025, the court in the Cheroti Derivative Action stayed the Cheroti Derivative Action until resolution of the anticipated motion to dismiss in the Securities Action. On November 5, 2025, the court in the District of Maryland proceedings consolidated the Sidhu Derivative Action and the Wallen Derivative Action and appointed lead counsel. On November 12, 2025, the court in the Consolidated Derivative Action stayed the Consolidated Derivative Action until resolution of the anticipated motion to dismiss in the Securities Action. The Company intends to vigorously defend itself against the allegations in these lawsuits.

We are subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business and due to the current environment. While the resolution of such matters cannot be predicted with certainty, management believes, based on currently available information, the final outcome of such ordinary course legal proceedings and claims will not have a material effect on the condensed consolidated financial position, results of operations or liquidity of the Company.

See Note 9 – Commitments and Contingencies Litigation and Other Matters of the Notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion of the Litigation and related matters.

Critical Accounting Policies

A summary of our critical accounting policies is included in our Annual Report on Form 10-K for the year ended December 31, 2025 in Management’s Discussion and Analysis of Financial Condition and Results of Operations. For the six months ended June 30, 2026, there were no material changes to these policies.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

There were no material changes in the Quantitative and Qualitative Disclosures about Market Risk set forth in our 2025 Annual Report on Form 10-K.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d – 15(e) under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”)). Because of inherent limitations, disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of disclosure controls and procedures are met.

Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were not effective due to the material weaknesses described below.

Notwithstanding the material weaknesses in our internal control over financial reporting, our principal executive officer and principal financial officer have concluded that the unaudited condensed consolidated financial statements included in this Form 10-Q fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States of America.

Material Weaknesses

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

As previously reported, management identified material weaknesses due to deficiencies in the design and operating effectiveness of controls which remain unremediated as of, and for the six months ended June 30, 2026. The material weaknesses identified in our internal control over financial reporting related to: (i) level of precision of the review of the general ledger and underlying reconciliations, and (ii) lack of appropriate segregation of duties over journal entries. These deficiencies contributed to the potential for there to be material errors in our financial statements.

Update on Remediation Plan

As previously reported, in response to the material weaknesses, management, with oversight of the Audit Committee, began to implement steps to remediate the material weaknesses. While the Company has made progress with the remediation of these material weaknesses, the remediation efforts are ongoing, because additional time is needed to complete the remediation and allow for the internal controls to be tested by management.

However, the material weaknesses discussed above cannot be considered completely remediated until the applicable controls are fully implemented, have operated for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. Accordingly, we will continue to monitor and evaluate the effectiveness of our internal control over financial reporting.

Changes in Internal Controls over Financial Reporting

Other than as described above, there were no changes in internal control over financial reporting that occurred during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The information required by this Item is incorporated by reference to Note 9 of the condensed consolidated financial statements included herein.

On July 1, 2024, a purported shareholder of the Company filed a class action lawsuit in the U.S. District Court for the Southern District of New York, captioned Zhengxu He, Trustee of the He & Fang 2005 Revocable Living Trust v. Seritage Growth Properties, Case No. 1:24:CV:05007, alleging that the Company, the Company’s Chief Executive Officer, and the Company’s Chief Financial Officer violated the federal securities laws. The complaint seeks to bring a class action on behalf of all persons and entities that purchased or otherwise acquired Company securities between July 7, 2022 and May 10, 2024. The complaint alleges that the defendants violated federal securities laws by issuing false, misleading, and/or omissive disclosures concerning the Company’s alleged lack of effective internal controls regarding the identification and review of impairment indicators for investments in real estate and the Company’s value and projected gross proceeds of certain real estate assets. The complaint seeks compensatory damages in an unspecified amount to be proven at trial, an award of reasonable costs and expenses to the plaintiff and class counsel, and such other and further relief as the court may deem just and proper. On or around January 15, 2025, another purported shareholder of the Company filed a derivative lawsuit in the U.S. District Court for the District of Maryland, captioned Paul Sidhu v. Seritage Growth Properties, Case No. 1:25-cv-00152. On or around January 20, 2025, another purported shareholder of the Company filed a derivative lawsuit in the U.S. District Court for the District of Maryland, captioned James Wallen v. Seritage Growth Properties, Case No. 1:25-cv-00190. On or around May 8, 2025, another purported shareholder of the Company filed a derivative lawsuit in the U.S. District Court for the Southern District of New York, captioned Derrick Cheroti v. Seritage Growth Properties, Case No. 1:25-vc-00152. The derivative actions allege the same or similar claimed acts and omissions underlying the Securities Action, assert breach of fiduciary duty and other claims against the Company’s Chief Executive Officer, the Company’s Chief Financial Officer, and current and former members of the Company’s Board of Trustees, and name the Company as a nominal defendant. The complaint in each of the derivative actions seeks compensatory damages in an unspecified amount to be proven at trial, an order directing the Company and the individual defendants to reform and improve the Company’s corporate governance and internal procedures, restitution from the individual defendants, an award of costs and expenses to the plaintiff and reasonable attorneys’ and experts’ fees, costs, and expenses, and such other and further relief as the court may deem just and proper. The complaint in the Cheroti Derivative Action also seeks an award of punitive damages, an order directing the individual defendants to account for all damages caused by them and all profits and special benefits and unjust enrichment obtained, and the imposition of a constructive trust. On September 2, 2025, the court in the Cheroti Derivative Action stayed the Cheroti Derivative Action until resolution of the anticipated motion to dismiss in the Securities Action. On November 5, 2025, the court in the District of Maryland proceedings consolidated the Sidhu Derivative Action and the Wallen Derivative Action and appointed lead counsel. On November 12, 2025, the court in the Consolidated Derivative Action stayed the Consolidated Derivative Action until resolution of the anticipated motion to dismiss in the Securities Action. The Company intends to vigorously defend itself against the allegations in these lawsuits.

The Company is subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business and due to the current environment. While the resolution of such matters cannot be predicted with certainty, management believes, based on currently available information, that the final outcome of such matters will not have a material effect on the consolidated financial position, results of operations, cash flows or liquidity of the Company.

Item 1A. Risk Factors

Please refer to Item 1A—Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025 for a description of certain material risks and uncertainties to which our business, financial condition and results of operations are subject. There have been no material changes to the risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2025.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

- 37 -

Item 5. Other Information

None.

During the three and six months ended June 30, 2026, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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Item 6. Exhibits


Exhibit No.	Description	SEC Document Reference

10.1	Loan and Security Agreement between Seritage SRC Finance LLC and b1Bank, dated as of July 24, 2026	Filed herewith.

10.2	Business Loan Agreement between Seritage Growth Properties, L.P. and b1Bank, dated July 24, 2026	Filed herewith.

10.3	Omnibus Agreement between Seritage Growth Properties, L.P., Seritage SRC Finance LLC, Seritage SRC Mezzanine Finance LLC, and Seritage Growth Properties, and b1Bank, dated July 24, 2026	Filed herewith.

10.4	Agreement of Purchase and Sale by Seritage SRC Finance LLC and Arena Development Intermediate, LLC, dated as of June 1, 2026	Filed herewith.

10.5	Amended and Restated Employment Agreement by and among Adam Metz, Seritage Growth Properties, L.P., and Seritage Growth Properties, dated July 1, 2026	Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K, filed on July 8, 2026.

31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith.

31.2	Certification of the Interim Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith.

32.1	Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350	Furnished herewith.

32.2	Certification of the Interim Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350	Furnished herewith.

101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document	Filed herewith.

101.SCH	Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents	Filed herewith.

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)	Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	SERITAGE GROWTH PROPERTIES

Dated: August 14, 2026	/s/ Adam Metz
	By:	Adam Metz
	President and Chief Executive Officer (Principal Executive Officer)

Dated: August 14, 2026	/s/ John Garilli
	By:	John Garilli
	Interim Chief Financial Officer (Principal Financial and Accounting Officer)

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EX-10.1 2 srg-ex10_1.htm EX-10.1 EX-10.1

Exhibit 10.1

EXECUTION VERSION

B1BANK – LOAN NO. 10000160875-10001

LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT (including all schedules, exhibits and appendices attached or otherwise identified therewith, as amended, modified or restated from time to time, this “Agreement”) dated as of July 24, 2026 (the “Effective Date”), is between (a) b1BANK, a Louisiana state-chartered bank (together with its successors and assigns, “Lender”) and (b) SERITAGE SRC FINANCE LLC, a Delaware limited liability company (“Borrower”).

RECITALS

WHEREAS Borrower (a) has determined that Borrower will benefit specifically and materially from the Credit Facility contemplated by this Agreement, and (b) has requested and bargained for the structure, terms and obligations set forth in the Loan Documents.

WHEREAS Lender is willing to make the Credit Facility available upon and subject to the provisions, terms and conditions set forth in the Loan Documents.

NOW THEREFORE, the parties hereto, intending to be legally bound, agree as follows:

Definitions. As used in this Agreement, all exhibits, appendices, and schedules hereto, and in any other Loan Documents made or delivered pursuant to this Agreement, the following terms will have the meanings given such terms in this Section 1 or in the provisions, sections, or recitals herein:

“Advance” means any advance under the Credit Facility, which advance shall be part of the Loan.

“Affiliate” means, with respect to a specified Person, another Person that directly or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“Approved Lease” means a Lease for space at a Property that satisfies all of the following requirements:

(a) the tenant under such Lease is not an Affiliate of Borrower or Guarantor (unless otherwise consented to by Lender in writing), (b) such Lease is on an industry standard form of tenant lease agreement for use by Borrower in leasing space at the Property or on tenant’s standard form of tenant lease agreement if a large commercial tenant, in each instance subject to customarily negotiated changes thereto, (c) such Lease is for commercial use only, (d) such Lease has been entered into by Borrower in the ordinary course of Borrower’s business, (e) such Lease shall be with a tenant that is creditworthy, as reasonably determined by Borrower, or shall be guaranteed by a Person that is creditworthy, as reasonably determined by Borrower, (f) if considered a “covered real estate transaction” under The Foreign Investment Risk Review Modernization Act of 2018, 50 U.S.C. Section 4565, as such may be hereafter amended or superseded, together with the rules and regulations which may now or hereafter be promulgated by the Committee on Foreign Investment in the United States (“CFIUS”) (or any other governmental body or agency) with respect thereto, Borrower shall have received clearance (or deemed clearance) from CFIUS prior to becoming effective, (g) unless an SNDA is obtained concurrently with such Lease, such Lease shall provide for automatic self-operative subordination to the Security Instrument, (h) such Lease shall not contain any option to purchase, any right of first refusal to purchase or any other provision which might adversely affect the rights of Lender under the Loan Documents in any material respect, and (i) such Lease shall not result in the violation of any provisions of any other Leases for space at such Property; provided, however, any Lease which does not satisfy the foregoing requirements may still be categorized as an Approved Lease to the extent Lender has provided express prior written approval thereto, such approval not to be unreasonably withheld.

“Authorizing Entity” means the board of directors, shareholders, members, managers, trustees, general partner, or other Person authorized or empowered to act on behalf of a Person pursuant to the Organizational Documents of such Person.

LOAN AND SECURITY AGREEMENT – PAGE 1 B1BANK – SERITAGE SRC FINANCE LLC

4923-2751-0193v.18 74470-1

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

“Beneficial Ownership Certification” means a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation, as provided in the Beneficial Ownership Regulation, Appendix A.

“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

“Business Day” means any day other than a Saturday, Sunday, or any other day on which the Federal Reserve Bank of Dallas, Texas, is closed.

“Collateral” means:

(a)

The Property.

(b)

All books, records, data, and plans containing any information pertaining directly or indirectly to the Collateral and all rights to retrieve data and other information pertaining directly or indirectly to the Collateral from third parties.

The term “Collateral,” as used herein, shall also include (a) any other property or assets, real or personal, tangible or intangible, now existing or hereafter acquired, of Borrower in which Borrower has granted or does hereafter grant a security interest or Lien to Lender as security for the Indebtedness pursuant to a written agreement between Lender and Borrower; and (b) all proceeds of all of the foregoing (including without limitation, insurance payable by reason of loss or damage to the foregoing property). The designation of proceeds does not authorize Borrower to sell, transfer or otherwise convey any of the foregoing property except in the ordinary course of Borrower’s business or as otherwise provided herein.

“Compliance Certificate” means a certificate, substantially in the form of Exhibit A, prepared by and certified by a Responsible Officer.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract, or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

“Credit Facility” means has the meaning set forth in Section 2(a).

“Debt” means, of any Person as of any date of determination (without duplication): (a) all obligations of such Person for borrowed money (including indebtedness in the form of mezzanine debt and preferred equity);

(b) all obligations of such Person evidenced by bonds, notes, debentures, or other similar instruments; (c) all obligations of such Person to pay the deferred purchase price of property, assets or services, except trade accounts payable of such Person arising in the ordinary course of business that are not past due by more than NINETY (90) days; (d) all capitalized lease obligations of such Person; (e) all debt or other obligations of others guaranteed by such Person; (f) all obligations secured by a Lien existing on property or assets owned by such Person, whether or not the obligations secured thereby have been assumed by such Person or are non-recourse to the credit of such Person; (g) without duplication of the foregoing, any contingent obligations of such Person (determined in accordance with GAAP); (h) any repurchase obligation or liability of a Person with respect to accounts, chattel paper or notes receivable sold by such Person; (i) any obligation arising with respect to any other transaction that is the functional equivalent of borrowing but which does not constitute a liability on the balance sheets of a Person; and (j) all payment and reimbursement obligations of such Person (whether contingent or otherwise) in respect of letters of credit, bankers’ acceptances, surety or other bonds and similar instruments.

“Deed of Trust (Texas)” means the DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF LEASES, ASSIGNMENT OF RENTS, AND FINANCING STATEMENT dated as of the Effective Date, executed by Borrower for the benefit of Lender (as the same may be amended, modified, or restated from time to time), covering the Property with the Land (as defined in the Deed of Trust (Texas)) located in Dallas County, Texas.

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

“Deed of Trust (Washington)” means the DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF LEASES, ASSIGNMENT OF RENTS, AND FIXTURE FILING dated as of the Effective

Date, executed by Borrower for the benefit of Lender (as the same may be amended, modified, or restated from time to time), covering the Property with the Land (as defined in the Deed of Trust (Washington)) located in King County, Washington.

“Default” means any Event of Default or event which with notice and/or the passage of time would be an Event of Default.

“Disclosure Letter” means that certain disclosure letter delivered by Borrower to Lender as of the Effective Date, as the same may be updated and/or replaced from time to time in connection with the re-making of any of the representations and warranties contained herein or in the other Loan Documents.

“Dollars” and “$” mean lawful money of the United States of America.

“ECP” means an “eligible contract participant” as defined in Section 1(a)(18) of the Commodity Exchange Act or any regulations promulgated thereunder and the applicable rules issued by the Commodity Futures Trading Commission and/or the SEC.

“Environmental Risk Agreement” means an ENVIRONMENTAL RISK AGREEMENT, whether one or more, executed by Borrower and Guarantor (as the same may be amended, restated, or modified from time to time).

“Event of Default” has the meaning set forth in Section 12.

“Excluded Hedge Obligation” means, with respect to any Guarantor, any Hedge Obligation if, and to the extent that, all or a portion of the guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Hedge Obligation (or any guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason to constitute an ECP at the time the guarantee of such Guarantor or the grant of such security interest becomes or would become effective with respect to such Hedge Obligation. If a Hedge Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Hedge Obligation that is attributable to swaps for which such guarantee or security interest is or becomes illegal.

“Extension Option” means the extension option of Borrower described in Section 2(d) of this Agreement.

“GAAP” means (a) generally accepted accounting principles, applied on a consistent basis, as set forth in Opinions of the Accounting Principles Board of the American Institute of Certified Public Accountants and/or in statements of the Financial Accounting Standards Board and/or their respective successors and which are applicable in the circumstances as of the relevant date, or (b) generally accepted accounting principles, applied on a consistent basis, as disclosed in writing and acceptable to Lender in its Permitted Discretion and which are applicable in the circumstances as of the relevant date, provided that liquidation basis of accounting shall be permitted hereunder as generally accepted accounting principles and same are approved by Lender. Accounting principles are applied on a “consistent basis” when the accounting principles applied in a current period are comparable in all material respects to those accounting principles applied in the preceding period.

“Governmental Authority” means the government of the United States of America, any other nation, or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank, or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“Guarantor” means SERITAGE SRC MEZZANINE FINANCE LLC, a Delaware limited liability company (“Mezzanine”), SERITAGE GROWTH PROPERTIES, L.P., a Delaware limited partnership (“Partnership”), SRG LIMITED PARTNER, LLC, a Delaware limited liability company (“Limited Partner”), and SERITAGE GROWTH PROPERTIES, a Maryland real estate investment trust (“REIT”).

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

“Guaranty” means a GUARANTY AGREEMENT, whether one or more, executed by Guarantor (as the same may be amended, restated, or modified from time to time).

“Hedge Agreement” means an agreement (including terms and conditions incorporated by reference therein and all schedules thereto and confirmations thereof) from time to time and at any time executed and delivered by Borrower and Lender or by Borrower and any Affiliate of Lender: (a) which provides for an interest rate, currency, equity, credit or commodity swap, cap, floor or collar, spot or foreign exchange transaction, cross-currency rate swap, currency option, any combination thereof, or option with respect to, any of the foregoing or any similar transactions, for the purpose of hedging Borrower’s exposures to fluctuations in interest rates, exchange rates, currency, stock, portfolio or loan valuations or commodity prices (including any such or similar agreement or transaction entered into by Lender in connection with any other agreement or transaction between Borrower and Lender or by Borrower and any Affiliate of Lender) and (b) a master agreement for any of the foregoing agreements referenced in (a) together with all supplements.

“Hedge Agreement Obligations” means any and all obligations of Borrower, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a) any Hedge Agreement permitted hereunder with Lender or an Affiliate of Lender, and (b) any cancellations, buy backs, reversals, terminations or assignments of any Hedge Agreement transaction permitted hereunder with Lender or an Affiliate of Lender. As of the Effective Date, there are no Hedge Agreement Obligations.

“Hedge Documents” means the Hedge Agreement and any and all other documents related to any Hedge Agreement, including but not be limited to the following: 2002 Multicurrency-Cross Border version of the ISDA Master Agreement, the Schedule to the Master Agreement, any Credit Support Annexes, any Swap Trade Confirmation, Risk Disclosure Statement, Eligible Contract Participant Verification Form, and all such other related documents as Lender may require. All such Hedge Documents shall be in form and content, and include such terms and conditions as required by Lender and/or its legal counsel. As of the Effective Date, there are no Hedge Documents.

“Hedge Obligation” means, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act or any rules or regulations promulgated thereunder. As of the Effective Date, there are no Hedge Obligations.

“HVCRE Regulations” means the required equity thresholds and capital retention obligations set forth in Part 217 of Chapter II of title 12 of the Code of Federal Regulations, as amended from time to time.

“Improvements” has the meaning set forth in the Security Instruments.

“Indebtedness” means (a) all indebtedness, obligations and liabilities of Borrower to Lender under the Note, this Agreement, and any of the other Loan Documents; (b) all accrued but unpaid interest on any of the indebtedness described in (a) above; (c) [intentionally omitted]; (d) all Hedge Agreement Obligations and other obligations, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (i) any and all Hedge Agreements, and (ii) any and all cancellations, buy backs, reversals, terminations or assignments of any Hedge Agreement transaction; (e) all costs and expenses incurred by Lender in connection with the collection and administration of all or any part of the indebtedness and obligations described in (a), (b), (c), and (d) above or the protection or preservation of, or realization upon, the collateral securing all or any part of such indebtedness and obligations, including without limitation all reasonable attorneys’ fees; and (f) all renewals, extensions, modifications and rearrangements of all or any part of the indebtedness and obligations described in (a), (b), (c), (d), and (e) above; provided, however, that the definition of “Indebtedness” shall not create any guarantee by any Guarantor of (or grant of security interest by any Guarantor to support, as applicable) any Excluded Hedge Obligations of such Guarantor for purposes of determining any obligations of any Guarantor.

“Indefeasibly Paid” means (a) with respect to the making of any payment on or in respect of the Indebtedness, that such payment of such Indebtedness has been paid in full in cash (or that such payment of such

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

Indebtedness has been otherwise satisfied in a manner acceptable to Lender in its Permitted Discretion), (b) that any and all commitments by Lender to make any loan or advance or extend any other credit that would, if made or extended, constitute Indebtedness have been irrevocably terminated, and (c) the termination of the Hedge Agreement Obligations or entering into other arrangements satisfactory to Lender as a counterparty thereto.

“Lease” has the meaning set forth in the Security Instruments.

“Lender’s Counsel” means Winstead PC.

“Lien” means any lien, mortgage, security interest, tax lien, pledge, charge, hypothecation, assignment, preference, priority, or other encumbrance of any kind or nature whatsoever (including, without limitation, any conditional sale or title retention agreement), whether arising by contract, operation of law, or otherwise.

“Loan” means all Advances (whether one or more) under the Credit Facility as established pursuant to the Loan Documents from time to time.

“Loan Documents” means this Agreement, the Note, the Guaranty, the Deed of Trust, the Environmental Risk Agreement and the other agreements, instruments and documents evidencing, securing, governing, guaranteeing, or pertaining to the Loan.

“Material Adverse Effect” means any act, event, condition, or circumstance (whether known or unknown, foreseeable, or unforeseeable) which would materially and adversely affect: (a) the ability of Borrower or any Guarantor to perform its obligations under any Loan Document to which it is a party; or (b) the legality, validity, binding effect, or enforceability against Borrower or any Guarantor of any Loan Document to which it is a party.

“Maturity Date” has the meaning set forth in the Note.

“Mortgage (Pennsylvania)” means the OPEN-END LEASEHOLD MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES, ASSIGNMENT OF RENTS, AND FINANCING

STATEMENT dated as of the Effective Date, executed by Borrower for the benefit of Lender (as the same may be amended, modified, or restated from time to time), covering Borrower’s leasehold interest in the Property with the Land (as defined in the Mortgage (Pennsylvania)) located in Montgomery County, Pennsylvania.

“Net Sales Proceeds” means, with respect to the sale, transfer or other disposition of any or all of the real property Collateral, the amount of cash received by Borrower plus the fair market value in cash of any non-cash consideration realized from such sale after deduction of any escrow, closing, recording and title insurance costs paid by Borrower in connection therewith.

“Note” means the PROMISSORY NOTE dated as of the Effective Date evidencing the Indebtedness (as amended, modified, or restated from time to time).

“Option Agreement” has the meaning set forth in the Disclosure Letter.

“Option Property” has the meaning set forth in the Disclosure Letter.

“Organizational Documents” means (a) in the case of a corporation, its articles or certificate of incorporation and bylaws; (b) in the case of a general partnership, its partnership agreement; (c) in the case of a limited partnership, its certificate of limited partnership and partnership agreement; (d) in the case of a trust, its trust agreement; (e) in the case of a joint venture, its joint venture agreement; (f) in the case of a limited liability company, its articles of organization or certificate of formation and limited liability company agreement, operating agreement or regulations; and (g) in the case of any other entity, its organizational and governance documents and agreements.

“Permitted Debt” has the meaning set forth in Section 7(k).

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

“Permitted Discretion” means, with respect to Lender, a determination made in the exercise of Lender’s commercially reasonable (from the perspective of a secured lender) business judgment.

“Permitted Encumbrances” means the following encumbrances: (a) Liens for taxes, assessments or governmental charges or levies not yet due and payable or Liens for taxes, assessments or governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves have been established in accordance with GAAP; (b) Liens in respect of property of a Person imposed by law which were incurred in the ordinary course of business and which have not arisen to secure Debt for borrowed money, such as carriers’, materialmen’s, warehousemen’s and mechanics’ Liens, statutory and common law landlord’s Liens, and other similar Liens arising in the ordinary course of business, and which either (i) do not in the aggregate materially detract from the value of such property or materially impair the use thereof in the operation of the business of a Person, or (ii) are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of the property subject to such Lien; (c) Liens created by or pursuant to the Loan Documents; (d) Liens arising from judgments, decrees, awards or attachments in circumstances not constituting an Event of Default; (e) easements, rights-of-way, restrictions, minor defects or irregularities in title, encroachments and other similar charges or encumbrances, in each case not securing Indebtedness and not interfering in any material respect with the ordinary conduct of the business of a Person; (f) Leases existing as of the Effective Date and Approved Leases; and (g)(i) Liens, charges, encumbrances, security interests, and adverse claims whatsoever, if any, set forth on Schedule B to the mortgagee title insurance policies issued to Lender to the extent the same are valid and subsisting and affect the Property, (ii) as to any particular real property at any time, such easements, encroachments, covenants, rights of way, minor defects, irregularities or encumbrances on title which would not reasonably be expected to materially impair such real property for the purpose for which it is held by the mortgagor or grantor thereof, or the Lien or hypothec held by Lender, (iii) zoning and other municipal ordinances which are not violated in any material respect by the existing improvements and the present use made by the mortgagor or grantor thereof of the premises, (iv) general real estate taxes and assessments not yet delinquent, (v) any Lien that would be disclosed on a true, correct and complete survey of the real property that does not materially affect the use or enjoyment of the real property as it is currently being used, and (vi) such other similar items as Lender may consent to.

“Permitted Transfer” means any of the following transfers:

(a)

transfers of the direct or indirect interests in Borrower or any Person comprising Guarantor to and among the holders thereof as of the date of this Agreement which do not result in a change in Control of Borrower or Guarantor;

(b)

Permitted Encumbrances;

(c)

transfers of worn out or obsolete personal property that are promptly replaced with property of equivalent value and functionality if reasonably necessary or which is no longer necessary in connection with the operation of any Property;

(d)

Leases existing as of the Effective Date and Approved Leases;

(e)

any transfers of the public shares of a publicly traded company or public company traded on a national exchange or quote system;

(f)

any transfer consisting of the merger of Guarantor with any other Person, or a reverse merger involving Guarantor, in each case to the extent that all or substantially all of the assets of Borrower and Guarantor are included in such transaction, provided that (i) Lender is provided prior written notice of any such merger;

(ii) following any such notice of merger, Borrower shall deliver to Lender all relevant information as may be deemed necessary by Lender to review in Lender’s Permitted Discretion; and (iii) as a result of any such merger

(A) Borrower shall remain as the sole owner and operator of the Property; and (B) Borrower’s liability under the Loan Documents shall in no way be diminished as a result of any such proposed merger and Lender shall be satisfied in its Permitted Discretion with the effect of such proposed merger on Guarantor’s liability under the Loan Documents; or

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

(g)

a transfer of up to forty-nine percent (49%) of non-controlling interests in Borrower or any person comprising Guarantor which does not result in a change in Control of Borrower or Guarantor;

provided, however, that in connection with any Permitted Transfer described in clause (a) above, Lender shall have received prior to such transfer true and correct copies of all documentation entered into or to be entered into with respect to such transfer; provided further, however, that in connection with any Permitted Transfer described in clauses (f) or (g) above, if such transfer will result in a Person that does not own directly or indirectly at least twenty percent (20%) of Borrower as of the Effective Date owning at least twenty percent (20%) directly or indirectly following the consummation of such transfer, Lender shall have received: (i) notice of such transfer at least ten (10) Business Days prior to such transfer, (ii) true and correct copies of all documentation entered into or to be entered into with respect to such transfer, and (iii) all appropriate documentation, certificates and affidavits reasonably requested by Lender that evidence the organization, good standing, qualification to do business, tax status, and all other information reasonably requested by Lender to confirm that such proposed transfer will satisfy the requirements of this Agreement, and sufficient for Lender to satisfy all applicable laws, including any “know-your-customer” or other procedures as may be required pursuant to applicable laws or the policies of Lender. After giving effect to any such transfer, no Person holding any direct or indirect interests in Borrower and/or rights to distributions from Borrower shall be a Prohibited Person or Person with whom Lender would be prohibited, pursuant to applicable laws or the policies of Lender, to engage in the transactions under the Loan Documents.

“Person” means any individual, corporation, limited liability company, trust (business or otherwise), association, company, partnership (general or limited), joint venture, Governmental Authority, or other entity, and shall include such Person’s heirs, administrators, personal representatives, executors, successors, and assigns.

“Property” has the meaning set forth in the Security Instruments.

“Qualified ECP Guarantor” means, in respect of any Hedge Obligation, each Borrower or Guarantor that has total assets exceeding $10,000,000 at the time the relevant Guaranty or grant of the relevant security interest becomes or would become effective with respect to such Hedge Obligation or such other person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

“Replacement Lease” has the meaning set forth in the Disclosure Letter.

“Responsible Officer” means the Person designated by any Person to act on behalf of such Person. Any document delivered hereunder that is signed by a Responsible Officer of such Person shall be conclusively presumed to have been authorized by all necessary corporate, limited liability company, partnership and/or other action on the part of Person and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Person.

“SEC” means the Securities and Exchange Commission of the U.S. of America or any successor thereto.

“Security Instruments” means the Deed of Trust (Texas), the Deed of Trust (Washington), the Mortgage (Pennsylvania), and any other mortgage, deed of trust, deed to secure debt or other security instrument to secure the payment of the Indebtedness, as each may be amended, modified, or restated from time to time.

“Subsidiary” means any entity (a) of which at least a majority of the ownership, equity or voting interest is at the time directly or indirectly owned or controlled by a Person and/or its Subsidiaries, and (b) which is treated as a subsidiary in accordance with GAAP. As of the Effective Date, Borrower has no Subsidiaries.

“UCC” means the Uniform Commercial Code as the same may, from time to time, be enacted and in effect in the State of Texas; provided, that to the extent that the UCC is used to define any term herein or in any Loan Document and such term is defined differently in different articles or divisions of the UCC, the definition of such term contained in Article 9 shall govern; provided further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of, or remedies with respect to, Lender’s Lien on any

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than the State of Texas, the term “UCC” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions related to such provisions.

All words and phrases used herein shall have the meaning specified in the UCC except to the extent such meaning is inconsistent with this Agreement. All definitions contained in this Agreement are equally applicable to the singular and plural forms of the terms defined. The words “hereof,” “herein” and “hereunder” and words of similar import referring to this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. Any accounting term used in the Loan Documents shall have, unless otherwise specifically provided therein, the meaning customarily given such term in accordance with GAAP, and all financial computations thereunder shall be computed, unless otherwise specifically provided therein, in accordance with GAAP consistently applied; provided, that all financial covenants and calculations in the Loan Documents shall be made in accordance with GAAP as in effect on the Effective Date unless Borrower and Lender shall otherwise specifically agree in writing. That certain items or computations are explicitly modified by the phrase “in accordance with GAAP” shall in no way be construed to limit the foregoing.

Credit Facility.

(a)

Term Loan. Subject to the terms and conditions set forth in this Agreement and the other Loan Documents, Lender hereby agrees to lend to Borrower in a single Advance the sum of FIFTEEN MILLION AND 00/100 DOLLARS ($15,000,000.00) (the “Credit Facility”), which shall be due and payable on the EARLIER of: (i) the acceleration of the Indebtedness pursuant to the terms of the Loan Documents; and (ii) July 24, 2028, subject to any extension as provided in Section 2(d) hereof. Amounts borrowed under the Credit Facility may not be reborrowed.

(b)

Use of Proceeds. The Advance under the Credit Facility shall be used by Borrower to finance and/or refinance the Property to support orderly asset sales and repayment.

(c)

Fees. Borrower agrees to pay to Lender an origination fee (the “Origination Fee”) equal to ONE HUNDRED TWELVE THOUSAND FIVE HUNDRED AND 00/100 DOLLARS ($112,500.00)

for the establishment of the Credit Facility. The Origination Fee shall be due and payable on the Effective Date, shall be deemed fully earned as of the Effective Date, shall compensate Lender for its costs and expenses in the structuring of the Credit Facility, and (to the maximum extent permitted by applicable law) shall not be deemed interest.

(d)

Extension Option. Borrower shall be entitled to request one (1) extension of the Maturity Date by a period of twelve (12) months from the then current Maturity Date, upon and subject to the following conditions: (i) Borrower shall request such Extension Option in writing and paid an extension fee to Lender equal to 0.10% of the then outstanding principal balance of the Loan at least thirty

(30) days prior to the then current Maturity Date, (ii) no monetary Default or material non-monetary Default or Event of Default shall exist and be continuing at the time of such request and at the time of such extension, (iii) Lender has received at Borrower’s sole cost and expense: (A) certificates of the appropriate government officials of the state of organization of Borrower and each Guarantor and any Authorizing Entity of Borrower and each Guarantor, and any state any such Person is currently doing business as to the existence, qualification and good standing of such Person, dated no more than TEN (10) days prior to the time of such extension, (B) the results of a UCC or other Lien search showing all financing statements and other documents or instruments on file against Borrower in such locations as Lender may request in its Permitted Discretion, dated no more than thirty (30) days prior to the time of such extension, (C) subject to applicable title underwriting requirements, such title searches and title insurance endorsements to the mortgagee policy(ies) of title insurance insuring the Liens of Lender on the Property as Lender may request in its Permitted Discretion, and (D) to the extent such extension is not previously authorized, the resolutions of Borrower and each Guarantor as adopted by such Person’s Authorizing Entity authorizing the execution, delivery, and performance of the extension documents that Borrower and Guarantor are a party to, as applicable, (iv) Borrower shall execute and deliver to Lender and cause to be executed and delivered to Lender all customary extension documents reasonably required by Lender to evidence the

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

extension of the Maturity Date, (v) Borrower shall have provided reasonably satisfactory evidence to Lender that Borrower and Partnership have in the aggregate Minimum Liquidity (as defined in Section 8(b) hereof) in an amount no less than TEN MILLION AND 00/100 DOLLARS ($10,000,000.00) and that Borrower is in compliance with the Debt Service Coverage Ratio for the most recently ended fiscal quarter pursuant to Section 8(a) hereof, (vi) Borrower and Partnership shall have satisfied the Minimum Liquidity test set forth in Section 8(b)(ii) hereof, and (vii) Borrower shall have provided reasonably satisfactory evidence to Lender that a Replacement Lease has been executed. Upon the effectiveness of the Extension Option, the payment provisions applicable to the Credit Facility shall be modified as described in the Note.

Note, Rate and Computation of Interest. The Credit Facility established pursuant to the Loan Documents shall be evidenced by a Note duly executed by Borrower and payable to the order of Lender, in form and substance acceptable to Lender. Interest on such Note shall accrue at the rates set forth therein. The principal of and interest on such Note shall be due and payable in accordance with the terms and conditions set forth in such Note and in this Agreement. All payments under this Agreement and the other Loan Documents shall be made to Lender at Lender’s offices as set forth herein in Dollars and immediately available funds, without setoff, deduction, or counterclaim, and free and clear of all taxes, at the time and in the manner provided in such Note.

Collateral.

(a)

Grant of Security Interest. As collateral security for the prompt payment in full when due (whether at stated maturity, by acceleration or otherwise) of the Indebtedness, Borrower hereby pledges to and grants Lender, a security interest in, all of Borrower’s right, title, and interest in the Collateral, whether now owned by Borrower or hereafter acquired and whether now existing or hereafter coming into existence.

(b)

Borrower Remains Liable. Notwithstanding anything to the contrary contained herein,

(i) Borrower shall remain liable under the contracts and agreements included in the Collateral to the extent set forth therein to perform all of Borrower’s respective duties and obligations thereunder to the same extent as if this Agreement had not been executed; (ii) the exercise by Lender of any of its rights hereunder shall not release Borrower from any of its duties or obligations under the contracts and agreements included in the Collateral unless and until such contracts and agreements are assumed in writing by Lender and

(iii) Lender shall not have any obligation or liability under any of the contracts and agreements included in the Collateral by reason of this Agreement, nor shall Lender be obligated to perform any of the obligations or duties of Borrower thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

(c)

Additional Documents; Errors and Omissions. TO SECURE FULL AND COMPLETE PAYMENT AND PERFORMANCE OF THE INDEBTEDNESS, BORROWER SHALL EXECUTE AND DELIVER AND CAUSE TO BE EXECUTED AND DELIVERED ALL OF THE LOAN DOCUMENTS REQUIRED BY LENDER IN THE EXERCISE OF ITS PERMITTED DISCRETION TO CARRY OUT THE PROVISIONS AND PURPOSES OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND TO CREATE, PRESERVE, AND PERFECT THE LIENS OF LENDER IN THE COLLATERAL. IN THE EVENT ANY OF THE LOAN DOCUMENTS EVIDENCING OR SECURING THE INDEBTEDNESS MISREPRESENTS OR INACCURATELY REFLECTS THE CORRECT TERMS AND/OR PROVISIONS OF THE INDEBTEDNESS, BORROWER SHALL UPON REQUEST BY LENDER AND IN ORDER TO CORRECT SUCH MISTAKE, EXECUTE AND DELIVER AND CAUSE TO BE EXECUTED AND DELIVERED SUCH NEW DOCUMENTS OR INITIAL AND CAUSE TO BE INITIALED CORRECTED, ORIGINAL DOCUMENTS AS LENDER MAY DEEM NECESSARY IN ITS PERMITTED DISCRETION TO REMEDY SAID ERRORS OR MISTAKES. BORROWER SHALL EXECUTE AND CAUSE TO BE EXECUTED SUCH OTHER DOCUMENTS AS LENDER SHALL DEEM NECESSARY IN ITS PERMITTED DISCRETION TO CORRECT ANY DEFECTS OR DEFICIENCIES IN THE LOAN DOCUMENTS. BORROWER’S FAILURE TO EXECUTE AND CAUSE TO BE EXECUTED SUCH DOCUMENTS AS REQUESTED WITHIN FIFTEEN (15) DAYS SHALL CONSTITUTE AN EVENT OF DEFAULT UNDER THIS AGREEMENT.

(d)

Setoff. As further security for the Indebtedness, Borrower grants to Lender a FIRST (1st) Lien and contractual right of set-off in and to all funds now or at any time hereafter coming within the custody or

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

control of Lender, including (without limitation) all deposit accounts, whether such deposit accounts have matured or not, and whether the exercise of such right of set-off results in loss of interest or other penalty under the terms of the deposit account agreement. It is further agreed that Lender shall have a FIRST (1st) Lien on all deposits and other sums at any time credited by or due from Lender to Borrower as security for the payment of the Indebtedness, and Lender, at its option after the occurrence of a Default may without notice and without any liability, hold all or any part of any such deposits or other sums until all amounts owing under the Loan Documents have been paid in full, and/or Lender may apply or set-off all or any part of any such deposits or other sums credited by or due from Lender to or against any sums due under the Loan Documents in any manner and in any order of preference which Lender, in its sole discretion, chooses. The rights and remedies of Lender hereunder are in addition to any other rights and remedies (including, without limitation, other rights of setoff) which Lender may have.

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

(e)

Satisfaction of Indebtedness. Until the Indebtedness has been Indefeasibly Paid and fully satisfied (other than contingent indemnification obligations to the extent no unsatisfied claim has been asserted) and the commitments of Lender under the Credit Facility have been terminated, Lender shall be entitled to retain the security interests in the Collateral granted under the Loan Documents and the ability to exercise all rights and remedies available to Lender under the Loan Documents and applicable laws.

(f)

Partial Reconveyance, Satisfaction or Release of the Property. At any time prior to the Maturity Date, Lender shall, at Borrower’s request, issue partial reconveyances, satisfactions or releases of the Security Instruments (“Partial Releases”) from portions of the Property; provided, however, that prior to or simultaneously with each such Partial Release each and every one of the following conditions shall be satisfied:

(i)

no monetary Default, material non-monetary Default or Event of Default shall be continuing and remain uncured; provided, however, that the foregoing condition shall not apply to a release of the Property subject to the Deed of Trust (Texas) pursuant to a sale under the purchase and sale agreement described in the Disclosure Letter.

(ii)

Lender shall have received any and all sums then due and payable under the Loan Documents, including, without limitation, those set forth in the Note and Security Instruments, together with all escrow, closing and recording costs, the costs of preparing and delivering such partial reconveyance, satisfaction or release and the cost of any title insurance endorsements required by Lender, including, without limitation, a partial reconveyance or release endorsement, if applicable.

(iii)

For any partial release of less than all of the Property under a single Security Instrument, Lender shall have received evidence satisfactory to Lender that the portion of the Property to be reconveyed or released and the portion of the Property which shall remain encumbered by the Security Instrument are each legal parcels lawfully created in compliance with all applicable laws and ordinances pertaining to subdivisions, parcel maps, condominiums or other land divisions and, at Borrower’s sole cost, Lender shall have received any title insurance endorsements to that effect requested by Lender.

(iv)

For the real property Collateral to be reconveyed, satisfied or released, Lender shall have received a release price for such real property Collateral equal to the minimum release price set forth below for such real property Collateral. The minimum release price for the real property Collateral shall be:

       Property

       Release Price

       Property subject to the Deed of Trust (Texas)

       The greater of (x) 100% of the Net Sales Proceeds and (y) eighty percent (80%) of the per square foot
value in the most current Appraisal for such Property for the portion of such Property to be


	released
Property subject to the Deed of Trust (Washington)	The greater of (x) 100% of the Net Sales Proceeds and (y) eighty percent (80%) of the per square foot value in the most current Appraisal for such Property for the portion of such Property to be released; provided, however, with respect to the Option Property, the release price shall be 100% of the Net Sales Proceeds from the sale of the Option Property upon the Option Property Closing (as defined in the Option Agreement)
Property subject to the Mortgage (Pennsylvania)	The outstanding principal balance of the Loan

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

(v)

The release price shall be applied to reduce the outstanding principal balance of

the Loan.

Neither the acceptance of any payment nor the issuance of any Partial Release by Lender shall affect Borrower’s obligation to repay all amounts owing under the Loan Documents or under the lien of the Security Instruments on the remainder of the Property which is not reconveyed, satisfied or released.

Conditions Precedent. The obligation of Lender to make the Advance under the Credit Facility is subject to the condition precedent that Lender shall have received, or such condition shall be otherwise satisfied, as of the Effective Date, to Lender’s satisfaction in the exercise of its Permitted Discretion:

(a)

Closing Certificate. A CLOSING CERTIFICATE executed by a Responsible Officer of Borrower and each Guarantor, or a Responsible Officer of the Authorizing Entity of Borrower and each Guarantor, which certifies: (i) the resolutions of such Person as adopted by such Person’s Authorizing Entity authorizing the execution, delivery, and performance of the Loan Documents that Borrower and Guarantor are a party to, as applicable; (ii) certificates of the appropriate government officials of the state of organization of Borrower and each Guarantor and any Authorizing Entity of Borrower and each Guarantor, and any state any such Person is currently doing business as to the existence, qualification and good standing of such Person, dated no more than TEN (10) days prior to the Effective Date; (iii) the true and correct Organizational Documents of Borrower and each Guarantor and any Authorizing Entity of Borrower and each Guarantor and (iv) the names of the Responsible Officer authorized to sign the Loan Documents that Borrower and/or Guarantor is a party to, as applicable, together with specimen signatures of such Persons.

(b)

Loan Documents. The Loan Documents executed by Borrower and Guarantor, as applicable.

(c)

Lien Search. The results of a UCC or other Lien search showing all financing statements and other documents or instruments on file against Borrower in such locations as Lender may request in its Permitted Discretion, dated no more than thirty (30) days prior to the Effective Date.

(d)

Financing Statements. UCC financing statements covering the Collateral shall have been filed with such filing offices as Lender may request in its Permitted Discretion.

(e)

Insurance Matters. Copies of insurance certificates describing all insurance policies as may be required by Lender, together with loss payee and lender endorsements in favor of Lender with respect to all insurance policies covering the Collateral.

(f)

Fees and Expenses. Evidence that the costs and expenses of Lender (including reasonable attorneys’ fees) and all fees owing to Lender, shall have been paid in full by Borrower.

(g)

Opinion(s) of Counsel. The opinion(s) of Borrower’s and Guarantor’s counsel as to

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

(1) the existence and due organization of Borrower and each Guarantor (if not a natural Person) or the legal capacity of Borrower and each Guarantor (if a natural Person); (2) the due authorization and execution of the Loan Documents; (3) the enforceability of the Loan Documents; (4) the perfection of Lender’s security interest in the Collateral and (5) such other matters as may be reasonably requested by Lender and its counsel in the exercise of Lender’s Permitted Discretion.

(h)

Real Property. (i) A binding commitment for title insurance policy in form and substance and from a title insurance company satisfactory to Lender, agreeing to issue a mortgagee policy of title insurance insuring the Lien of Lender on the Property, with such endorsements and affirmative coverage as Lender may request in its Permitted Discretion, (ii) evidence satisfactory to Lender that the Property is not located within a “special flood hazard area” as designated on maps prepared by the Federal Emergency Management Agency (FEMA) or within any “wetlands” area as designated and defined by The Federal Manual for Identifying and Delineating Jurisdictional Wetlands (or successor standard specified by Lender), and (iii) a survey acceptable to the title company and Lender.

(i)

Environmental Government Records Search. An environmental government records search covering the Property, with results acceptable to Lender.

(j)

Appraisal. An appraisal covering the Property addressed to Lender, in form and content acceptable to Lender, in its Permitted Discretion, and conducted and prepared by an appraiser acceptable to Lender. The appraisal shall comply with all appraisal requirements of the Lender and any Governmental Authority and shall reflect a fair value for the Property equal to or in excess of that specified by the Lender as a condition to making credit and other financial accommodations available pursuant to this Agreement.

(k)

Leases. Fully executed and then in effect copies of all Leases and amendments thereto, with all appropriate exhibits and schedules attached thereto.

(l)

[Intentionally Omitted].

(m)

Other Matters. Such other documents and agreements as may be required by Lender in its Permitted Discretion.

The Advance hereunder shall be deemed to be a representation and warranty by Borrower that the conditions specified in this Section have been satisfied on and as of the date of the applicable Advance.

Representations and Warranties. Borrower hereby represents and warrants to Lender as

follows:

(a)

Existence; Location. Borrower (i) is duly organized, validly existing, and in good standing under the laws of the jurisdiction of its organization; (ii) has all requisite power and authority to own its assets and carry on its business as now being or as proposed to be conducted; and (iii) is qualified to do business in all jurisdictions in which the nature of its business makes such qualification necessary and where failure to so qualify would have a Material Adverse Effect. Borrower has the power and authority to execute, deliver, and perform its obligations under the Loan Documents to which it is or may become a party. Borrower’s exact legal name, jurisdiction of organization, type of entity, are disclosed as set forth in this Agreement. Borrower has not changed its name, jurisdiction of organization, or its corporate structure in any way (e.g., by merger, consolidation, change in corporate form or otherwise) within the past FIVE

(5) years.

(b)

Binding Obligations. The execution, delivery, and performance of the Loan Documents by Borrower has been duly authorized by all necessary action by Borrower, and constitute legal, valid, and binding obligations of Borrower, enforceable in accordance with their respective terms, except as limited by bankruptcy, insolvency or similar laws of general application relating to the enforcement of creditors’ rights and except to the extent specific remedies may generally be limited by equitable principles.

(c)

No Consent. The execution, delivery and performance of the Loan Documents, and the consummation of the transactions contemplated thereby, do not (i) conflict with, result in a violation of, or

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

constitute a default under (1) any provision of the Organizational Documents (if any) or other instrument binding upon Borrower, (2) any law, governmental regulation, court decree or order applicable to Borrower, or (3) any contractual obligation, agreement, judgment, license, order or permit applicable to or binding upon Borrower, (ii) require the consent, approval or authorization of any third party, or (iii) result in or require the creation of any Lien, charge or encumbrance upon any property or asset of Borrower except as may be expressly contemplated in the Loan Documents. To Borrower’s knowledge, no consent is required for the exercise by Lender of the rights provided for in the Loan Documents or the remedies in respect of the Collateral pursuant to the Loan Documents (except as may be required in connection with the disposition of certain Collateral by applicable law, regulation, or judicial decision).

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

(d)

Financial Condition. Each financial statement of Borrower, and to Borrower’s knowledge, Guarantor, supplied to Lender truly discloses and fairly presents such Person’s financial condition as of the date of each such statement. There has been no material adverse change in such financial condition or results of operations of Borrower or to Borrower’s knowledge, Guarantor, subsequent to the date of the most recent financial statement supplied to Lender.

(e)

Operation of Business. Borrower possesses all contracts, licenses, permits, franchises, or rights thereto, necessary to conduct its businesses substantially as now conducted and as presently proposed to be conducted except for any that, the absence of which, would not reasonably be expected to have a Material Adverse Effect, and Borrower is not in violation of any valid rights of others with respect to any of the foregoing, except any violations that would not reasonably be expected to have a Material Adverse Effect.

(f)

Litigation and Judgments. Except as set forth in the Disclosure Letter, there is no action, suit, investigation, or proceeding before or by any Governmental Authority or arbitrator pending, or to the knowledge of Borrower, threatened against or affecting Borrower that would, if adversely determined, have a Material Adverse Effect. There are no outstanding judgments against Borrower.

(g)

Debt. Borrower has no Debt other than the Permitted Debt.

(h)

Disclosure. To Borrower’s knowledge, no statement, information, report, representation, or warranty made by Borrower or Guarantor in the Loan Documents or furnished to Lender in connection with the Loan Documents or any of the transactions contemplated hereby contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements herein or therein not misleading, in each case to the extent that same would result in a Material Adverse Effect. To Borrower’s knowledge, the information included in the Beneficial Ownership Certification is true and correct in all respects.

(i)

Agreements. Except as set forth in the Disclosure Letter, Borrower is not a party to any indenture, loan, or credit agreement, or to any lease or other agreement or instrument, or subject to any charter or corporate or other organizational restriction which would reasonably be expected to have a Material Adverse Effect. Borrower is not in default in any material respect in the performance, observance, or fulfillment of any of the obligations, covenants, or conditions contained in any agreement or instrument material to its business.

(j)

Compliance with Laws. To Borrower’s knowledge, Borrower and Guarantor are not in violation of any law, rule, regulation, order, or decree of any Governmental Authority or arbitrator, the violation of which would reasonably be expected to have a Material Adverse Effect.

(k)

Taxes; Governmental Charges. To Borrower’s knowledge, Borrower and Guarantor have filed all federal, state, and local tax reports and returns required by any law or regulation to be filed by it and has either duly paid all taxes, duties and charges indicated due on the basis of such returns and reports, or made adequate provision for the payment thereof, and the assessment of any material amount of additional taxes in excess of those paid and reported is not reasonably expected. Borrower has no

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

knowledge of any pending investigation of Borrower by any taxing authority or any pending but unassessed tax liability.

(l)

Use of Proceeds; Margin Securities. Borrower is not engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of regulations of the Board of Governors of the Federal Reserve System), and no part of the proceeds of any Advance will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying margin stock.

(m)

ERISA. Borrower is complying in all material respects with all applicable provisions of the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations and published interpretations thereunder (“ERISA”). Neither a reportable event nor a prohibited transaction has occurred and is continuing with respect to any plan. No notice of intent to terminate a plan has been filed, nor has any plan been terminated. No circumstances exist which constitute grounds entitling the Pension Benefit Guaranty Corporation or any entity succeeding to all or any of its functions under ERISA (the “PBGC”) to institute proceedings to terminate, or appoint a trustee to administer, a plan, nor has the PBGC instituted any such proceedings. Neither Borrower nor any ERISA Affiliate (as defined below) has completely or partially withdrawn from a multiemployer plan. Borrower and each ERISA Affiliate have met their minimum funding requirements under ERISA with respect to all of their plans, and the present value of all vested benefits under each plan do not exceed the fair market value of all plan assets allocable to such benefits, as determined on the most recent valuation date of the plan and in accordance with ERISA. Neither Borrower nor any ERISA Affiliate has incurred any liability to the PBGC under ERISA. “ERISA Affiliate” means each trade or business (whether or not incorporated) which together with Borrower would be deemed to be a “single employer” within the meaning of section 4001(b)(1) of ERISA or subsections (b), (c), (m) or (o) of section 414 of the Internal Revenue Code of 1986.

(n)

Regulated Entities. Borrower is not (i) an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940 or

(ii) subject to regulation under the Federal Power Act, the Interstate Commerce Act, any state public utilities code, or any other federal or state statute, rule or regulation limiting its ability to incur Debt, pledge its assets or perform its obligations under the Loan Documents.

(o)

Customer Identification – USA Patriot Act Notice; OFAC. Lender hereby notifies Borrower that pursuant to the requirements of the Patriot Act and Lender’s policies and practices, Lender is required to obtain, verify, and record certain information and documentation that identifies Borrower, which information includes the name and address of Borrower and such other information that will allow Lender to identify Borrower in accordance with the Patriot Act. Borrower represents and covenants that it is not and will not become a Person (individually, a “Prohibited Person”) listed on the OFAC List or otherwise subject to any other prohibitions or restriction imposed by any laws, rules or regulations administered by OFAC (collectively the “OFAC Rules”), provided that no Event of Default shall occur hereunder as a result of the trading of shares of stock in any Affiliate of Borrower on a public stock exchange. Borrower represents and covenants that, except as a result of the trading of shares of stock in any Affiliate of Borrower on a public stock exchange, it also (i) is not and will not become owned or controlled by a Prohibited Person, (ii) is not acting and will not act for or on behalf of a Prohibited Person, (iii) is not otherwise associated with and will not become associated with a Prohibited Person, (iv) is not providing and will not provide any material, financial or technological support for or financial or other service to or in support of acts of terrorism for a Prohibited Person. Except as a result of the trading of shares of stock in any Affiliate of Borrower on a public stock exchange, Borrower will not permit the transfer any interest in Borrower to a Prohibited Person. Borrower shall notify Lender if Borrower has knowledge that Borrower, Guarantor or any member or beneficial owner of Borrower or Guarantor is or becomes a Prohibited Person or is indicted on or arraigned and held over on charges involving money laundering or predicate crimes to money laundering. Borrower covenants to promptly notify the Lender of any change in the information provided in the Beneficial Ownership Certification that would result in a change to the list of Borrower’s beneficial owners identified therein. Borrower will not enter into any transaction or undertake any activities related to the Loan in violation any anti-money laundering laws (the “Anti-Money Laundering Laws”). Borrower shall (i) not use or permit the use of any proceeds of the Loan in any way that will violate either

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

the OFAC Rules or Anti-Money Laundering Laws, (ii) comply and cause all of its subsidiaries to comply with applicable OFAC Rules and Anti-Money Laundering Laws, (iii) provide information as Lender may require from time to time to permit Lender to satisfy its obligations under the OFAC Rules and/or the Anti-Money Laundering Laws, and (iv) not engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the foregoing. Borrower shall immediately notify Lender after Borrower obtains actual knowledge that Borrower or Guarantor is a Prohibited Person or (i) is convicted of, (ii) pleads nolo contendere to, (iii) is indicted on, or (iv) is arraigned and held over on charges involving money laundering or predicate crimes to money laundering.

(p)

Representations and Warranties Relating to the Collateral.

(i)

Information. To Borrower’s knowledge, all material information supplied by Borrower to Lender with respect to the Collateral is true, correct, and complete in all material respects.

(ii)

Security Interest. Borrower has and will have at all times (1) good and valid rights in and title to the Collateral with respect to which it has purported to grant a security interest hereunder, (2) full right, power, and authority to grant a security interest in the Collateral to Lender in the manner provided herein, free and clear of any Lien, security interest or other charge or encumbrance other than for the Permitted Encumbrances. The Loan Documents create a legal, valid, and binding security interest in favor of Lender in all now owned and hereafter acquired Collateral securing the Indebtedness.

(iii)

No Financing Statements, Mortgages or Control Agreements. Other than the financing statements, mortgages, and control agreements with respect to this Agreement, there are no other financing statements, mortgages or control agreements covering any Collateral, other than those evidencing Permitted Encumbrances.

The foregoing representations and warranties will be true and correct in all respects with respect to any additional Collateral or additional specific descriptions of certain Collateral delivered to Lender in the future by Borrower. The failure of any of these representations or warranties or any description of Collateral therein to be accurate or complete shall not impair the security interest in any such Collateral.

Covenants. Until all Indebtedness is Indefeasibly Paid or performed, and Lender has no further commitment to lend under the Credit Facility, Borrower agrees and covenants as follows:

(a)

[Intentionally Omitted].

(b)

Maintenance of Existence; Conduct of Business. Borrower shall preserve and maintain its existence and all of its leases, privileges, licenses, permits, franchises, qualifications, and rights that are necessary or desirable in the ordinary conduct of its business. Borrower shall conduct its business in accordance with existing business practices.

(c)

Taxes and Claims. Borrower shall pay or discharge at or before maturity or before becoming delinquent (i) all taxes, levies, assessments, and governmental charges imposed on it or its income or profits or any of its property or assets, and (ii) all lawful claims for labor, material, and supplies, which, if unpaid, might become a Lien upon any of its property or assets; provided, however, that Borrower shall not be required to pay or discharge any tax, levy, assessment, or governmental charge, or claims for labor, material or supplies, in each case which is being contested in good faith by appropriate proceedings diligently pursued, and for which adequate reserves in accordance with GAAP have been established and are held by Borrower.

(d)

Ownership and Liens; Impairment of Collateral. Borrower will maintain good and indefeasible title to the Collateral free and clear of all Liens, security interests, encumbrances, or adverse claims, except for Permitted Encumbrances. Borrower will cause any financing statement or other security instrument with respect to the Collateral to be terminated, except for Permitted Encumbrances. Borrower will defend at its expense Lender’s right, title, and security interest in and to the Collateral against the

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

claims of any third party. Borrower will not take any action that would in any manner impair the enforceability of Lender’s security interest in any Collateral.

(e)

Inspection Rights. At any reasonable time and from time to time, Borrower shall permit representatives of Lender: (i) to examine, inspect, review, evaluate and make physical verifications and appraisals of the Collateral; (ii) to examine, copy, and make extracts from its books and records; (iii) to visit and inspect its properties and assets; and (iv) to discuss its business, operations, and financial condition with its officers, employees, and independent certified public accountants, in each instance, at the Borrower’s expense.

(f)

Keeping Books and Records. Borrower shall cause Guarantor to maintain proper books of record and account in which full, true, and correct entries in conformity with GAAP shall be made of all dealings and transactions in relation to Borrower’s business and activities.

(g)

Compliance with Laws. Borrower shall comply in all material respects with all applicable laws, rules, regulations, orders, and decrees of any Governmental Authority or arbitrator, where the failure to comply would reasonably be expected to have a Material Adverse Effect.

(h)

Compliance with Agreements. Borrower shall comply in all material respects with all agreements, contracts, and instruments binding on it or affecting its properties or business, where the failure to comply would reasonably be expected to have a Material Adverse Effect.

(i)

ERISA. Borrower shall comply with all minimum funding requirements, and all other material requirements, of ERISA, if applicable, so as not to give rise to any liability thereunder.

(j)

Depository Relationship. For so long as b1Bank is Lender holding the majority interest in the Loan, Borrower shall use Lender as its principal depository bank for the maintenance of business, cash management, operating and administrative deposit accounts, provided, however, Lender agrees that Borrower and/or its Affiliates may maintain deposits as set forth in the Disclosure Letter. Lender confirms to Borrower that in the event that Borrower deposits in money market accounts at Lender amounts in excess of $38,000,000.00 but no greater than $63,000,000.00 (the “Money Market Cap”), such deposits shall earn 3.50% (3.56% APY) for a period of twelve (12) months after the date of this Agreement; provided, however, any amounts in excess of the Money Market Cap shall earn interest at standard bank published rates by Lender.

(k)

Debt. Borrower shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, incur, create, assume, or permit to exist any Debt, except (the “Permitted Debt”):

(i)

Debt to Lender;

(ii)

trade payables incurred in the ordinary course of business;

(iii)

guaranty obligations and other contingent liabilities in favor of Lender pursuant to the Revolver Loan and/or any other credit facility extended by Lender to an Affiliate of Borrower; and

(iv)

Debt disclosed on Schedule 7(k).

(l)

Restricted Payments. Borrower shall not and shall not permit Guarantor to (if any Default has occurred or would occur by reason of any action hereunder), directly or indirectly, declare or pay any dividends or make any other payment or distribution (in cash, property, or obligations), on account of its equity interests, or redeem, purchase, retire, call, or otherwise acquire any of its equity interests, or permit any of its Subsidiaries to purchase or otherwise acquire any equity interest of such Person, or set apart any money for a sinking or other analogous fund for any dividend or other distribution on its equity interests or for any redemption, purchase, retirement, or other acquisition of any of its equity interests, or incur any obligation (contingent or otherwise) to do any of the foregoing. Notwithstanding the foregoing,

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

REIT may make distributions to service regularly scheduled payments on its preferred stock in an amount no greater than $5,000,000 per year.

(m)

Fundamental Change. Borrower will not (i) make any material change in the nature of its business as carried on as of the Effective Date, (ii) amend or permit the amendment of any of its Organizational Documents without the prior written consent of Lender, such consent not to be unreasonably withheld provided any such amendment would not result in a Default or Event of Default and would not reasonably be expected to have a Material Adverse Effect, (iii) liquidate, merge, or consolidate with or into any other Person, (iv) make a change in its entity type (i.e., covert from a limited liability company to a limited partnership or other type of entity) or the jurisdiction in which it is organized, or

(v) permit ANY change in Borrower’s legal name or the state of Borrower’s organization, in each case except in connection with a Permitted Transfer. Borrower shall execute and deliver all such additional documents and perform all additional acts as Lender, in its sole discretion, may request in order to continue or maintain the existence and priority of its security interest in all of the Collateral.

(n)

Change in Control. Without the prior written consent of Lender, Borrower shall not permit a change in Control of Borrower other than in connection with a Permitted Transfer.

(o)

Accounting. Borrower shall not change its fiscal year or make any change (i) in accounting treatment or reporting practices, except as required by GAAP and disclosed to Lender, or (ii) in tax reporting treatment, except as required by law and disclosed to Lender.

(p)

Notices of Material Events. Borrower will furnish to Lender prompt written notice of the following:

(i)

the occurrence of any Default;

(ii)

the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against Borrower or, to Borrower’s knowledge, Guarantor, that, if adversely determined, would reasonably be expected to result in a Material Adverse Effect; and

(iii)

[intentionally omitted].

Each notice delivered under this Section shall be accompanied by a statement of a Responsible Officer of Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

(q)

Limited Purpose. Borrower hereby represents warrants and covenants that Borrower, until payment in full of the Indebtedness, shall engage in no other business but those reasonably related to its ownership of the Property and other similar business and investments in commercial real estate.

(r)

HVCRE Compliance. Borrower shall at all times cause the Property to remain compliant with the HVCRE Regulations such that the Property does not, in the determination of Lender, need to be classified as High Volatility Commercial Real Estate. The parties hereto acknowledge that as of the Effective Date, the Property is not classified as High Volatility Commercial Real Estate.

(s)

Ad Valorem Taxes; Tax and Insurance Escrow. Borrower shall comply with all requirements set forth in the Security Instruments with respect to the payment of ad valorem taxes and tax and insurance escrows.

(t)

Net Sales Proceeds. Borrower shall deposit with Lender the Net Sales Proceeds received by Borrower from any sale, transfer or other disposition of all or any portion of the Property. Such Net Sales Proceeds shall be neither Collateral nor restricted.

(u)

SNDAs and Tenant Estoppels. Within thirty (30) days after the date of this Agreement, to the extent not delivered prior to the closing of the Loan, Borrower shall deliver to Lender (i) a tenant estoppel certificate in form and substance satisfactory to Lender, taking into account the terms of the applicable Lease

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

(each an “Estoppel Certificate”) from all tenants under Leases at any Property in excess of 30,000 square feet (provided that such period shall be extended by Lender as long as Borrower is using commercially reasonable efforts to obtain same) and (ii) a fully executed subordination, non-disturbance and attornment agreement satisfactory to Lender, taking into account the terms of the applicable Lease (each an “SNDA”) from all tenants under Leases at any Property in excess of 30,000 square feet (provided that such period shall be extended by Lender as long as Borrower is using commercially reasonable efforts to obtain same). In addition, Borrower shall use commercially reasonable efforts to cause (i) all tenants under Leases at any Property in excess of 30,000 square feet to execute and deliver to Lender an SNDA concurrently with the execution of such Lease or such longer period of time agreed to by Lender in writing, and (ii) all tenants under Leases at any Property an Estoppel Certificate within thirty (30) days of written request by Lender, such request not to be made more than one (1) time per year unless an Event of Default is continuing.

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

(v)

Termination of Memorandum. To the extent not delivered prior to the closing of the Loan, Borrower shall use commercially reasonably efforts to cause to be terminated of record that certain “Memorandum of Management Agreement” recorded June 25, 2019 as Recording No. 20190625000641 of the Official Records of King County, Washington.

Financial Covenants. Until all Indebtedness is Indefeasibly Paid or satisfied, and Lender has no further commitment to lend under the Credit Facility, Borrower agrees and covenants that it will, unless Lender shall otherwise consent in writing:

(a)

Debt Service Coverage Ratio. Borrower will maintain a Debt Service Coverage Ratio of at least 1.15 to 1.00, to be tested at the end of each calendar quarter. If Borrower fails to comply with this covenant, then, within TEN (10) days of notice from Lender, Borrower shall prepay the Indebtedness (or, with Lender’s consent, post cash Collateral) in an amount sufficient (or, with respect to cash Collateral, in an amount which would be sufficient) in Lender’s Permitted Discretion for Borrower to regain compliance with such covenant. Any failure to comply with the foregoing requirement shall constitute an immediate Event of Default hereunder. Borrower shall release any cash Collateral to Borrower if Borrower satisfies this Debt Service Coverage Ratio test in the following quarter (without considering such cash Collateral).

(b)

Minimum Liquidity. Borrower and Partnership shall maintain aggregate Minimum Liquidity in an amount no less than (i) FIVE MILLION AND 00/100 DOLLARS ($5,000,000.00), measured as of the last day of each calendar quarter, and (ii) TEN MILLION AND 00/100 DOLLARS ($10,000,000.00), measured as of December 31, 2027.

(c)

Defined Terms. The following terms will have the meanings given such terms in this

Section:

“Debt Service” means, for any month, the monthly installment of principal and interest that would be payable on the Loan in order to fully amortize the Loan (assuming the Loan is fully advanced and outstanding) over a twenty (20) year amortization period, in equal monthly installments, assuming a fixed rate of interest equal to the then current interest rate under the Note.

“Debt Service Coverage Ratio” means, as of any applicable date of determination, the ratio of

(i)

Net Operating Income for the Property for the twelve (12) month period ending on such date, to

(ii)

Debt Service for such period.

“Minimum Liquidity” means, for any Person as of any date, the owned amount of Permitted Investments (which are unencumbered by any Lien or other restriction which might impair the disposal of such Permitted Investment) having aggregate market value (as determined by Lender in its reasonable discretion). With respect to Partnership, the undrawn availability under the $25,000,000.00 revolving line

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

of credit by Lender to the Partnership (the “Revolver Loan”) shall qualify as Minimum Liquidity so long as there is no default or event of default under such line of credit.

“Net Operating Income” means, for any period, as of any applicable date of determination, the actual rental income and other revenues of the Property for such period (including, without duplication, any option payments received pursuant to the option agreement described in the Disclosure Letter), less, without duplication, (i) actual expenses of the Property paid during such period, (ii) a pro-rata portion of any other actual expenses incurred but not paid during such period, and (iii) other expenses, even if not charged, that are normally allocated to property of this type including, but not limited to, reasonable reserves for taxes, vacancy, insurance, repair and replacement of improvements, and based on the actual management fee, in the event of a third party manager, or on an assumed reasonable management fee, in the case of any other manager, as determined by Lender in its sole discretion. In the event that a tenant under any Lease of the Property fails to renew its Lease at least ninety (90) days prior to the expiration of such Lease, the rental income and expense reimbursement with respect to such Lease shall be excluded from Net Operating Income; provided, however, at least ninety (90) days prior to the expiration of such Lease, Borrower may replace such Lease with a Lease with a different tenant, and in such event, the rental income and expense reimbursement with respect to such replacement Lease shall be included in Net Operating Income.

“Permitted Investments” means (a) cash or cash equivalents; (b) readily marketable direct obligations of the United States of America or any agency thereof with maturities of ONE (1) year or less from the date of acquisition; (c) deposits with maturities of ONE (1) year or less from the date of acquisition with Lender or fully insured deposits by the Federal Deposit Insurance Corporation with maturities of ONE (1) year or less from the date of acquisition with any commercial bank other than Lender; (d) commercial paper of a domestic issuer if at the time of purchase such paper is rated in one of the two highest rating categories of Standard and Poor’s Corporation or Moody’s Investors Service, and

(e) such other readily marketable stocks, mutual funds, equity securities, financial instruments or other as Lender may approve from time to time in its reasonable discretion.

A breach of a financial covenant contained in this Section shall be deemed to have occurred as of any date of determination thereof by Lender or as of the last day of any specified measuring period, regardless of when the financial statements or any certificate reflecting such breach are delivered to Lender. Borrower shall provide Lender such calculations and certificates as Lender shall require in its Permitted Discretion in calculating compliance with the financial covenants set forth herein.

Reporting Requirements. Until all Indebtedness is Indefeasibly Paid and satisfied, and Lender has no further commitment to lend under the Credit Facility, Borrower agrees and covenants that it will furnish or cause to be furnished the following:

(a)

Interim Financial Statements. As soon as available, and in any event within FORTY-FIVE (45) days after the end of each calendar quarter (or, if later, on the date of any required public filing thereof with the SEC), financial statements on an accrual basis to include a balance sheet, income statement and cash flow statement of REIT (on a consolidated basis), as of the end of such calendar quarter, all in form and in detail satisfactory to Lender in its Permitted Discretion and duly certified (subject to year-end review adjustments) by a Responsible Officer (i) as being true and correct in all material aspects to the best of such officer’s knowledge (subject to year-end adjustments), and (ii) as having been prepared in accordance with GAAP; in the event that Borrower delivers to Lender a quarterly report of REIT on Form 10-Q for any calendar quarter, as filed with the SEC within the time frames set forth in this subsection, such Form 10-Q shall satisfy all requirements of this subsection with respect to such calendar quarter to the extent that it contains the information required by this subsection.

(b)

Annual Financial Statements. As soon as available and in any event within ONE HUNDRED TWENTY (120) days after the end of each fiscal year, financial statements on an accrual basis to include a balance sheet, income statement and cash flow statement of REIT (on a consolidated basis), as of the end of such fiscal year, audited by independent certified public accountants of recognized standing satisfactory to Lender; in the event that Borrower delivers to Lender an annual report of REIT on

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

Form 10-K for any fiscal year, as filed with the SEC within the time frames set forth in this subsection, such Form 10-K shall satisfy all requirements of this subsection with respect to such fiscal year to the extent that it contains the information required by this subsection.

(c)

[Intentionally Omitted.]

(d)

[Intentionally Omitted.]

(e)

Compliance Certificate. Concurrently with the delivery of the interim financial statements required by Section 9(a) hereof, a certificate of a Responsible Officer of Borrower (i) stating that to such officer’s knowledge, no Default has occurred and is continuing, or if a Default has occurred and is continuing, a statement as to the nature thereof and the action which is proposed to be taken with respect thereto, and (ii) showing in reasonable detail the calculations demonstrating compliance with the financial covenants set forth in Section 8 of this Agreement.

(f)

[Intentionally Omitted.]

(g)

[Intentionally Omitted.]

(h)

[Intentionally Omitted.]

(i)

Notice of Default and Events of Default. As soon as possible and in any event within FIVE (5) Business Days after the occurrence of each Default, a written notice setting forth the details of such Default and the action which is proposed to be taken by Borrower with respect thereto.

(j)

General Information. Borrower shall promptly deliver such other information concerning Borrower, Guarantor or the Collateral as Lender may reasonably request.

(k)

Rent Roll. As soon as available and in any event within FIFTEEN (15) days after the end of June and December of each year, a current rent roll with respect to the Property subject to the Mortgage (Pennsylvania) for the period then ended, in form and in detail satisfactory to Lender in its Permitted Discretion and duly certified by a Responsible Officer of Borrower (i) as being true and correct in all material aspects to the best of such officer’s knowledge, and (ii) as having been prepared in accordance with GAAP.

10.

Insurance and Casualty.

(a)

Required Insurance Coverage. Borrower, at its expense, shall maintain and provide to Lender copies of policies or other satisfactory evidence of insurance providing the following:

(i)

Commercial General Liability Insurance with limits of not less than ONE MILLION DOLLARS ($1,000,000.00) per occurrence combined single limit and TWO MILLION DOLLARS ($2,000,000.00) in the aggregate for the policy period, or in whatever higher amounts as may be required by Lender from time to time by notice to Borrower (with deductibles acceptable to Lender).

(ii)

Umbrella/Excess Liability in excess of Commercial General Liability, Automobile Liability and Employers’ Liability coverages which is at least as broad as these underlying policies with a limit of liability of FIVE MILLION DOLLARS ($5,000,000.00).

(iii)

All-Risk Property (Special Cause of Loss) Insurance including, without limitation, coverage for loss or damage to the Property and Improvements by fire and other perils including windstorm, malicious mischief, building ordinance extension endorsement (including cost of demolition, increased costs of construction and the value of the undamaged portion of the building and soft costs coverage), and boiler and machinery coverage (if separate policy, that policy must include loss of rents or business interruption coverage), as specified by Lender. The policy shall be in an amount not less than the

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

full insurable value on a replacement cost basis of the insured Property and Improvements and personal property related thereto (without deduction for depreciation). If the policy is a blanket policy covering the Property and Improvements and one or more other properties, the policy must specify the dollar amount of the total blanket limit of the policy that is allocated to each property, and the amount so allocated to the Property and Improvements must not be less than the full insurable value on a replacement cost basis. Such policy shall not contain an exclusion for terrorist losses. However, if such an exclusion exists in the All-Risk policy, a separate terrorism policy covering Certified Acts of Terrorism must be evidenced to Lender in an amount equal to the full replacement cost of the Property and Improvements, or the amount of the Loan, whichever is less. This policy must also list Lender as mortgagee and loss payee.

(iv)

If the Property, or any part thereof, lies within a “special flood hazard area” as designated on maps prepared by the Federal Emergency Management Agency (FEMA), a National Flood Insurance Program Standard Flood Insurance Policy and/or insurance from a private insurance carrier (which may substitute for or supplement such standard flood insurance policy) in form and substance acceptable to Lender covering the Improvements and contents, if applicable, for the duration of the Loan in the amount of the full insurable value of the Improvements and contents, if applicable, or the amount of the Loan, whichever is less.

(v)

Rent loss or business interruption insurance against loss of income arising out of damage to or destruction of the Property and Improvements by fire or other peril insured against under each policy; provided, however, such insurance need not be effective prior to the time a tenant occupies the Project for the purposes of conducting business. The amount of the policy shall be satisfactory to Lender in its Permitted Discretion.

(vi)

Such other insurance coverages in such amounts as Lender may require either in response to any legal or regulatory change or any internally generated set of insurance guidelines generally applicable to construction or real estate loans made or held by Lender.

(b)

Policy Requirements. All insurance policies shall (i) be issued by an insurance company licensed to do business in the state where the Project is located having a rating of “A-” VIII or better by

A.M. Best Co., in Best’s Rating Guide, (ii) name Lender and any and all subsidiaries “and their successors and/or assigns as their interests may appear” as additional insureds on all liability insurance and as mortgagee and loss payee on all All-Risk Property, flood insurance, and rent loss or business interruption insurance, (iii) be endorsed to show that Borrower’s insurance shall be primary and all insurance carried by Lender is strictly excess and secondary and shall not contribute with Borrower’s insurance, (iv) provide that Lender is to receive THIRTY (30) days written notice prior to non-renewal or cancellation, (v) be evidenced by a certificate of insurance to be provided to Lender along with a copy of the policy for All-Risk Property coverage or such other evidence of insurance acceptable to Lender in its Permitted Discretion, (vi) include either policy or binder numbers on the ACORD form, and (vii) be in form and amounts acceptable to Lender; provided, however, that with respect to any flood insurance required hereunder, acceptable proof of coverage shall not include certificates of insurance.

(c)

Evidence of Insurance; Payment of Premiums. Borrower shall deliver to Lender, at least FIVE (5) days before the expiration of an existing policy, evidence acceptable to Lender of the continuation of the coverage of the expiring policy. If Lender has not received satisfactory evidence of such continuation of coverage in the time frame herein specified, Lender shall have the right, but not the obligation, to purchase such insurance for Lender’s interest only. Any amounts so disbursed by Lender pursuant to this Section shall be repaid by Borrower within TEN (10) days after written demand therefor. Nothing contained in this Section shall require Lender to incur any expense or take any action hereunder, and inaction by Lender shall never be considered a waiver of any right accruing to Lender on account on this Section. The payment by Lender of any insurance premium for insurance which Borrower is obligated to provide hereunder but which Lender believes has not been paid, shall be conclusive between the parties as to the legality and amounts so paid. Borrower agrees to pay all premiums on such insurance as they become due and will not permit any condition to exist on or with respect to the Property which would wholly or partially invalidate any insurance thereon.

(d)

Disclosure Relating to Collateral Protection Insurance. As of the date of this disclosure, Borrower and Lender have consummated a transaction pursuant to which Lender has agreed to make Loans

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

to Borrower. Borrower has pledged the Property to secure the Indebtedness in accordance with the Loan Documents. This notice relates to Borrower’s obligations with respect to insuring the Property against damage. To this end, Borrower must do the following:

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

(i)

Keep the Property insured against damage in the amount equal to the Indebtedness or as otherwise required by the Loan Documents;

(ii)

Purchase the insurance from an insurer that is authorized to do business in Texas (or State where the real property Collateral is located) or an eligible surplus lines insurer;

(iii)

Name Lender the person to be paid under the policy in the event of loss; and

(iv)

Deliver to Lender a copy of the policy and proof of the payment of premiums.

Lender may obtain collateral protection insurance on behalf of Borrower at Borrower’s expense if Borrower fails to meet any of the foregoing requirements.

(e)

No Liability; Assignment. Lender shall not by the fact of approving, disapproving, accepting, preventing, obtaining, or failing to obtain any such insurance, incur any liability for the form or legal sufficiency of insurance contracts, solvency of insurers, or payment of losses, and Borrower hereby expressly assumes full responsibility therefor and all liability, if any, thereunder. Borrower hereby absolutely assigns and transfers to Lender all of Borrower’s right, title and interest in and to any unearned premiums paid on policies and any claims thereunder and Lender shall have the right, but not the obligation, to assign any then existing claims under the same to any purchaser of the Property at any foreclosure sale; provided, however, that so long as no Default exists and is continuing hereunder, Borrower shall have the right under a license granted hereby, and Lender hereby grants to Borrower a license, to exercise rights under said policies and in and to said premiums subject to the provisions of this Agreement. Said license shall be revoked automatically upon the occurrence and during the continuance of a Default hereunder. In the event of a foreclosure of the Deed of Trust, or other transfer of title to the Property in extinguishment in whole or in part of the Loan, all right, title and interest of Borrower in and to the insurance policies then in force and all proceeds payable thereunder shall thereupon vest in the purchaser at such foreclosure or Lender or other transferee in the event of such other transfer of title.

(f)

No Separate Insurance. Borrower shall not carry any separate insurance on the Property concurrent in kind or form with any insurance required hereunder or in the event of loss contributing without Lender’s prior written consent, and any such policy shall have attached a standard non-contributing mortgagee clause, with loss payable to Lender, and shall otherwise meet all other requirements set forth herein.

(g)

Casualty Loss.

(i)

If all or any part of the Property shall be damaged or destroyed by fire or other casualty, Borrower shall give immediate written notice and make a claim to the insurance carrier and Lender. With respect to any such casualty loss for which Borrower has an insurance claim that exceeds ONE MILLION AND NO/100 DOLLARS ($1,000,000.00) (the “Restoration Threshold”), Borrower hereby authorizes and empowers Lender, at Lender’s option and in Lender’s sole discretion as attorney-in-fact for Borrower, to make proof of loss, to adjust and compromise any claim under insurance policies, to appear in and prosecute any action arising from such insurance policies, to collect and receive insurance proceeds, and to deduct therefrom Lender’s expenses incurred in the collection of such proceeds; provided, however, that the foregoing authorization and empowerment of Lender to act as attorney-in-fact for Borrower shall not become effective until the occurrence and during the continuance of An Event of Default or until such time as Borrower fails to diligently pursue the collection of such insurance proceeds in Lender’s opinion. The foregoing appointment is irrevocable, coupled with an interest and continuing so

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

long as Indebtedness remains outstanding, and such rights, powers and privileges shall be exclusive in Lender and its successors and assigns.

(ii)

As sole loss payee on all policies of casualty insurance, Lender shall receive all insurance proceeds in excess of the Restoration Threshold from any casualty loss and shall hold the same in an interest-bearing account pending disposition in accordance with this Section. Borrower authorizes Lender to deduct from such insurance proceeds received by Lender all of Lender’s costs and expenses (including, without limitation, reasonable attorneys’ fees) incurred in connection with the collection thereof (the remainder of such insurance proceeds being referred to herein as “Net Casualty Proceeds”).

(iii)

Lender shall deliver any Net Casualty Proceeds that are less than the Restoration Threshold to Borrower. Lender shall cause all other Net Casualty Proceeds from any casualty loss affecting the Property to be disbursed for the cost of reconstruction of the Property if all of the following conditions are satisfied within NINETY (90) days after the applicable casualty loss: (1) Borrower satisfies Lender that the reconstruction can be completed within a reasonable period of time after such casualty loss (but in no event later than the Maturity Date) and that after giving effect to such reconstruction the Property will be restored to its condition immediately prior to the casualty loss; (2) Borrower satisfies Lender that the Net Casualty Proceeds are sufficient to pay all costs of reconstruction, and if insufficient, Borrower deposits with Lender additional funds to make up such insufficiency; and (3) Borrower delivers to Lender all plans and specifications and construction contracts for the work of reconstruction and such plans and specifications and construction contracts are in form and content acceptable to Lender in its Permitted Discretion and with a contractor acceptable to Lender. The disbursement of Net Casualty Proceeds pursuant to this clause shall be in accordance with customary disbursement procedures and shall not be available during the continuance of an Event of Default. Any Net Casualty Proceeds not required to reconstruct the Property shall be delivered to Borrower after expiration of the lien period for the work of reconstruction (or, at Borrower’s option, after delivery of title insurance to Lender over such liens where the lien period has not so expired). Upon the occurrence and during the continuance of an Event Default or in the event Borrower is unable to satisfy the conditions set forth in subclauses (1) through (4) hereof by the required date, Lender shall have the right (but not the obligation) to apply all Net Casualty Proceeds held by it to the payment of the Indebtedness. Borrower shall have the obligation to promptly and diligently complete the work of reconstruction necessitated by any casualty loss and restore the Property to the equivalent of its condition immediately prior to such casualty provided the applicable Net Casualty Proceeds are made available to Borrower for such purpose.

(h)

Condemnation and Other Awards. Immediately upon receiving written notice of the institution or threatened institution of any proceeding for the condemnation of the Property or any part thereof, Borrower shall notify Lender of such fact. Borrower shall then file or defend its rights thereunder and prosecute the same with due diligence to its final disposition; provided, however, that Borrower shall not enter into any settlement of such proceeding without the prior approval of Lender if the amount in controversy exceeds the Restoration Threshold. Lender shall be entitled, at its option, to appear in any such proceeding in its own name, and upon the occurrence and during the continuation of an Event of Default or if Borrower fails to diligently prosecute such proceeding, (i) Lender shall be entitled, at its option, to appear in and prosecute any such proceeding or to make any compromise or settlement in connection with such condemnation on behalf of Borrower, and (ii) Borrower hereby irrevocably constitutes and appoints Lender as its attorney-in-fact, and such appointment is coupled with an interest, to commence, appear in and prosecute such action or proceeding or to make such compromise or settlement in connection with any such condemnation on its behalf. The foregoing appointment is irrevocable and continuing so long as the Indebtedness remains outstanding, and such rights, powers and privileges shall be exclusive in Lender and its successors and assigns. If the Property or any material part thereof is taken or materially diminished in value in connection with such condemnation, or if a consent settlement is entered, by or under threat of such proceeding, the award or settlement payable to Borrower by virtue of its interest in the Property, shall be, and by these presents is, assigned, transferred, and set over unto Lender. Any such award or settlement shall be first applied to reimburse Lender for all costs and expenses, including reasonable attorneys’ fees, incurred in connection with the collection of such award or settlement. The balance of such award or settlement (the “Net Condemnation Proceeds”) shall be paid to Lender for application in the manner set forth in Section 10(g) as if such award or settlement constituted insurance proceeds from a casualty loss;

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provided, however, that Lender shall have no obligation to make Net Condemnation Proceeds available for construction or reconstruction of the Property unless Lender has determined that the Property as so constructed or reconstructed after giving effect to the condemnation would have a value that is no less than its value would have been had there been no such condemnation. Borrower shall have the obligation to promptly and diligently complete the work of reconstruction necessitated by any condemnation and restore the Property to the equivalent of its condition immediately prior to such condemnation (or if the initial construction of the Improvements is not substantially complete at the time of such condemnation, continue the construction of the Improvements in accordance with the terms hereof) provided the applicable Net Condemnation Proceeds are made available to Borrower for such purpose.

11.

Rights of Lender. Lender shall have the rights contained in this Section at all times that this Agreement is effective.

(a)

Financing Statements. Borrower hereby authorizes Lender to file one or more financing or continuation statements, and amendments thereto, relating to the Collateral. Borrower hereby irrevocably authorizes Lender at any time and from time to time to file in any UCC jurisdiction any initial financing statements and amendments thereto that (i) properly describe the Collateral and (ii) contain any other information required by Article 9 of the UCC for the sufficiency or filing office acceptance of any financing statement or amendment. Borrower hereby ratifies any pre-filed financing statement relating to the Collateral made by or on behalf of Lender.

(b)

Power of Attorney. Borrower hereby irrevocably appoints Lender as Borrower’s attorney-in-fact, such power of attorney being coupled with an interest, with full authority in the place and stead of Borrower and in the name of Borrower or otherwise, from time to time following the occurrence and during the continuation of an Event of Default in Lender’s Permitted Discretion, to take any action and to execute any instrument which Lender may deem necessary or appropriate to accomplish the purposes of this Agreement.

(c)

Performance by Lender. If Borrower shall fail to perform any covenant or agreement contained in any of the Loan Documents, then Lender may perform or attempt to perform such covenant or agreement on behalf of Borrower. In such event, Borrower shall, at the request of Lender, promptly pay to Lender on demand any amount expended by Lender in connection with such performance or attempted performance, together with interest thereon at the Maximum Rate (as such term is defined in the Note) from and including the date of such expenditure to but excluding the date such expenditure is paid in full. Notwithstanding the foregoing, it is expressly agreed that Lender shall not have any liability or responsibility for the performance of any covenant, agreement, or other obligation of Borrower under this Agreement or any other Loan Document.

(d)

Borrower’s Receipt of Proceeds. Upon the occurrence and during the continuation of an Event of Default, all amounts and proceeds (including instruments and writings) received by Borrower in respect of the Collateral shall be received in trust for the benefit of Lender hereunder and, upon the written request of Lender, shall be segregated from other property of Borrower and shall be forthwith delivered to Lender in the same form as so received (with any necessary endorsement) and applied to the Indebtedness in accordance with the Loan Documents.

12.

Events of Default. Each of the following shall constitute an “Event of Default” under this Agreement:

(a)

Payment Default. The failure, refusal, or neglect of Borrower to pay when due any part of the principal of, or interest on the Indebtedness owing to Lender by Borrower or any other indebtedness or obligations due and owing from Borrower to Lender under the Loan Documents from time to time and such failure, refusal or neglect shall continue unremedied for a period of TEN (10) Business Days from the date such payment is due.

(b)

Performance or Warranty Default. Except as otherwise provided in this Agreement, the failure of Borrower or Guarantor to timely and properly observe, keep or perform any covenant,

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

agreement, warranty or condition required herein or in any of the other Loan Documents or any other agreement with Lender unless such Default is cured within (i) TEN (10) Business Days following written notice from Lender to Borrower with respect to any Default that can be cured by the payment of money or

(ii) THIRTY (30) days following written notice from Lender to Borrower with respect to any Default that cannot be cured by the payment of money, except that, if (x) such curable Default cannot be cured within THIRTY (30) days, (y) Borrower or Guarantor as applicable has, within such period, taken such actions as necessary and appropriate to cure such curable Default, and (z) Borrower or Guarantor, as applicable, shall continue to diligently pursue such actions, then such cure period shall be extended for a period of NINETY

(90) days.

(c)

Representations. Any representation contained herein or in any of the other Loan Documents made by Borrower or Guarantor is false, misleading, or erroneous in any material respect when made or when deemed to have been made unless Borrower or Guarantor believed that any such representation was true when made, such representation is susceptible of being cured and made true and correct in all material respects, and Borrower or Guarantor, as applicable, take whatever action is required so that such representation is made true and correct in all material respects within THIRTY (30) days after the earlier to occur of (i) Borrower’s or Guarantor’s knowledge that such representation was false, misleading, or erroneous in any material respect and (ii) notice from Lender.

(d)

Other Debt. The occurrence of any event which results in the ACCELERATION of the maturity of any Debt for borrowed money in an aggregate principal amount in excess of FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($500,000.00) owing by Borrower to any third party under any agreement or understanding.

(e)

Insolvency. If Borrower or Guarantor (i) becomes insolvent, or makes a transfer in fraud of creditors, or makes an assignment for the benefit of creditors, or admits in writing its inability to pay its debts as they become due; (ii) generally is not paying its debts as such debts become due; (iii) has a receiver, trustee or custodian appointed for, or take possession of, all or substantially all of its assets, either in a proceeding brought by it or in a proceeding brought against it and such appointment is not discharged or such possession is not terminated within NINETY (90) days after the effective date thereof or it consents to or acquiesces in such appointment or possession; (iv) files a petition for relief under the United States Bankruptcy Code or any other present or future federal or state insolvency, Bankruptcy or similar laws (all of the foregoing hereinafter collectively called “Applicable Bankruptcy Law”) or an involuntary petition for relief is filed against it under any Applicable Bankruptcy Law and such involuntary petition is not dismissed within NINETY (90) days after the filing thereof, or an order for relief naming it is entered under any Applicable Bankruptcy Law, or any composition, rearrangement, extension, reorganization or other relief of debtors now or hereafter existing is requested or consented to by it; or (v) fails to have discharged within a period of NINETY (90) days any attachment, sequestration or similar writ levied upon any property of it.

(f)

Judgment. The entry of any judgment against Borrower or Guarantor or the issuance or entry of any attachments or other Liens against any of the property of Borrower for an amount in excess of ONE MILLION AND 00/100 DOLLARS ($1,000,000.00) or, provided no Material Adverse Effect results, the property of Guarantor for an amount in excess of FIVE MILLION AND 00/100 DOLLARS ($5,000,000.00) (individually or in the aggregate) if not appealed (or not capable of being appealed), uninsured, undischarged, unbonded or undismissed on the date on which such judgment would be executed upon.

(g)

Action Against Collateral. The Collateral or any material portion thereof is taken on execution or other process of law in any action other than pursuant to eminent domain.

(h)

Change in Control. Without Lender’s written consent, any transfer of interests in Borrower or Guarantor or change in Control of Borrower, in each case other than in connection with a Permitted Transfer.

(i)

ERISA Default. Any of the following events shall occur or exist with respect to Borrower or any ERISA Affiliate: (i) any prohibited transaction involving any plan; (ii) any reportable event with respect to any plan; (iii) the filing under Section 4041 of ERISA of a notice of intent to terminate any plan or the termination of any plan; (iv) any event or circumstance that might constitute grounds entitling the PBGC to

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

institute proceedings under Section 4042 of ERISA for the termination of, or for the appointment of a trustee to administer, any plan, or the institution by the PBGC of any such proceedings; or (v) complete or partial withdrawal under Section 4201 or 4204 of ERISA from a multiemployer plan or the reorganization, insolvency, or termination of any multiemployer plan; and in each case above, such event or condition, together with all other events or conditions, if any, have subjected or would subject Borrower to any tax, penalty, or other liability to a plan, a multiemployer plan, the PBGC, or otherwise (or any combination thereof) which in the aggregate exceed or would reasonably be expected to have a Material Adverse Effect.

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(j)

Dissolution. Borrower or Guarantor shall have been dissolved, liquidated, or merged or consolidated with or into any other Person without the prior written consent of Lender, in each case other than in connection with a Permitted Transfer.

(k)

Action of Lien Holder. The holder of any Lien or security interest on the Collateral (without hereby implying the consent of Lender to the existence or creation of any such Lien or security interest on the Collateral), institutes foreclosure or other proceedings for the enforcement of its remedies thereunder that are not being contested in good faith by Borrower.

(l)

Subordinate Indebtedness. The subordination provisions related to any Subordinate Indebtedness or any other agreement, document or instrument governing any Subordinate Indebtedness shall for any reason be revoked or invalidated, or otherwise cease to be in full force and effect, or any Person shall contest in any manner the validity or enforceability thereof or deny that it has any further liability or obligation thereunder, or the Indebtedness, for any reason shall not have the priority contemplated by this Agreement or any such subordination provisions.

(m)

[Intentionally Omitted].

(n)

Encumbrance. Without the prior written consent of Lender, Borrower grants any easement or dedication, files any plat, condominium declaration, or restriction, or otherwise encumbers the Property, unless such action is expressly permitted by the Loan Documents.

(o)

Transfer of the Property. Title to all or any part of the Property (other than obsolete or worn personal property replaced by adequate substitutes of equal or greater value than the replaced items when new) shall become vested in any party other than Borrower or a permitted assignee, whether by operation of law or otherwise, except for any Permitted Transfer.

(p)

[Intentionally Omitted].

(q)

[Intentionally Omitted].

(r)

Loan Documents. (i) The Loan Documents shall at any time after their execution and delivery and for any reason cease (1) to create a valid and perfected first priority security interest (subject to Permitted Encumbrances) in and to the Collateral; or (2) to be in full force and effect or shall be declared null and void, or (ii) the validity or enforceability of the Loan Documents shall be contested by Borrower or any other Person party thereto or Borrower shall deny it has any further liability or obligation under the Loan Documents.

Nothing contained in this Agreement shall be construed to limit the events of default enumerated in any of the other Loan Documents and all such events of default shall be cumulative.

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

13.

Remedies and Related Rights. If an Event of Default shall have occurred and be continuing, and without limiting any other rights and remedies provided herein, under any of the Loan Documents or otherwise available to Lender, Lender may exercise one or more of the rights and remedies provided in this Section.

(a)

Remedies. Upon the occurrence and during the continuance of any one or more of the foregoing Events of Default, the entire unpaid balance of principal of the Note, together with all accrued but unpaid interest thereon, and all other Indebtedness owing to Lender by Borrower at such time shall, at the option of Lender, become immediately due and payable without further notice, demand, presentation, notice of dishonor, notice of intent to accelerate, notice of acceleration, protest or notice of protest of any kind, all of which are expressly waived by Borrower; provided, however, concurrently and automatically with the occurrence of an Event of Default under Section 12(e), the Indebtedness at such time shall, without any action by Lender, become due and payable, without further notice, demand, presentation, notice of dishonor, notice of acceleration, notice of intent to accelerate, protest or notice of protest of any kind, all of which are expressly waived by Borrower. All rights and remedies of Lender set forth in this Agreement and in any of the other Loan Documents may also be exercised by Lender, in its sole discretion, upon the occurrence of an Event of Default, and not in substitution or diminution of any rights now or hereafter held by Lender under the terms of any other agreement. Notwithstanding the foregoing, interest rate swap or other derivative transactions evidenced by a Hedge Agreement shall be terminated only in accordance with the terms of such Hedge Agreement.

(b)

Other Remedies. Upon the occurrence of any one or more of the foregoing Events of Default, Lender may from time to time at its discretion, without limitation and without notice except as expressly provided in any of the Loan Documents:

(i)

Exercise in respect of the Collateral all the rights and remedies of a secured party under the UCC (whether or not the UCC applies to the affected Collateral);

(ii)

Require Borrower to, and Borrower hereby agrees that it will at its expense and upon request of Lender, assemble the Collateral as directed by Lender and make it available to Lender at a place to be designated by Lender which is reasonably convenient to both parties;

(iii)

Reduce its claim to judgment or foreclose or otherwise enforce, in whole or in part, the security interest granted hereunder by any available judicial procedure;

(iv)

Sell or otherwise dispose of, at its office, on the premises of Borrower or elsewhere, the Collateral, as a unit or in parcels, by public or private proceedings, and by way of one or more contracts (it being agreed that the sale or other disposition of any part of the Collateral shall not exhaust Lender’s power of sale, but sales or other dispositions may be made from time to time until all of the Collateral has been sold or disposed of or until the Indebtedness has been paid and performed in full), and at any such sale or other disposition it shall not be necessary to exhibit any of the Collateral;

(v)

Buy the Collateral, or any portion thereof, at any public sale;

(vi)

Buy the Collateral, or any portion thereof, at any private sale if the Collateral is of a type customarily sold in a recognized market or is of a type which is the subject of widely distributed standard price quotations;

(vii)

Apply for the appointment of a receiver for the Collateral, and Borrower hereby consents to any such appointment; and

(viii)

At its option, retain the Collateral in satisfaction of the Indebtedness whenever the circumstances are such that Lender is entitled to do so under the UCC or otherwise.

Borrower agrees that in the event Borrower is entitled to receive any notice under the UCC, as it exists in the state governing any such notice, of the sale or other disposition of any Collateral, reasonable notice

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shall be deemed given when such notice is deposited in a depository receptacle under the care and custody of the United States Postal Service, postage prepaid, at Borrower’s address set forth on the signature page hereof, THIRTY (30) days prior to the date of any public sale, or after which a private sale, of any of such Collateral is to be held. Lender shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. Lender may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.

(c)

Application of Proceeds. If any Event of Default shall have occurred and is continuing, Lender may at its sole discretion apply or use any cash held by Lender as Collateral, and any cash proceeds received by Lender in respect of any sale or other disposition of, collection from, or other realization upon, all or any part of the Collateral as follows in such order and manner as Lender may elect:

(i)

to the repayment or reimbursement of the reasonable costs and expenses (including, but not limited to, reasonable attorneys’ fees and expenses) incurred by Lender in connection with (1) the administration of the Loan Documents, (2) the custody, preservation, use or operation of, or the sale of, collection from, or other realization upon, the Collateral, and (3) the exercise or enforcement of any of the rights and remedies of Lender hereunder;

(ii)

to the payment or other satisfaction of any Liens and other encumbrances upon

the Collateral;

(iii)

to the satisfaction of the Indebtedness, including without limitation to pay any amounts in respect of Hedge Agreement Obligations;

(iv)

by holding such cash and proceeds as Collateral;

(v)

to the payment of any other amounts required by applicable law; and

(vi)

by delivery to Borrower or any other party lawfully entitled to receive such cash or proceeds whether by direction of a court of competent jurisdiction or otherwise.

(d)

Deficiency. In the event that the proceeds of any sale of, collection from, or other realization upon, all or any part of the Collateral by Lender are insufficient to pay all amounts to which Lender is legally entitled, Borrower (unless otherwise provided) shall be liable for the deficiency, together with interest thereon as provided in the Loan Documents.

(e)

Non-Judicial Remedies. In granting to Lender the power to enforce its rights hereunder without prior judicial process or judicial hearing, Borrower expressly waives, renounces, and knowingly relinquishes any legal right which might otherwise require Lender to enforce its rights by judicial process. Borrower recognizes and concedes that non-judicial remedies are consistent with the usage of trade, are responsive to commercial necessity and are the result of a bargain at arm’s length.

(f)

Other Recourse. Borrower waives any right to require Lender to proceed against any third party, exhaust any Collateral or other security for the Indebtedness, or to have any third party joined with Borrower in any suit arising out of the Indebtedness or any of the Loan Documents, or pursue any other remedy available to Lender. Borrower further waives any and all notice of acceptance of this Agreement and of the creation, modification, rearrangement, renewal, or extension of the Indebtedness. Borrower further waives any defense arising by reason of any disability or other defense of any third party or by reason of the cessation from any cause whatsoever of the liability of any third party. Until all of the Indebtedness shall have been paid in full, Borrower shall have no right of subrogation and Borrower waives the right to enforce any remedy which Lender has or may hereafter have against any third party and waives any benefit of and any right to participate in any other security whatsoever now or hereafter held by Lender. Borrower authorizes Lender, and without notice or demand and without any reservation of rights against Borrower and without affecting Borrower’s liability hereunder or on the Indebtedness to (i) take or

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

hold any other property of any type from any third party as security for the Indebtedness, and exchange, enforce, waive and release any or all of such other property, (ii) apply such other property and direct the order or manner of sale thereof as Lender may in its Permitted Discretion determine, (iii) renew, extend, accelerate, modify, compromise, settle or release any of the Indebtedness or other security for the Indebtedness, (iv) waive, enforce or modify any of the provisions of any of the Loan Documents executed by any third party, and (v) release or substitute any third party.

(g)

No Waiver; Cumulative Remedies. No failure on the part of Lender to exercise and no delay in exercising, and no course of dealing with respect to, any right, power, or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power, or privilege under this Agreement preclude any other or further exercise thereof or the exercise of any other right, power, or privilege. The rights and remedies provided for in this Agreement and the other Loan Documents are cumulative and not exclusive of any rights and remedies provided by law.

(h)

Equitable Relief. Borrower recognizes that in the event Borrower fails to pay, perform, observe, or discharge any or all of the Indebtedness, any remedy at law may prove to be inadequate relief to Lender, and that Lender has the right to enforce its rights and remedies under the Loan Documents under applicable law or in equity, including, without limitation, the right to pursue any remedy for injunctive or other equitable relief.

(i)

HVCRE Compliance. If at any time, in the determination of Lender in its Permitted Discretion, Borrower fails to be in full compliance with HVCRE Regulations, Borrower shall immediately take such actions as may be necessary or desirable to cause Borrower to be in compliance, including without limitation obtaining additional equity. If Borrower fails to take such action or remedy such failure, then, in addition to any other rights and remedies Lender may have, Lender may take such actions as are necessary or desirable to bring Borrower and the Property into compliance with HVCRE Regulations, including without limitation increasing the interest rate on the Loan and/or reducing the maximum outstanding principal balance of the Loan. The parties hereto acknowledge that as of the Effective Date, the Property is not classified as High Volatility Commercial Real Estate.

For purposes of this Section, “Collateral” means any part of the Property that is covered by the scope of Article 9 of the UCC.

14.

Cross-Collateralization and Cross-Default. Borrower and Lender contemplate that Borrower and Lender have engaged or may, from time to time, engage in various loan transactions and that from time to time other circumstances may arise, in which Borrower becomes obligated to Lender, including transactions of a type that are very different from the transactions evidenced by the Loan Documents, including by notes, advances, overdrafts, bookkeeping entries, guaranty agreements, deeds of trust, or any other method or means (each a “Loan Obligation”). Unless otherwise agreed in writing, Borrower and Lender agree that all such transactions will be secured by the Collateral, and that the Indebtedness arising under this Agreement and the other Loan Documents will be secured by any collateral granted in connection with such Loan Obligation. Repayment of all Indebtedness and performance of all other obligations under this Agreement by Borrower shall not terminate Lender’s security interests in the Collateral unless Lender executes a written release. Unless otherwise agreed in writing, if any default occurs under any Loan Obligation, then Lender may declare an Event of Default hereunder and an Event of Default hereunder shall be a default under such Loan Obligation. Lender’s failure to exercise its right of cross-default shall not constitute a waiver by Lender of such right. Notwithstanding anything to the contrary contained herein, in no event shall the Revolver Loan or any letter of credit facility made by Lender to Partnership be deemed a Loan Obligation or deemed to be cross-defaulted or cross-collateralized with the Loan or this Agreement.

15.

Indemnity. BORROWER SHALL INDEMNIFY LENDER AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS, AND AGENTS (EACH, AN “INDEMNIFIED PERSON”) FROM, AND HOLD EACH OF THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES) TO WHICH ANY OF THEM MAY BECOME SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO (a) THE NEGOTIATION, EXECUTION, DELIVERY, PERFORMANCE,

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

ADMINISTRATION, OR ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS, (b) ANY OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS, (c) ANY BREACH BY BORROWER OF ANY REPRESENTATION, WARRANTY, COVENANT, OR OTHER AGREEMENT CONTAINED IN ANY OF THE LOAN DOCUMENTS, OR (d) ANY INVESTIGATION, LITIGATION, OR OTHER PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY THREATENED INVESTIGATION, LITIGATION, OR OTHER PROCEEDING, RELATING TO ANY OF THE FOREGOING. WITHOUT LIMITING ANY PROVISION OF THIS AGREEMENT OR OF ANY OTHER LOAN DOCUMENT, IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO THAT EACH INDEMNIFIED PERSON TO BE INDEMNIFIED UNDER THIS SECTION SHALL BE INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES) ARISING OUT OF OR RESULTING FROM THE SOLE CONTRIBUTORY OR ORDINARY NEGLIGENCE OF SUCH PERSON. THE INDEMNIFICATION PROVIDED FOR IN THIS SECTION SHALL NOT EXTEND TO LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES) ARISING OUT OF OR RESULTING FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH PERSON; PROVIDED, HOWEVER, THAT (I) THE FOREGOING INDEMNITY SHALL NOT INCLUDE ANY SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES EXCEPT TO THE EXTENT IN CONNECTION WITH ANY THIRD PARTIES UNAFFILIATED WITH LENDER AND (II) NO OFFICER, DIRECTOR, EMPLOYEE, ATTORNEY OR AGENT OF BORROWER OR GUARANTOR SHALL HAVE ANY LIABILITY WITH RESPECT TO, AND LENDER HEREBY WAIVES, RELEASES, AND AGREES NOT TO SUE ANY OF THEM, ON ACCOUNT OF THE FOREGOING INDEMNITY. BORROWER AGREES THAT THE PROVISIONS OF THIS SECTION ARE A MATERIAL INDUCEMENT TO LENDER’S AGREEMENT TO ENTER INTO THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS. IF BORROWER OR ANY THIRD PARTY EVER ALLEGES SUCH GROSS NEGLIGENCE OR WILLFUL MISCONDUCT BY ANY INDEMNIFIED PERSON, THE INDEMNIFICATION PROVIDED FOR IN THIS SECTION SHALL NONETHELESS BE PAID UPON DEMAND, SUBJECT TO LATER ADJUSTMENT OR REIMBURSEMENT, UNTIL SUCH TIME AS (A) A COURT OF COMPETENT JURISDICTION ENTERS A FINAL JUDGMENT AS TO THE EXTENT AND EFFECT OF THE ALLEGED GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OR (B) LENDER HAS EXPRESSLY AGREED IN WRITING WITH BORROWER THAT SUCH CLAIM IS PROXIMATELY CAUSED BY SUCH INDEMNIFIED PERSON’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. THE INDEMNIFICATION PROVIDED FOR IN THIS SECTION SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT AND SHALL EXTEND AND CONTINUE TO BENEFIT EACH INDIVIDUAL OR ENTITY THAT IS OR HAS AT ANY TIME BEEN AN INDEMNIFIED PERSON HEREUNDER.

16.

Limitation of Liability. Neither Lender nor any officer, director, employee, attorney, or agent of Lender shall have any liability with respect to, and Borrower hereby waives, releases, and agrees not to sue any of them upon, any claim for any special, indirect, incidental or consequential damages suffered or incurred by Borrower in connection with, arising out of, or in any way related to, this Agreement or any of the other Loan Documents, or any of the transactions contemplated by this Agreement or any of the other Loan Documents. Borrower hereby waives, releases, and agrees not to sue Lender or any of Lender’s Affiliates, officers, directors, employees, attorneys, or agents for punitive damages in respect of any claim in connection with, arising out of, or in any way related to, this Agreement or any of the other Loan Documents, or any of the transactions contemplated by this Agreement or any of the other Loan Documents. BORROWER AGREES THAT THE PROVISIONS OF THIS SECTION ARE A MATERIAL INDUCEMENT TO LENDER’S AGREEMENT TO ENTER INTO THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS.

17.

No Duty. All attorneys, accountants, appraisers, and other professional Persons and consultants retained by Lender shall have the right to act exclusively in the interest of Lender and shall have no duty of disclosure, duty of loyalty, duty of care, or other duty or obligation of any type or nature whatsoever to Borrower or any of Borrower’s equity holders or any other Person. Documents in connection with the transactions contemplated hereunder have been prepared by Lender’s Counsel. Borrower acknowledges and understands that Lender’s Counsel is acting solely as counsel to Lender in connection with the transaction contemplated herein, is not representing Borrower in connection therewith, and has not, in any manner, undertaken to assist or render legal advice to

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

Borrower with respect to this transaction. Borrower has been advised to seek other legal counsel to represent Borrower’s interests in connection with the transactions contemplated herein.

18.

Lender not Fiduciary. The relationship between Borrower and Lender is solely that of debtor and creditor, and Lender has no fiduciary or other special relationship with Borrower, and no term or condition of any of the Loan Documents shall be construed so as to deem the relationship between Borrower and Lender to be other than that of debtor and creditor.

19.

Waiver and Agreement. No waiver of any provision in this Agreement or in any of the other Loan Documents and no departure by Borrower therefrom shall be effective unless the same shall be in writing and signed by Lender, and then shall be effective only in the specific instance and for the purpose for which given and to the extent specified in such writing. No modification or amendment to this Agreement or to any of the other Loan Documents shall be valid or effective unless the same is signed by the party against whom it is sought to be enforced.

20.

Benefits. This Agreement shall be binding upon and inure to the benefit of Lender and Borrower, and their respective heirs, personal representatives, successors, and assigns, provided, however, that Borrower may not, without the prior written consent of Lender, assign any rights, powers, duties, or obligations under this Agreement or any of the other Loan Documents.

21.

Notices. All notices or other communications required or permitted to be given pursuant to this Agreement or the other Loan Documents (unless otherwise expressly stated therein) shall be in writing and shall be considered as properly given if (a) mailed by first class United States mail, postage prepaid, registered or certified with return receipt requested, (b) by delivering same in person to the intended addressee, or (c) by delivery to an independent third party commercial delivery service for same day or next day delivery and providing for evidence of receipt at the office of the intended addressee. Notice so mailed shall be effective upon its deposit with the United States Postal Service or any successor thereto; notice sent by such a commercial delivery service shall be effective upon delivery to such commercial delivery service; notice given by personal delivery shall be effective only if and when received by the addressee; and notice given by other means shall be effective only if and when received at the office or designated place or machine of the intended addressee. For purposes of notice, the addresses of the parties shall be as set forth herein; provided, however, that any party shall have the right to change its address for notice hereunder to any other location within the continental United States by the giving notice to the other parties in the manner set forth herein.

22.

Construction; Venue; Service of Process. THE LOAN DOCUMENTS HAVE BEEN EXECUTED AND DELIVERED IN THE STATE OF TEXAS, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, AND SHALL BE PERFORMABLE BY THE PARTIES HERETO IN HARRIS COUNTY, TEXAS (THE “VENUE SITE”), EXCEPT THAT THE LAWS OF ANY JURISDICTION WHERE ANY REAL PROPERTY COLLATERAL IS LOCATED (THE “PROPERTY SITUS”) SHALL GOVERN THE PERFECTION, PRIORITY AND ENFORCEMENT OF THE LIENS ENCUMBERING SUCH REAL PROPERTY COLLATERAL CREATED UNDER THE APPLICABLE SECURITY INSTRUMENTS. EACH OF THE PARTIES ACKNOWLEDGES, STIPULATES AND AGREES THAT (I) THE TRANSACTION EVIDENCED, GOVERNED AND/OR SECURED HEREBY BEARS A REASONABLE RELATIONSHIP TO THE STATE OF TEXAS IN THAT, AMONG OTHER THINGS, LENDER HAS CONDUCTED A SUBSTANTIAL PART OF THE NEGOTIATIONS FOR THIS TRANSACTION IN THE STATE OF TEXAS, THE LOAN EVIDENCED HEREBY HAS BEEN ORIGINATED FROM THE STATE OF TEXAS, LENDER AND BORROWER WILL PERFORM A SUBSTANTIAL PART OF ITS OBLIGATIONS FOR THE LOAN IN THE STATE OF TEXAS (INCLUDING WITHOUT LIMITATION THE SERVICING OF THE LOAN BY LENDER), AND (II) LENDER WOULD NOT HAVE ENTERED INTO THIS TRANSACTION BUT FOR THE FOREGOING STIPULATION AND AGREEMENT AS TO THE CHOICE OF TEXAS LAW TO GOVERN THIS TRANSACTION. ANY ACTION OR PROCEEDING AGAINST BORROWER UNDER OR IN CONNECTION WITH ANY OF THE LOAN DOCUMENTS MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT WITHIN THE VENUE SITE; PROVIDED, HOWEVER, TO THE EXTENT THAT THE LAWS OF ANY PROPERTY SITUS REQUIRES CERTAIN ACTIONS WITH RESPECT TO THE FORECLOSURE OF LIENS AND ENFORCEMENT OF RIGHTS

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

AND REMEDIES AGAINST THE REAL PROPERTY COLLATERAL TO OCCUR IN THE STATE AND/OR IN THE COUNTY IN WHICH THE REAL PROPERTY COLLATERAL IS LOCATED, LENDER MAY COMMENCE LEGAL PROCEEDINGS AND ENFORCE ANY OF ITS RIGHTS AND REMEDIES AS TO MATTERS OF PRIORITY OF LIENS AND ASSIGNMENTS AND OTHER TITLE MATTERS RELATING TO THE REAL PROPERTY COLLATERAL IN ANY STATE OR FEDERAL COURT WITHIN THE PROPERTY SITUS. BORROWER HEREBY IRREVOCABLY (A) SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS, AND (B) WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT OR THAT ANY SUCH COURT IS AN INCONVENIENT FORUM. BORROWER AGREES THAT SERVICE OF PROCESS UPON IT MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, AT ITS ADDRESS SPECIFIED OR DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT. NOTHING IN ANY OF THE OTHER LOAN DOCUMENTS SHALL AFFECT THE RIGHT OF LENDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF LENDER TO BRING ANY ACTION OR PROCEEDING AGAINST BORROWER, GUARANTOR OR WITH RESPECT TO ANY OF ITS RESPECTIVE PROPERTY IN COURTS IN OTHER JURISDICTIONS. ANY ACTION OR PROCEEDING BY BORROWER AGAINST LENDER SHALL BE BROUGHT ONLY IN A COURT LOCATED IN THE VENUE SITE. BORROWER AGREES THAT THE VENUE PROVISIONS OF THIS SECTION ARE A MATERIAL INDUCEMENT TO LENDER’S AGREEMENT TO ENTER INTO THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS AND LENDER WOULD NOT ENTER INTO SUCH TRANSACTIONS EXCEPT IN RELIANCE ON THE VENUE PROVISIONS SET FORTH HEREIN.

23.

Invalid Provisions. If any provision of the Loan Documents is held to be illegal, invalid, or unenforceable under present or future laws, such provision shall be fully severable, and the remaining provisions of the Loan Documents shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance.

24.

Expenses. Borrower shall pay all reasonable costs and expenses (including, without limitation, reasonable attorneys’ fees) in connection with (a) the drafting and execution of the Loan Documents and the transactions contemplated therein, (b) any action required in the course of administration of the Indebtedness and obligations evidenced by the Loan Documents, and (c) any action in the enforcement of Lender’s rights upon the occurrence of an Event of Default.

25.

Sale, Pledge or Participation of the Loan. Borrower agrees that Lender may, at its option, sell, pledge or participate its interests in the Loan and its rights under this Agreement to a financial institution or institutions and, in connection with each such sale, pledge or participation Lender may disclose any financial and other information available to Lender concerning Borrower to any Person party to such transaction subject to obtaining a confidentiality agreement with each such Person prior to disclosing Borrower’s or Guarantor’s confidential information.

26.

Conflicts. Except as otherwise expressly provided in the Note, in the event any term or provision of this Agreement is inconsistent with or conflicts with any provision of the other Loan Documents, the terms and provisions contained in this Agreement shall be controlling. The terms, conditions, and provisions of the other Loan Documents (as the same may be amended, modified, or restated from time to time) are incorporated herein by reference, the same as if stated verbatim herein.

27.

Multiple Counterparts. The Loan Documents may be executed in a number of identical separate counterparts, each of which for all purposes is to be deemed an original, but all of which shall constitute, collectively, one agreement. Signature pages to Loan Documents may be detached from multiple separate counterparts and attached to the same document and a telecopy, pdf., or other facsimile of any such executed signature page shall be valid as an original. The exchange of copies of the Loan Documents and of signature pages by telecopy, pdf. or other facsimile transmission shall constitute effective execution and delivery of the Loan Documents as to the parties thereto and may be used in lieu of the original agreement for all purposes. The Loan Documents may be in the form of an Electronic Record and may be executed using Electronic Signatures (including, without limitation, facsimile and .pdf) which shall be deemed to have the same force and effect as manual signatures

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

and shall be considered an original, and shall have the same legal effect, validity, and enforceability as a paper record. For purposes hereof, “Electronic Record” and “Electronic Signature” shall have the meanings assigned to them, respectively, by 15 USC §7006, as it may be amended from time to time.

28.

Survival. All representations and warranties made in the Loan Documents or in any document, statement, or certificate furnished in connection with this Agreement shall survive the execution and delivery of the Loan Documents, and no investigation by Lender or any closing shall affect the representations and warranties or the right of Lender to rely upon them.

29.

Construction. Borrower and Lender acknowledge that they had the opportunity to consult with legal counsel of its own choice and has been afforded an opportunity to review this Agreement and the other Loan Documents with its legal counsel of its own choice and that this Agreement and the other Loan Documents shall be construed as if jointly drafted by Borrower and Lender.

30.

Independence of Covenants. All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or be otherwise within the limitations of, another covenant shall not avoid the occurrence of an Event of Default if such action is taken or if such condition exists.

31.

Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND LENDER HEREBY IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF ANY PARTY IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION AND EXECUTED BY EACH PARTY HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

32.

Patriot Act Notice. Lender hereby notifies Borrower that pursuant to the requirements of Section 326 of the USA Patriot Act of 2001, 31 U.S.C. § 5318 (the “Act”), it is required to obtain, verify, and record information that identifies Borrower, which information includes the name and address of Borrower and other information that will allow Lender to identify Borrower in accordance with the Act. In addition, Borrower agrees to

(a) ensure that no Person who owns a controlling interest in or otherwise controls Borrower or any Subsidiary of Borrower is or shall be listed on the Specially Designated Nationals and Blocked Person List or other similar lists maintained by the OFAC, the Department of the Treasury or included in any Executive Order, (b) not to use or permit the use of proceeds of the Loan to violate any of the foreign asset control regulations of the OFAC or any enabling statute or Executive Order relating thereto, and (c) comply, or cause its Subsidiaries to comply, with the applicable laws.

33.

Notice of Right to Receive a Copy of Appraisal. If the Indebtedness is secured by a Lien in real property, Borrower has a right to receive a copy of the appraisal report used in connection with the Loan. If Borrower would like to receive a copy, Borrower must contact Lender at the address set forth herein and request a copy of the appraisal report. Lender must receive such a request from Borrower no later than NINETY (90) days after the Effective Date.

34.

Regulation B.

(a)

Notice of Joint Intent. Federal Regulation B (the Federal Equal Credit Opportunity Act) requires Lender to obtain evidence of Borrower’s intention to apply for joint credit or provide a joint

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

guaranty. Borrower’s signature below shall evidence such intent. Borrower’s intent shall apply to future related extensions of joint credit and joint guaranty.

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

(b)

Equal Credit Opportunity Act. The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided the applicant has the capacity to enter into a binding contract); because all or part of the applicant’s income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. The Federal agency that administers compliance with this law concerning this creditor is:

Bureau of Consumer Financial Protection 1700 G Street NW

Washington, DC 20006

(c)

Disclosure of Right to Request Specific Reasons for Credit Denial. If Borrower’s application for business credit is denied, Borrower has the right to a written statement of the specific reasons for the denial. To obtain the statement, please contact Lender within SIXTY (60) days from the date Borrower is notified of Lender’s decision. Lender will send Borrower a written statement of reasons for the denial within THIRTY (30) days of receiving Borrower’s request for the statement.

35.

Notice of Balloon Payment. At maturity (whether by acceleration or otherwise), Borrower must repay the entire principal balance of Loan and unpaid interest then due. Lender is under no obligation to refinance the outstanding principal balance of Loan (if any) at that time. Borrower will, therefore, be required to make payment out of other assets Borrower may own; or Borrower will have to find a lender willing to lend Borrower the money at prevailing market rates, which may be higher than the interest rate on the outstanding principal balance of the Loan. If Borrower have guaranteed payment of the Loan, Borrower may be required to perform under such guaranty.

36.

Additional Interest Provision. It is expressly stipulated and agreed to be the intent of Borrower and Lender at all times to comply strictly with the applicable law governing the maximum rate or amount of interest payable on the indebtedness evidenced by any Note, any Loan Document, and the Related Indebtedness (or applicable United States federal law to the extent that it permits Lender to contract for, charge, take, reserve, or receive a greater amount of interest than under applicable law). If the applicable law is ever judicially interpreted so as to render usurious any amount (a) contracted for, charged, taken, reserved or received pursuant to any Note, any of the other Loan Documents or any other communication or writing by or between Borrower and Lender related to the transaction or transactions that are the subject matter of the Loan Documents, (b) contracted for, charged, taken, reserved or received by reason of Lender’s exercise of the option to accelerate the maturity of any Note and/or any and all indebtedness paid or payable by Borrower to Lender pursuant to any Loan Document other than any Note (such other indebtedness being referred to in this Section as the “Related Indebtedness”), or (c) Borrower will have paid or Lender will have received by reason of any voluntary prepayment by Borrower of any Note and/or the Related Indebtedness, then it is Borrower’s and Lender’s express intent that all amounts charged in excess of the Maximum Rate shall be automatically canceled, ab initio, and all amounts in excess of the Maximum Rate theretofore collected by Lender shall be credited on the principal balance of any Note and/or the Related Indebtedness (or, if any Note and all Related Indebtedness have been or would thereby be paid in full, refunded to Borrower), and the provisions of any Note and the other Loan Documents shall immediately be deemed reformed and the amounts thereafter collectible hereunder and thereunder reduced, without the necessity of the execution of any new document, so as to comply with the applicable law, but so as to permit the recovery of the fullest amount otherwise called for hereunder and thereunder; provided, however, if any Note or Related Indebtedness has been paid in full before the end of the stated term thereof, then Borrower and Lender agree that Lender shall, with reasonable promptness after Lender discovers or is advised by Borrower that interest was received in an amount in excess of the Maximum Rate, either refund such excess interest to Borrower and/or credit such excess interest against such Note and/or any Related Indebtedness then owing by Borrower to Lender. In no event shall the provisions of Chapter 346 of the Texas Finance Code (which regulates certain revolving credit loan accounts and revolving triparty accounts) apply to any Note and/or any of the Related Indebtedness. Notwithstanding anything to

LOAN AND SECURITY AGREEMENT – PAGE B1BANK – SERITAGE SRC FINANCE LLC

the contrary contained herein or in any of the other Loan Documents, it is not the intention of Lender to accelerate the maturity of any interest that has not accrued at the time of such acceleration or to collect unearned interest at the time of such acceleration.

37.

Tax Information. Borrower understands and agrees that Lender may obtain, use, and share Borrower’s state and federal tax return information or that of Guarantor for purposes of: (a) reviewing and responding to the Loan application; (b) originating the Loan; (c) servicing the Loan; (d) selling or transferring all or a part of the Loan or any interest in it; and (e) internal marketing analysis, marketing to Borrower, and other marketing as permitted by law. Borrower understands to accomplish these purposes Lender may need to share this information with third parties, including loan servicers, actual or potential purchasers or investors in loans, government agency loan guarantors, mortgage insurers, marketing companies, and others, depending on the type of Loan applied for, and Borrower agrees to such information sharing for these purposes on Borrower’s behalf. For the purpose of this consent to sharing tax return information, Lender and third parties includes the affiliates, agents, and any successors or assigns of Lender and third parties.

38.

Document Retention Policy. Borrower expressly acknowledges, understands, and agrees that Lender’s document retention policy involves the imaging of the Loan Documents and the destruction of the paper originals thereof. In connection therewith, Borrower hereby waives any and all rights Borrower has or may have to claim, for any and all purposes whatsoever, that the imaged copies of the Loan Documents are not originals thereof.

39.

Notice of Final Agreement. It is the intention of Borrower and Lender that the following NOTICE OF FINAL AGREEMENT be incorporated by reference into each of the Loan Documents (as the same may be amended, modified, or restated from time to time). Borrower and Lender warrant and represent that the entire agreement made and existing by or among Borrower and Lender with respect to the Loan is and shall be contained within the Loan Documents, and that no agreements or promises exist or shall exist by or among, Borrower and Lender that are not reflected in the Loan Documents. By execution and delivery of this Agreement, Borrower acknowledges that Borrower has received a copy of this NOTICE OF FINAL AGREEMENT.

NOTICE OF FINAL AGREEMENT

THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES, AND THE SAME MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

LOAN AND SECURITY AGREEMENT - SIGNATURE PAGE B1 BANK - SERITAGE SRC FINANCE LLC

AGREED as of the Effective Date.

LENDER: BIBANK

By:

Name:.

Title: _

Address:

bl BANK

Brittmoore Banking Center c/o Loan Operations

PO Box 1823

Lake Charles, LA 70602-1823

LOAN AND SECURITY AGREEMENT - SIGNATURE PAGE B1BANK - SERITAGE SRC FINANCE LLC

BORROWER:

SERITAGE SRC FINANCE LLC,

a Delaware limited liabili

By:, /s/Matthew Fernand _

Name: Matthew Femand Title: Vice President

Address:

Seritage SRC Finance, LLC 500 Fifth Avenue, Ste 1530 New York, NY 10110

LOAN AND SECURITY AGREEMENT – SCHEDULE 7(K) B1BANK – SERITAGE SRC FINANCE LLC

SCHEDULE 7(K) TO

LOAN AND SECURITY AGREEMENT

NONE.

LOAN AND SECURITY AGREEMENT – EXHIBIT A B1BANK – SERITAGE SRC FINANCE LLC

EXHIBIT A TO

LOAN AND SECURITY AGREEMENT COMPLIANCE CERTIFICATE

DATE:

RE: LOAN AND SECURITY AGREEMENT (as amended, modified or restated from time to time, the “Agreement”) dated as of July 24, 2026 among (a) b1BANK, a Louisiana state-chartered bank (together with its successors and assigns, “Lender”) and (b) SERITAGE SRC FINANCE LLC, a Delaware limited liability company (“Borrower”).


Section Reference	Subject Period
Section 9(a) – Quarterly Financial Statements
Section 8(a) – Financial Covenants (Debt Service Coverage Ratio)
Section 8(b) – Financial Covenants (Minimum Liquidity)

This Compliance Certificate is delivered under the Agreement. Capitalized terms used in this Compliance Certificate shall, unless otherwise indicated, have the meanings set forth in the Agreement. Responsible Officer hereby certifies to Lender as of the date hereof that: (a) such Responsible Officer is the of Borrower, and that, as such, Responsible Officer is authorized to execute and deliver this Compliance Certificate to Lender on behalf of Borrower; (b) such Responsible Officer has reviewed and is familiar with the terms of the Agreement and has made, or has caused to be made under such Responsible Officer’s supervision, a detailed review of the transactions and condition (financial or otherwise) of Borrower during the Subject Period; (c) during the Subject Period, Borrower performed and observed each covenant and condition of the Loan Documents applicable to it and no Default currently exists or has occurred which has not been cured or waived by Lender (except as may be set forth on Exhibit I attached hereto); (d) the representations and warranties of Borrower contained in the Agreement, and any representations and warranties of Borrower that are contained in any document furnished at any time under or in connection with the Loan Documents, are true and correct on and as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date; (e) the financial statements of REIT attached to this Compliance Certificate were prepared in accordance with GAAP, and present, on a consolidated basis, fairly and accurately the financial condition and results of operations of REIT and its Subsidiaries as of the end of and for the Subject Period (as provided to the SEC pursuant to the applicable Form 10-K, Form 10-Q, or Form 8-K filing), and (f) the financial covenant analyses as set forth on Exhibit II and information set forth below are true and accurate on and as of the date of this Compliance Certificate.

BORROWER:

SERITAGE SRC FINANCE LLC,

a Delaware limited liability company

By: Name: Title:

LOAN AND SECURITY AGREEMENT – EXHIBIT B1BANK – SERITAGE SRC FINANCE LLC

EXHIBIT I

DEFAULT

LOAN AND SECURITY AGREEMENT – EXHIBIT B1BANK – SERITAGE SRC FINANCE LLC

EXHIBIT II

FINANCIAL COVENANTS

EX-10.2 3 srg-ex10_2.htm EX-10.2 EX-10.2

Exhibit 10.2

BUSINESS LOAN AGREEMENT

       Principal
$25,000,000.00

       Loan Date
07-24-2026

       Maturity
07-24-2028

       Loan No
***

       Call / Coll
4A / 9

       Account
00000399823

       Officer
1478

       Initials

      

       References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item.
Any item above containing "***" has been omitted due to text length limitations.

Borrower: Seritage Growth Properties, L.P.

500 5th Ave Suite 1530 New York, NY 10110-1502

Lender: b1BANK

Houston - Brittmoore Rd. Banking Center C/O Loan Operations

PO Box 1823

Lake Charles, LA 70602-1823

THIS BUSINESS LOAN AGREEMENT dated July 24, 2026, is made and executed between Seritage Growth Properties, L.P. ("Borrower") and b1BANK ("Lender") on the following terms and conditions. Borrower has applied to Lender for a loan or loans or other financial accommodations, including those which may be described on any exhibit or schedule attached to this Agreement. Borrower understands and agrees that: (A) in granting, renewing, or extending any Loan, Lender is relying upon Borrower's representations, warranties, and agreements as set forth in this Agreement; (B) the granting, renewing, or extending of any Loan by Lender at all times shall be subject to Lender's sole judgment and discretion; and (C) all such Loans shall be and remain subject to the terms and conditions of this Agreement.

APPLICATION FOR AND PURPOSE OF THE LOAN. Borrower has applied to Lender for a Loan in the aggregate principal amount of

$25,000,000.00 for the following purpose: To refinance existing debt by providing a 100% cash-secured revolving line of credit for general corporate working capital, liquidity management, and operating needs during the orderly disposition of remaining real estate assets..

BORROWER'S NOTE. Lender has agreed to consider making Loan Advances to Borrower, from time to time, one or more times, on a revolving line of credit basis up to a maximum principal amount outstanding at any one or more times not to exceed $25,000,000.00, or such other amounts as to which Lender may agree. Borrower agrees to be bound and obligated under the terms and conditions of this Agreement and Lender's procedures and additional requirements for requesting Loan Advances, as well as any and all Security Agreements directly or indirectly securing repayment of the same.

LINE OF CREDIT. Borrower's Note shall be considered for all purposes as a "master note" and shall evidence any and all Loan Advances made by Lender to Borrower from time to time on a self-replenishing line of credit basis. Loan Advances under Borrower's Note may be requested orally or in writing. Lender may, but need not, require that all oral requests be confirmed in writing. Borrower agrees to be liable for all sums advanced by Lender under Borrower's Loan and Note in accordance with the instructions of any officer or other representative of Borrower or credited to Borrower's deposit account(s) with Lender. Borrower additionally agrees that the unpaid principal balance outstanding under Borrower's Loan and Note shall at all times be evidenced by endorsements on the Note, or alternatively, by Lender's internal records, including Lender's electronic records. Borrower additionally agrees that Lender may, within its sole judgment, refuse to extend Loan Advances to Borrower whenever Lender determines or has reason to believe that any one or more of the following conditions exists or will occur: (a) the amount of the requested Loan Advance will result in Borrower exceeding its maximum line of credit; (b) Borrower is not complying or has not complied with Lender's procedures and additional requirements for requesting Loan Advances; (c) Borrower has failed to provide Lender with satisfactory documentation to support the requested Loan Advance; (d) Lender has reason to believe that Borrower is not presently complying, or has not complied with the terms and conditions of this Agreement, or has committed or is in the process of committing an Event of Default hereunder or under any Security Agreement directly or indirectly securing repayment of Borrower's Loan and Note; or (e) Lender deems itself to be insecure with regard to the repayment of Borrower's Loan and Note. Lender shall have no obligation or liability to Borrower or to any other person or persons arising out of or in any way accruing from Lender's reasonable refusal to extend Loan Advances to Borrower for any of the reasons stated above.

AUTOMATIC PAYMENTS. Borrower hereby authorizes Lender automatically to deduct from Borrower's D - DDA (Demand Deposit Account) account, numbered 84503253808, the amount of any loan payment. If the funds in the account are insufficient to cover any payment, Lender shall not be obligated to advance funds to cover the payment. At any time and for any reason, Borrower or Lender may voluntarily terminate Automatic Payments.

TERM. This Agreement shall be effective as of July 24, 2026, and shall continue in full force and effect until such time as all of Borrower's Loans in favor of Lender have been paid in full, including principal, interest, costs, expenses, attorneys' fees, and other fees and charges, or until such time as the parties may agree in writing to terminate this Agreement.

CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial Advance and each subsequent Advance under this Agreement shall be subject to the fulfillment to Lender's satisfaction of all of the conditions set forth in this Agreement and in the Related Documents.

Loan Documents. Borrower shall provide to Lender the following documents for the Loan: (1) the Note; (2) Security Agreements granting to Lender security interests in the Collateral; (3) financing statements and all other documents perfecting Lender's Security Interests; (4) evidence of insurance as required below; (5) guaranties; (6) together with all such Related Documents as Lender may require for the Loan; all in form and substance satisfactory to Lender and Lender's counsel.

Borrower's Authorization. Borrower shall have provided in form and substance satisfactory to Lender properly certified resolutions, duly authorizing the execution and delivery of this Agreement, the Note and the Related Documents. In addition, Borrower shall have provided such other resolutions, authorizations, documents and instruments as Lender or its counsel, may require.

Payment of Fees and Expenses. Borrower shall have paid to Lender all fees, charges, and other expenses which are then due and payable as specified in this Agreement or any Related Document.

Representations and Warranties. The representations and warranties set forth in this Agreement, in the Related Documents, and in any document or certificate delivered to Lender under this Agreement are true and correct.

No Event of Default. There shall not exist at the time of any Advance a condition which would constitute an Event of Default under this Agreement or under any Related Document.

REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as of the date of this Agreement, as of the date of each disbursement of loan proceeds, as of the date of any renewal, extension or modification of any Loan, and at all times any Indebtedness exists:

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Organization. Borrower is a partnership which is, and at all times shall be, duly organized, validly existing, and in good standing under and by virtue of the laws of the State of Delaware. Borrower is duly authorized to transact business in all other states in which Borrower is doing business, having obtained all necessary filings, governmental licenses and approvals for each state in which Borrower is doing business. Specifically, Borrower is, and at all times shall be, duly qualified as a foreign partnership in all states in which the failure to so qualify would have a material adverse effect on its business or financial condition. Borrower has the full power and authority to own its properties and to transact the business in which it is presently engaged or presently proposes to engage. Borrower maintains an office at 500 5th Ave Suite 1530, New York, NY 10110-1502. Unless Borrower has designated otherwise in writing, the principal office is the office at which Borrower keeps its books and records including its records concerning the Collateral. Borrower will notify Lender prior to any change in the location of Borrower's principal office address or any change in Borrower's name. Borrower shall do all things necessary to preserve and to keep in full force and effect its existence, rights and privileges, and shall comply with all regulations, rules, ordinances, statutes, orders and decrees of any governmental or quasi-governmental authority or court applicable to Borrower and Borrower's business activities.

Assumed Business Names. Borrower has filed or recorded all documents or filings required by law relating to all assumed business names used by Borrower. Excluding the name of Borrower, the following is a complete list of all assumed business names under which Borrower does business: None.

Authorization. Borrower's execution, delivery, and performance of this Agreement and all the Related Documents have been duly authorized by all necessary action by Borrower and do not conflict with, result in a violation of, or constitute a default under (1) any provision of (a) Borrower's articles or agreements of partnership, or (b) any agreement or other instrument binding upon Borrower or (2) any law, governmental regulation, court decree, or order applicable to Borrower or to Borrower's properties.

Financial Information. Each of Borrower's financial statements supplied to Lender truly and completely disclosed Borrower's financial condition as of the date of the statement, and there has been no material adverse change in Borrower's financial condition subsequent to the date of the most recent financial statement supplied to Lender. Borrower has no material contingent obligations except as disclosed in such financial statements.

Legal Effect. This Agreement constitutes, and any instrument or agreement Borrower is required to give under this Agreement when delivered will constitute legal, valid, and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms.

Properties. Except as contemplated by this Agreement or as previously disclosed in Borrower's financial statements or in writing to Lender and as accepted by Lender, and except for property tax liens for taxes not presently due and payable, Borrower owns and has good title to all of Borrower's properties free and clear of all Security Interests, and has not executed any security documents or financing statements relating to such properties. All of Borrower's properties are titled in Borrower's legal name, and Borrower has not used or filed a financing statement under any other name for at least the last five (5) years.

Hazardous Substances. Except as disclosed to and acknowledged by Lender in writing, Borrower represents and warrants that: (1) During the period of Borrower's ownership of the Collateral, there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance by any person on, under, about or from any of the Collateral. (2) Borrower has no knowledge of, or reason to believe that there has been (a) any breach or violation of any Environmental Laws; (b) any use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Collateral by any prior owners or occupants of any of the Collateral; or (c) any actual or threatened litigation or claims of any kind by any person relating to such matters. (3) Neither Borrower nor any tenant, contractor, agent or other authorized user of any of the Collateral shall use, generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about or from any of the Collateral; and any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations, and ordinances, including without limitation all Environmental Laws. Borrower authorizes Lender and its agents to enter upon the Collateral to make such inspections and tests as Lender may deem appropriate to determine compliance of the Collateral with this section of the Agreement. Any inspections or tests made by Lender shall be at Borrower's expense and for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Borrower or to any other person. The representations and warranties contained herein are based on Borrower's due diligence in investigating the Collateral for hazardous waste and Hazardous Substances. Borrower hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Borrower becomes liable for cleanup or other costs under any such laws, and (2) agrees to indemnify, defend, and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Agreement or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release of a hazardous waste or substance on the Collateral. The provisions of this section of the Agreement, including the obligation to indemnify and defend, shall survive the payment of the Indebtedness and the termination, expiration or satisfaction of this Agreement and shall not be affected by Lender's acquisition of any interest in any of the Collateral, whether by foreclosure or otherwise.

Litigation. There are no suits or proceedings pending, or to the knowledge of Borrower, threatened against or affecting Borrower or Borrower's assets, before any court or by any governmental agency, other than those previously disclosed to Lender in writing, which, if adversely determined, may have a material adverse effect on Borrower's financial condition or business.

Taxes. To the best of Borrower's knowledge, all of Borrower's tax returns and reports that are or were required to be filed, have been filed, and all taxes, assessments and other governmental charges have been paid in full, except those presently being or to be contested by Borrower in good faith in the ordinary course of business and for which adequate reserves have been provided.

Information. All information heretofore or contemporaneously herewith furnished by Borrower to Lender for the purposes of or in connection with this Agreement or any transaction contemplated hereby is, and all information hereafter furnished by or on behalf of Borrower to Lender 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.

Lien Priority. Unless otherwise previously disclosed to Lender in writing, Borrower has not entered into or granted any Security Agreements, or permitted the filing or attachment of any Security Interests on or affecting any of the Collateral directly or indirectly securing repayment of Borrower's Loan and Note, that would be prior or that may in any way be superior to Lender's Security Interests and rights in and to such Collateral.

Binding Effect. This Agreement, the Note, all Security Agreements (if any), and all Related Documents are binding upon the signers thereof, as well as upon their successors, representatives and assigns, and are legally enforceable in accordance with their respective terms.

AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so long as this Agreement remains in effect, Borrower will:

Notices of Claims and Litigation. Promptly inform Lender in writing of (1) all material adverse changes in Borrower's financial condition,

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and (2) all existing and all threatened litigation, claims, investigations, administrative proceedings or similar actions affecting Borrower or any Guarantor which could materially affect the financial condition of Borrower or the financial condition of any Guarantor.

Financial Records. Maintain its books and records in accordance with GAAP, or an OCBOA acceptable to Lender, applied on a consistent basis, and permit Lender to examine and audit Borrower's books and records at all reasonable times.

Financial Statements. Furnish Lender with such financial statements and other related information at such frequencies and in such detail as Lender may reasonably request.

Additional Information. Furnish such additional information and statements, as Lender may request from time to time.

Additional Requirements.

Cash and Equivalents. Maintain Cash and Equivalents in excess of $5,000,000.00. The term Cash and Equivalents means Unencumbered Cash, Time Deposits, Market Securities, and availability on the revolving line of credit acceptable to Lender. Cash and Cash Equivalents excludes any cash held in operating accounts and excludes any cash held as payable on preferred stock. Cash held in related Borrower, Seritage SRC Finance LLC maybe included in meeting the $5,0000,000 minimum. Covenant is to be tested with in 45 days unless the SEC filing date is more than 45 days after the respective quarter end.

Compliance Certificate. Borrower covenants and agrees with Lender that Borrower will furnish to Lender on 45 days after the end of each fiscal Quarterly unless SEC filing date is more than 45 days after respective quarter end a statement identifying the Borrower's financial performance requirements per this loan agreement, the Borrower's actual performance of this metric, and certifying the accuracy of the calculation and Borrower's compliance with the metric to the best knowledge and belief by Borrower's Chief Financial officer or other person acceptable to Lender, in a form acceptable to Lender.

Insurance. Maintain fire and other risk insurance, public liability insurance, and such other insurance as Lender may require with respect to Borrower's properties and operations, in form, amounts, coverages and with insurance companies acceptable to Lender. Borrower, upon request of Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations that coverages will not be cancelled or diminished without at least ten (10) days prior written notice to Lender. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Borrower or any other person. In connection with all policies covering assets in which Lender holds or is offered a security interest for the Loans, Borrower will provide Lender with such lender's loss payable or other endorsements as Lender may require.

Insurance Reports. Furnish to Lender, upon request of Lender, reports on each existing insurance policy showing such information as Lender may reasonably request, including without limitation the following: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the properties insured; (5) the then current property values on the basis of which insurance has been obtained, and the manner of determining those values; and (6) the expiration date of the policy. In addition, upon request of Lender (however not more often than annually), Borrower will have an independent appraiser satisfactory to Lender determine, as applicable, the actual cash value or replacement cost of any Collateral. The cost of such appraisal shall be paid by Borrower.

Guaranties. Prior to disbursement of any Loan proceeds, furnish executed guaranties of the Loans in favor of Lender, executed by the guarantors named below, on Lender's forms, and in the amounts and under the conditions set forth in those guaranties.

Names of Guarantors Amounts

Seritage Growth Properties Unlimited

SRG Limited Partner, LLC Unlimited

Seritage SRC Finance LLC Unlimited Seritage SRC Mezzanine Finance LLC Unlimited

Other Agreements. Comply with all terms and conditions of all other agreements, whether now or hereafter existing, between Borrower and any other party and notify Lender immediately in writing of any default in connection with any other such agreements.

Loan Proceeds. Use all Loan proceeds solely for Borrower's business operations, unless specifically consented to the contrary by Lender in writing.

Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness and obligations, including without limitation all assessments, taxes, governmental charges, levies and liens, of every kind and nature, imposed upon Borrower or its properties, income, or profits, prior to the date on which penalties would attach, and all lawful claims that, if unpaid, might become a lien or charge upon any of Borrower's properties, income, or profits. Provided however, Borrower will not be required to pay and discharge any such assessment, tax, charge, levy, lien or claim so long as (1) the legality of the same shall be contested in good faith by appropriate proceedings, and (2) Borrower shall have established on Borrower's books adequate reserves with respect to such contested assessment, tax, charge, levy, lien, or claim in accordance with GAAP or an OCBOA acceptable to Lender.

Performance. Perform and comply, in a timely manner, with all terms, conditions, and provisions set forth in this Agreement, in the Related Documents, and in all other instruments and agreements between Borrower and Lender. Borrower shall notify Lender immediately in writing of any default in connection with any agreement.

Operations. Maintain executive and management personnel with substantially the same qualifications and experience as the present executive and management personnel; provide written notice to Lender of any change in executive and management personnel; conduct its business affairs in a reasonable and prudent manner.

Environmental Studies. Promptly conduct and complete, at Borrower's expense, all such investigations, studies, samplings and testings as may be requested by Lender or any governmental authority relative to any substance, or any waste or by-product of any substance defined as toxic or a hazardous substance under applicable federal, state, or local law, rule, regulation, order or directive, at or affecting any property or any facility owned, leased or used by Borrower.

Compliance with Governmental Requirements. Comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the conduct of Borrower's properties, businesses and operations, and to the use or occupancy of the Collateral, including without limitation, the Americans With Disabilities Act. Borrower may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Borrower has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Collateral are not jeopardized. Lender may require Borrower to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest.

Beneficial Ownership Information. Comply with all beneficial ownership information reporting requirements of the Corporate Transparency Act and its implementing regulations (collectively the CTA), if applicable to that Borrower. Any Borrower that is or becomes a reporting company as defined in the CTA: (1) has filed, or will file within required timeframes a complete and accurate report of its beneficial ownership information with the Financial Crimes Enforcement Network (FinCEN) as required by the CTA; (2) will update or correct its

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beneficial ownership information with FinCEN within required timeframes upon any change in its beneficial ownership information; (3) will provide Lender with a copy of its beneficial ownership information report filed with FinCEN upon request; (4) consents to allow Lender to obtain from FinCEN beneficial ownership information filed by Borrower; and (5) will notify Lender in writing of any change in its beneficial ownership information within 30 days of such change.

Inspection. Permit employees or agents of Lender at any reasonable time to inspect any and all Collateral for the Loan or Loans and Borrower's other properties and to examine or audit Borrower's books, accounts, and records and to make copies and memoranda of Borrower's books, accounts, and records. If Borrower now or at any time hereafter maintains any records (including without limitation computer generated records and computer software programs for the generation of such records) in the possession of a third party, Borrower, upon request of Lender, shall notify such party to permit Lender free access to such records at all reasonable times and to provide Lender with copies of any records it may request, all at Borrower's expense.

Environmental Compliance and Reports. Borrower shall comply in all respects with any and all Environmental Laws; not cause or permit to exist, as a result of an intentional or unintentional action or omission on Borrower's part or on the part of any third party, on property owned and/or occupied by Borrower, any environmental activity where damage may result to the environment, unless such environmental activity is pursuant to and in compliance with the conditions of a permit issued by the appropriate federal, state or local governmental authorities; shall furnish to Lender promptly and in any event within thirty (30) days after receipt thereof a copy of any notice, summons, lien, citation, directive, letter or other communication from any governmental agency or instrumentality concerning any intentional or unintentional action or omission on Borrower's part in connection with any environmental activity whether or not there is damage to the environment and/or other natural resources.

Additional Assurances. Make, execute and deliver to Lender such promissory notes, mortgages, deeds of trust, security agreements, assignments, financing statements, instruments, documents and other agreements as Lender or its attorneys may reasonably request to evidence and secure the Loans and to perfect all Security Interests.

LENDER'S EXPENDITURES. Borrower recognizes and agrees that Lender may incur certain expenses in connection with Lender's exercise of rights under this Agreement. If any action or proceeding is commenced that would materially affect Lender's interest in the Collateral or if Borrower fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Borrower's failure to discharge or pay when due any amounts Borrower is required to discharge or pay under this Agreement or any Related Documents, Lender on Borrower's behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, Encumbrances and other claims, at any time levied or placed on any Collateral and paying all costs for insuring, maintaining and preserving any Collateral, including without limitation, the purchase of insurance protecting only Lender's interest in any Collateral. Lender may further take such other action or actions and incur such additional expenditures as Lender may deem to be necessary and proper to cure or rectify any actions or inactions on Borrower's part as may be required under this Agreement. Nothing under this Agreement or otherwise shall obligate Lender to take any such actions or to incur any such additional expenditures on Borrower's behalf, or as making Lender in any way responsible or liable for any loss, damage, or injury to any Collateral, to Borrower, or to any other person or persons, resulting from Lender's election not to take such actions or to incur such additional expenses. In addition, Lender's election to take any such actions or to incur such additional expenditures shall not constitute a waiver or forbearance by Lender of any Event of Default under this Agreement. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Borrower. All such expenses will become a part of the Indebtedness and, at Lender's option, will

(A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity.

NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this Agreement is in effect, Borrower shall not, without the prior written consent of Lender:

Indebtedness and Liens. (1) Except for trade debt incurred in the normal course of business and indebtedness to Lender contemplated by this Agreement, create, incur or assume indebtedness for borrowed money, including finance leases, (2) sell, transfer, mortgage, assign, pledge, lease, grant a security interest in, or encumber any of Borrower's assets (except as allowed as Permitted Liens), or (3) sell with recourse any of Borrower's accounts receivable, except to Lender.

Continuity of Operations. (1) Engage in any business activities substantially different than those in which Borrower is presently engaged,

(2) cease operations, liquidate, merge or restructure as a legal entity (whether by division or otherwise), consolidate with or acquire any other entity, change its name, convert to another type of entity or redomesticate, dissolve or transfer or sell Collateral out of the ordinary course of business, or (3) make any distribution with respect to any capital account, whether by reduction of capital or otherwise.

Loans, Acquisitions and Guaranties. (1) Loan, invest in or advance money or assets to any other person, enterprise or entity, (2) purchase, create or acquire any interest in any other enterprise or entity, or (3) incur any obligation as surety or guarantor other than in the ordinary course of business.

Agreements. Enter into any agreement containing any provisions which would be violated or breached by the performance of Borrower's obligations under this Agreement or in connection herewith.

CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to Borrower, whether under this Agreement or under any other agreement, Lender shall have no obligation to make Loan Advances or to disburse Loan proceeds if: (A) Borrower or any Guarantor is in default under the terms of this Agreement or any of the Related Documents or any other agreement that Borrower or any Guarantor has with Lender; (B) Borrower or any Guarantor dies, becomes incompetent or becomes insolvent, files a petition in bankruptcy or similar proceedings, or is adjudged a bankrupt; (C) there occurs a material adverse change in Borrower's financial condition, in the financial condition of any Guarantor, or in the value of any Collateral securing any Loan; or (D) any Guarantor seeks, claims or otherwise attempts to limit, modify or revoke such Guarantor's guaranty of the Loan or any other loan with Lender; or (E) Lender in good faith deems itself insecure, even though no Event of Default shall have occurred.

DEPOSIT ACCOUNTS. As collateral security for repayment of Borrower's Note and all renewals and extensions, as well as to secure any and all other loans, notes, indebtedness and obligations that Borrower may now and in the future owe to Lender or incur in Lender's favor, whether direct or indirect, absolute or contingent, due or to become due, of any nature and kind whatsoever (with the exception of any indebtedness under a consumer credit card account), and to the extent permitted by law, Borrower is granting Lender a continuing security interest in any and all funds that Borrower may now and in the future have on deposit with Lender or in certificates of deposit or other deposit accounts as to which Borrower is an account holder (with the exception of IRA, pension, and other tax-deferred deposits). Borrower further agrees that, to the extent permitted by law, Lender may at any time apply any funds that Borrower may have on deposit with Lender or in certificates of deposit or other deposit accounts as to which Borrower is an account holder against the unpaid balance of Borrower's Note and any and all other present and future indebtedness and obligations that Borrower may then owe to Lender, in principal, interest, fees, costs, expenses, and reasonable attorneys' fees.

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EVENTS OF DEFAULT. The following actions or inactions or both shall constitute Events of Default under this Agreement:

Default Under the Note. Should Borrower default in the payment of principal or interest under the Note or any of the Indebtedness.

Default Under this Agreement. Should Borrower violate, or fail to comply fully with any of the terms and conditions of, or default under this Agreement.

Default Under other Agreements. Should any default occur or exist under any Related Document which directly or indirectly secures repayment of the Loan and any of the Indebtedness.

Other Defaults in Favor of Lender. Borrower or any guarantor defaults under any other loan, extension of credit, security right, instrument, document, or agreement, or obligation in favor of Lender.

Default in Favor of Third Parties. Should Borrower or any Guarantor default under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower's property, or any Guarantor's ability to perform their respective obligations under this Agreement, or any Related Document, or pertaining to the Indebtedness.

Insolvency. Should the suspension, failure or insolvency, however evidenced, of Borrower or any Guarantor occur or exist.

Readjustment of Indebtedness. Should proceedings for readjustment of indebtedness, reorganization, composition or extension under any insolvency law be brought by or against Borrower or any Guarantor.

Assignment for Benefit of Creditors. Should Borrower or any Guarantor file proceedings for a respite or make a general assignment for the benefit of creditors.

Receivership. Should a receiver of all or any part of Borrower's property, or the property of any Guarantor, be applied for or appointed.

Dissolution Proceedings. Proceedings for the dissolution or appointment of a liquidator of Borrower or any guarantor are commenced.

False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Agreement or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter.

Change in Ownership. Any change in ownership interest of twenty-five percent (25%) or more of any partnership interest in Borrower.

Insecurity. Lender in good faith believes itself insecure with regard to repayment of the Loan.

EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where otherwise provided in this Agreement or the Related Documents, all commitments and obligations of Lender under this Agreement or the Related Documents or any other agreement immediately will terminate (including any obligation to make further Loan Advances or disbursements), and, at Lender's option, all Indebtedness immediately will become due and payable, all without notice of any kind to Borrower, except that in the case of an Event of Default of the type described in the "Insolvency" subsection above, such acceleration shall be automatic and not optional. In addition, Lender shall have all the rights and remedies provided in the Related Documents or available at law, in equity, or otherwise.

Lender shall have the right at its sole option, to accelerate payment of Borrower's Note in full, in principal, interest, costs, expenses, attorneys' fees, and other fees and charges, as well as to accelerate the maturity of any and all other loans and/or obligations that Borrower may then owe to Lender, whether direct or indirect, or by way of assignment or purchase of a participation interest, and whether absolute or contingent, liquidated or unliquidated, voluntary or involuntary, determined or undetermined, due or to become due, and whether now existing or hereafter arising, and whether Borrower is obligated alone or with others on a "solidary" or "joint and several" basis, as a principal obligor or as a surety, of every nature and kind whatsoever, whether any such indebtedness may be barred under any statute of limitations or otherwise may be unenforceable or voidable for any reason whatsoever.

Lender shall have the additional right, again at its sole option, to file an appropriate collection action against Borrower and/or against any guarantor or guarantors of Borrower's Loan and Note, and/or to proceed or exercise any rights against any Collateral then securing repayment of Borrower's Loan and Note. Borrower and each guarantor further agree that Lender's remedies shall be cumulative in nature and nothing under this Agreement or otherwise, shall be construed as to limit or restrict the options and remedies available to Lender following any event of default under this Agreement or otherwise.

Except as may be prohibited by applicable law, all of Lender's rights and remedies shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Borrower or of any Grantor shall not affect Lender's right to declare a default and to exercise its rights and remedies.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement:

Amendments. No amendment, modification, consent or waiver of any provision of this Agreement, and no consent to any departure by Borrower therefrom, shall be effective unless the same shall be in writing signed by a duly authorized officer of Lender, and then shall be effective only as to the specific instance and for the specific purpose for which given.

Attorneys' Fees; Expenses. Borrower agrees to pay upon demand all of Lender's costs and expenses, including Lender's reasonable attorneys' fees in an amount not exceeding 25.000% of the principal balance due on the Loan and Lender's legal expenses, incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone else to help enforce this Agreement, and Borrower shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's reasonable attorneys' fees in an amount not exceeding 25.000% of the principal balance due on the Loan and legal expenses whether or not there is a lawsuit, including reasonable attorneys' fees in an amount not exceeding 25.000% of the principal balance due on the Loan and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Borrower also shall pay all court costs and such additional fees as may be directed by the court.

Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement.

Consent to Loan Participation. Borrower agrees and consents to Lender's sale or transfer, whether now or later, of one or more participation interests in the Loan to one or more purchasers, whether related or unrelated to Lender. Lender may provide, without any limitation whatsoever, to any one or more purchasers, or potential purchasers, any information or knowledge Lender may have about Borrower or about any other matter relating to the Loan, and Borrower hereby waives any rights to privacy Borrower may have with respect to such matters. Borrower additionally waives any and all notices of sale of participation interests, as well as all notices of any repurchase of such participation interests. Borrower also agrees that the purchasers of any such participation interests will be considered as the absolute owners of such interests in the Loan and will have all the rights granted under the participation agreement or agreements

BUSINESS LOAN AGREEMENT

(Continued)

Page

governing the sale of such participation interests. Borrower further waives all rights of offset or counterclaim that it may have now or later against Lender or against any purchaser of such a participation interest and unconditionally agrees that either Lender or such purchaser may enforce Borrower's obligation under the Loan irrespective of the failure or insolvency of any holder of any interest in the Loan. Borrower further agrees that the purchaser of any such participation interests may enforce its interests irrespective of any personal claims or defenses that Borrower may have against Lender.

Governing Law. This Agreement will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of Louisiana without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of Louisiana.

No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of dealing between Lender and Borrower, or between Lender and any Grantor, shall constitute a waiver of any of Lender's rights or of any of Borrower's or any Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Agreement, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender.

Notices. To give Borrower any notice required under this Agreement, Lender may hand deliver or mail the notice to Borrower at Borrower's last address in Lender's records. If there is more than one Borrower under this Agreement, notice to a single Borrower shall be considered as notice to all Borrowers. To give Lender any notice under this Agreement, Borrower (or any Borrower) shall mail the notice to Lender by registered or certified mail at the address specified in this Agreement, or at any other address that Lender may have given to Borrower (or any Borrower) by written notice as provided in this section. All notices required or permitted under this Agreement must be in writing and will be considered as given on the day it is delivered by hand or deposited in the U.S. Mail as provided herein.

Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term hereof, such provision shall be fully severable. This Agreement shall be construed and enforceable as if the illegal, invalid or unenforceable provision had never comprised a part of it, and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom. Furthermore, in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement, a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and legal, valid and enforceable.

Subsidiaries and Affiliates of Borrower. To the extent the context of any provisions of this Agreement makes it appropriate, including without limitation any representation, warranty or covenant, the word "Borrower" as used in this Agreement shall include all of Borrower's subsidiaries and affiliates. Notwithstanding the foregoing however, under no circumstances shall this Agreement be construed to require Lender to make any Loan or other financial accommodation to any of Borrower's subsidiaries or affiliates.

Successors and Assigns. All covenants and agreements by or on behalf of Borrower contained in this Agreement or any Related Documents shall bind Borrower's successors and assigns and shall inure to the benefit of Lender and its successors and assigns. Borrower shall not, however, have the right to assign Borrower's rights under this Agreement or any interest therein, without the prior written consent of Lender.

Survival of Representations and Warranties. Borrower understands and agrees that in extending Loan Advances, Lender is relying on all representations, warranties, and covenants made by Borrower in this Agreement or in any certificate or other instrument delivered by Borrower to Lender under this Agreement or the Related Documents. Borrower further agrees that regardless of any investigation made by Lender, all such representations, warranties and covenants will survive the extension of Loan Advances and delivery to Lender of the Related Documents, shall be continuing in nature, shall be deemed made and redated by Borrower at the time each Loan Advance is made, and shall remain in full force and effect until such time as Borrower's Indebtedness shall be paid in full, or until this Agreement shall be terminated in the manner provided above, whichever is the last to occur.

Waive Jury. All parties to this Agreement hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by any party against any other party.

ADDITIONAL REQUIREMENTS. Provisions included in the Omnibus Agreement will override and supersede provisions and terms in all the loan documents.

DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Agreement. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Agreement shall have the meanings attributed to such terms in the Louisiana Commercial Laws (La. R.S. 10: 9-101, et seq.). Accounting words and terms not otherwise defined in this Agreement shall have the meanings assigned to them in accordance with generally accepted accounting principles as in effect on the date of this Agreement:

Advance. The word "Advance" means a disbursement of Loan funds made, or to be made, to Borrower or on Borrower's behalf on a line of credit or multiple advance basis under the terms and conditions of this Agreement.

Agreement. The word "Agreement" means this Business Loan Agreement, as this Business Loan Agreement may be amended or modified from time to time, together with all exhibits and schedules attached or to be attached to this Business Loan Agreement from time to time.

Borrower. The word "Borrower" means Seritage Growth Properties, L.P. and includes all co-signers and co-makers signing the Note and all their successors and assigns.

Collateral. The word "Collateral" means all property and assets granted as collateral security for a Loan, whether real or personal property, whether granted directly or indirectly, whether granted now or in the future, and whether granted in the form of a security interest, mortgage, collateral mortgage, deed of trust, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor's lien, equipment trust, conditional sale, trust receipt, lien, charge, lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever, whether created by law, contract, or otherwise.

Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto.

BUSINESS LOAN AGREEMENT

(Continued) Page 7

Event of Default. The words "Event of Default" mean any of the events of default set forth In this Agreement In the default section of this Agreement.

GAAP. The word "GAAP" means generally accepted accounting principles.

Grantor, The word "Granter'' means each and all of the persons or entitles granting a Security Interest In any Collateral for the Loan, Including without llmltatlon all Borrowers granting such a Security Interest.

Guarantor. The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Loan.

Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when Improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances" are used in their very broadest sense and Include without !imitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also Includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos.

Indebtedness. The word "Indebtedness" means the indebtedness evidenced by the Note or Related Documents, In principal, Interest, costs, expenses and attorneys' fees and all other fees and charges together with all other Indebtedness and costs and expenses for which Borrower Is responsible under this Agreement or under any of the Related Documents.

Lender. The word "Lender" means b1BANK, its successors and assigns, and any subsequent holder or holders of Borrower's Loan and Note, or any interest therein.

Loan. The word "Loan" means any and all loans and financial accommodations from Lender to Borrower whether now or hereafter existing, and however evidenced, Including without limitation those loans and financial accommodations described herein or described on any exhibit or schedule attached to this Agreement from time to time.

Note. The word "Note" means the Note dated July 23, 2026 and executed by Seritage Growth Properties, L.P. In the principal amount of

$25,000,000.00, together with all renewals, extensions, modifications, refinanclngs, consolldatlons and substitutions of and for the note or credit agreement.

OCBOA. The term "OCBOA" means Other Comprehensive Basis of Accounting, as designated by Lender In writing as an acceptable alternative to GAAP.

Permitted Liens. The words "Permitted Liens" mean (1) liens and security Interests securing Indebtedness owed by Borrower to Lender;

(2) liens for taxes, assessments, or similar charges either not yet due or being contested In good faith; (3) liens of materlalmen, mechanics, warehousemen, or carriers, or other like liens arising In the ordinary course of business and securing obligations which are not yet delinquent; (4) purchase money liens or purchase money security Interests upon or In any property acquired or held by Borrower In the ordinary course of business to secure Indebtedness outstanding on the date of this Agreement or permitted to be Incurred under the paragraph of this Agreement titled "Indebtedness and Liens"; (5) liens and security Interests which, as of the date of this Agreement, have been disclosed to and approved by the Lender In writing; and (6) those liens and security Interests which In the aggregate constitute an Immaterial and insignificant monetary amount with respect to the net value of Borrower's assets.

Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other Instruments, agreements and documents, whether now or hereafter existing, executed In connection with the loan.

Security Agreement. The words "Security Agreement" mean and Include lndlvldually, collectively, Interchangeably and without limitation any agreements, promises, covenants, arrangements, understandings or other agreements, whether created by law, contract, or otherwise, evidencing, governing, representing, or creating a Security Interest.

Security Interest. The words "Security Interest" mean, without limitation, any and all types of collateral security, present and future, whether In the form of a lien, charge, encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor's lien, equipment trust, conditional sale, trust receipt, lien or title retention contract, lease or consignment lntehded as a security device, or any other security or lien Interest whatsoever whether created by law, contract, or otherwise.

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT AND BORROWER AGREES TO

ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS DATED JULY 23, 2026. BORROWER:

SERITAGE GROWTH PROPERTIES, LP.

Matthew Fernand, Chief Legal Officer and Corporate

Secretary of Serltage Growth Properties

BUSINESS LOAN AGREEMENT

(Continued) Page 8

LENDER:

B1BANK

By:

Authorized Signer

LaserPIU, Ver. 26.1.10.001 Copr. Flnaslra USA CorporaUon 1997, 2026. All Rights Rese,ved. -LA c:\l..aserPro\CFI\LPL\C40.FC TR410902-4 PR�1S3

EX-10.3 4 srg-ex10_3.htm EX-10.3 EX-10.3

Exhibit 10.3

EXECUTION VERSION

B1BANK – LOAN NO. 10000160820-10001

OMNIBUS AGREEMENT

THIS OMNIBUS AGREEMENT (as amended, modified or restated from time to time, this “Agreement”) dated as of July 24, 2026 (the “Effective Date”) is executed by (a) SERITAGE GROWTH PROPERTIES, L.P., a Delaware limited partnership (“Borrower”), and (b) SERITAGE SRC FINANCE LLC, a Delaware limited liability company, SERITAGE SRC MEZZANINE FINANCE LLC, a Delaware limited liability company, SRG LIMITED PARTNER, LLC, a Delaware limited liability company, and SERITAGE GROWTH PROPERTIES, a Maryland real estate investment trust (whether one or more, “Guarantor” and together with Borrower, “Obligors”), and (c) b1BANK, a Louisiana state-chartered bank (together with its successors and assigns, “Lender”).

RECITALS

WHEREAS, Lender is making a revolving credit facility available to Borrower pursuant to (a) that certain Business Loan Agreement dated as of the Effective Date by and between Lender and Borrower (as amended, restated or otherwise modified from time to time, the “Business Loan Agreement”), and (b) that certain PROMISSORY NOTE dated as of the Effective Date, in the original principal amount of TWENTY-FIVE MILLION AND 00/100 DOLLARS ($25,000,000.00) (the “Commitment”), made by Borrower and payable to the order of Lender (as amended, restated or otherwise modified from time to time, the “Note”);

WHEREAS, as a condition to such credit facility, Borrower has executed and delivered to Lender that certain ASSIGNMENT OF DEPOSIT ACCOUNT (as amended, modified, or restated from time to time, the “Assignment”) dated as of the Effective Date, executed by Borrower, as grantor, for the benefit of Lender, covering the Account (as defined in the Assignment), and deposited into such Account the amount of TWENTY-FIVE MILLION AND 00/100 DOLLARS ($25,000,000.00) (the “Minimum Balance”); and

WHEREAS, as a condition to such credit facility, Guarantor has executed and delivered to Lender that certain COMMERCIAL GUARANTY (as amended, modified, or restated from time to time, the “Guaranty”) dated as of the Effective Date, executed by Guarantor for the benefit of Lender; and

WHEREAS, Obligors have determined that Obligors (a) will benefit specifically and materially from the credit facility contemplated by the Note, and (b) have requested and bargained for the structure, terms and obligations set forth in the Note and Related Documents (as defined in the Assignment).

NOW THEREFORE, in consideration of the foregoing, the mutual covenants hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lender, Borrower, and Obligors hereby agree as follows:

Definitions. Capitalized terms used herein which are not defined herein shall have the same meaning as contained in the Note. In addition, the following terms shall have the following meaning:

(a)

“Collateral” has the meaning ascribed to such term in the Assignment.

(b)

(c)

OMNIBUS AGREEMENT – PAGE 1

B1BANK – SERITAGE GROWTH PROPERTIES, L.P. 4936-9947-4102v.16 74470-2

OMNIBUS AGREEMENT – PAGE

B1BANK – SERITAGE GROWTH PROPERTIES, L.P.

(d)

(e)

“Loan” means only the revolving line of credit made available by Lender to Borrower pursuant to the Business Loan Agreement and the Note, as such revolving line of credit may be amended, restated, extended, renewed or otherwise modified from time to time in accordance with the Related Documents.

(f)

“Minimum Liquidity” means, for any Person as of any date, the owned amount of Permitted Investments (which are unencumbered by any Lien or other restriction which might impair the disposal of such Permitted Investment) having aggregate market value (as determined by Lender in its reasonable discretion). With respect to Borrower, the undrawn availability under the Note shall qualify as Minimum Liquidity of Borrower so long as there is no default or event of default under the Note or any Related Document.

(g)

“Obligations” means (i) the unpaid principal of the Loan; (ii) accrued and unpaid interest on the Loan; and (iii) all fees, costs, expenses, indemnities and reimbursement obligations expressly owing by Borrower or any Guarantor under the Business Loan Agreement, the Note, and the Related Documents.

(h)

“Permitted Discretion” means, with respect to Lender, a determination made in the exercise of Lender’s commercially reasonable (from the perspective of a secured lender) business judgment.

(i)

(e) such other readily marketable stocks, mutual funds, equity securities, financial instruments or other as Lender may approve from time to time in its reasonable discretion.

(j)

“Permitted Transfer” means any of the following transfers:

ii.

Permitted Liens (as defined in the Business Loan Agreement);

iii.

transfers of worn out or obsolete personal property of Borrower or Guarantor;

iv.

Leases existing as of the Effective Date and Approved Leases (in each case, as defined in the Real Estate Loan Agreement);

any transfers of the public shares of a publicly traded company or public company traded on a national exchange or quote system;

vi.

any transfer consisting of the merger of Guarantor with any other Person, or a reverse merger involving Guarantor, in each case to the extent that all or substantially all of the assets of Borrower and Guarantor are included in such transaction, provided that (A) Lender is provided prior written notice of any such merger; (B) following any such notice of merger,

OMNIBUS AGREEMENT – PAGE

B1BANK – SERITAGE GROWTH PROPERTIES, L.P.

Borrower shall deliver to Lender all relevant information as may be deemed necessary by Lender to review in Lender’s Permitted Discretion; and (C) as a result of any such merger (I) Borrower shall remain as the sole owner of the Collateral; and (II) Borrower’s liability under the Business Loan Agreement, the Note, and the Related Documents shall in no way be diminished as a result of any such proposed merger and Lender shall be satisfied in its Permitted Discretion with the effect of such proposed merger on Guarantor’s liability under the Related Documents; or

vii.

a transfer of up to forty-nine percent (49%) of non-controlling interests in Borrower or any person comprising Guarantor which does not result in a change in Control of Borrower or Guarantor;

provided, however, that in connection with any Permitted Transfer described in clause (i) above, Lender shall have received prior to such transfer true and correct copies of all documentation entered into or to be entered into with respect to such transfer; provided further, however, that in connection with any Permitted Transfer described in clauses (vi) or (vii) above, if such transfer will result in a Person that does not own directly or indirectly at least twenty percent (20%) of Borrower as of the Effective Date owning at least twenty percent (20%) directly or indirectly following the consummation of such transfer, Lender shall have received: (A) notice of such transfer at least ten (10) business days prior to such transfer, (B) true and correct copies of all documentation entered into or to be entered into with respect to such transfer, and (C) all appropriate documentation, certificates and affidavits reasonably requested by Lender that evidence the organization, good standing, qualification to do business, tax status, and all other information reasonably requested by Lender to confirm that such proposed transfer will satisfy the requirements of this Agreement, and sufficient for Lender to satisfy all applicable laws, including any “know-your-customer” or other procedures as may be required pursuant to applicable laws or the policies of Lender. After giving effect to any such transfer, no Person holding any direct or indirect interests in Borrower and/or rights to distributions from Borrower shall be a Prohibited Person or Person with whom Lender would be prohibited, pursuant to applicable laws or the policies of Lender, to engage in the transactions under the Business Loan Agreement, the Note, and the Related Documents.

(k)

(l)

“Prohibited Person” means a Person listed on the OFAC List or otherwise subject to any other prohibitions or restriction imposed by any laws, rules or regulations administered by the Office of Foreign Assets Control.

(m)

“Real Estate Borrower” means SERITAGE SRC FINANCE LLC, a Delaware limited liability company.

(n)

“Real Estate Credit Facility” means that certain credit facility by Lender to Real Estate Borrower evidenced, in part, by the Real Estate Loan Agreement and that certain PROMISSORY NOTE dated as of the Effective Date, in the original principal amount of FIFTEEN MILLION AND 00/100 DOLLARS ($15,000,000.00), made by Real Estate Borrower and payable to the order of Lender (as amended, restated or otherwise modified from time to time).

(o)

“Real Estate Loan Agreement” means that certain Loan and Security Agreement dated as of the Effective Date by and between Lender and Real Estate Borrower in connection with the Real Estate Credit Facility (as amended, restated or otherwise modified from time to time).

OMNIBUS AGREEMENT – PAGE

B1BANK – SERITAGE GROWTH PROPERTIES, L.P.

Minimum Liquidity Covenant. Within FORTY-FIVE (45) days after the end of each calendar quarter ended after the date of this Agreement (or such later date that Borrower files its financial statements with the Securities and Exchange Commission of the U.S. of America or any successor thereto), Borrower shall demonstrate to Lender that Borrower and Real Estate Borrower have as of the last date of such calendar quarter, in the aggregate, Minimum Liquidity in an amount no less than FIVE MILLION AND 00/100 DOLLARS ($5,000,000.00). The provisions of the Business Loan Agreement under both sub-headings “Cash and Equivalents” under the heading “AFFIRMATIVE COVENANTS” are hereby deleted.

Reduction of Commitment; Minimum Balance.

(a)

Borrower covenants and agrees that the unpaid principal balance of the Obligations shall not at any time exceed the Minimum Balance deposited in the Account or the Commitment. If, at any time, the unpaid principal balance of the Obligations shall exceed the Minimum Balance deposited in the Account or the Commitment, Borrower shall immediately pay to Lender sums sufficient to reduce the unpaid principal balance of the Obligations by the amount of such excess (which payment shall, for the avoidance of doubt, not reduce the Commitment), without the necessity of notice or demand by Lender. The foregoing shall not limit, waive or otherwise affect any rights or remedies available to Lender, whether under this Agreement, the Business Loan Agreement, the Note, any other Related Document, at law or otherwise.

(b)

Borrower may from time to time reduce the Commitment; provided that (i) each reduction of the Commitment shall be in an amount that is an integral multiple of $10,000.00 and not less than $100,000.00, (ii) Borrower has complied with Section 3(a) hereof on or prior to the effectiveness of such reduction, and (iii) after taking into account the reduction and any required paydown pursuant to Section 3(a) hereof, the Commitment shall not be less than the outstanding principal balance of the Real Estate Credit Facility. Borrower shall notify Lender of any election to reduce the Commitment in accordance with the foregoing at least five (5) business days prior to the effective date of such reduction, specifying such election and the effective date thereof. Each notice delivered by Borrower pursuant to this Section shall be irrevocable. Any reduction of the Commitment shall be permanent.

(c)

Borrower covenants and agrees to maintain the Minimum Balance in the Account. Notwithstanding the foregoing, upon the effectiveness of any reduction in the Commitment pursuant to Section 3(b) hereof, the Minimum Balance shall be reduced by the same amount by which the Commitment was reduced, and the amounts on deposit in the Account in excess of such reduced Minimum Balance shall be automatically released from the Collateral and available for Borrower to withdraw from such Account. Upon the irrevocable termination of the Commitment and repayment in full of the Obligations, the Assignment shall be terminated automatically and without any further action required by Lender or Borrower and all amounts in the Account shall be returned to Borrower.

(d)

No amount in excess of the Minimum Balance in the Account shall constitute Collateral in respect of the Obligations or be pledged, restricted, blocked, subject to control or subject to setoff for the Obligations and Lender shall, promptly upon written request by Borrower from time to time, permit any such excess amount to be withdrawn from the Account. All interest accruing on amounts in the Account shall belong to Borrower. Except with respect to the Obligations, the Account shall not constitute “collateral” nor shall the Account be subject to setoff in respect of any obligations other than the Obligations.

Extension Option. Borrower shall be entitled to elect (on no more than one (1) occasion) to extend the maturity date under the Note and availability period thereunder by a period of twelve (12) months from the then current maturity date under the Note, upon and subject only to the following conditions: (a) Borrower shall elect such extension option in writing (the date of such election, the “Extension Election Date”) and pay an extension fee to Lender equal to 0.10% of the then outstanding principal balance of the Loan at least thirty (30) days prior to the then current maturity date under the Note, (b) no monetary Event of Default or material non-monetary Event of Default shall exist and be continuing at the time of such Extension Election Date and at the time of such extension, (c) if requested by Lender, Lender shall have received (i) certificates of the appropriate government officials of the state of organization of Borrower and any authorizing entity of Borrower, as to the existence,

OMNIBUS AGREEMENT – PAGE

B1BANK – SERITAGE GROWTH PROPERTIES, L.P.

qualification and good standing of Borrower and any such authorizing entity of Borrower, dated no more than TEN

(10) days prior to the effective date of such extension, and (ii) results of a UCC or other lien search showing all financing statements and other documents or instruments on file against Borrower in the state of organization of Borrower, dated no more than thirty (30) days prior to the effective date of such extension, (d) if requested by Lender, Borrower shall have executed and delivered to Lender an amended and restated Note or an amendment to the Note which evidences such extended maturity date and continues the monthly installments of interest only payments, together with such other documents as Lender reasonably requires in connection with such amended and/or restated Note, and (e) Borrower shall have provided reasonably satisfactory evidence to Lender that, as of each of (i) December 31, 2027 and (ii) the Extension Election Date, Borrower and Real Estate Borrower maintain in the aggregate Minimum Liquidity in an amount no less than FIVE MILLION AND 00/100 DOLLARS ($5,000,000.00). Upon the effectiveness of such extension election, Borrower shall continue to make payments under the Note as required by the Note, as may be amended and/or restated, subject to Section 5(d) hereof.

Amendments to the Related Documents. Notwithstanding anything to the contrary herein, the Business Loan Agreement, the Note, any Guaranty, Assignment or any other Related Document, the parties hereto agree that:

(a)

Date: All references to the date of July 23, 2026 as the date of a document, effective date or date of execution in the Business Loan Agreement, the Note, the Assignment, each Guaranty, and any Related Documents, are hereby amended to be July 24, 2026.

(b)

References: All references to “Loan,” “Loans,” “Note,” “Indebtedness,” “Obligations,” “Liabilities,” “Related Documents,” “Loan Documents,” “Loan Agreement,” “Debt,” “all obligations,” “present and future indebtedness,” “credit accommodations,” “debts,” or any similar term, phrase or concept, including any such term used in any granting clause, guaranty, collateral description, cross-collateralization provision, setoff provision, default provision, covenant, representation, waiver or remedies provision in the Business Loan Agreement, the Note, the Assignment, each Guaranty, and any Related Documents, are hereby amended and limited so that each such term refers solely to the Commitment, the Note, and the Loan made thereunder, the Related Documents and/or the Obligations, as applicable.

(c)

Advances: The following words in the first (1st) paragraph of the Business Loan Agreement are hereby deleted: “(B) the granting, renewing, or extending of any Loan by Lender at all times shall be subject to Lender’s sole judgment and discretion”. Lender’s obligation to fund advances under the Commitment are subject only to the express conditions set forth in the Loan Agreement and the Note (as modified by this Agreement) and such advances shall be funded promptly (and in any event within one (1) business day) of any written request therefor by Borrower.

(d)

Interest Rate: The Interest Rate on the Loan shall initially be 5.50% per annum based on a year of 360 days and shall be recalculated by Lender (in consultation with, and subject to the prior consent of, Borrower) on, and effective as of, each 12-month anniversary of the date of this Agreement (including during any extension period pursuant to Section 4 hereof) to be equal to the rate that is 2.00% plus the rate of interest per annum accruing to Borrower on the Account (which rate shall reflect the then current market rate as reasonably determined by Lender in consultation with, and with the prior consent of, Borrower).

(e)

Default Rate: The section in the Note under the heading “INTEREST AFTER DEFAULT” is hereby deleted in its entirety and replaced with the following: “Following the occurrence of and during the continuation of an Event of Default, the interest rate on the unpaid principal balance of this Note shall be increased at Lender’s discretion up to the interest rate otherwise applicable as of such date under the terms of this Note plus FOUR PERCENT (4.00%) per annum (the ”Default Rate“). At Lender’s option, any accrued and unpaid interest, fees, or charges may, for purposes of computing and accruing interest on a daily basis after the due date of this Note or any installment thereof, be deemed to be a part of the principal balance, and interest shall accrue on a daily compounded basis after such date at the Default Rate provided in this Note until the entire outstanding balance of principal and interest is paid in full. However, in no event will the interest rate exceed the maximum interest rate limitations under applicable law.”

(f)

Amendments:

OMNIBUS AGREEMENT – PAGE

B1BANK – SERITAGE GROWTH PROPERTIES, L.P.

The “Negative Covenants” set forth in the Business Loan Agreement and each other Related Document under the subheadings (or with respect to) “Indebtedness and Liens”, “Continuity of Operations” (other than clause (2) thereof, which shall be limited to ceasing operations, liquidating, dissolving, merging, restructuring, consolidating, changing its name, converting to another type of entity, or redomesticating, in each case, excluding any Permitted Transfer, the occurrence of which shall not constitute a breach of any covenant in, or constitute a Default or Event of Default under, the Business Loan Agreement or any Related Document, and other than clause (3) thereof, which shall be modified to permit payments required to be made on preferred stock outstanding as of the date of this Agreement in an amount no greater than

$5,000,000 per year), “Operations”, and “Loans, Acquisitions and Guaranties” are hereby deleted.

ii.

All references to “material adverse change” or like terms shall be interpreted to mean a material adverse effect on (A) the ability of Borrower or any Guarantor to perform its obligations under any Related Document to which it is a party; or (B) the legality, validity, binding effect, or enforceability against Borrower or any Guarantor of any Related Document to which it is a party.

iii.

All provisions with respect to protective advances are hereby deleted.

iv.

The obligation set forth in the Note under the heading “DEPOSIT RELATIONSHIP” and in the Guaranty under the heading “MISCELLANEOUS PROVISIONS” in the subheading “Deposit Relationship” (and any similar provision in any other Related Document) shall only apply with respect to a deposit account relationship with b1Bank (and not, for the avoidance of doubt, any other lender) and shall cease to apply on the earlier to occur of the date upon which (y) b1Bank ceases to hold the majority interest in the Commitment and (z) the Commitment is terminated.

(g)

Amendment to Assignment: Any UCC financing statement filed by Lender may identify the Account and any other Collateral granted by Borrower in respect of the Obligations, but may not, unless separately authorized in writing by Borrower identify collateral as “all assets” or similar terms. Any power of attorney granted under the Assignment shall be exercisable only after an Event of Default has occurred and is continuing.

(h)

Events of Default:

The following “Events of Default” (including any corresponding event of default of similar meaning in any other Related Document) are deleted from the Business Loan Agreement, the Note, the Assignment and each other Related Document: “Other Defaults in Favor of Lender”, “Default in Favor of Third Parties”, “Adverse Change”, “Insecurity”, and “Change in Ownership”.

ii.

The Event of Default under the sub-heading “False Statements” in the Note and the Assignment and any other Event of Default arising under any other Related Document that occurs as a result of any representation, warranty or statement that is false, misleading or erroneous, shall be deemed not to have occurred if Borrower, or Guarantor, as applicable, believed that any such representation, warranty or statement was true when made, such representation, warranty or statement, as applicable, is susceptible of being cured and made true and correct in all material respects, and Borrower or such Guarantor, as applicable, take whatever action is required so that such representation, warranty or statement is made true and correct in all material respects within THIRTY (30) days after the earlier to occur of (y) Borrower’s or such Guarantor’s knowledge, as applicable, that such representation, warranty or statement was false, misleading, or erroneous in any material respect and (z) notice from Lender.

iii.

No Event of Default shall be deemed to existing solely as the result of the death, incompetency, withdrawal of members or change in individual managers of Borrower, Guarantor or any other Person and all references in any Guaranty and each other Related Document to death, incompetency, estates, heirs, and consumer credit reporting are hereby deleted.

OMNIBUS AGREEMENT – PAGE

B1BANK – SERITAGE GROWTH PROPERTIES, L.P.

(i)

Assignments: Borrower agrees that Lender may, at its option, but with Borrower’s prior written consent unless an Event of Default has occurred and is continuing, sell or participate its interests in the Loan and its rights relating thereto to a financial institution or institutions and, in connection with each such sale or participation Lender may disclose any financial and other information available to Lender concerning or received from Borrower or any Guarantor (such information, “Confidential Information”) to any Person that is an assignee or participant or prospective assignee or participant subject to such Person executing Lender’s standard confidentiality agreement prior to disclosing such Confidential Information. Notwithstanding the foregoing, Lender may at any time pledge or assign a security interest in all or any portion of its rights under the Business Loan Agreement, the Note, the Related Documents, and this Agreement to secure obligations of Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release Lender from any of its obligations hereunder or substitute any such pledge or assignee for Lender as a party hereto.

(j)

Commercial Guaranty: With respect to provisions in each Guaranty under the heading “GUARANTOR’S REPRESENTATIONS AND WARRANTIES”: (i) clause (E) is hereby deleted in its entirety and (ii) the following words are added at the beginning of clause (H) thereof: “other than as disclosed to Lender in writing”. The following provisions under the heading “MISCELLANEOUS PROVISIONS” in each Guaranty are hereby deleted: “Loans, Acquisitions and Guaranties”, “Operations” and “Continuity of Operations” (other than clause (2) thereof, which shall be limited to ceasing operations, liquidating, dissolving, merging, restructuring, consolidating, changing its name, converting to another type of entity, or redomesticating, in each case, excluding any Permitted Transfer, the occurrence of which shall not constitute a breach of any covenant in, or constitute a Default or Event of Default under, the Business Loan Agreement or any Related Document, and other than clause (3) thereof, which shall be modified to permit payments required to be made on preferred stock outstanding as of the date of this Agreement in an amount no greater than $5,000,000 per year).

(k)

Attorneys’ Fees; Expenses: With respect to the provisions in each of the Business Loan Agreement, the Note, each Guaranty and the Assignment under the heading “Attorneys’ Fees; Expenses”,

(i) in the Business Loan Agreement, each reference to “in an amount not exceeding 25.000% of the principal balance due on the Loan” is hereby deleted, (ii) in the Note, the reference to “in an amount not exceeding 25.000% of the principal balance due on the loan” is hereby deleted, (iii) in each Guaranty, each reference to “equal to 25.000% of the amount due under this Guaranty” is hereby deleted, and (iv) in the Assignment, each reference to “equal to 25.000% of the principal balance due on the Indebtedness” is hereby deleted.

General.

(a)

This Agreement is a “Related Document” as defined and described in the Assignment, and all of the terms and provisions relating to Related Documents shall apply hereto. This Agreement shall be governed by the provisions of the Note pertaining to Jury Waiver, Governing Law, and Choice of Venue.

(b)

This Agreement shall be binding upon and inure to the benefit of Lender and Obligors, and their successors, and assigns, provided, however, that no Obligor may, without the prior written consent of Lender, assign any rights, powers, duties, or obligations under this Agreement or any of the other Related Documents.

(c)

To the extent there is any conflict between the provisions of this Agreement and the other Related Documents, the terms of this Agreement shall control.

OMNIBUS AGREEMENT – PAGE

B1BANK – SERITAGE GROWTH PROPERTIES, L.P.

NOTICE OF FINAL AGREEMENT

THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES, AND THE SAME MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

OMNIBUS AGREEMENT - SIGNATURE PAGE BlBANK- SERITAGE GROWTH PROPERTIES, L.P.

IN WITNESS WHEREOF, the parties hereof have executed this Agreement as of the Effective Date.

LENDER: Bl BANK

BORROWER:

SERITAGE GROWTH PROPERTIES, L.P.,

a Delaware limited partnership

By: Seritage Growth Properties,

a Maryland real estate investment trust,

Name: Matthew Fernand

Title: Chief Legal Officer and Corporate Secretary

OMNIBUS AGREEMENT - SIGNATURE PAGE BIBANK-SERITAGE GROWTH PROPERTIES, L.P.

GUARANTOR:

SERITAGE SRC FINANCE LLC,

a Delaware limited liability company

Name: Matthew Fernand

Title: Vice President

GUARANTOR:

SERITAGE SRC MEZZANINE FINANCE LLC,

By:. ------------

Name: Matthew Fernand

Title: Vice President

GUARANTOR:

SRG LIMITED PARTNER, LLC,

By: ---------------

Name: Matthew Fernand

Title: Vice President

GUARANTOR:

SERITAGE GROWTH PROPERTIES,

By: _ Name: Matthew Fernand

Title: Chief Legal Officer and Corporate Secretary

EX-10.4 5 srg-ex10_4.htm EX-10.4 EX-10.4

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Exhibit 10.4

EXECUTION VERSION

AGREEMENT OF PURCHASE AND SALE

Dallas Midtown, Dallas, Texas

KEY TERMS SUMMARY


Effective Date:	June 1, 2026
Buyer:	Arena Development Intermediate, LLC, a Delaware limited liability company
Seller:	Seritage SRC Finance LLC, a Delaware limited liability company
Property:	Certain real property containing approximately 22 acres located between Preston Road and Montfort Drive, North of Highway 635, South of Alpha Road, in the City and County of Dallas, State of Texas, as generally shown on the site plan set forth on Exhibit A (the “Land”), together with all Improvements (defined below) located on the Land and Seller’s interest in all other property described in Section 2. The final acreage and legal description for the Land shall be set forth in the final Survey (see Section 8.2). “Seritage Property” shall mean the portion of the Land generally shown on Exhibit A and designated as Seritage Property, together with all Improvements located on the Seritage Property and Seritage Seller’s right, title and interest in and to all other related Property described in Section 2.
Title Company:	UTB Title, writing on behalf of Chicago Title Insurance Company (Section 8)
Escrow Agent:	UTB Title
Funding Agent:	Chicago Title Insurance Company
Purchase Price:	$50,760,000, subject to prorations, setoffs and adjustments in accordance with the terms of this Agreement (Section 4).
Closing Date:	The date that is the earlier of (i) ninety (90) days following the Entitlements Period Expiration Date (defined below), and (ii) January 31, 2028 (Section 14)
Broker(s):	None (Section 20)
Related Agreement:	That certain Agreement of Purchase and Sale, dated as of the date hereof, by and between TX Dallas Midtown LP, Algodon I LP, SJM Block 4 LP, SJM Block 9 LP, SJM Block 10 LP, SJM LT Midtown LP, and Dallas-Montfort Property LLC (collectively, “Related Seller”), as seller, and Buyer, as Buyer, pursuant to which Buyer has agreed to purchase certain property located near the Property (“Related Property”), all as more fully set forth in the Related Agreement

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       Exhibits:

       Exhibit A – Site Plan of the Land Exhibit B- Due Diligence Materials Exhibit C - Form of Deed
Exhibit D - Form of Assignment of Contracts Exhibit E - Form of Assignment of Leases
Exhibit F - Form of Assignment of Intangible Property Exhibit G - Form of Bill of Sale
Exhibit H – Form of Vendor Notice Exhibit I – Form of Tenant Notice

      

       Schedules:

       Schedule 10.5 – List of Service Contracts Schedule 10.6 – Litigation
Schedule 10.12 – Lease Schedule

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AGREEMENT OF PURCHASE AND SALE

THIS AGREEMENT OF PURCHASE AND SALE (“Agreement”) is entered into as of the Effective Date by Buyer and Seller. The parties agree as follows:

Key Terms Summary; Enumeration of Exhibits; Consent. References in the body of this Agreement to a portion of the Key Terms Summary (e.g., the defined terms in the left-hand column of the Key Terms Summary) are deemed and construed to incorporate all the terms provided under each such referenced portion of the Key Terms Summary (as applicable). References in the Key Terms Summary to a portion of the body of this Agreement (e.g., Section references in the right-hand column of the Key Terms Summary) are deemed and construed to incorporate all the terms provided under each such referenced portion of the body of the Agreement (as applicable). Notwithstanding the foregoing, if there is any inconsistency between the Key Terms Summary and another portion of this Agreement, the terms of the Key Terms Summary control. The Exhibits enumerated in the Key Terms Summary and attached to this Agreement are incorporated in this Agreement by reference and are to be construed as a part of this Agreement.

Agreement of Sale and Purchase. Subject to the terms of this Agreement, Seller shall sell to Buyer, and Buyer shall purchase from Seller, the Property, which shall include the Land and all of the following (collectively, the “Property”):

2.1.

all buildings, structures, fixtures (to the extent of Seller’s interest therein) and improvements on the Land, including, without limitation, as applicable, Seller’s interest in streets, utility lines, drainage and stormwater infrastructure, other infrastructure, monuments and landscaping or other improvements (collectively, the “Improvements”) (the Land and the Improvements are collectively referred to herein as the “Real Property”);

2.2.

Seller’s right, title and interest in and to, all rights and appurtenances pertaining to the Land, including, without limitation, as applicable, all (i) minerals, oil, gas, and other hydrocarbon substances thereon; (ii) adjacent strips, streets, roads, alleys and rights-of-way, public or private, open or proposed; (iii) development rights, covenants, easements, privileges, and hereditaments, whether or not of record, and (iv) access, air, water, riparian, development, utility, and solar rights;

2.3.

all tangible personal property upon the Land owned by Seller and used in connection with the operation of such Land and/or the Improvements, which may include, without limitation, as applicable, equipment, appliances, tools, machinery, supplies, building materials and other similar personal property which are located on the Real Property and used in the day-to-day operation or maintenance of the Real Property (collectively, the “Personal Property”);

2.4.

to the extent assignable (with any applicable assignment costs being Buyer’s responsibility), all of Seller’s right, title and interest in and to all intangible personal property related to the Real Property, including, without limitation, as applicable: trade names and trademarks; all marketing or promotional materials related to the Real Property; any site plans, plans and specifications and other architectural, engineering, and landscaping drawings and/or plans; any surveys, soils reports, environmental reports or inspections, substrata studies, traffic studies and any other plans or studies of any kind; any warranties, guarantees, licenses, permits and bonds that Seller received in connection with the ownership of the Real Property; and any permits, approvals, licenses, consents, restrictions and certificates issued by a governmental or quasi-governmental authority (including any pending applications) (collectively, the “Intangible Property”) Notwithstanding the foregoing, (a) Intangible Property shall not include (i) any trade names, trademarks, or other intellectual property containing the name Seritage or any derivatives thereof, (ii) any Intangible Property that is privileged or confidential or (iii) any plans or specifications that

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contain designs that constitute the proprietary intellectual property of the developer and/or the ultimate tenant or occupant of the applicable improvements.

2.5.

all of Seller’s right, title and interest in and to the Service Contracts to the extent assumed by Buyer in accordance with Section 11.2, which for the avoidance of doubt shall include Service Contracts entered into by Seller after the Effective Date in accordance with the provisions of this Agreement (to the extent the same are permitted under the terms of this Agreement to survive the Closing Date);

2.6.

all of Seller’s right, title and interest in and to those certain leases, licenses and occupancy agreements described on Schedule 10.12 (the “Lease Schedule”), together with all leases, licenses and occupancy agreements entered into by Seller after the Effective Date in accordance with the provisions of this Agreement (to the extent the same are permitted under the terms of this Agreement to survive the Closing Date) (collectively, the “Leases”); and

2.7.

all of Seller’s right, title and interest in and to all other rights, privileges, and appurtenances that relate in any way to the above-described properties.

Consideration.

3.1.

Independent Consideration. Contemporaneously with the execution and delivery of this Agreement, Buyer has delivered to Seller, and Seller acknowledges receipt of, One Hundred Dollars ($100.00) (the “Independent Consideration”), which amount the parties bargained for and agreed to as consideration for Buyer’s right to inspect and purchase the Property pursuant to this Agreement and for Seller’s execution, delivery and performance of this Agreement. The Independent Consideration is in addition to and independent of any other consideration or payment provided in this Agreement, is nonrefundable and fully earned and will be retained by Seller notwithstanding any other provision hereof.

Purchase Price. Subject to satisfaction or waiver of all conditions to Closing in accordance with the applicable terms and provisions of this Agreement, the Purchase Price for the Property (as adjusted by the terms of this Agreement and subject to the prorations set forth in Article 5 of this Agreement) is payable by Buyer to Seller (via Funding Agent) at Closing by wire transfer of immediately available federal funds and, upon consummation of the Closing, Funding Agent shall disburse to Seller such amount in accordance with the escrow instructions delivered by Seller to Funding Agent. Seller shall have the right, together with Related Seller, to issue a joint instruction to Funding Agent to modify the allocation of the Purchase Price under this Agreement and the “Purchase Price” (as defined in the Related Agreement) under the Related Agreement. Seller acknowledges and agrees that Seller, together with Related Seller, shall provide to Buyer the reallocation of the Purchase Price under this Agreement and the “Purchase Price” under the Related Agreement on or prior to the date that is thirty (30) days following the date on which the Survey is finalized and approved by Buyer. Following the date on which the reallocation is agreed upon between Seller and Related Seller, Seller and Related Seller shall prepare draft amendments to this Agreement and the Related Agreement to memorialize the reallocated Purchase Price and deliver the same to Buyer for Buyer’s review and approval (not to be unreasonably withheld). Once the forms of amendments are agreed upon, Buyer and Seller shall execute the approved amendment to this Agreement simultaneously with the execution of the amendment to the Related Agreement memorializing the updated allocation of the Purchase Price under this Agreement and the “Purchase Price” (as defined in the Related Agreement) (collectively, the “Approved Amendments”). Once executed by Seller and Buyer, Funding Agent and Escrow Agent shall acknowledge the Approved Amendments by their signatures thereto.

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Closing Costs; Pro-Rations at Closing.

5.1.

Recording Fees and Other Fees. Seller shall pay (i) the cost of any title examination fees charged by Title Company to the extent related to ordering the Commitment and/or issuing the Title Policy (as defined below), (ii) the cost of the base premium for the Title Policy in the amount of the Purchase Price (but not premiums for any endorsements or any title insurance requirements of Buyer’s lender, if applicable), (iii) the cost to prepare and obtain all other documents necessary to perform Seller’s agreements and obligations under this Agreement, and (iv) the cost of preparing and recording all documents necessary to correct or remove defects in or encumbrances upon Seller’s title to the Property (to the extent Seller is obligated under this Agreement to do so or has committed in writing to remove such defects or encumbrances). Buyer shall pay (a) the cost of recording the Deed, (b) the cost of any premiums for endorsements to the Title Policy and any title insurance requirements of Buyer’s lender (if applicable),

(c) the cost of applying for and pursuing the Entitlements, (d) the cost of the Survey (as defined below), (e) the cost incurred by Buyer to conduct its inspections, tests, studies and the like (including the Tests), and

(f) the cost to prepare and obtain all other documents necessary to perform Buyer’s agreements and obligations under this Agreement. Each party shall pay its own attorneys’ fees and fifty percent of any escrow fees charged by Escrow Agent or Funding Agent. Any other costs and expenses which are not specifically allocated between Seller and Buyer in this Section 5.1 or elsewhere in this Agreement shall be allocated between Seller and Buyer according to local custom in connection with the sale of commercial real property in Dallas, Texas (as reasonably agreed by the parties).

5.2.

Prorations. Except as otherwise indicated by this Agreement, Funding Agent shall prorate between the parties (and the parties shall deposit funds therefor with Funding Agent or shall instruct Funding Agent to debit against sums held by Funding Agent owing to such party), as of 11:59 p.m. the day immediately prior to the Closing Date (such prior date, the “Adjustment Date”), all income and expenses with respect to the Property that are payable to or by the owner of the Property, including all matters set forth in this Section 5.2, so that the income and expense items with respect to the period up to and including the Adjustment Date shall be the responsibility of Seller and the income and expense items with respect to the period after the Adjustment Date shall be the responsibility of Buyer. Seller and Buyer shall prorate any items of costs or expenses not specified in this Article 5 in the manner that such items are customarily apportioned between sellers and buyers in connection with the sale of commercial real property in Dallas, Texas.

5.3.

Utilities. All charges, taxes and fees for utility services (including without limitation, as applicable: water, sewer, gas and electricity), shall be prorated on an accrual basis. Seller shall endeavor to obtain utility meter readings to a date not more than five (5) days before the Closing Date and the unfixed water rates and charges, sewer taxes and rents and gas and electricity charges, if any, based thereon for the intervening time shall be apportioned on the basis of such last readings. If such readings are not obtainable by the Closing Date, then, at the Closing, any water rates and charges, sewer taxes and rents and gas and electricity charges which are based on such readings shall be prorated based upon the per diem charges obtained by using the most recent period for which such readings shall then be available. Upon the taking of subsequent actual readings, the apportionment of such charges shall be recalculated and Seller or Buyer, as the case may be, promptly shall make any applicable payment to the other based upon such recalculations. In the event Seller has previously made any utility deposits for services at the Property, then Seller shall elect (with notice of such election provided to Buyer on or before five (5) days prior to Closing, failing which Seller shall be deemed to have elected option (ii) below), whether (i) to receive a credit for such amounts at Closing (to the extent the deposit is actually transferred to and for the benefit of Buyer, as confirmed in writing by the subject deposit holder and provided to Buyer on or before Closing) or (ii) to request a reimbursement of the deposit from the applicable utility provider.

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5.4.

Taxes. Ad valorem taxes (“Taxes”) assessed against the Property for the current applicable calendar or fiscal year in which Closing occurs will be prorated on a calendar year or fiscal year basis, as applicable, as of the Adjustment Date, and will be based on the actual Taxes for the applicable current calendar or fiscal year. If the actual Taxes for the current calendar or fiscal year are unavailable, then such pro-ration will be based on one hundred percent (100%) the actual Taxes for the prior calendar or fiscal year, and Seller and Buyer shall recalculate such pro-ration within sixty (60) days following date on which the actual Taxes for the calendar or fiscal year in which the Closing occurs are determined (as a point of clarity, Seller is not in any way responsible for any incremental increase in Taxes to the extent resulting from any improvements constructed by or on behalf of Buyer at the Property following the Closing Date). Seller shall promptly provide Buyer with all relevant documentation relating to the Taxes (including any tax bills) whether received by Seller before or after Closing. Notwithstanding anything to the contrary, for any tenant that, pursuant to its Lease (if any), makes payments to fund Taxes (whether annually, semi-annually or otherwise on less than a monthly basis), the portion of Taxes that such tenant is obligated to pay through such rent payments shall be excluded from the Tax proration between Seller and Buyer as contemplated above. Buyer and Seller shall prorate any payments made by such tenant for the tax year in which the Closing occurs, and Buyer shall collect any such payments that are payable following the Closing Date directly from the tenants as and when due and payable by such tenants. Seller expressly reserves (i) the right (but shall not have the obligation) to commence, prosecute and complete any and all contests and appeals that may be available with respect to Taxes which are allocable to any fiscal year occurring prior to the fiscal year in which the Closing Date occurs; and (ii) the right to receive any and all refunds and proceeds that may be payable as a result of any such contests or appeals of Taxes commenced under clause (i) above. If Seller commences any contest or appeal with respect to the fiscal year in which the Closing Date occurs, then, (x) if such contest or appeal is to be settled or resolved prior to the Closing Date, the proposed settlement or resolution shall be subject to Buyer’s prior approval, not to be unreasonably withheld, conditioned or delayed and (y) if such contest or appeal is continuing as of the Closing Date, Seller shall assign its rights under such contest or proceeding to Buyer at Closing and Buyer shall be permitted to settle or resolve the same following the Closing Date, subject to Seller’s prior approval, not to be unreasonably withheld, conditioned or delayed. Any tax refunds received by Buyer following the Closing Date which are allocable to the period prior to the Closing Date will be promptly paid by Buyer to Seller (net of applicable costs and expenses) and any tax refunds received by Seller following the Closing Date which are allocable to the period following the Closing Date will be promptly paid by Seller to Buyer (net of applicable costs and expenses).

5.5.

Service Contracts. With regard to Service Contracts to the extent assumed by Buyer at Closing in accordance with Section 11.2: (i) Seller shall be credited for sums that have been prepaid by Seller prior to the Adjustment Date under the Service Contracts if such prepaid amounts pertain to services for periods of time from and after the Adjustment Date, and, provided, that such prepayment amount is confirmed in writing provided to Buyer by the counterparty to the Service Contract or pursuant to other confirmation reasonably acceptable to Buyer; and (ii) Buyer shall be credited at Closing for any amounts that are due or accrued but unpaid as of the Adjustment Date and relate to a Service Contract and the period of time prior to the Adjustment Date.

5.6.

Leases. To the extent any Leases are in place on the Closing Date, the following provisions shall apply: Rents as and when collected (the term "rents" as used in this Agreement includes all payments due and payable by the tenants to the applicable landlord under the Leases) shall be prorated as of the Adjustment Date. At Closing, Seller shall credit to the account of Buyer the amount of any security deposits then held by Seller with respect to the Leases. As to any pass-through expense payments, escalation rent and/or percentage rent payable under the Leases, Seller shall (to the extent required by the Leases) bill all applicable tenants in the ordinary course, through the Closing Date. At or before Closing, Seller shall deliver to Buyer all material records used by Seller to calculate payment of such rents described in the immediately preceding sentence for the year of Closing (whether fiscal or calendar year), and the parties

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shall allocate any monthly payments paid with respect to such rents in the same manner as Rent. Following the Closing, the parties shall promptly true-up with one another after the reconciliations with respect to such rents for the year of Closing (whether fiscal or calendar year) are completed by Buyer and Buyer has calculated the final amount of such rents payable for the year of Closing (whether fiscal or calendar year). Subject to the terms of the Leases, Buyer shall endeavor to complete such reconciliations as soon as reasonably practicable following the end of the year of Closing (whether fiscal or calendar year).

5.7.

Settlement Statement; Reprorations. At least five (5) Business Days prior to the Closing Date, Seller shall prepare a draft set of prorations for Buyer’s review. Seller and Buyer shall work together in good faith to approve said prorations so that the Funding Agent may then prepare (in accordance with the terms of this Agreement) and deliver to Seller and Buyer an initial closing statement for their respective review and approval (such statement, upon approval by Seller and Buyer, the “Settlement Statement”). Notwithstanding the foregoing or anything else to the contrary, either Seller and/or Buyer may request separate closing statements based on the agreed upon set of prorations. No later than one hundred and twenty (120) days following the Closing Date (or such later date as may be applicable under Section 5.4 or Section 5.6 above but solely with respect to Taxes and the Leases, as applicable), Buyer shall prepare and present to Seller a recalculation of any and all amounts due or subject to proration under this Article 5 (taking into consideration any errors and changes necessary because of the lack of complete or accurate information as of the Closing Date) as well as supporting documentation for such recalculation. Subject to reasonable verification by Seller, the parties shall make the appropriate adjusting payments between them within sixty (60) days after delivery of any such recalculation. All matters set forth in this Article 5 shall survive Closing.

Conveyance of Title. Seller shall convey fee simple title to the Real Property to Buyer by special warranty deed, subject only to the Permitted Exceptions (as defined in Section 8.5) (the “Deed”).

Inspection Period and Entitlements Period.

7.1.

Due Diligence Materials; Inspection Period. Prior to the Effective Date, Seller has, to the extent related to the particular Property owned by the particular Seller in question, delivered to Buyer copies of the items set forth on Exhibit B attached hereto and made a part hereof (the “Initial Due Diligence Materials”), which Due Diligence Materials were delivered to Buyer by posting the same to a data room at the following web address: https://seritagegrowthproperties-my.sharepoint.com/:f:/g/personal/jmerrell_seritage_com/IgDahf3X3P6oQb9leF472jNPAZ3PvS-5WZYR9UKcQ1vmcC0?e=SzMien. In addition to the foregoing, Buyer may from time to time at any time prior to the Closing Date, reasonably request that Seller provide, to the extent related to the particular Property owned by the particular Seller in question, additional reasonable due diligence documents, materials, or information relating to such Property, and such Seller shall, within five (5) Business Days after receipt of any such request, deliver to Buyer copies of such requested items to the extent in such Seller's possession or reasonable control (collectively, to the extent provided by such Seller to Buyer, the “Additional Due Diligence Materials” and, together with the Initial Due Diligence Materials, collectively, the “Due Diligence Materials”). Subject to the applicable terms and provisions of this Agreement (including Sections 7.2 and 7.2.7 below), Buyer may review the Due Diligence Materials and examine the condition of, and Seller’s title to, the Property from the Effective Date until June 30, 2026 (said interim period being referred to herein as the “Inspection Period”); provided, that if this Agreement is not terminated upon the expiration of the Inspection Period, Buyer’s right to review the Due Diligence Materials and examine the condition of the Property shall continue through the Closing Date. Except as otherwise expressly provided in this Agreement, Buyer acknowledges and agrees that all documentation and any information provided to Buyer by or on behalf of Seller or its agents or representatives (including the Due Diligence Materials) are provided as an accommodation only and solely as a convenience to Buyer, without

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representation or warranty of any kind, express or implied. Notwithstanding the foregoing or anything else

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to the contrary, Seller shall not be required to deliver or otherwise make available to Buyer any proprietary materials, attorney/client materials, or other privileged or confidential materials.

7.2.

Access and Inspection. From the Effective Date and until the earlier of (i) the Closing or (ii) the sooner termination of this Agreement, Seller grants to Buyer, its employees, agents, representatives, and independent contractors, permission and license to conduct engineering, market, traffic, and economic feasibility studies of the Property and a physical inspection of the Property, including the right to enter upon the Property to collect information and to perform any tests, investigations, reports, studies, and inspections to the Property that Buyer deems necessary to make its determination as to the suitability of the Property for Buyer’s intended development and/or use, including any and all environmental, structural, geotechnical, soil, groundwater, topographical, geological, subsurface, and engineering tests and studies, site planning feasibility studies, surveys, and zoning analyses (all of the foregoing inspections, tests, studies and the like, collectively, “Tests”). Seller shall reasonably cooperate with Buyer in good faith during Buyer’s performance of the Tests (at no cost or expense to Seller). Buyer shall provide Seller with at least two (2) Business Days’ advance notice of any Test performed at the Property (which notice shall be provided to Eric Dinenberg and may be provided via email to said party). Seller may have a representative present during any Property access by or on behalf of Buyer (including as to any Tests made by or on behalf of Buyer on the Property).

7.2.1.

To the extent any Tests will be performed on any portion of the Property that is subject to a Lease (other than any temporary leases or licenses for use of vacant portions of the Property unless the licensee has the right to use such portion of the Property on the date when Buyer plans to perform such Test), access to such portions of the Property (including as to any such Tests) shall be subject to the applicable terms of the Leases (including the rights of the tenants/licensees/occupants thereunder) and shall not unreasonably interfere with the use of the Property (including any operations and activities thereon) by the tenants/licensees/occupants under any such Leases. Buyer shall not contact any tenants/licensees/occupants of the Property that is party to a Lease without Seller's prior written consent, such consent not to be unreasonably withheld, conditioned or delayed.

7.2.2.

No such Tests shall be invasive without the prior written consent of Seller, unless invasive testing (i.e., a Phase II ESA) is recommended under a Phase I ESA or related report. If Buyer has the right to conduct any invasive testing, the same shall be subject to reasonable and customary conditions provided by Seller, including, that Seller shall have reasonable approval over the scope and location of such invasive testing. As a point of clarity, a customary Phase I ESA, geotech and PCA are expressly permitted (subject to the other applicable terms and provisions hereof).

7.2.3.

All Property access (including as to any such Tests) shall be conducted in accordance with standards customarily employed by sophisticated investors in connection with the performance of due diligence review of commercial property in Dallas, Texas and in compliance with all applicable laws, codes and ordinances.

7.2.4.

Following any entry onto the Property by or on behalf of Buyer (including as to any such Tests), if Buyer’s performance of any such Tests or any other Property access by or on behalf of Buyer results in damage to any portion of the Property, Buyer shall promptly restore the Property (at Buyer’s sole cost) to a condition which is as near as possible to the condition that existed immediately prior to the applicable Test, reasonable wear and tear excepted (such obligation to survive any termination of this Agreement occurring prior to Closing for a period of two (2) years).

7.2.5.

If Buyer or Seller elects to terminate this Agreement in accordance with the terms and provisions of this Agreement, and if requested by Seller, Buyer (at no cost to Buyer) shall promptly furnish to Seller copies of any reports received by Buyer relating to any Tests; provided, however,

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that such reports shall be delivered without any representation, warranty, or liability on the part of Buyer, and such foregoing obligation shall survive the termination of this Agreement. In addition, upon the termination of this Agreement, Buyer shall, subject to Buyer’s customary document retention practices, promptly return to Seller, destroy or delete (as applicable) any Due Diligence Materials and other documentation and information provided by or on behalf of Seller to Buyer with respect to Seller and/or the Property, such obligation to survive the termination of this Agreement.

7.2.6.

Buyer shall indemnify and hold harmless Seller from any actual damages, liabilities, claims, costs and expenses incurred by or on behalf of Seller (collectively, “Losses”), to the extent caused by Buyer or Buyer’s employees, agents, representatives or independent contractors accessing the Property following the Effective Date for any reason (including to conduct Tests); provided, however, that Buyer’s indemnification obligation shall not apply to and shall expressly exclude each and all of the following: (i) Losses incurred to the extent related to any condition that existed at the Property prior to the date of the applicable Test, including without limitation, the mere discovery (but not, for the avoidance of doubt, exacerbation) of, hazardous, toxic, or regulated substance, material, or waste; (ii) Losses to the extent arising from the gross negligence or willful misconduct of Seller, Related Seller or any of Seller’s or Related Seller’s agents, employees, members, representatives, contractors, licensees and invitees; and/or (iii) consequential, special and punitive damages. Buyer’s indemnification obligation under this Section 7.2 shall survive (i) any termination of this Agreement occurring prior to Closing for a period of two (2) years and (ii) the Closing Date (if the Closing occurs), but solely with respect to any claims commenced prior to the Closing Date that are continuing as of the Closing Date and, otherwise, with respect to any claims arising on or following the Closing Date to the extent covered by the insurance of Buyer actually held or otherwise required to be held by Buyer pursuant to Section 7.2.7 below.

7.2.7.

Insurance. As a condition precedent to Buyer or anyone acting on Buyer’s behalf entering the Property for any reason (including to perform the Tests), Buyer shall maintain or cause to be maintained, at Buyer’s sole cost and expense, and deliver to Seller reasonable evidence of, a policy of comprehensive general public liability and property damage insurance: (a) with a combined single limit of not less than $1,000,000 per occurrence/$2,000,000 general aggregate and $5,000,000 excess umbrella liability, (b) insuring Buyer, and including Seller (including any other designees reasonably requested by Seller, including any property manager and lender of Seller) as additional insureds. Buyer shall deliver reasonable evidence of such insurance coverage to Seller prior to any Property access by or on behalf of Buyer. As a point of clarity, any party performing Tests on behalf of Buyer must be reputable and qualified and otherwise insured to the same degree as Buyer as described above or otherwise in a manner reasonably acceptable to Seller (and provide Seller with reasonable evidence thereof prior to any such Property access by such party). As a further point of clarity, any Buyer consultant performing environmental Tests (including any Phase I ESA or permitted Phase II ESA) must also maintain environmental impairment or pollution liability insurance, with commercially reasonable limits (and provide Seller with reasonable evidence thereof prior to any such Property access by such party).

7.2.8.

Notwithstanding the foregoing or anything contained in this Agreement to the contrary, Buyer shall have the right to terminate this Agreement at any time prior to the expiration of the Inspection Period for no reason or any reason at all (in Buyer’s sole discretion), by delivery of written notice to Seller prior to 6:00 p.m. CST on the last day of the Inspection Period and without payment of any termination fee; provided, that, for the avoidance of doubt, Seller shall be permitted to retain the initial

$169,200 released to Seller from the First Deposit (defined below). Upon delivery of any such termination notice, this Agreement shall automatically terminate and the parties shall have no further obligations or liabilities hereunder other than those that expressly survive a termination of this Agreement.

7.2.9.

Intentionally Omitted.

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7.3.

Entitlements Period.

7.3.1.

Subject to the other applicable terms and provisions of this Agreement, Buyer shall have the right to prepare and submit one or more applications to obtain the Entitlements and take all other actions as Buyer deems reasonably necessary or desirable in order to pursue and obtain the Entitlements. The period during which Buyer may apply for and pursue the Entitlements (such period, the “Entitlements Period”) shall commence upon the expiration of the Inspection Period and shall expire upon the earlier to occur of (i) January 28, 2028, and (ii) the date on which Buyer obtains the Entitlements (such earlier date, the “Entitlements Period Expiration Date”). Buyer shall pursue the Entitlements in good faith during the Entitlements Period, taking into account Buyer’s development plan for the Property, and Buyer shall have the right to determine the timing and sequencing of the Entitlement application process.

7.3.2.

For purposes of this Agreement, the “Entitlements” shall mean all of the following items necessary or desirable for Buyer’s intended development of the Land as a mixed-use development, which shall include a professional sports and entertainment arena or complex and may include, without limitation, parking, retail shopping, restaurants, hotels, office buildings, multifamily buildings, experiential entertainment and/or condominium buildings (collectively, the “Project”): (a) approval from the City of Dallas for an amendment or modification to the existing zoning regulations to permit the Project, (b) approval from all applicable governmental authorities for license(s) and/or an abandonment(s), (c) approval from the City of Dallas for a preliminary plat(s) (as a point of clarity, and notwithstanding anything to the contrary, Buyer may not file a final plat prior to Closing), (d) approval from the City of Dallas for a development and/or economic incentive agreement(s), (e) approval from all applicable governmental authorities for the modification, creation and/or implementation of a specialty district, including but not limited to a public improvement district or tax increment financing district, and

(f) any other approvals, permits or entitlements determined by Buyer to be reasonably necessary or desirable to obtain in connection with the Project. Entitlements shall be considered “obtained” by Buyer only after final approval from the relevant governmental authorities with respect to items (a) through (f) above has been received. Subject to the last sentence of this Section 7.3.2, Buyer shall have the right to submit the application for the Entitlements and request Entitlements in any form determined by Buyer, in Buyer’s sole discretion and Seller shall have no approval over any such applications or submissions. Buyer shall be solely responsible for payment of all costs and expenses incurred in connection with Buyer seeking and obtaining the Entitlements, including without limitation, all costs and expenses associated with defending any administrative or litigation challenges to the Entitlements. Notwithstanding the foregoing or anything else to the contrary, Buyer’s application(s) for the Entitlements shall not request, or otherwise result in, the diminishment or reduction of any of the uses that are legally permitted to be constructed on the Land as of the Effective Date or otherwise reduce any of Seller’s other existing zoning rights or add any obligations on the part of Seller (other than Seller’s obligation to cooperate with Buyer under Section 7.3.4 below), unless expressly approved by Seller in writing. The parties acknowledge that as part of the zoning of the Property as of the Effective Date, the streets that form a part of the Property (or will form a part of the development thereof) are controlled by the Streets Plan (Exhibit 887C) (the “Streets Plan”). As part of the process of applying for the Entitlements, Buyer shall have the right to amend the City’s Thoroughfare Plan in order to accommodate the Project; provided, that such amendments to the City’s Thoroughfare Plan requested by Buyer shall not terminate the Streets Plan or render the Streets Plan unenforceable as it relates to Seller’s zoning rights in effect with respect to the Property as of the Effective Date. Buyer shall not make any requests in connection with its application for the Entitlement(s) that will cause the Property to no longer be governed by the TIF District (as defined below).

7.3.3.

Buyer agrees to provide written status updates concerning the Entitlements to Seller at least once every calendar month (and otherwise reasonably update Seller as and when reasonably requested by Seller from time to time) and promptly following the achievement or delay of any significant milestones in the Entitlements processing until all of the Entitlements have been obtained

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as provided in Section 7.3.2 above. Further, Buyer shall promptly notify Seller upon Buyer obtaining the Entitlements.

7.3.4.

Seller acknowledges and agrees that, upon written request from Buyer, Seller will provide prompt and reasonable cooperation to Buyer in Buyer’s efforts to obtain the Entitlements, which cooperation may include, but shall not be limited to, Seller’s execution and delivery of zoning applications, site plan applications, variance requests and/or special or conditional use permit applications; provided, that Seller shall not incur any additional cost, expense or liability as a result of providing any such cooperation to Buyer and Seller shall have the right to reasonably approve any particular forms that Seller is requested by Buyer to execute for purposes of confirming the accuracy thereof (but in no event shall this reasonable approval right be deemed to give Seller approval of the application for Entitlements generally (even if the document(s) required to be executed by Seller are being submitted as part of the collective application for the Entitlements), subject to the other applicable terms and provisions of this Section 7.3). For avoidance of doubt, but subject to the other applicable terms and provisions of this Section 7.3 (including the last sentence of Section 7.3.2), Seller and Buyer hereby acknowledge and confirm their intent that Seller not be entitled to approve or withhold approval for any Entitlements, including any applications or other submittals or documents by which Buyer seeks to obtain Entitlements.

7.3.5.

Notwithstanding the foregoing, Buyer shall have the right to terminate this Agreement at any time prior to 6:00 p.m. CST on the Entitlements Period Expiration Date for no reason or any reason at all (in Buyer’s sole discretion), by delivery of written notice to Seller prior to the applicable date and time set forth above and without payment of any termination fee; provided, that, for the avoidance of doubt, Seller shall be permitted to retain all Release Payments previously released or otherwise required to be released to Seller prior to such termination date by Funding Agent in accordance with Section 7.4. Upon delivery of any such termination notice, this Agreement shall automatically terminate and the parties shall have no further obligations or liabilities hereunder other than those that expressly survive a termination of this Agreement.

7.4.

Deposits.

7.4.1.

On or before 6:00 p.m. CST on the third (3rd) Business Day following the Effective Date, Buyer shall deliver to Funding Agent a deposit of $169,200 (the “First Deposit”). Within one (1) Business Day following Funding Agent’s receipt of the First Deposit, Funding Agent shall release the First Deposit to Seller in accordance with the wiring instructions provided to Funding Agent by Seller.

7.4.2.

If Buyer has not elected to terminate this Agreement on or before the expiration of the Inspection Period, then for each month of the Entitlements Period, Buyer shall be obligated to pay Seller a payment (each, a “Release Payment”), in the amount of: (i) with respect to the first month of the Entitlements Period through and including the sixth (6th) month of the Entitlements Period, $126,900 per month and (ii) for the seventh (7th) month of the Entitlements Period and each month thereafter until the month in which the Entitlements Period Expiration Date occurs, $274,950 per month. The Release Payments shall be funded to Funding Agent (to be held in escrow in accordance with the terms of this Agreement) as follows:

7.4.2.1.

If Buyer has not elected to terminate this Agreement on or before the expiration of the Inspection Period, then on or before June 30, 2026, Buyer shall deliver to Funding Agent a deposit in the amount equal to the total Release Payments owed for the first six (6) months of the Entitlements Period totaling $761,400 (the “Second Deposit”). On July 1, 2026, Funding Agent shall release $126,900 to Seller as payment for the Release Payment owed to Seller by Buyer for the first month of the Entitlements Period. Thereafter, on the first day of each subsequent month during the Entitlements

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Period, Funding Agent shall release to Seller the applicable Release Payment from the Second Deposit in accordance with the wring instructions provided to Funding Agent by Seller, each in satisfaction of Buyer’s obligation to fund the Release Payment for such month in accordance with Section 7.4.2, unless prior to the first day of such month, Buyer has terminated this Agreement.

7.4.2.2.

If Buyer has not elected to terminate this Agreement prior to December 31, 2026, then on or before December 31, 2026, Buyer shall deliver to Funding Agent a deposit equal to the total Release Payments owed for the next six (6) months of the Entitlement Period totaling

$1,649,700 (the “Third Deposit”). On January 1, 2027 and on the first day of each month of the Entitlements Period thereafter, Funding Agent shall continue to release to Seller the applicable Release Payment from the Third Deposit in accordance with the wiring instructions provided to Funding Agent by Seller, each in satisfaction of Buyer’s obligation to fund the Release Payment for such month in accordance with Section 7.4.2, unless prior to the first day of such month Buyer has terminated this Agreement.

7.4.2.3.

If Buyer has not elected to terminate this Agreement prior to June 30, 2027, then on or before June 30, 2027, Buyer shall deliver to Funding Agent a deposit equal to the total Release Payments owed for the next seven (7) months of the Entitlement Period totaling $1,924,650 (the “Fourth Deposit” and, together with the First Deposit, the Second Deposit and the Third Deposit, collectively, the “Deposit”). On July 1, 2027 and on the first day of each month of the Entitlements Period thereafter, Funding Agent shall continue to release to Seller the applicable Release Payment from the Fourth Deposit in accordance with the wiring instructions provided to Funding Agent by Seller, each in satisfaction of Buyer’s obligation to fund the Release Payment for such month in accordance with Section 7.4.2, unless prior to the first day of such month Buyer has terminated this Agreement.

7.4.3.

Notwithstanding anything to the contrary, (i) the First Deposit and all Release Payments shall be deemed to be earned by Seller upon Seller’s receipt of the same from Funding Agent (or the date Funding Agent is otherwise required to release the same to Seller in accordance with this Section 7.4, if earlier) and shall be non-refundable to Buyer, except upon a termination of this Agreement by Buyer resulting from a Seller Default to the extent expressly described in Section 17.2, and (ii) neither the First Deposit nor any Release Payments will be credited towards the Purchase Price, such that the First Deposit and all Release Payments shall be in addition to the Purchase Price.

7.4.4.

If the Closing occurs on or before the date on which the final portion of any Deposit has been released to Seller, then, that portion of the Deposit then held by Funding Agent shall be applied at Closing towards the Purchase Price, or, at Buyer’s option, refunded to Buyer. If this Agreement is terminated by Buyer in accordance with Section 7.3.5, Section 9.1, Section 13.3, Section 17.2 or any other express termination right of Buyer under this Agreement, then within two (2) Business Days following such termination, Funding Agent shall return to Buyer any portion of any Deposit then held by Funding Agent (excluding any portion of the Deposit that was required to be released to Seller prior to the date of termination in accordance with this Section 7.4) in accordance with wiring instructions provided by Buyer to Funding Agent.

7.4.5.

Seller shall have the right, together with Related Seller, to issue a joint instruction to Funding Agent to modify the allocation of the Deposit and any monthly Release Payments owed (and released to) Seller hereunder and the “Deposit” and any “Release Payments” (as such terms are defined in the Related Agreement) owed (and released to) Related Seller under the Related Agreement. Funding Agent shall comply with any such joint instruction regarding a reallocation of such Deposit, Release Payments, “Deposit” and “Release Payments” (as such terms are defined in the Related Agreement). Notwithstanding the foregoing, in no event shall Funding Agent be permitted to release to Seller and Related Seller, in the aggregate, in any month more than the total applicable Release Payment and “Release Payment” (as defined in the Related Agreement) owed to Seller and Related Seller,

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respectively, under this Agreement and the Related Agreement (i.e., $600,000 in the aggregate for the first six (6) months of the Entitlement Period and $1,300,000 in the aggregate for each subsequent month of the Entitlement Period). For the avoidance of doubt, Buyer shall have no liability as a result of any such joint instruction (or whether Funding Agent complies or fails to comply), and Buyer’s obligations under this Section 7.4 shall be deemed satisfied with respect to each Deposit upon each date that Buyer makes each such required Deposit in accordance with this Section 7.4.

Title Commitment; Survey; Title Defects

8.1.

Within ten (10) Business Days following the Effective Date (or as soon thereafter as the same is made available by the Title Company), Seller, at Seller’s expense, shall cause the Title Company to provide Buyer with a commitment for an owner’s policy of title insurance covering the Real Property (the “Commitment”), and copies of all instruments listed or referenced in the Commitment as exceptions or matters subject to requirements for the issuance of a title policy pursuant to the Commitment (collectively, the “Exception Documents”).

8.2.

Within thirty (30) days following the Effective Date (or as soon thereafter as the same is made available by the surveyor), Buyer, at Buyer’s expense, shall obtain a land title survey (the “Survey”) of the Property and the property being conveyed to Buyer pursuant to the Related Agreement (the “Related Agreement Property”), which Survey must (i) meet the Minimum Standard Detail Requirements (including items 1, 2, 3, 4, 6, 7(a), 7(b)(1), 7(c), 8, 9, 10, 11(b), 13, 14, 15 and 16 of Table “A” thereof) and the Accuracy Standards for ALTA/NSPS Land Title Surveys as adopted by the American Land Title Association, the National Society of Professional Surveyors, and the American Congress on Surveying and Mapping and in effect on the date of the Survey; (ii) locate and show each exception referred to in Schedule B of the Commitment that is susceptible of location and indicate its effect on the Property (and make note of those exceptions that cannot be located and the reasons therefor); (iii) include an overall acreage and legal description for the overall Property together with the Related Agreement Property, as well as a legal description for each portion of the Property owned by Seller and each Related Seller (as applicable); and (iv) name Seller, Related Seller and the Title Company as certified parties. Buyer shall promptly deliver the Survey to Seller and the Escrow Agent upon receipt thereof. Buyer agrees to order the Survey within five (5) business days of the Effective Date and provide Seller with reasonable evidence thereof. Notwithstanding the foregoing or anything else to the contrary, Seller shall have the right to review a draft of the Survey in order to confirm the property lines/dimensions of the various lots that form a part of the Property and verify ownership between and amongst Seller and each Related Seller before the Survey is finalized; provided, however, that such right of review shall not constitute a right of approval by Seller and shall in no event limit Buyer’s ability to object to matters shown on the Survey in accordance with Sections 8.3 or 8.4 below.

8.3.

Buyer shall notify Seller of (i) any defects in or encumbrances upon Seller’s title to the Property (or any portion thereof) that are reflected in the Commitment and unacceptable to Buyer in Buyer’s sole discretion, and (ii) Buyer’s objections to matters shown by the Survey (collectively, “Buyer’s Title Objections”) no later than thirty (30) days following Buyer’s receipt of the last of the Commitment, all Exception Documents and the Survey. Except with respect to Mandatory Cure Items, Seller may, but is not obligated to, remove, correct, and/or satisfy Buyer’s Title Objections prior to Closing. Seller shall notify Buyer within ten (10) Business Days following receipt of Buyer’s Title Objections as to whether Seller will remove, correct, and/or satisfy each of Buyer’s Title Objections in the manner indicated (if applicable) in Buyer’s Title Objections (“Seller’s Title Response”). If in Seller’s Title Response, Seller elects to cure Buyer’s Title Objections, (a) Seller shall cure the same on or prior to Closing and (b) if requested by Buyer, keep Buyer reasonably apprised of Seller’s progress toward removing, correcting, and/or satisfying the same (and the manner in which such will be removed, corrected, and/or satisfied, provided, that Buyer shall not be obligated to accept affirmative insurance over any Buyer’s Title Objection that Seller elects to cure

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unless approved by Buyer (in Buyer’s sole discretion)). If, in Seller’s Title Response, Seller does not elect to cure Buyer’s Title Objections, or if Seller fails to timely deliver Seller’s Title Response, then in either event, Buyer may elect by written notice delivered to Seller prior to the expiration of the Inspection Period either (1) to proceed to Closing and consummate the transactions contemplated by this Agreement and each applicable Buyer’s Title Objection shall become a Permitted Exception or (2) to terminate this Agreement, whereupon this Agreement shall automatically terminate and no party will have any rights, duties, or obligations hereunder, except those specifically stated herein to survive termination of this Agreement (in this regard, if Buyer fails to timely make a written election as provided above, Buyer will be deemed to have elected option (1) above). If Seller fails to timely deliver Seller’s Title Response, Seller shall be deemed to have elected not to cure any of the Buyer’s Title Objections, except with respect to Mandatory Cure Items. If, in Seller’s Title Response, Seller elects to cure Buyer’s Title Objections but the same are not cured on or before the Closing Date, then, the same shall constitute a Seller Default (subject to applicable notice and cure periods) but, if the cost of removal of the applicable Buyer’s Title Objection can be reasonably reduced to a monetary sum, then, instead of exercising the remedies set forth in Section 17.2, Buyer may, with Seller’s prior written consent, proceed to Closing and receive a credit against the Purchase Price in an amount equal to the amount required to remove such Buyer’s Title Objection. As an alternative to Buyer exercising the Purchase Price credit remedy above, Seller may elect to extend the Closing Date for a period of up to thirty (30) days in an effort to remove or resolve any such items, provided, that (i) Seller has commenced to cure the applicable item prior to the Closing Date and is diligently prosecuting the cure to completion during such extension period; and (ii) this extension option shall run concurrent with any other extension rights of Seller under this Agreement.

8.4.

In the event that an update or modification to the Commitment or Survey obtained following the delivery to Buyer of the prior version of the Commitment or (as applicable), the prior version of the Survey, discloses any new or modified title or survey matter (including a modification in the scope of exception, requirement or coverage) that was (i) not shown on the initial Commitment or Survey (or any other updates thereto previously delivered to Buyer), and (ii) not caused by or on behalf of Buyer, Buyer may deliver written notice to Seller of the same (“Supplemental Objections”) within five (5) Business Days of Buyer’s receipt of such updated Commitment or Survey, as applicable. Thereafter, the Supplemental Objections shall be treated in the same manner as the Buyer’s Title Objections, except that Seller’s Title Response must be provided within seven (7) Business Days of Seller’s receipt of the Supplemental Objections (failing which Seller shall be deemed to have elected not to cure any such Supplemental Objections upon the expiration of said 7-Business Day period) and Buyer’s election based on such Seller’s Title Response (or deemed response) must be made within seven (7) Business Days following the giving of Seller’s Title Response or the expiration of Seller’s 7-Business Day response period if Seller does not formally respond. Notwithstanding anything contained in this Agreement to the contrary, the Closing Date shall be automatically extended to allow Seller and Buyer the full review and response times they are entitled to with respect to Supplemental Objections if the Closing Date is scheduled for a date that would occur prior to the expiration of Seller’s and Buyer’s 7-Business Day respond periods under this Section 8.4.

8.5.

For the purposes of this Agreement, the term “Permitted Exceptions” shall mean

(i) exceptions to title for the terms of the specific recorded instruments and other exceptions set forth on Schedule B of the Commitment, to which Buyer does not object within the timeframes prescribed in Sections 8.3 or 8.4 above as applicable or which become a Permitted Exception pursuant to the terms of Section 8.3, (ii) matters arising after the Effective Date that have been approved in writing by Buyer or, if applicable, that are otherwise caused by or on behalf of Buyer and (iii) Permitted Tenant Liens (as hereinafter defined). For the avoidance of doubt, Permitted Exceptions shall expressly exclude all Mandatory Cure Items.

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8.6.

Notwithstanding anything to the contrary contained herein, without the necessity of objection or request by Buyer, on or prior to Closing, Seller shall be required to cure the following items:

(i) liens and encumbrances affecting the Property which secure the payment of indebtedness of an ascertainable amount (other than the lien for taxes not yet due and payable), (ii) any mortgage, security agreement, financing statement or other similar agreement that evidences or secures indebtedness, in each case encumbering the Property, any portion thereof or Seller’s interest in and to any of the Leases, (iii) any mechanic’s or materialman’s lien with respect to work performed by or on behalf of Seller, or by or on behalf of any tenant of the Property pursuant to a Lease (if any) to the extent such lien constitutes a monetary lien encumbering the Property, provided, that, if (a) such lien results from work performed by any tenant under a Lease or any other action taken by a tenant under a Lease, (b) such tenant is not in default under its Lease (beyond the giving of any required notice and the expiration of any applicable cure period) and such Lease is in full force and effect, and (c) such Lease obligates the applicable tenant to remove such lien within a specified time period, then such lien shall not constitute a Mandatory Cure Item (a lien satisfying the conditions set forth in clauses (a) through (c) above being referred to herein as, a “Permitted Tenant Lien”), (iv) federal, state and municipal tax liens, in each case of Seller or an affiliate of Seller to the extent such tax lien encumbers the Property or any portion thereof, and (v) any encumbrance affecting the Property or portion thereof that is created or recorded by, on behalf of, or at the direction of, Seller after the Effective Date that was not approved by Buyer as required by the terms of this Agreement (collectively, the “Mandatory Cure Items” and each, a “Mandatory Cure Item”). If any Mandatory Cure Items have not been removed as of the Closing Date, Buyer may elect (A) to consummate the transaction contemplated by this Agreement without regard to such Mandatory Cure Item, in which event the Purchase Price shall be reduced by the amount of all outstanding Mandatory Cure Items that are monetary liens, or (B) treat such Mandatory Cure Item as a Seller Default (subject to applicable notice and cure periods) and exercise the remedies set forth in Section 17.2. As an alternative to Buyer exercising the remedy set forth in subsection

(A) above, Seller may extend the Closing Date for a period of up to thirty (30) days in an effort to remove or resolve any such Mandatory Cure Items; provided, that (i) Seller has commenced to cure the applicable item prior to the Closing Date and is diligently prosecuting the cure to completion during such extension period; and (ii) this extension option shall run concurrent with any other extension rights of Seller under this Agreement.

Risk of Condemnation or Casualty Pending Closing. All risk of loss to the Property remains upon Seller until the conclusion of the Closing (subject to Section 7.2, as applicable). If, prior to Closing, either (a) condemnation or eminent domain proceedings are commenced by any person or entity with the authority of eminent domain against the Property, or any part thereof, or if Seller receives written notice of any pending or threatened condemnation or eminent domain proceedings against the Property, or any part thereof (each, a “Condemnation”); or (b) the Property suffers any damage by fire, flood, or other casualty (a “Casualty”) then, in either such event, Seller shall give Buyer prompt written notice thereof accompanied by reasonable supporting documentation, including without limitation, with respect to a Condemnation, all written information provided to Seller by the authority commencing or threatening the subject Condemnation.

9.1.

With respect to any Condemnation, within fifteen (15) Business Days after such notice and supporting information is received by Buyer (provided that the Closing Date shall be automatically extended to allow Buyer such full response time if there are less than fifteen (15) Business Days between the scheduled Closing Date and the date Buyer receives notice of such Condemnation), Buyer may: (i) accept the Property and proceed to Closing subject to the Condemnation; or (ii) terminate this Agreement whereupon the parties have no right, duty, or obligation hereunder, except those specifically stated herein to survive termination of this Agreement (in this regard, if Buyer fails to timely make a written election as provided above, Buyer will be deemed to have elected option (i) above). In the event Buyer elects to proceed to Closing pursuant to subpart (i) above, at Closing, all awards related to the subject Condemnation shall be paid to Buyer (to the extent previously received by Seller) or otherwise assigned to

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Buyer, with no reduction in the Purchase Price, and at Closing, Seller will assign to Buyer all of Seller’s right, title, and interest in and to any such awards.

9.2.

With respect to any Casualty, Buyer shall remain obligated to proceed to Closing, with no reduction in the Purchase Price, and at Closing, all of Seller’s property insurance proceeds (if any) related to the subject Casualty (including any rent loss insurance proceeds (if any) related to the period after Closing) shall be paid to Buyer (to the extent previously received by Seller, but net of any actual out-of-pocket demolition and other costs and expenses reasonably incurred by Seller to the extent required under any Lease or to otherwise secure the Property in a commercially reasonable and safe manner taking into account the then current use of the applicable portion of the Property) or otherwise assigned to Buyer (subject to the requirements of the Leases, as applicable), Buyer shall receive a credit from Seller at Closing in the amount of all deductibles associated with any such insurance that have not yet been paid, and at Closing, Seller will assign to Buyer all of Seller’s right, title, and interest in and to any such insurance proceeds.

10.

Representations and Warranties of Seller; Disclaimers and Waivers. As of the Effective Date, Seller hereby represents as to the representations set forth in this Article 10. As of the Closing Date, all of such representations shall also be remade and be true and correct in all material respects as of the Closing Date (subject to permitted updates thereto pursuant to Section 13.1, as applicable); provided, that with respect to representations set forth in this Article 10 that are already subject to a materiality qualifier (i.e., Section 10.9, 10.10 or 10.11), such representations (subject to permitted updates thereto pursuant to Section 13.1, as applicable) shall be true and correct without taking into account the “in all material respects” qualifier set forth in this sentence).

10.1.

Organization; Authority. Seller is duly organized, validly existing and in good standing under the laws of the state of its organization. Seller is authorized to transact business in the state in which the Property is located. Seller has full power and authority to enter into and perform this Agreement in accordance with its terms without the necessity of obtaining any third-party approval (other than those which have been obtained by Seller) and the persons executing this Agreement on behalf of Seller have been duly authorized to do so. Seller represents that the secretary’s certificate confirming that the transaction contemplated hereunder has been authorized by the Board of Trustees of Seller’s parent company that Seller previously provided to Buyer as part of the Initial Due Diligence Materials is duly executed and delivered and true and correct in all material respects.

10.2.

No Options. Seller has not granted any unrecorded option or right of first refusal or first opportunity pursuant to which any person has the right to acquire the Property or any portion thereof and, to Seller’s knowledge, no such unrecorded option or right of first refusal or first opportunity otherwise remains in effect.

10.3.

Contract Enforceable. This Agreement resulted from an arm’s-length negotiation, has been duly executed and delivered by Seller and constitutes a legal, valid, and binding obligation of Seller, enforceable against Seller in accordance with the terms hereof, except as enforceability hereof may be limited by bankruptcy, insolvency, or reorganization laws or applicable principles of equity.

10.4.

Consents and Approvals; No Violation. Neither the execution and delivery of this Agreement by Seller nor the consummation by Seller of the transactions contemplated hereby will (i) require Seller to file or register with, notify, or obtain any permit, authorization, consent, or approval of, any governmental, quasi-governmental, or regulatory authority; (ii) breach any provisions of the organizational documents of Seller; (iii) violate or breach any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default), under any note, bond, mortgage, indenture, deed of trust, license, franchise, permit, lease, contract, agreement, covenant,

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exclusive or other instrument, commitment, or obligation to which Seller is a party, or by which Seller, the Property or any of Seller’s material assets may be bound; or (iv) violate any order, writ, injunction, decree, judgment, statute, law, or ruling of any court or governmental authority applicable to Seller, the Property or any of Seller’s material assets.

10.5.

Service Contracts. The operating, maintenance and other service contracts (collectively, the “Service Contracts”) listed on Schedule 10.5 (as the same may be updated to include Service Contracts entered into by Seller in accordance with this Agreement) are all of the operating, maintenance and service contracts and agreements to which Seller (directly or through its property manager, if any) is a party or is otherwise bound. Seller has delivered to Buyer the copies of each Service Contract in Seller’s possession or control used by Seller in connection with its operation of the Property. Seller has not received written notice from any counterparty to a Service Contract asserting any default by Seller under such Service Contract which remains unresolved or sent any written notice of default to any counterparty to a Service Contract which remains unresolved.

10.6.

Litigation. Except as disclosed on Schedule 10.6, and other than actions, suits, arbitrations, unsatisfied orders or judgments, government investigations or proceedings, in each case, covered by insurance (and for which the insurer has acknowledged coverage) and excluding any proceedings that may be initiated by Buyer with respect to Entitlements pursuant to Section 7.3, (i) there is no action, suit, arbitration, unsatisfied order or judgment, government investigation or proceeding pending against Seller which would (if adversely determined) have an adverse impact on Seller’s ability to perform its obligations under this Agreement or which adversely affects the Property and (ii) to Seller’s knowledge, no such action, suit, arbitration, unsatisfied order or judgment, or government investigation described in subsection (i) above is currently threatened in writing against Seller or the Property.

10.7.

Eminent Domain/Condemnation. No condemnation or eminent domain proceedings are now pending and Seller has not received a written threat of condemnation or eminent domain proceedings from any applicable governmental authorities with respect to the Property or any portion thereof.

10.8.

Foreign Investment and Real Property Tax Act. Seller is not a “foreign person” but is a “United States person” within the meaning of Section 1445 and 7701 of the Internal Revenue Code, Foreign Investment in Real Property Tax Act of 1980, or under any comparable state statutes that are applicable to this transaction.

10.9.

Compliance with Laws; Permitted Exceptions. Seller has not received written notice, which remains unresolved, from applicable governmental authorities of any material violations of any laws, ordinances, rules, regulations, zoning, or other legal requirements with respect to the Property, including with respect to the Americans with Disabilities Act, zoning laws, subdivision laws, building codes, fire codes, and hazardous or toxic substance or material which is regulated or controlled by applicable laws. Seller has not received written notice from any party under a Permitted Exception asserting any default by Seller under such Permitted Exception which remains unresolved or sent any written notice of default to any counterparty to such Permitted Exception which remains unresolved.

10.10.

Due Diligence Materials. To Seller’s knowledge, all of the Due Diligence Materials that have been or will be delivered or made available by Seller to Buyer in connection with the Property are the versions used by Seller (in all material respects) in the ordinary course in the operation of the Property as it relates to the subject matter thereof. To Seller’s knowledge, such Due Diligence Materials do not contain any information known by Seller to be materially false or materially misleading.

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10.11.

Leases; Possessory Rights. As of the Effective Date, Seller is not party to any Leases. If, as of the Closing Date Seller has entered into any Leases in accordance with the terms of this Agreement, then, the following representations and warranties shall be made by Seller with respect to all such Leases in effect on the Closing Date: The Leases listed on the Lease Schedule are all of the Leases to which Seller is a party or otherwise bound, relating to the Property. Seller has delivered to Buyer the true, correct and complete (in all material respects) copies of the Leases. To Seller’s knowledge, Seller has no obligation to perform any work or pay any allowance under the Leases which has not yet been performed or paid, other than customary maintenance and repair obligations on the part of landlord to be performed in accordance with the applicable Lease. Seller has not received written notice from any tenant under a Lease asserting any default by Seller under such Lease which remains unresolved or sent any written notice of default to any tenant under a Lease which remains unresolved. There are no leasing commissions or fees payable with respect to any Leases for which Seller is liable that have not been paid in full (such that any such commission or fee could become due or payable after the Closing). Subject to the possessory rights under the Leases, Permitted Exceptions and Service Contracts (as applicable), to Seller’s knowledge, there are no other parties in possession of the Property or of any part thereof except Seller, and subject to the foregoing, no other party has been granted any license, lease, sublease or other right relating to the use or possession of the Property by, through or under Seller. Seller has not consented to any sublease of any Lease which is currently in effect.

10.12.

ERISA. Seller (a) has never maintained any “employee benefit plan” (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)), (b) has never maintained a “plan” (within the meaning of Section 4975 of the Code) or (c) is not entity whose underlying assets include “plan assets” (within the meaning of 29 C.F.R. Section 2510-101, as modified by Section 3(42) of ERISA) by reason of a plan’s investment in such entity.

10.13.

Employees. Seller does not employ any employees with respect to the Property.

10.14.

Tax Assessments. Except as may be included in the Initial Due Diligence Materials, Seller has not received notice of any contemplated or actual special tax assessments affecting the Property. There are no pending tax contest proceedings with respect to the Property.

10.15.

Bankruptcy. Seller has not (i) made a general assignment for the benefit of creditors, (ii) filed any voluntary petition in bankruptcy or suffered the filing of any involuntary petition,

(iii)

suffered the appointment of a receiver to take possession of all or substantially all of Seller’s assets, or

(iv)

suffered the attachment or other judicial seizure of any of Seller’s assets.

10.16.

Anti-Money Laundering, Sanctions, Anti-Corruption. Neither Seller nor, to Seller’s knowledge, any of its beneficial owners is a target of any economic, trade, or financial sanctions, sectoral sanctions, secondary sanctions, trade embargoes, or anti-terrorism laws imposed from time to time by the governments of the United States, Canada, and the European Union, including but not limited to those administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”). Seller and, to Seller’s knowledge, each of its beneficial owners is in compliance with all applicable anti-money laundering and anti-terrorist laws, regulations, rules, executive orders and government guidance imposed from time to time by the governments of the United States, Canada, and the European Union, including the reporting, record keeping and compliance requirements of the Bank Secrecy Act (“BSA”), as amended by The International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001, Title III of the USA PATRIOT Act (the “Patriot Act”), and other authorizing statutes, executive orders and regulations administered by OFAC, and related Securities and Exchange Commission, SRO or other agency rules and regulations. Neither Seller nor, to Seller’s knowledge, any of its beneficial owners is a person or entity with whom Buyer is restricted from doing business with under the Patriot Act and regulations promulgated pursuant thereto, including without limitation persons and entities named on

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the OFAC Specially Designated Nationals and Blocked Persons List. Notwithstanding the foregoing, the “beneficial owners” for purposes of this Section 10.16 shall exclude the holders of any publicly traded securities.

10.17.

TIF Districts. The Property constitutes part of a tax increment financing reinvestment zone pursuant to that certain (a) Ordinance No. 29340, authorized by the Dallas City Council on May 14, 2014, designating Tax Increment Financing Reinvestment Zone Number Twenty (Mall Area Redevelopment TIF District) pursuant to Chapter 311 of the Texas Tax Code, and (b) the Project Plan and Reinvestment Zone Financing Plan authorized by Resolution No. 15-1145 and Ordinance No. 29771 on June 17, 2015 (collectively, the “TIF District”). Seller is not party to any specific agreements granting tax increment financing or other economic incentives to Seller with respect to the Property.

10.18.

Survival of Seller’s Representations and Warranties. The representations and warranties of Seller set forth in this Agreement (subject to permitted updates thereto pursuant to Section 13.1, as applicable) shall survive Closing for a period of nine (9) months (as applicable, the “Survival Period”); except that for purposes of the Fundamental Representations (defined below) the Survival Period shall be a period of twelve (12) months following the Closing Date. No claim by Buyer for a breach of any representation or warranty of Seller shall be actionable or payable following Closing if the breach in question results from a condition, state of facts or other matter of which Buyer has knowledge prior to Closing (in this regard, Buyer shall be deemed to have knowledge of all Initial Due Diligence Materials and any Additional Due Diligence Materials delivered to Buyer by Seller following Buyer’s written request therefor in accordance with Section 7.1). In addition, no claim for a breach of any representation or warranty of Seller shall be actionable or payable following the Closing Date unless: (a) the claims for all such breaches collectively aggregate $10,575 or more, in which event the full amount of such claims shall be actionable; (b) written notice containing a description of such breach shall have been given by Buyer to Seller prior to the expiration of the Survival Period (a “Claim Notice”); and (c) Buyer commences a litigation action with respect to the applicable Claim Notice within forty-five (45) days following the giving of the applicable Claim Notice. For the avoidance of doubt, the representations and warranties of Seller set forth in this Agreement shall survive Closing solely for the duration of the Survival Period, subject to Buyer’s right to provide a Claim Notice and commence a litigation action as described above, even if such litigation action continues beyond the Survival Period. Notwithstanding the foregoing or anything else to the contrary, in no event shall Seller be liable to Buyer for breaches of any representations or warranties made by Seller in excess of an aggregate amount equal to 2.25% of the Purchase Price (the “Liability Cap”). For the avoidance of doubt, in no event shall the Liability Cap apply to: (i) claims to the extent arising from the fraud of Seller or any of Seller’s affiliates, officers, directors, members, or employees, (ii) prorations and adjustments under Section 5 above, (iii) brokerage commissions payable under Section 20,

(iv) attorneys’ fees or other enforcement amounts payable under Section 22.12 (as distinguishable from any other judgment, settlement or award payable under Section 22.12), or (v) any indemnification obligations of Seller under this Agreement that expressly survive Closing. The foregoing provision shall survive the Closing. For purposes of this Agreement, “Fundamental Representations” shall mean the representations and warranties of Seller set forth in Sections 10.1, 10.2, 10.3, 10.4, 10.6, 10.8 and 10.16.

10.18.1.

Intentionally Omitted.

10.19.

Seller’s Knowledge. Whenever the phrases “to Seller’s knowledge” or any similar phrase is used herein, those phrases mean the actual knowledge, without any obligation to inquire or investigate, of Eric Dinenberg (the “Seller Knowledge Party”). Seller Knowledge Party is the person or persons affiliated with Seller that is highly familiar with the subject matter of the representations and warranties of Seller set forth in this Agreement that are qualified by Seller’s knowledge or words of similar import. Notwithstanding the foregoing or anything else to the contrary, the representations and warranties contained in Section 10 (and, as applicable, elsewhere in this Agreement) are the representations and

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warranties of Seller and in no event or circumstances will be construed as either the individual representations and warranties of Seller Knowledge Party or to create any individual or other personal liability for Seller Knowledge Party.

10.20.

WAIVER AND RELEASE. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, IT IS UNDERSTOOD AND AGREED THAT SELLER IS NOT MAKING AND HAS NOT AT ANY TIME MADE ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESSED OR IMPLIED, WITH RESPECT TO THE PROPERTY, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OR REPRESENTATIONS AS TO HABITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE (OTHER THAN SELLER'S LIMITED WARRANTY OF TITLE TO BE SET FORTH IN THE DEED), ZONING, TAX CONSEQUENCES, LATENT OR PATENT PHYSICAL OR ENVIRONMENTAL CONDITION, UTILITIES, OPERATING HISTORY OR PROJECTIONS, VALUATION, GOVERNMENTAL APPROVALS, OR ANY OTHER MATTER OR THING REGARDING THE PROPERTY. BUYER ACKNOWLEDGES AND AGREES THAT UPON CLOSING SELLER SHALL SELL AND CONVEY TO BUYER AND BUYER SHALL ACCEPT THE PROPERTY "AS IS, WHERE IS, WITH ALL FAULTS", EXCEPT TO THE EXTENT EXPRESSLY PROVIDED OTHERWISE IN THIS AGREEMENT OR ANY INSTRUMENT DELIVERED BY SELLER AT CLOSING. BUYER HAS NOT RELIED AND WILL NOT RELY ON, AND SELLER IS NOT LIABLE FOR OR BOUND BY, ANY EXPRESSED OR IMPLIED WARRANTIES, GUARANTIES, STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY OR RELATING THERETO (INCLUDING SPECIFICALLY, WITHOUT LIMITATION, PROPERTY INFORMATION PACKAGES DISTRIBUTED WITH RESPECT TO THE PROPERTY) MADE OR FURNISHED BY SELLER, THE MANAGER OF THE PROPERTY, OR ANY REAL ESTATE BROKER OR AGENT REPRESENTING OR PURPORTING TO REPRESENT SELLER, TO WHOMEVER MADE OR GIVEN, DIRECTLY OR INDIRECTLY, ORALLY OR IN WRITING, UNLESS SPECIFICALLY SET FORTH IN THIS AGREEMENT OR ANY INSTRUMENT DELIVERED BY SELLER AT CLOSING. BUYER REPRESENTS TO SELLER THAT BUYER HAS CONDUCTED, OR WILL CONDUCT PRIOR TO CLOSING, SUCH INVESTIGATIONS OF THE PROPERTY, INCLUDING BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF, AS BUYER DEEMS NECESSARY TO SATISFY ITSELF AS TO THE CONDITION OF THE PROPERTY AND THE EXISTENCE OR NONEXISTENCE OR CURATIVE ACTION TO BE TAKEN WITH RESPECT TO ANY HAZARDOUS OR TOXIC SUBSTANCES ON OR DISCHARGED FROM THE PROPERTY, AND WILL RELY SOLELY UPON SAME AND NOT UPON ANY INFORMATION PROVIDED BY OR ON BEHALF OF SELLER OR ITS AGENTS OR EMPLOYEES WITH RESPECT THERETO, OTHER THAN SUCH REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AS ARE EXPRESSLY SET FORTH IN THIS AGREEMENT OR ANY INSTRUMENT DELIVERED BY SELLER AT CLOSING. UPON CLOSING, BUYER ACKNOWLEDGES THE RISK THAT ADVERSE MATTERS, INCLUDING BUT NOT LIMITED TO, CONSTRUCTION DEFECTS AND ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY BUYER'S INVESTIGATIONS, AND BUYER, UPON CLOSING, SHALL BE DEEMED TO HAVE WAIVED, RELINQUISHED AND RELEASED SELLER (AND SELLER'S OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS) FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION, LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING ATTORNEYS' FEES AND COURT COSTS) OF ANY AND EVERY KIND OR CHARACTER, KNOWN OR UNKNOWN, WHICH BUYER MIGHT HAVE ASSERTED OR ALLEGED AGAINST SELLER (AND SELLER'S OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS) AT ANY TIME BY REASON OF OR ARISING OUT OF ANY LATENT OR PATENT CONSTRUCTION DEFECTS OR PHYSICAL CONDITIONS, VIOLATIONS OF ANY APPLICABLE LAWS (INCLUDING, WITHOUT LIMITATION, ANY ENVIRONMENTAL LAWS) AND ANY AND ALL OTHER ACTS, OMISSIONS, EVENTS, CIRCUMSTANCES OR MATTERS REGARDING THE

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PROPERTY, IN EACH CASE OTHER THAN (COLLECTIVELY, THE “EXCLUDED CLAIMS”) (i) CLAIMS TO THE EXTENT ARISING FROM MATTERS SPECIFICALLY SET FORTH IN AND THUS SUBJECT TO THIS AGREEMENT OR ANY INSTRUMENT DELIVERED BY SELLER AT CLOSING,

(ii)

CLAIMS TO THE EXTENT ARISING FROM THE FRAUD OF SELLER, RELATED SELLER OR ANY OF SELLER’S OR RELATED SELLER’S AFFILIATES, OFFICERS, DIRECTORS, MEMBERS OR EMPLOYEES. BUYER AGREES THAT SHOULD ANY CLEANUP, REMEDIATION OR REMOVAL OF HAZARDOUS SUBSTANCES OR OTHER ENVIRONMENTAL CONDITIONS ON THE PROPERTY BE REQUIRED AFTER THE DATE OF CLOSING, UNLESS OTHERWISE SPECIFICALLY SET FORTH IN THIS AGREEMENT OR ANY INSTRUMENT DELIVERED BY SELLER AT CLOSING, BUYER SHALL HAVE NO RIGHT TO REQUIRE SELLER TO PERFORM, AND SELLER SHALL HAVE NO OBLIGATION TO PERFORM SUCH CLEAN-UP, REMOVAL OR REMEDIATION FOLLOWING THE CLSOING DATE. AS PART OF THE PROVISIONS OF THIS SECTION 10.20, BUT NOT AS A LIMITATION THEREON, BUYER HEREBY AGREES, REPRESENTS AND WARRANTS THAT THE MATTERS RELEASED HEREIN ARE NOT LIMITED TO MATTERS WHICH ARE KNOWN OR DISCLOSED, AND BUYER HEREBY WAIVES ANY AND ALL RIGHTS AND BENEFITS WHICH IT NOW HAS, OR IN THE FUTURE MAY HAVE CONFERRED UPON IT, BY VIRTUE OF THE PROVISIONS OF FEDERAL, STATE OR LOCAL LAW, RULES OR REGULATIONS, OTHER THAN WITH RESPECT TO THE EXCLUDED CLAIMS. SELLER AND BUYER ACKNOWLEDGE AND AGREE THAT THE COMPENSATION TO BE PAID TO SELLER FOR THE PROPERTY WAS NEGOTIATED TAKING INTO ACCOUNT THAT THE PROPERTY IS BEING SOLD SUBJECT TO THE TERMS AND PROVISIONS OF THIS SECTION

10.20. SELLER AND BUYER AGREE THAT THE TERMS AND PROVISIONS OF THIS SECTION

10.20 SHALL SURVIVE CLOSING.

11.

Covenants of Seller.

11.1.

Seller Obligations Prior to Closing. During the period commencing on the Effective Date and ending on the Closing Date, Seller shall:

11.1.1.

Not enter into any new agreement or contract (including any Lease) that would be binding upon Buyer or the Property or any portion thereof without the written consent of Buyer in each instance, which may be given or withheld in Buyer’s sole discretion. Notwithstanding the foregoing or anything else to the contrary:

11.1.1.1.

Seller is entitled to terminate or amend any existing Service Contract in its discretion, provided no such amendment shall extend the then-current term of the applicable Service Contract beyond the Closing Date unless the same is on commercially reasonable terms, is consistent with Seller’s ordinary course of business and is otherwise terminable upon no more than thirty

(30) days’ notice without penalty or fee;

11.1.1.2.

Seller is entitled to enter into any new Service Contract in its discretion consistent with Seller’s ordinary course of business, provided, that if the term of such new Service Contract may extend beyond the Closing Date, such Service Contract must be on commercially reasonable terms and be terminable upon no more than thirty (30) days’ notice without penalty or fee;

11.1.1.3.

Seller may enter into Leases that constitute short-term license agreements permitting temporary events (such as carnivals, amusement parks, circuses, holiday events, concerts or similar uses or other temporary uses in Seller’s reasonable discretion) on vacant portions of the Property; provided, that (a) no such license shall grant any leasehold or other possessory interest in the Property (other than the license interest itself), (b) any such license shall require the licensee to comply with all applicable legal requirements and carry commercially reasonable insurance, and (c) if the term of

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such license will extend past June 1, 2027 (taking into account all extensions or other options, even if the exercise thereof is at the discretion of one or both parties to such license), then such license shall be subject to Buyer’s prior written approval, not to be unreasonably withheld, conditioned or delayed. For the avoidance of doubt, any license entered into in accordance with this Section 11.1.1.3 shall constitute a Lease for all purposes under this Agreement;

11.1.1.4.

Seller may terminate the Leases and/or the possessory rights thereunder and otherwise enforce the Leases in Seller’s discretion consistent with Seller’s ordinary course of business (including if due to a tenant or licensee default thereunder); and

11.1.1.5.

Intentionally Deleted.

Seller agrees to keep Buyer reasonably apprised with respect to the matters described in this Section 11.1.1.

11.1.2.

(i) not create, incur or suffer to exist any mortgage, deed of trust, lien, pledge or other encumbrance arising by, through or Seller in any way affecting any portion of the Property that will survive the Closing (subject to the other applicable terms and provisions of this Agreement); as a point of clarity, and notwithstanding anything to the contrary, between the Effective Date and Closing, Seller is entitled to refinance existing debt (including mortgage debt) and/or procure new debt (including mortgage debt), so long as any lien related to any such debt (to the extent affecting the Property) is released on or before Closing and, provided, that the parties agree that any such refinancing or new debt (to the extent affecting the Property) is deemed to be a Mandatory Cure Item and (ii) not consent to any tenant under any Lease recording or placing of record any leasehold mortgage, deed of trust, lien, pledge or other encumbrance in any way affecting any portion of the Property and, if any such tenant records any of the foregoing in violation of such tenant’s lease, use commercially reasonable efforts to cause such tenant to remove all such items placed of record under the Lease, which commercially reasonable efforts shall include declaring a default under the Lease and pursuing appropriate remedies permitted under the Lease as a result thereof as reasonably determined by Seller in consultation with Buyer. For the avoidance of doubt, nothing in this Section 11.1.2 shall limit Buyer’s rights to object to title exceptions under Sections 8.3 and 8.4 or Seller’s obligations with respect to Mandatory Cure Items;

11.1.3.

Not modify the zoning for the Property without the prior written consent of Buyer, which may be given or withheld in Buyer’s sole discretion (subject to Section 7.3, as applicable) and not materially change the physical condition of the Property from the condition existing on the Effective Date without Buyer’s prior written consent, which may be given or withheld in Buyer’s sole discretion;

11.1.4.

Operate the Property and maintain insurance thereon in substantial accordance with past practice in effect prior to the Effective Date, reasonable wear and tear excepted; and

11.1.5.

Furnish to Buyer copies of any written notice, claim, or demand received by Seller during the pendency of this Agreement that would materially change any representation given by Seller herein.

11.2.

Service Contracts. No later than the expiration of the Inspection Period, Buyer will advise Seller in writing which Service Contracts Buyer elects to assume at Closing and which Service Contracts Buyer requires to be terminated at Closing (in this regard, if Buyer fails to provide such notice, Buyer shall be deemed to have assumed all Service Contracts). Seller shall deliver notices of termination of all Service Contracts that are not so assumed so that the same are terminated on or before the Closing Date. Notwithstanding the foregoing, in no event shall Buyer have the right to assume any Service Contracts that automatically terminate in connection with a sale of the Property and Seller shall terminate effective as

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of the Closing Date all Service Contracts with any affiliate of Seller or Related Seller (even if Buyer does not elect to assume the same).

11.3.

Management and Leasing Agreements. Notwithstanding any term of this Agreement to the contrary, on or before the Closing, Seller shall cause any existing property management and/or leasing agreements to which Seller is a party or otherwise bound that affect the Property, to be terminated.

11.4.

Exclusivity. From the Effective Date until the Closing Date (or earlier termination of this Agreement) Seller (on behalf of itself and its partners, officers, directors and members) agrees that it will not and will not knowingly permit any of its brokers, finders or representatives to, actively entertain, solicit or enter into any other offers, agreements or negotiations for or with respect to the sale or the granting of rights to purchase the Property (or any interest therein), or for any sale or joint venture pertaining to the Property; provided, however, that Seller shall not be deemed to be in breach of this Section 11.4 solely as a result of (i) receiving unsolicited communications from third parties (including brokers) regarding the Property as long as Seller does not engage in substantive negotiations in response to any such unsolicited communications and promptly notifies such party that the Property is under contract, (ii) the sales of any publicly traded shares of any direct or indirect owners of Seller, (iii) the sale of equity interests in a direct or indirect owner of Seller, provided, that, with respect to this clause (iii), (a) the sale also involves interests in real property other than the Property, (b) the sale is for a valid business purpose and is not designed with the intent to circumvent the restrictions of this Section 11.4 and (c) the purchaser of such equity interests shall remain bound to cause Seller to comply with the terms of this Agreement and, upon request by Buyer, such purchaser shall execute an acknowledgement confirming the same.

11.5.

Updated Information. Between the Effective Date and the Closing Date, Seller shall, promptly following receipt thereof by Seller (or its affiliates or property manager) following the Effective Date, deliver to Buyer copies of all of the following: (i) written notices of any of the types of matters described in Section 10.6, written notices of violations issued by any applicable governmental authority (including violations of environmental laws) with respect to Seller, Related Seller, the Property and/or the Related Property, and any other written notices that are reasonably likely to impact the Entitlements and/or Buyer’s operation or ownership and/or the development of the Property or the Related Property following Closing, (ii) all new Service Contracts, Leases and Permitted Exceptions entered into by Seller or any amendments or modifications thereof, and (iii) except to the extent that any of the following items are delivered to Seller by or on behalf of Buyer, material written communications pertaining to the Project or the Entitlements, including, without limitation, material written correspondence from the City of Dallas, any neighbors or stakeholders in the area where the Property is located, etc.

12.

Representations and Warranties of Buyer. As of the Effective Date, Buyer hereby warrants and represents to Seller as follows:

12.1.

Organization; Authority. Buyer is an entity which is duly organized, validly existing and in good standing under the laws of the state of its organization. Buyer is authorized to transact business in the state in which the Property is located. Buyer has full power and authority to enter into and perform this Agreement in accordance with its terms without the necessity of obtaining any third-party approval (other than those which have been obtained by Buyer), and the persons executing this Agreement on behalf of Buyer have been duly authorized to do so. Buyer represents that the organizational chart and the redacted organizational documents of Buyer (establishing purpose and authority to approve and consummate the transactions contemplated hereunder) that Buyer previously provided to Seller prior to the Effective Date are true and correct in all material respects.

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12.2.

Contract Enforceable. This Agreement resulted from an arm’s-length negotiation, has been duly executed and delivered by Buyer and constitutes a legal, valid, and binding obligation of Buyer, enforceable against Buyer in accordance with the terms hereof, except as enforceability hereof may be limited by bankruptcy, insolvency, or reorganization laws or applicable principles of equity.

12.3.

Consents and Approvals; No Violation. Neither the execution and delivery of this Agreement by Buyer nor the consummation by Buyer of the transactions contemplated hereby will (i) require Buyer to file or register with, notify, or obtain any permit, authorization, consent, or approval of, any governmental, quasi-governmental, or regulatory authority (subject to Section 7.3, as applicable); (ii) breach any provisions of the organizational documents of Buyer; (iii) violate or breach any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default), under any note, bond, mortgage, indenture, deed of trust, license, franchise, permit, lease, contract, agreement, covenant, exclusive or other instrument, commitment, or obligation to which Buyer is a party, or by which Buyer or any of Buyer’s material assets may be bound; or (iv) violate any order, writ, injunction, decree, judgment, statute, law, or ruling of any court or governmental authority applicable to Buyer, or to Buyer’s knowledge, any of Buyer’s material assets.

12.4.

Litigation. There is no action, suit, arbitration, unsatisfied order or judgment, government investigation or proceeding pending against Buyer and, to Buyer’s knowledge, no action, suit, arbitration, unsatisfied order or judgment, or government investigation is currently threatened in writing against Buyer, which, in either case, if adversely determined, would have an adverse impact on the ability of Buyer to perform Buyer’s obligations under this Agreement.

12.5.

Foreign Person and Anti- Money Laundering, Sanctions, Anti-Corruption. Buyer is not a “foreign person” or “foreign corporation” or a “disregarded entity” all as those terms are defined in the internal revenue code, and the regulations promulgated thereunder. Neither Buyer nor, to Buyer’s knowledge, any of its beneficial owners is a target of any economic, trade, or financial sanctions, sectoral sanctions, secondary sanctions, trade embargoes, or anti-terrorism laws imposed from time to time by the governments of the United States, Canada, and the European Union, including but not limited to those administered or enforced by the OFAC. Buyer and, to Buyer’s knowledge, each of its beneficial owners is in compliance with all applicable anti-money laundering and anti-terrorist laws, regulations, rules, executive orders and government guidance imposed from time to time by the governments of the United States, Canada, and the European Union, including the reporting, record keeping and compliance requirements of the BSA, as amended by the Patriot Act, and other authorizing statutes, executive orders and regulations administered by OFAC, and related Securities and Exchange Commission, SRO or other agency rules and regulations. Neither Buyer nor, to Buyer’s knowledge, any of its beneficial owners is (and they will not be), a person or entity with whom Seller is restricted from doing business with under the Patriot Act and regulations promulgated pursuant thereto, including without limitation persons and entities named on the OFAC Specially Designated Nationals and Blocked Persons List.

12.6.

Bankruptcy. Buyer has not (i) made a general assignment for the benefit of creditors, (ii) filed any voluntary petition in bankruptcy or suffered the filing of any involuntary petition,

(iii)

suffered the appointment of a receiver to take possession of all or substantially all of Buyer’s assets, or

(iv)

suffered the attachment or other judicial seizure of any of Buyer’s assets.

12.7.

Buyer’s Knowledge. Whenever the phrases “to Buyer’s knowledge” or any similar phrase is used herein, those phrases mean the actual knowledge of Steve Garfinkel (“Buyer Knowledge Party”). The Buyer Knowledge Party is the person or persons affiliated with Buyer that is highly familiar with the subject matter of the representations and warranties of Buyer set forth in this Agreement that are qualified by Buyer’s knowledge or words of similar import. Notwithstanding the foregoing or anything else to the contrary, the representations and warranties contained in Section 12 (and,

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as applicable, elsewhere in this Agreement) are the representations and warranties of Buyer and in no event or circumstances will be construed as either the individual representations and warranties of Buyer Knowledge Party or to create any individual or other personal liability for Buyer Knowledge Party.

13.

Conditions Precedent

13.1.

Conditions Precedent to Buyer’s Obligations. The obligations of Buyer under this Agreement are subject to satisfaction or written waiver by Buyer of each of the following conditions or requirements on or before the Closing Date:

13.1.1.

Seller’s warranties and representations under this Agreement are true and correct as of the Effective Date and true and correct in all material respects as of the Closing Date; provided, that, if, as of the Closing Date, any of Seller’s representations or warranties is not true and correct in all material respects (a “Rep Breach”), then, such Rep Breach shall only constitute a failure of Buyer’s condition to Closing set forth in this Section 13.1.1 and shall not constitute a breach or Seller Default under this Agreement (any such Rep Breach, an “FC Rep Change”) if such Rep Breach (i) occurs by virtue of the passage of time and (ii) does not arise from the acts or omissions (where there is a duty to act) of Seller. Notwithstanding the foregoing, if, as of the Closing Date, Seller modifies its representations and warranties under this Agreement to reflect (a) any state of facts approved or consented to by Buyer (in writing) during the term of this Agreement, (b) a Condemnation disclosed to Buyer in accordance with Section 9 (including any for which Buyer waived its termination right, or did not have a termination right, under Section 9.1),

(c) a tax contest proceeding commenced by Seller in the ordinary course of business, or (d) any action taken by Seller that is expressly permitted pursuant to the terms of this Agreement, none of the changes described in clauses (a) through (d) above shall constitute a Rep Breach;

13.1.2.

Seller is not in Seller Default hereunder beyond applicable notice and cure periods hereunder and Related Seller is not in “Seller Default” (as defined in the Related Agreement) beyond applicable notice and cure periods under the Related Agreement;

13.1.3.

the obligations of Seller contained in this Agreement have been performed in all material respects;

13.1.4.

Escrow Agent has confirmed in writing that it is unconditionally (except payment of the applicable premium to be paid at Closing), prepared to issue an owner’s title policy of insurance to Buyer in the amount of the Purchase Price, subject only to the Permitted Exceptions, and including such endorsements and expanded coverage (the costs of which are to be paid by Buyer) that the Escrow Agent confirmed during the Inspection Period was available for issuance in a final title policy based on the Commitment (the “Title Policy”); and

13.1.5.

Seller shall deliver to Buyer, at least five (5) Business Days prior to the Closing Date, a duly executed and acknowledged estoppel certificate, in a form reasonably approved by Buyer, from each of the tenants or licensees of the Property that are party to a Lease that will be in effect on the Closing Date (collectively, the “Tenant Estoppel Certificates”), dated no more than forty-five (45) days prior to the Closing Date and disclosing no information that conflicts (in any material and adverse respect) with the applicable Lease or any representation or warranty of Seller set forth in this Agreement. Buyer shall provide Seller with a completed draft of each Tenant Estoppel Certificate prior to Seller transmitting such draft to such tenant for Seller’s reasonable review and approval. Seller shall deliver to Buyer copies of the signed Tenant Estoppel Certificates, or any comments to the same received from the tenants, promptly following Seller’s receipt thereof. Buyer shall respond promptly to each of the foregoing requests. As a point of clarity, and notwithstanding anything to the contrary, if Seller fails to procure any of the Tenant Estoppel Certificates and Seller otherwise used commercially reasonable efforts to obtain such

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Tenant Estoppel Certificates, Seller shall not in any way be deemed to be in breach or Seller Default under this Agreement but the same shall constitute a failure of condition under this Section 13.1.5. Notwithstanding anything contained in this Agreement to the contrary, if Seller delivers to Buyer a fully executed Tenant Estoppel Certificate that complies with all requirements set forth in this Section 13.1.5 and which attaches a full copy of the applicable Lease to such fully executed Tenant Estoppel Certificate, then Seller shall not have liability for the representation of Seller set forth in the second sentence of Section

10.11 with respect to such Lease (and only such Lease).

13.1.6.

All conditions precedent to Buyer’s obligation to close under the Related Agreement are fully satisfied or have been waived by Buyer (in writing).

13.2.

Conditions Precedent to Seller’s Obligations. The obligations of Seller under this Agreement are subject to satisfaction or written waiver by Seller of each of the following conditions or requirements on or before the Closing Date: (i) Buyer’s warranties and representations under this Agreement are true and correct as of the Effective Date and true and correct in all material respects at Closing (subject to updates thereto which may be made in the ordinary course through no intentional fault on the part of Buyer, for which updates Buyer shall have no liability to Seller with respect thereto or otherwise be in default hereunder); in this regard, Buyer shall promptly notify Seller of any such updates upon Buyer being made aware thereof); (ii) Buyer is not in Buyer Default hereunder beyond applicable notice and cure periods; (iii) the obligations of Buyer contained in this Agreement have been performed in all material respects; and (iv) all conditions precedent to Related Seller’s obligation to close under the Related Agreement are fully satisfied or have been waived by Related Seller (in writing).

13.3.

Effect of Failure of Condition Precedent. So long as a party is not in Seller Default or Buyer Default, as applicable, hereunder beyond applicable notice and cure periods, if any condition to such party's obligation to proceed with the Closing hereunder has not been satisfied as of the Closing Date, then subject to any applicable notice and cure periods provided in Section 17.1 and Section 17.2, the party benefited by such condition shall, in its sole discretion, either (i) terminate this Agreement by delivering written notice to the other party on or before the Closing Date (as the Closing Date may be extended as provided below) or such earlier date as is provided herein, provided, that the Related Agreement must also be terminated simultaneously or (ii) elect to close notwithstanding the non-satisfaction of such condition, in which event of an election to close such party shall be deemed to have waived any such condition, provided, that an election to waive and proceed to closing shall only be permitted if the closing will simultaneously occur under the Related Agreement. If such party elects to terminate this Agreement, then this Agreement shall terminate, and neither party shall have any further obligations hereunder, other than those obligations that expressly survive the termination of this Agreement; provided that if such unsatisfied condition arises from a Seller Default or Buyer Default, as applicable, by non-terminating party, then subject to any applicable notice and cure periods provided in Section 17.1 and Section 17.2, the terminating party shall have the right to exercise any additional or alternative remedies available with respect to the subject Seller Default or Buyer Default, as applicable, to the extent specifically set forth in Section 17.1 or Section 17.2, as applicable.

14.

Closing. The closing (the “Closing”) of the transactions contemplated by this Agreement will occur through an escrow established at the offices of Escrow Agent not later than 4:00 p.m. CST on the Closing Date. The date of Closing will be the Closing Date set forth in the Key Terms Summary. TIME SHALL BE OF THE ESSENCE with respect to each party’s obligation to consummate the Closing on the Closing Date, as the same may be extended pursuant to any express provision of this Agreement. Notwithstanding anything contained in this Agreement to the contrary, the obligations of Seller and Buyer to consummate the Closing under this Agreement are expressly conditioned upon the simultaneous consummation of the closing under the Related Agreement, and no party shall be obligated to consummate the Closing, and neither Escrow Agent nor Funding Agent shall release any documents or funds with respect

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to the Closing, unless the closing under the Related Agreement occurs concurrently with the Closing under this Agreement.

15.

Possession. Seller shall deliver possession of the Property to Buyer at Closing (subject to the other applicable terms and provisions of this Agreement, including the Leases, the Service Contracts not required to be terminated on or before the Closing Date and the Permitted Exceptions, as applicable).

16.

Closing Documents.

16.1.

Seller Closing Deliverables. At or prior to Closing, Seller shall deliver to Escrow Agent the following documents, to be released and (as applicable) recorded by Escrow Agent upon Closing:

16.1.1.

The duly executed and acknowledged Deed in the form attached hereto

as Exhibit C;

16.1.2.

A duly executed counterpart of the Assignment of Service Contracts (to the extent Buyer has elected to assume the same or is otherwise required to assume the same pursuant to this Agreement), in the form attached hereto as Exhibit D (the “Assignment of Contracts”);

16.1.3.

A duly executed counterpart of the Assignment and Assumption of Leases, in the form attached hereto as Exhibit E (the “Assignment of Leases”), if any Leases are in effect on the Closing Date;

16.1.4.

A duly executed counterpart of the Assignment of Intangible Property in the form attached hereto as Exhibit F (the “Assignment of Intangibles”);

16.1.5.

A duly executed counterpart of the Bill of Sale in the form attached hereto as Exhibit G (the “Bill of Sale”);

16.1.6.

A notice to each party to each Service Contract (to the extent Buyer has elected to assume the same or is otherwise required to assume the same pursuant to this Agreement), in the form attached hereto as Exhibit H (each, a “Vendor Notice”), to be sent to all applicable recipients by Buyer following Closing;

16.1.7.

A notice to each tenant under the Leases, in the form attached hereto as Exhibit I (each, a “Tenant Notice”), to be sent to all applicable recipients by Buyer following Closing, if any Leases are in effect on the Closing Date;

16.1.8.

All owner’s affidavits or certificates, corporate authorizations, evidence of Seller’s capacity and authority for the Closing and other documents in form and scope required by the Escrow Agent to deliver title insurance in accordance with Section 13.1(iii) above or otherwise to effectuate Closing (provided the same are otherwise in form and substance reasonably acceptable to Seller);

16.1.9.

A completed and executed IRS Form W-9 or FIRPTA affidavit for Seller;

16.1.10.

A duly executed counterpart of the Settlement Statement;

16.1.11.

Intentionally Omitted;

16.1.12.

An updated rent roll dated within three (3) Business Days prior to the Closing Date, if any Leases are in effect on the Closing Date; and

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16.1.13.

On the Closing Date, Seller shall deliver to Buyer or make available at the Property, as applicable, a set of keys and/or access cards to the Property, together with, as applicable, any security or other codes necessary to access the Property or any part thereof.

16.2.

Buyer Closing Deliverables. At or prior to Closing, Buyer shall deliver (i) solely with respect to Section 16.2.1, to Funding Agent the funds required under such Section and (ii) with respect to all other subsections of this Section 16.2, to Escrow Agent the following documents and deliverables required thereunder, to be released and (as applicable) recorded by Funding Agent or Escrow Agent (as applicable) upon Closing

16.2.1.

Wire transfer of immediately available federal funds in the amount required under Section 4;

16.2.2.

A duly executed counterpart of the Assignment of Contracts;

16.2.3.

A duly executed counterpart of the Assignment of Leases, if any Leases are in effect on the Closing Date;

16.2.4.

A duly executed counterpart of the Assignment of Intangibles;

16.2.5.

A duly executed counterpart of the Bill of Sale

16.2.6.

A duly executed counterpart of each Vendor Notice;

16.2.7.

A duly executed counterpart of each Tenant Notice, if any Leases are in effect on the Closing Date;

16.2.8.

A duly executed counterpart of the Settlement Statement;

16.2.9.

Intentionally Omitted; and

16.2.10.

All affidavits or certificates, corporate authorizations, evidence of Buyer’s capacity and authority for the Closing and other documents in form and scope required by the Escrow Agent to deliver the Title Policy or otherwise to effectuate Closing (provided the same are otherwise in form and substance reasonably acceptable to Buyer).

17.

Breach, Termination, and Expiration.

17.1.

Breach by Buyer. If Buyer (i) defaults in its obligation to pay the Purchase Price at Closing, consummate the Closing or perform any of its other obligations to be performed on the Closing Date as required by this Agreement and such default is not cured within five (5) days following Buyer’s receipt of written notice from Seller of such default, (ii) Buyer fails to fund any Deposit as and when the same is required to be funded in accordance with the provisions of Section 7.4 and such failure is not cured within five (5) days following Buyer’s receipt of written notice from Seller of such failure, (iii) if Buyer breaches any other material covenant or fails to perform any material obligation of Buyer contained in this Agreement (i.e., any material covenant or obligation to be performed by Buyer prior to the Closing Date) and such breach is not cured within thirty (30) days following Buyer’s receipt of written notice from Seller of such breach or failure, (iv) if, as of the Closing Date, there is a material breach of Buyer’s warranties and representations made in this Agreement (subject to permitted updates thereto pursuant to Section 13.2, as applicable) and such breach is not cured within thirty (30) days following Buyer’s receipt of written notice from Seller of such breach or (v) a “Buyer Default” (as defined in the Related Agreement) has occurred

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under the Related Agreement and is continuing, then, any of the foregoing clauses (i) through (v) shall constitute a “Buyer Default” and upon the occurrence and during the continuance of a Buyer Default, Seller shall be entitled to terminate this Agreement upon written notice to Buyer and retain the First Deposit and the Release Payments as full liquidated damages and as Seller’s sole and exclusive remedy for any such Default by Buyer; provided, that as a condition to such termination, Related Seller is also terminating the Related Agreement simultaneously. The parties acknowledge the difficulty of ascertaining Seller’s damages in such a circumstance and agree that the amount of the First Deposit and the Release Payments represents a reasonable and mutual attempt by Buyer and Seller to anticipate the consequence to Seller of the applicable Buyer Default. Upon delivery of any such termination notice, this Agreement shall automatically terminate and the parties shall have no further obligations or liabilities hereunder other than those that expressly survive a termination of this Agreement.

17.2.

Breach by Seller. If Seller (i) defaults in its obligation to consummate the Closing or perform any of its other obligations to be performed on the Closing Date as required by this Agreement and such default is not cured within ten (10) Business Days following Seller’s receipt of written notice from Buyer of such default, (ii) if Seller breaches any other material covenant or fails to perform any material obligation of Seller contained in this Agreement (i.e., any material covenant or obligation to be performed by Seller prior to the Closing Date) and such breach is not cured within thirty (30) days following Seller’s receipt of written notice from Buyer of such breach or failure, (iii) if, as of the Closing Date, there is a Rep Breach (other than an FC Rep Change) and such Rep Breach is not cured within thirty (30) days following Seller’s receipt of written notice from Buyer of such Rep Breach, or (iv) a “Seller Default” (as defined in the Related Agreement) has occurred under the Related Agreement and is continuing, then, any of the foregoing clauses (i) through (iv) shall constitute a “Seller Default”, and upon the occurrence and during the continuance of a Seller Default, Buyer may at its option, as its sole and exclusive remedy, (a) waive said Seller Default and proceed to Closing without any reduction in the Purchase Price, provided, that Buyer has also waived any “Seller Defaults” (as defined in the Related Agreement) under the Related Agreement and the closing under the Related Agreement will occur simultaneously with the Closing hereunder, (b) terminate this Agreement upon written notice to Seller, whereupon, Seller shall be obligated to pay to Buyer (within ten (10) Business Days following the giving of such termination notice) a full refund of the First Deposit and all Release Payments previously paid by Buyer and reimbursement to Buyer by Seller of actual and verifiable out-of-pocket costs (excluding the First Deposit and the Release Payments) incurred by Seller in connection with this transaction (the “Pursuit Costs”), in an aggregate amount not to exceed $211,500, which Pursuit Costs shall be paid by Seller to Buyer within ten (10) Business Days after the date that Buyer provides Seller with a written invoice therefor, together with reasonable evidence of the subject Pursuit Costs, which may be provided in the form of receipt or invoices, following which, this Agreement shall automatically terminate and the parties shall have no further obligations or liabilities hereunder other than those that expressly survive a termination of this Agreement, provided, that as a condition to any such termination, Buyer is also simultaneously terminating the Related Agreement; or (c) enforce Seller’s obligation to convey the Property to Buyer pursuant to this Agreement or any other material obligation of Seller that is the subject to the applicable Seller Default by suit for specific performance, provided a specific performance action is filed by Buyer within thirty (30) days following the expiration of the applicable notice and cure period described in the first paragraph of this Section 17.2. In the event that an action for specific performance is commenced by Buyer under the Related Agreement in order to enforce the terms thereof, this Agreement shall remain in effect pending the resolution of such action for specific performance and,

(i) if the result of such action is that that closing under the Related Agreement will occur, then the Closing hereunder shall occur on the same date as under the Related Agreement, subject in all events to satisfaction of all conditions to Closing under this Agreement and the Related Agreement (unless waived by Buyer in writing) and (ii) if the result of such action is that the closing under the Related Agreement will not occur and the Related Agreement will instead be terminated under clause (b) of Section 17.2 of the Related Agreement, then this Agreement shall also terminate effective on the same date of termination of the Related Agreement in accordance with clause (b) of this Section 17.2. Notwithstanding the foregoing or

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anything contained in this Agreement to the contrary, in the event Buyer is precluded from bringing an action for specific performance of this Agreement because of the nature of the Seller Default (e.g., Seller sold the Property to another party in breach of this Agreement) under this Agreement or Buyer is precluded from bringing an action for specific performance of the Related Agreement because of the nature of the “Seller Default” (as defined in the Related Agreement) under the Related Agreement (e.g., Related Seller sold the Related Property to another party in breach of the Related Agreement), in either such case, Buyer shall be entitled to pursue an action against Seller and Related Seller to recover from Seller and Related Seller any and all actual damages, costs, expenses and losses suffered or incurred by Buyer as a result of such Seller Default hereunder and/or “Seller Default” (as defined in the Related Agreement) under the Related Agreement. The provisions of clause (b) of this Section 17.2 shall survive any termination of this Agreement until all amounts owed by Seller to Buyer thereunder have been paid to Buyer in full.

17.3.

Cross-Default. Seller and Buyer acknowledge and agree that this Agreement and the Related Agreement are intended to be fully cross-defaulted and enforced as a single, integrated transaction, and, accordingly, any Seller Default or Buyer Default under this Agreement shall automatically constitute a “Seller Default” or “Buyer Default” (as applicable) by such party under the Related Agreement, and any “Seller Default” or “Buyer Default” under the Related Agreement shall automatically constitute a Seller Default or Buyer Default (as applicable) by such party under this Agreement, in each case without the necessity of any additional notice or action except to the extent expressly required under the applicable notice and cure provisions of this Agreement or the Related Agreement.

17.4.

Exclusive Remedies. Except as otherwise provided in this Agreement, the rights and remedies set forth in this Article 17 are the sole and exclusive remedies available to Seller and Buyer in the event of a breach or default by the other party of this Agreement.

17.5.

No Personal Liability. Buyer acknowledges and agrees that: (i) the direct and indirect shareholders, partners, members, owners, trustees, officers, directors, employees, agents, contractors and security holders of Seller are not assuming any, and shall have no, personal liability for any obligations of Seller under this Agreement. Similarly, Seller acknowledges and agrees that: (i) the direct and indirect shareholders, partners, members, owners, trustees, officers, directors, employees, agents, contractors and security holders of Buyer are not assuming any, and shall have no, personal liability for any obligations of Buyer under this Agreement.

18.

Assignment. Buyer may assign this Agreement and Buyer’s rights and obligations under this Agreement to any affiliate of Buyer without Seller’s prior written consent, though in such case the assignor-Buyer will not be released of its obligations under this Agreement and shall remain jointly and severally liable under this Agreement with the assignee-Buyer. In order to exercise such assignment right, Buyer must provide Seller with written notice of such assignment at least ten (10) days prior to Closing (though the actual assignment instrument may be made to be effective on or before Closing). The Seller may not assign or transfer any rights or obligations under this Agreement without the prior written consent of Buyer, which consent may be provided or withheld in the sole discretion of Buyer.

19.

Notices.

19.1.

Written Notice; Delivery Methods. Any notice or other communication required or permitted to be given under this Agreement, or by law, shall be in writing, delivered to the applicable address below and either (a) personally delivered, (b) sent by any nationally-recognized overnight courier service, delivery charges prepaid, or (c) sent by email with a PDF attachment with an original copy thereof transmitted to the recipient by one of the other means described in clause (a) or (b) of this Section 19.1 in the event such notice constitutes a default or termination notice. Any notice required or given hereunder shall be deemed received the same Business Day if sent by hand delivery or by email with a PDF attachment

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or the next Business Day if sent by overnight courier; provided that, any notice received after 6:00 p.m. CST on any Business Day or received on any day that is not a Business Day shall be deemed to have been received on the following Business Day. Further, all notices given pursuant to this Agreement will be effective if executed and sent or received by counsel for Buyer or Seller, as applicable.

If to Buyer: If to Seller:

c/o Interface Operations LLC

410 South Rampart Boulevard, Suite 440 Las Vegas, Nevada 89145

Attention: Steven Garfinkel Email: sgarfinkel@adfam.com

With a copy to:

Haynes Boone LLP 2801 N Harwood Street Dallas, Texas 75201

Attention: Stephanie M. Spell, Esq. Email: stephanie.spell@haynesboone.com

And copy to:

Jackson Walker LLP

2323 Ross Avenue, Suite 600

Dallas, Texas 75201

Attention: Brian Lidji, Esq. and Suzan Kedron, Esq. Email: blidji@jw.com and skedron@jw.com

c/o Seritage Growth Properties Attn: Eric Dinenberg and Matthew Fernand

500 Fifth Avenue, Suite 1530 New York, NY 10110

E: edinenberg@seritage.com; mfernand@seritage.com

With a copy to:

Condon Tobin

Attn: Rory Nerenberg 8080 Park Ln., Suite 700

Dallas, TX 75231

E: Rnerenberg@condontobin.com

20.

Broker(s). Each party represents to the other that it has had no dealings with any real estate broker, agent, or finder in connection with the negotiation of this Agreement and that it knows of no real estate broker or agent entitled to any commission or finder’s fee in connection with this Agreement. Each party shall indemnify and hold harmless the other party from and against any and all claims, demands, losses, liabilities, lawsuits, judgments, costs, and expenses (including attorneys’ fees and costs) with respect to any leasing commission, finder’s fee, or equivalent compensation alleged to be owing on account of the indemnifying party’s dealings with any real estate broker, agent, or finder. The provisions of this Section 20 survive Closing or the earlier termination of this Agreement.

21.

Survival. Except as expressly set forth herein with respect to those provisions that expressly survive the Closing Date, the terms and provisions of this Agreement shall merge into the execution and delivery of the Deed at Closing.

22.

Additional Terms.

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22.1.

Successors or Assigns. The terms, conditions, covenants, and agreements of this Agreement extend to and are binding upon Seller, Buyer, and their respective successors and assigns, if any (provided that this provision is not intended to provide consent to an assignment, which assignment rights and restrictions are governed by Section 18).

22.2.

Severability. If any provision of this Agreement is held to be unenforceable, then that provision is to be construed either by modifying it to the minimum extent necessary to make it enforceable (if permitted by law) or disregarding it (if not). If an unenforceable provision is modified or

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disregarded in accordance with this Section 22.2, the rest of the Agreement is to remain in effect as written, and the unenforceable provision is to remain as written in any circumstances other than those in which the provision is held to be unenforceable.

22.3.

Waiver. The parties may waive any provision of this Agreement only by a writing executed by the party or parties against whom the waiver is sought to be enforced. No failure or delay in exercising any right or remedy or in requiring the satisfaction of any condition under this Agreement, and no act, omission, or course of dealing between the parties, operates as a waiver or estoppel of any right, remedy, or condition. A waiver once given is not to be construed as a waiver on any future occasion or against any other person or entity.

22.4.

Amendment. The parties may amend this Agreement only by a written agreement of the parties that identifies itself as an amendment to this Agreement and that is signed by both Buyer and Seller; provided, however, as a condition thereto, a corresponding amendment must be simultaneously made to the Related Agreement signed by both Buyer and Related Seller.

22.5.

Headings & Interpretation. The descriptive headings/captions of the sections and subsections of this Agreement are for convenience only, do not constitute a part of this Agreement, and do not affect this Agreement’s construction or interpretation. Whenever used in this Agreement: (i) the words “herein”, “hereof”, and similar words refer to this Agreement in its entirety and not solely to any specific sentence, paragraph, or section; (ii) the words “include,” “includes,” and “including” mean considered as part of a larger group, incorporate “without limitation”, and are not limited to the items recited; (iii) the word “shall” means “is obligated to”; (iv) the word “may” means “is permitted to, but is not obligated to”; and (v) unless otherwise noted reference to a specific Section or Exhibit is a reference to a Section or Exhibit in this Agreement.

22.6.

Choice of Law. The laws of the State of Texas (without giving effect to its conflict of laws principles) govern all matters arising out of or relating to this Agreement and the transactions it contemplates, including its interpretation, construction, performance, and enforcement.

22.7.

No Construction Against Drafting Party. Seller and Buyer acknowledge that each of them and their respective counsel have had an opportunity to review this Agreement and that this Agreement will not be construed for or against either party merely because such party prepared or drafted this Agreement or any particular provision thereof.

22.8.

Counterparts & Digital Signatures. The parties may execute this Agreement in multiple counterparts, each of which constitutes an original, and all of which, collectively, constitute only one agreement. The signatures of all parties need not appear on the same counterpart. This Agreement is valid, binding, and enforceable against a party only when executed by an authorized individual on behalf of a party by means of (i) an electronic signature that complies with the federal Electronic Signatures in Global and National Commerce Act, state enactments of the Uniform Electronic Transactions Act, or any other relevant and applicable electronic signatures law; (ii) an original manual signature; or (iii) a faxed, scanned, or photocopied manual signature. Each electronic signature or faxed, scanned, or photocopied manual signature has for all purposes the same validity, legal effect, and admissibility in evidence as an original manual signature. This Agreement is effective upon delivery of one executed counterpart from each party to the other parties. In proving this Agreement, a party must produce or account only for the executed counterpart of the party to be charged.

22.9.

Damages. Notwithstanding anything set forth in this Agreement to the contrary, neither party is liable to the other for any special, indirect, punitive, or consequential damages.

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22.10.

Time of the Essence. Time is of the essence in this Agreement.

22.11.

Business Days. “Business Day” (or “business day”) means, as to any party, any day that is not a Saturday, Sunday, or other day on which national banks are authorized or required to close in the State of Texas or the State of Nevada (“Bank Holiday”). To compute a time period under this Agreement when the period is stated in days or a longer unit of time: (i) exclude the day of the event that triggers the period; (ii) count every day, including intermediate Saturdays, Sundays, and Bank Holidays; and (iii) include the last day of the period, but if the last day is a Saturday, Sunday, or Bank Holiday, the period continues to run until the end of the next day that is not a Saturday, Sunday, or Bank Holiday. Any obligation that is required to be performed hereunder shall be performed on or before 6:00 p.m. CST on the applicable Business Day unless another time for performance is specifically set forth herein.

22.12.

Attorneys’ Fees. In the event of any litigation related to this Agreement, whether to enforce its terms, recover for default, or otherwise, if either party receives a judgment, settlement, or award in its favor (the “Receiving Party”) against the other party (the “Paying Party”) in such litigation, the Paying Party will pay upon demand all of the Receiving Party’s costs, charges, and expenses (including reasonable attorneys’ fees, court costs, and expert witness fees) arising out of such litigation (including the costs of any appeal related thereto).

22.13.

No Third-Party Beneficiaries. Except for references to Related Seller with respect to the Related Agreement pertaining to cross-condition, cross-default, etc., the terms and provisions of this Agreement and of the documents to be executed and delivered at Closing are and will be for the benefit of Seller and Buyer only and are not for the benefit of any third party. Accordingly, no third party shall have the right to enforce the terms or provisions of this Agreement or of the documents to be executed and delivered at Closing. This Section 22.13 shall survive the Closing of the transaction contemplated by this Agreement.

22.14.

Intentionally Omitted.

22.15.

1031 Exchange. Seller and/or Buyer may elect to seek to structure its purchase or sale (as applicable) of the Property as a tax-deferred exchange pursuant to Section 1031 of the Internal Revenue Code of 1986, as amended, and the treasury regulations promulgated thereunder (“1031 Exchange”). In connection with the foregoing, the non-requesting party shall reasonably cooperate with the requesting party (at no material cost to such non-requesting party), including, but not limited to, executing and delivering requested documentation related thereto (provided the same is reasonably acceptable to the non-requesting party); provided that (i) the non-requesting party shall not be required to incur any additional liabilities or financial obligations as a consequence of such cooperation, (ii) neither party shall be relieved of its obligations, representations or warranties under this Agreement, (iii) any attempt to structure an acquisition or sale of the Property as a 1031 Exchange shall not be a condition to, and shall not delay or extend, the Closing, and (iv) no documents required to be executed in connection with the 1031 Exchange shall increase the obligations or decrease the rights of the non-requesting party under this Agreement. Additionally, in connection with any 1031 Exchange, neither party shall be required to acquire title to any other property. Any risk that the 1031 Exchange might not qualify as a tax-deferred transaction shall be borne solely by the party seeking to effectuate the same. Each requesting party hereby agrees to indemnify, defend and hold the non-requesting party harmless from any and all losses, costs, claims, liabilities, penalties, and expenses, including, without limitation, reasonable attorneys' fees, fees of accountants and other experts, and costs of any judicial or administrative proceeding or alternative dispute resolution to which the other may be exposed, due to any attempt of the requesting party to structure the transaction as a 1031 Exchange.

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22.16.

Further Assurances. The parties shall execute such instructions to the Escrow Agent, the Funding Agent and the Title Company and such other instruments and to do such further acts as may be reasonably necessary to carry out the provisions of this Agreement; provided such instruments do not increase either parties’ obligations or decrease either parties’ rights, except in each case, to a de minimis extent.

23.

Merger/Prior Agreements. This Agreement, together with the Related Agreement, constitutes the final agreement between the parties. It is the complete and exclusive expression of the parties’ agreement on the matters contained in this Agreement, together with all references to the Related Agreement. All prior and contemporaneous negotiations and agreements between the parties on the matters contained in this Agreement are expressly merged into and superseded by this Agreement and the Related Agreement. The provisions of this Agreement may not be explained, supplemented, or qualified through evidence of trade usage or a prior course of dealings. In entering into this Agreement, the parties have not relied upon any statement, representation, or agreement of the other party except for those expressly contained in this Agreement. There is no condition precedent to the effectiveness of this Agreement other than those expressly stated in this Agreement.

24.

Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION OR OTHER LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS IT CONTEMPLATES. THIS WAIVER APPLIES TO ANY ACTION OR OTHER LEGAL PROCEEDING, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE. EACH PARTY ACKNOWLEDGES THAT IT HAS RECEIVED THE ADVICE OF COMPETENT COUNSEL.

25.

Confidentiality. Buyer and Seller shall each maintain as confidential any and all material obtained about the other or, (i) in the case of Buyer, about the Property (including the Due Diligence Materials and other documentation and information provided by or on behalf of Seller or otherwise such due diligence documentation and information procured by or on behalf of Buyer), this Agreement or the transactions contemplated hereby, and shall not disclose such information to any third party and (ii) in the case of Seller, about the Entitlements, any applications submitted with respect thereto, and any development or other plans of Buyer. Notwithstanding the foregoing, Buyer and Seller shall have the right to disclose information with respect to the Property, in its reasonable discretion: (a) to comply with applicable law, court order, subpoena or other demand by a governmental or quasi-governmental authority, (b) to its officers, directors, employees, attorneys, accountants, consultants and other authorized agents, to the extent related to the proposed sale of the Property from Seller to Buyer and provided that Seller and Buyer instruct such party’s recipients of such information and materials that such information and materials are confidential and should be kept confidential, (c) with respect to Buyer, to Buyer’s environmental auditors, consultants, current or prospective investors, current or prospective partners, engineers, potential lenders, and permitted assignees under this Agreement (and each of their respective officers, directors, employees, agents, advisors, representatives, attorneys, engineers, partners, investors or licensees) and other consultants to the extent related to Buyer’s evaluation of its proposed acquisition of the Property, provided that Buyer instructs the recipients of such information and materials that such information and materials are confidential and should be kept confidential and (d) with respect to Buyer, in connection with the application and approval process for the Entitlements. Notwithstanding the foregoing, the terms of this Section 25 shall not apply to any documentation, materials and information in the public domain other than as a result of a breach of this Section 25. Each party acknowledges that a breach of this Section 25 would cause irreparable harm for which monetary damages would be an inadequate remedy, and therefore the non-breaching party shall be entitled to injunctive relief, specific performance and other equitable remedies without the necessity of proving actual damages or posting bond, in addition to any other remedies available at law or in equity. Seller and Buyer (in such capacity, the “Indemnifying Party”) each indemnify, defend

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and hold harmless the other party and its affiliates, members, officers, directors and representatives (collectively, the “Indemnified Party”) from and against any actual losses, damages, liabilities, costs and expenses (including reasonable attorneys’ fees) incurred by the Indemnified Party to the extent arising from any breach of this Section 25 by the Indemnifying Party or its affiliates, members, officers, directors or representatives. The provisions of this paragraph shall survive the Closing or any termination of this Agreement for a period of two (2) years and is subject to Section 26 (as applicable).

26.

Press Releases. Seller and Buyer agree that, except as required by any applicable laws, including, without limitation, the rules and regulations of the Securities and Exchange Commission or of any stock exchange or other regulatory authority applicable to any of them or as required by court or administrative order or proceeding, no party shall, with respect to this Agreement and the transactions contemplated in this Agreement, make any public pronouncements or issue press releases prior to the Closing, except that Buyer acknowledges that Seller and its affiliates, will disclose this Agreement in connection with any filings on Form 8-K or 10-Q or in quarterly and/or annual reports (each, a “Seritage Filing”). Notwithstanding the foregoing, following the Effective Date but prior to the Closing Date, (i) Buyer shall be permitted to issue any press releases that may be required or would otherwise benefit Buyer in its pursuit of the Entitlements; and (ii) Seller shall be permitted to issue any press releases, subject to obtaining Buyer’s prior written approval (not to be unreasonably withheld, conditioned or delayed); provided, that no press releases permitted under the foregoing clause (i) or (ii) shall disclose the Purchase Price payable hereunder, the Closing Date or any other material economic or other business terms of the transactions contemplated in this Agreement. Without limiting the foregoing, notwithstanding anything contained in this Section 26 to the contrary, following the later of (a) the first date on which a Seritage Filing has been publicly filed (the “Seritage Filing Date”), or (b) the time at which Buyer has publicly announced the transactions contemplated hereunder, if a third-party requests a statement from Seller with respect to the Property, this Agreement or the transactions contemplated hereunder, Seller shall be permitted to state the following (the “Permitted Seller Statement”): “Seritage has entered into an option agreement with Mavericks’ ownership to sell its property at the Valley View mall site. While we understand the Mavericks are still evaluating different sites, and a zoning and entitlements process would need to be completed before any sale is final, we hope that the future Mavericks’ arena is at Valley View.” Following the Seritage Filing Date, Buyer shall have the right to request revisions to the Permitted Seller Statement, by delivery of written notice to Seller, in which event, Buyer and Seller shall reasonably cooperate to agree on an updated Permitted Seller Statement in form reasonably agreed upon by both Seller and Buyer and memorialized in a letter agreement or amendment to this Agreement. Following the Closing, neither party shall issue any press release that states the Purchase Price payable hereunder.

27.

Intentionally Omitted.

28.

Escrow Provisions.

28.1.

The parties acknowledge that the Escrow Agent and the Funding Agent are acting solely as stakeholders at their request and for their convenience, that the Escrow Agent and Funding Agent shall not be deemed to be the agent of either of the parties, and neither the Escrow Agent nor the Funding Agent shall be liable to either of the parties for any act or omission on its part, other than for their fraud, gross negligence or willful misconduct. Seller and Buyer shall jointly and severally indemnify and hold the Escrow Agent and Funding Agent harmless from and against all actual costs, claims and expenses, including reasonable attorneys’ fees and disbursements, incurred in connection with the performance of the Escrow Agent’s and Funding Agent’s (as applicable) duties hereunder, except to the extent any of the foregoing accrues as a result of the fraud, gross negligence or willful misconduct of Escrow Agent or Funding Agent.

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28.2.

The Escrow Agent and the Funding Agent have each acknowledged their agreement to these provisions by signing this Agreement in the place indicated following the signatures of Sellers and Buyer.

28.3.

Seller, Buyer, and Escrow Agent each acknowledge and agree that, notwithstanding any role of Escrow Agent in managing the title and survey process or coordinating the preparation, execution, and delivery of documents in connection with the Closing, Funding Agent shall be the sole party responsible for the receipt, custody, investment, disbursement, and transfer of all funds in connection with the transactions contemplated by this Agreement, including, without limitation, the First Deposit, the Release Payments, and the Purchase Price (collectively, the "Transaction Funds"). Neither Escrow Agent nor any other party shall receive, hold, or disburse any Transaction Funds except as expressly directed by Funding Agent in accordance with the terms of this Agreement. In the event of any conflict between the duties of Escrow Agent and Funding Agent with respect to the handling of Transaction Funds, the authority of Funding Agent shall control.

29.

Effectiveness. Seller and Buyer acknowledge and agree that this Agreement and the Related Agreement are being entered into as one integrated transaction, and, notwithstanding anything to the contrary contained herein, this Agreement shall not become effective unless and until the Related Agreement has been duly executed and delivered by all parties thereto.

[Remainder of Page Left Blank Intentionally – Signatures on Following Page(s)]

____________________

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The parties hereby execute this Agreement as of the dates set forth below.

Buyer:

ARENA DEVELOPMENT INTERMEDIATE,

LLC, a Delaware limited liability company

By: /s/Patrick Dumont Print Name: Patrick Dumont

Title: President

Seller:

SERITAGE SRC FINANCE LLC,

a Delaware limited liability company

By: /s/Matthew Fernand

Name: Matthew Fernand

Title: Vice President

June 1, 2026

Date:

June 1, 2026

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JOINDER

By the execution hereof, the undersigned hereby joins the Agreement to which this page is attached for the purpose of agreeing to be jointly and severally liable for the obligations of Seritage Seller under Section

10.18 of the Agreement. Such obligations shall be subject to and limited by all of the terms and provisions set forth in Section 10.18 (and the other applicable terms and provisions) of the Agreement, including, without limitation, the Survival Period and the Liability Cap allocable to Seritage Seller (though as a point of clarity, the Liability Cap allocable to Seritage Seller constitutes the maximum aggregate liability of Seritage Seller and Seritage Growth Properties, LP with respect to the obligations of Seritage Seller under Section 10.18 of this Agreement).

Seritage Growth Properties, LP

By: Seritage Growth Properties,

a Maryland real estate investment trust Its: General Partner

By: /s/Matthew Fernand Name: Matthew Fernand

Title: Chief Legal Officer and Corporate Secretary

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Seller - Seritage SRC Finance LLC / Buyer - Arena Development Intermediate LLC

JOINDER BY ESCROW AGENT, TITLE COMPANY AND FUNDING AGENT

Escrow Agent, Title Company and Funding Agent have executed this Agreement in order to confirm that Escrow Agent, Title Company and Funding Agent shall disburse the First Deposit and the Release Payments and the Purchase Price, all pursuant to the provisions of this Agreement.

UTB TITLE

Date executed by Escrow Agent: By:/s/Brenda Manning

6/1/26

Title: Escrow Officer

CHICAGO TITLE INSURANCE COMPANY

Date executed by Title Company: By: /s/Irayda Pacheco

and Funding Agent Name: Irayda Pacheco

6/02/2026

Title: AVP, Commercial Funding Manager

EX-31.1 6 srg-ex31_1.htm EX-31.1 EX-31.1

Exhibit 31.1

CERTIFICATION

I, Adam Metz, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Seritage Growth Properties;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


/s/ Adam Metz		Date: August 14, 2026
Adam Metz
President and Chief Executive Officer (Principal Executive Officer)

EX-31.2 7 srg-ex31_2.htm EX-31.2 EX-31.2

Exhibit 31.2

CERTIFICATION

I, John Garilli, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Seritage Growth Properties;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


/s/ John Garilli		Date: August 14, 2026
John Garilli
Interim Chief Financial Officer (Principal Financial and Accounting Officer)

EX-32.1 8 srg-ex32_1.htm EX-32.1 EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the Quarterly Report of Seritage Growth Properties, a Maryland real estate investment trust (the “Company”), on Form 10-Q for the quarter ended June 30, 2026 as filed with the Securities and Exchange Commission (the “Report”), I, Adam Metz, President and Chief Executive Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

      /s/ Adam Metz

     

      Adam Metz
President and Chief Executive Officer
(Principal Executive Officer)
August 14, 2026

     

A signed original of this written statement required by Section 906 has been provided to Seritage Growth Properties and will be retained by Seritage Growth Properties and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2 9 srg-ex32_2.htm EX-32.2 EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the Quarterly Report of Seritage Growth Properties, a Maryland real estate investment trust (the “Company”), on Form 10-Q for the quarter ended June 30, 2026 as filed with the Securities and Exchange Commission (the “Report”), I, John Garilli, Interim Chief Financial Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

      /s/ John Garilli

     

      John Garilli
Interim Chief Financial Officer
(Principal Financial and Accounting Officer)
August 14, 2026

     