“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:

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.

“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”).

“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

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).

“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:

(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

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

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.

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.

(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

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.

(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.

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.

(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.

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.

follows:

(5) years.

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

(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.

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.

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.

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.

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

(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.

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.

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

“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

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.

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.

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.

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.

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

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

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.

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.

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.

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

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.

the Collateral;

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.

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

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.

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.