Document:

srg-ex1010_608.htm

 

Exhibit 10.10

SECOND AMENDMENT TO MEZZANINE LOAN AGREEMENT

THIS SECOND AMENDMENT TO MEZZANINE LOAN AGREEMENT (this “Amendment”) is made as of the 8th day of November, 2016 (the “Amendment Date”), by and among:

	
(A)
	
Wells Fargo Bank, National Association (“Wells Fargo”), not individually but solely in its capacity as trustee (the “Trustee”) for the holders of J.P. Morgan Chase Commercial Mortgage Securities Trust 2015-SGP MZ, Commercial Mezzanine Pass-Through Certificates, Series 2015-SGP MZ (as successor-in-interest to JPMorgan Chase Bank, National Association, a national banking association (“JPM”), and H/2 Special Opportunities III Corp., a Delaware corporation, collectively with JPM, “Original Lender”) (Wells Fargo, together with its successors and assigns, "Lender");

	
(B)
	
SERITAGE SRC MEZZANINE FINANCE LLC and SERITAGE KMT MEZZANINE FINANCE LLC, each a Delaware limited liability company (individually and/or collectively, as the context may require, “Borrower”); and

	
(C)
	
Seritage Growth Properties, a Maryland real estate investment trust, and Seritage Growth Properties, L.P., a Delaware limited partnership (individually and/or collectively, as the context may require, the “Guarantor”).  

RECITALS:

WHEREAS, on July 7, 2015 (the “Closing Date”) Original Lender made a loan to Borrower in the original principal amount of $236,195,656 (the “Loan”), which Loan is evidenced by, inter alia: (i) the Notes (as defined in the Loan Agreement) and (ii) that certain Mezzanine Loan Agreement (the “Original Loan Agreement”), dated as of the Closing Date, by and among Borrower and Original Lender, as amended by that certain Omnibus Amendment (Mezzanine Loan), dated as of September 28, 2015, by and among Original Lender, Borrower and Guarantor (the “Omnibus Amendment”; and together with the Original Loan Agreement, as the same may be further amended, replaced or otherwise modified from time to time, collectively, the “Loan Agreement”); 

WHEREAS, in connection with the origination of the Loan, (i) Guarantor executed and delivered that certain Guaranty, dated as of the Closing Date, as amended by the Omnibus Amendment (as the same may be further amended, replaced or otherwise modified from time to time, collectively, the “Guaranty”), (ii) Borrower and Guarantor executed and delivered that certain environmental indemnity agreement, dated as of the Closing Date (as the same may be amended, replaced or otherwise modified from time to time, the “Environmental Indemnity”), and (iii) Guarantor executed and delivered that certain Completion Guaranty (Mezzanine), dated as of the Closing Date (as the same may be amended, replaced or otherwise modified from time to time, the “Completion Guaranty”); 

WHEREAS, the Notes and the Loan were subsequently transferred to J.P. Morgan Chase Commercial Mortgage Securities Corp. (the “Depositor”) and included in the J.P. Morgan Chase Commercial Mortgage Securities Trust 2015-SGP MZ (the “Trust”), Commercial Mezzanine Pass-Through Certificates, Series 2015-SGP MZ transaction (the “Securitization”);

WHEREAS, (i) Strategic Asset Services LLC (“SAS”) has been appointed as primary servicer (in such capacity, the “Primary Servicer”) with respect to each of the Loan and the Mortgage Loan (as defined in the Loan Agreement); (ii) SAS has been appointed as special servicer of the Mortgage Loan (in such capacity, the “Mortgage Special Servicer”); and (iii) Berkadia Commercial Mortgage LLC (“Berkadia”) has been appointed as the master servicer of the Loan and the Mortgage Loan (in such capacities, the “Master Servicer”) and as the special servicer of the Loan (in such capacity, the “Mezzanine Special Servicer”); and

WHEREAS, Borrower and Lender hereby agree to amend the Loan Agreement on the terms set forth herein.  All capitalized terms used but not defined herein have the meanings ascribed to them in the Loan Agreement. 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

22790655.6.BUSINESS 

 

ARTICLE I.

AMENDMENTS TO LOAN AGREEMENT

1.1. Amendments to Definitions. 

(a) The definition of “Liquidity” set forth in the Loan Agreement is hereby amended by deleting the phrase “provided that (a) Liquidity shall include any cash and cash equivalents on deposit in the Cash Flow Sweep Reserve Account not earmarked for a specific use and (b) undrawn amounts of the Mortgage Loan Future Advance Amount (to the extent not designated by Property Owner to fund a specified Redevelopment Project) shall count as Liquidity at all times prior to January 7, 2017, but not thereafter” that appears therein and replacing it with the phrase “provided that (a) Liquidity shall include any cash and cash equivalents on deposit in the Cash Flow Sweep Reserve Account and in the Redevelopment Project Reserve Account, in each case, not earmarked for a specific use and (b) undrawn amounts of the Mortgage Loan Future Advance Amount (to the extent not designated by Property Owner to fund a specified Redevelopment Project) shall count as Liquidity at all times prior to January 7, 2017, but not thereafter”.

(b) The definition of “Spread Maintenance Expiration Date” set forth in the Loan Agreement is hereby amended by deleting each reference to “January 9, 2018” that appears therein and replacing each such reference with “March 9, 2018”.

(c) The definition of “Spread Maintenance Premium” set forth in the Loan Agreement is hereby amended by inserting at the end thereof the following provision: “; and provided further, that, notwithstanding anything in this Agreement or any other Loan Document to the contrary, the amount of Spread Maintenance Premium calculated pursuant to this definition shall be adjusted so that the Spread Maintenance Premium calculated for the period of time from February 9, 2018 through March 9, 2018 shall be an amount equal to $1,000,000 multiplied by (A) a fraction equal to the principal balance of the Loan being repaid divided by an amount equal to the principal balance of the Loan being repaid plus the principal amount of the Mortgage Loan being repaid with the result further multiplied by (B) a fraction equal to the amount of the Loan being repaid divided by the outstanding principal balance of the Loan immediately prior to such repayment.”  

(d) A new definition of “Amendment Date” is hereby added to the “Definitions” section of the Loan Agreement in alphabetical order, as follows: “Amendment Date” shall mean November 8, 2016.

1.2. Amendment to Section 5.22(a).  Section 5.22(a) of the Loan Agreement is hereby amended by adding the following sentences to the end of such clause (a):

“From and after the Amendment Date and for so long as there are undrawn amounts of the Mortgage Loan Future Advance Amount (to the extent not previously designated by Borrower or Property Owner to fund a specific Redevelopment Project), all new Redevelopment Plans and Budgets submitted by Borrower or Property Owner to Lender shall provide that the source of funding of such Redevelopment Projects shall be the Mortgage Loan Future Advance Amount and the costs shall be funded from the Mortgage Loan Future Advance Amount for so long as such amounts are available and subject to the satisfaction of all conditions for the advance of such funds (it being understood that with respect to any Redevelopment Project that has been approved by Lender and the conditions set forth in Section 5.22(b) have been satisfied, if the conditions of Section 5.22(c)(ii) or (vi) of the Mortgage Loan Agreement are not satisfied despite Property Owner’s good faith efforts to satisfy such conditions or such conditions are waived by Lender, then Property Owner or Borrower shall be permitted to pay the costs related to such Redevelopment Project with unrestricted cash; provided that in such circumstances Borrower shall cause Property Owner to diligently pursue the satisfaction of such conditions and cause Property Owner to request a draw of the Mortgage Loan Future Advance Amount promptly following satisfaction of such conditions).  Notwithstanding anything in this clause (a) to the contrary, with respect to the first $80,000,000 of new Redevelopment Plans and Budgets submitted to Lender from and after the Amendment Date, all references to $5,000,000 in this clause (a) shall mean $15,000,000 and all references to $7,500,000 in this clause (a) shall mean $15,000,000, in each case, for the purposes of Section 5.22(a) only, and shall not modify the definition of “Major Redevelopment Project” or the amounts referenced therein with respect to any other provision of the Loan Documents.”  

1.3. Change of Notice Address.  Effective as of the date hereof, by its signature below each of Borrower and Guarantor hereby provides notice of a change of its address as follows for all purposes of the Loan Documents:

2

 

“If to Borrower or Guarantor:

 

			
	
c/o Seritage Growth Properties, L.P.

	
489 Fifth Avenue 18th Floor

	
New York, New York 10017

	
Attention:
	
 
	
Matthew Fernand

	
 
	
 
	
Executive Vice President & General Counsel

	
 
	
 
	
mfernand@seritage.com

	
 
	
 
	
 

	
 
	
 
	
and

	
 
	
 
	
 

	
 
	
 
	
Mary Rottler

	
 
	
 
	
Executive Vice President, Operations and Leasing

	
 
	
 
	
mrottler@seritage.com

	
 

	
with copies to:

	
 

	
Fried, Frank, Harris, Shriver & Jacobson LLP

	
One New York Plaza

	
New York, New York 10004

	
Attention:
	
 
	
Jonathan L. Mechanic

	
 
	
 
	
jonathan.mechanic@friedfrank.com”

 

ARTICLE II.

REPRESENTATIONS AND RATIFICATION

2.1. Representations.  Borrower and Guarantor each represent and warrant, that this Amendment constitutes a legal, valid and binding obligation of such party, enforceable against such party, in accordance with its terms, subject to bankruptcy, insolvency and other limitations on creditors’ rights generally and to equitable principles.  Borrower and Guarantor each represent and warrant that as of the Amendment Date, the execution and delivery by such party of this Amendment and the performance of its respective obligations hereunder: (i) have been duly authorized by all requisite action on the part of such party; (ii) will not violate any provision of any applicable legal requirements, decree, injunction or demand of any court or other governmental authority, any organizational document of such party, or any indenture or agreement or other instrument to which such party is a party or by which such party is bound; (iii) will not be in conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under, or result in the creation or imposition of any lien of any nature whatsoever upon any of the property or assets of such party pursuant to any such indenture or agreement or instrument; (iv) has been duly executed and delivered by such party; (v) except for those obtained or filed on or prior to the Amendment Date, it is not required to obtain any consent, approval or authorization from, or to file any declaration or statement with, any governmental authority or other agency in connection with or as a condition to such party’s execution, delivery or performance of this Amendment; and (vi) this Amendment has been duly executed and delivered.  

2.2. Borrower Ratification of Loan Documents.  Borrower hereby: (i) unconditionally ratifies and confirms, renews and reaffirms all of its obligations under the Loan Documents (as defined in the Loan Agreement), as amended hereby; (ii) acknowledges and agrees that such obligations remain in full force and effect, binding on and enforceable against it in accordance with the terms, covenants and conditions of the Loan Documents, without impairment, and remains unconditionally liable to Lender in accordance with the terms, covenants and conditions of the Loan Documents, as amended hereby; (iii) acknowledges and agrees that nothing herein contained shall be construed to impair the security or affect the priority of or otherwise impair the lien of any mortgage or other lien which Lender ever had, now has or may hereafter have on any property of Borrower under any of the Loan Documents, nor to impair any rights or powers which Lender or its successors may have for nonperformance of any term of any of the Loan Documents; (iv) ratifies and confirms, renews and reaffirms in all respects and without condition, all of the terms, covenants and conditions set forth in the Loan Documents, as amended hereby; and (v) represents and warrants that all representations and warranties made by Borrower contained in the Loan Documents are true and correct in all material respects on the Amendment Date and are hereby remade with the same effect as if made on the Amendment Date, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct in all material respects as of such earlier date), and except with respect to matters that have heretofore been disclosed in writing to Lender in the form of an updated Exception Report (provided, that, in no event shall such update reflect facts the existence of which would constitute an Event of Default or would result in a Material Adverse Effect or a Property Material Adverse Effect), as evidenced by an Officer’s Certificate.

3

 

2.3. Guarantor Ratification of Loan Documents.  Guarantor hereby: (i) agrees to the modification of the Loan as set forth herein; (ii) unconditionally ratifies and confirms, renews and reaffirms all of its obligations under the Guaranty, the Environmental Indemnity, the Completion Guaranty and any other Loan Document to which it is a party; (iii) acknowledges and agrees that such obligations remain in full force and effect, binding on and enforceable against Guarantor in accordance with the terms, covenants and conditions of the Guaranty, the Environmental Indemnity, the Completion Guaranty and such Loan Documents, without impairment, and remain unconditionally liable to Lender in accordance with the terms, covenants and conditions of the Guaranty, the Environmental Indemnity, the Completion Guaranty and such Loan Documents; (iv) acknowledges and agrees that nothing herein contained shall be construed to impair the security or affect the priority of or otherwise impair the lien of any mortgage or other lien which Lender ever had, now has or may hereafter have on any property of Guarantor and Borrower under any of the Loan Documents, nor to impair any rights or powers which Lender or its successors may have for nonperformance of any term of any of the Loan Documents; (v) ratifies and confirms, renews and reaffirms in all respects and without condition, all of the terms, covenants and conditions set forth in the Guaranty, the Environmental Indemnity, the Completion Guaranty and any other Loan Document to which it is a party; (vi) represents, warrants and agrees that, as of the Amendment Date, it has no defenses, set-offs, rights of recoupment, claims or counterclaims of any nature with respect to its obligations under the Guaranty, the Environmental Indemnity, the Completion Guaranty or any other Loan Document to which it is a party or the enforcement thereof; and (vii) represents and warrants that all representations and warranties made by Guarantor contained in the Guaranty, the Environmental Indemnity, the Completion Guaranty and any other Loan Document to which it is a party are true and correct in all material respects on the Amendment Date and are hereby remade with the same effect as if made on the Amendment Date, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct in all material respects as of such earlier date), and except with respect to matters that have heretofore been disclosed in writing to Lender in the form of an updated Exception Report (provided, that, in no event shall such update reflect facts the existence of which would constitute an Event of Default or would result in a Material Adverse Effect or a Property Material Adverse Effect), as evidenced by an Officer’s Certificate. 

ARTICLE III.

WAIVERS AND RELEASES

3.1. Consideration.  Borrower and Guarantor each hereby acknowledges and agrees that: (i) it has received good and valuable consideration for its agreement to the terms and provisions of this Amendment; (ii) its agreement to such terms and provisions is a material condition and inducement to Lender’s willingness to enter into this Amendment; (iii) Lender has relied upon the agreement of each of Borrower and Guarantor to such terms and provisions in entering into this Amendment and Lender would not have entered into this Amendment without the agreement of Borrower and Guarantor to the terms and provisions of this Amendment, and Article III of this Amendment in particular; and (iv) it has been represented by competent counsel of its own choosing in the negotiation of this Amendment and Article III of this Amendment in particular, and it has discussed these provisions with counsel and hereby knowingly and willingly waives its rights as described in this Article III of this Amendment.  This Amendment may be introduced as evidence in any judicial or other proceeding, without further authentication or foundation, and shall constitute prima facie evidence of the facts and agreements set forth herein.

3.2. No Defaults; Defenses, Counterclaims or Offsets.  Each of Borrower and Guarantor acknowledge, agree, represent and warrant as to itself that, as of the Amendment Date, after giving effect to the modification of the Loan as contemplated hereby, no Event of Default has occurred and is continuing under any of the Loan Documents.  Borrower and Guarantor, each for itself and its respective successors and assigns, and by its execution hereof each: (i) hereby acknowledges, admits and agrees that, as of the Amendment Date, there are no objections, claims, defenses, counterclaims or offsets relating to its obligations under or in respect of the Loan, the Loan Documents or to the enforcement or exercise by Lender of any of its rights, powers or remedies under or in respect of the Loan Documents, at law or in equity; (ii) hereby irrevocably waives, relinquishes and releases any and all such objections, claims, defenses, counterclaims or offsets that may now exist, including without limitation, any and all such objections, claims, defenses, counterclaims or offsets whether known or unknown, foreseeable or unforeseeable; and (iii) hereby irrevocably further waives and renounces, to the fullest extent permitted by law, all rights to the benefits of any moratorium, reinstatement, marshaling, forbearance, valuation, stay, extension, redemption, appraisement, exemption and homestead now or hereafter provided by the Constitution and laws of the United States of America and of each state thereof, both as to itself and in and to all of its property, real and personal, against the enforcement and collection of the obligations evidenced by the Notes or the other Loan Documents; provided, that, notwithstanding anything to the contrary, any representations, acknowledgments, agreements, releases, waivers or otherwise contained in this Section 3.2 apply solely to periods of time and events that have occurred on or prior to the Amendment Date, the intent of the parties not being to waive or release any of Borrower’s or Guarantor’s rights with respect to events or occurrences after the Amendment Date.

3.3. Releases.  Borrower and Guarantor each on behalf of itself and its respective successors and assigns (collectively, the “Borrower Releasing Parties”) each hereby irrevocably releases, and forever discharges each Exculpated Party from any and all 

4

 

manner of controversies, liabilities, expenses, damages, judgments, actions, claims, demands and causes of action of any nature whatsoever, whether at law or in equity, whether known or unknown, which any of Borrower Releasing Parties now have by reason of any matter, cause or thing, from the beginning of the world to and including the Amendment Date arising out of or relating to any Exculpated Matter; provided, that, notwithstanding anything to the contrary, any representations, acknowledgments, agreements, releases, waivers or otherwise contained in this Section 3.3 apply solely to periods of time and events that have occurred on or prior to the Amendment Date, the intent of the parties not being to waive or release any of Borrower’s or Guarantor’s rights with respect to events or occurrences after the Amendment Date.  As used herein, “Exculpated Matter” means: (i) the interpretation, calculation, application and/or timing of the provisions of the Loan Documents or Mortgage Loan Documents related to any Cash Flow Sweep Cure Collateral, any Cash Flow Sweep Period and any Cash Flow Sweep Trigger Event (collectively, the “Cash Flow Sweep Definitions”), and, solely as they relate to the Cash Flow Sweep Definitions, In-Place NOI, Operating Expenses, Operating Income, SHLD EBITDAR, SHLD EBITDAR Rent Ratio, any Test Period, Third Party In-Place NOI and/or the Third Party In-Place NOI Threshold, and in each case, solely as they relate to the Cash Flow Sweep Definitions, any definitions or provisions of the Loan Documents or the Mortgage Loan Documents referred to therein or upon which the interpretation, calculation, application and/or timing of any of the foregoing rely; (ii) the granting of any extension or waiver of the applicability or timing with respect to the determination of any of the provisions described in clause (i) of this definition; and (iii) any matter with respect to any pre-negotiation agreement among SAS, Borrower and the other parties thereto in connection with the foregoing.  As used herein, “Exculpated Party” means each of the following: (i) each Original Lender; (ii) the Trustee; (iii) the Collateral Agent; (iv) the Trust; (v) the Primary Servicer; (vi) the Master Servicer; (vii) the Mortgage Special Servicer; (viii) the Mezzanine Special Servicer; (ix) the Depositor; (x) each other Lender (including holders and beneficial owners of certificates issued in connection with the Securitization); and (xi) all Related Parties of the foregoing.  As used herein, “Related Parties” shall mean with respect to any Person, such Person’s affiliates, and such Person’s and such Person’s affiliates partners, officers, directors, employees, agents, attorneys, servicers, subservicers, primary servicers, special servicers, contractors, representatives, participants, successors, assigns, subsidiaries, equity owners and predecessors-in-interest.

ARTICLE IV.

MISCELLANEOUS

4.1. Severability.  In case any provision of this Amendment shall be invalid, illegal, or unenforceable, such provision shall be deemed to have been modified to the extent necessary to make it valid, legal, and enforceable, provided that any such modification does not prevent the practical realization of the principal benefits intended by this Amendment.  In the event of such modification, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

4.2. No Modification Except in Writing.  None of the terms of this Amendment may be waived, altered, terminated or amended except by an instrument in writing duly executed by Borrower, Guarantor and Lender.

4.3. Further Assurances.  This Amendment shall be subject to Section 5.9 of the Loan Agreement.

4.4. Governing Law.  This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts made and performed in such state (without regard to principles of conflicts of laws).  Borrower hereby waives any claim to assert that the law of any other jurisdiction governs this Amendment, and this Amendment shall be governed by and construed in accordance with the laws of the State of New York pursuant to Section 5-1401 of the New York General Obligations Law.

4.5. Joint and Several Liability. If Borrower or Guarantor consists of more than one person or party, the obligations and liabilities of each such person or party hereunder shall be joint and several.

4.6. Costs and Expenses. Borrower shall pay all of Lender’s reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees (which shall include, without limitation, such attorneys’ fees incurred by any servicer (including without limitation the Primary Servicer) and/or by or on behalf of the Trust)) incurred in connection with this Amendment.

4.7. Miscellaneous.

(a) The captions and Section headings in this Amendment are for convenience only and are not intended to define, alter, limit or enlarge in any way the scope or meaning of this Amendment or any term or provision set forth in this Amendment.

(b) The Recitals set forth at the beginning of this Amendment are incorporated in and made a part of this Amendment by this reference.

5

 

(c) Each reference in this Amendment to any gender shall be deemed also to include any other gender, and the use in this Amendment of the singular shall be deemed also to include the plural and vice versa, unless the context requires otherwise.

(d) This Amendment is, and shall be deemed to be, the product of joint drafting by the parties hereto and shall not be construed against any of them as the drafter hereof.

(e) This Amendment, together with the Loan Documents, constitute the entire agreement among the parties relating to the subject matter hereof.  To the extent this Amendment conflicts with any of the other Loan Documents, this Amendment shall control.

(f) This Amendment shall inure to the benefit of and be binding upon the parties and their respective heirs, successors and assigns.

(g) This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  This Amendment will not be binding on or constitute evidence of a contract between the parties until such time as a counterpart of this document has been executed by each party and a copy thereof is delivered to each party to this Amendment.

4.8. Mortgage Lender Consent. Wells Fargo Bank, National Association, not individually but solely in its capacity as trustee for the holders of J.P. Morgan Chase Commercial Mortgage Securities Trust 2015-SGP, Commercial Mortgage Pass-Through Certificates, Series 2015-SGP (together with its successors and assigns, “Mortgage Lender”) hereby executes this Amendment in order to consent to this Amendment and agrees that the Lender shall be entitled to rely upon the consent contained herein as satisfying any notice and consent obligations contained under the Intercreditor Agreement between the Lender and the Mortgage Lender.

4.9. Conditions Precedent to the Effectiveness of this Amendment.  The parties hereto acknowledge and agree that this Amendment shall have no force or effect until Mortgage Lender has received the Lump Sum Redevelopment Deposit (as defined in the Mortgage Loan Agreement), executed counterparts of this Amendment from each party hereto, and Borrower has paid Lender’s reasonable, out-of-pocket attorneys’ fees incurred in connection herewith (which shall include, without limitation, such attorneys’ fees incurred by any servicer (including without limitation the Primary Servicer) and/or by or on behalf of the Trust).

[Signatures appear on following pages]

 

 

 

6

 

IN WITNESS WHEREOF, the parties have hereunto executed this Amendment as of the date first written above.

 

			
	
BORROWER:

	
 

	
SERITAGE SRC MEZZANINE FINANCE LLC, a Delaware limited liability company

	
 
	
 
	
 

	
By:
	
 
	
 

	
 
	
 
	
Name:

	
 
	
 
	
Title:

	
 
	
 
	
 

	
SERITAGE KMT MEZZANINE FINANCE LLC, a Delaware limited liability company

	
 
	
 
	
 

	
By:
	
 
	
 

	
 
	
 
	
Name:

	
 
	
 
	
Title:

 

 

 

22790655.6.BUSINESS 

 

 

					
	
GUARANTOR:

	
 

	
Seritage Growth Properties,

a Maryland real estate investment trust

	
 
	
 
	
 

	
By:
	
 
	
 

	
 
	
 
	
Name:

	
 
	
 
	
Title:

	
 
	
 
	
 

	
Seritage Growth Properties, L.P.,

a Delaware limited partnership

	
 
	
 
	
 

	
By:
	
 
	
Seritage Growth Properties,

	
 
	
 
	
its general partner

	
 
	
 
	
 

	
 
	
 
	
By:
	
 
	
 

	
 
	
 
	
 
	
 
	
Name:

	
 
	
 
	
 
	
 
	
Title:

 

 

 

 

					
	
LENDER:

	
 

	
wells fargo bank, national association, NOT INDIVIDUALLY BUT SOLELY IN ITS CAPACITY as trustee for the holders of J.P. Morgan Chase Commercial Mortgage Securities Trust 2015-SGP MZ, Commercial Mezzanine Pass-Through Certificates, Series 2015-SGP MZ 

	
 
	
 
	
 

	
By:
	
 
	
Strategic Asset Services LLC,

	
 
	
 
	
in its capacity as Primary Servicer

	
 
	
 
	
 

	
 
	
 
	
By:
	
 
	
 

	
 
	
 
	
 
	
 
	
Name:

	
 
	
 
	
 
	
 
	
Title:

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
 
	
 

	
 
	
 
	
 
	
 
	
Name:

	
 
	
 
	
 
	
 
	
Title:

 

 

 

 

			
	
ACKNOWLEDGED AND AGREED:

	
 

	
MORTGAGE BORROWERS:

	
 

	
SERITAGE SRC FINANCE LLC,

a Delaware limited liability company

	
 
	
 
	
 

	
By:
	
 
	
 

	
 
	
 
	
Name:

	
 
	
 
	
Title:

	
 
	
 
	
 

	
SERITAGE KMT FINANCE LLC,

a Delaware limited liability company

	
 
	
 
	
 

	
By:
	
 
	
 

	
 
	
 
	
Name:

	
 
	
 
	
Title:

 

 

 

 

			
	
ACKNOWLEDGED AND AGREED:

	
 

	
JV PLEDGORS:

	
 

	
SERITAGE GS HOLDINGS LLC,

a Delaware limited liability company

	
 
	
 
	
 

	
By:
	
 
	
 

	
 
	
 
	
Name:

	
 
	
 
	
Title:

	
 
	
 
	
 

	
SERITAGE SPS HOLDINGS LLC,

a Delaware limited liability company

	
 
	
 
	
 

	
By:
	
 
	
 

	
 
	
 
	
Name:

	
 
	
 
	
Title:

	
 
	
 
	
 

	
SERITAGE MS HOLDINGS LLC,

a Delaware limited liability company

	
 
	
 
	
 

	
By:
	
 
	
 

	
 
	
 
	
Name:

	
 
	
 
	
Title:

 

 

 

 

					
	
ACKNOWLEDGED AND AGREED, as a party to, and

as Guarantor (as defined in the Mortgage Loan Agreement)

under and with respect to, any Mortgage Loan Document:

	
 

	
SERITAGE GROWTH PROPERTIES,

a Maryland real estate investment trust

	
 
	
 
	
 

	
By:
	
 
	
 

	
 
	
 
	
Name:

	
 
	
 
	
Title:

	
 
	
 
	
 

	
SERITAGE GROWTH PROPERTIES, L.P.,

a Delaware limited partnership

	
 
	
 
	
 

	
By:
	
 
	
Seritage Growth Properties,

	
 
	
 
	
its general partner

	
 
	
 
	
 

	
 
	
 
	
By:
	
 
	
 

	
 
	
 
	
 
	
 
	
Name:

	
 
	
 
	
 
	
 
	
Title:

 

 

 

 

					
	
ACKNOWLEDGED AND AGREED:

	
 

	
MORTGAGE LENDER:

	
 

	
wells fargo bank, national association,

not individually but solely in its

capacity as trustee for the holders

of J.P. Morgan Chase Commercial

Mortgage Securities Trust 2015-SGP,

Commercial Mortgage Pass-Through

Certificates, Series 2015-SGP

	
 
	
 
	
 

	
By:
	
 
	
Strategic Asset Services LLC,

	
 
	
 
	
in its capacity as Primary Servicer

	
 
	
 
	
 

	
 
	
 
	
By:
	
 
	
 

	
 
	
 
	
 
	
 
	
Name:

	
 
	
 
	
 
	
 
	
Title:

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
 
	
 

	
 
	
 
	
 
	
 
	
Name:

	
 
	
 
	
 
	
 
	
Title:srg-ex1014_610.htm

 

Exhibit 10.14

EXECUTION VERSION

SERITAGE GROWTH PROPERTIES

TIME-VESTING RESTRICTED SHARE AGREEMENT 

 

	
Name of Grantee:
	
 
	
 
	
 
	
(the “Grantee”)

	
 
	
 
	
 
	
 
	
 

	
No. of Restricted Shares:
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
Issuance Date:
	
 
	
 
	
 
	
(the “Issuance Date”)

 

WHEREAS, the Grantee currently provides services to Seritage Growth Properties, a Maryland real estate investment trust (the “Company”) and its Subsidiaries as defined in the Seritage Growth Properties 2015 Share Plan (the “Plan”); 

WHEREAS, the Company desires to (i) provide the Grantee with an incentive to remain in the employ of the Company or its Subsidiaries and (ii) increase the Grantee’s interest in the success of the Company by granting restricted Shares (the “Restricted Shares”); 

WHEREAS, reference is made herein to the Grantee’s employment agreement with the Company dated May 15, 2015 (the “Employment Agreement”), as this issuance of Restricted Shares constitutes the grant of equity awards contemplated as a “Sign-On Award TV-RSU Award” for purposes of the Company satisfying its obligations to grant such an award pursuant to the Employment Agreement; and 

WHEREAS, the issuance of the Restricted Shares is made pursuant to the Plan; and made subject to the terms and conditions of this Seritage Growth Properties Restricted Share Agreement (the “Agreement”). 

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows: 

1. Definitions; Incorporation of Plan Terms. Capitalized terms used in this Agreement without definition shall have the meanings assigned to them in the Plan. This Agreement and the Restricted Shares shall be subject to the Plan and the terms of the Plan are incorporated into this Agreement by reference. In the event of any difference between the provisions of this Agreement and the terms of the Plan, the terms of this Agreement will control. The Grantee hereby acknowledges receipt of a copy of the Plan. 

2. Grant of Restricted Shares. Subject to the provisions of this Agreement and pursuant to the provisions of the Plan, the Company hereby grants and issues to the Grantee the Restricted Shares specified above.  The Grantee agrees that within thirty days of the Issuance Date, the Grantee shall give notice to the Company as to whether the Grantee has made an election pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended. 

3. Vesting of Restricted Shares.  

(a) All Restricted Shares shall be subject to the vesting requirements set forth on Schedule A of this Agreement.

(b) Except as provided in the Grantee’s Employment Agreement, if the Grantee resigns or the Grantee’s employment is terminated by the Company for any reason other than the Grantee’s death or Disability, the Grantee’s Restricted Shares will be forfeited as of the date of termination.

(c) If the Grantee’s employment terminates due to the Grantee’s death or Disability (as defined below), then, unless the Grantee’s Employment Agreement separately provides for treatment of unvested Restricted Shares upon the Grantee’s death or Disability, any outstanding, unvested Restricted Shares as of the date of termination shall vest as of the date of termination, and performance with respect to such Restricted Shares will be determined as of the date of termination.  “Disability” shall be defined as in the Grantee’s Employment Agreement, or, if not defined in the Grantee’s Employment Agreement, shall mean disability as defined under the Company’s long-term disability plan (regardless of whether the Grantee is a participant under such plan), or, if no such plan exists, Grantee’s inability by reason of disability to perform Grantee’s duties for 180 consecutive days.

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(d) Upon a Change in Control, the treatment of the Grantee’s Restricted Shares will determined in accordance with Section 13 of the Plan.

4. Forfeiture.  Except as otherwise set forth in this Agreement or the Employment Agreement, all unvested Restricted Shares shall be automatically cancelled and forfeited upon any termination of the Grantee’s employment with the Company and its Subsidiaries prior to vesting.

5. Grantee’s Rights During the Restricted Period. 

(a) Except as otherwise provided in the Plan or this Agreement, during any period when the Restricted Shares are forfeitable, the Grantee may exercise all the rights of a shareholder with respect to the Restricted Shares, including the right to vote such shares and to receive any ordinary cash dividends (without regard to any vesting requirements set forth on Schedule A of this Agreement). The Grantee’s rights to a dividend other than an ordinary cash dividend shall be subject to the terms of the Plan. The Grantee will not be entitled to voting or dividend rights with respect to record dates occurring before the Issuance Date, nor with respect to record dates occurring on or after the date, if any, on which the Grantee forfeits the Restricted Shares.

(b) No rights granted under the Plan or this Agreement and no shares issued pursuant to a Restricted Share Award Agreement shall be transferable by the Grantee other than by will or by the laws of descent and distribution prior to the time the Grantee’s interest in such shares has become fully vested. The transferability of the shares shall also be limited by any legend restricting transferability on any certificates representing such shares.

(c) No physical certificates evidencing the Restricted Shares will be issued to the Grantee. Instead, the Restricted Shares will be evidenced by certificates held by or on behalf of the Company, in book-entry form, or otherwise, as determined by the Company. 

6. Delivery of Vested Shares. 

(a) Restricted Shares that have vested in accordance with Section 3 shall be delivered (via certificate or such other method as the Committee determines) to the Grantee as soon as practicable after vesting occurs. 

(b) By accepting Restricted Shares, the Grantee agrees not to sell shares at a time when applicable laws or the Company’s rules prohibit a sale. This restriction will apply as long as the Grantee is an employee, consultant or director of the Company or a Subsidiary.

(c) To the extent that Grantee does not vest in any Restricted Shares, all interest in such shares shall be forfeited. The Grantee has no right or interest in Restricted Shares that are forfeited. 

(d) The Company shall have the right to refuse to issue or transfer any shares under this Agreement if the Company acting in its absolute discretion determines that the issuance or transfer of such shares might violate any applicable law or regulation.

7. Taxes. 

(a) This Section 7(a) applies only to (a) all Grantees who are U.S. employees, and (b) to those Grantees who are employed by a Subsidiary of the Company that is obligated under applicable local law to withhold taxes with respect to the settlement of the Restricted Shares. Such Grantee shall pay to the Company or a designated Subsidiary, promptly upon request, and in any event at the time the Grantee recognizes taxable income with respect to the Restricted Shares, an amount equal to the taxes the Company determines it is required to withhold under applicable tax laws with respect to the Restricted Shares. The Grantee may satisfy the foregoing requirement by making a payment to the Company in cash or by delivering already owned unrestricted Shares or by having the Company withhold a number of Shares in which the Grantee would otherwise become vested under this Agreement, in each case, having a value equal to the minimum amount of tax required to be withheld. Such Shares shall be valued at their Fair Market Value on the date as of which the amount of tax to be withheld is determined.

(b) The Grantee acknowledges that the tax laws and regulations applicable to the Restricted Shares and the disposition of the shares following the settlement of Restricted Shares are complex and subject to change. 

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8. Exchange of Restricted Shares for LTIP Units.  Within thirty (30) days after the Grant Date, the Company and the Grantee may agree to exchange the Restricted Shares for LTIP Units, which, upon any such exchange, shall be subject to the same vesting terms as set forth in this Agreement, but which shall not provide the Grantee with the rights of a Company shareholder (including as provided under this Agreement, but which shall instead entitled the Grantee with such rights as may attach to LTIP Units pursuant to the applicable terms of the limited partnership agreement of Seritage Growth Properties, L.P. 

9. Protections Against Violations of Agreement. No purported sale, assignment, mortgage, hypothecation, transfer, pledge, encumbrance, gift, transfer in trust (voting or other) or other disposition of, or creation of a security interest in or lien on, any of the Restricted Shares by any holder thereof in violation of the provisions of this Agreement or the Declaration of Trust or the Bylaws of the Company, will be valid, and the Company will not transfer any shares resulting from the settlement of Restricted Shares on its books nor will any of such shares be entitled to vote, nor will any dividends be paid thereon, unless and until there has been full compliance with such provisions to the satisfaction of the Company. The foregoing restrictions are in addition to and not in lieu of any other remedies, legal or equitable, available to enforce such provisions. 

10. Survival of Terms. This Agreement shall apply to and bind the Grantee and the Company and their respective permitted assignees and transferees, heirs, legatees, executors, administrators and legal successors. 

11. Notices. All notices and other communications provided for herein shall be in writing and shall be delivered by hand or sent by certified or registered mail, return receipt requested, postage prepaid, addressed, if to the Grantee, to the Grantee’s attention at the mailing address set forth at the foot of this Agreement (or to such other address as the Grantee shall have specified to the Company in writing) and, if to the Company, to the Company’s office at 333 Beverly Road, Hoffman Estates, IL 60179, Attention: General Counsel (or to such other address as the Company shall have specified to the Grantee in writing). All such notices shall be conclusively deemed to be received and shall be effective, if sent by hand delivery, upon receipt, or if sent by registered or certified mail, on the fifth day after the day on which such notice is mailed. 

12. Waiver. The waiver by either party of compliance with any provision of this Agreement by the other party shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by such party of a provision of this Agreement. 

13. Authority of the Administrator. In accordance with the terms of the Plan, the Committee shall have full authority to interpret and construe the terms of the Plan and this Agreement. The determination of the Committee as to any such matter of interpretation or construction shall be final, binding and conclusive.

14. Representations. The Grantee has reviewed with her own tax advisors the applicable tax (U.S., foreign, state, and local) consequences of the transactions contemplated by this Agreement. The Grantee is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. The Grantee understands that he (and not the Company) shall be responsible for any tax liability imposed on him that may arise as a result of the transactions contemplated by this Agreement. 

15. Entire Agreement; Governing Law. This Agreement and the Plan and the other related agreements expressly referred to herein set forth the entire agreement and understanding between the parties hereto and supersedes all prior agreements and understandings relating to the subject matter hereof. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same agreement. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Maryland. 

16. Severability. Should any provision of this Agreement be held by a court of competent jurisdiction to be unenforceable, or enforceable only if modified, such holding shall not affect the validity of the remainder of this Agreement, the balance of which shall continue to be binding upon the parties hereto with any such modification (if any) to become a part hereof and treated as though contained in this original Agreement. Moreover, if one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to scope, activity, subject or otherwise so as to be unenforceable, in lieu of severing such unenforceable provision, such provision or provisions shall be construed by the appropriate judicial body by limiting or reducing it or them, so as to be enforceable to the maximum extent compatible with the applicable law as it shall then appear, and such determination by such judicial body shall not affect the enforceability of such provisions or provisions in any other jurisdiction. 

17. Amendments; Construction. The Committee may amend the terms of this Agreement prospectively or retroactively at any time, but no such amendment shall impair the rights of the Grantee hereunder without his consent. Headings to Sections of this Agreement are intended for convenience of reference only, are not part of this Agreement and shall have no effect on the interpretation hereof. 

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18. Acceptance. The Grantee hereby acknowledges receipt of a copy of the Plan and this Agreement. The Grantee has read and understand the terms and provision thereof, and accepts the shares of Restricted Shares subject to all the terms and conditions of the Plan and this Agreement. The Grantee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under this Agreement. 

19. Miscellaneous. 

(a) No Rights to Grants or Continued Employment. The Grantee acknowledges that the award granted under this Agreement is not an employment right. Neither the Plan nor this Agreement, nor any action taken or omitted to be taken hereunder or thereunder, shall be deemed to create or confer on the Grantee any right to be retained as an employee of the Company or any Subsidiary thereof, or to interfere with or to limit in any way the right of the Company or any Subsidiary thereof to terminate the employment of the Grantee at any time. 

(b) No Restriction on Right of Company to Effect Corporate Changes. Neither the Plan nor this Agreement shall affect in any way the right or power of the Company or its Shareholders to make or authorize any or all adjustments, recapitalizations, reorganizations, or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issue of Share or of options, warrants or rights to purchase Share or of bonds, debentures, preferred, or prior preference Shares whose rights are superior to or affect the Common Share or the rights thereof or which are convertible into or exchangeable for Common Share, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of the assets or business of the Company, or any other corporate act or proceeding, whether of a similar character or otherwise. 

(c) Assignment. The Company shall have the right to assign any of its rights and to delegate any of its duties under this Agreement to any of its affiliates. 

THIS AGREEMENT SHALL BE NULL AND VOID AND UNENFORCEABLE BY THE GRANTEE UNLESS SIGNED AND DELIVERED TO THE COMPANY NOT LATER THAN THIRTY (30) DAYS SUBSEQUENT TO THE ISSUANCE DATE. 

BY SIGNING THIS AGREEMENT, THE GRANTEE IS HEREBY CONSENTING TO THE PROCESSING AND TRANSFER OF THE GRANTEE’S PERSONAL DATA BY THE COMPANY TO THE EXTENT NECESSARY TO ADMINISTER AND PROCESS THE AWARDS GRANTED UNDER THIS AGREEMENT. 

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and the Grantee has executed this Agreement, both as of the day and year first above written.

[SIGNATURE PAGE FOLLOWS]

 

 

 

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IN WITNESS WHEREOF, the Company and the Grantee have executed this Agreement as of the date first above written.

 

	
COMPANY

	
 

	
SERITAGE GROWTH PROPERTIES

	
 

	
By:
	
 
	
 

	
 
	
 
	
Name:
	
Benjamin Schall

	
 
	
 
	
Title:
	
Chief Executive Officer

 

	
GRANTEE

	
 

	
By:
	
 
	
 

	
 
	
 
	
Name:
	
Matthew Fernand

	
 
	
 
	
Address:
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

 

 

 

 

 

SCHEDULE A 

(TIME-VESTING RESTRICTED SHARES)

The Restricted Shares shall vest on the corresponding date(s) set forth in the vesting schedule set forth below (each, a “Vesting Date”) and provided that, subject to Sections 3 and 4 of the Time-Vesting Restricted Share Agreement, on each Vesting Date, the Grantee is an active employee of the Company from the Issuance Date through such Vesting Date (without consideration of any severance-related salary continuation period, if applicable). 

 

	
Vesting Date
	
 
	
Vesting of Restricted

Shares
	
 

	
First anniversary of Issuance Date
	
 
	
 
	
33.3
	
%

	
Second anniversary of Issuance Date
	
 
	
 
	
33.3
	
%

	
Third anniversary of Issuance Date
	
 
	
 
	
33.4
	
%

 

B-6

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