S-11/A

As filed with the Securities and Exchange Commission on May 11, 2015

Registration No. 333-203163

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 2

to

FORM S-11

FOR REGISTRATION

Under

THE SECURITIES ACT OF 1933

OF SECURITIES OF CERTAIN REAL ESTATE COMPANIES

Seritage Growth Properties

(Exact Name of Registrant as Specified in Its Governing Instruments)

Seritage Growth Properties

3333 Beverly Road

Hoffman Estates, Illinois 60179

(847) 286-2500

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

Robert A. Riecker

c/o Sears Holdings Corporation

3333 Beverly Road

Hoffman Estates, Illinois 60179

(847) 286-2500

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)

Copies to:

Kristin M. Coleman, Esq. Senior Vice President, General Counsel and Corporate Secretary Sears Holdings Corporation 3333 Beverly Road Hoffman Estates, Illinois 60179 (847) 286-2500 Daniel A. Neff, Esq. Robin Panovka, Esq. Wachtell, Lipton, Rosen & Katz 51 West 52nd Street New York, New York 10019 (212) 403-1000

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the Securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box:  x

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement of the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box.  ¨

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

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x  (Do not check if a smaller reporting company)	Smaller reporting company	¨

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

EXPLANATORY NOTE

This registration statement has been prepared on a prospective basis on the assumption that, among other things, the rights offering (as described in the prospectus which is a part of this registration statement) and the related transactions (including the negotiation, execution and performance of the agreements referred to in the prospectus) and approvals contemplated to occur prior to or contemporaneously with the rights offering will be consummated as contemplated by the prospectus. There can be no assurance, however, that any or all of such transactions will occur or will occur as so contemplated. Any significant modifications to or variations in the transactions contemplated will be reflected in an amendment or supplement to this registration statement.

EXPLANATORY NOTE

This Amendment No. 2 to Form S-11 is being filed for the sole purpose of filing certain exhibits to the Registration Statement (Reg. No. 333-203163) and to reflect such exhibits in the Exhibit Index. Accordingly, this Amendment consists only of the facing page, this explanatory note, Part II of the Registration Statement, the signature page to the Registration Statement and the filed exhibits. No change is made to the preliminary prospectus constituting Part I of the Registration Statement, which is being omitted.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 31. Other Expenses of Issuance and Distribution.

The following table itemizes the expenses incurred by us in connection with the issuance and registration of the securities being registered hereunder. All amounts shown are estimates except the SEC registration fee.

SEC Registration Fee	$	11,620
Stock Exchange Listing Fee		*
Printing and Engraving Expenses		*
Legal Fees (other than Blue Sky Expenses)		*
Blue Sky Expenses		*
Accounting Fees and Expenses		*
Transfer Tax and Title Insurances		*
Consulting Fees and Expenses		*
Other Fees and Expenses		*
Total	$	*

* To be filed by amendment.

Item 32. Sales to Special Parties.

None.

Item 33. Recent Sales of Unregistered Securities.

None.

Item 34. Indemnification of Directors and Officers.

Maryland law permits a Maryland REIT to include in its declaration of trust a provision eliminating the liability of its trustees and officers to the REIT and its shareholders for money damages, except for liability resulting from (i) actual receipt of an improper benefit or profit in money, property or services or (ii) active and deliberate dishonesty that is established by a final judgment and that is material to the cause of action. Seritage Growth’s declaration of trust contains a provision that eliminates the liability of our trustees and officers to the maximum extent permitted by Maryland law.

The MRL permits a Maryland REIT to indemnify and advance expenses to its trustees, officers, employees and agents to the same extent as permitted by the MGCL for directors, officers, employees and agents of a Maryland corporation. The MGCL requires a Maryland corporation (unless its charter provides otherwise) to indemnify a director or officer who has been successful, on the merits or otherwise, in the defense of any proceeding to which he or she is made or threatened to be made a party by reason of his or her service in that capacity. The MGCL permits a Maryland corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made or threatened to be made a party by reason of their service in those or other capacities unless it is established that:

• the act or omission of the director or officer was material to the matter giving rise to the proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty;

• the director or officer actually received an improper personal benefit in money, property or services; or

• in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful.

II-1

Under the MGCL, a Maryland corporation may not indemnify a director or officer in a suit by the corporation or in its right in which the director or officer was adjudged liable to the corporation or in a suit in which the director or officer was adjudged liable on the basis that a personal benefit was improperly received. A court may order indemnification if it determines that the director or officer is fairly and reasonably entitled to indemnification, even though the director or officer did not meet the prescribed standard of conduct or was adjudged liable on the basis that personal benefit was improperly received. However, indemnification for an adverse judgment in a suit by the corporation or in its right, or for a judgment of liability on the basis that a personal benefit was improperly received, is limited to expenses.

In addition, the MGCL permits a Maryland corporation to advance reasonable expenses to a director or officer upon our receipt of:

• a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification by the corporation; and

• a written undertaking by or on behalf of the director or officer to repay the amount paid or reimbursed by the corporation if it is ultimately determined that the director or officer did not meet the standard of conduct.

Seritage Growth’s declaration of trust authorizes Seritage Growth to obligate itself, and Seritage Growth’s bylaws obligate it, to the maximum extent permitted by Maryland law in effect from time to time, to indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses in advance of final disposition of a proceeding to:

• any present or former trustee or officer who is made or threatened to be made a party to a proceeding by reason of his or her service in that capacity; or

• any individual who, while a trustee or officer of the company and at the company’s request, serves or has served as a trustee, director, officer, partner, member or manager of another real estate investment trust, corporation, partnership, joint venture, trust, limited liability company, employee benefit plan or any other enterprise and who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity.

Seritage Growth’s declaration of trust and bylaws also permit it to indemnify and advance expenses to any person who served a predecessor of Seritage Growth in any of the capacities described above and to any employee or agent of Seritage Growth or a predecessor of Seritage Growth.

Item 35. Treatment of Proceeds from Stock Being Registered.

None of the proceeds will be contributed to an account other than the appropriate capital account.

II-2

Item 36. Financial Statements and Exhibits.

(A) Financial Statements. See Index to Combined Financial Statements and the related notes thereto.

(B) Exhibits. The following exhibits are filed as part of, or incorporated by reference into, this registration statement on Form S-11:

Exhibit
3.1**	Form of Articles of Amendment and Restatement of Declaration of Trust of Seritage Growth Properties
3.2**	Form of Bylaws of Seritage Growth Properties
4.1	Form of Certificate for Common Share for Seritage Growth Properties
4.2**	Form of Rights Certificate
5.1**	Form of Opinion of Venable LLP with respect to the securities to be registered
8.1**	Form of Opinion of Wachtell, Lipton, Rosen & Katz with respect to tax matters
10.1	Form of Partnership Agreement of Seritage Growth Properties, L.P.
10.2**	Form of Indemnification Agreement between Seritage Growth Properties and its trustees and executive officers
10.3*	Form of Master Lease, by and between Seritage Growth Properties, L.P. and Sears Holdings Corporation
10.4	Form of Subscription, Distribution and Purchase and Sale Agreement, by and between Seritage Growth Properties and Sears Holdings Corporation
10.5	Form of Transition Services Agreement, by and between Seritage Growth Properties, L.P. and Sears Holdings Management Corporation
10.6	Form of Seritage Growth Properties 2015 Share Plan
21.1*	List of Subsidiaries
23.1*	Consent of Venable LLP (included in Exhibit 5.1)
23.2*	Consent of Wachtell, Lipton, Rosen & Katz (included in Exhibit 8.1)
23.3**	Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm
23.4**	Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm
99.1**	Form of Instruction for use of Seritage Growth Properties Subscription Rights Certificates
99.2**	Form of Letter to Stockholders Who Are Record Holders
99.3**	Form of Letter to Nominee Holders Whose Clients Are Beneficial Holders
99.4**	Form of Letter to Clients of Nominee Holders
99.5**	Form of Nominee Holder Certification
99.6**	Form of Beneficial Owner Election

* To be filed by amendment.

** Previously filed.

II-3

Item 37. Undertakings.

(a) The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

(b) Insofar as indemnification of liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

(c) The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance under Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4), or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and this offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-4

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that the registrant meets all of the requirements for filing on Form S-11 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Hoffman Estates, State of Illinois, on this 11th day of May, 2015.

SERITAGE GROWTH PROPERTIES
By:	/s/ Benjamin Schall
	Benjamin Schall
	Chief Executive Officer and President

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Benjamin Schall Benjamin Schall	Chief Executive Officer and President (Principal Executive Officer)	May 11, 2015
/s/ Robert A. Riecker Robert A. Riecker	Trustee and Treasurer (Principal Financial Officer and Principal Accounting Officer)	May 11, 2015

II-5

EX-4.1

Exhibit 4.1

Number *0* Shares *0*

SEE REVERSE FOR IMPORTANT

NOTICE ON TRANSFER RESTRICTIONS

AND OTHER INFORMATION

THIS CERTIFICATE IS TRANSFERABLE IN THE CITIES OF                                      CUSIP                     

SERITAGE GROWTH PROPERTIES

a Real Estate Investment Trust

Formed under the Laws of the State of Maryland

THIS CERTIFIES THAT **Specimen**

is the owner of **Zero (0)** fully paid and nonassessable class A common shares of beneficial interest, $0.01 par value per share, of

Seritage Growth Properties

a Maryland real estate investment trust (the “Trust”), transferable on the books of the Trust by the holder hereof in person or by its duly authorized attorney upon surrender of this Certificate properly endorsed. This Certificate and the shares evidenced hereby are issued and shall be held subject to all of the provisions of the declaration of trust (the “Declaration of Trust”) and Bylaws of the Trust and any amendments thereto. This Certificate is not valid unless countersigned and registered by the Transfer Agent and Registrar.

IN WITNESS WHEREOF, the Trust has caused this Certificate to be executed on its behalf by its duly authorized officers.

DATED                     

Countersigned and Registered:
		[IMPRESSION OF
Transfer Agent and Registrar		TRUST SEAL]	[                                         ], President
By:
	Authorized Signature		[                            ], Secretary

IMPORTANT NOTICE

The Trust will furnish to any shareholder, on request and without charge, a full statement of the information required by Section 8-203(d) of the Corporations and Associations Article of the Annotated Code of Maryland with respect to the designations and any preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms and conditions of redemption of the shares of each class of beneficial interest which the Trust has authority to issue and, if the Trust is authorized to issue any preferred or special class in series, (i) the differences in the relative rights and preferences between the shares of each series to the extent set, and (ii) the authority of the Board of Trustees to set such rights and preferences of subsequent series. The foregoing summary does not purport to be complete and is subject to and qualified in its entirety by reference to the Declaration of Trust of the Trust, a copy of which will be sent without charge to each shareholder who so requests. Such request must be made to the Secretary of the Trust at its principal office or to the Transfer Agent.

The shares evidenced by this certificate are subject to restrictions on Beneficial and Constructive Ownership and Transfer for the purpose, among others, of the Trust’s maintenance of its status as a real estate investment trust (a “REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). Subject to certain further restrictions and except as expressly provided in the Trust’s Declaration of Trust, (i) no Person may Beneficially or Constructively Own Common Shares of the Trust in excess of the Common Share Ownership Limit unless such Person is an Excepted Holder (in which case the Excepted Holder Limit shall be applicable); (ii) no Person may Beneficially or Constructively Own Equity Shares of the Trust in excess of the Aggregate Share Ownership Limit, unless such Person is an Excepted Holder (in which case the Excepted Holder Limit shall be applicable); (iii) no Person may Beneficially or Constructively Own Equity Shares that would result in the Trust being “closely held” under Section 856(h) of the Code or otherwise cause the Trust to fail to qualify as a REIT; (iv) no Person may Transfer Equity Shares if such Transfer would result in Equity Shares of the Trust being owned by fewer than 100 Persons; (v) no Person may Beneficially Own or Constructively Own Equity Shares that could result in the Trust failing to qualify as a “domestically controlled qualified investment entity” under Section 897(h)(4)(B) of the Code; and (vi) no Person shall Constructively Own Equity Shares to the extent that such Constructive Ownership would cause any income of the Trust that would otherwise qualify as “rents from real property” for purposes of Section 856(d) of the Code to fail to qualify as such. Any Person who Beneficially or Constructively Owns or attempts to Beneficially or Constructively Own Equity Shares which cause or will cause a Person to Beneficially or Constructively Own Equity Shares in excess or in violation of the above limitations must immediately notify the Trust. If any of the restrictions on transfer or ownership described above are violated, the Equity Shares in excess or in violation of the above limitations will be automatically transferred to a Trustee of a Charitable Trust for the benefit of one or more Charitable Beneficiaries. In addition, the Trust may redeem shares upon the terms and conditions specified by the Board of Trustees in its sole and absolute discretion if the Board of Trustees determines that ownership or Transfer or other event may violate the restrictions described above. Furthermore, upon the occurrence of certain events, attempted Transfers in violation of the restrictions described above may be void ab initio. All capitalized terms in this legend have the meanings defined in the Trust’s Declaration of Trust, as the same may be amended from time to time, a copy of which, including the restrictions on transfer and ownership, will be furnished to each holder of Equity Shares of the Trust on request and without charge. Requests for such a copy may be directed to the Secretary of the Trust at its Principal Office.

KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN

OR DESTROYED, THE TRUST WILL REQUIRE A BOND OF INDEMNITY AS A

CONDITION TO THE ISSUANCE OF A REPLACEMENT CERTIFICATE.

The following abbreviations, when used in the inscription on the face of this Certificate, shall be construed as though they were written out in full according to applicable laws or regulations:

TEN COM	-	as tenants in common	UNIF GIFT MIN ACT                  Custodian
TEN ENT	-	as tenants by the entireties	(cust)                              (Minor)
JT TEN	-	as joint tenants with right of survivorship and not as tenants in common	under Uniform Gifts to Minors Act of                                               (State)

Additional abbreviations may also be used though not in the above list.

FOR VALUE RECEIVED,                          HEREBY SELLS, ASSIGNS AND TRANSFERS UNTO

(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

(PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE)

                                          (            ) shares of beneficial interest in the Trust represented by this Certificate and do hereby irrevocably constitute and appoint                                      attorney to transfer the said shares on the books of the Trust, with full power of substitution in the premises.

Dated
	NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THIS CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

EX-10.1

Exhibit 10.1

FORM OF

AGREEMENT OF LIMITED PARTNERSHIP

OF

SERITAGE GROWTH PROPERTIES, L.P.

Dated as of                     , 2015

THE PARTNERSHIP INTERESTS ISSUED PURSUANT TO THIS AGREEMENT OF LIMITED PARTNERSHIP HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES OR “BLUE SKY” LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY NOT BE SOLD OR TRANSFERRED UNLESS THEY ARE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY OTHER APPLICABLE SECURITIES OR “BLUE SKY” LAWS, OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. SUCH PARTNERSHIP INTERESTS ARE SUBJECT TO THE RESTRICTIONS ON TRANSFER SET FORTH IN THIS AGREEMENT.

ARTICLE 1	DEFINED TERMS		1
	Section 1.1	Definitions	1
ARTICLE 2	ORGANIZATIONAL MATTERS		14
	Section 2.1	Organization	14
	Section 2.2	Name	14
	Section 2.3	Resident Agent; Principal Office	15
	Section 2.4	Power of Attorney	15
	Section 2.5	Term	16
	Section 2.6	Number of Partners	16
	Section 2.7	Partnership Interests are Securities	16
ARTICLE 3	PURPOSE		17
	Section 3.1	Purpose and Business	17
	Section 3.2	Powers	17
	Section 3.3	Partnership Only for Purposes Specified	17
	Section 3.4	Representations and Warranties by the Parties	18
ARTICLE 4	CAPITAL CONTRIBUTIONS		19
	Section 4.1	Capital Contributions of the Partners	19
	Section 4.2	Loans by Third Parties	19
	Section 4.3	Additional Funding and Capital Contributions	20
	Section 4.4	Stock Plan	21
	Section 4.5	Other Contribution Provisions	21
ARTICLE 5	DISTRIBUTIONS		23
	Section 5.1	Requirement and Characterization of Distributions	23
	Section 5.2	Distributions in Kind	23
	Section 5.3	Distributions Upon Liquidation	23
ARTICLE 6	ALLOCATIONS		23
	Section 6.1	Timing and Amount of Allocations of Net Income and Net Loss	23
	Section 6.2	General Allocations	24
	Section 6.3	Additional Allocation Provisions	24
	Section 6.4	Tax Allocations	26
ARTICLE 7	MANAGEMENT AND OPERATIONS OF BUSINESS		26
	Section 7.1	Management	26
	Section 7.2	Certificate of Limited Partnership	30
	Section 7.3	Restrictions on General Partner’s Authority	30
	Section 7.4	Reimbursement of the General Partner	33
	Section 7.5	Outside Activities of the General Partner	34
	Section 7.6	Contracts with Affiliates	34

-i-

	Section 7.7	Indemnification	35
	Section 7.8	Liability of the General Partner	37
	Section 7.9	Other Matters Concerning the General Partner	37
	Section 7.10	Title to Partnership Assets	38
	Section 7.11	Reliance by Third Parties	38
ARTICLE 8	RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS		39
	Section 8.1	Limitation of Liability	39
	Section 8.2	Management of Business	39
	Section 8.3	Outside Activities of Limited Partners	39
	Section 8.4	Return of Capital	40
	Section 8.5	Rights of Limited Partners Relating to the Partnership	40
	Section 8.6	Redemption Rights	41
ARTICLE 9	BOOKS, RECORDS, ACCOUNTING AND REPORTS		44
	Section 9.1	Records and Accounting	44
	Section 9.2	Fiscal Year	44
	Section 9.3	Reports	44
ARTICLE 10	TAX MATTERS		45
	Section 10.1	Preparation of Tax Returns	45
	Section 10.2	Tax Matters Partner	45
	Section 10.3	Withholding	45
ARTICLE 11	TRANSFERS AND WITHDRAWALS		46
	Section 11.1	Transfer	46
	Section 11.2	Transfer of General Partner’s Partnership Interest	47
	Section 11.3	Limited Partners’ Rights to Transfer	48
	Section 11.4	Substituted Limited Partners	50
	Section 11.5	Assignees	50
	Section 11.6	General Provisions	50
ARTICLE 12	ADMISSION OF PARTNERS		52
	Section 12.1	Admission of Successor General Partner	52
	Section 12.2	Admission of Additional Limited Partners	52
	Section 12.3	Amendment of Agreement and Certificate of Limited Partnership	53
ARTICLE 13	DISSOLUTION AND LIQUIDATION		53
	Section 13.1	Dissolution	53
	Section 13.2	Winding Up	54
	Section 13.3	Rights of Limited Partners	55
	Section 13.4	Notice of Dissolution	55
	Section 13.5	Cancellation of Certificate of Limited Partnership	55
	Section 13.6	Reasonable Time for Winding-Up	55
	Section 13.7	Waiver of Partition	55

-ii-

	Section 13.8	Liability of Liquidator	55
ARTICLE 14	AMENDMENT OF PARTNERSHIP AGREEMENT; CONSENTS		56
	Section 14.1	Amendments	56
	Section 14.2	Action by the Partners	56
ARTICLE 15	GENERAL PROVISIONS		57
	Section 15.1	Addresses and Notice	57
	Section 15.2	Titles and Captions	57
	Section 15.3	Pronouns and Plurals	57
	Section 15.4	Further Action	57
	Section 15.5	Binding Effect	57
	Section 15.6	Creditors	58
	Section 15.7	Waiver	58
	Section 15.8	Counterparts	58
	Section 15.9	Applicable Law	58
	Section 15.10	Invalidity of Provisions	58
	Section 15.11	Entire Agreement	59
	Section 15.12	No Rights as Shareholders	59

-iii-

AGREEMENT OF LIMITED PARTNERSHIP
OF
SERITAGE GROWTH PROPERTIES, L.P.

THIS AGREEMENT OF LIMITED PARTNERSHIP, dated as of             , 2015, is entered into by and among Seritage Growth Properties, a Maryland real estate investment trust (the “Company”), as the General Partner and the Persons whose names are set forth in Exhibit A attached hereto (the “Contributors”), as the Limited Partners, together with any other Persons who become Partners in the Partnership as provided herein.

WHEREAS, the Partnership (as defined below) was formed as a limited partnership under the laws of the State of Delaware pursuant to a Certificate of Limited Partnership filed on             , 2015;

WHEREAS, Sears Holdings Corporation, a Delaware corporation (“Sears Holdings”), will distribute to holders of its common stock subscription rights to purchase REIT Common Shares (as defined below);

WHEREAS, the Company will issue REIT Common Shares pursuant to such subscription rights in an offering (the “Rights Offering”) registered with the SEC (as defined below), and will contribute the net proceeds from the Rights Offering to the Partnership to fund the Partnership’s purchase of certain properties from certain Subsidiaries of Sears Holdings (the “Properties Purchase”); and

WHEREAS, the Partnership will issue Partnership Interests (as defined below) to the Company and certain other persons in connection with the Rights Offering and the Properties Purchase and certain related transactions.

NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and intending to be legally bound hereby, the parties hereto hereby agree as follows:

ARTICLE 1

DEFINED TERMS

Section 1.1 Definitions.

The following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms used in this Agreement.

“Act” means the Delaware Revised Uniform Limited Partnership Act, as it may be amended, supplemented or restated from time to time, and any successor to such statute.

“Additional Funds” shall have the meaning set forth in Section 4.3.A.

“Additional Limited Partner” means a Person admitted to the Partnership as a Limited Partner pursuant to Section 12.2 and who is shown as such on the books and records of the Partnership.

“Adjustment Date” means, with respect to any Capital Contribution, the close of business on the Business Day last preceding the date of the Capital Contribution, provided that if such Capital Contribution is being made by the General Partner in respect of the proceeds from the issuance of REIT Shares (or the issuance of the General Partner’s securities exercisable for, convertible into or exchangeable for REIT Shares), then the Adjustment Date shall be as of the close of business on the Business Day last preceding the date of the issuance of such securities.

“Affiliate” means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with such Person. For purposes of this definition, “control” when used with respect to any Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Agreed Value” means the fair market value of a Partner’s non-cash Capital Contribution as of the date of contribution as determined by the General Partner. The names and addresses of the Partners, number of Partnership Units issued to each Partner, and the Agreed Value of non-cash Capital Contributions as of the date of contribution are set forth in Exhibit A, as it may be amended or restated from time to time.

“Agreement” means this Agreement of Limited Partnership, as it may be amended or restated from time to time.

“Appraisal” means with respect to any assets, the opinion of an independent third party experienced in the valuation of similar assets, selected by the General Partner in good faith, provided that such opinion may be in the form of an opinion by such independent third party that the value for such property or asset as set by the General Partner is fair, from a financial point of view, to the Partnership.

“Assignee” means a Person to whom one or more Partnership Units have been transferred in a manner permitted under this Agreement, but who has not become a Substituted Limited Partner, and who has the rights set forth in Section 11.5.

“Available Cash” means, with respect to any period for which such calculation is being made,

(i) the sum of:

a. the Partnership’s Net Income or Net Loss (as the case may be) for such period,

b. Depreciation and all other noncash charges deducted in determining Net Income or Net Loss for such period,

-2-

c. the amount of any reduction in reserves of the Partnership referred to in clause (ii)(f) below (including, without limitation, reductions resulting because the General Partner determines such amounts are no longer necessary),

d. the excess of the net proceeds from the sale, exchange, disposition, or refinancing of Partnership property for such period over the gain (or loss, as the case may be) recognized from any such sale, exchange, disposition, or refinancing during such period (excluding Terminating Capital Transactions), and

e. all other cash received by the Partnership for such period that was not included in determining Net Income or Net Loss for such period;

(ii) less the sum of:

a. all principal debt payments made during such period by the Partnership,

b. capital expenditures made by the Partnership during such period,

c. investments in any entity (including loans made thereto) to the extent that such investments are not otherwise described in clauses (ii)(a) or (b) above,

d. all other expenditures and payments not deducted in determining Net Income or Net Loss for such period,

e. any amount included in determining Net Income or Net Loss for such period that was not received by the Partnership during such period,

f. the amount of any increase in reserves established during such period which the General Partner determines is necessary or appropriate in its sole and absolute discretion, and

g. the amount of any working capital accounts and other cash or similar balances which the General Partner determines to be necessary or appropriate in its sole and absolute discretion.

Notwithstanding the foregoing, Available Cash shall not include any cash received or reductions in reserves, or take into account any disbursements made or reserves established, after commencement of the dissolution and liquidation of the Partnership.

“Board” means the Board of Trustees of the Company.

“Business Day” means any day except a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to be closed.

“Capital Account” shall have the meaning set forth in Section 4.6.

-3-

“Capital Contribution” means, with respect to any Partner, the amount of money and the initial Gross Asset Value of any property (other than money) contributed to the Partnership with respect to the Partnership Units held by such Partner (net of liabilities secured by such property which the Partnership assumes or takes subject to).

“Cash Amount” means, with respect to any Common Units subject to a Redemption, an amount of cash equal to the Deemed Partnership Interest Value attributable to such Common Units.

“Certificate” means the Certificate of Limited Partnership of the Partnership filed with the office of the Secretary of State of the State of Delaware on                     , 2015, as amended from time to time in accordance with the terms hereof and the Act.

“Change of Control” means any occurrence resulting in (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becoming the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities entitled to vote in the election of members of the Board having 30% or more of the then-outstanding voting power of the Company; (ii) the Company becoming a party to a merger, consolidation, share exchange, reorganization, sale of assets or other similar extraordinary transaction, or a proxy contest, in each case as a consequence of which members of the Board in office immediately prior to such transaction or event constitute less than a majority of the Board thereafter; or (iii) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board (including for this purpose any new trustee whose election or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds of the trustees then still in office who were trustees at the beginning of such period) ceasing for any reason to constitute at least a majority of the Board.

“Charter” means the Declaration of Trust of the Company filed with the Maryland State Department of Assessments and Taxation on December 18, 2014, as amended or restated on [—], 2015 and as further amended or restated from time to time.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Common Unit” means a Partnership Unit representing a Partnership Interest that is without preference as to distributions and allocations or rights upon voluntary or involuntary liquidation, dissolution or winding up.

“Company” shall have the meaning set forth in the preamble.

“Consent” means the consent to, approval of, or vote on a proposed action by a Partner given in accordance with
Article 14.

“Consent of the Limited Partners” means the Consent of a Majority in Interest of the Limited Partners, which Consent shall be obtained prior to the taking of any action for which it is required by this Agreement and may be given or withheld by a Majority in Interest of the Limited Partners, unless otherwise expressly provided herein, in their sole and absolute discretion.

-4-

“Contributed Property” means each property or other asset, in such form as may be permitted by the Act, but excluding cash, contributed or deemed contributed to the Partnership (or deemed contributed to the Partnership on termination and reconstitution thereof pursuant to Code Section 708).

“Contributors” shall have the meaning set forth in the preamble.

“Conversion Factor” means 1.0; provided that in the event that:

(i) the Company (a) declares or pays a dividend on its outstanding REIT Common Shares wholly or partly in REIT Common Shares or makes a distribution to all holders of its outstanding REIT Common Shares wholly or partly in REIT Common Shares; (b) splits or subdivides its outstanding REIT Common Shares or (c) effects a reverse stock split or otherwise combines or reclassifies its outstanding REIT Common Shares into a smaller number of REIT Common Shares, then the Conversion Factor shall be adjusted by multiplying the Conversion Factor by a fraction, (I) the numerator of which shall be the number of REIT Common Shares issued and outstanding on the record date for such dividend, distribution, split, subdivision, reverse split or combination (assuming for such purpose that such dividend, distribution, split, subdivision, reverse split or combination has occurred as of such time), and (II) the denominator of which shall be the actual number of REIT Common Shares (determined without the above assumption) issued and outstanding on the record date for such dividend, distribution, split, subdivision, reverse split or combination;

(ii) the Company distributes any rights, options or warrants to all holders of its REIT Common Shares to subscribe for or to purchase or to otherwise acquire REIT Common Shares (or other securities or rights convertible into, exchangeable for or exercisable for REIT Common Shares) at a price per share less than the Fair Market Value of a REIT Common Share on the record date for such distribution (each a “Distributed Right”), then, as of the distribution date of such Distributed Rights or, if later, the time such Distributed Rights become exercisable, the Conversion Factor shall be adjusted by multiplying the Conversion Factor by a fraction (a) the numerator of which shall be the number of REIT Common Shares issued and outstanding on the record date (or, if later, the date such Distributed Rights become exercisable) plus the maximum number of REIT Common Shares purchasable under such Distributed Rights and (b) the denominator of which shall be the number of REIT Common Shares issued and outstanding on the record date (or, if later, the date such Distributed Rights become exercisable) plus a fraction (I) the numerator of which is the minimum aggregate purchase price under such Distributed Rights of the maximum number of REIT Common Shares purchasable under such Distributed Rights and (II) the denominator of which is the Value of a REIT Common Share as of the record date (or, if later, the date such Distributed Rights become exercisable); provided, however, that, if any such Distributed Rights expire or become no longer exercisable, then the Conversion Factor shall be adjusted, effective retroactive to the date of distribution (or, if later, the date such Distributed Rights become exercisable) of the Distributed Rights, to reflect a reduced maximum number of REIT Common Shares or any change in the minimum aggregate purchase price for the purposes of the above fraction; and

(iii) the Company shall, by dividend or otherwise, distribute to all holders of its REIT Common Shares evidences of its indebtedness or assets (including securities, but

-5-

excluding any dividend or distribution referred to in subsection (i) or (ii) above), which evidences of indebtedness or assets relate to assets not received by the Company or its Subsidiaries pursuant to a pro rata distribution by the Partnership, then the Conversion Factor shall be adjusted to equal the amount determined by multiplying the Conversion Factor in effect immediately prior to the close of business on the date fixed for determination of stockholders entitled to receive such distribution by a fraction the numerator of which shall be such Fair Market Value of a REIT Common Share on the date fixed for such determination and the denominator of which shall be the Fair Market Value of a REIT Common Share on the date fixed for such determination less the then fair market value (as reasonably determined by the General Partner) of the portion of the evidences of indebtedness or assets so distributed applicable to one REIT Common Share.

Any adjustment to the Conversion Factor shall become effective immediately after the effective date of such event retroactive to the record date, if any, for such event (or, if later, the date such Distributed Rights become exercisable). If, however, the General Partner received a Notice of Redemption after the record date, if any, but prior to the effective date of such event, the Conversion Factor shall be determined as if the General Partner had received the Notice of Redemption immediately prior to the record date for such event.

Notwithstanding the foregoing, the Conversion Factor shall not be adjusted in connection with an event described in clauses (i) or (ii) above if, in connection with such event, the Partnership makes a distribution of cash, Partnership Units, REIT Common Shares and/or rights, options or warrants to acquire Partnership Units and/or REIT Common Shares with respect to all applicable Common Units or effects a reverse split of, or otherwise combines, the Common Units, as applicable, that is comparable as a whole in all material respects with such event.

“Debt” means, as to any Person, as of any date of determination, (i) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services; (ii) all amounts owed by such Person to banks or other Persons in respect to reimbursement obligations under letters of credit, surety bonds and other similar instruments guaranteeing payment or other performance of obligations by such Person; (iii) all indebtedness for borrowed money or for the deferred purchase price of property or services secured by any lien on any property owned by such Person, to the extent attributable to such Person’s interest in such property, even though such Person has not assumed or become liable for the payment thereof; and (iv) lease obligations of such Person that, in accordance with generally accepted accounting principles, should be capitalized.

“Deemed Partnership Interest Value” means, as of any date with respect to any class of Partnership Interests, the Deemed Value of the Partnership Interests of such class multiplied by the applicable Partner’s Percentage Interest of such class.

“Deemed Value of the Partnership Interests” means, as of any date with respect to any class or series of Partnership Interests, (i) the total number of shares of beneficial interest of the General Partner corresponding to such class or series of Partnership Interests (as provided for in Sections 4.1 and 4.3) issued and outstanding as of the close of business on such date (excluding any treasury shares) multiplied by the Fair Market Value of a share of such beneficial interest on such date; (ii) divided by the Percentage Interest of the General Partner in such class of Partnership Interests on such date.

-6-

“Depreciation” means, for each Partnership Year or other period, an amount equal to the depreciation, amortization or other cost recovery deduction allowable under the Code with respect to a Partnership asset for such year or other period, except that if the Gross Asset Value of a Partnership asset differs from its adjusted basis for federal income tax purposes at the beginning of such year or other period, Depreciation shall be an amount that bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization or other cost recovery deduction for such year or other period bears to such beginning adjusted tax basis; provided, however, that if the federal income tax depreciation, amortization or other cost recovery deduction for such year is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the General Partner.

“Distributed Right” has the meaning set forth in the definition of “Conversion Factor.”

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder.

“Fair Market Value” means, with respect to any share of beneficial interest of the General Partner, the average of the daily market price for the ten (10) consecutive Trading Days immediately preceding the date with respect to which “Fair Market Value” must be determined hereunder or, if such date is not a Business Day, the immediately preceding Business Day. The market price for each such Trading Day shall be: (i) if such shares are listed or admitted to trading on any securities exchange, the closing price, regular way, on such day, or if no such sale takes place on such day, the average of the closing bid and asked prices on such day, (ii) if such shares are not listed or admitted to trading on any securities exchange, the last reported sale price on such day or, if no sale takes place on such day, the average of the closing bid and asked prices on such day, as reported by a reliable quotation source designated by the General Partner, or (iii) if such shares are not listed or admitted to trading on any securities exchange and no such last reported sale price or closing bid and asked prices are available, the average of the reported high bid and low asked prices on such day, as reported by a reliable quotation source designated by the General Partner, or if there shall be no bid and asked prices on such day, the average of the high bid and low asked prices, as so reported, on the most recent day (not more than ten (10) days prior to the date in question) for which prices have been so reported; provided that, if there are no bid and asked prices reported during the ten (10) days prior to the date in question, the Fair Market Value of such shares shall be determined by the General Partner acting reasonably and in good faith on the basis of such quotations and other information as it considers, in its reasonable judgment, appropriate; and provided, further, that, in connection with determining the Deemed Value of the Partnership Interests for purposes of determining the number of additional Partnership Units issuable upon a Capital Contribution funded by an underwritten public offering of shares of beneficial interest of the General Partner, the Fair Market Value of such shares shall be the public offering price per share of such class of beneficial interest sold.

“Flow Through Entity” shall have the meaning set forth in Section 2.6.

-7-

“Funding Notice” shall have the meaning set forth in Section 4.3.B.

“General Partner” means the Company or its successor in accordance with the terms of this Agreement as general partner of the Partnership.

“General Partner Interest” means the Partnership Interest held by the General Partner in its capacity as General Partner, which Partnership Interest is an interest as a general partner under the Act. A General Partner Interest may be expressed as a number of any type of Partnership Units.

“Gross Asset Value” means, with respect to any asset of the Partnership, such asset’s adjusted basis for federal income tax purposes, except as follows:

(i) The initial Gross Asset Value of any asset contributed by a Partner to the Partnership shall be the gross fair market value of such asset, as determined by the contributing Partner and the General Partner; provided that if the contributing Partner and the General Partner cannot agree on such determination, such determination shall be made by Appraisal; provided, further, that if the contributing Partner is the General Partner then, except with respect to the General Partner’s capital contributions of cash, REIT Shares or other shares of beneficial interest of the General Partner, the determination of the fair market value of the contributed asset shall be determined by (a) the price paid by the General Partner if the asset is acquired by the General Partner contemporaneously with its contribution to the Partnership or (b) Appraisal, if otherwise acquired by the General Partner.

(ii) The Gross Asset Values of all Partnership assets shall be adjusted to equal their respective gross fair market values, as determined by the General Partner using such reasonable method of valuation as it may adopt, immediately prior to the following events:

(a) a Capital Contribution (other than a de minimis Capital Contribution, within the meaning of Regulations Section 1.704-1(b)(2)(iv)(f)(5)(i)) to the Partnership by a new or existing Partner as consideration for Partnership Units, if the General Partner reasonably determines that such adjustment is necessary or appropriate to reflect the relative economic interests of the Partners in the Partnership;

(b) the distribution by the Partnership to a Partner of more than a de minimis amount (within the meaning of Regulations Section 1.704-1(b)(2)(iv)(f)(5)(i)) of Partnership property as consideration for the redemption of Partnership Units, if the General Partner reasonably determines that such adjustment is necessary or appropriate to reflect the relative economic interests of the Partners in the Partnership;

(c) the liquidation of the Partnership within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g); and

(d) at such other times as the General Partner shall reasonably determine necessary or advisable in order to comply with Regulations Sections 1.704-1(b) and 1.704-2.

-8-

(ii) The Gross Asset Value of Partnership assets distributed to any Partner shall be the gross fair market value of such asset on the date of distribution as determined by the distributee and the General Partner, or if the distributee and the General Partner cannot agree on such a determination, by Appraisal.

(iii) If the Gross Asset Value of a Partnership asset has been determined or adjusted pursuant to subparagraph (i) or (ii), such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Net Income and Net Losses.

“Holder” means either the Partner or an Assignee owning a Partnership Unit.

“Immediate Family” means, with respect to any natural Person, such natural Person’s estate or heirs or current spouse, parents, parents-in-law, children, siblings and grandchildren and any trust or estate, all of the beneficiaries of which consist of such Person or such Person’s spouse, parents, parents-in-law, children, siblings or grandchildren.

“Incapacity” or “Incapacitated” means, (i) as to any natural person that is a Partner, death, total physical disability or entry by a court of competent jurisdiction adjudicating him or her incompetent to manage his or her Person or his or her estate; (ii) as to any corporation that is a Partner, the filing of a certificate of dissolution, or its equivalent, for the corporation or the revocation of its charter; (iii) as to any partnership that is a Partner, the dissolution and commencement of winding up of the partnership; (iv) as to any estate that is a Partner, the distribution by the fiduciary of the estate’s entire interest in the Partnership; (v) as to any trustee of a trust that is a Partner, the termination of the trust (but not the substitution of a new trustee); or (vi) as to any Partner, the bankruptcy of such Partner. For purposes of this definition, bankruptcy of a Partner shall be deemed to have occurred when (a) the Partner commences a voluntary proceeding seeking liquidation, reorganization or other relief under any bankruptcy, insolvency or other similar law now or hereafter in effect, (b) the Partner is adjudged as bankrupt or insolvent, or a final and nonappealable order for relief under any bankruptcy, insolvency or similar law now or hereafter in effect has been entered against the Partner, (c) the Partner executes and delivers a general assignment for the benefit of the Partner’s creditors, (d) the Partner files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the Partner in any proceeding of the nature described in clause (b) above, (e) the Partner seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator for the Partner or for all or any substantial part of the Partner’s properties, (f) any proceeding seeking liquidation, reorganization or other relief under any bankruptcy, insolvency or other similar law now or hereafter in effect has not been dismissed within one hundred twenty (120) days after the commencement thereof, (g) the appointment without the Partner’s consent or acquiescence of a trustee, receiver of liquidator has not been vacated or stayed within ninety (90) days of such appointment, or (h) an appointment referred to in clause (g) is not vacated within ninety (90) days after the expiration of any such stay.

“Indemnitee” means (i) any Person made a party, or threatened to be made a party, to a proceeding by reason of his, her or its status as (a) the Company, (b) the General Partner or (c) a director, trustee, officer, or employee of the Company, the General Partner or the Partnership, and (ii) such other Persons (including, without limitation, Affiliates, officers,

-9-

employees and agents of the Company, the General Partner or the Partnership or any of their respective Subsidiaries) as the General Partner may designate from time to time (whether before or after the event giving rise to potential liability), in its sole and absolute discretion.

“IRS” means the U.S. Internal Revenue Service.

“Limited Partner” means any Person named as a Limited Partner in Exhibit A attached hereto, as such Exhibit may be amended from time to time, or any Substituted Limited Partner or Additional Limited Partner, in such Person’s capacity as a Limited Partner in the Partnership.

“Limited Partnership Interest” means a Partnership Interest of a Limited Partner representing a fractional part of the Partnership Interests of all Limited Partners and includes any and all benefits to which the holder of such a Partnership Interest may be entitled as provided in this Agreement, together with all obligations of such Person to comply with the terms and provisions of this Agreement. A Limited Partnership Interest may be expressed as a number of Partnership Units.

“Liquidating Events” shall have the meaning set forth in Section 13.1.

“Liquidator” shall have the meaning set forth in Section 13.2.A.

“Majority in Interest of the Limited Partners” means Limited Partners, excluding the General Partner and its controlled Affiliates in their respective capacities as holders of Limited Partnership Interests, holding in the aggregate Percentage Interests of Limited Partnership Interests that are greater than fifty percent (50%) of the aggregate Percentage Interests of Limited Partnership Interests held by all Limited Partners, excluding any and all Limited Partnership Interests held by the General Partner and its controlled Affiliates.

“Minimum Gain” means an amount determined in accordance with Regulations Section 1.704-2(d) by computing, with respect to each Nonrecourse Liability of the Partnership, the amount of gain, if any, that the Partnership would realize if it disposed of the property subject to such liability for no consideration other than full satisfaction thereof, and by then aggregating the amounts so computed.

“Minimum Gain Chargeback” shall have the meaning set forth in Section 6.3.A.

“Net Income” or “Net Loss” means for each Partnership Year, an amount equal to the Partnership’s taxable income or loss for such Partnership Year, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain loss, or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), adjusted as follows:

(i) Any income of the Partnership that is exempt from federal income tax and not otherwise taken into account in computing Net Income or Net Loss pursuant to this definition of Net Income or Net Loss shall be added to such taxable income or loss;

-10-

(ii) In lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Partnership Year;

(iii) Any items that are specially allocated pursuant to Sections 6.3 and 6.4 shall not be taken into account in computing Net Income or Net Loss; and

(iv) Any expenditures of the Partnership described in Code Section 705(a)(2)(B) (or treated as such under Regulations Section 1.704-1(b)(2)(iv)(i)) and not otherwise taken into account in computing Net Income or Net Loss pursuant to this definition of Net Income or Net Loss shall be deducted in calculating such taxable income or loss.

“New Securities” means (i) any rights, options, warrants or convertible or exchangeable securities having the right to subscribe for or purchase REIT Shares or other shares of beneficial interest of the General Partner, excluding grants under any Stock Plan, or (ii) any Debt issued by the General Partner that provides any of the rights described in clause (i).

“Nonrecourse Deductions” shall have the meaning set forth in Regulations Section 1.704-2(b)(1) and Regulations Section 1.704-2(c).

“Nonrecourse Liability” shall have the meaning set forth in Regulations Section 1.704-2(b)(3).

“Notice of Redemption” means the Notice of Redemption substantially in the form of Exhibit B to this Agreement.

“Partner” means a General Partner or a Limited Partner, and “Partners” means the General Partner(s) and the Limited Partners.

“Partner Nonrecourse Debt” shall have the meaning set forth in Regulations Section 1.704-2(b)(4).

“Partner Nonrecourse Debt Minimum Gain” has the meaning set forth in Regulations Section 1.704-2(i). A Partner’s share of Partner Nonrecourse Debt Minimum Gain shall be determined in accordance with Regulations Section 1.704-2(i)(5).

“Partner Nonrecourse Deductions” shall have the meaning set forth in Regulations Section 1.704-2(i)(1) and (2), and the amount of Partner Nonrecourse Deductions with respect to a Partner Nonrecourse Debt for a Partnership Year shall be determined in accordance with the rules of Regulations Section 1.704-2(i)(2).

“Partnership” means the limited partnership formed under the Act and pursuant to this Agreement, and any successor thereto.

“Partnership Interest” means an ownership interest in the Partnership of either a Limited Partner or the General Partner and includes any and all benefits to which the holder of such a Partnership Interest may be entitled as provided in this Agreement, together with all obligations of such Person to comply with the terms and provisions of this Agreement. There

-11-

may be one or more classes or series of Partnership Interests as provided in Section 4.3. A Partnership Interest may be expressed as a number of Partnership Units. Unless otherwise expressly provided for by the General Partner at the time of the original issuance of any Partnership Interests, all Partnership Interests (whether of a Limited Partner or a General Partner) shall be of the same class or series.

“Partnership Minimum Gain” shall have the meaning set forth in Regulations Section 1.704-2(b)(2).

“Partnership Record Date” means the record date established by the General Partner for the distribution of Available Cash with respect to Partnership Interests that are not entitled to any preference in distribution pursuant to Section 5.1, which record date shall be the same as the record date established by the General Partner for a distribution to its shareholders of some or all of its portion of such distribution.

“Partnership Unit” means, with respect to any class of Partnership Interest, a fractional, undivided share of such class of Partnership Interest issued pursuant to Sections 4.1 and 4.3. The ownership of Partnership Units may be (but is not required to be) evidenced by a certificate for units substantially in the form of Exhibit C hereto or as the General Partner may otherwise determine with respect to any class of Partnership Units issued from time to time under Sections 4.1 and 4.3.

“Partnership Year” means the fiscal year of the Partnership, which shall be the calendar year.

“Percentage Interest” means, as to a Partner holding a class or series of Partnership Interests, its interest in such class or series as determined by dividing the Partnership Units of such class or series owned by such Partner by the total number of Partnership Units of such class then outstanding as specified in Exhibit A attached hereto, as such Exhibit may be amended from time to time. If the Partnership issues more than one class or series of Partnership Interests, the interest in the Partnership among the classes or series of Partnership Interests shall be determined as set forth in the amendment to the Partnership Agreement setting forth the rights and privileges of such additional classes or series of Partnership Interest, if any, as contemplated by Section 4.3.D.

“Person” means an individual or a corporation, partnership, limited liability company, trust, unincorporated organization, association or other entity.

“Properties” means such interests in real property and personal property, including without limitation, fee interests, interests, in ground leases, interests in joint ventures, interests in mortgages and Debt instruments, as the Partnership may hold from time to time.

“Properties Purchase” shall have the meaning set forth in the recitals.

“Qualified Transferee” means an “Accredited Investor” as defined in Rule 501 promulgated under the Securities Act.

“Redemption” shall have the meaning set forth in Section 8.6.A.

-12-

“Redemption Underwriter” shall have the meaning set forth in Section 8.6.G.

“Regulations” means the final, temporary or proposed income tax regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

“Regulatory Allocations” shall have the meaning set forth in Section 6.3.F.

“REIT” means a real estate investment trust within the meaning of Code Sections 856 through 859.

“REIT Common Share” means a Class A common share of beneficial interest, $0.01 par value per share, of the General Partner.

“REIT Non-Economic Share” means a Class B common share of beneficial interest, $0.01 par value per share, of the General Partner.

“REIT Requirements” shall have the meaning set forth in Section 5.1.

“REIT Share” means a common share of beneficial interest of the General Partner, which may be, without limitation, a REIT Common Share or a REIT Non-Economic Share.

“REIT Shares Amount” means, as of any date, an aggregate number of REIT Common Shares equal to the number of Tendered Units or Repurchased REIT Shares, as applicable, multiplied by the Conversion Factor.

“REIT Shares Election” shall have the meaning set forth in Section 8.6.B.

“Repurchased REIT Shares” shall have the meaning set forth in the Section 7.5.C.

“Rights Offering” shall have the meaning set forth in the recitals.

“Sears Holdings” shall have the meaning set forth in the recitals of this Agreement.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder.

“SEC” means the U.S. Securities and Exchange Commission.

“Specified Redemption Date” means the day of receipt by the General Partner of a Notice of Redemption.

“Stock Plan” means any share incentive, share option, share ownership or employee benefits plan of the General Partner.

“Subsidiary” means, with respect to any Person, any corporation, partnership, limited liability company, joint venture or other entity of which 50% or more of (i) the voting power of the voting equity securities or (ii) the outstanding equity interests is owned, directly or indirectly, by such Person.

-13-

“Substituted Limited Partner” means a Person who is admitted as a Limited Partner of the Partnership pursuant to Section 11.4.

“Tax Matters Partner” has the meaning set forth within Code Section 6231(a)(7).

“Tenant” means any tenant from which the General Partner derives rent either directly or indirectly through partnerships, including the Partnership.

“Tendered Units” shall have the meaning set forth in Section 8.6.A.

“Tendering Partner” shall have the meaning set forth in Section 8.6.A.

“Terminating Capital Transaction” means any sale or other disposition of all or substantially all of the assets of the Partnership or a related series of transactions that, taken together, result in the sale or other disposition of all or substantially all of the assets of the Partnership.

“Termination Transaction” shall have the meaning set forth in Section 11.2.B.

“Trading Day” means, if shares of beneficial interest of the General Partner are listed or admitted to trading on any securities exchange, any day on which such shares are traded on such securities exchange (or, if there are more than one such exchange, the principal such exchange) or (ii) if such shares are not listed or admitted to trading on any securities exchange, any date for which sales prices or closing bid and asked prices (or, if they are not available, high bid and low asked prices) are reported by a reliable quotation source designated by the General Partner.

ARTICLE 2

ORGANIZATIONAL MATTERS

Section 2.1 Organization

The Partnership is a limited partnership formed and continued pursuant to the provisions of the Act and upon the terms and subject to the conditions set forth in this Agreement. Except as expressly provided herein to the contrary, the rights and obligations of the Partners and the administration and termination of the Partnership shall be governed by the Act. The Partnership Interest of each Partner shall be personal property for all purposes.

Section 2.2 Name

The name of the Partnership is Seritage Growth Properties, L.P. The Partnership’s business may be conducted under any other name or names deemed advisable by the General Partner, including the name of the General Partner or any Affiliate thereof. The words “Limited Partnership,” “L.P.,” “Ltd.” or similar words or letters shall be included in the

-14-

Partnership’s name where necessary for the purposes of complying with the laws of any jurisdiction that so requires. The General Partner in its sole and absolute discretion may change the name of the Partnership at any time and from time to time and shall notify the Limited Partners of such change in the next regular communication to the Limited Partners.

Section 2.3 Resident Agent; Principal Office

The registered agent of the Partnership for service of process in the State of Delaware and the registered office of the Partnership in the State of Delaware is c/o The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. The General Partner may from time to time designate in its sole and absolute discretion another registered agent or another location for the registered office or principal place of business, and shall provide the Limited Partners with notice of such change in the next regular communication to the Limited Partners. The principal office of the Partnership shall be located at [•] or at such other place as the General Partner may from time to time designate by notice to the Limited Partners. The Partnership may maintain offices at such other place or places within or outside the State of Delaware as the General Partner deems advisable.

Section 2.4 Power of Attorney

A. Each Limited Partner and each Assignee constitutes and appoints the General Partner, any Liquidator and the authorized officers and attorneys-in-fact of each of the foregoing, and each of those acting singly, in each case with full power of substitution, as its true and lawful agent and attorney-in-fact, with full power and authority in its name, place and stead to:

(1) execute, swear to, seal, acknowledge, deliver, file and record in the appropriate public offices (a) all certificates, documents and other instruments (including, without limitation, this Agreement and the Certificate and all amendments or restatements thereof) that the General Partner or any Liquidator deems appropriate or necessary to form, qualify or continue the existence or qualification of the Partnership as a limited partnership (or a partnership in which the Limited Partners have limited liability) in the State of Delaware and in all other jurisdictions in which the Partnership may conduct business or own property; (b) all instruments that the General Partner or any Liquidator deems appropriate or necessary to reflect any amendment, change, modification or restatement of this Agreement duly adopted in accordance with its terms; (c) all conveyances and other instruments or documents that the General Partner or any Liquidator deems appropriate or necessary to reflect the dissolution and liquidation of the Partnership pursuant to the terms of this Agreement, including, without limitation, a certificate of cancellation; (d) all instruments relating to the admission, withdrawal, removal or substitution of any Partner pursuant to, or other events described in, Article 11, 12 or 13 hereof or the Capital Contribution of any Partner; and (e) all certificates, documents and other instruments relating to the determination of the rights, preferences and privileges of Partnership Interests; and

(2) execute, swear to, seal, acknowledge and file all ballots, consents, approvals, waivers, certificates and other instruments appropriate or necessary, in the sole and absolute discretion of the General Partner or any Liquidator, to make, evidence, give, confirm or

-15-

ratify any vote, consent, approval, agreement or other action that is made or given by the Partners hereunder or is consistent with the terms of this Agreement or appropriate or necessary, in the sole discretion of the General Partner or any Liquidator, to effectuate the terms or intent of this Agreement.

Nothing contained herein shall be construed as authorizing the General Partner or any Liquidator to amend this Agreement except in accordance with Article 14 hereof or as may be otherwise expressly provided for in this Agreement.

B. The foregoing power of attorney is hereby declared to be irrevocable and a power coupled with an interest, in recognition of the fact that each of the Partners will be relying upon the power of the General Partner and any Liquidator to act as contemplated by this Agreement in any filing or other action by it on behalf of the Partnership, and it shall survive and not be affected by the subsequent Incapacity of any Limited Partner or Assignee or the transfer of all or any portion of such Limited Partner’s or Assignee’s Partnership Units and shall extend to such Limited Partner’s or Assignee’s heirs, successors, assigns and personal representatives. Each such Limited Partner or Assignee hereby agrees to be bound by any representation made by the General Partner or any Liquidator, acting in good faith pursuant to such power of attorney; and each such Limited Partner or Assignee hereby waives any and all defenses which may be available to contest, negate or disaffirm the action of the General Partner or any Liquidator, taken in good faith under such power of attorney. Each Limited Partner or Assignee shall execute and deliver to the General Partner or any Liquidator, within fifteen (15) days after receipt of the General Partner’s or Liquidator’s request therefor, such further designation, powers of attorney and other instruments as the General Partner or any Liquidator, as the case may be, deems necessary to effectuate this Agreement and the purposes of the Partnership.

Section 2.5 Term

The term of the Partnership shall be perpetual unless the Partnership is dissolved sooner pursuant to the provisions of Article 13 or as otherwise provided by law.

Section 2.6 Number of Partners

Without the consent of the General Partner, which may be given or withheld in its sole discretion, the Partnership shall not at any time have more than 100 partners (including as partners those persons indirectly owning an interest in the Partnership through a partnership, limited liability company, S corporation or grantor trust (such entity, a “Flow Through Entity”), but only if substantially all of the value of such person’s interest in the Flow Through Entity is attributable to the Flow Through Entity’s interest (direct or indirect) in the Partnership).

Section 2.7 Partnership Interests are Securities

All Partnership Interests shall be securities within the meaning of, and governed by, (i) Article 8 of the Delaware Uniform Commercial Code as in effect from time to time in the State of Delaware and (ii) Article 8 of the Uniform Commercial Code of any other applicable jurisdiction.

-16-

ARTICLE 3

PURPOSE

Section 3.1 Purpose and Business

The purpose and nature of the business to be conducted by the Partnership is (i) to conduct any business that may be lawfully conducted by a limited partnership organized pursuant to the Act, provided, however, that such business shall be limited to and conducted in such a manner as to permit the General Partner at all times to be classified as a REIT for federal income tax purposes, unless the General Partner ceases to qualify as a REIT for reasons other than the conduct of the business of the Partnership, (ii) to enter into any partnership, joint venture, limited liability company or other similar arrangement to engage in any business described in the foregoing clause (i) or to own interests in any entity engaged, directly or indirectly, in any such business and (iii) to do anything necessary or incidental to the foregoing. In connection with the foregoing, and without limiting the General Partner’s right in its sole discretion to cease qualifying as a REIT, the Partners acknowledge that the General Partner has elected REIT status and the General Partner’s continued qualification as a REIT and the avoidance of income and excise taxes on the General Partner inure to the benefit of all the Partners and not solely to the General Partner. The General Partner shall be empowered to do any and all acts and things necessary or prudent to ensure that the Partnership will not be classified as a “publicly traded partnership” taxable as a corporation for purposes of Section 7704 of the Code.

Section 3.2 Powers

The Partnership is empowered to do any and all acts and things necessary, appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment of the purposes and business described herein and for the protection and benefit of the Partnership, including, without limitation, full power and authority, directly or through its ownership interest in other entities, to enter into, perform and carry out contracts of any kind, borrow money and issue evidences of indebtedness, whether or not secured by mortgage, deed of trust, pledge or other lien, acquire, own, manage, improve and develop real property, and lease, sell, transfer and dispose of real property; provided, however, that the Partnership shall not take, or refrain from taking, any action which, in the judgment of the General Partner, in its sole and absolute discretion, could (i) adversely affect the ability of the General Partner to continue to qualify as a REIT, (ii) subject the General Partner to any additional taxes under Section 857 or Section 4981 of the Code or (iii) violate any law or regulation of any governmental body or agency having jurisdiction over the General Partner or its securities or the Partnership or any of its Subsidiaries, unless any such action (or inaction) under clause (i), (ii) or (iii) shall have been specifically consented to by the General Partner in writing.

Section 3.3 Partnership Only for Purposes Specified

The Partnership shall be a partnership only for the purposes specified in Section 3.1, and this Agreement shall not be deemed to create a company, venture or partnership among the Partners with respect to any activities whatsoever other than the activities within the purposes

-17-

of the Partnership as specified in Section 3.1. Except as otherwise provided in this Agreement, no Partner shall have any authority to act for, bind, commit or assume any obligation or responsibility on behalf of the Partnership, its properties or any other Partner. No Partner, in its capacity as a Partner under this Agreement, shall be responsible or liable for any indebtedness or obligation of another Partner, nor shall the Partnership be responsible or liable for any indebtedness or obligation of any Partner, incurred either before or after the execution or delivery of this Agreement by such Partner, except as to those responsibilities, liabilities, indebtedness or obligations incurred pursuant to and as limited by the terms of this Agreement and the Act.

Section 3.4 Representations and Warranties by the Parties

A. Each Partner that is a natural person represents and warrants to each other Partner that (i) such Partner has the legal capacity to enter into this Agreement and perform such Partner’s obligations hereunder, (ii) the consummation of the transactions contemplated by this Agreement to be performed by such Partner will not result in a breach or violation of, or a default under, any agreement by which such Partner or any of such Partner’s property is bound, or any statute, regulation, order or other law to which such Partner is subject, and (iii) this Agreement is binding upon, and enforceable against, such Partner in accordance with its terms.

B. Each Partner that is not a natural person represents and warrants to each other Partner that (i) its execution and delivery of this Agreement and all transactions contemplated by this Agreement to be performed by it have been duly authorized by all necessary action, including without limitation, that of its general partner(s), committee(s), trustee(s), member(s), beneficiaries, directors and/or shareholder(s), as the case may be, as required, (ii) the consummation of such transactions shall not result in a breach or violation of, or a default under, its certificate of limited partnership, partnership agreement, trust agreement, limited liability company operating agreement, charter or bylaws, as the case may be, any agreement by which such Partner or any of such Partner’s properties or any of its partners, beneficiaries, trustees, members, directors or shareholders, as the case may be, is or are bound, or any statute, regulation, order or other law to which such Partner or any of its partners, trustees, beneficiaries members, directors or shareholders, as the case may be, is or are subject, and (iii) this Agreement is binding upon, and enforceable against, such Partner in accordance with its terms.

C. Each Partner represents, warrants and agrees that (i) it is an “accredited investor” as defined in Rule 501 promulgated under the Securities Act, (ii) it has acquired and continues to hold its interest in the Partnership for its own account for investment purposes only and not for the purpose of, or with a view toward, the resale or distribution of all or any part thereof in violation of applicable laws, nor with a view toward selling or otherwise distributing such interest or any part thereof at any particular time or under any predetermined circumstances in violation of applicable laws. Each Partner further represents and warrants that it is a sophisticated investor, able and accustomed to handling sophisticated financial matters for itself, particularly real estate investments, and that it has a sufficiently high net worth that it does not anticipate a need for the funds that it has invested in the Partnership in what it understands to be a highly speculative and illiquid investment.

-18-

D. The representations and warranties contained in Sections 3.4.A, 3.4.B and 3.4.C and this Section 3.4.D shall survive the execution and delivery of this Agreement by each Partner and the dissolution, liquidation, termination and winding up of the Partnership.

E. Each Partner hereby acknowledges that no representations as to potential profit, cash flows, funds from operations or yield, if any, in respect of the Partnership or the General Partner have been made by any Partner or any employee or representative or Affiliate of any Partner, and that projections and any other information, including, without limitation, financial and descriptive information and documentation, which may have been in any manner submitted to such Partner shall not constitute any representation or warranty of any kind or nature, express or implied, and no representation or warranty of any kind or nature has been made by any Partner or any employee or representative or Affiliate of any Partner with respect thereto.

F. Notwithstanding the foregoing, the General Partner may, in its sole and absolute discretion, permit the modification of any of the representations and warranties contained in Sections 3.4.A, 3.4.B and 3.4.C above as applicable to any Partner, provided that such representations and warranties, as modified, shall be set forth in a separate writing addressed to the Partnership and the General Partner.

ARTICLE 4

CAPITAL CONTRIBUTIONS

Section 4.1 Capital Contributions of the Partners

A. At the time of their respective execution of this Agreement, the Partners shall make Capital Contributions as set forth in Exhibit A to this Agreement. The Partners shall own Partnership Units of the class or series and in the amounts and Percentage Interests set forth in Exhibit A, which Exhibit A shall be adjusted from time to time by the General Partner to the extent necessary to reflect accurately exchanges, redemptions, Capital Contributions, the issuance of additional Partnership Units or similar events. Except as required by law or as otherwise provided in Sections 4.3 and 4.4, no Partner shall be required or permitted to make any additional Capital Contributions or loans to the Partnership. Unless otherwise specified by the General Partner at the time of the creation of any class of Partnership Interests, such Partnership Interests shall be Common Units and the class or series of beneficial interest of the Company corresponding thereto shall be REIT Common Shares.

B. All Partnership Units held by the Company shall be deemed to be Limited Partnership Interests and shall be held by the Company in its capacity as a Limited Partner in the Partnership.

Section 4.2 Loans by Third Parties

The Partnership may incur Debt, or enter into other similar credit, guarantee, financing or refinancing arrangements for any purpose (including, without limitation, in connection with any acquisition of Properties) upon such terms as the General Partner determines appropriate; provided that, the Partnership shall not incur any Debt that is recourse to any Partner, except to the extent otherwise agreed to by the applicable Partner in its sole discretion.

-19-

Section 4.3 Additional Funding and Capital Contributions

A. General. The General Partner may, at any time and from time to time determine that the Partnership requires additional funds (“Additional Funds”) for the acquisition of additional Properties, redemption of Partnership Units or such other purposes as the General Partner may determine. Additional Funds may be raised by the Partnership, at the election of the General Partner, from (i) outside borrowings (subject to Section 4.2), (ii) the General Partner or any of its Affiliates or (iii) additional Capital Contributions (subject to this Section 4.3).

B. Funding Notice. The General Partner shall give written notice (the “Funding Notice”) to the Limited Partners of the need for Additional Funds and the anticipated source(s) thereof.

C. Issuance of Additional Partnership Interests. Upon delivery of a Funding Notice, the General Partner may raise all or any portion of the Additional Funds by accepting additional Capital Contributions. In connection with any such additional Capital Contributions (of cash or property) the General Partner is hereby authorized to cause the Partnership from time to time to issue to Partners (including the General Partner) or other Persons (including, without limitation, in connection with the contribution of property to the Partnership) additional Common Units or other Partnership Interests in one or more classes, or one or more series of any of such classes, with such designations, preferences and relative, participating, optional or other special rights, powers and duties, including rights, powers and duties senior to then-existing Limited Partnership Interests, all as shall be determined by the General Partner, subject to Delaware law, including without limitation, (i) the allocations of items of Partnership income, gain, loss, deduction and credit to such class or series of Partnership Interests, (ii) the right of each such class or series of Partnership Interests to share in Partnership distributions and (iii) the rights of each such class or series of Partnership Interests upon dissolution and liquidation of the Partnership; provided that no such additional Common Units or other Partnership Interests shall be issued to the General Partner unless and until each other Partner holding Partnership Interests is given an option, for a period of 10 Business Days following delivery of notice of such option, to subscribe for any or all additional Partnership Interests in the same class in proportion to its Percentage Interests in such class and upon the making of a proportionate Capital Contribution; provided, further, that this Agreement shall be amended to the extent necessary to reflect the terms of any such Partnership Interests in one or more classes, or one or more series of any of such classes, including such designations, preferences and relative, participating, optional or other special rights, powers and duties, at the time of the issuance of additional Partnership Interests.

D. Issuance of REIT Shares or Other Securities by the General Partner. The General Partner shall not issue any additional REIT Shares (other than REIT Shares issued pursuant to Section 8.6 or pursuant to a dividend or distribution (including any share split) of REIT Shares to all of its shareholders), other shares of beneficial interest of the General Partner or New Securities unless (i) the General Partner shall make a Capital Contribution of the net proceeds from the issuance of such additional REIT Shares, other shares of beneficial interest or

-20-

New Securities, as the case may be, and from the exercise of the rights contained in such additional New Securities, as the case may be, and (ii) except with respect to securities to be issued pursuant to any Stock Plan or dividend reinvestment plan, the General Partner shall have delivered to the Limited Partners a Funding Notice regarding the securities to be issued.

E. Percentage Interest Adjustments in the Case of Capital Contributions for Partnership Units. Upon the acceptance of additional Capital Contributions in exchange for any class or series of Partnership Units, the Percentage Interest related thereto shall be equal to a fraction, the numerator of which is equal to the amount of cash and the Agreed Value of the Property contributed as of the Adjustment Date and the denominator of which is equal to the sum of (i) the Deemed Value of the Partnership Interests of such class or series (computed as of the Business Day immediately preceding the Adjustment Date) and (ii) the aggregate amount of additional Capital Contributions contributed to the Partnership on such Adjustment Date in respect of such class or series of Partnership Interests. The Percentage Interest of each other Partner holding Partnership Interests of such class or series not making a full pro rata Capital Contribution shall be adjusted to equal a fraction, the numerator of which is equal to the sum of (i) the Deemed Partnership Interest Value of such Limited Partner in respect of such class or series (computed as of the Business Day immediately preceding the Adjustment Date) and (ii) the amount of additional Capital Contributions made by such Partner to the Partnership in respect of such class or series of Partnership Interests as of such Adjustment Date, and the denominator of which is equal to the sum of (x) the Deemed Value of the Partnership Interests of such class or series (computed as of the Business Day immediately preceding the Adjustment Date) and (y) the aggregate amount of additional Capital Contributions contributed by all Partners and/or third parties to the Partnership on such Adjustment Date in respect of such class or series; provided, however, that solely for purposes of calculating a Partner’s Percentage Interest pursuant to this Section 4.3.E, cash Capital Contributions by the General Partner will be deemed to equal the cash contributed by the General Partner plus, in the case of cash contributions funded by an offering of any shares of beneficial interest of the General Partner, the offering costs attributable to the cash contributed to the Partnership. The General Partner shall promptly give each Partner written notice of its Percentage Interest, as adjusted.

Section 4.4 Stock Plan

If at any time or from time to time the General Partner sells REIT Common Shares pursuant to any Stock Plan, the General Partner shall contribute the proceeds therefrom to the Partnership as an additional Capital Contribution pursuant to Section 4.3 in exchange for an amount of additional Common Units equal to the number of REIT Common Shares so sold. The General Partner’s Capital Account shall be increased by the amount of cash so contributed.

Section 4.5 Other Contribution Provisions

In the event that any Partner is admitted to the Partnership (or any existing Partner is issued additional Partnership Interests) and is given a Capital Account in exchange for services rendered to the Partnership, such transaction shall be treated by the Partnership and the affected Partner as if the Partnership had compensated such Partner in cash and the Partner had contributed such cash to the capital of the Partnership. In addition, with the consent of the General Partner, one or more Limited Partners may enter into contribution agreements with the Partnership which have the effect of providing a guarantee of certain obligations of the Partnership.

-21-

Section 4.6 Capital Accounts

The Partnership shall establish and maintain a separate capital account (“Capital Account”) for each Partner, including a Partner who shall pursuant to the provisions hereof acquire a Partnership Interest, which Capital Account shall be:

(1) Credited with the amount of cash contributed by such Partner to the capital of the Partnership; the initial Gross Asset Value (net of liabilities secured by such contributed property that the Partnership assumes or takes subject to) of any other property contributed by such Partner to the capital of the Partnership; such Partner’s distributive share of Net Income; and any other items in the nature of income or gain that are allocated to such Partner pursuant to Article 6 hereof, but excluding tax items described in Regulations Section 1.704-1(b)(4)(i); and

(2) Debited with the amount of cash distributed to such Partner pursuant to the provisions of this Agreement; the Gross Asset Value (net of liabilities secured by such distributed property that such Partner assumes or takes subject to) of any Partnership property distributed to such Partner pursuant to any provision of this Agreement; the amount of unsecured liabilities of such Partner assumed by the Partnership; such Partner’s distributive share of Net Loss; and any other items in the nature of expenses or losses that are allocated to such Partner pursuant to Article 6 hereof, but excluding tax items described in Regulations Section 1.704-1(b)(4)(i).

(3) In the event that any or all of a Partner’s Partnership Units are transferred within the meaning of Regulations Section 1.704-1(b)(2)(iv)(l), the transferee shall succeed to the Capital Account of the transferor to the extent that it relates to the Partnership Units so transferred.

In the event that the Gross Asset Values of Partnership assets are adjusted pursuant to the definition of “Gross Asset Value,” the Capital Accounts of the Partners shall be adjusted to reflect the aggregate net adjustments as if the Partnership sold all of its properties for their fair market values and recognized gain or loss for federal income tax purposes equal to the amount of such aggregate net adjustment.

Except as required by law, no Limited Partner shall be liable for any deficit in its Capital Account or be obligated to return any distributions of any kind received from the Partnership.

The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Regulations Section 1.704-1(b), and shall be interpreted and applied as provided in the Regulations.

-22-

ARTICLE 5

DISTRIBUTIONS

Section 5.1 Requirement and Characterization of Distributions

Subject to Article 13, the other provisions of this Article 5 and the rights and preferences of any additional class or series of Partnership Units established pursuant to this Agreement, the General Partner shall cause the Partnership to distribute quarterly all, or such portion as the General Partner may in its discretion determine, of the Available Cash generated by the Partnership to the Partners who are Partners on the applicable record date with respect to such distribution in accordance with their respective Percentage Interests of Limited Partnership Interests on the applicable record date.

Unless otherwise expressly provided for herein or in an agreement at the time a new class of Partnership Interests is created in accordance with Article 4, no Partnership Interest shall be entitled to a distribution in preference to any other Partnership Interest. The General Partner shall take such reasonable efforts, as determined by it in its sole and absolute discretion and consistent with its qualification as a REIT, to cause the Partnership to distribute sufficient amounts, in accordance with this Section 5.1, to enable the General Partner to pay shareholder dividends that will (a) satisfy all actions or omissions as may be necessary (including making appropriate distributions from time to time) to permit the General Partner and, where applicable, each of its respective Subsidiaries to qualify or continue to qualify as a REIT within the meaning of Code Section 856 et seq., as such provisions may be amended from time to time, or the corresponding provisions of succeeding law (“REIT Requirements”) and (b) avoid any federal income or excise tax liability of the General Partner.

Section 5.2 Distributions in Kind

No right is given to any Partner to demand and receive property of the Partnership, except as set forth in Section 8.6. No distribution of any property of the Partnership other than cash shall be made except following the occurrence of a Liquidating Event and in accordance with Article 13.

Section 5.3 Distributions upon Liquidation

Proceeds from a Terminating Capital Transaction shall be distributed to the Partners in accordance with Section 13.2.

ARTICLE 6

ALLOCATIONS

Section 6.1 Timing and Amount of Allocations of Net Income and Net Loss

Net Income and Net Loss of the Partnership shall be determined and allocated with respect to each Partnership Year as of the end of each such year. Subject to the other provisions of this Article 6, an allocation to a Partner of a share of Net Income or Net Loss shall be treated as an allocation of the same share of each item of income, gain, loss or deduction that is taken into account in computing Net Income or Net Loss.

-23-

Section 6.2 General Allocations

A. Except as otherwise provided in this Article 6, Net Income and Net Loss of the Partnership (and each item thereof) for each Partnership Year shall be allocated to each of the Partners holding the same class of Partnership Interests in accordance with their respective Percentage Interest of such class. The General Partner is authorized to modify the allocations in this Section 6.2 and amend such provisions (including the defined terms used therein) in such manner as the General Partner determines is necessary or appropriate to reflect the issuance of additional series or classes of Partnership Interests pursuant to Section 4.3 or 4.4. Any such modification may be made pursuant to the certificate of designations or similar instrument establishing such new class or series.

Section 6.3 Regulatory Allocations

Notwithstanding the foregoing provisions of this Article 6, the following provisions shall apply:

A. Minimum Gain Chargeback. A Partner shall not receive an allocation of any Partnership deduction that would result in total loss allocations attributable to Nonrecourse Liabilities in excess of such Partner’s share of Minimum Gain (as determined under Regulations Section 1.704-2(g)). If the Partnership makes a distribution allocable to the proceeds of a Nonrecourse Liability, in accordance with Regulations Section 1.704-2(h), the distribution will be treated as allocable to an increase in Partnership Minimum Gain to the extent the increase results from encumbering Partnership property with aggregate Nonrecourse Liabilities that exceed the property’s adjusted tax basis. If there is a net decrease in Partnership Minimum Gain for a Partnership Year, in accordance with Regulations Section 1.704-2(f) and the exceptions contained therein, the Partners shall be allocated items of Partnership income and gain for such Partnership Year (and, if necessary, for subsequent Partnership Years) equal to the Partners’ respective shares of the net decrease in Minimum Gain within the meaning of Regulations Section 1.704-2(g)(2) (the “Minimum Gain Chargeback”). The items to be allocated pursuant to this Section 6.3.A shall be determined in accordance with Regulations Section 1.704-2(f) and (j).

B. Partner Nonrecourse Deductions; Partner Minimum Gain Chargeback. Any item of Partner Nonrecourse Deduction with respect to a Partner Nonrecourse Debt shall be allocated to the Partner or Partners who bear the economic risk of loss for such Partner Nonrecourse Debt in accordance with Regulations Section 1.704-2(i)(1). If the Partnership makes a distribution allocable to the proceeds of a Partner Nonrecourse Debt, in accordance with Regulations Section 1.704-2(i)(6) the distribution will be treated as allocable to an increase in Partner Minimum Gain to the extent the increase results from encumbering Partnership property with aggregate Partner Nonrecourse Debt that exceeds the property’s adjusted tax basis. Subject to Section 6.2.A hereof, but not withstanding any other provision of this Agreement, in the event that there is a net decrease in Partner Nonrecourse Debt Minimum Gain for a Partnership Year, then after taking into account allocations pursuant to Section 6.2.A, but before any other allocations are made for such taxable year, and subject to the exceptions set forth in Regulations

-24-

Section 1.704-2(i)(4), each Partner with a share of Partner Nonrecourse Debt Minimum Gain at the beginning of such Partnership Year shall be allocated items of income and gain for such Partnership Year (and, if necessary, for subsequent Partnership Years) equal to such Partner’s share of the net decrease in Partner Nonrecourse Debt Minimum Gain as determined in a manner consistent with the provisions of Regulations Section 1.704-2(g)(2). The items to be so allocated pursuant to this Section 6.3.B shall be determined in accordance with Regulations Section 1.704-2(i)(4) and (j).

C. Excess Nonrecourse Liabilities. Pursuant to Regulations Section 1.752-3(a)(3), for the purpose of determining each Partner’s share of excess nonrecourse liabilities of the Partnership, and solely for such purpose, each Partner’s interest in Partnership profits shall be determined by any reasonable method chosen by the General Partner including, without limitation, the principles set forth in Rev. Rul. 95-41, 1995-1 C.B. 132.

D. Limitation on Allocation of Net Loss; Qualified Income Offset. No Limited Partner shall be allocated any item of deduction or loss of the Partnership if such allocation would cause such Limited Partner’s Capital Account to become negative by more than the sum of (i) any amount such Limited Partner is obligated to restore upon liquidation of the Partnership, plus (ii) such Limited Partner’s share of the Partnership’s Minimum Gain and Partner Nonrecourse Debt Minimum Gain. An item of deduction or loss that cannot be allocated to a Limited Partner pursuant to this Section 6.3.D shall be allocated to the General Partner. For this purpose, in determining the Capital Account balance of such Limited Partner, the items described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6) shall be taken into account. In the event that (a) any Limited Partner unexpectedly receives any adjustment, allocation or distribution described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), and (b) such adjustment, allocation, or distribution causes or increases a deficit balance (net of amounts which such Limited Partner is obligated to restore or deemed obligated to restore under Regulations Section 1.704-2(g)(1) and 1.704-2(i)(5) and determined after taking into account any adjustments, allocations, or distributions described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6) that, as of the end of the Partnership Year, reasonably are expected to be made to such Limited Partner) in such Limited Partner’s Capital Account as of the end of the Partnership Year to which such adjustment, allocation, or distribution relates, then items of Partnership income and gain (consisting of a pro rata portion of each item of income or gain) for such Partnership Year and each subsequent Partnership Year shall be allocated to such Limited Partner until such deficit balance or increase in such deficit balance, as the case may be, has been eliminated. In the event that this Section 6.3.D and Section 6.3.A and/or B apply, Section 6.3.A and/or B hereof shall be applied prior to this Section 6.3.D.

E. Capital Account Deficits. In the event any Partner has a deficit Capital Account at the end of any Partnership Year which is in excess of the amount such Partner is obligated to restore to the penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), such Partner shall be specially allocated items of Partnership income and gain in the amount of such excess as quickly as possible, provided that an allocation pursuant to this Section 6.3.E shall be made only if and to the extent that such Partner would have a deficit Capital Account in excess of such amount after all other allocations provided for under this Agreement have been made as if this Section 6.3.E and Section 6.3.D were not in this Agreement.

-25-

F. Curative Allocation. The Regulatory Allocations shall be taken into account in allocating other items of income, gain, loss and deduction among the Partners so that, to the extent possible, the cumulative net amount of allocations of Partnership items under this Section 6.3 shall be equal to the net amount that would have been allocated to each Partner if the Regulatory Allocations had not been made. This Section 6.3.F is intended to minimize to the extent possible and to the extent necessary any economic distortions which may result from application of the Regulatory Allocations and shall be interpreted in a manner consistent therewith. For purposes hereof, “Regulatory Allocations” shall mean the allocations provided under this Section 6.3 (other than this Section 6.3.F).

Section 6.4 Tax Allocations

A. Allocations Respecting Section 704(c) Revaluations. In accordance with Code Section 704(b) and 704(c) and the Regulations thereunder, income, gain, loss and deduction with respect to any property contributed to the capital of the Partnership shall, solely for federal income tax purposes, be allocated among the Partners on a property by property basis so as to take account of any variation between the adjusted basis of such property to the Partnership for federal income tax purposes and the initial Gross Asset Value of such property. If the Gross Asset Value of any Partnership property is adjusted as described in the definition of Gross Asset Value, subsequent allocations of income, gains or losses from taxable sales or other dispositions and deductions with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and the Gross Asset Value of such asset in the manner prescribed under Code Sections 704(b) and 704(c) of the Code and the Regulations thereunder. Any elections or other decisions relating to allocations under Code Section 704(c) (including under Regulations Section 1.704-3, whether to use the “traditional method,” the “traditional method with curative allocations” or the “remedial method) shall be made by the General Partner.

B. The Net Income, Net Loss, gains, deductions and credits of the Partnership (and all items thereof) for each Partnership Year shall be determined in accordance with the accounting method followed by the Partnership for federal income tax purposes.

C. Except as provided in Section 6.3.A, for income tax purposes, each item of income, gain, loss or deduction shall be allocated among the Partners in the same manner as its correlative item of “book” income, gain, loss or deduction has been allocated pursuant to this Article 6.

ARTICLE 7

MANAGEMENT AND OPERATIONS OF BUSINESS

Section 7.1 Management

A. Except as otherwise expressly provided in this Agreement, all management powers over the business and affairs of the Partnership are exclusively vested in the General Partner, and no Limited Partner shall have any right to participate in or exercise control or management power over the business and affairs of the Partnership. The General Partner may

-26-

not be removed by the Limited Partners with or without cause, except with the consent of the General Partner. In addition to the powers now or hereafter granted a general partner of a limited partnership under applicable law or which are granted to the General Partner under any other provision of this Agreement, the General Partner, subject to the other provisions of this Agreement, including without limitation Section 7.3, shall have full power and authority to do all things deemed necessary or desirable by it to conduct the business of the Partnership, to exercise all powers set forth in Section 3.2 and to effectuate the purposes set forth in Section 3.1, including, without limitation:

(1) the making of any expenditures, the lending or borrowing of money (including, without limitation, making prepayments on loans and borrowing money to permit the Partnership to make distributions to its Partners in such amounts as will permit the General Partner (so long as the General Partner has determined to qualify as a REIT) to avoid the incurrence of any federal income tax (including, for this purpose, any excise tax pursuant to Section 4981 of the Code) and to make distributions to its shareholders sufficient to permit the General Partner to maintain REIT status), the assumption or guarantee of, or other contracting for, indebtedness and other liabilities, the issuance of evidences of indebtedness (including the securing of same by mortgage, deed of trust or other lien or encumbrance on the Partnership’s assets) and the incurring of any obligations it deems necessary for the conduct of the activities of the Partnership;

(2) the making of tax, regulatory and other filings, or rendering of periodic or other reports to governmental or other agencies having jurisdiction over the business or assets of the Partnership;

(3) the acquisition, disposition, mortgage, pledge, encumbrance, hypothecation or exchange of any assets of the Partnership or the merger or other combination of the Partnership with or into another entity;

(4) the mortgage, pledge, encumbrance or hypothecation of any assets of the Partnership, and the use of the assets of the Partnership (including, without limitation, cash on hand) for any purpose consistent with the terms of this Agreement and on any terms it sees fit, including, without limitation, the financing of the conduct or the operations of the General Partner or the Partnership, the lending of funds to other Persons (including, without limitation, the General Partner (if necessary to permit the financing or capitalization of a Subsidiary of the Partnership) or any Subsidiaries of the Partnership) and the repayment of obligations of the Partnership, any of its Subsidiaries and any other Person in which it has an equity investment;

(5) the negotiation, execution, and performance of any contracts, leases, conveyances or other instruments that the General Partner considers useful or necessary to the conduct of the Partnership’s operations or the implementation of the General Partner’s powers under this Agreement;

(6) the distribution of Partnership cash or other Partnership assets in accordance with this Agreement;

-27-

(7) the selection and dismissal of employees of the Partnership (including, without limitation, employees having titles such as “president,” “vice president,” “secretary” and “treasurer”), and agents, outside attorneys, accountants, consultants and contractors of the Partnership, the determination of their compensation and other terms of employment or hiring, including waivers of conflicts of interest and the payment of their expenses and compensation out of the Partnership’s assets;

(8) the maintenance of such insurance (including, without limitation, directors and officers insurance) for the benefit of the Partnership and the Partners as it deems necessary or appropriate;

(9) the formation of, or acquisition of an interest in, and the contribution of property to, any further limited or general partnerships, joint ventures or other relationships that it deems desirable (including, without limitation, the acquisition of interests in, and the contributions of property to any Subsidiary and any other Person in which it has an equity investment from time to time); provided that, as long as the General Partner has determined to continue to qualify as a REIT, the Partnership may not engage in any such formation, acquisition or contribution that would cause the General Partner to fail to qualify as a REIT;

(10) the control of any matters affecting the rights and obligations of the Partnership, including the conduct of litigation and the incurring of legal expense and the settlement of claims and litigation, and the indemnification of any Person against liabilities and contingencies to the extent permitted by law;

(11) the undertaking of any action in connection with the Partnership’s direct or indirect investment in any Person (including, without limitation, contributing or loaning Partnership funds to, incurring indebtedness on behalf of, or guarantying the obligations of any such Persons);

(12) subject to the other provisions in this Agreement, the determination of the fair market value of any Partnership property distributed in kind using such reasonable method of valuation as it may adopt, provided that such methods are otherwise consistent with requirements of this Agreement;

(13) the management, operation, leasing, landscaping, repair, alteration, demolition or improvement of any real property or improvements owned by the Partnership or any Subsidiary of the Partnership or any Person in which the Partnership has made a direct or indirect equity investment;

(14) holding, managing, investing and reinvesting cash and other assets of the Partnership;

(15) the collection and receipt of revenues and income of the Partnership;

-28-

(16) the exercise, directly or indirectly through any attorney-in-fact acting under a general or limited power of attorney, of any right, including the right to vote, appurtenant to any asset or investment held by the Partnership;

(17) the exercise of any of the powers of the General Partner enumerated in this Agreement on behalf of or in connection with any Subsidiary of the Partnership or any other Person in which the Partnership has a direct or indirect interest, or jointly with any such Subsidiary or other Person;

(18) the exercise of any of the powers of the General Partner enumerated in this Agreement on behalf of any Person in which the Partnership does not have an interest pursuant to contractual or other arrangements with such Person;

(19) the maintenance of the Partnership’s books and records; and

(20) the making, execution and delivery of any and all deeds, leases, notes, deeds to secure debt, mortgages, deeds of trust, security agreements, conveyances, contracts, guarantees, warranties, indemnities, waivers, releases or legal instruments or agreements in writing necessary or appropriate in the judgment of the General Partner for the accomplishment of any of the powers of the General Partner enumerated in this Agreement.

B. Each of the Limited Partners agrees that the General Partner is authorized to execute, deliver and perform the above-mentioned agreements and transactions on behalf of the Partnership without any further act, approval or vote of the Partners, notwithstanding any other provisions of this Agreement (except as provided in Section 7.3), the Act or any applicable law, rule or regulation. The execution, delivery or performance by the General Partner or the Partnership of any agreement authorized or permitted under this Agreement shall not constitute a breach by the General Partner of any duty that the General Partner may owe the Partnership or the Limited Partners or any other Persons under this Agreement or of any duty stated or implied by law or equity.

C. At all times from and after the date hereof, the General Partner may cause the Partnership to obtain and maintain (i) casualty, liability and other insurance on the properties of the Partnership and (ii) liability insurance for the Indemnities hereunder.

D. At all times from and after the date hereof, the General Partner may cause the Partnership to establish and maintain working capital reserves in such amounts as the General Partner, in its sole and absolute discretion, deems appropriate and reasonable from time to time.

E. Except as provided in this Agreement with respect to the qualification of the General Partner as a REIT and as may be provided in a separate written agreement between the Partnership and a Limited Partner, in exercising its authority under this Agreement, the General Partner may, but shall be under no obligation to, take into account the tax consequences to any Partner (including the General Partner) of any action taken by the General Partner. Except as provided in this Agreement with respect to the qualification of the General Partner as a REIT and as may be provided in a separate written agreement between the Partnership and a Limited Partner, the General Partner and the Partnership shall not have liability to a Partner under any circumstances as a result of an income tax liability incurred by such Limited Partner as a result of an action (or inaction) by the General Partner pursuant to its authority under this Agreement.

-29-

Section 7.2 Certificate of Limited Partnership

To the extent that such action is determined by the General Partner to be reasonable and necessary or appropriate, the General Partner shall file amendments to and restatements of the Certificate and do all the things to maintain the Partnership as a limited partnership (or a partnership in which the limited partners have limited liability) under the laws of the State of Delaware and each other state, the District of Columbia or other jurisdiction, in which the Partnership may elect to do business or own property. Subject to the terms of Section 8.5.A(4), the General Partner shall not be required, before or after filing, to deliver or mail a copy of the Certificate or any amendment thereto to any Limited Partner. The General Partner shall use all reasonable efforts to cause to be filed such other certificates or documents as may be reasonable and necessary or appropriate for the formation, continuation, qualification and operation of a limited partnership (or a partnership in which the limited partners have limited liability) in the State of Delaware, any other state, or the District of Columbia or other jurisdiction, in which the Partnership may elect to do business or own property.

Section 7.3 Restrictions on General Partner’s Authority

A. The General Partner may not take any action in contravention of an express prohibition or limitation of this Agreement, including, without limitation:

(1) taking any action that would make it impossible to carry on the ordinary business of the Partnership, except as otherwise provided in this Agreement;

(2) possessing Partnership property, or assigning any rights in specific Partnership property, for other than a Partnership purpose except as otherwise provided in this Agreement;

(3) admitting a Person as a Partner, except as otherwise provided in this Agreement;

(4) performing any act that would subject a Limited Partner to liability as a general partner in any jurisdiction or any other liability except as provided herein or under the Act; or

(5) entering into any contract, mortgage, loan or other agreement that expressly prohibits or restricts the Company or the Partnership from performing their respective obligations under this Agreement in connection with a Redemption or prohibits or restricts the ability of a Limited Partner to exercise its rights to a Redemption in full, except with the written consent of such Limited Partner.

B. Without the prior Consent of the Limited Partners, neither the General Partner nor the Partnership may engage in, cause or permit:

(1) at any time:

-30-

(i) any action that would make it impossible to carry on the ordinary business of the Partnership, except as otherwise provided in this Agreement;

(ii) any action that would subject a Limited Partner to liability not contemplated in this Agreement or under the Act;

(iii) entering into any contract, mortgage loan or other agreement that expressly prohibits or restricts the Company or the Partnership from performing their respective specific obligations in connection with a Redemption as provided in Section 8.6 or restricts the ability of a Limited Partner to exercise its rights of Redemption in full without the written consent of such Limited Partner;

(iv) except as explicitly permitted under Section 7.3.C, any amendment, modification or termination of this Agreement;

(v) any other direct or indirect transfer of all or any portion of the General Partner’s Partnership Interest, other than pursuant to and in accordance with Section 11.2;

(vi) any voluntary withdrawal of the General Partner as general partner except pursuant to and in accordance with Section 11.2;

(vii) any general assignment for the benefit of creditors, or appointment or acquiescence in the appointment of a custodian, receiver or trustee for all or any part of the assets of the General Partner or the Partnership;

(viii) the commencement of any proceeding for bankruptcy by or on behalf of the General Partner or the Partnership

(ix) the confession of a judgment against the General Partner or the Partnership;

(x) the adoption of any plan of liquidation or dissolution of the General Partner or the Partnership;

(xi) any change in any election relating to the tax status of the Partnership or the Company, including, without limitation, the status of the General Partner as a REIT;

(xii) any admission into the Partnership of any Additional or Substitute General Partners, except pursuant to and in accordance with Article 11 or Article 12;

-31-

(2) at any time that the General Partner’s Percentage Interest of the Common Units is less than [—] percent ([—]%):

(i) the sale, lease, exchange or other transfer of all or substantially all of the assets of the General Partner or the Partnership, whether in a single transaction or a series of related transactions;

(ii) any waiver of any restrictions in the Charter relating to the ownership and transfer of shares of beneficial interest of the General Partner, including, without limitation, any restriction preventing a person or entity from owning, or being deemed to own, beneficially or by virtue of the applicable constructive ownership provisions of the Code, more than a percentage specified in the Charter, in value or in number of shares, whichever is more restrictive, of the outstanding shares of any class or series of shares of beneficial interest of the General Partner, including, without limitation, the REIT Common Shares; or

(iii) any direct or indirect transfer of all or any portion of the General Partner’s Partnership Interest in connection with, or any other occurrence of, (A) a merger, consolidation, conversion or other combination or extraordinary transaction involving the Partnership or (B) a Change of Control of the Partnership.

C. Notwithstanding Section 7.3.B, the General Partner shall have the power to amend this Agreement as may be required to facilitate or implement any of the following purposes:

(1) to reflect the issuance of additional Partnership Interests pursuant to Section 4.3.C or the admission, substitution, termination or withdrawal of Partners in accordance with Articles 11 and 12;

(2) to reflect a change that is of an inconsequential nature and does not adversely affect the Limited Partners in any material respect, or to cure any ambiguity, correct any provision in this Agreement not inconsistent with law or with other provisions, or make other changes with respect to matters arising under this Agreement that will not be inconsistent with law or with the provisions of this Agreement;

(3) to satisfy any requirements, conditions or guidelines contained in any order, directive, opinion, ruling or regulation of a federal or state agency or contained in federal or state law;

(4) to reflect such changes necessary for the General Partner to satisfy the REIT Requirements, including changes which may be necessitated due to a change in applicable law (or an authoritative interpretation thereof) or a ruling of the IRS; and

-32-

(5) to modify, as set forth in the definition of “Capital Account,” the manner in which Capital Accounts are computed.

The General Partner will provide notice to the Limited Partners prior to taking any action under this Section 7.3.C.

D. Notwithstanding Section 7.3.B and 7.3.C, this Agreement shall not be amended with respect to any Partner adversely affected, and no action may be taken by the General Partner, without the Consent of such Partner adversely affected if such amendment or action would (i) convert a Limited Partner’s interest in the Partnership into a general partner’s interest (except as the result of the General Partner acquiring such interest), (ii) modify the limited liability of a Limited Partner, (iii) alter rights of the Partner to receive distributions pursuant to Article 5 or Section 13.2.A(3) or the allocations specified in Article 6 (except as permitted pursuant to Section 4.3 and Section 7.3.C(3)), (iv) materially alter or modify the rights of Redemption or the REIT Shares Amount as set forth in Section 8.6, and related definitions thereof or (v) amend this Section 7.3.D; provided, that if all holders of Partnership Units of the same class or series are adversely affected on a uniform or pro rata basis, this Agreement may be amended with respect to such Partners by the consent of Partners holding in the aggregate Percentage Interests of such class or series that are greater than fifty percent (50%) of the aggregate Percentage Interests of such class or series held by all Partners. Further, no amendment may alter the restrictions on the General Partner’s authority set forth elsewhere in this Section 7.3 without the Consent specified in such section. This Section 7.3D does not require unanimous consent of all Partners adversely affected unless the amendment is to be effective against all Partners adversely affected.

Section 7.4 Reimbursement of the General Partner

A. Except as provided in this Section 7.4 and elsewhere in this Agreement (including the provisions of Articles 5 and 6 regarding distributions, payments and allocations to which it may be entitled), the General Partner shall not be compensated for its services as general partner of the Partnership.

B. The General Partner shall be reimbursed on a monthly basis for all expenses it incurs relating to the operation of, or for the benefit of, the Partnership. The Limited Partners acknowledge that the General Partner’s sole business is the ownership of interests in and operation of the Partnership and that such expenses are incurred for the benefit of the Partnership. Such reimbursements shall be in addition to any reimbursement to the General Partner as a result of indemnification pursuant to Section 7.7.

C. If and to the extent any reimbursements to the General Partner pursuant to this Section 7.4 constitute gross income of the General Partner (as opposed to the repayment of advances made by the General Partner on behalf of the Partnership), such amounts shall constitute guaranteed payments within the meaning of Section 707(c) of the Code, shall be treated consistently therewith by the Partnership and all Partners, and shall not be treated as distributions for purposes of computing the Partners’ Capital Accounts.

-33-

Section 7.5 Outside Activities of the General Partner

A. The General Partner, the Company and any Affiliates of the General Partner or the Company may acquire Limited Partnership Interests and shall be entitled to exercise all rights of a Limited Partner relating to such Limited Partnership Interests.

B. Except in connection with a transaction pursuant to Section 11.2, without the Consent of the Limited Partners, the General Partner shall not, directly or indirectly, enter into or conduct any business, other than in connection with the ownership, acquisition and disposition of Partnership Interests as a General Partner and the management of the business of the Partnership, its operation as a public reporting company with a class (or classes) of securities registered under the Exchange Act, its operation as a REIT and such activities as are incidental to the same. Without the Consent of the Limited Partners, the General Partner shall not, directly or indirectly, participate in or otherwise acquire (i) any interest in any real or personal property or (ii) any equity securities or other interests (or securities convertible into or exercisable for such equity securities or other interests) of any Person other than the Partnership, except in each case its General Partner Interest, its Limited Partnership Interests, and such bank accounts, similar instruments or other short-term investments as it deems necessary to carry out its responsibilities contemplated under this Agreement and the Charter.

C. In the event the General Partner exercises its rights under the Charter to purchase REIT Shares (such REIT Shares, the “Repurchased REIT Shares”), then the purchase price paid by the General Partner for such Repurchased REIT Shares and any other expenses incurred by the General Partner in connection with such purchase shall be considered expenses of the Partnership and shall be advanced to the General Partner or reimbursed to the General Partner, subject, to the extent that the Repurchased REIT Shares are REIT Common Shares, to the condition that the General Partner shall cause the Partnership to redeem a number of Common Units held by the General Partner equal to the REIT Shares Amount.

Section 7.6 Contracts with Affiliates

A. The Partnership may lend or contribute to Persons in which it has an equity investment, and such Persons may borrow funds from the Partnership, on terms and conditions established on the Partnership’s behalf in the sole and absolute discretion of the General Partner. Any Person that has an equity investment in the Partnership may lend or contribute to the Partnership, and the Partnership may borrow funds from such Person, on terms and conditions established on the Partnership’s behalf in the sole and absolute discretion of the General Partner. The foregoing authority shall not create any right or benefit in favor of any Person.

B. Except as provided in Section 7.5.B and subject to Section 7.3.B, the Partnership may transfer assets to joint ventures, other partnerships, corporations or other business entities in which it is or thereby becomes a participant upon such terms and subject to such conditions consistent with this Agreement and applicable law.

C. The General Partner, in its sole and absolute discretion and without the approval of the Limited Partners, may propose and adopt on behalf of the Partnership employee

-34-

benefit plans funded by the Partnership for the benefit of employees of the General Partner, the Partnership, Subsidiaries of the Partnership or any Affiliate of any of them in respect of services performed, directly or indirectly, for the benefit of the Partnership, the General Partner or any of the Partnership’s Subsidiaries. The General Partner also is expressly authorized to cause the Partnership to issue to it Common Units corresponding to REIT Common Shares issued by the General Partner pursuant to any Stock Plan or any similar or successor plan and to repurchase such Common Units from the General Partner to the extent necessary to permit the General Partner to repurchase such REIT Common Shares in accordance with such plan.

D. The General Partner is expressly authorized to enter into, in the name and on behalf of the Partnership, a right of first opportunity arrangement and other conflict avoidance agreements with various Affiliates of the Partnership and the General Partner, on such terms as the General Partner, in its sole and absolute discretion, believes are advisable.

Section 7.7 Indemnification

A. The Partnership shall indemnify an Indemnitee from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including legal fees and expenses), judgments, fines, settlements, and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, that relate to the operations of the Partnership as set forth in this Agreement in which any Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, unless it is established that the act or omission of the indemnitee constituted fraud, intentional harm or gross negligence on the part of the indemnitee; (ii) the claim is brought by the indemnitee (other than to enforce the indemnitee’s rights to indemnification or advance of expenses); or (iii) the indemnitee is found to be liable to the Partnership, and then only with respect to each such claim. Without limitation, the foregoing indemnity shall extend to any liability of any Indemnitee, pursuant to a loan guaranty or otherwise, for any indebtedness of the Partnership or any Subsidiary of the Partnership (including, without limitation, any indebtedness that the Partnership or any Subsidiary of the Partnership has assumed or taken subject to), and the General Partner is hereby authorized and empowered, on behalf of the Partnership, to enter into one or more indemnity agreements consistent with the provisions of this Section 7.7 in favor of any Indemnitee having or potentially having liability for any such indebtedness. The termination of any proceeding by judgment, order or settlement does not create a presumption that the Indemnitee did not meet the requisite standard of conduct set forth in this Section 7.7.A. The termination of any proceeding by conviction or upon a plea of nolo contendere or its equivalent, or any entry of an order of probation prior to judgment, creates a rebuttable presumption that the Indemnitee acted in a manner contrary to that specified in this Section 7.7.A. Any indemnification pursuant to this Section 7.7 shall be made only out of the assets of the Partnership.

B. Reasonable expenses incurred by an Indemnitee who is a party to a proceeding may be paid or reimbursed by the Partnership in advance of the final disposition of the proceeding upon receipt by the Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Partnership as authorized in Section 7.7.A has been met and (ii) a written undertaking by or on behalf of the Indemnitee to repay the amount if it shall ultimately be determined that the standard of conduct has not been met.

-35-

C. The indemnification provided by this Section 7.7 shall be in addition to any other rights to which an Indemnitee or any other Person may be entitled under any agreement, pursuant to any vote of the Partners, as a matter of law or otherwise, and shall continue as to an Indemnitee who has ceased to serve in such capacity.

D. The Partnership may purchase and maintain insurance, on behalf of the Indemnities and such other Persons as the General Partner shall determine, against any liability that may be asserted against or expenses that may be incurred by such Person in connection with the Partnership’s activities, regardless of whether the Partnership would have the power to indemnify such Person against such liability under the provisions of this Agreement.

E. For purposes of this Section 7.7, the Partnership shall be deemed to have requested an Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by it of its duties to the Partnership also imposes duties on, or otherwise involves services by, it to the plan or participants or beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect to an employee benefit plan pursuant to applicable law shall constitute fines within the meaning of this Section 7.7; and actions taken or omitted by the Indemnitee with respect to an employee benefit plan in the performance of its duties for a purpose reasonably believed by it to be in the interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose which is not opposed to the best interests of the Partnership.

F. In no event may an Indemnitee subject the Limited Partners to personal liability by reason of the indemnification provisions set forth in this Agreement.

G. An Indemnitee shall not be denied indemnification in whole or in part under this Section 7.7 because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.

H. The provisions of this Section 7.7 are for the benefit of the Indemnitees, their heirs, successors, assigns and administrators and shall not be deemed to create any rights for the benefit of any other Persons. Any amendment, modification or repeal of this Section 7.7 or any provision hereof shall be prospective only and shall not in any way affect the limitations on the Partnership’s liability to any Indemnitee under this Section 7.7 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.

I. If and to the extent any reimbursements to the General Partner pursuant to this Section 7.7 constitute gross income of the General Partner (as opposed to the repayment of advances made by the General Partner on behalf of the Partnership) such amounts shall constitute guaranteed payments within the meaning of Section 707(c) of the Code, shall be treated consistently therewith by the Partnership and all Partners, and shall not be treated as distributions for purposes of computing the Partners’ Capital Accounts.

-36-

Section 7.8 Liability of the General Partner

A. Notwithstanding anything to the contrary set forth in this Agreement, the General Partner shall not be liable or accountable in damages or otherwise to the Partnership, any Partners or any Assignees for losses sustained, liabilities incurred or benefits derived as a result of errors in judgment or mistakes of fact or law or any act or omission except in the event of the General Partner’s willful misconduct or recklessness.

B. The Limited Partners expressly acknowledge that the General Partner is acting for the benefit of the Partnership, the Limited Partners and the General Partner’s shareholders collectively, that the General Partner is under no obligation to give priority to the separate interests of the Limited Partners or the General Partner’s shareholders (including, without limitation, the tax consequences to Limited Partners or Assignees or to shareholders) in deciding whether to cause the Partnership to take (or decline to take) any actions and that the General Partner shall not be liable to the Partnership or to any Partner for monetary damages for losses sustained, liabilities incurred, or benefits not derived by Limited Partners in connection with such decisions, except in the event of the General Partner’s willful misconduct or recklessness.

C. Subject to its obligations and duties as General Partner set forth in Section 7.1.A, the General Partner may exercise any of the powers granted to it by this Agreement and perform any of the duties imposed upon it hereunder either directly or by or through its agents. The General Partner shall not be responsible for any misconduct or negligence on the part of any such agent appointed by it, except in the event of the General Partner’s willful misconduct or recklessness.

D. Any amendment, modification or repeal of this Section 7.8 or any provision hereof shall be prospective only and shall not in any way affect the limitations on the General Partner’s liability to the Partnership and the Limited Partners under this Section 7.8 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.

Section 7.9 Other Matters Concerning the General Partner

A. The General Partner may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties.

B. The General Partner may consult with legal counsel, accountants, appraisers, management consultants, investment bankers and other consultants and advisers selected by it, and any act taken or omitted to be taken in reliance upon the opinion of such Persons as to matters which such General Partner reasonably believes to be within such Person’s professional or expert competence shall be conclusively presumed to have been done or omitted in good faith and in accordance with such opinion.

-37-

C. The General Partner shall have the right, in respect of any of its powers or obligations hereunder, to act through any of its duly authorized officers and a duly appointed attorney or attorneys-in-fact. Each such attorney shall, to the extent provided by the General Partner in the power of attorney, have full power and authority to do and perform all and every act and duty which is permitted or required to be done by the General Partner hereunder.

D. Notwithstanding any other provisions of this Agreement or any nonmandatory provision of the Act, any action of the General Partner on behalf of the Partnership or any decision of the General Partner to refrain from acting on behalf of the Partnership, undertaken in the good faith belief that such action or omission is necessary or advisable in order (i) to protect the ability of the General Partner to continue to qualify as a REIT or (ii) to avoid the General Partner incurring any taxes under Section 857 or Section 4981 of the Code, is expressly authorized under this Agreement and is deemed approved by all of the Limited Partners.

Section 7.10 Title to Partnership Assets

Title to Partnership assets, whether real, personal or mixed and whether tangible or intangible, shall be deemed to be owned by the Partnership as an entity, and no Partners, individually or collectively, shall have any ownership interest in such Partnership assets or any portion thereof. Title to any or all of the Partnership assets may be held in the name of the Partnership, the General Partner or one or more nominees, as the General Partner may determine, including Affiliates of the General Partner. The General Partner hereby declares and warrants that any Partnership assets for which legal title is held in the name of the General Partner or any nominee or Affiliate of the General Partner shall be held by the General Partner for the use and benefit of the Partnership in accordance with the provisions of this Agreement; provided, however, that the General Partner shall use its best efforts to cause beneficial and record title to such assets to be vested in the Partnership as soon as reasonably practicable. All Partnership assets shall be recorded as the property of the Partnership in its books and records, irrespective of the name in which legal title to such Partnership assets is held.

Section 7.11 Reliance by Third Parties

Notwithstanding anything to the contrary in this Agreement, any Person dealing with the Partnership shall be entitled to assume that the General Partner has full power and authority to encumber, sell or otherwise use in any manner any and all assets of the Partnership and to enter into any contracts on behalf of the Partnership, and such Person shall be entitled to deal with the General Partner as if it were the Partnership’s sole party in interest, both legally and beneficially. Each Limited Partner hereby waives any and all defenses or other remedies that may be available against such Person to contest, negate or disaffirm any action of the General Partner in connection with any such dealing. In no event shall any Person dealing with the General Partner or its representatives be obligated to ascertain that the terms of this Agreement have been complied with or to inquire into the necessity or expedience of any act or action of the General Partner or its representatives. Each and every certificate, document or other instrument executed on behalf of the Partnership by the General Partner or its representatives shall be conclusive evidence in favor of any and every Person relying thereon or claiming thereunder that (i) at the time of the execution and delivery of such certificate, document or instrument, this

-38-

Agreement was in full force and effect, (ii) the Person executing and delivering such certificate, document or instrument was duly authorized and empowered to do so for and on behalf of the Partnership and (iii) such certificate, document or instrument was duly executed and delivered in accordance with the terms and provisions of this Agreement and is binding upon the Partnership.

ARTICLE 8

RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

Section 8.1 Limitation of Liability

The Limited Partners shall have no liability under this Agreement (other than for breach thereof) except as expressly provided in this Agreement or under the Act.

Section 8.2 Management of Business

No Limited Partner or Assignee (other than the General Partner, any of its Affiliates or any officer, director, employee, partner, agent or trustee of the General Partner, the Partnership or any of their Affiliates, in their capacity as such) shall take part in the operations, management or control (within the meaning of the Act) of the Partnership’s business, transact any business in the Partnership’s name or have the power to sign documents for or otherwise bind the Partnership. The transaction of any such business by the General Partner, any of its Affiliates or any officer, director, employee, partner, agent or trustee of the General Partner, the Partnership or any of their Affiliates, in their capacity as such, shall not affect, impair or eliminate the limitations on the liability of the Limited Partners or Assignees under this Agreement.

Section 8.3 Outside Activities of Limited Partners

Subject to any agreements entered into by a Limited Partner or its Affiliates with the General Partner, Partnership or a Subsidiary of the Partnership, any Limited Partner (including, subject to Section 7.5, the Company) and any officer, director, employee, agent, trustee, Affiliate or shareholder of any Limited Partner shall be entitled to and may have business interests and engage in business activities in addition to those relating to the Partnership, including business interests and activities in direct competition with the Partnership or that are enhanced by the activities of the Partnership. Neither the Partnership nor any Partners shall have any rights by virtue of this Agreement in any business ventures of any Limited Partner or Assignee. Subject to such agreements, none of the Limited Partners nor any other Person shall have any rights by virtue of this Agreement or the partnership relationship established hereby in any business ventures of any other Person, other than the Limited Partners benefitting from the business conducted by the General Partner, and such Person shall have no obligation pursuant to this Agreement to offer any interest in any such business ventures to the Partnership, any Limited Partner or any such other Person, even if such opportunity is of a character which, if presented to the Partnership, any Limited Partner or such other Person, could be taken by such Person. Notwithstanding the foregoing, without the prior consent of the General Partner, no Limited Partner shall knowingly take any action, including acquiring, directly or indirectly, an interest in any tenant of a Property which would have, through the actual or constructive ownership of any

-39-

tenant of any Property, the effect of causing the percentage of the gross income of the General Partner that fails to be treated as “rents from real property” within the meaning of Section 856(d) of the Code to exceed such percentage on the date hereof. Each Limited Partner shall have a duty to notify the General Partner on a timely basis of any potential acquisition or change in ownership that could reasonably be expected to have such effect.

Section 8.4 Return of Capital

No Limited Partner shall be entitled to the withdrawal or return of his or her Capital Contribution, except to the extent of distributions made pursuant to this Agreement or upon termination of the Partnership as provided herein and with respect to the rights of Redemption set forth in Section 8.6. No Limited Partner or Assignee shall have priority over any other Limited Partner or Assignee either as to the return of Capital Contributions or as to profits, losses, distributions or credits, except as otherwise expressly provided in this Agreement.

Section 8.5 Rights of Limited Partners Relating to the Partnership

A. In addition to other rights provided by this Agreement or by the Act, and except as limited by Section 8.5.C, each Limited Partner shall have the right, for a purpose reasonably related to such Limited Partner’s interest as a limited partner in the Partnership, upon written demand with a statement of the purpose of such demand and at the Partnership’s expense:

(1) to obtain a copy of the most recent annual and quarterly reports filed with the SEC by the General Partner pursuant to the Exchange Act, and each communication sent to the shareholders of the General Partner;

(2) to obtain a copy of the Partnership’s federal, state and local income tax returns for each Partnership Year;

(3) to obtain a current list of the name and last known business, residence or mailing address of each Partner;

(4) to obtain a copy of this Agreement and the Certificate and all amendments thereto, together with executed copies of all powers-of-attorney pursuant to which this Agreement, the Certificate and all amendments thereto have been executed; and

(5) to obtain true and full information regarding the amount of cash and a description and statement of any other property or services contributed by each Partner and which each Partner has agreed to contribute in the future, and the date on which each became a Partner.

B. The Partnership shall notify each Limited Partner in writing of any adjustment made in the Conversion Factor or the calculation of the REIT Shares Amount within ten (10) Business Days of the date such change becomes effective.

C. Notwithstanding any other provision of this Section 8.5, the General Partner may keep confidential from the Limited Partners, for such period of time as the General

-40-

Partner reasonably determines, any information that (i) the General Partner reasonably believes to be in the nature of trade secrets or other information the disclosure of which the General Partner in good faith believes is not in the best interests of the Partnership or (ii) the Partnership or the General Partner is required by law or by agreements with unaffiliated third parties to keep confidential.

D. Representatives of the General Partner shall meet with representatives of the Limited Partners quarterly, or more frequently upon the request of any holder of Partnership Units whose Percentage Interest exceeds ten percent (10%), in order to discuss matters that Limited Partners may reasonably request, including, without limitation, the management, operations and strategy of the Partnership.

Section 8.6 Redemption Rights

A. Commencing on the date that is 12 months after a Limited Partner’s acquisition of Common Units, such Limited Partner shall have the right (subject to the terms and conditions set forth herein) to require the Partnership to redeem all or a portion of such Common Units acquired on or prior to such date and held by such Limited Partner (such Common Units being hereafter referred to as “Tendered Units”) in exchange for the Cash Amount (a “Redemption”); provided that no Partnership Units other than Common Units are entitled to a right of Redemption under this Agreement unless the terms of such Partnership Units so provide. Any Redemption shall be exercised pursuant to a Notice of Redemption delivered to the General Partner by the Limited Partner who is exercising the right (the “Tendering Partner”). The Cash Amount shall be delivered as a certified check payable to the Tendering Partner within ten (10) days of the Specified Redemption Date.

B. Notwithstanding Section 8.6.A, if a Limited Partner has delivered to the General Partner a Notice of Redemption, then the General Partner may, in its sole and absolute discretion (subject to Section 8.6.D), elect to acquire some or all of the Tendered Units from the Tendering Partner in exchange for the REIT Shares Amount (calculated as of the Specified Redemption Date) and, if the General Partner so elects, the Tendering Partner shall sell the Tendered Units to the General Partner in exchange for the REIT Shares Amount. In such event, the Tendering Partner shall have no right to cause the Partnership to redeem such Tendered Units for cash. The Company shall give such Tendering Partner written notice of its election (the “REIT Shares Election”) on or before the close of business on the fifth (5^th) Business Day after its receipt of the Notice of Redemption, and the Tendering Partner may elect to withdraw its redemption request at any time before the close of business on the fifth (5^th) Business Day after the Tendering Partner receives the REIT Shares Election.

C. The REIT Shares Amount, if applicable, shall be delivered as duly authorized, validly issued, fully paid and nonassessable REIT Common Shares, free of any pledge, lien, encumbrance or restriction, other than those provided in the Charter, the Bylaws of the General Partner, the Securities Act, relevant state securities or blue sky laws and any applicable registration rights agreement with respect to such REIT Common Shares entered into by the Tendering Partner. Subject to Section 8.6.G, notwithstanding any delay in such delivery (but subject to Section 8.6.D), the Tendering Partner shall be deemed the owner of such REIT Common Shares for all purposes, including without limitation, rights to vote or consent, and receive dividends, as of the Specified Redemption Date, unless the Tendering Partner elects to withdraw its redemption request in accordance with Section 8.6.B.

-41-

D. Subject to Section 8.6.G but notwithstanding anything to the contrary in any other provision of this Agreement, a Limited Partner (i) shall not be entitled to effect a Redemption for cash or an exchange for REIT Common Shares to the extent the ownership or right to acquire REIT Common Shares pursuant to such exchange by such Partner on the Specified Redemption Date would cause such Partner or any other Person to violate the restrictions on ownership and transfer of REIT Shares set forth in the Charter and (ii) shall have no rights under this Agreement to acquire REIT Shares which would otherwise be prohibited under the Charter. To the extent any attempted Redemption or other exchange for REIT Shares would be in violation of this Section 8.6.D, it shall be null and void ab initio and such Limited Partner shall not acquire any rights or economic interest in the cash otherwise payable upon such Redemption or the REIT Shares otherwise issuable upon such exchange.

E. Notwithstanding anything to the contrary in this Agreement (but subject to Section 8.6.D), with respect to any Redemption or other exchange for REIT Common Shares pursuant to this Section 8.6:

(1) All Partnership Units acquired by the General Partner pursuant thereto shall automatically, and without further action required, be converted into and deemed to be Limited Partnership Interests and held by the Company in its capacity as a Limited Partner in the Partnership.

(2) Without the consent of the General Partner, each Limited Partner may not effect a Redemption during the period after the Partnership Record Date with respect to a distribution by the Partnership and before the record date established by the General Partner for a distribution to its shareholders of some or all of its portion of such distribution by the Partnership, provided that the distribution by the General Partner occurs within 30 Business Days of the distribution by the Partnership.

(3) The consummation of any Redemption or other exchange for REIT Common Shares shall be subject to the expiration or termination of the applicable waiting period, if any, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

(4) Each Tendering Partner shall continue to own all Common Units subject to any Redemption or other exchange for REIT Common Shares, and be treated as a Limited Partner with respect to such Common Units for all purposes of this Agreement, until such Tendering Partner is deemed the owner of such REIT Common Shares for all purposes, including without limitation, rights to vote or consent, and receive dividends, under the terms of this Agreement.

F. The General Partner shall take all actions necessary to effect any registration of REIT Common Shares under the Securities Act, the Exchange Act and the securities or “blue sky” laws of any state or other jurisdiction, and appropriate actions ancillary thereto, as may be required in connection with any Redemption or other exchange for REIT Common Shares as promptly as practicable.

-42-

G. Notwithstanding anything in this Section 8.6 to the contrary, ESL Investments, Inc. and its Affiliates (to the extent it and they are Limited Partners) shall have the right to sell any or all Common Units then held by it or them to one or more investment banks or other underwriters (collectively, the “Redemption Underwriter”), which shall then have the right, by delivery of a Notice of Redemption indicating an “Underwriter Redemption” as set forth therein, to require the Partnership to redeem such Common Units (which shall be deemed to be Tendered Units for purposes of this Agreement) for REIT Common Shares in accordance with this Section 8.6 and in connection with a public offering; provided that:

(1) The Redemption Underwriter shall be required to redeem no fewer than all Tendered Units and such Tendered Units shall be exchanged only for the REIT Shares Amount (calculated as of the Specified Redemption Date) and not for cash and without discretion of, election by, or notice to or from the General Partner or any other Person;

(2) The General Partner shall deliver or cause to be delivered to the transfer agent for the REIT Common Shares upon the written order of the Tendering Partner or the Redemption Underwriter, on the date set forth in such order, a confirmation of book-entry transfer of shares representing such REIT Common Shares, issued in such name or names as the Tendering Partner or the Redemption Underwriter shall direct. The Redemption Underwriter may provide a Notice of Redemption prior to becoming the legal owner of the Tendered Units with the delivery of the REIT Common Shares to the Redemption Underwriting being conditioned upon the delivery of the Tendered Units. The General Partner shall deliver or cause to be delivered the REIT Common Shares no later than three Business Days following being provided with the Redemption Notice and, on or before such third Business Day, immediately following the surrender of the Tendered Units;

(3) The Redemption Underwriter shall not be treated as a Limited Partner with respect to such Common Units for purposes of this Agreement, except to the extent necessary to effectuate the transaction contemplated by this Section 8.6.G and matters ancillary thereto and as required by applicable law;

(4) The Partnership and the General Partner shall take all steps reasonably requested by the Redemption Underwriter in order to facilitate settlement in the proposed underwritten offering; and

(5) The issuance of such REIT Common Shares upon such exchange shall be made without charge for any stamp or other similar tax in respect of such issuance; provided, that the Tendering Partner shall pay to the General Partner the amount of any tax which may be payable in respect of any transfer involved in such issuance or establish to the reasonable satisfaction of the General Partner that such tax has been paid.

-43-

ARTICLE 9

BOOKS, RECORDS, ACCOUNTING AND REPORTS

Section 9.1 Records and Accounting

The General Partner shall keep or cause to be kept at the principal office of the Partnership appropriate books and records with respect to the Partnership’s business, including without limitation, all books and records necessary to provide to the Limited Partners any information, lists and copies of documents required to be provided pursuant to Section 9.3. Any records maintained by or on behalf of the Partnership in the regular course of its business may be kept on, or be in the form of, any information storage device, provided that the records so maintained are convertible into clearly legible written form within a reasonable period of time. The books of the Partnership shall be maintained, for financial and tax reporting purposes, on an accrual basis in accordance with generally accepted accounting principles.

Section 9.2 Fiscal Year

The fiscal year of the Partnership shall be the calendar year.

Section 9.3 Reports

A. No later than the date on which the Company mails its annual report to its shareholders, the General Partner shall cause to be mailed to each Limited Partner, as of the close of the Partnership Year, an annual report containing financial statements of the Partnership, or of the Company if such statements are prepared solely on a consolidated basis with the Company, for such Partnership Year, presented in accordance with generally accepted accounting principles, such statements to be audited by a nationally recognized firm of independent public accountants selected by the General Partner.

B. As soon as practicable, but in no event later than forty-five (45) days after the close of each calendar quarter (except the last calendar quarter of each year), or such earlier date as they are filed with the SEC, the General Partner shall cause to be mailed to each Limited Partner as of the last day of the calendar quarter, a report containing unaudited financial statements of the Partnership, or of the General Partner, if such statements are prepared solely on a consolidated basis with the applicable law or regulation, or as the General Partner determines to be appropriate

C. The Partnership shall further cause to be prepared and transmitted to the General Partner such other reports and/or information as are necessary for the General Partner to determine and maintain its qualification as a REIT under the REIT Requirements, its earnings and profits derived from the Partnership, its liability for a tax as a consequence of its Partnership Interest and distributive share of taxable income or loss and items thereof, in each case in a manner that will permit the General Partner to comply with its respective obligations to file federal, state and local tax returns and information returns and to provide its stockholders with tax information.

-44-

ARTICLE 10

TAX MATTERS

Section 10.1 Preparation of Tax Returns

A. Consistent with all other provisions of this Agreement, the General Partner shall determine the methods to be used in the preparation of federal, state, and local income and other tax returns for the Partnership in connection with all items of income and expense, including, but not limited to, valuation of assets, the methods of Depreciation and cost recovery, credits and tax accounting methods and procedures, and all tax elections.

B. The Partnership shall timely cause to be prepared and transmitted to the Partners, federal and appropriate state and local Partnership Income Tax Schedules “K-1” or any substitute therefor, with respect to each Partnership Year on appropriate forms prescribed. The Partnership shall make reasonable efforts to prepare and submit such forms before the due date for filing federal income tax returns for the fiscal year in question (determined without extensions), and shall in any event prepare and submit such forms on or before July 15 of the year following the fiscal year in question.

Section 10.2 Tax Matters Partner

A. The General Partner shall be the Tax Matters Partner of the Partnership. As Tax Matters Partner, the General Partner shall have the right and obligation to take all actions authorized and required, respectively, by the Code for the Tax Matters Partner. The General Partner shall have the right to retain professional assistance in respect of any audit of the Partnership by the IRS and all out-of-pocket expenses and fees incurred by the General Partner on behalf of the Partnership as Tax Matters Partner shall constitute Partnership expenses. In the event the General Partner notice of a final Partnership adjustment under Code Section 6223(a)(2), the General Partner shall either (i) file a court petition for judicial review of such final adjustment within the period provided under Code Section 6226(a), a copy of which petition shall be mailed to all Limited Partners on the date such petition is filed, or (ii) mail a written notice to all Limited Partners, within such period, that describes the General Partner’s reasons for determining not to file such a petition.

B. All elections and determinations required or permitted to be made by the Partnership under the Code or any applicable state or local tax law shall be made by the General Partner in its sole and absolute discretion.

C. In the event that the General Partner shall be removed or replaced pursuant to any provision of this Agreement, the successor to the General Partner shall assume the obligations of this Section 10.2.

Section 10.3 Withholding

Each Partner hereby authorizes the Partnership to withhold from or pay on behalf of or with respect to such Partner any amount of federal, state, local, or foreign taxes that the General Partner determines the Partnership is required to withhold or pay with respect to any

-45-

amount distributable or allocable to such Partner pursuant to this Agreement, including, without limitation, any taxes required to be withheld or paid by the Partnership pursuant to Section 1441, 1442, 1445 or 1446 of the Code. Any amount paid on behalf of or with respect to a Partner shall constitute a loan by the Partnership to such Partner, which loan shall be due within fifteen (15) days after repayment is demanded of the Partner in question, and shall be repaid through withholding of subsequent distributions to such Partner. Nothing in this Section 10.3 shall create any obligation on the General Partner to advance funds to the Partnership or to borrow funds from third parties in order to make payments on account of any liability of the Partnership under a withholding tax act. Any amounts payable by a Limited Partner hereunder shall bear interest at the base rate on corporate loans at large United States money center commercial banks, as published from time to time in The Wall Street Journal, plus two (2) percentage points (but not higher than the maximum lawful rate), such interest to accrue from the date such amount is due (i.e., fifteen (15) days after demand) until such amount is paid in full. To the extent the payment or accrual of withholding tax results in a federal, state or local tax credit to the Partnership, such credit shall be allocated to the Partner to whose distribution the tax is attributable.

Section 10.4 Puerto Rico Tax Matters

A. For purposes of Section 10.3, the Partnership may assume that any Partner who, upon request, fails to provide the General Partner with satisfactory evidence of its tax status for Puerto Rico income tax purposes shall be considered, for purposes of the Puerto Rico Internal Revenue Code of 2011, as amended, or any successor statute (collectively, the “PR Code”), both a foreign person and a foreign partner.

B. Unless otherwise incompatible with the PR Code or the regulations thereunder, any reference to the Code or the Regulations shall also be deemed a reference to the corresponding provision of the PR Code or its regulations for purposes of, among other things, (1) the determination of Net Income or Net Loss for Puerto Rico income tax purposes, (2) the allocation of such Net Income or Net Loss among the Partners and (3) this Article 10.

C. A Partner who is eligible to participate in the filing of a combined tax return and desires to participate in the filing of such a return must submit to the Partnership such information as may be required by the PR Code, its regulations or any administrative pronouncement, such as a Puerto Rico Treasury Department Administrative Determination or Circular Letter, in order to elect and participate in the filing of a combined tax return.

ARTICLE 11

TRANSFERS AND WITHDRAWALS

Section 11.1 Transfer

A. The term “transfer,” when used in this Article 11 with respect to a Partnership Interest, shall be deemed to refer to a transaction by which the General Partner purports to assign its General Partner Interest to another Person or by which a Limited Partner purports to assign its Limited Partnership Interest to another Person, and includes a sale, assignment, gift (outright or in trust), pledge, encumbrance, hypothecation, mortgage, exchange

-46-

or any other disposition by operation of law or otherwise. The term “transfer” when used in this Article 11 does not include any Redemption or other exchange for REIT Common Shares pursuant to Section 8.6. No part of the interest of a Limited Partner shall be subject to the claims of any creditor or any spouse for alimony or support, or to legal process, and may not be voluntarily or involuntarily alienated or encumbered except as may be specifically provided for in this Agreement.

B. No Partnership Interest may be transferred, in whole or in part, except in accordance with the terms and conditions set forth in this Article 11. Any transfer or purported transfer of a Partnership Interest not made in accordance with this Article 11 shall be null and void ab initio.

Section 11.2 Transfer of General Partner’s Partnership Interest

A. Except in connection with a transaction described in Section 11.2.B, the General Partner shall not withdraw from the Partnership and shall not transfer all or any portion of its interest in the Partnership (whether by sale, statutory merger or consolidation, liquidation or otherwise) without the prior written consent of all of the Limited Partners, which may be given or withheld by each Limited Partner in its sole and absolute discretion, and only upon the admission of a successor General Partner pursuant to Section 12.1. Upon any transfer of a Partnership Interest in accordance with the provisions of this Section 11.2, the transferee shall become a Substitute General Partner for all purposes herein, and shall be vested with the powers and rights of the transferor General Partner, and shall be liable for all obligations and responsible for all duties of the General Partner, once such transferee has executed such instruments as may be necessary to effectuate such admission and to confirm the agreement of such transferee to be bound by all the terms and provisions of this Agreement with respect to the Partnership Interest so acquired. It is a condition to any transfer otherwise permitted hereunder that the transferee assumes, by operation of law or express agreement, all of the obligations of the transferor General Partner under this Agreement with respect to such transferred Partnership interest, and no such transfer (other than pursuant to a statutory merger or consolidation approved by the Consent of the Limited Partners in accordance with Section 11.2.B wherein all obligations and liabilities of the transferor General Partner are assumed by a successor corporation by operation of law) shall relieve the transferor General Partner of its obligations under this Agreement without the consent of all of the Limited Partners, which may be given or withheld by each Limited Partner in its sole and absolute discretion. In the event the General Partner withdraws from the Partnership, in violation of this Agreement or otherwise, or otherwise dissolves or terminates, or upon the Incapacity of the General Partner, a Majority in Interest of the Limited Partners may elect to continue the Partnership business by selecting a Substitute General Partner in accordance with the Act.

B. The General Partner shall not engage in, or cause or permit, any direct or indirect transfer of all or any portion of the General Partner’s Partnership Interest in connection with, or any other occurrence of, (i) a merger, consolidation, conversion or other combination or extraordinary transaction involving the General Partner, (ii) a reclassification, recapitalization or change of the outstanding REIT Shares (other than a change in par value, or from par value to no par value, or as a result of a share split, share dividend or similar subdivision), or (iii) a Change of Control of the Company, or any reclassification, recapitalization or change of its outstanding

-47-

equity interests (“Termination Transaction”), unless (A) the Termination Transaction has been approved by the Consent of the Limited Partners and (B) in connection with such Termination Transaction all Limited Partners either will receive, or will have the right to elect to receive, for each Partnership Unit an amount of cash, securities or other property equal to the product of the REIT Shares Amount and the greatest amount of cash, securities or other property paid to a holder of one REIT Common Share in consideration of one REIT Common Share at any time during the period from and after the date on which the Termination Transaction is consummated, subject to any escrow, contingent value or other deferred consideration arrangement applicable to such consideration for such REIT Common Share; provided that, if, in connection with the Termination Transaction, a purchase, tender or exchange offer shall have been made to and accepted by the holders of more than fifty percent (50%) of the outstanding REIT Common Shares, each holder of Partnership Units shall have the right to elect to receive the greatest amount of cash, securities, or other property which such holder would have received had it exercised its rights of Redemption pursuant to Section 8.6 and received REIT Common Shares in exchange for its Partnership Units immediately prior to the expiration of such purchase, tender or exchange offer and had thereupon accepted or tendered such REIT Common Shares into such purchase, tender or exchange offer (subject to any escrow, contingent value or other deferred consideration arrangement that would have been applicable to such consideration for such REIT Common Shares).

C. In connection with any transaction permitted by Section 11.2.B, the General Partner shall use its commercially reasonable efforts to structure such Termination Transaction to avoid causing the Limited Partners to recognize gain for federal income tax purposes by virtue of the occurrence of or their participation in such Termination Transaction. In the event of any actual or threatened breach by the General Partner of this Section 11.2.C, the Limited Partners shall be entitled to injunctive relief, in addition to any other remedy available at law or in equity.

Section 11.3 Limited Partners’ Rights to Transfer

A. Each Limited Partner shall have the right to transfer all or any portion of its Partnership Interest, subject to the provisions of Section 11.6 and the satisfaction of each of the following conditions:

(1) Waiting Period. Prior to the first anniversary of a Limited Partner’s acquisition of a Partnership Interest, no Limited Partner shall transfer all or any portion of its Partnership Interest to any transferee without the consent of the General Partner, which consent may be withheld in its sole and absolute discretion; provided, however, that any Limited Partner may, at any time (whether prior to or after such first anniversary), without the consent of the General Partner, (i) transfer all or any portion of its Partnership Interest to an Affiliate (other than Sears Holdings), another original Limited Partner or any of its Affiliates, or an Immediate Family member, subject to the provisions of Section 11.6, (ii) transfer all or any portion of its Partnership Interest to a trust for the benefit of a charitable beneficiary or to a charitable foundation, subject to the provisions of Section 11.6 and (iii) subject to the provisions of Section 11.6, pledge all or any portion of its Partnership Interest to a lending institution, which is not an Affiliate of such Limited Partner, as collateral or security for a bona fide loan or other extension of credit, and transfer such pledged Partnership Interest to such lending institution in connection with the exercise of remedies under such loan or extension or credit, and the transfer of such pledged Partnership Interest by the lender to any transferee.

-48-

(2) Qualified Transferee. Any transfer of a Partnership Interest shall be made only to Qualified Transferees. It is a condition to any transfer otherwise permitted hereunder that the transferee assumes by operation of law or express agreement all of the obligations of the transferor Limited Partner under this Agreement with respect to such transferred Partnership Interest and no such transfer (other than pursuant to a statutory merger or consolidation or other event wherein all obligations and liabilities of the transferor Limited Partner are assumed by a successor by operation of law) shall relieve the transferor Limited Partner of its obligations under this Agreement without the approval of the General Partner, in its reasonable discretion. Notwithstanding the foregoing, any transferee of any transferred Partnership Interest shall be subject to any and all ownership limitations contained in the Charter and the representations in Section 3.4.D. Any transferee, whether or not admitted as a Substituted Limited Partner, shall take subject to the obligations of the transferor hereunder. Unless admitted as a Substitute Limited Partner, no transferee, whether by a voluntary transfer, by operation of law or otherwise, shall have rights hereunder, other than the rights of an Assignee as provided in Section 11.5.

B. If a Limited Partner is subject to Incapacity, the executor, administrator, trustee, committee, guardian, conservator, or receiver of such Limited Partner’s estate shall have all the rights of a Limited Partner, but not more rights than those enjoyed by other Limited Partners, for the purpose of settling or managing the estate, and such power as the Incapacitated Limited Partner possessed to transfer all or any part of his or its interest in the Partnership. The Incapacity of a Limited Partner, in and of itself, shall not dissolve or terminate the Partnership.

C. The General Partner may prohibit any transfer otherwise permitted under Section 11.3 by a Limited Partner of his or her Partnership Units if, in the opinion of legal counsel to the Partnership, such transfer would require the filing of a registration statement under the Securities Act by the Partnership or would otherwise violate any federal or state securities laws or regulations applicable to the Partnership or the Partnership Unit.

D. In no event may any transfer or assignment of a Partnership Unit (including any Redemption or other exchange for REIT Common Shares pursuant to Section 8.6) be made, nor any new Partnership Unit be issued by the Partnership, (i) if such transfer would immediately or with the passage of time cause the General Partner to fail to comply with the REIT Requirements, such determination to be made assuming that the General Partner does comply with the REIT Requirements immediately prior to the proposed transfer; (ii) if such transfer would result in a deemed distribution to any Partner attributable to a failure to meet the requirements of Regulations Section 1.752-2(d)(1), unless such Partner consents thereto; (iii) if such transfer would cause any lender to the Partnership to hold in excess of ten (10%) percent of the Partnership Interest that would, pursuant to the regulations under Code Section 752 or any successor provision, cause a loan by such lender to constitute Partner Nonrecourse Debt; (iv) if such transfer would, in the opinion of counsel to the Partnership, cause the Partnership to cease to be classified as a Partnership for federal income tax purposes or (v) if such transfer is effectuated through an “established securities market” or a “secondary market (or the substantial equivalent thereof)” within the meaning of Section 7704 of the Code.

-49-

Section 11.4 Substituted Limited Partners

A. No Limited Partner shall have the right to substitute a transferee as a Limited Partner in his, her or its place (including any transferee permitted by Section 11.3). The General Partner shall, however, have the right to consent to the admission of a transferee of the interest of a Limited Partner pursuant to this Section 11.4 as a Substituted Limited Partner, which consent may be given or withheld by the General Partner in its sole and absolute discretion. The General Partner’s failure or refusal to permit a transferee of any such interests to become a Substituted Limited Partner shall not give rise to any cause of action against the Partnership or any Partner.

B. A transferee who has been admitted as a Substituted Limited Partner in accordance with this Article 11 shall have all the rights and powers and be subject to all the restrictions and liabilities of a Limited Partner under this Agreement. The admission of any transferee as a Substituted Limited Partner shall be conditioned upon the transferee executing and delivering to the Partnership an acceptance of all of the terms and conditions of this Agreement (including without limitation, the provisions of Section 2.4 and such other documents or instruments as may be required or advisable to effect the admission, in the sole and absolute discretion of the General Partner).

C. Upon the admission of a Substituted Limited Partner, the General Partner shall amend Exhibit A to reflect the name, address, number of Partnership Units, and Percentage Interest of such Substituted Limited Partner and to eliminate or adjust, if necessary, the name, address and interest of the predecessor of such Substituted Limited Partner.

Section 11.5 Assignees

If the General Partner, in its sole and absolute discretion, does not consent to the admission of any permitted transferee under Section 11.3 as a Substituted Limited Partner, as described in Section 11.4, such transferee shall be considered an Assignee for purposes of this Agreement. An Assignee shall be entitled to all the rights of an assignee of a limited partnership interest under the Act, including the right to receive distributions from the Partnership and the share of Net Income, Net Losses, gain and loss attributable to the Partnership Units assigned to such transferee, the rights to transfer the Partnership Units provided in this Article 11, and the rights of Redemption provided in Section 8.6, but shall not be deemed to be a holder of Partnership Units for any other purpose under this Agreement, and shall not be entitled to effect a Consent with respect to such Partnership Units on any matter presented to the Limited Partners for approval (such Consent right remaining with the transferor Limited Partner). In the event any such transferee desires to make a further assignment of any such Partnership Units, such transferee shall be subject to all the provisions of this Article 11 to the same extent and in the same manner as any Limited Partner desiring to make an assignment of Partnership Units.

Section 11.6 General Provisions

A. No Limited Partner may withdraw from the Partnership other than as a result of (i) a permitted transfer of all of such Limited Partner’s Partnership Units in accordance with this Article 11 and the transferee(s) of such Partnership Units being admitted to the Partnership as a Substituted Limited Partner or (ii) pursuant to the exercise of its rights of Redemption of all of its Common Units under Section 8.6.

-50-

B. Any Limited Partner who shall transfer all of such Limited Partner’s Partnership Units in a transfer permitted pursuant to this Article 11 where such transferee was admitted as a Substituted Limited Partner or pursuant to the exercise of its rights of Redemption of all of such Limited Partner’s Partnership Units under Section 8.6 shall cease to be a Limited Partner.

C. Transfers pursuant to this Article 11 may only be made on the first day of a fiscal quarter of the Partnership, unless the General Partner otherwise agrees.

D. If any Partnership Interest is transferred, assigned or redeemed during any quarterly segment of the Partnership’s fiscal year in compliance with the provisions of this Article 11 or exchanged or redeemed pursuant to Section 8.6 on any day other than the first day of a Partnership Year, then all distributions of Available Cash with respect to which the Partnership Record Date is before the date of such transfer, assignment, exchange or redemption shall be made to the transferor Partner, and all distributions of Available Cash thereafter, in the case of a transfer or assignment other than a redemption, shall be made to the transferee Partner.

E. In addition to any other restrictions on transfer herein contained, including without limitation the provisions of this Article 11 and Section 2.6, in no event may any transfer or assignment of a Partnership Interest by any Partner (including by way of a Redemption) be made (i) to any person or entity who lacks the legal right, power or capacity to own a Partnership Interest; (ii) in violation of applicable law; (iii) of any component portion of a Partnership Interest, such as the Capital Account, or rights to distributions, separate and apart from all other components of a Partnership Interest; (iv) if such transfer would cause the Partnership to become, with respect to any employee benefit plan subject to Title I of ERISA, a “party-in-interest” (as defined in Section 3(14) of ERISA) or a “disqualified person” (as defined in Section 4975(c) of the Code); (v) if such transfer would, in the opinion of counsel to the Partnership, cause any portion of the assets of the Partnership to constitute assets of any employee benefit plan pursuant to Department of Labor Regulations Section 2510.2-101; (vi) if such transfer requires the registration of such Partnership Interest pursuant to any applicable federal or state securities laws; or (vii) if such transfer subjects the Partnership to be regulated under the Investment Company Act of 1940, the Investment Advisors Act of 1940 or the Employee Retirement Income Security Act of 1974, each as amended.

F. Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited Partners to transfer interests in the Partnership (including by exercising redemption rights) as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded partnership” taxable as an association under Code Section 7704. If and when the General Partner determines that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof to each of the Limited Partners, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership that states that, in the opinion of such counsel, restrictions are desirable in order to avoid the Partnership being treated as a “publicly traded partnership” under Code Section 7704. The General Partner shall have the authority (but shall not be required

-51-

to) take any steps it determines are necessary or appropriate in its sole discretion to ensure that the Partnership will not be classified as a “publicly traded partnership” taxable as a corporation under Code Section 7704.

ARTICLE 12

ADMISSION OF PARTNERS

Section 12.1 Admission of Successor General Partner

A successor to all of the General Partner’s General Partner Interest pursuant to Section 11.2 who is proposed to be admitted as a successor General Partner shall be admitted to the Partnership as the General Partner, effective upon such transfer. Any such transferee shall carry on the business of the Partnership without dissolution. In each case, the admission shall be subject to the successor General Partner executing and delivering to the Partnership an acceptance of all of the terms and conditions of this Agreement and such other documents or instruments as may be required to effect the admission. In the case of such admission on any day other than the first day of a Partnership Year, all items attributable to the General Partner Interest for such Partnership Year shall be allocated between the transferring General Partner and such successor as provided in Article 11.

Section 12.2 Admission of Additional Limited Partners

A. After the admission to the Partnership of the initial Limited Partners on the date hereof, a Person who makes a Capital Contribution to the Partnership in accordance with this Agreement shall be admitted to the Partnership as an Additional Limited Partner only upon furnishing to the General Partner (i) evidence of acceptance in form satisfactory to the General Partner of all of the terms and conditions of this Agreement, including, without limitation, the power of attorney granted in Section 2.4 and (ii) such other documents or instruments as may be required in the discretion of the General Partner in order to effect such Person’s admission as an Additional Limited Partner.

B. Notwithstanding anything to the contrary in this Section 12.2, no Person shall be admitted as an Additional Limited Partner without the consent of the General Partner, which consent may be given or withheld in the sole and absolute discretion of the General Partner. The admission of any Person as an Additional Limited Partner shall become effective on the date upon which the name of such Person is recorded on the books and records of the Partnership, following the receipt of the Capital Contribution in respect of such Limited Partner and the consent of the General Partner to such admission. All distributions of Available Cash with respect to which the Partnership Record Date is before the date of such admission shall be made solely to Partners and Assignees other than the Additional Limited Partner (other than in its capacity as an Assignee) and, except as otherwise agreed to by the Additional Limited Partners and the General Partner, all distributions of Available Cash thereafter shall be made to all Partners and Assignees including such Additional Limited Partner.

-52-

Section 12.3 Amendment of Agreement and Certificate of Limited Partnership

For the admission to the Partnership of any Partner, the General Partner shall take all steps necessary and appropriate under the Act to amend the records of the Partnership and, if necessary, to prepare as soon as practical an amendment of this Agreement (including an amendment of Exhibit A) and, if required by law, shall prepare and file an amendment to the Certificate and may for this purpose exercise the power of attorney granted pursuant to Section 2.4.

ARTICLE 13

DISSOLUTION AND LIQUIDATION

Section 13.1 Dissolution

The Partnership shall not be dissolved by the admission of Substituted Limited Partners or Additional Limited Partners or by the admission of a successor General Partner in accordance with the terms of this Agreement. Upon the withdrawal of the General Partner, any successor General Partner (selected as described in Section 13.1.B) shall continue the business of the Partnership. The Partnership shall dissolve, and its affairs shall be wound up, upon the first to occur of any of the following (“Liquidating Events”):

A. an event of withdrawal of the General Partner, as defined in the Act, unless, within ninety (90) days after the withdrawal, a Majority in Interest of the Limited Partners agree in writing, in their sole and absolute discretion, to continue the business of the Partnership and to the appointment, effective as of the date of withdrawal, of a substitute General Partner;

B. subject to compliance with Section 7.3.B, an election to dissolve the Partnership made by the General Partner, in its sole and absolute discretion,

C. entry of a decree of judicial dissolution of the Partnership pursuant to the provisions of the Act;

D. the sale, in accordance with this Agreement (including without limitation Section 7.3.B) of all or substantially all of the assets and properties of the Partnership for cash or marketable securities;

E. the Incapacity of the General Partner, unless a Majority in Interest of the Limited Partners agree in their sole and absolute discretion agree in writing to continue the business of the Partnership and to the appointment, effective as of a date prior to the date of such Incapacity, of a substitute General Partner; or

F. the Redemption or other exchange for REIT Common Shares of all Partnership Units (other than those of the General Partner) pursuant to this Agreement, unless waived by the General Partner.

-53-

Section 13.2 Winding Up

A. Upon the occurrence of a Liquidating Event, the Partnership shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the claims of its creditors and Partners, and no Partner shall take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Partnership’s business and affairs. The General Partner (or, in the event there is no remaining General Partner, any Person elected by a Majority in Interest of the Limited Partners (the “Liquidator”)) shall be responsible for overseeing the winding up and dissolution of the Partnership and shall take full account of the Partnership’s liabilities and property and the Partnership property shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom (which may, to the extent determined by the General Partner, include shares of beneficial interest in the General Partner) shall be applied and distributed in the following order:

(1) First, to the payment and discharge of all of the Partnership’s debts and liabilities to creditors other than the General Partner;

(2) Second, to the payment and discharge of all of the Partnership’s debts and liabilities to the General Partner; and

(3) The balance, if any, to the General Partner and Limited Partners in accordance with their positive Capital Account balances, determined after taking into account all Capital Account adjustments for the Partnership taxable year during which the liquidation occurs (other than those made as a result of the liquidating distribution set forth in this Section 13.2.A(3)).

If upon dissolution and termination of the Partnership the Capital Account of any Partner (after giving effect to all contributions, distributions and allocations for all taxable years, including the year during which such liquidation occurs) is less than zero, then such Partner shall have no obligation to restore the negative balance in its Capital Account, and such deficit shall not be considered a debt owed to the Partnership or to any other Person for any purpose whatsoever.

The General Partner shall not receive any additional compensation for any services performed pursuant to this Article 13 other than reimbursement of its expenses as provided in Section 7.4.

B. Notwithstanding the provisions of Section 13.2.A which require liquidation of the assets of the Partnership, but subject to the order of priorities set forth therein, if prior to or upon dissolution of the Partnership the Liquidator determines that an immediate sale of part or all of the Partnership’s assets would be impractical or would cause undue loss to the Partners, the Liquidator may, in its sole and absolute discretion, defer (including by establishing reserves and/or distributing into escrow) for a reasonable time the liquidation of any assets except those necessary to satisfy liabilities of the Partnership (including to those Partners as creditors) and/or distribute to the Partners, in lieu of cash, as tenants in common and in accordance with the provisions of Section 13.2.A, undivided interests in such Partnership assets as the Liquidator deems not suitable for liquidation. Any such distributions in kind shall be made only if, in the good faith judgment of the Liquidator, such distributions in kind are in the best interest of the Partners, and shall be subject to such conditions relating to the disposition and

-54-

management of such properties as the Liquidator deems reasonable and equitable and to any agreements governing the operation of such properties at such time. The Liquidator shall determine the fair market value of any property distributed in kind using such reasonable method of valuation as it may adopt.

Section 13.3 Rights of Limited Partners

Except as otherwise provided in this Agreement, each Limited Partner shall look solely to the assets of the Partnership for the return of his Capital Contribution and shall have no right or power to demand or receive property from the General Partner. No Limited Partner shall have priority over any other Limited Partner as to the return of his Capital Contributions, distributions or allocations.

Section 13.4 Notice of Dissolution

In the event a Liquidating Event occurs or an event occurs that would, but for the provisions of Section 13.1, result in a dissolution of the Partnership, the General Partner shall, within thirty (30) days thereafter, provide written notice thereof to each of the Partners and to all other parties with whom the Partnership regularly conducts business (as determined in the discretion of the General Partner) and shall publish notice thereof in a newspaper of general circulation in each place in which the Partnership regularly conducts business (as determined in the discretion of the General Partner).

Section 13.5 Cancellation of Certificate of Limited Partnership

Upon the completion of the liquidation of the Partnership cash and property as provided in Section 13.2 hereof, the Partnership shall be terminated, a certificate of cancellation shall be filed, and the Certificate and all qualifications of the Partnership as a foreign limited partnership in jurisdictions other than the State of Delaware shall be cancelled and such other actions as may be necessary to terminate the Partnership shall be taken.

Section 13.6 Reasonable Time for Winding Up

A reasonable time shall be allowed for the orderly winding up of the business and affairs of the Partnership and the liquidation of its assets pursuant to Section 13.2, in order to minimize any losses otherwise attendant upon such winding up, and the provisions of this Agreement shall remain in effect between the Partners during the period of liquidation.

Section 13.7 Waiver of Partition

Each Partner hereby waives any right to partition of the Partnership property.

Section 13.8 Liability of Liquidator

Any Liquidator shall be indemnified and held harmless by the Partnership in the same manner and to the same degree as an Indemnitee may be indemnified pursuant to Section 7.7.

-55-

ARTICLE 14

AMENDMENT OF PARTNERSHIP AGREEMENT; CONSENTS

Section 14.1 Amendments

A. The actions requiring consent or approval of Limited Partners pursuant to this Agreement, including Section 7.3, or otherwise pursuant to applicable law, are subject to the procedures in this Article 14.

B. Amendments to this Agreement may be proposed by the General Partner or by any Limited Partner. Following such proposal, the General Partner shall submit any proposed amendment to the Limited Partners. The General Partner shall seek the written consent of the Limited Partners on the proposed amendment or shall call a meeting to vote thereon and to transact any other business that it may deem appropriate. For purposes of obtaining a written consent, the General Partner may require a response within a reasonable specified time, but not less than fifteen (15) days, and failure to respond in such time period shall constitute a consent which is consistent with the General Partner’s recommendation (if so recommended) with respect to the proposal; provided that an action shall become effective at such time as requisite consents are received even if prior to such specified time.

Section 14.2 Action by the Partners

A. Meetings of the Partners may be called by the General Partner and shall be called upon the receipt by the General Partner of a written request by Limited Partners holding twenty-five percent (25%) or more of the Partnership Interests held by Limited Partners. The call shall state the nature of the business to be transacted. Notice of any such meeting shall be given to all Partners not less than seven (7) days nor more than thirty (30) days prior to the date of such meeting. Partners may vote in person or by proxy at such meeting. Whenever the vote or Consent of the Limited Partners or of the Partners is permitted or required under this Agreement, such vote or Consent may be given at a meeting of Partners or may be given in accordance with the procedure prescribed in Section 14.1.

B. Any action required or permitted to be taken at a meeting of the Partners may be taken without a meeting if a written consent setting forth the action so taken is signed by the percentage as is expressly required by this Agreement for the action in question. Such consent may be in one instrument or in several instruments, and shall have the same force and effect as a vote of the Percentage Interests of the Partners (expressly required by this Agreement). Such consent shall be filed with the General Partner. An action so taken shall be deemed to have been taken at a meeting held on the effective date so certified.

C. Each Limited Partner may authorize any Person or Persons to act for him by proxy on all matters in which a Limited Partner is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. Every proxy must be signed by the Limited Partner or his attorney-in-fact. A proxy may be granted in writing, by means of electronic transmission or as otherwise permitted by applicable law. No proxy shall be valid

-56-

after the expiration of eleven (11) months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the Limited Partner executing it, such revocation to be effective upon the Partnership’s receipt of written notice of such revocation from the Limited Partner executing such proxy.

D. Each meeting of Partners shall be conducted by the General Partner or such other Person as the General Partner may appoint pursuant to such rules for the conduct of the meeting as the General Partner or such other Person deems appropriate.

ARTICLE 15

GENERAL PROVISIONS

Section 15.1 Addresses and Notice

Any notice, demand, request or report required or permitted to be given or made to a Partner or Assignee under this Agreement shall be in writing and shall be deemed given or made when delivered in person or when sent by first class United States mail, nationally recognized overnight delivery service, or electronic mail to the Partner or Assignee at the address set forth in Exhibit A or such other address as the Partners shall notify the General Partner in writing.

Section 15.2 Titles and Captions

All article or section titles or captions in this Agreement are for convenience only. They shall not be deemed part of this Agreement and in no way define, limit, extend or describe the scope or intent of any provisions hereof. Except as specifically provided otherwise, references to “Articles” and “Sections” are to Articles and Sections of this Agreement.

Section 15.3 Pronouns and Plurals

Whenever the context may require, any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa.

Section 15.4 Further Action

The parties shall execute and deliver all documents, provide all information and take or refrain from taking action as may be necessary or appropriate to achieve the purposes of this Agreement.

Section 15.5 Binding Effect

This Agreement shall be binding upon and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives and permitted assigns.

-57-

Section 15.6 Creditors

Other than as expressly set forth herein with respect to Indemnitees, none of the provisions of this Agreement shall be for the benefit of, or shall be enforceable by, any creditor of the Partnership in its capacity as such or other third party having dealings with the Partnership.

Section 15.7 Waiver

No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon any breach thereof shall constitute waiver of any such breach or any other covenant, duty, agreement or condition.

Section 15.8 Counterparts

This Agreement may be executed in counterparts, all of which together shall constitute one agreement binding on all the parties hereto, notwithstanding that all such parties are not signatories to the original or the same counterpart. Each party shall become bound by this Agreement immediately upon affixing its signature hereto.

Section 15.9 Applicable Law; Waiver of Jury Trial

A. This Agreement shall be construed in accordance with and governed by the laws of the State of Delaware, without regard to the principles of conflicts of law.

B. Each Partner hereby (i) stipulates that any dispute or disagreement between or among any of the parties hereto as to the interpretation of any provision of, or the performance of obligations under, this Agreement shall be commenced and prosecuted in its entirety in, and consents to the exclusive jurisdiction and proper venue of, the Delaware Court of Chancery (and if the Delaware Court of Chancery shall be unavailable, any federal court located within the State of Delaware), and each party hereto consents to personal and subject matter jurisdiction and venue in such courts and waives and relinquishes all right to attack the suitability or convenience of such venue or forum by reason of its present or future domiciles, or by any other reason, for any such dispute or disagreement. The parties hereto acknowledge that all directions issued by the forum court, including all injunctions and other decrees, will be binding and enforceable in all jurisdictions and countries; and (ii) TO THE FULLEST EXTENT PERMITTED BY LAW, IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 15.10 Invalidity of Provisions

If any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby.

-58-

Section 15.11 Entire Agreement

This Agreement contains the entire understanding and agreement among the Partners with respect to the subject matter hereof and supersedes any other prior written or oral understandings or agreements among them with respect thereto.

Section 15.12 No Rights as Shareholders

Nothing contained in this Agreement shall be construed as conferring upon the holders of Partnership Units any rights whatsoever as holders of REIT Shares or otherwise as shareholders of the General Partner, including without limitation any right to receive dividends or other distributions made to shareholders of the General Partner or to vote or to consent or to receive notice as shareholders in respect of any meeting of shareholders for the election of trustees of the General Partner or any other matter.

[Signature Page Follows]

-59-

IN WITNESS WHEREOF, the parties hereto have executed this Agreement of Limited Partnership as of the date first written above.

SERITAGE GROWTH PROPERTIES, L.P.
By:	SERITAGE GROWTH PROPERTIES, a Maryland real estate investment trust Its General Partner
	By:	/s/
	Name:
	Title:
LIMITED PARTNERS:
By:	SERITAGE GROWTH PROPERTIES, L.P. Attorneys-in-Fact for the Contributors
	By:	SERITAGE GROWTH PROPERTIES, a Maryland real estate investment trust Its General Partner
	By:	/s/
	Name:
	Title:

-60-

EXHIBIT A

PARTNERS, CONTRIBUTIONS AND PARTNERSHIP INTERESTS

Name and Address of Partner	Cash Contributions		Agreed Value of Contributed Property (*)		Total Contributions		Partnership Units		Percentage Interest
COMMON UNITS
General Partner Seritage Growth Properties	$	1.00		—	$	1.00		1
Limited Partners
Seritage Growth Properties, L.P. Attorney-in-Fact for the Limited Partners	$	1.00		—	$	1.00		1
XXXXXX			$	XXXXXX	$	XXXXXX		XXXXXX
XXXXXX			$	XXXXXX	$	XXXXXX		XXXXXX		.XXX
XXXXXX			$	XXXXXX	$	XXXXXX		XXXXXX		.XXX
XXXXXX			$	XXXXXX	$	XXXXXX		XXXXXX
XXXXXX			$	XXXXXX	$	XXXXXX		XXXXXX		.XXX
XXXXXX			$	XXXXXX	$	XXXXXX		XXXXXX		.XXX
XXXXXX			$	XXXXXX	$	XXXXXX		XXXXXX
XXXXXX			$	XXXXXX	$	XXXXXX		XXXXXX
XXXXXX			$	XXXXXX	$	XXXXXX		XXXXXX		.XXX
XXXXXX			$	XXXXXX	$	XXXXXX		XXXXXX
XXXXXX			$	XXXXXX	$	XXXXXX		XXXXXX		.XXX
XXXXXX			$	XXXXXX	$	XXXXXX		XXXXXX		.XXX

* Net of Debt (if any)

A-1

EXHIBIT B

NOTICE OF REDEMPTION

The undersigned hereby (i) transfers                      Common Units of Seritage Growth Properties, L.P. in accordance with the terms of the Limited Partnership Agreement of Seritage Growth Properties, L.P. and the rights of Redemption and/or exchange referred to therein, (ii) surrenders such Common Units and all right, title and interest therein and (iii) directs that the cash or REIT Common Shares deliverable upon Redemption or exchange be delivered to the address specified below, and if applicable, that such REIT Common Shares be registered or placed in the name(s) and address(es) specified below.

Underwriter Redemption:          Yes          No

Dated:
	Name of Limited Partner or Underwriter:

(Signature of Limited Partner or Underwriter)

(Street Address)

(City) (State) (Zip Code)

Signature Guaranteed by:

Issue REIT Common Shares to:

Please insert social security or identifying number:

Name:

B-1

EXHIBIT C

FORM OF PARTNERSHIP UNIT CERTIFICATE

CERTIFICATE FOR PARTNERSHIP UNITS OF

SERITAGE GROWTH PROPERTIES, L.P.

No.                                               COMMON UNITS

Seritage Growth Properties, as the General Partner of Seritage Growth Properties, L.P., a Delaware limited partnership (the “Partnership”), hereby certifies that                          is a Limited Partner of the Partnership whose Partnership Interests therein, as set forth in the Agreement of Limited Partnership of Seritage Growth Properties, L.P. (the “Partnership Agreement”), under which the Partnership is existing and as filed in the office of the Secretary of State of the State of Delaware (copies of which are on file at the Partnership’s principal office at                         , represent                      units of limited partnership interest in the Partnership.

THE COMMON UNITS REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH THE PROVISIONS OF THE PARTNERSHIP AGREEMENT AS OF                     ,                      AS IT MAY BE AMENDED FROM TIME TO TIME (A COPY OF WHICH IS ON FILE WITH THE PARTNERSHIP). EXCEPT AS OTHERWISE PROVIDED IN SUCH AGREEMENT, NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE COMMON UNITS REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR (B) IF THE PARTNERSHIP HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF COUNSEL FOR THE HOLDER THAT SUCH TRANSFER, SALE ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE ACT AND THE RULES AND REGULATIONS IN EFFECT THEREUNDER.

DATED:                                              ,         .
	Seritage Growth Properties,
	General Partner of Seritage Growth Properties, L.P.
ATTEST:
By:	By:

C-1

EX-10.4

Exhibit 10.4

FORM OF

SUBSCRIPTION, DISTRIBUTION AND PURCHASE AND SALE AGREEMENT

BY AND BETWEEN

SEARS HOLDINGS CORPORATION

AND

SERITAGE GROWTH PROPERTIES

DATED AS OF [—], 2015

TABLE OF CONTENTS

		Page
	ARTICLE I
	DEFINITIONS
1.1	Definitions		2
	ARTICLE II
	THE SUBSCRIPTION, THE DISTRIBUTION AND THE PURCHASE AND SALE
2.1	The Subscription		12
2.2	The Distribution		12
2.3	The Purchase and Sale		13
2.4	Use of Proceeds		13
	ARTICLE III
	THE CLOSING
3.1	Actions Prior to Closing		14
3.2	The Closing		15
3.3	Conditions Precedent to the Rights Offering Closing		15
3.4	Conditions Precedent to the Properties Sale Closing		16
3.5	Adjustments and Prorations with respect to the Transaction		21
3.6	Brokers		21
	ARTICLE IV
	DISPUTE RESOLUTION
4.1	Disputes		22
4.2	Dispute Resolution		22
4.3	Arbitration of Unresolved Disputes		22
4.4	Continuity of Service and Performance		24
	ARTICLE V
	MUTUAL RELEASES; INDEMNIFICATION
5.1	Release of Pre-Closing Date Claims		25
5.2	Indemnification by Seritage		26
5.3	Indemnification by SHC		28
5.4	Adjustments to Indemnification Obligations		28
5.5	Contribution		29
5.6	Procedures for Indemnification of Direct Claims		29
5.7	Procedures for Indemnification of Third-Party Claims		30
5.8	Remedies Cumulative		31
5.9	Survival of Indemnities		31
5.10	No Impairment of Insurance Claims		31
5.11	Right of Offset		31
5.12	Treatment of Certain Payments		31

	ARTICLE VI
	INSURANCE MATTERS
6.1	Insurance Matters	32
6.2	Miscellaneous	35
	ARTICLE VII
	CONFIDENTIALITY; EXCHANGE OF INFORMATION
7.1	Agreement for Exchange of Information; Archives	35
7.2	Ownership of Information	36
7.3	Record Retention	36
7.4	Production of Witnesses; Records; Cooperation	36
7.5	Confidential Information	37
7.6	Protective Arrangements	38
7.7	Other Agreements Providing for Exchange of Information	38
7.8	Privileged Matters	38
	ARTICLE VIII
	FURTHER ASSURANCES AND ADDITIONAL COVENANTS
8.1	Further Assurances	40
8.2	Performance	40
8.3	Order of Precedence	41
	ARTICLE IX
	TERMINATION AND AMENDMENT
9.1	Sole Discretion of SHC	41
9.2	Amendment and Termination	41
	ARTICLE X
	MISCELLANEOUS
10.1	Limitation of Liability	41
10.2	Expenses	42
10.3	Counterparts	42
10.4	Notices	42
10.5	Public Announcements	43
10.6	Severability	43
10.7	Entire Agreement	44
10.8	Amendment; No Waiver	44
10.9	Successors and Assigns	44
10.10	Third-Party Beneficiaries	44
10.11	Governing Law; Jurisdiction	44
10.12	Waiver of Jury Trial	45
10.13	Headings	45
10.14	Interpretation	45
10.15	Fair Construction	46
10.16	Specific Performance	46

-ii-

10.17	Good Faith	46
10.18	Force Majeure	46
10.19	Payment Terms	46
10.20	Survival of Covenants	47
10.21	No Agency	47
10.22	Risk of Loss	47

-iii-

SUBSCRIPTION, DISTRIBUTION AND PURCHASE AND SALE AGREEMENT

This SUBSCRIPTION, DISTRIBUTION AND PURCHASE AND SALE AGREEMENT, made and entered into effective as of [—], 2015 (this “Agreement”), is by and between Sears Holdings Corporation, a Delaware corporation (“SHC”), and Seritage Growth Properties, a Maryland real estate investment trust (“Seritage”). Capitalized terms shall have the respective meanings assigned to them in Article I.

R E C I T A L S

WHEREAS, the Board of Directors of SHC (the “SHC Board”) has determined that it is in the best interests of SHC and holders of SHC Common Stock to create a new publicly traded company to which it will cause its Subsidiaries to sell the Transferred Properties and lease such properties back pursuant to the terms of the Transaction;

WHEREAS, in furtherance of the foregoing, the SHC Board has determined that it is appropriate and desirable for (i) SHC to subscribe for subscription rights (the “Rights”), each of which entitles the holder to purchase, subject to certain terms and conditions from Seritage [—] Seritage Common Shares (the “Subscription”), (ii) SHC to distribute pro rata to holders of shares of SHC Common Stock such Rights (the “Distribution”), (iii) Seritage to sell such Seritage Common Shares pursuant to such Rights in a rights offering registered with the SEC (the “Rights Offering”), except for certain Rights that Seritage and Operating Partnership will agree to exchange for limited partnership interests in Operating Partnership or Class B common shares of beneficial interest, par value $0.01 per share, of Seritage, and (iv) Seritage to use the proceeds from the Rights Offering, together with other financing, to purchase the Transferred Entities and the Transferred Properties from the SHC Group and lease certain of such Transferred Properties back to the SHC Group pursuant to the terms of the Master Lease and other of such Transferred Properties to third parties (together with the Subscription and the Distribution, the “Transaction”), in each case as more fully described in this Agreement and the other Ancillary Agreements;

WHEREAS, Seritage has been organized for this purpose and has not engaged in activities except in preparation for the Transactions and the distribution of Seritage Common Shares;

WHEREAS, it is appropriate and desirable to set forth the principal corporate transactions required to effect the Transaction and certain other agreements that will govern certain matters relating to the Transaction and the relationship of SHC, Seritage and their respective Subsidiaries following the Closing.

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, the parties, intending to be legally bound, hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1 Definitions. For the purpose of this Agreement, the following terms shall have the following meanings:

“AAA Commercial Arbitration Rules” means the Commercial Arbitration Rules of the American Arbitration Association.

“Action” means any demand, action, claim, dispute, suit, countersuit, arbitration, inquiry, subpoena, proceeding or investigation of any nature (whether criminal, civil, legislative, administrative, regulatory, prosecutorial or otherwise) by or before any federal, state, local, foreign or international Governmental Authority or any arbitration or mediation tribunal.

“Affiliate” means (solely for purposes of this Agreement and for no other purpose) (a) with respect to Seritage, its Subsidiaries, and (b) with respect to SHC, its Subsidiaries; provided, however, that except where the context indicates otherwise (and solely for purposes of this Agreement and for no other purpose), from and after the Closing Date, no member of the SHC Group shall be deemed to be an Affiliate of any member of the Seritage Group and no member of the Seritage Group shall be deemed to be an Affiliate of any member of the SHC Group.

“Agent” means the subscription agent to be appointed by SHC to distribute to the holders of SHC Common Stock the Rights, and to the holders of the Rights the Seritage Common Shares, to be distributed and sold pursuant to, and on the terms and conditions of, the Transaction.

“Agreement” has the meaning set forth in the Preamble.

“Ancillary Agreements” means the Master Lease, the Transition Services Agreement, the SHC Closing Deliverables and the Seritage Closing Deliverables.

“Approvals or Notifications” means any consents, waivers, approvals, permits or authorizations to be obtained from, notices, registrations or reports to be submitted to, or other filings to be made with, any third Person, including any Governmental Authority.

“Assignment and Assumption of REAs” has the meaning set forth in Section 3.4(a)(ii)(C).

“Assignment and Assumption of Personal Property and Intangibles” has the meaning set forth in Section 3.4(a)(ii)(B).

“Assignment and Assumption of Ground Lease” has the meaning set forth in Section 3.4(a)(ii)(E).

“Assignment and Assumption of Lease” set forth in Section 3.4(a)(ii)(G).

-2-

“Business Day” means any day that is not a Saturday, a Sunday or any other day on which banks in New York, New York are required or authorized by applicable Law to be closed.

“Closing” has the meaning set forth in Section 3.2.

“Closing Date” has the meaning set forth in Section 3.2.

“Common Privileges” has the meaning set forth in Section 7.8.

“Continuing Trustee” means (a) each member of the Seritage Board as of immediately following the Closing and (b) any person becoming a member of the Seritage Board subsequent to the Closing whose election or nomination for election was approved by the affirmative majority vote of the members of the Seritage Board who are Continuing Trustees at the time of such election or nomination (either by a specific vote or by approval of the proxy statement of the relevant party in which such person is named as a nominee for trustee, without written objection to such nomination).

“Control” (including the terms “Controlled by” and “under common Control with”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly or as trustee, personal representative or executor, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, general partnership or other interests, as trustee, personal representative or executor, by contract, agreement, obligation, indenture, instrument, lease, promise, credit arrangement, release, warranty, commitment, undertaking or otherwise.

“Deed” shall have the meaning assigned thereto in Section 3.4(a)(ii)(A).

“Disclosing Party” means a party that discloses Information to the Receiving Party.

“Disputes” has the meaning set forth in Section 4.1.

“Dispute Meeting” has the meaning set forth in Section 4.2(b).

“Dispute Notice” has the meaning set forth in Section 4.2(b).

“Dispute Resolution Committee” has the meaning set forth in Section 4.2(a).

“Distribution” has the meaning set forth in the Recitals.

“Distribution Date” has the meaning set forth in Section 2.2.

“Environmental Equipment” means all above-ground and underground storage tanks for petroleum, petroleum products, solvents, chemicals or other liquids; above-ground or in-ground hydraulic and mechanical lifts; solvent recovery systems; oil-water separator systems; alignment locks; gasoline pumps, dispensers, pipes and pipelines, and dispensing islands and canopies, and ancillary equipment; and all other machinery, equipment, facilities, fixtures and installations now or hereafter used, operated, installed, altered or maintained in connection with or associated with the use, storage, generation, treatment, recycling, transportation, removal or disposal of Hazardous Materials, now or hereafter located at, on or about the Transferred Properties.

-3-

“Environmental Law” means any and all Laws, guidances, policies or determinations, as amended from time to time, now or hereafter in effect, or promulgated, pertaining to pollution, the environment, natural resources, public health and safety and industrial hygiene, including the management, use, generation, manufacture, labeling, registration, production, storage, release, discharge, spilling, leaking, emitting, injecting, escaping, abandoning, dumping, disposal, handling, treatment, removal, decontamination, cleanup, transportation or regulation of or exposure to any Hazardous Substance, including the Industrial Site Recovery Act, the Clean Air Act, the Clean Water Act, the Toxic Substances Control Act, the Comprehensive Environmental Response Compensation and Liability Act, the Resource Conservation and Recovery Act, the Federal Insecticide, Fungicide, Rodenticide Act, the Safe Drinking Water Act and the Occupational Safety and Health Act.

“Environmental Problems” has the meaning set forth in Section 5.2(b).

“Exchange” means the New York Stock Exchange.

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder.

“Expiration Date” means 5:00 p.m. New York City time on [—], 2015, or such later date to which SHC may determine to extend the Rights Offering.

“Fee Properties” has the meaning set forth in the definition of Transferred Properties.

“Financing” means [—].

“Financing Closing” means [—].

“Fixtures” means all equipment, machinery, fixtures, and other items of property, including all components thereof, that are now or hereafter located in, on or used in connection with and permanently affixed to or otherwise incorporated into the Improvements, together with all replacements, modifications, alterations and additions thereto, and other items of real and/or personal property, including all components thereof, now and hereafter located in, on or used in connection with, and permanently affixed to or incorporated into the Improvements, including all HVAC equipment, all furnaces, boilers, heaters, electrical equipment, heating, plumbing, lighting, ventilating, refrigerating, incineration, air- and water-pollution-control, waste-disposal, air-cooling and air-conditioning systems and apparatus, security systems, sprinkler systems and fire- and theft-protection equipment, elevators, escalators and lifts, including all Environmental Equipment.

“Form S-11” has the meaning set forth in Section 3.3(a)(C).

“Good Faith” means honesty in fact and the observance of reasonable commercial standards of fair dealing in accordance with applicable Law.

-4-

“Governmental Approvals” means any notices or reports to be submitted to, or other filings to be made with, or any consents, registrations, approvals, permits or authorizations to be obtained from, any Governmental Authority.

“Governmental Authority” means any federal, state, local, foreign or international court, government, department, commission, board, bureau, agency, official or other legislative, judicial, regulatory, administrative or governmental authority.

“Ground Lease SNDA” has the meaning set forth in Section 3.4(b)(ii)(L).

“Ground Leases” has the meaning set forth in the definition of Transferred Properties.

“Group” means either the SHC Group or the Seritage Group, as the context requires.

“Hazardous Substances” means each and every element, compound, chemical mixture, emission, contaminant, pollutant, material, waste or other substance (including radioactive substances, whether solid, liquid or gaseous) which is defined, determined or identified as hazardous or toxic under any Environmental Law or for which liability or standards of care or a requirement for investigation or remediation are imposed under, or that are otherwise subject to, Environmental Law, including without limitation asbestos, asbestos containing materials, urethane, polychlorinated biphenyls, any petroleum product, petroleum derived products and/or its constituents or derivatives, and any caustic, flammable or explosive materials. Without limiting the generality of the foregoing, the term shall mean and include:

(a) “hazardous substances” as defined in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Superfund Amendment and Reauthorization Act of 1986, or Title III of the Superfund Amendment and Reauthorization Act, each as amended, and regulations promulgated thereunder; excluding, however, common maintenance and cleaning products regularly found at properties with a standard of operation and maintenance comparable to the applicable Property;

(b) “hazardous waste” and “regulated substances” as defined in the Resource Conservation and Recovery Act of 1976, as amended, and regulations promulgated thereunder;

(c) “hazardous materials” as defined in the Hazardous Materials Transportation Act, as amended, and regulations promulgated thereunder;

(d) “chemical substance or mixture” as defined in the Toxic Substances Control Act, as amended, and regulations promulgated thereunder; and

(e) “hazardous materials” as defined under all applicable environmental protection statutes of each state and municipality in which the Demised Premises are located.

“Improvements” means any and all buildings, structures, Fixtures, support systems, surface parking lots, parking streets and garages and other improvements now or hereafter affixed to or located on or under the Land or connected thereto, including, but not limited to, alleyways and connecting tunnels, passageways and entranceways to any adjacent malls, shopping centers or other third-party properties, sidewalks, utility pipes, conduits and lines (on-

-5-

site and off-site to the extent SHC Group has any interest in the same), parking areas and roadways appurtenant to such buildings and structures located on any Fee Properties or Leasehold Properties, as the case may be, excluding fixtures owned by utilities or other service providers or other third parties.

“Indemnifying Party” has the meaning set forth in Section 5.4(a).

“Indemnitee” has the meaning set forth in Section 5.4(a).

“Indemnity Payment” has the meaning set forth in Section 5.4(a).

“Information” means information, whether or not patentable or copyrightable, in written, oral, electronic or other tangible or intangible forms, stored in any medium, including studies, reports, records, books, contracts, instruments, surveys, discoveries, ideas, concepts, know-how, techniques, designs, specifications, drawings, blueprints, diagrams, models, prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes, computer programs or other software, marketing plans, customer names, memos, and other technical, financial, employee or business information or data.

“Insurance Proceeds” means those monies (a) received by an insured or reinsured from a Third-Party insurer or reinsurer, (b) paid by a Third-Party insurer or reinsurer on behalf of the insured or reinsured or (c) received (including by way of set-off) from any Third Party in the nature of insurance, contribution or indemnification in respect of any Liability, in any such case net of any applicable premium adjustments (including, retrospectively rated premium adjustments) and net of any self-insured retention, deductible or other form of self-insurance, net of any premium increases and net of any third-party costs or expenses incurred in the collection thereof.

“Intangibles” means any and all warranties and guaranties (express or implied) issued to the SHC Group relating specifically to the Fee Properties and/or the Leasehold Properties (but not those that relate to the operations taking place at the Fee Properties and/or Leasehold Properties) and all architectural and construction plans and drawings, architectural and other professional contracts, construction contracts, and all permits, certificates of occupancy, licenses, approvals and authorizations issued by any Governmental Authority in connection with the foregoing, together with all air and development rights (if any), in each case to the extent they are in effect as of the Closing Date and which are transferable and may be assigned to or by the SHC Group, but expressly excluding all Intellectual Property, trade secrets and other proprietary information owned or licensed by the SHC Group.

“Intellectual Property” means all right, title and interest in or relating to intellectual property or industrial property, whether arising under the Law of the United States or any other country or any political subdivision thereof or multinational Laws or any other Law, including, (a) patents, patent applications, and all divisionals, continuations and continuations-in-part thereof, together with all reissues, reexaminations, renewals and extensions thereof and all rights to obtain such divisionals, continuations and continuations-in-part, reissues, reexaminations, renewals and extensions, and all utility models and statutory invention registrations and any other such analogous rights, (b) trademarks, service marks, Internet domain names, trade dress,

-6-

trade styles, logos, trade names, services names, brand names, corporate names, assumed business names and general intangibles and other source identifiers of a like nature, together with the goodwill associated with any of the foregoing, and all registrations and applications for registrations thereof, together with all renewals and extensions thereof and all rights to obtain such renewals and extensions, (c) copyrights, mask work rights, database and design rights, moral rights and rights in Internet websites, whether registered or unregistered and whether published or unpublished, all registrations and recordings thereof and all applications in connection therewith, together with all renewals, continuations, reversions and extensions thereof and all rights to obtain such renewals, continuations, reversions and extensions and (iv) confidential and proprietary Information, including, trade secrets and know-how. “Intellectual Property” also includes all goodwill associated with Intellectual Property and the right to sue and recover at Law or in equity for past, present and future infringement, misappropriation, dilution, violation or other impairment of such Intellectual Property and all license agreements (including, licenses from or to third parties in respect of Intellectual Property).

“Interests” has the meaning set forth in Exhibit I to this Agreement.

“Land” means (a) the fee interest in and to those certain parcels of land that comprise the Fee Properties, and (b) the leasehold interest in and to those certain parcels of land that comprise the premises demised under the Ground Lease, together with all of SHC Group’s right, title and interest (if any) in and to all rights, appurtenances, hereditaments and tenements pertaining thereto, including all right, title and interest (if any) of the SHC Group in and to adjacent streets, alleys, easements and rights-of-way, and all oil, gas, mineral, water and irrigation rights running with or otherwise pertaining thereto.

“Landlord” means [—], as landlord under the Master Lease.

“Lands’ End Lease” means, with respect to each applicable main SHC Group store building located on the Transferred Properties, the leasing arrangement for space in such store between the SHC Group and Lands’ End, Inc. pursuant to a master lease of space within SHC Group stores located at various SHC Group properties, including the Transferred Properties. Notwithstanding anything herein to the contrary, SHC Group shall not assign the Lands’ End Leases with the conveyance of the Transferred Properties but will remain as the landlord (sublandlord) under the Lands’ End Leases; provided that (i) the Tenant under the Master Lease shall assign to the landlord under the Master Lease the economic benefits of such lease (but not such lease itself) in respect of the Transferred Properties and (ii) the Tenant under the Master Lease will discharge the landlord’s obligations under the Lands’ End Leases, in each case, on the terms and conditions provided in the Master Lease.

“Landlord’s Mortgage” has the meaning set forth in Section 3.4(b)(ii)(M).

“Landlord Mortgage SNDA” has the meaning set forth in Section 3.4(b)(ii)(N).

“Law” means any national, supranational, federal, state, provincial, local or similar law (including common law), statute, code, order, ordinance, rule, regulation, treaty (including any income tax treaty), license, permit, authorization, approval, consent, decree, injunction, binding judicial or administrative interpretation or other requirement, in each case, enacted, promulgated, issued or entered by a Governmental Authority.

-7-

“Lease”, “Leases” means each and every existing third-party lease or sublease of a portion of the Transferred Properties as of the Closing Date, other than in-store concessions, departments and licenses by the SHC Group comprising in the aggregate less than 10% of rental value of all the rentable square footage at the main SHC Group store building located on the Transferred Properties (including all amendments and extensions thereof), and excluding the Lands’ End Leases, as set forth on Schedule A (which such Schedule A shall be updated at the Closing for any of the foregoing executed after the date of this Agreement and on or prior to the Closing Date).

“Leasehold Properties” has the meaning set forth in the definition of Transferred Properties.

“Liability” or “Liabilities” means with respect to any Person, any and all claims, debts, demands, actions, causes of action, suits, damages, costs, obligations, accruals, accounts payable, reckonings, bonds, indemnities and similar obligations, agreements, promises, guarantees, make whole agreements and similar obligations, and other liabilities and requirements of such Person, including all contractual obligations, whether accrued or fixed, absolute or contingent, matured or unmatured, liquidated or unliquidated, reserved or unreserved, known or unknown, or determined or determinable, whenever arising and including those arising under any applicable Law, rule, regulation, Action, threatened or contemplated Action, order or consent decree of any Governmental Authority or any award of any arbitrator or mediator of any kind, and those arising under any Contract, including those arising under this Agreement, in each case, whether or not recorded or reflected or required to be recorded or reflected on the books and records or financial statements of any Person. For the avoidance of doubt, Liabilities shall include reasonable attorneys’ fees, the costs and expenses of all demands, assessments, judgments, settlements and compromises, and any and all other costs and expenses whatsoever reasonably incurred in connection with anything contemplated by the preceding sentence.

“Loss” has the meaning set forth in Section 10.22.

“Loss Limit” has the meaning set forth in Section 10.22.

“Mark” means (a) the seritage.com domain name registration, (b) U.S. trademark registration #4577331 for the word mark “SERITAGE” and any unregistered trademark, service mark, trade name, d/b/a, certification mark, slogan, logo symbol, trade dress or other indicia of origin related to the foregoing registered word mark, and all applications or registrations relating thereto, and (c) all goodwill connected with the use thereof and symbolized thereby.

“Master Lease” means the Master Lease Agreement, dated of [—], 2015, by and between [—], as landlord.

“Memoranda” and “Memorandum” have the meanings set forth in Section 3.4(a)(ii)(H).

“Operating Partnership” means Seritage Growth Properties, L.P., a Delaware limited partnership, of which Seritage is the general partner.

-8-

“Owner’s Title Affidavit” has the meaning set forth in Section 3.4(a)(ii)(I).

“Paying Party” has the meaning set forth in Section 10.19.

“Payee Party” has the meaning set forth in Section 10.19.

“Permitted Encumbrances” means (i) all matters of record and (ii) all other matters that do not have a material adverse effect on the continued use of the Transferred Properties in the manner they are being used as of the date hereof and, in the case of the Leasehold Properties (and any Improvements located thereon), the terms of the respective Ground Leases.

“Person” means an individual, a general or limited partnership, a corporation, a trust, a joint venture, an unincorporated organization, a limited liability entity, any other entity and any Governmental Authority.

“Personal Property” means all tangible personal property located upon the Land or within the Improvements, including without limitation, any and all plans, specifications, drawings, books, building records, and all other items of personal property owned by the SHC Group and used exclusively in connection with the Land or Improvements (i.e., not in connection with or relating to the operations taking place on the Land or within the Improvements) and which are not included in the Fixtures, but expressly excluding all inventory, merchandise and trade fixtures and other personal property used in the operation of the SHC Group, its tenants and other users of the property (whether owned by them, their vendors or other third parties), including, without limitation, racks, shelving, registers, computers, computer terminals and computer-related equipment, security equipment, cleaning and maintenance equipment, batteries, tires, automobile testing equipment, petroleum and petroleum products, and other tangible personal property.

“Personnel” means the officers, directors, employees, agents, suppliers, licensors, licensees, contractors, subcontractors and other representatives, from time to time, of a party and its Affiliates; provided, that the Personnel of the members of the Seritage Group shall not be deemed Personnel of the members of the SHC Group and the Personnel of the members of the SHC Group shall not be deemed Personnel of the members of the Seritage Group.

“Prime Rate” means the rate which JPMorgan Chase Bank, N.A. (or any successor thereto or other major money center commercial bank agreed to by the parties) announces from time to time as its prime lending rate, as in effect from time to time.

“Properties Sale” has the meaning set forth in Section 2.3(c).

“Properties Sale Closing” has the meaning set forth in Section 3.2.

“Purchase Price” means the aggregate Purchase Price payable by Seritage to SHC for all Transferred Properties in the amount of $[—] in cash, allocated as to each Transferred Property as set forth on Schedule B, subject to any provisions hereof providing for adjustments or prorations; provided that there shall be credited against the Purchase Price the principal amount of the Financing encumbering the Transferred Properties and the Transferred Entities immediately prior to the Properties Sale Closing.

-9-

“REA” or “REAs” means each and every reciprocal easement, operating and/or construction agreements and in all other easements, covenants and similar rights related to the Transferred Properties identified therein.

“Receiving Party” means a party that to which Information is disclosed by the Disclosing Party.

“Record Date” means 5:00 p.m., New York City time on the date to be determined by the SHC Board as the record date for determining holders of SHC Common Stock entitled to receive Rights in the Distribution.

“Record Holders” means the holders of record of shares of SHC Common Stock as of the Record Date.

“Restricted Payment” any dividend or other distribution (whether in cash, securities or other property) with respect to any equity interests in SHC, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such equity interests in SHC, or any option, warrant or other right to acquire any such equity interests in SHC.

“Retail Operations Claims” means any and all Liabilities arising out of or relating to the retail business operations or other activities conducted on or about the Transferred Properties by the SHC Group or the Tenant’s Related Users (as such term is defined in the Master Lease), prior to the Closing Date or at any time during the term of the Master Lease with respect to the premises demised thereunder, including without limitation claims from or by all customers, licensees, invitees, employees, Governmental Authorities or any other Person for, among other things, non-compliance with applicable Law, personal injury, property damage, product or service warranty, service, merchandise, products liability, tax, employment (including any pension-related claims), consumer credit and vendor claims. For the avoidance of doubt, Retail Operations Claims shall include Liabilities arising under tort claims by third-parties or as a result of non-compliance with applicable Law, in each case, arising from the physical condition or use of the Transferred Properties by SHC Group or Tenant’s Related Users (as such term is defined in the Master Lease), but shall not include (a) claims by Seritage Group and its successors and assigns, relating directly and solely to the physical condition of the Transferred Properties, other than Environmental Problems as provided in this Agreement and in the Master Lease and such other matters as provided in the Master Lease, and (b) claims arising out of or relating to the recapture or redevelopment of the Transferred Properties by the Seritage Group following the Property Sale Closing or arising out of or relating to an act or omission occurring with respect to, or on or about, such recaptured or redeveloped space following such redevelopment or recapture, except to the extent provided in the Master Lease.

“Rights” has the meaning set forth in the Recitals.

“Rights Offering” has the meaning set forth in the Recitals.

“Rights Offering Closing” has the meaning set forth in Section 3.2.

-10-

“SEC” means the U.S. Securities and Exchange Commission.

“Securities Act” means the U.S. Securities Act of 1933, as amended, together with the rules and regulations promulgated thereunder.

“Seritage” has the meaning set forth in the Preamble.

“Seritage Board” means the Board of Trustees of Seritage.

“Seritage Closing Deliverables” has the meaning set forth in Section 3.4(b)(ii).

“Seritage Common Shares” means the Class A common shares of beneficial interest, par value $0.01 per share, of Seritage.

“Seritage Group” means Seritage and each Affiliate of Seritage immediately after the Closing Date.

“Seritage Indemnitee” has the meaning set forth in Section 5.3.

“Shared Privilege” has the meaning set forth in Section 7.8(d).

“SHC” has the meaning set forth in the Preamble.

“SHC Board” has the meaning set forth in the Recitals.

“SHC Closing Deliverables” has the meaning set forth in Section 3.4(a)(ii).

“SHC Common Stock” means the common stock, par value $0.01 per share, of SHC.

“SHC Group” means SHC and each Affiliate of SHC immediately after the Closing Date (in each case other than any member of the Seritage Group).

“SNDA” has the meaning set forth in Section 3.4(b)(ii)(L).

“SHC Indemnitee” has the meaning set forth in Section 5.2.

“Subscription” has the meaning set forth in the Recitals.

“Subsidiary” or “subsidiary” means, with respect to any Person, any corporation, limited liability company, joint venture or partnership of which such Person (a) beneficially owns, either directly or indirectly, more than fifty percent (50%) of (i) the total combined voting power of all classes of voting securities of such Person, (ii) the total combined equity interests or (iii) the capital, profit or beneficial interests, in the case of a partnership, limited liability company or trust, or (b) otherwise has the power to vote, either directly or indirectly, sufficient securities or interests to elect a majority of the board of directors or similar governing body or to Control such Person.

“Tenant” means Kmart Operations, LLC and Sears Operations, LLC, as tenant under the Master Lease.

-11-

“Third-Party” means any Person that is neither a party to this Agreement nor an Affiliate of either party to this Agreement.

“Third-Party Claim” has the meaning set forth in Section 5.7(a).

“Third-Party Proceeds” has the meaning set forth in Section 5.4(a).

“Title Commitments” means all of the latest revised title commitments issued by the Title Company as of the date of this Agreement with respect to all of the Transferred Properties.

“Title Company” means a nationally recognized title insurance company selected by Seritage to issue one or more title insurance policies with respect to the Transferred Properties.

“Title Policy” has the meaning set forth in Section 3.4(a)(ii)(I).

“Transaction” has the meaning set forth in the Recitals.

“Transferred Entities” has the meaning set forth in Exhibit I to this Agreement.

“Transferred Properties” means collectively the (a) real properties owned in fee by the SHC Group (“Fee Properties”) and (b) the leasehold interests owned by the SHC Group under the ground leases (the “Leasehold Properties”) (including all amendments and extensions thereof, the “Ground Leases”), to the extent such Fee Properties and Leasehold Properties are identified on Exhibits I and II.

“Transition Services Agreement” means the Transition Services Agreement, dated as of [—], 2015, by and between Sears Holdings Management Corporation and Operating Partnership, as amended from time to time.

ARTICLE II

THE SUBSCRIPTION, THE DISTRIBUTION AND THE PURCHASE AND SALE

2.1 The Subscription. Seritage hereby issues and delivers to SHC, and SHC hereby subscribes for, [—] unitized Rights, each with the right when exercised to purchase one Seritage Common Share from Seritage, subject to certain conditions and on the terms and in the manner described in “The Rights Offering” section of the Form S-11, the receipt of which Rights by SHC is hereby acknowledged.

2.2 The Distribution. SHC shall instruct the Agent to distribute to each Record Holder, as soon as practicable after [11:59] [p].m. New York City time, or such other time as SHC may determine, on such date as SHC may determine (the “Distribution Date”), one Right for each share of SHC Common Stock held by such Record Holder as of the Record Date. SHC hereby agrees that from the date of this Agreement until the earlier of the termination of this Agreement or the Distribution Date, SHC shall, and shall cause the SHC Group to, use reasonable best efforts to operate its stores located at the Transferred Properties in the ordinary course consistent with past practice in all material respects, except as required by applicable Law, as contemplated by this Agreement or as consented to in writing by Seritage; provided that in no event shall SHC or any other member of the SHC Group, without the prior written consent

-12-

of Seritage, sell, convey, assign, transfer, license or otherwise dispose of, directly or indirectly, any Transferred Properties, other than as would be permitted without consent of Seritage under the Master Lease.

2.3 The Purchase and Sale.

(a) Upon the terms and subject to the conditions set forth in this Agreement, at the Properties Sale Closing, SHC shall, and shall cause the other members of the SHC Group to, transfer, convey, assign and deliver to each transferee identified on Exhibit I or such other member of the Seritage Group as Seritage shall designate, and each such transferee or member of the Seritage Group shall purchase and acquire from SHC or the other members of the SHC Group, as applicable, all of the SHC Group’s right, title and interest in and to each of the Interests in the Transferred Entities.

(b) Upon the terms and subject to the conditions set forth in this Agreement, at the Properties Sale Closing, SHC shall, and shall cause the other members of the SHC Group to, transfer, convey, assign and deliver to each transferee identified on Exhibit II or such other member of the Seritage Group as Seritage shall designate, and each such transferee or member of the Seritage Group shall purchase and acquire from SHC or the other members of the SHC Group, as applicable, all of the SHC Group’s right, title and interest in and to each of the Transferred Properties identified on Exhibit II (for the avoidance of doubt, excluding the Transferred Properties identified on Exhibit I, which shall be purchased and sold pursuant to Section 2.3(a)).

(c) Upon the terms and subject to the conditions set forth in this Agreement, at the Properties Sale Closing, SHC shall, or shall cause the applicable member of the SHC Group to, transfer, convey, assign and deliver to Operating Partnership or its designee all of its right, title and interest in and to the Mark “SERITAGE,” together with all rights to sue, counterclaim, and to collect damages, payments and equitable relief for all legal and equitable claims of past, present, and future infringements or other violations thereof, any rights to protection of interest in such Mark and all income, royalties, damages and payments now or hereafter due or payable with respect thereto, for its own use and benefit and for the use and on behalf of its successors, assigns or other legal representatives (together with the purchase and sale of the Interests in the Transferred Entities pursuant to Section 2.3(a) and the purchase and sale of the transferred Properties pursuant to Section 2.3(b), the “Properties Sale”).

(d) Upon the terms and subject to the conditions set forth in this Agreement, at the Properties Sale Closing, in consideration for the Properties Sale, Seritage shall pay or cause to be paid to SHC or its designee(s), by wire transfer of immediately available funds to such account(s) as are designated in writing by SHC, the Purchase Price for all of the Interests conveyed pursuant to Section 2.3(a), all of the Transferred Properties conveyed pursuant to Section 2.3(b) and the Mark conveyed pursuant to
Section 2.3(c).

2.4 Use of Proceeds. SHC covenants and agrees that it shall not use, or permit or cause to be used, the proceeds of the Properties Sale, or any portion thereof, directly or indirectly, for purposes of making a Restricted Payment.

-13-

ARTICLE III

THE CLOSING

3.1 Actions Prior to Closing. Prior to the Closing Date and subject to the terms and conditions set forth herein, the parties shall take, or cause to be taken, the following actions in connection with the Transaction:

(a) Securities Law Matters. Seritage shall file any amendments or supplements to the Form S-11 as may be necessary or advisable in order to cause the Form S-11 to become effective prior to the Distribution Date and remain effective as required by the SEC or federal, state or other applicable securities Laws. SHC and Seritage shall cooperate in preparing, filing with the SEC and causing to become effective registration statements or amendments thereof which are required to reflect the establishment of, or amendments to, any employee benefit and other plans necessary or advisable in connection with the transactions contemplated by this Agreement and the Ancillary Agreements. SHC and Seritage shall take all such action as may be necessary or advisable under the securities or blue sky Laws of the United States (and any comparable Laws under any non-U.S. jurisdiction) in connection with the transactions contemplated by this Agreement and the Ancillary Agreements.

(b) Subscription Agent. SHC shall enter into a subscription agent agreement with the Agent or otherwise provide instructions to the Agent regarding the Distribution and the Rights Offering.

(c) Stock-Based Employee Benefit Plans. Seritage and, if applicable, SHC shall take all actions as may be necessary to approve the stock-based employee benefit plans of Seritage in order to satisfy the requirements of Rule 16b-3 under the Exchange Act and the applicable rules and regulations of the Exchange.

(d) Delivery of Rights and Seritage Common Shares. On or prior to the Distribution Date, SHC shall deliver to the Agent such number of Rights as is necessary to permit the distribution of one Right for each share of SHC Common Stock held by such Record Holders in the Distribution. On or prior to the Closing Date, Seritage shall deliver to the Agent book-entry transfer authorizations for such number of the outstanding Seritage Common Shares as is necessary to effect the Rights Offering. Seritage agrees to provide all further book-entry transfer authorizations for Seritage Common Shares that SHC or the Agent shall require in order to effect the Distribution and the Rights Offering

(e) Approvals and Notifications. To the extent that the Transaction requires any Approvals or Notifications, the parties shall endeavor to obtain or make such Approvals or Notifications as soon as reasonably practicable; provided, however, that, except to the extent expressly provided in this Agreement or any of the Ancillary Agreements or as otherwise agreed between SHC and Seritage, neither SHC nor Seritage shall be obligated to contribute capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial accommodation) to any Person in order to obtain or make such Approvals or Notifications.

-14-

(f) Other Ancillary Agreements. Effective as of the date hereof, each of SHC and Seritage shall, and shall cause their respective Subsidiaries, as applicable, to, execute and deliver all Ancillary Agreements to which such Person is a party.

3.2 The Closing. The closing of the Rights Offering (the “Rights Offering Closing”) and the closing of the Properties Sale (the “Properties Sale Closing,” and collectively the “Closing”) shall occur as soon as practicable after the Expiration Date and the satisfaction or waiver of the conditions set forth in Sections 3.3(a), 3.4(a) and 3.4(b), on such date and at such time as SHC may determine (the “Closing Date”). SHC and Seritage shall cooperate to cause the conditions to the Closing set forth in Sections 3.3(a), 3.4(a) and 3.4(b) to be satisfied at the Closing Date.

3.3 Conditions Precedent to the Rights Offering Closing.

(a) In no event shall SHC be required to consummate the Rights Offering Closing occur unless (i) the Properties Sale Closing shall have occurred contemporaneously with such Rights Offering Closing and (ii) each of the following conditions shall have been satisfied or waived by SHC in its sole and absolute discretion:

(A) SHC Board Approval. The SHC Board shall have authorized and approved the Transaction and not withdrawn such authorization and approval, and the SHC Board shall have declared the Distribution.

(B) Execution of Ancillary Agreements. Each of the Ancillary Agreements shall have been duly executed and delivered by the parties thereto and all of the actions required to be performed prior to the Closing shall have been completed, including those required pursuant to Section 3.4.

(C) Effectiveness of Form S-11. A Registration Statement on Form S-11 registering the offering of Rights and the Seritage Common Shares (the “Form S-11”) shall be effective under the Securities Act, with no stop order in effect with respect thereto and no proceedings for such purpose pending before or threatened by the SEC.

(D) Minimum Subscription. Holders of Rights shall have subscribed for, in the aggregate, no fewer than [—] Seritage Common Shares in the Rights Offering.

(E) Listing on the Exchange. The Rights and the Seritage Common Shares shall have been accepted for listing on the Exchange, subject to official notice of issuance.

(F) Governmental Approvals. All Governmental Approvals necessary to consummate the Transaction shall have been obtained and be in full force and effect.

(G) No Order or Injunction. No order, injunction or decree issued by any Governmental Authority of competent jurisdiction or other legal

-15-

restraint or prohibition preventing the consummation of the Transaction or any of the related transactions shall be in effect, and no other event outside the control of SHC shall have occurred or failed to occur that prevents the consummation of the Transaction or any of the related transactions.

(H) Seritage Board. The individuals listed in the Form S-11 as members of the Seritage Board following the Closing shall have been duly elected and qualified to serve as members of the Seritage Board following the Closing.

(I) Seritage Officers. SHC shall have delivered or caused to be delivered to Seritage resignations, effective as of immediately after the Closing, of each individual who will serve as an officer of Seritage or member of the Seritage Board immediately after the Closing and who served as an officer or member of the SHC Board immediately prior to the Closing and will no longer serve in such capacity immediately after the Closing.

(J) Declaration of Trust. The Amended and Restated Declaration of Trust of Seritage and the Amended and Restated Bylaws of Seritage, each in such form as may be reasonably determined by SHC, shall be in effect.

(K) No Circumstances Making Transaction Inadvisable. No event or development shall have occurred or exist that, in the judgment of the SHC Board, in its sole and absolute discretion, makes the Transaction not in the best interest of SHC or holders of SHC Common Stock, or makes it inadvisable to effect the Transaction or the other transactions contemplated.

(b) The conditions set forth in Section 3.3(a) are for the sole benefit of SHC and shall not give rise to or create any duty on the part of SHC or the SHC Board to waive or not to waive any such condition or to effect the Transaction or in any way limit SHC’s rights of termination set forth in Article IX or alter the consequences of any such termination from those specified in such Article. Any determination made by the SHC Board prior to the Closing concerning the satisfaction or waiver of any or all of the conditions set forth in Section 3.3(a) shall be conclusive and binding on the parties.

3.4 Conditions Precedent to the Properties Sale Closing.

(a) Conditions to Seritage’s Obligations. In no event shall Seritage be obligated to consummate the Properties Sale Closing unless (i) the Financing Closing shall have occurred immediately prior to the Rights Offering Closing and the Rights Offering Closing shall have occurred contemporaneously with such Properties Sale Closing and (ii) unless waived by Seritage, SHC shall have, or shall have caused to be, delivered to Seritage or its designee, or, in the case of the Interests in the Transferred Entities purchased and sold pursuant to Section 2.3(a), to the appropriate Transferred Entity or Transferred Entities (or, in either case, to the Title Company for recording, as applicable) at or prior to the Properties Sale Closing all of the following items with respect to the respective Transferred Properties, executed and acknowledged

-16-

by the appropriate member of the SHC Group as applicable or other signatory as designated below (collectively, the “SHC Closing Deliverables”):

(A) A duly executed and acknowledged deed without covenants against grantor’s acts, or any warranties or representations whatsoever with respect to each Fee Property, except that the grantor is in possession of and has not previously conveyed fee title to each Fee Property, except such covenants, representations and warranties, if any, as are required for issuance of a Title Policy on customary terms for each of the Transferred Properties, duly executed and acknowledged by the appropriate members of the SHC Group, in the form attached as Schedule C (the “Deed”) together with any additional duly executed and acknowledged deeds required by Seritage in its reasonable discretion or the Title Company to convey all of such member’s right, title and interest in and to the Improvements located on the Fee Property and/or the Leasehold Property, with the appropriate member of the Seritage Group as grantee, sufficient to convey to such grantee (including with respect to the Transferred Entities) good and marketable title to the Fee Properties and all Improvements located on the Fee Properties, and all Improvements located on the Leasehold Property to the extent owned by SHC Group, in each case free and clear of all liens, charges, encumbrances, title defects and other clouds on title other than those set forth in the Title Commitments and other Permitted Encumbrances;

(B) a duly executed and acknowledged Assignment and Assumption of Personal Property and Intangibles assigning the SHC Group’s interest in the Personal Property and Intangibles related to the Transferred Properties (“Assignment and Assumption of Personal Property and Intangibles”) in the form attached hereto as Schedule D;

(C) a true and complete, fully executed copy of each REA;

(D) a duly executed and acknowledged Assignment and Assumption of REAs assigning the SHC Group’s interest in all REAs (“Assignment and Assumption of REAs”) in the form attached hereto as Schedule E;

(E) a true and complete, fully executed copy of each Ground Lease;

(F) a duly executed and acknowledged Assignment and Assumption of Ground Lease with respect to each Ground Lease (“Assignment and Assumption of Ground Lease”), free and clear of all liens, charges, encumbrances, title defects and other clouds on title other than those set forth in the Title Commitments;

(G) a true and complete, fully executed copy of each Lease;

-17-

(H) a duly executed and acknowledged Assignment and Assumption of Lease with respect to each Lease (“Assignment and Assumption of Lease”);

(I) a duly executed and acknowledged Master Lease in the form attached as Schedule F, together with separate memoranda thereof (each, a “Memorandum” and collectively, “Memoranda”) in the form of Schedule G for recording with respect to each Fee Property and each Leasehold Property with such ministerial and non-substantive modifications as required for recordation of the respective Memorandum in the land records of the jurisdiction in which the respective Transferred Property is located;

(J) such owner’s affidavits, gap indemnities and other documentation as may be customarily and reasonably required by the Title Company (collectively, “Owner’s Title Affidavit”) in connection with its issuance (at the request of Seritage) of an Owner’s or Leasehold Title Policy or any Lender’s Title Policy required in connection with the Financing, as appropriate, with respect to any or all of the Transferred Properties (collectively, “Title Policy”);

(K) a certificate in the form attached hereto as Schedule H from and duly executed by SHC stating that it is not a “foreign person” as defined in the Federal Foreign Investment in Real Property Tax Act of 1980;

(L) such evidence as the Title Company may reasonably require as to the authority of the person or persons executing any document on behalf of any member of the SHC Group, including in respect of any Transferred Entity, as applicable;

(M) a duly executed closing statement prepared in accordance with the terms of this Agreement that is reasonably acceptable to Seritage;

(N) duly executed transfer tax returns, certificates and affidavits required in connection with the consummation of the Transaction contemplated hereby;

(O) any documents and any fees or costs payable by the SHC Group with respect to the Transaction pursuant to Section 10.2(a);

(P) copies of certificates executed by the Secretary or other appropriate officer or representative of the SHC Group, attaching thereto and duly certifying as of the Closing Date the applicable resolutions of the SHC Board authorizing the execution and delivery of this Agreement, the SHC Closing Deliverables and the consummation of the transactions contemplated hereunder;

(Q) copies of certificates executed by the Secretary or other appropriate officer or representative of the SHC Group, attaching good standing certificates for each applicable Person in the SHC Group from its jurisdiction of

-18-

formation and (as and to the extent required by the Title Company) each jurisdiction in which such Person is qualified to do business and in which the Transferred Properties are located, in each case dated as of a date no later than twenty (20) days prior to the Closing Date;

(R) a true and complete copy of each mortgage on the Transferred Properties subject to the Master Lease in connection with the Financing (collectively, “Landlord’s Mortgage”);

(S) a Ground Lease SNDA executed and acknowledged by the Tenant under the Master Lease;

(T) a Landlord Mortgage SNDA executed and acknowledged by the Tenant under the Master Lease;

(U) certificates evidencing, or certified copies of book-entry notations of, the Interests in the Transferred Entities and instruments of transfer relating thereto, in each case to the extent appropriate, together with copies of the limited liability company or equivalent agreements of such Transferred Entities, each with a notation evidencing the transferee of such Interests as the holder of such Interests, and a good standing certificate for each such Transferred Entity; and

(V) such additional documents as are otherwise provided for herein or as shall be reasonably required by Seritage and reasonably acceptable to the SHC Group to consummate the Properties Sale and which are not inconsistent with any other provisions herein.

(b) Conditions to SHC’s Obligations. In no event shall SHC be obligated to consummate the Properties Sale Closing unless (i) the Financing Closing shall have occurred immediately prior to the Properties Sale Closing and the Rights Offering Closing shall have occurred contemporaneously with such Properties Sale Closing and (ii) unless waived by SHC, Seritage shall have, or shall have caused to be, delivered to SHC, in the case of Transferred Properties purchased and sold pursuant to Section 2.3(b), or SHC shall have received from the appropriate Transferred Entity or Transferred Entities, in the case of Transferred Properties purchased and sole pursuant to Section 2.3(a) (or, in either case, to or from the Title Company for recording, as applicable) at or prior to the Properties Sale Closing all of the following items, each executed by the appropriate member of the Seritage Group (the “Seritage Closing Deliverables”):

(A) a duly executed and acknowledged Assignment and Assumption of Personal Property and Intangibles;

(B) a duly executed and acknowledged Assignment and Assumption of REAs;

(C) a duly executed and acknowledged Assignment and Assumption of Ground Lease with respect to each Ground Lease;

-19-

(D) a duly executed and acknowledged Assignment and Assumption of Lease with respect to each Lease;

(E) a duly executed and acknowledged Master Lease, together with separate Memoranda thereof;

(F) such evidence as the Title Company may reasonably require as to the authority of the person or persons executing any document on behalf of any member of the Seritage Group or any Transferred Entity, as applicable;

(G) a duly executed closing statement prepared in accordance with the terms of this Agreement that is reasonably acceptable to SHC;

(H) duly executed transfer tax returns, certificates and affidavits required in connection with the consummation of the Transaction contemplated hereby;

(I) any documents and any fees or costs payable by any member of the Seritage Group in connection with the Transaction pursuant to Section 10.2(a) hereof;

(J) copies of certificates executed by the Secretary or other appropriate officer or representative of the Seller, attaching thereto and duly certifying as of the Closing Date the applicable resolutions of the Seritage Board authorizing the execution and delivery of this Agreement, the Seritage Closing Deliverables and the consummation of the Transaction contemplated hereunder;

(K) copies of certificates executed by the Secretary or other appropriate officer or representative of each applicable member of the Seritage Group or Transferred Entity, attaching good standing certificates from its jurisdiction of formation and each jurisdiction in which it is qualified to do business, in each case dated as of a date no later than twenty (20) days prior to the Closing Date;

(L) a subordination and non-disturbance agreement (“SNDA”) from the landlord under each Ground Lease, only if and to the extent Seritage or the Transferred Entity, as applicable, has been able to obtain the same with the exercise of commercially reasonable efforts (“Ground Lease SNDA), executed and acknowledged by the ground lessor and the applicable member of the Seritage Group or Transferred Entity;

(M) a SNDA with respect to each Landlord Mortgage (“Landlord Mortgage SNDA”), executed and acknowledged by the mortgagee and the applicable member of the Seritage Group or Transferred Entity;

(N) at the option of Seritage, the Title Policy (so long as Seritage shall have paid or caused to be paid all title premiums and other costs of

-20-

the Title Company and shall have satisfied the requirements of the Title Company as applicable to the applicable member of the Seritage Group or Transferred Entity); and

(O) such additional documents as are otherwise provided for herein or as shall be reasonably required by SHC to consummate the Properties Sale and which are not inconsistent with any other provisions herein.

(c) Sale of Transferred Properties “AS IS, WHERE IS”. Except as expressly set forth to the contrary in this Agreement and subject in all respects to the provisions of Article 5, the sale of the Transferred Properties (including in respect of Transferred Entities) to Seritage is made “AS IS, WHERE IS, WITH All FAULTS”, without warranty or representation (express or implied) of any kind by the SHC Group.

3.5 Adjustments and Prorations with respect to the Transaction.

(a) Rents. For the period from and after the Closing Date, rents payable by tenants under the Leases shall be the property of Seritage, and rents payable under the Ground Leases shall be payable by Seritage, subject to the rights and obligations of Tenant and Landlord under the Master Lease and Seritage under the Leases. Therefore, all such rents payable under the Leases (including fixed, percentage and additional (regularly scheduled and recurring) rent) and the Ground Leases shall be apportioned between Seritage and SHC as of the Closing Date, based on the ratio of the number of days in the period for which such rents are paid to the number of days in such period (i) before and including the Closing Date and (ii) after the Closing Date, subject to the further rights and obligations of Tenant and Landlord under the Master Lease and Seritage under the Leases. SHC and Seritage hereby agree that if any of the rents cannot be prorated accurately as of the Closing Date, then the same shall be estimated (based on current information then known) as of the Closing Date and either party owing the other party a sum of money based on subsequent proration calculations once accurate information is obtained shall pay such sum to the other party within thirty (30) days after such accurate information is obtained.

(b) Taxes, Impositions and Other Expenses. At the Closing, (i) real property taxes, common area charges, and all other recurring, scheduled and all other leasing, maintenance, operating and other costs and expenses which have been paid or are payable by the SHC Group with respect to the Transferred Properties and reimbursements in respect of such amounts payable to the SHC Group by tenants under the Leases (other than as included in additional rent), and (ii) all other amount payable by the SHC Group under the REAs, or Ground Leases, shall be apportioned on the same basis as rents under the Leases and Ground Leases are apportioned pursuant to Section 3.5(a) (for the avoidance of doubt, in each case subject to the rights and obligations of Tenant and Landlord under the Master Lease and Seritage under the Leases).

(c) Delinquencies. Notwithstanding anything to the contrary in Section 3.5(a) or (b), all delinquent rents, taxes, impositions and other costs and expenses (if any) contemplated by Section 3.5(a) and 3.5(b) or otherwise shall be paid solely by SHC at the Closing.

3.6 Brokers. SHC and Seritage each warrant and represent to the other that neither party has dealt with any broker, finder or other Person who is or may be entitled to any broker’s commission, finder’s fee or other similar compensation with respect to the Transaction.

-21-

ARTICLE IV

DISPUTE RESOLUTION

4.1 Disputes. Except as otherwise specifically provided in any Ancillary Agreement (the terms of which, to the extent so provided therein, shall govern the resolution of “Disputes” as that term or any similar term is defined in the Ancillary Agreements), the procedures for discussion, negotiation and arbitration set forth in this Article IV shall apply to all disputes, controversies or claims (whether arising in contract, tort or otherwise) that may arise out of, relate to, arise under or in connection with, this Agreement or any Ancillary Agreement, or the transactions contemplated hereby or thereby (including, all actions taken in furtherance of the transactions contemplated hereby or thereby on or prior to the Closing Date), between or among any member of the SHC Group and any member of the Seritage Group (collectively, “Disputes”).

4.2 Dispute Resolution.

(a) On the Distribution Date, the parties shall form a committee (the “Dispute Resolution Committee”) that shall attempt to resolve all Disputes. The Dispute Resolution Committee shall initially consist of four (4) representatives, two (2) of which shall be designated by each party, and each of whom shall be a senior officer of SHC or Seritage, as applicable. Each party may replace one or more of its representatives at any time upon written notice to the other party. A reasonable number of additional representatives of each party who have been involved with matters surrounding the Dispute may also participate in Dispute Resolution Committee meetings, subject to prior written notice being provided to the other party.

(b) If a Dispute arises, no party may take any formal legal action (such as seeking to terminate this Agreement, seeking arbitration in accordance with Section 4.3, or instituting or seeking any judicial or other legal action, relief, or remedy with respect to or arising out of this Agreement) unless such party has first (i) delivered a notice of dispute (the “Dispute Notice”) to all of the members of the Dispute Resolution Committee and (ii) complied with the terms of this Article IV; provided, however, that the foregoing shall not apply to any Disputes with respect to compliance with obligations relating to confidentiality or preservation of privilege. The Dispute Resolution Committee shall meet no later than the tenth (10^th) Business Day following delivery of the Dispute Notice (the “Dispute Meeting”) and shall attempt to resolve each Dispute that is listed on the Dispute Notice. Each party shall cause its designees on the Dispute Resolution Committee to negotiate in Good Faith to resolve all Disputes in a timely manner. If by the end of the twentieth (20^th) Business Day following the Dispute Meeting the Dispute Resolution Committee has not resolved all of the Disputes, the parties shall proceed to arbitrate the unresolved Disputes in accordance with Section 4.3.

4.3 Arbitration of Unresolved Disputes.

(a) Except as provided in the Master Lease, in the event any Dispute is not finally resolved pursuant to Section 4.2(a), and unless the parties have mutually agreed to mediate or use some other form of alternative dispute resolution in an attempt to resolve the Dispute, then such Dispute may be submitted to be finally resolved by binding arbitration pursuant to the AAA Commercial Arbitration Rules as then in effect.

-22-

(b) Without waiving its rights to any remedy under this Agreement and without first complying with the provisions of Section 4.2(a), either party may seek any interim or provisional relief that is necessary to protect the rights or property of that party either (i) before any federal or state court located in Cook County, Illinois, (ii) before a special arbitrator, as provided for under the AAA Commercial Arbitration Rules, or (iii) before the arbitral tribunal established hereunder.

(c) Unless otherwise agreed by the parties in writing, any Dispute to be decided in arbitration hereunder shall be decided (i) before a sole arbitrator if the amount in dispute, inclusive of all claims and counterclaims, totals less than $3 million; or (ii) by an arbitral tribunal of three (3) arbitrators if (A) the amount in dispute, inclusive of all claims and counterclaims, is equal to or greater than $3 million or (B) either party elects in writing to have such dispute decided by three (3) arbitrators when one of the parties believes, in its sole judgment, the issue could have significant precedential value; provided, however, that the party that makes a request referred to the in foregoing clause (B) shall solely bear the increased costs and expenses associated with a panel of three (3) arbitrators (i.e., the additional costs and expenses associated with the two (2) additional arbitrators).

(d) If the arbitration shall be before an arbitral tribunal of three (3) arbitrators, the panel of three (3) arbitrators shall be chosen as follows: (i) upon the written demand of either party and within ten (10) Business Days from the date of receipt of such demand, each party shall name an arbitrator selected by such party in its sole and absolute discretion, and (ii) the two (2) party-appointed arbitrators shall thereafter, within twenty (20) Business Days from the date on which the second of the two (2) arbitrators was named, name a third, independent arbitrator who shall act as chairperson of the arbitral tribunal. In the event that either party fails to name an arbitrator within ten (10) Business Days from the date of receipt of a written demand to do so, then upon written application by either party, that arbitrator shall be appointed pursuant to the AAA Commercial Arbitration Rules. In the event that the two (2) party-appointed arbitrators fail to appoint the third, independent arbitrator within twenty (20) Business Days from the date on which the second of the two (2) arbitrators was named, then upon written application by either party, the third, independent arbitrator shall be appointed pursuant to AAA Commercial Arbitration Rules. If the arbitration shall be before a sole independent arbitrator, then the sole independent arbitrator shall be appointed by agreement of the parties within fifteen (15) Business Days from the date of receipt of written demand of either party. If the parties cannot agree to a sole independent arbitrator, then upon written application by either party, the sole independent arbitrator shall be appointed pursuant to AAA Commercial Arbitration Rules. If the parties have agreed upon a single arbitrator, then each party shall have a one-time right during such arbitration to remove such arbitrator for any reason (in which case the parties shall then re-select their arbitrator(s) as provided above).

(e) All arbitrators selected pursuant to this Section 4.3 shall be practicing attorneys with at least five (5) years’ experience with the technology and/or Law applicable to the technology, services or transactions relevant to the Dispute.

(f) The place of arbitration shall be Cook County, Illinois. Along with the arbitrator(s) appointed, the parties shall agree to a mutually convenient date and time to conduct the arbitration, but in no event shall the final hearing(s) be scheduled more than nine (9) months from submission of the Dispute to arbitration unless the parties agree otherwise in writing.

-23-

(g) The arbitral tribunal shall have the right to award, on an interim basis, or include in the final award, any relief that it deems proper in the circumstances, including money damages (with interest on unpaid amounts from the due date), injunctive relief (including specific performance) and only to the extent expressly permitted by Section 4.3(m), attorneys’ fees and costs; provided that the arbitral tribunal shall not award any relief not specifically requested by the parties and, in any event, shall not award any damages of the types prohibited under Section 10.1. Upon constitution of the arbitral tribunal following any grant of interim relief by a special arbitrator or court pursuant to Section 4.3(b), the tribunal may affirm or disaffirm that relief, and the parties shall seek modification or rescission of the order entered by the special arbitrator or court as necessary to accord with the tribunal’s decision.

(h) Neither party shall be bound by Rule 13 of the Federal Rules of Civil Procedure or any analogous Law or provision in the AAA Commercial Arbitration Rules governing deadlines for compulsory counterclaims; rather, each party may only bring a counterclaim within sixty (60) days after the initial submission of the Dispute to arbitration (subject to any applicable statutes of limitation).

(i) So long as either party has a timely claim to assert, the agreement to arbitrate Disputes set forth in this Section 4.3 shall continue in full force and effect subsequent to, and notwithstanding the completion, expiration or termination of, this Agreement.

(j) The interim or final award in an arbitration pursuant to this Section 4.3 shall be conclusive and binding upon the parties, and a party obtaining a final award may enter judgment upon such award in any court of competent jurisdiction.

(k) It is the intent of the parties that the agreement to arbitrate Disputes set forth in this Section 4.3 shall be interpreted and applied broadly such that all reasonable doubts as to arbitrability of a Dispute shall be decided in favor of arbitration.

(l) The parties agree that any Dispute submitted to arbitration shall be governed by, and construed and interpreted in accordance with the Laws of the State of Illinois, as provided in Section 10.11, and, except as otherwise provided in this Article IV or mutually agreed to in writing by the parties, the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq., shall govern any arbitration between the parties pursuant to this Section 4.3.

(m) Subject to Section 4.3(c)(ii)(B), each party shall bear its own fees, costs and expenses and shall bear an equal share of the costs and expenses of the arbitration, including the fees, costs and expenses of the three (3) arbitrators; provided that the arbitral tribunal may award the prevailing party its reasonable fees and expenses (including attorneys’ fees), if it finds that there was no good-faith basis for the position taken by the other party in the arbitration.

4.4 Continuity of Service and Performance. Unless otherwise agreed in writing, the parties shall continue to provide undisputed services and honor all other undisputed commitments under this Agreement and each Ancillary Agreement during the course of dispute resolution pursuant to the provisions of this Article IV.

-24-

ARTICLE V

MUTUAL RELEASES; INDEMNIFICATION

5.1 Release of Pre-Closing Date Claims.

(a) Except as provided in Section 5.1(c) and in this Section 5.1(a), effective as of the Closing Date, Seritage does hereby, for itself and each other member of the Seritage Group, their respective Affiliates, successors and assigns, and all Persons who at any time on or prior to the Closing Date have been stockholders, directors, officers, agents or employees of any member of the Seritage Group and their respective heirs, executors, administrators, successors and assigns (in each case, in their respective capacities as such), remise, release and forever discharge SHC and the other members of the SHC Group, their respective Affiliates, and all Persons who at any time on or prior to the Closing Date have been stockholders, directors, officers, agents or employees of any member of the SHC Group (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, from any and all Liabilities whatsoever, whether at law or in equity (including any right of contribution), whether arising under any contract or agreement, by operation of law or otherwise, existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed at or before the Closing Date, including in connection with the transactions and all other activities to implement the Transaction except that, in no event shall the foregoing effect a release of the SHC Group or any other Person from any Liabilities for any willful or intentional misconduct or fraud.

(b) Except as provided in Section 5.1(c) and in this Section 5.1(b), effective as of the Closing Date, SHC does hereby, for itself and each other member of the SHC Group, their respective Affiliates, and all Persons who at any time on or prior to the Closing Date have been stockholders, directors, officers, agents or employees of any member of the SHC Group and their respective heirs, executors, administrators, successors and assigns (in each case, in their respective capacities as such), remise, release and forever discharge Seritage, the other members of the Seritage Group, their respective Affiliates, and all Persons who at any time on or prior to the Closing Date have been stockholders, directors, officers, agents or employees of any member of the Seritage Group (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, from any and all Liabilities whatsoever, whether at law or in equity (including any right of contribution), whether arising under any contract or agreement, by operation of law or otherwise, existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed at or before the Closing Date, including in connection with the transactions and all other activities to implement the Transaction, except that, in no event shall the foregoing effect a release of the Seritage Group or any other Person from any Liabilities for any willful or intentional misconduct or fraud.

(c) Nothing contained in Section 5.1(a) or (b) shall impair any right of any Person to enforce this Agreement or any Ancillary Agreement, in each case in accordance with its terms. Nothing contained in Section 5.1(a) or (b) shall release any Person from any obligations set forth in Sections 3.4 through 3.6 or from:

-25-

(i) any Liability, contingent or otherwise, assumed, transferred, assigned or allocated to the Group of which such Person is a member in accordance with, or any other Liability of any member of any Group under, this Agreement or any Ancillary Agreement;

(ii) any Liability provided in or resulting from any other agreement or understanding that is entered into on or after the Closing Date between one party (or a member of such party’s Group), on the one hand, and the other party (or a member of such party’s Group), on the other hand;

(iii) any Liability that the parties may have with respect to indemnification or contribution pursuant to this Agreement or any Ancillary Agreement;

(iv) any Liability the release of which would result in the release of any Person not otherwise intended to be released pursuant to this Section 5.1; or

(v) any obligation existing prior to the Closing Date of any member of a Group to indemnify any Person who has been a director, officer, employee, agent or other representative of any member of the Group at any time on or prior to the Closing Date.

(d) Seritage shall not make, and shall not permit any other member of the Seritage Group to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against SHC or any other member of the SHC Group, or any other Person released pursuant to Section 5.1(a), with respect to any Liabilities released pursuant to Section 5.1(a), subject to the provisions of Section 5.1(c). SHC shall not make, and shall not permit any other member of the SHC Group to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification against Seritage or any other member of the Seritage Group, or any other Person released pursuant to Section 5.1(b), with respect to any Liabilities released pursuant to Section 5.1(b), subject to the provisions of Section 5.1(c).

(e) It is the intent of each of SHC and Seritage, by virtue of the provisions of this Section 5.1, to provide for a full and complete release and discharge of all Liabilities existing or arising from all acts and events occurring or failing to occur or alleged to have occurred or to have failed to occur and all conditions existing or alleged to have existed on or before the Closing Date, between or among Seritage or any other member of the Seritage Group, on the one hand, and SHC or any other member of the Seritage Group, on the other hand (including any contractual agreements or arrangements existing or alleged to exist between or among any such members on or before the Closing Date), except as otherwise set forth in this Section 5.1. At any time, at the request of the other party, each party shall, no later than the fifth (5th) Business Day following the receipt of such request, cause each member of its respective Group to execute and deliver releases reflecting the provisions hereof.

5.2 Indemnification by Seritage. Except as provided in Section 5.1, following the Closing Date and subject to Section 10.1 and without duplication of any indemnification in any Ancillary Agreement, Seritage shall, and shall cause the members of the Seritage Group (other

-26-

than any such member which is prohibited from providing such indemnity pursuant to the terms of any financing incurred by Seritage in connection with the transactions contemplated herein) to, indemnify, defend and hold harmless each member of the SHC Group and its Affiliates, and each of their respective current or former directors, officers, employees, agents, and each of the heirs, executors, administrators, successors and assigns of any of the foregoing (each, a “SHC Indemnitee”), from and against all Liabilities actually incurred or suffered by the SHC Indemnitee relating to, arising out of or resulting from one or more of the following:

(a) each breach by Seritage or any member of the Seritage Group of this Agreement or any Ancillary Agreement, including any representation, warranty or covenant set forth therein;

(b) other than those Liabilities indemnified pursuant to Section 5.3, any Liability whether direct or indirect, known or unknown, foreseen or unforeseen, that may arise on account of or in any way be connected with the Land, Improvements or Intangibles, including, the physical, environmental and structural condition of any Transferred Property or any Law or regulation applicable thereto, including any claim or matter (regardless of when it first appeared) relating to or arising from (i) any non-compliance with Environmental Law or with Governmental Approvals required by Environmental Law, including the presence of any environmental problems, (ii) the use, spilling, leaking, emitting, injecting, escaping, abandoning, dumping, presence, storage, release, threatened release, discharge, migration of or exposure to Hazardous Substances on, in, under, from or around any Land or Improvements regardless of when such Hazardous Substances were first introduced in, on or about such Land, Improvements or Intangibles (any matters described in (i) and (ii) collectively, “Environmental Problems”), (iii) any patent or latent defects or deficiencies with respect to any Land, Improvements or Intangibles, (iv) any REAs or any other instruments or agreements (A) pertaining to the Land, Improvements or Intangibles or (B) otherwise assigned to or assumed by a member of the Seritage Growth under this Agreement or any Ancillary Agreement, and (v) any and all matters related to any Land, Improvements or Intangibles or any portion thereof, including the condition and/or operation of any Land, Improvements or Intangibles and each part thereof in each case provided in this Section 5.2(b), solely, to the extent arising out of or resulting from any action or failure to act by a member of the Seritage Group (or its Related Users (as such term is defined in the Master Lease), vendors, invitees and tenants that are not members of the SHC Group) following the Closing Date;

(c) any direct or indirect guarantee, indemnification or contribution obligation, surety bond or other credit support agreement, arrangement, commitment or understanding for the benefit of any member of the Seritage Group by any member of the SHC Group that survives the Closing Date, other than with respect to or in connection with any Ancillary Agreements; and

(d) any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, with respect to all Information contained in the Form S-11 (as amended or supplemented), other than with respect to the matters described in Section 5.3(b).

-27-

5.3 Indemnification by SHC. Following the Closing Date and subject to Section 10.1 and without duplication of any indemnification in any Ancillary Agreement, SHC shall, and shall cause the members of the SHC Group to, indemnify, defend and hold harmless each member of the Seritage Group and its Affiliates, and each of their respective current or former directors, officers, employees, agents, and each of the heirs, executors, administrators, successors and assigns of any of the foregoing (each, a “Seritage Indemnitee”), from and against any and all Liabilities arising out of or resulting from any of the following:

(a) each breach by SHC or any member of the SHC Group of this Agreement or any Ancillary Agreement, including any representation, warranty or covenant set forth therein;

(b) any Retail Operations Claims;

(c) any Environmental Problems to the extent they (i) exist as of the Closing Date and/or (ii) are caused by Tenant or any of Tenant’s Related Users (as such term is defined in the Master Lease), and in any case become known or disclosed at any time during the Term of the Master Lease or after the expiration or termination of the Master Lease; or

(d) any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, with respect to statements made explicitly in SHC’s or another member of the SHC Group’s name in the Form S-11 (as amended or supplemented).

5.4 Adjustments to Indemnification Obligations.

(a) The parties intend that each Liability subject to indemnification, contribution or reimbursement pursuant hereto shall be net of (i) all Insurance Proceeds, and (ii) all recoveries, judgments, settlements, contribution, indemnities and other amounts received (including by way of set-off) from all Third Parties, in each case that actually reduce the amount of, or are paid to the applicable indemnitee in respect of, such Liability (“Third-Party Proceeds”). Accordingly, the amount that a party (each, an “Indemnifying Party”) is required to pay to each Person entitled to indemnification hereunder (each an “Indemnitee”) shall be reduced by all Insurance Proceeds and Third-Party Proceeds received by or on behalf of the Indemnitee in respect of the relevant Liability; provided, however, that all amounts described in Section 5.2 or 5.3 that are incurred by an Indemnitee shall be paid promptly by the Indemnifying Party and shall not be delayed pending any determination as to the availability of Insurance Proceeds or Third-Party Proceeds; provided, further, that upon such payment by or on behalf of an Indemnifying Party to an Indemnitee in connection with a Third-Party Claim, to the extent permitted by applicable Laws such Indemnitee shall assign its rights to recover all Insurance Proceeds and Third-Party Proceeds to the Indemnifying Party and such Indemnifying Party shall be subrogated to and shall stand in the place of such Indemnitee as to all events and circumstances in respect of which such Indemnitee may have with respect to all rights, defenses, and claims relating to such Third-Party Claim. If, notwithstanding the second proviso in the preceding sentence, an Indemnitee receives a payment required to be made under this Section 5.4(a) (an “Indemnity Payment”) from an Indemnifying Party in respect of a Liability and subsequently receives Insurance Proceeds or Third-Party Proceeds in respect of such Liability, then the Indemnitee shall pay to the Indemnifying Party an amount equal to the excess of the amount paid by the

-28-

Indemnifying Party over the amount that would have been due if such Insurance Proceeds and Third-Party Proceeds had been received before the Indemnity Payment was made. Each member of the SHC Group and each member of the Seritage Group shall use commercially reasonable efforts to seek to collect or recover all Insurance Proceeds and all Third-Party Proceeds to which such Person is entitled in respect of a Liability for which such Person seeks indemnification pursuant to this Article V; provided, however, that such Person’s inability to collect or recover any such Insurance Proceeds or Third-Party Proceeds shall not limit the Indemnifying Party’s obligations hereunder.

(b) An insurer that would otherwise be obligated to pay a claim shall not be relieved of the responsibility with respect thereto or, solely by virtue of the indemnification provisions hereof, have any subrogation rights with respect thereto, it being expressly understood and agreed that no insurer or other third party shall be entitled to a “windfall” (i.e., a benefit it would not have been entitled to receive in the absence of the indemnification provisions hereof) by virtue of the indemnification provisions hereof.

5.5 Contribution. If the indemnification provided for in this Article V is unavailable to, or insufficient to hold harmless, an Indemnitee in respect of a Liability for which indemnification is provided for herein then each Indemnifying Party shall, in lieu of indemnifying such Indemnitee, contribute to the amount paid or payable by such Indemnitee as a result of such Liability, in such proportion as shall be sufficient to place the Indemnitee in the same position as if such Indemnitee were indemnified hereunder. If the contribution provided for in the previous sentence shall, for any reason, be unavailable or insufficient to put the Indemnitee in the same position as if it were indemnified under Section 5.2 or 5.3, as the case may be, then the Indemnifying Party shall contribute to the amount paid or payable by such Indemnitee as a result of such Liability, in such proportion as shall be appropriate to reflect the relative benefits received by and the relative fault of the Indemnifying Party on the one hand and the Indemnitee on the other hand with respect to the matter giving rise to the Liability.

5.6 Procedures for Indemnification of Direct Claims. Each claim for indemnification made directly by the Indemnitee against the Indemnifying Party that does not result from a Third-Party Claim shall be asserted by written notice from the Indemnitee to the Indemnifying Party specifically claiming indemnification hereunder, which notice shall state the amount claimed, if known, and method of computation thereof, and shall contain a reference to the provisions of this Agreement or the applicable Ancillary Agreement in respect of which such right of indemnification is claimed by such Indemnitee. Such Indemnifying Party shall have a period of thirty (30) days after the receipt of such notice within which to respond thereto. If such Indemnifying Party does not respond within such thirty (30)-day period, such Indemnifying Party shall be deemed to have accepted responsibility for the indemnification sought and shall have no further right to contest the validity of such claim. If such Indemnifying Party does respond within such thirty (30) day period and rejects such claim in whole or in part, such Indemnitee shall be free to pursue resolution as provided in Article IV. Subject to Article VII, the Indemnitee shall make available to the Indemnifying Party all witnesses, all pertinent records, all materials, and all Information in the Indemnitee’s possession or under its control reasonably requested by the Indemnifying Party relating to a claim made pursuant to this Section 5.6.

-29-

5.7 Procedures for Indemnification of Third-Party Claims.

(a) If an Indemnitee shall receive notice of the assertion of a claim, or commencement of an Action, by a Third Party against it (each, a “Third-Party Claim”) that may give rise to a claim for indemnification pursuant to this Agreement, within thirty (30) days of the receipt of such notice, the Indemnitee shall give the Indemnifying Party notice of such Third-Party Claim, which notice shall describe such Third-Party Claim in reasonable detail; provided, however, that the failure to provide such notice as provided in this Section 5.7 shall not release the Indemnifying Party from any of its obligations under this Section 5.7(a), except to the extent such Indemnifying Party is actually prejudiced by such failure to give notice.

(b) Each Indemnifying Party shall be entitled (but shall not be required) to assume and control the defense of each Third-Party Claim at its expense and through counsel of its choice that is reasonably acceptable to the Indemnitee if it gives notice of its intention to do so to the Indemnitee within thirty (30) days of the receipt of notice from the Indemnitee in accordance with Section 5.7(a); provided, however, that the Indemnifying Party shall not, without the prior written consent of the Indemnitee, settle, compromise or offer to settle or compromise such Third-Party Claim; provided, further, that such Indemnitee shall not withhold such consent if the settlement or compromise (i) contains no finding or admission of a violation of applicable Law or a violation of the rights of a Person by the Indemnitee or any of its Affiliates, (ii) contains no finding or admission that would have an adverse effect on the Indemnitee or any of its Affiliates as determined by the Indemnitee in Good Faith, (iii) involves only monetary relief which the Indemnifying Party has agreed to pay and does not contain an injunction or other non-monetary relief affecting the Indemnitee or any of its Affiliates, and (iv) includes a full, irrevocable unconditional release of the Indemnitee from such Third-Party Claim.

(c) If the Indemnifying Party elects to undertake the defense against a Third-Party Claim as provided by Section 5.7(b), the Indemnitee shall cooperate with the Indemnifying Party with respect to such defense and shall have the right, but not the obligation, to participate in such defense and to employ separate counsel of its choosing at its own expense; provided, however, that such expense shall be the responsibility of the Indemnifying Party if (i) the Indemnifying Party and the Indemnitee are both named parties to the proceedings and the Indemnitee shall have reasonably concluded that representation of both parties by the same counsel would be inappropriate due to actual or potential conflicts of interest (in which case the Indemnifying Party shall not be responsible for expenses in respect of more than one counsel for the Indemnitee in any single jurisdiction), or (ii) the Indemnitee assumes the defense of the Third-Party Claim after the Indemnifying Party has failed, in the reasonable judgment of the Indemnitee, to diligently defend the Third-Party Claim after having elected to assume its defense.

(d) If the Indemnifying Party (i) does not elect to assume the defense in accordance with Section 5.7(b), or (ii) after assuming the defense of a Third-Party Claim, fails to take reasonable steps necessary to defend diligently such Third-Party Claim within ten (10) days after receiving written notice from the Indemnitee to the effect that the Indemnifying Party has so failed, the Indemnitee shall have the right but not the obligation to assume its own defense; provided, however, that the Indemnitee shall not settle or compromise such Third-Party Claim without the consent of the Indemnifying Party, which consent shall not be unreasonably withheld. For the avoidance of doubt, the Indemnitee’s right to indemnification for a Third-Party Claim shall not be adversely affected by assuming the defense of such Third-Party Claim.

-30-

(e) Subject to Article VII, the Indemnitee and the Indemnifying Party shall reasonably cooperate in the defense of a Third-Party Claim including by (i) making available all witnesses, all pertinent records, all materials, and all Information in each other’s possession or under each other’s control relating to the Third-Party Claim, (ii) assisting with litigation defense strategy, investigations, discovery preparation, trial preparation, and similar activities with respect to the Third-Party Claim, and (iii) using commercially reasonable efforts to avoid taking any action, or omitting to take any action, that would materially and adversely prejudice each other’s defense of, or actual or potential rights of recovery with respect to, the Third-Party Claim. The Indemnifying Party shall have no obligation in accordance with this Section 5.7(e) to an Indemnitee for any Third-Party Claim to the extent such Indemnitee fails to comply with this Section 5.7(e) with respect to the Third-Party Claim and such failure shall have materially and adversely prejudiced the Indemnifying Party.

5.8 Remedies Cumulative. The remedies provided in this Article V shall be cumulative and, subject to the provisions of 5.7(e), shall not preclude assertion by any Indemnitee of any other rights or the seeking of any and all other remedies against any Indemnifying Party.

5.9 Survival of Indemnities. The rights and obligations of each of SHC and Seritage and their respective Indemnified Parties under this Article V shall survive (a) the sale or other transfer by any member of either party’s Group of any assets or businesses or the assignment by it of any Liabilities and (b) any merger, consolidation, business combination, sale of all or substantially all of its assets, restructuring, recapitalization, reorganization or similar transaction involving any member of either party’s Group, subject to the provisions of Section 10.9.

5.10 No Impairment of Insurance Claims. Without limiting Section 6.2(b), if any Liabilities are or would otherwise be covered by insurance as of the Closing Date absent this Agreement, no provision of this Article 5 or any other provision of this Agreement shall be deemed to prejudice, impair, reduce, offset, negate or otherwise adversely affect such insurance coverage in effect immediately prior to the Closing; and any Indemnifying Party shall succeed to and be entitled to enforce and enjoy all rights of the covered party with respect to such insurance coverage, and such covered party hereby assigns all such coverage and rights to the Indemnifying Party.

5.11 Right of Offset. The members of each of the Seritage Group and the SHC Group shall each be entitled to offset any payments required to be made under this Agreement against any amounts owed to the SHC Group or the Seritage Group, as applicable, under this Agreement. Notwithstanding the foregoing, the parties expressly agree that no amount payable hereunder shall be offset against an amount owing under the Master Lease.

5.12 Treatment of Certain Payments. All indemnification payments made pursuant to this Agreement and all payments made pursuant to Section 3.5 shall be treated as adjustments to the Purchase Price for all tax purposes except as otherwise required pursuant to a “determination” within the meaning of Section 1313(a) of the Internal Revenue Code of 1986, as amended (or any similar provision of state, local or foreign law).

-31-

ARTICLE VI

INSURANCE MATTERS

6.1 Insurance Matters.

(a) If not obtained prior to the Closing Date, then within 60 days after the Closing Date, Seritage shall obtain appropriate insurance policies for itself and the Seritage Group covering those risks that, prior to the Closing Date, were jointly insured with the members of the SHC Group. In no event shall SHC, any other member of the SHC Group or any SHC Indemnitee have any Liability or obligation whatsoever to any member of the Seritage Group in the event that any insurance policy or other contract or policy of insurance shall be terminated or otherwise cease to be in effect for any reason, shall be unavailable or inadequate to cover any Liability of any member of the Seritage Group for any reason whatsoever or shall not be renewed or extended beyond the current expiration date. Seritage does hereby, for itself and each other member of the Seritage Group, agree that no member of the SHC Group or any SHC Indemnitee shall have any liability whatsoever as a result of the insurance policies and practices of SHC and its Affiliates as in effect at any time prior to the Closing Date, including as a result of the level or scope of any such insurance, the creditworthiness of any insurance carrier, the terms and conditions of any policy, the adequacy or timeliness of any notice to any insurance carrier with respect to any claim or potential claim or otherwise, any professional or other advice with respect to the initial policies for Seritage, any handling of claims for Seritage, or any oversight or advice with respect to risk management or other insurance-related issues; provided that this Section 6.1(a) shall not negate SHC’s agreement under Section 6.1(b).

(b) SHC agrees to use its commercially reasonable efforts to cause (and, without limitation of the foregoing, to the extent within its control as to self-insurance programs, shall cause) the interests and rights of Seritage and the other members of the Seritage Group as of the Closing Date as insureds or beneficiaries or in any other capacity under occurrence-based insurance policies and programs (and under claims-made policies and programs to the extent a claim has been submitted prior to the Closing Date) of SHC or any other member of the SHC Group in respect of the period prior to the Closing Date to survive the Closing Date for the period for which such interests and rights would have survived without regard to the transactions contemplated hereby to the extent permitted by such policies; and any proceeds received by SHC or any other member of the SHC Group after the Closing Date under such policies and programs in respect of Seritage and the other members of the Seritage Group (other than in respect of amounts previously paid to Seritage and the other members of the Seritage Group) shall be for the benefit of Seritage and such other members of the Seritage Group; provided, that the interests and rights of Seritage and the other members of the Seritage Group shall be subject to the terms and conditions of such insurance policies and programs, including any limits on coverage or scope, any deductibles and other fees and expenses and SHC’s allocation of the cost of claims to its business units, for this purpose including Seritage, according to its allocation program in effect as of the Closing Date, and shall be subject to the following additional conditions:

(i) Seritage shall report, on behalf of itself and the other members of the Seritage Group, as promptly as practicable, claims to SHC’s Vice President for Risk Management and the Deputy General Counsel of Litigation (or such other individuals as SHC may designate in writing) and otherwise in accordance with

-32-

SHC’s claim reporting procedures in effect immediately prior to the Closing Date (or in accordance with any modifications to such procedures after the Closing Date communicated by SHC to Seritage in writing);

(ii) Seritage and the other members of the Seritage Group shall indemnify, hold harmless and reimburse SHC and the other members of the SHC Group for any premiums, retrospectively rated premiums, defense costs, settlements, judgments, legal fees, indemnity payments, deductibles, retentions, claim expenses and claim handling fees or other charges allocated to the members of the Seritage Group pursuant to the allocation program maintained by SHC in effect as of the Closing Date, whether such underlying claims are made by a member of the Seritage Group, its employees or a Third Party;

(iii) Seritage shall, and shall cause the other members of the Seritage Group to, cooperate with and assist SHC and the other members of the SHC Group and share such Information as is reasonably necessary in order to permit SHC and the other members of the SHC Group to manage and conduct the insurance matters contemplated by this Article VI, including, without limitation, the production of witnesses in accordance with Section 7.4; and

(iv) Seritage shall exclusively bear (and neither SHC nor any other member of the SHC Group shall have any obligation to repay or reimburse Seritage or any other member of the Seritage Group for) and shall be liable for all uninsured, uncovered, unavailable or uncollectible amounts of all such claims made by Seritage or any other member of the Seritage Group under the policies as provided for in this Section 6.1(b). In the event an insurance policy aggregate is exhausted, or believed likely to be exhausted, due to noticed claims, the members of the Seritage Group, on the one hand, and the members of the SHC Group, on the other hand, shall be responsible for their pro rata portion of the reinstatement premium, if any, based upon the losses of such Group submitted to SHC’s insurance carrier(s) (including any submissions prior to the Closing Date). To the extent that either Group is allocated more than its pro rata portion of such premium due to the timing of losses submitted to SHC’s insurance carrier(s), the other party shall promptly pay the first party an amount so that each Group has been properly allocated its pro rata portion of the reinstatement premium. Subject to the following sentence, SHC may elect not to reinstate the policy aggregate. In the event that SHC elects not to reinstate the policy aggregate, it shall provide prompt written notice to Seritage, and Seritage may direct SHC in writing to, and SHC shall, in such case, reinstate the policy aggregate in which case the policy aggregate shall accrue solely to Seritage’s benefit; provided, that Seritage shall be responsible for all reinstatement premiums and other costs associated with such reinstatement; provided, further, that SHC shall have the right to pay its pro rata portion of the reinstatement premium and receive the pro rata benefit of the policy aggregate.

In the event that any member of the Seritage Group incurs any losses, damages or Liability prior to or in respect of the period prior to the Closing Date for which such member of the Seritage Group is entitled to coverage under Seritage’s third-party insurance policies, the same process pursuant to this Section 6.1(b) shall apply, substituting “SHC” for “Seritage” and “Seritage” for “SHC.”

-33-

(c) Except as provided in Section 6.1(b), from and after the Closing Date, neither Seritage nor any other member of the Seritage Group shall have any rights to or under any of the insurance policies of SHC or any other member of the SHC Group.

(d) Neither Seritage nor any other member of the Seritage Group, in connection with making a claim under any insurance policy of SHC or any other member of the SHC Group pursuant to this Section 6.1, shall take any action that would be reasonably likely to (i) have an adverse impact on the then-current relationship between SHC or any other member of the SHC Group, on the one hand, and the applicable insurance company, on the other hand, (ii) result in the applicable insurance company terminating or reducing coverage, or increasing the amount of any premium owed by SHC or any other member of the SHC Group under the applicable insurance policy or (iii) otherwise compromise, jeopardize or interfere with the rights of SHC or any other member of the SHC Group under the applicable insurance policy.

(e) Subject to Section 6.1(b), and subject to the provisions of any Ancillary Agreements, SHC and the other members of the SHC Group shall retain the exclusive right to control their insurance policies and programs, including the right to defend, exhaust, settle, release, commute, buy-back or otherwise resolve disputes with respect to any of their insurance policies and programs and to amend, modify or waive any rights under any such insurance policies and programs, notwithstanding whether any such policies or programs apply to any Liabilities Seritage and/or claims Seritage has made or could make in the future, and no member of the Seritage Group shall, without the prior written consent of SHC, erode, exhaust, settle, release, commute, buy-back or otherwise resolve disputes with insurers of SHC or other members of the SHC Group with respect to any of the insurance policies and programs of the members of the SHC Group, or amend, modify or waive any rights under any such insurance policies and programs. Neither SHC nor any other member of the SHC Group shall have any obligation to secure extended reporting for any claims under any of the insurance policies and programs of SHC or other members of the SHC Group for any acts or omissions by any member of the Seritage Group incurred prior to the Closing Date.

(f) This Agreement is not intended as an attempted assignment of any policy of insurance or as a contract of insurance and shall not be construed to waive any right or remedy of any member of the Seritage Group in respect of any insurance policy or any other contract or policy of insurance.

(g) Nothing in this Agreement shall be deemed to obligate SHC or any other member of the SHC Group to obtain or maintain credit insurance coverage to cover any Liabilities of members of the Seritage Group that may at any time arise under any insurance coverage for any member of the Seritage Group.

(h) Nothing in this Agreement shall be deemed to restrict any member of the Seritage Group from acquiring at its own expense any insurance policy in respect of any Liabilities or covering any period.

-34-

6.2 Miscellaneous.

(a) Each of the parties intends by this Agreement that a Third-Party, including a third-party insurer or reinsurer, or other Third Party that, in the absence of the Agreement would otherwise be obligated to pay any claim or satisfy any indemnity or other obligation, shall not be relieved of the responsibility with respect thereto and shall not be entitled to a “windfall” (i.e., avoidance of the obligation that such Person would have in the absence of this Agreement). To the extent that any such Person would receive such a windfall, SHC and Seritage shall negotiate in Good Faith concerning an amendment of this Agreement to avoid such a windfall.

(b) This Article 6 shall in all respects be subject to Section 5.10.

ARTICLE VII

CONFIDENTIALITY; EXCHANGE OF INFORMATION

7.1 Agreement for Exchange of Information; Archives.

(a) Except in the case of an Action or threatened Action by either party hereto or any Person in such party’s Group against the other party hereto or any Person in its Group, and subject to Section 7.1(b), each party shall provide, or cause to be provided, to the other party or any member of its Group, at any time before or after the Closing, as soon as reasonably practicable after written request therefor, all Information in the possession or under the control of its Group (and access to the Personnel of its Group during normal business hours and upon reasonable notice in connection with the discussion and explanation of such Information), which any member of the other party’s Group reasonably requests and is necessary or reasonably advisable (i) to comply with reporting, disclosure, filing or other requirements under applicable Law or imposed by any national securities exchange or any Governmental Authority having jurisdiction over such Person, (ii) for use in any other judicial, regulatory, administrative or other proceeding or in order to satisfy audit, accounting, regulatory, litigation or other similar requirements or (iii) to comply with its obligations under this Agreement or any Ancillary Agreement. The receiving party shall use any Information received pursuant to this Section 7.1(a) solely to the extent reasonably necessary to satisfy the applicable obligations or requirements described in clause (i), (ii) or (iii) of the immediately preceding sentence.

(b) Subject to the last sentence of this Section 7.1(b), in the event that either SHC or Seritage, as applicable, reasonably determines that the exchange of any Information pursuant to Section 7.1(a) could be commercially detrimental, violate any applicable Law, agreement or policy (including SHC’s or Seritage’s privacy policies) or waive or jeopardize any attorney-client privilege or attorney work product protection, such party shall not be required to provide access to or furnish such Information to the other party; provided, however, that the parties shall take all commercially reasonable measures to permit compliance with Section 7.1(a) in a manner that avoids any such harm or consequence (as reasonably determined by the Group providing the Information). Both SHC and Seritage intend that any provision of access to or the furnishing of Information pursuant to this Section 7.1 that would otherwise be within the ambit of any legal privilege shall not operate as waiver of such privilege.

-35-

(c) Each party shall, and shall cause the members of its Group to, use and maintain the information provided by the other party or member of such other party’s Group in accordance with all applicable privacy and data protection Laws, and shall implement and maintain at all times appropriate measures to protect any personal data against unauthorized or unlawful processing and accidental loss, destruction, damage, alteration and disclosure.

(d) The party requesting Information shall reimburse the other party for the reasonable out-of-pocket costs and expenses, if any, in complying with a request for Information pursuant to this Article VII.

7.2 Ownership of Information. Except as otherwise provided in this Agreement or an Ancillary Agreement, all Information owned by, and provided by or on behalf of, a Disclosing Party to a Receiving Party shall remain the property of the Disclosing Party and nothing herein shall be construed as granting or conferring rights of license or otherwise in any such Information to the Receiving Party or any other Person.

7.3 Record Retention. To facilitate the possible exchange of Information pursuant to this Article VII and other provisions of this Agreement and the Ancillary Agreements, except as otherwise expressly provided in any Ancillary Agreement, (i) each party shall, and shall cause members of its Group to, use reasonable best efforts to retain all Information in accordance with their respective record retention policies and procedures as in effect as of the Closing Date and (ii) no party shall destroy, or permit any member of its Group to destroy, any Information which any member of the other Group may have the right to obtain pursuant to this Agreement prior to the later of the period in the applicable retention policy or the fifth ⁽5th) anniversary of the Closing Date without first notifying the other party of the proposed destruction and giving the other party the opportunity to take possession of such Information prior to such destruction.

7.4 Production of Witnesses; Records; Cooperation.

(a) After the Closing Date and subject to Section 7.1(b), but only with respect to a Third-Party Claim, each of SHC and Seritage shall, and shall cause the other members of its Group to, use commercially reasonable efforts to, make available, upon written request, their officers, employees, other Personnel and agents (whether as witnesses or otherwise) and any books, records or other documents within their control or that they otherwise have the ability to make available, to the extent that each such Person (giving consideration to business demands of such officers, employees, other Personnel and agents) or books, records or other documents may reasonably be required in connection with any Action or threatened or contemplated Action (including preparation for such Action) in which SHC or Seritage, as applicable, may from time to time be involved, regardless of whether such Action is a matter with respect to which indemnification may be sought hereunder. The requesting party shall bear all reasonable out-of-pocket costs and expenses in connection therewith.

(b) SHC and Seritage shall use their commercially reasonable efforts to cooperate and consult to the extent reasonably necessary with respect to any Actions or threatened or contemplated Actions involving each other’s Group, other than an Action by one or more members of a Group against one or more members of the other Group.

-36-

(c) The obligation of SHC and Seritage to make available directors, officers, employees and other Personnel and agents or provide witnesses and experts pursuant to this Section 7.4 is intended to be interpreted in a manner so as to facilitate cooperation and shall include the obligation to make available Personnel and other officers without regard to whether such individual or the employer of such individual could assert a possible business conflict (subject to the exception set forth in the first sentence of Section 7.4(a)). Without limiting the foregoing, each of SHC and Seritage agrees that neither it nor any Person or Persons in its respective Group shall take any adverse action against any Person of its Group based on such Person’s provision of assistance or Information to the other Group pursuant to this Section 7.4.

(d) Upon the reasonable request of a party, the other party shall, and shall cause all other relevant members of its Group to, enter into a mutually acceptable common interest agreement so as to maintain to the extent practicable any applicable attorney-client privilege or work product immunity of any member of either Group.

7.5 Confidential Information.

(a) Subject to Section 7.6 and the Ancillary Agreements, the Receiving Party, its Affiliates and its and their Personnel shall use Information provided by the Disclosing Party only in connection with this Agreement and, except as expressly permitted by this Agreement and subject to the first sentence of Section 7.5(b), shall not disclose any such Information.

(b) The Receiving Party shall (i) restrict disclosure of Information provided by the Disclosing Party to its and its Affiliates’ Personnel, in the case of those Personnel, with a need to know such Information for purposes of performing the Receiving Party’s responsibilities or exercising the Receiving Party’s rights under this Agreement, (ii) advise those Personnel of the obligation not to disclose such Information or use such Information in a manner prohibited by this Agreement, (iii) copy such Information only as necessary for those Personnel who need it for performing the Receiving Party’s responsibilities under this Agreement, and ensure that confidentiality is maintained in the copying process and (iv) protect such Information, and require those Personnel to protect it, using the same degree of care as the Receiving Party uses with its own Information, but no less than reasonable care. The Receiving Party shall be liable to the Disclosing Party for any unauthorized disclosure or use of such Information by any of its and its Affiliates current or former Personnel in violation of this Section 7.5.

(c) Without limiting the foregoing, when any Information provided by the Disclosing Party is no longer needed for the purposes contemplated by this Agreement, the Receiving Party shall, promptly after request of the Disclosing Party, either return such Information in tangible form (including all copies thereof and all notes, extracts or summaries based thereon) or certify to the Disclosing Party that it has destroyed such Information (other than electronic copies residing in automatic backup systems that are not generally available to the Receiving Party’s Personnel or copies retained to the extent required by applicable Law, regulation or a bona fide document retention policy).

(d) The obligations under this Section 7.5 do not apply to any Information that the Receiving Party can demonstrate (i) was known to the Receiving Party prior to the disclosure thereof to the Receiving Party from the Disclosing Party without any obligation owed to the

-37-

Disclosing Party or its Affiliates to hold it in confidence, (ii) is disclosed to third parties by the Disclosing Party or its Affiliates without an obligation of confidentiality to the Disclosing Party or its Affiliate, as applicable, (iii) is or becomes available to any member of the public other than by disclosure by the Receiving Party, its Affiliates or its or their Personnel in violation of this Section 7.5, (iv) was or is independently developed by the Receiving Party or its Affiliates or Personnel without use of Information provided by the Disclosing Party, (v) legal counsel’s advice is that such Information is required to be disclosed by applicable Law or the rules and regulations of any applicable Governmental Authority or any stock exchange on which such party’s securities are listed and the Receiving Party has complied with Section 7.6, or (vi) legal counsel’s advice is that such Information is required to be disclosed in response to a valid subpoena or order of a court or other Governmental Authority of competent jurisdiction or other valid legal process and the Receiving Party has complied with Section 7.6. Further, the obligations under this Section 7.5 do not apply to Information delivered pursuant to the Master Lease, confidentiality with respect to which shall be governed by the Master Lease.

7.6 Protective Arrangements. If the Receiving Party determines that the exceptions under Section 7.5(d)(v) or 7.5(d)(vi) apply, the Receiving Party shall give the Disclosing Party, to the extent legally permitted and reasonably practicable, prompt prior notice of such disclosure and an opportunity to contest such disclosure and shall use commercially reasonable efforts to cooperate, at the expense of the Receiving Party, in seeking any reasonable protective arrangements requested by the Disclosing Party. In the event that such appropriate protective order or other remedy is not obtained, the Receiving Party may furnish, or cause to be furnished, only that portion of such Information that the Receiving Party is advised by legal counsel is legally required to be disclosed and shall take commercially reasonable steps to ensure that confidential treatment is accorded such Information.

7.7 Other Agreements Providing for Exchange of Information. The rights and obligations granted or created under this Article VII are subject to any specific limitations, qualifications or additional provisions on the sharing, exchange, retention or confidential treatment of Information set forth in any Ancillary Agreement.

7.8 Privileged Matters. To allocate the interests of each party in the Information as to which either party or any member of their respective Groups is entitled to assert a privilege in connection with professional services that have been provided prior to the Closing Date for the collective benefit of each of the members of the SHC Group and the members of the Seritage Group, whether or not such a privilege exists or the existence of which is in dispute (collectively, “Common Privileges”), the parties agree as follows:

(a) SHC shall be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged Information which does not relate primarily to the Transferred Properties, whether or not the privileged Information is in the possession of or under the control of members of the SHC Group or members of the Seritage Group. SHC also shall be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged Information which relates to any pending or future Action that is, or which SHC reasonably anticipates may become, a Liability of SHC or a member of the SHC Group and that is not also, or that SHC reasonably anticipates will not become, a Liability of Seritage or any member of the Seritage Group, whether or not the privileged Information is in the possession of or under the control of members of the SHC Group or members of the Seritage Group.

-38-

(b) Subject to Section 7.8(c), Seritage shall be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged Information which relates primarily to the Transferred Properties, whether or not the privileged Information is in the possession of or under the control of members of the SHC Group or members of the Seritage Group. Seritage also shall be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged Information which relates to any pending or future Action that is, or which Seritage reasonably anticipates may become, a Liability of Seritage or a member of the Seritage Group and that is not also, or that Seritage reasonably anticipates will not become, a Liability of SHC or any member of the SHC Group, whether or not the privileged Information is in the possession of or under the control of members of the SHC Group or members of the Seritage Group.

(c) SHC shall be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged Information which relates to the Transaction or the other transactions contemplated thereby, it being understood and agreed that the expectation and intention as between SHC and Seritage with respect to any communications between advisors to SHC and Seritage occurring up to and including the Closing Date in connection with the Transaction and such other transactions are that the privilege and the expectation of client confidence belong exclusively to SHC.

(d) Subject to the restrictions in this Section 7.8, SHC and Seritage agree that they shall have equal right to assert all Common Privileges not allocated pursuant to the terms of Section 7.8(a), 7.8(b) or 7.8(c) (each, a “Shared Privilege”) with respect to Information as to which the a member of either party’s Group may assert a privilege. Each party shall ensure that no member of its Group may waive any Shared Privilege, without the written consent of the other party which shall not be unreasonably withheld or delayed.

(e) In the event of an Action between one or more members of the Seritage Group, on the one hand, and one or more members of the SHC Group, on the other hand, each such Person shall have the right to use any Information that may be subject to a Shared Privilege, without obtaining the consent of the other party, it being understood and agreed that the use of Information with respect to the Action or other dispute between members of the Seritage Group, on the one hand, and members of the SHC Group, on the other hand, shall not operate as or be used by either party as a basis for asserting a waiver of such Shared Privilege with respect to Third Parties.

(f) If a dispute arises between any member of the Seritage Group, on the one hand, and any member of the SHC Group, on the other hand, regarding whether a Shared Privilege should be waived to protect or advance the interest of either party, each party agrees that it shall negotiate in Good Faith and endeavor to minimize any prejudice to the rights of the other party, and shall not unreasonably withhold consent to any request for waiver by the other party.

(g) Upon receipt by either party or by any member of its Group of any subpoena, discovery or other request that arguably calls for the production or disclosure of

-39-

Information subject to a Shared Privilege or as to which the other party or a member of such other party’s Group has the sole right hereunder to assert a privilege, or if either party obtains knowledge that any current or former directors, officers, agents or employees of any member of its Group have received any subpoena, discovery or other requests that arguably call for the production or disclosure of such privileged Information, such party shall promptly notify the other party of the existence of the request and shall provide the other party a reasonable opportunity to review the Information and to assert any rights it or any member of its Group may have under this Section 7.8 or otherwise to prevent the production or disclosure of such privileged Information. Each party shall bear its own expenses in connection with any such request.

(h) The transfer of all Records and other Information and each party’s retention of Records and other Information that may include privileged Information of the other party pursuant to this Agreement is made in reliance on the agreement of SHC and Seritage, as set forth in this Article VII to maintain the confidentiality of Information provided by a Disclosing Party and to assert and maintain all applicable privileges. The access to Information being granted and the agreement to provide witnesses herein, the furnishing of notices and documents and other cooperative efforts contemplated hereby, and the transfer of privileged Information between and among the parties and members of their respective Groups pursuant hereto shall not be deemed a waiver of any privilege that has been or may be asserted under this Agreement or otherwise.

ARTICLE VIII

FURTHER ASSURANCES AND ADDITIONAL COVENANTS

8.1 Further Assurances.

(a) The parties shall use all reasonable best efforts to take, or cause to be taken, all appropriate action, to do or cause to be done all things necessary, proper or advisable under applicable Law, and to execute and deliver such documents and other papers, as may be required to carry out the provisions of this Agreement and the Ancillary Agreements and to consummate and make effective the transactions contemplated by hereby or thereby, whether before, on or after the Closing Date.

(b) Without limiting the foregoing, prior to, on and after the Closing Date, each party shall reasonably cooperate with the other party, and without any further consideration, but at the expense of the requesting party, to execute and deliver, or use its reasonable best efforts to cause to be executed and delivered, all instruments, including, instruments of conveyance, assignment and transfer, and to make all filings with, and to obtain or make any necessary Approvals or Notifications and obtain all necessary Governmental Approvals, including, under any permit, license, agreement, indenture or other instrument, and to take all such other actions as such party may reasonably be requested to take by the other party from time to time, consistent with the terms of this Agreement, in order to effectuate the provisions and purposes of this Agreement and the Ancillary Agreements and the transactions contemplated hereby and thereby.

8.2 Performance. Each party shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in this Agreement or in any Ancillary Agreement to be performed by any member of such party’s Group.

-40-

8.3 Order of Precedence. Notwithstanding anything to the contrary in this Agreement or any Ancillary Agreement, in the case of any conflict between the provisions of this Agreement and the provisions of any Ancillary Agreement, the provisions of the Ancillary Agreement shall prevail.

ARTICLE IX

TERMINATION AND AMENDMENT

9.1 Sole Discretion of SHC. Notwithstanding any other provision of this Agreement or any Ancillary Agreement, until the Closing Date, SHC shall have the sole and absolute discretion:

(a) to determine whether to proceed with all or any part of the Transaction, and to determine the timing of the Transaction and any and all conditions to the Closing or any part thereof or of any other transaction contemplated by this Agreement; and

(b) to amend or otherwise change, delete or supplement, from time to time, any term or element of the Transaction or any other transaction contemplated by this Agreement or any Ancillary Agreement; provided that SHC shall consult with Seritage, to the extent practicable, prior to implementing any such amendment, change, deletion or supplement.

9.2 Amendment and Termination. This Agreement and the Ancillary Agreements may be amended, supplemented, terminated and the transactions contemplated hereby may be modified or abandoned at any time without the approval of or prior notice to Seritage or of the holders of SHC Common Stock in the sole and absolute discretion of SHC prior to the Closing Date, if the SHC Board determines, in its sole and absolute discretion, that (a) any of the conditions set forth in Section 3.3(a) have not been satisfied, (b) the Transaction is not in the best interest of SHC or the holders of SHC Common Stock or (c) that market or other conditions are such that it is not advisable to consummate the Transaction. In the event of a termination in accordance with the foregoing, this Agreement shall forthwith become void and there shall be no Liability on the part of either party; provided, further, that SHC shall consult with Seritage, to the extent practicable, prior to implementing any amendment, change, deletion or supplement of this Agreement or any Ancillary Agreement. After the Closing Date, this Agreement may not be amended, supplemented or terminated except by an agreement in writing signed by both parties.

ARTICLE X

MISCELLANEOUS

10.1 Limitation of Liability.

(a) IN NO EVENT SHALL EITHER PARTY OR ANY MEMBER OF ITS GROUP BE LIABLE TO THE OTHER PARTY OR ANY MEMBER OF SUCH OTHER PARTY’S GROUP FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT, INCIDENTAL OR PUNITIVE DAMAGES OR LOST PROFITS, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE) ARISING IN ANY WAY OUT OF THIS AGREEMENT, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES; PROVIDED, HOWEVER, THAT THE FOREGOING LIMITATIONS SHALL NOT LIMIT AN INDEMNIFYING PARTY’S INDEMNIFICATION

-41-

OBLIGATIONS HEREUNDER WITH RESPECT TO ANY LIABILITY ANY INDEMNITEE MAY HAVE TO ANY THIRD PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT, INCIDENTAL OR PUNITIVE DAMAGES OR LOST PROFITS, EXCEPT AS OTHERWISE PROVIDED IN THE ANCILLARY AGREEMENTS.

(b) Neither party nor any member of its Group shall have any Liability to the other party or any member of such other party’s Group in the event that any Information exchanged or provided pursuant to this Agreement that is an estimate or forecast, or that is based on an estimate or forecast, is found to be inaccurate in the absence of willful misconduct by the providing Person. Neither party nor any member of its Group shall have any Liability to the other party or any member of such other party’s Group if any Information is destroyed after reasonable best efforts by the Person from whom Information is requested, to comply with the provisions of Section 7.3.

10.2 Expenses.

(a) Expenses Incurred on or Prior to the Closing Date. Except (i) as otherwise expressly set forth in this Agreement or any Ancillary Agreement or (ii) or as otherwise agreed to in writing by the parties, all costs and expenses (including filing and recording fees and transfer taxes) incurred on or prior to the Closing Date in connection with the preparation, execution, delivery and recordation of this Agreement and any Ancillary Agreement, the Transaction, the Form S-11 and the consummation of the transactions contemplated hereby and thereby on or prior to the Closing Date, in each case to the extent approved by SHC, shall be charged to and paid by a member of the SHC Group, except that (A) each Party shall bear its own attorneys’ fees and (B) Seritage shall be solely responsible (and shall reimburse the SHC Group to the extent previously paid) for (I) the Title Company’s previous costs and expenses and (II) all of Seritage’s financing costs and expenses (including mortgage recording taxes), in the case of clauses (I) and (II), in connection with the transactions contemplated by this Agreement.

(b) Expenses Incurred or Accrued After the Closing Date. Except as otherwise expressly set forth in this Agreement or any Ancillary Agreement, or as otherwise agreed to in writing by the parties, each party shall bear its own costs and expenses incurred or accrued after the Closing Date.

10.3 Counterparts. This Agreement may be executed and delivered (including by facsimile or other electronic transmission (e.g., .pdf file)) in counterparts, and by the different parties in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.

10.4 Notices. All notices, requests, demands, waivers and other communications required or permitted to be given under this Agreement or any Ancillary Agreement must be in writing and shall be deemed to have been duly given (a) when delivered by hand, (b) three (3) Business Days after mailing, certified or registered mail, return receipt requested, with postage prepaid, (c) on the same Business Day when sent by facsimile or electronic mail (return receipt requested) if the transmission is completed before 5:00 p.m. recipient’s time, or one (1) Business Day after the facsimile or email is sent if the transmission is completed on or after 5:00 p.m. recipient’s time, or (d) one (1) Business Day after it is sent by Express Mail, Federal Express or

-42-

other courier service, as follows (or at such other address for a party as shall be specified in a notice given in accordance with this Section 10.4):

If to SHC, to:

Sears Holdings Corporation

3333 Beverly Road

Hoffman Estates, Illinois 60179

Attn.: General Counsel

Facsimile: [—]

Email: [—]

If to Seritage, to:

Seritage Growth Properties

[—]

Attn.: General Counsel

Facsimile: [—]

Email: [—]

10.5 Public Announcements. Following the Closing Date, the parties shall be permitted to make, or cause to be made, any press release or public announcement in respect of this Agreement or the transactions contemplated by this Agreement taking place on the Closing Date or otherwise communicate with any news media unless otherwise prohibited by applicable Law or applicable stock exchange regulation or the provisions of this Agreement or any Ancillary Agreement; provided, that the parties shall consult with each other prior to issuing, and shall, subject to the requirements of Section 7.5, provide the other party the opportunity to review and comment upon press releases and other public statements in connection with the Transaction or any of the other transactions contemplated hereby or by any Ancillary Agreement and prior to making any filings with any Governmental Authority or national securities exchange with respect thereto. Notwithstanding the foregoing, except as may be required by federal or state Law including any SEC rules and regulations or the rules and regulations of any securities exchange or any inter-dealer quotation system, neither party shall (a) issue any publicity or press release regarding its relationship with the other party, except as mutually agreed, or (b) disclose or refer to any Ancillary Agreement or the other party in any prospectus, annual report or other filing, without the prior consent of the other party. Neither party shall refer to this Agreement or the other party in the solicitation of business without obtaining the other party’s prior written approval.

10.6 Severability. If any provision of this Agreement is declared by any court of competent jurisdiction to be illegal, invalid, void or unenforceable, such provision shall (to the extent permitted under applicable Law) be construed by modifying or limiting it so as to be legal, valid and enforceable to the maximum extent compatible with, and possibly under, applicable Law, and all other provisions of this Agreement shall not be affected and shall remain in full force and effect.

-43-

10.7 Entire Agreement. This Agreement and the Ancillary Agreements, including the exhibits, schedules and appendices thereto and together with all the agreements contemplated hereby and thereby, constitute the entire agreement of the parties with respect to the subject matter hereof and thereof and supersede and integrate all prior or contemporaneous agreements, undertakings, promises and undertakings, both written and oral, between the parties with respect to the subject matter hereof and thereof. Without limiting the foregoing, no agent or representative of any party has made any promises, undertakings or inducements to or for the benefit of any other party which is not completely set forth therein.

10.8 Amendment; No Waiver. Subject to Article IX, the terms, covenants and conditions of this Agreement may be amended, modified or waived only by a written instrument signed by the parties, or in the event of a waiver, by the party waiving such compliance. Either party’s failure at any time to require performance of any provision shall not affect that party’s right to enforce that or any other provision at a later date. No waiver of any condition or breach of any provision, term or covenant contained in this Agreement, whether by conduct or otherwise, in any one or more instances shall be deemed to be or construed as a further or continuing waiver of that or any other condition or of the breach of that or another provision, term or covenant of this Agreement.

10.9 Successors and Assigns. This Agreement shall be binding on, and shall inure to the benefit of, the successors and assigns of the parties.

10.10 Third-Party Beneficiaries. Except for the indemnification rights under this Agreement of any SHC Indemnitee or Seritage Indemnitee in their respective capacities as such and members of each party’s Group, (a) the provisions of this Agreement are solely for the benefit of the parties and are not intended to confer upon any Person except the parties any rights or remedies hereunder and (b) there are no third-party beneficiaries of this Agreement and this Agreement shall not provide any other Person with any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Agreement.

10.11 Governing Law; Jurisdiction. This Agreement (and all claims, controversies or causes of action, whether in contract, tort or otherwise, that may be based upon, arise out of or relate to this Agreement or the negotiation, execution, termination, performance or nonperformance of this Agreement (including any claim, controversy or cause of action based upon, arising out of or relating to any representation or warranty made in or in connection with this Agreement or as an inducement to enter into this Agreement)) shall be governed by, and construed and enforced in accordance with, the Laws of the State of Illinois, without regard to any choice or conflict of law provision or rule (whether of the State of Illinois or any other jurisdiction) that would cause the application of the Laws of any jurisdiction other than the State of Illinois. Each of the parties irrevocably agrees that all proceedings arising out of or relating to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by the other party or its successors or assigns shall be brought, heard and determined exclusively in any federal or state court sitting in Cook County, Illinois. Consistent with the preceding sentence, each of the parties hereby (a) submits to the exclusive jurisdiction of any federal or state court sitting in Cook County, Illinois for the purpose of any proceeding arising out of or relating to this Agreement or the rights and obligations arising hereunder

-44-

brought by either party and (b) irrevocably waives, and agrees not to assert by way of motion, defense, counterclaim, or otherwise, in any such proceeding, any claim that it or its property is not subject personally to the jurisdiction of the above-named courts, that the proceeding is brought in an inconvenient forum, that the venue of the proceeding is improper, or that this Agreement, the Transaction or any of the other transactions contemplated by this Agreement may not be enforced in or by any of the above-named courts. Each party agrees that service of process upon such party in any such action or proceeding shall be effective if notice is given in accordance with Section 10.4.

10.12 Waiver of Jury Trial. EACH OF THE PARTIES HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH OF THE PARTIES HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.12.

10.13 Headings. The descriptive headings contained in this Agreement are included for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.

10.14 Interpretation. In this Agreement:

(a) “include,” “includes,” and “including” are inclusive and mean, respectively, “include without limitation,” “includes without limitation,” and “including without limitation,”

(b) “or” is disjunctive but not necessarily exclusive,

(c) numbered “Section” references refer to sections of this Agreement unless otherwise specified,

(d) section headings are for convenience only and have no interpretive value,

(e) unless otherwise indicated all references to a number of days mean calendar (and not business) days and all references to months or years mean calendar months or years,

(f) “to the extent” shall be construed to measure the degree to which an event has occurred and does not merely mean “if”.

(g) references to $ or Dollars mean U.S. Dollars, and

-45-

(h) hereof,” “herein” and “herewith” and words of similar import, unless otherwise stated, shall be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement.

10.15 Fair Construction. This Agreement shall be deemed to be the joint work product of the parties without regard to the identity of the draftsperson, and any rule of construction that a document is interpreted or construed against the drafting party shall not be applicable.

10.16 Specific Performance. In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the affected party shall have the right to specific performance and injunctive or other equitable relief of its rights under this Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative. The other party shall not oppose the granting of such relief. The parties agree that the remedies at law for any breach or threatened breach hereof, including monetary damages, are inadequate compensation for any loss and that any defense in any action for specific performance that a remedy at law would be adequate is waived. Any requirements for the securing or posting of any bond with such remedy are waived.

10.17 Good Faith. Each of SHC and Seritage shall exercise Good Faith in the performance of its obligations under this Agreement.

10.18 Force Majeure. Neither party shall be responsible to the other for any delay in or failure of performance of its obligations under this Agreement to the extent such delay or failure is attributable to any act of God, act of terrorism, fire, accident, war, embargo or other governmental act, or riot; provided, however, that the party affected thereby gives the other party prompt written notice of the occurrence of any event which is likely to cause any delay or failure setting forth its best estimate of the length of any delay and any possibility that it shall be unable to resume performance; provided, further, that said affected party shall use its commercially reasonable efforts to expeditiously overcome the effects of that event and resume performance.

10.19 Payment Terms.

(a) Except as expressly provided to the contrary in this Agreement or in any Ancillary Agreement, (i) any amount to be paid or reimbursed by one party (the “Paying Party”) to the other (the “Payee Party”) under this Agreement or any Ancillary Agreement shall be paid or reimbursed hereunder within fifteen (15) days after presentation of an invoice or a written demand therefor, and (ii) upon request of the Payee Party, the Paying Party shall provide to the Payee Party reasonable documentation or other reasonable explanation supporting such amount to the extent such Information is then readily available to Paying Party.

(b) Except for any amounts due under the Master Lease and except as expressly provided to the contrary in this Agreement or in any other Ancillary Agreement, any amount not paid when due pursuant to this Agreement or any Ancillary Agreement (and any amount billed or otherwise invoiced or demanded and properly payable that is not paid within fifteen (15) days of such bill, invoice or other demand) shall bear interest at a rate per annum equal to the Prime Rate plus 2% (or the maximum legal rate, whichever is lower), calculated for the actual number of days elapsed, accrued from the date on which such payment was due up to the date of the actual receipt of payment.

-46-

10.20 Survival of Covenants. Except as expressly set forth in this Agreement, the covenants, representations and warranties contained in this Agreement, and the Liabilities for the breach of any obligations contained herein, shall survive the Closing Date and shall remain in full force and effect.

10.21 No Agency. Nothing in this Agreement shall or shall be construed to create or establish a relationship of agency, partnership, employer/employee or any other fiduciary relationship between any member of the SHC Group and any member of the Seritage Group, and it is the intent and desire of the parties that the relationship be and be construed as that of independent contracting parties and not as agents, partners, joint venturers or a relationship of employer/employee.

10.22 Risk of Loss. The risk of loss or damage to the Transferred Properties (which shall include those Transferred Properties for which Interests are being acquired) by fire, flood, casualty, condemnation or act of God (“Loss”) shall be borne by the parties as hereinafter provided in this Section 10.22.

(a) If any Loss occurs before the Closing Date with respect to any one (1) Transferred Property, then the following shall apply: in the event of a Loss (other than a Total Destruction as defined in the Master Lease), so long as (i) SHC Group completely restores the Transferred Property or Seritage is fully compensated for the complete cost of restoration (as reasonably estimated by Seritage) from SHC’s own funds and/or the assignment of all net insurance proceeds at the Closing, and (ii) SHC Group covenants to comply or cause Tenant to comply with all terms and conditions of the Master Lease with respect to such Transferred Property (including completion of restoration thereof), Seritage shall proceed to purchase and accept the Transferred Property subject to any unrestored Loss without adjustment of the Purchase Price;

(b) In the event of (i) a Total Destruction (which is not totally restored at the Closing (whether or not Seritage is not fully compensated by SHC Group and/or net insurance proceeds)) or (ii) any other Loss which is not fully restored at the Closing and for which Seritage is not fully compensated by SHC Group and/or net insurance proceeds, Seritage shall have the right to either (A) refuse to purchase the applicable Transferred Property and receive a reduction of the Purchase Price in the amount of the allocated portion of the Purchase Price with respect to such Transferred Property set forth on Schedule B (and in such event shall not receive any such compensation or reserve proceeds) or (B) proceed to purchase and take such Transferred Property subject to the unrestored or unreimbursed Loss and receive a reduction of the Purchase Price in the amount equal to the value of the entire Loss in excess of the compensation actually received from SHC Group and/or net insurance proceeds, not to exceed the allocated portion of the Purchase Price set forth on Schedule B.

(c) If there is a Loss with respect to a Transferred Property and the Closing proceeds with respect to such Transferred Property are adjusted as provided above, the amount of any suspension or abatement in rents or other charges to which the tenant is entitled under any Leases or any Lands’ End Leases shall be credited to Seritage as an adjustment to the allocated portion of the Purchase price for such Transferred Property.

-47-

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives.

SEARS HOLDINGS CORPORATION

By:

Name:

Title:

SERITAGE GROWTH PROPERTIES

By:

Name:

Title:

[Signature Page to Subscription and Distribution Agreement]

Exhibit I

Interests in Transferred Entities

Entity to be Transferred (each, a “Transferred Entity”) Equity Interests to be Transferred (the “Interests”) Seritage Group Transferee Transferred Properties

I-1

Exhibit II

Transferred Properties

Transferred Properties SHC Group Transferor Seritage Group Transferee

II-1

EX-10.5

Exhibit 10.5

FORM OF

TRANSITION SERVICES AGREEMENT

BY AND BETWEEN

SEARS HOLDINGS MANAGEMENT CORPORATION

AND

SERITAGE GROWTH PROPERTIES, L.P.

DATED AS OF [—], 2015

Table of Contents

		Page
ARTICLE I. SERVICES			1
1.01	Services to be Provided.		1
1.02	Quantity and Nature of Service.		1
1.03	Changes in the Services.		2
1.04	Transition Plan.		3
1.05	Standard of Care.		3
1.06	Responsibility For Errors; Delays.		3
1.07	Good Faith Cooperation; Alternatives.		3
1.08	Use of Third Parties.		3
1.09	Assets of Seritage.		3
1.10	Ownership of Information and Other Assets.		4
1.11	Contact Person.		4
ARTICLE II. CHARGES AND PAYMENTS FOR SERVICES			4
2.01	Compensation.		4
2.02	Payments.		5
2.03	Taxes.		5
ARTICLE III. TERMINATION			5
3.01	Termination of an Individual Service for Convenience by Seritage.		5
3.02	Termination of the Agreement.		6
3.03	Obligations on Termination.		6
3.04	Termination of an Individual Service by SHMC.		6
ARTICLE IV. CONFIDENTIALITY			7
4.01	Confidential Information.		7
ARTICLE V. INDEMNIFICATION; LIMITATION OF LIABILITY			7
5.01	Indemnification by Seritage.		7
5.02	Indemnification by SHMC.		7
5.03	Procedure.		8
5.04	Limitation of Liability.		8
ARTICLE VI. MISCELLANEOUS			8
6.01	Vendor Agreements.		8
6.03	Survival.		9
6.04	Equitable Relief.		9
6.05	Dispute Resolution.		9
6.06	Other Provisions.		9
	Appendices
Exhibit A	Services
Exhibit B	Contact Persons
Exhibit C	Lenders

- i -

TRANSITION SERVICES AGREEMENT

This TRANSITION SERVICES AGREEMENT (this “Agreement”), made and entered into effective as of [—], 2015, is by and between Sears Holdings Management Corporation, a Delaware corporation (“SHMC”), and Seritage Growth Properties, L.P., a Delaware limited partnership (“Seritage”). SHMC and Seritage each are sometimes referred to as a “Party” and together sometimes are referred to as the “Parties.” Capitalized terms used but not otherwise defined herein shall have the meanings given to such terms in the Separation, Distribution and Purchase and Sale Agreement, dated as of [—], 2015, by and between Sears Holdings Corporation (“SHC”) and Seritage Growth Properties (the “Separation Agreement”).

For good and valuable consideration, the receipt of which SHMC and Seritage hereby acknowledge, Seritage and SHMC hereby agree as follows:

ARTICLE I.

SERVICES

1.01 Services to be Provided. During the Service Period, SHMC shall provide, or cause to be provided, to Seritage the services described on Exhibit A to the extent not prohibited by applicable Law (each, a “Service,” and collectively, the “Services”). “Service Period” shall mean the period commencing on the Closing Date and continuing until 5:00 p.m. (Central Time) on the last day of the month in which the 18 calendar month anniversary of the Closing Date occurs (the “Expiration Date”). This Agreement shall automatically (and without notice) expire at 11:59 p.m. (Central Time) on the Expiration Date, unless otherwise agreed by the Parties in writing after the date of this Agreement, it being understood that neither Party has the right to renew or extend the Service Period without the written agreement of the other Party. Except as expressly stated in Exhibit A, in the event of any conflict or inconsistency between this Agreement and Exhibit A, this Agreement shall control. Unless otherwise agreed in writing by the Parties, the Services to be provided by or at the direction of SHMC under this Agreement are limited to those expressly stated herein, and those modified or added to this Agreement by a Service Change (defined in Section 1.03). This Agreement, and the Services, Fees and Expenses hereunder, may only be modified by a written amendment executed by both Parties, and Seritage acknowledges and agrees that in the absence of such signed written amendment, Seritage shall not rely (and any such reliance would be unreasonable) upon any proposed amendment or course of dealing by the Parties. Notwithstanding anything in this Agreement to the contrary, nothing in this agreement shall require or permit SHMC to provide any business managerial services to Seritage or to direct the business, financial or strategic policies or decisions of Seritage.

1.02 Quantity and Nature of Service. Except as otherwise provided in this Agreement, there shall be no change in the scope or level of, or use by, Seritage of the Services during the Service Period (including changes requiring the hiring or training of additional employees by SHMC) without the mutual written agreement of the Parties and adjustments, if any, to the charges for such Services. However, SHMC may make changes from time to time in the manner of performing Services (including changes to its, its Affiliates’ and its Personnel’s systems) without Seritage’s consent, whether the Services are provided by SHMC through its or its Affiliates’ employees or any third party provider contracted by SHMC or its Affiliates (a “Vendor”). Notwithstanding anything in this

1

Agreement to the contrary, SHMC shall not provide any legal services or legal advice to Seritage and Seritage shall not be entitled to rely on SHMC for legal advice or counsel, and any advisory communications given by SHMC to Seritage is not to be construed as legal advice. Seritage shall not resell any Services, provide the Services to any joint venture in which it participates or any non-wholly owned Subsidiary, or otherwise use the Services in any way other than as SHMC or its Affiliates used the Services prior to the Closing Date under the Separation Agreement with respect to the operation of the properties conveyed to Seritage under the Separation Agreement. For purposes of this Agreement, “Affiliate” means (i) with respect to Seritage, its Subsidiaries, and (ii) with respect to SHMC, SHC and its Subsidiaries; provided however, that except where the context indicates otherwise, for purposes of this Agreement, from and after the effective date of this Agreement, (1) neither Seritage nor its Subsidiaries shall be deemed to be Affiliates of SHMC, and (2) neither SHC nor its Subsidiaries shall be deemed to be Affiliates of Seritage. For purposes of this Agreement, “Subsidiary” means, with respect to any Person, any corporation, limited liability company, joint venture or partnership of which such Person (a) beneficially owns, either directly or indirectly, more than fifty percent (50%) of (i) the total combined voting power of all classes of voting securities of such Person, (ii) the total combined equity interests or (iii) the capital, profit or beneficial interests, in the case of a partnership, limited liability company or trust, or (b) otherwise has the power to vote, either directly or indirectly, sufficient securities or interests to elect a majority of the board of directors or similar governing body or to Control such Person.

1.03 Changes in the Services. If Seritage desires to make changes in this Agreement to provide for different or additional Services to be provided by SHMC (each, a “Service Change”), the parties shall comply with the following Service Change process:

(a) Seritage shall prepare a written proposal for the Service Change including a description of the services, deliverables and schedule, in such detail as would be needed by an unaffiliated third party contractor to develop a competent price proposal for similar services. For special project work that is within the scope of services covered by an hourly or unit rate in Exhibit A, Seritage may use the hourly rate or unit rate stated in Exhibit A in developing the proposal price.

(b) All Service Change proposals and responses must be delivered by a Party’s Contact Person to the other Party’s Contact Person. If SHMC can provide the different or additional services proposed in a Service Change with its then-existing resources and capabilities, SHMC and Seritage will proceed to negotiate in good faith a proposed amendment to this Agreement to reflect the Service Change. If SHMC cannot provide any additional services proposed in a Service Change with its then-existing resources and capabilities, SHMC shall use commercially reasonable efforts to obtain such additional services through a third-party provider. SHMC and Seritage shall execute a written amendment to this Agreement reflecting each Service Change, including changes to the services, deliverables, schedule, fees, and expenses under this Agreement. If SHMC will arrange for the additional services under a Service Change to be provided by a third-party provider, Seritage shall, if requested by SHMC, execute a written agreement directly with the third-party provider for the additional services. In the absence of a signed amendment, the Parties must fulfill their obligations under this Agreement without regard to such proposed amendment.

2

(c) Any Service Change proposal by Seritage for a service to be added to the Services must be delivered to SHMC within the first 12 months following the effective date of this Agreement; no Service Changes for additional services will be made after that date.

1.04 Transition Plan. During the Service Period, Seritage shall provide SHMC with quarterly reports concerning Seritage’s plans for transitioning the performance of all Services to Seritage, its Affiliates or third party providers prior to the Expiration Date. SHMC shall provide Seritage with such information as is reasonably necessary to assist Seritage with such transition.

1.05 Standard of Care. Except as otherwise set forth in this Agreement, SHMC does not assume any responsibility under this Agreement other than to render the Services in Good Faith and in compliance with all applicable Laws, without willful misconduct or gross negligence. SHMC MAKES NO OTHER GUARANTEE, REPRESENTATION OR WARRANTY OF ANY KIND (WHETHER EXPRESS OR IMPLIED) REGARDING ANY OF THE SERVICES PROVIDED HEREUNDER, AND EXPRESSLY DISCLAIMS ALL OTHER GUARANTEES, REPRESENTATIONS AND WARRANTIES OF ANY NATURE WHATSOEVER, WHETHER STATUTORY, ORAL, WRITTEN, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTIES ARISING FROM COURSE OF DEALING OR USAGE OF TRADE. SUBJECT TO THE OTHER PROVISIONS OF THIS AGREEMENT, SHMC SHALL ONLY BE OBLIGATED TO PROVIDE SERVICES IN A MANNER CONSISTENT WITH PAST PRACTICE (INCLUDING PRIORITIZATION AMONG PROJECTS FOR SHMC AND ITS AFFILIATES, AND SERITAGE AND ITS AFFILIATES).

1.06 Responsibility For Errors; Delays. SHMC’s sole responsibility to Seritage for errors or omissions in Services caused by SHMC shall be to furnish correct information, payment or adjustment in the Services, and if such errors or omissions are solely or primarily caused by SHMC, SHMC shall promptly furnish such corrections at no additional cost or expense to Seritage if Seritage promptly advises SHMC of such error or omission.

1.07 Good Faith Cooperation; Alternatives. SHMC and Seritage shall use Good Faith efforts to cooperate with each other in all matters relating to the provision and receipt of the Services. If SHMC reasonably believes it is unable to provide any Service because of a failure to obtain Vendor consents or because of impracticability, SHMC shall notify Seritage promptly after SHMC becomes aware of such fact and the Parties shall cooperate to determine the best alternative approach. Seritage shall provide such reasonable advance notice and forecasts of Services as are requested by SHMC or its Vendor performing the Services from time to time.

1.08 Use of Third Parties. SHMC may use any Affiliate or any Vendor (including former Affiliates) to provide the Services; provided, however, that SHMC shall remain liable at all times for the performance of Services by such Affiliate or any Vendor or Personnel under this Agreement, except as stated in Section 1.06.

1.09 Assets of Seritage. During the Service Period, (a) SHMC and its Affiliates and Vendors may use, at no charge, all of the software and other assets, tangible and intangible, of Seritage (together, the “Assets”) to the extent necessary to perform the Services

(but for no other purpose), and (b) Seritage shall consult with SHMC prior to upgrading or replacing any of the Assets that are necessary for SHMC to provide the Services.

3

1.10 Ownership of Information and Other Assets. Neither Party shall acquire under this Agreement any right, title or interest in any Asset that is owned or licensed by the other. All Information provided by or on behalf of a Party to the other Party or its Affiliates for the purpose of providing or receiving the Services shall remain the property of the Party providing such Information. To the extent the provision of any Service involves intellectual property, including software or patented or copyrighted material, or material constituting trade secrets, each Party agrees that it and its Affiliates shall not copy, modify, reverse engineer, decompile or in any way alter any of such material, or otherwise use such material in a manner inconsistent with the terms and provisions of this Agreement, without the express written consent of the other Party. All specifications, tapes, software, programs, services, manuals, materials and documentation developed or provided by SHMC, its Affiliates or its Vendors and utilized in performing this Agreement shall be and remain the property of SHMC, such Affiliates or such Vendors, as applicable, and shall not, without SHMC’s prior written consent, be sold, transferred, disseminated or conveyed by Seritage or its Affiliates to any other Person (other than their Affiliates and their respective directors, officers, employees, agents and representatives) or used, in each case other than in receiving the Services under, or in performing, this Agreement.

1.11 Contact Person. Each Party shall appoint one contact person (a “Contact Person”) to facilitate communications and performance under this Agreement. The initial Contact Person of each Party is set forth on Exhibit B. Each Party shall have the right at any time and from time to time to replace its Contact Person by written notice to the other Party, following which Exhibit B shall be amended to reflect such Party’s new Contact Person.

ARTICLE II.

CHARGES AND PAYMENTS FOR SERVICES

2.01 Compensation.

(a) As consideration for the provision of the Services, Seritage shall pay, or cause to be paid, to SHMC or its designee(s) the fees for the Services as specified on Exhibit A (the “Fees”), payable as provided on Exhibit A. Upon termination of an individual Service, Seritage shall pay all Fees attributable to the Service being terminated actually performed, or expense actually incurred, through the date of termination of such Service. If the Fees include charges for Services performed by a Vendor and the Vendor’s fees increase during the Service Period, SHMC shall be entitled to include such increased charges as an increase in the Fees.

(b) For any Services requested by Seritage that are not otherwise performed or provided by SHMC in its normal business operations prior to the Closing Date (“New Services”), SHMC shall use commercially reasonable efforts to provide the New Services to Seritage, or arrange for third parties to provide them. Seritage shall pay SHMC a Fee to perform or provide New Services, equal to SHMC’s direct and indirect costs, plus [—]%, and including SHMC’s actual, reasonable expenses incurred in initiating the New Services.

4

(c) In addition to the Fees, Seritage shall reimburse SHMC or its designee(s) for all reasonable and documented expenses actually incurred in SHMC’s or its Affiliate’s performance of the Services that are not included in the Fees (“Expenses”), including, without limitation, the costs of any software, systems or other assets, or modifications thereof. To the extent reasonably practicable, SHMC shall provide Seritage with notice of such Expenses prior to incurring them. If directed by SHMC, Seritage shall pay directly any or all Vendors providing Services to or for the benefit of Seritage. Seritage shall reimburse SHMC or its designee(s) for the costs of all third-party Personnel used to perform the Services under this Agreement on a cost plus [•]% basis. Except as otherwise provided for in this Agreement, each Party shall bear its own expenses with respect to the transactions contemplated by this Agreement.

2.02 Payments. Seritage shall pay Fees in accordance with Section 10.19 of the Separation Agreement. Unless otherwise mutually agreed in writing, all amounts payable under this Agreement shall be reconciled weekly and the Party owing the net amount shall, make payment to the Party owed the net amount by electronic transfer of immediately available funds to a bank account designated by such owed Party from time to time. Monthly installments shall be included the first week’s reconciliation of each month. All amounts remaining unpaid for more than 15 days after their respective due date(s) shall accrue interest as set forth in Section 10.19 of the Separation Agreement until paid in full.

2.03 Taxes. The Parties hereby acknowledge that the Fees specified on Exhibit A do not include applicable taxes. Seritage shall be responsible for the payment of all taxes payable in connection with the Services, including sales, use, excise, value-added, business, service, goods and services, consumption, withholding and other similar taxes or duties, including taxes incurred on transactions between and among SHMC, its Affiliates, Vendors and Personnel, along with any related interest and penalties (“Transaction Taxes”). Seritage shall reimburse SHMC for any deficiency relating to Transaction Taxes that are Seritage’s responsibility under this Agreement. Notwithstanding anything in this Section 2.03 to the contrary, each Party shall be responsible for its own income and franchise taxes, employment taxes and property taxes, except as otherwise provided in the Separation Agreement or any of the other Ancillary Agreements. The Parties shall cooperate in Good Faith to minimize Transaction Taxes to the extent legally permissible. Each Party shall provide to the other Party any resale exemption, multiple points of use certificates, treaty certification and other exemption information reasonably requested by such other Party.

ARTICLE III.

TERMINATION

3.01 Termination of an Individual Service for Convenience by Seritage. Subject to the next sentence, Seritage, upon 60 days’ prior written notice to SHMC, may reduce or terminate for Seritage’s convenience any individual Service at the end of a Seritage fiscal month. Seritage may not terminate an individual Service if the termination would adversely affect SHMC’s ability to perform another Service. If Seritage’s reduction or termination of a Service results in charges to SHMC or its Affiliate during the Term of this Agreement (e.g., termination charges or loss of volume discounts, severance for any Personnel no longer needed to provide Services), Seritage shall reimburse SHMC for such expenses.

5

3.02 Termination of the Agreement.

(a) Seritage may terminate this Agreement in the event of a material breach of this Agreement by the SHMC if SHMC fails to cure the breach within 30 days following receipt of written notice of the breach from Seritage. Seritage may terminate this Agreement in the event of a material breach of any of the payment obligations set forth in this Agreement by Seritage if Seritage or its lenders set forth on Exhibit C (the “Lenders”) fail to cure the breach within 30 days following receipt of written notice of the breach from SHMC (in the case of the Lenders, to the address set forth on such exhibit).

(b) Seritage’s breach of the Master Lease Agreement, dated as of [—], 2015, by and between [—], or the Separation Agreement (collectively, the “Cross Default Agreements”) constitutes a breach by Seritage of this Agreement (which breach may only be cured, if at all, in accordance with the express provisions of the affected Cross Default Agreement). Furthermore, if Seritage wrongfully terminates a Cross Default Agreement or if Seritage’s breach of a Cross Default Agreement results in the SHMC Entity counterparty terminating that agreement; then SHMC may also terminate this Agreement for cause. SHMC’s remedies under this Section 3.02 are in addition to and not in lieu of any and all other legal and equitable remedies available to SHMC upon Seritage’s breach of this Agreement.

(c) Following any foreclosure of any property of Seritage by the Lenders, the Lenders shall be entitled to reinstate this Agreement upon the terms set forth herein, provided that the “Service Period” shall be deemed to commence on the date of such foreclosure and continue until 5:00 p.m. (Central Time) on the last day of the month in which the 18 calendar month anniversary of the date of such foreclosure occurs and SHMC and the Lenders shall execute an appropriate amendment to this Agreement pursuant to which the Lenders or their designee shall become entitled to the rights and subject to the obligations of Seritage hereunder in respect of such property.

3.03 Obligations on Termination. Upon termination of this Agreement, Seritage shall return to SHMC, as soon as reasonably practicable, all equipment or other property of SHMC or its Affiliates, whether owned, leased, or licensed, and Seritage shall pay all outstanding Fees for Services rendered and Expenses incurred through the date this Agreement is terminated in accordance with its terms.

3.04 Termination of an Individual Service by SHMC. If an Affiliate of SHMC that provides a Service is unwilling or unable to provide the Service and: (i) the Affiliate of SHMC does not provide a similar service to SHMC or its other Affiliates on terms that are comparable to the terms of this Agreement, and (ii) SHMC is unable to retain a replacement Vendor to provide the Service on terms that are comparable to the terms of this Agreement, SHMC, upon providing 90-days’ prior written notice to Seritage, may terminate the Service, but the termination of the Service shall have no effect upon the provision of the other Services to Seritage. If an Affiliate or Vendor that provides a Service is unwilling or unable to allow Seritage to use the Service under the existing (or comparable) terms, and SHMC is unable to retain a replacement Vendor to provide the Service on terms that are comparable to the terms of this Agreement, SHMC, upon providing 90-days’ prior written notice to Seritage, may terminate the Service, but the termination shall have no effect upon the provision of the other Services to Seritage. If SHMC is unable to give Seritage 90-days’ prior written notice to Seritage due to a Vendor’s refusal to allow Seritage to use the Service for 90 days, then SHMC shall provide as much notice as possible.

6

ARTICLE IV.

CONFIDENTIALITY

4.01 Confidential Information. All Information provided by or on behalf of a Party to the other Party or its Affiliates under or in connection with this Agreement shall be subject to Sections 7.5 and 7.6 of the Separation Agreement, which shall apply hereto as if set forth herein, mutatis mutandis.

ARTICLE V.

INDEMNIFICATION; LIMITATION OF LIABILITY

5.01 Indemnification by Seritage. Seritage shall defend, indemnify and hold harmless each SHMC Indemnitee from and against any and all costs, liabilities, losses, penalties, expenses and damages (including reasonable attorneys’ fees) of every kind and nature related to or arising out of actions and failures or act by Personnel of Seritage or its Affiliates in connection this Agreement (“Seritage Claims”), except to the extent that such Seritage Claims are found by a final judgment or opinion of an arbitrator or a court of competent jurisdiction to be caused by (i) a breach of any provision of this Agreement by SHMC or (ii) any negligent act or omission, or willful misconduct, of SHMC, its Affiliates, or its or their respective directors, officers, employees, agents or representatives in performance of this Agreement.

5.02 Indemnification by SHMC. SHMC shall defend, indemnify and hold harmless each Seritage Indemnitee from and against any and all costs, liabilities, losses, penalties, expenses and damages (including reasonable attorneys’ fees) of every kind and nature arising from third-party claims, demands, litigation and suits that (a) relate to bodily injury or death of any person or damage to real and/or tangible personal property directly caused by the negligence or willful misconduct of SHMC, its Affiliates, or its or their respective directors, officers, employees, agents or representatives during the performance of the Services or (b) relate to the intentional infringement of any copyright or trade secret by an Asset owned by SHMC or its Affiliates and used by SHMC in the performance of the Services (together, “SHMC Claims”). Notwithstanding the foregoing obligations set forth in this Section 5.02, SHMC shall not be required defend, indemnify or hold harmless any Seritage Indemnitee to the extent that such SHMC Claims are found by a final judgment or opinion of an arbitrator or a court of competent jurisdiction to be caused by (i) a breach of any provision of this Agreement by Seritage, (ii) any negligent act or omission, or willful misconduct, of Seritage, its Affiliates, or its or their respective directors, officers, employees, agents or representatives in performance of this Agreement or (iii) with respect to infringement claims relating to (A) Seritage’s use of the Asset in combination with any product or information not provided by SHMC, (B) Seritage’s distribution, marketing or use for the benefit of third parties of the Asset, (C) Seritage’s use of the Asset other than as contemplated by this Agreement, (D) Seritage’s use of the asset that differs materially in scope, extent or intensity to that of SHMC or its Affiliates prior to the effective date of this Agreement, or (E) information, direction, specification or materials provided by or on behalf of Seritage. Seritage Claims and SHMC Claims are each individually referred to as a “Claim.”

7

5.03 Procedure. Any Claim under this Agreement shall be subject to Sections 5.5 through 5.11 of the Separation Agreement, which shall apply hereto as if set forth herein, mutatis mutandis.

5.04 Limitation of Liability. EXCEPT FOR (A) EACH PARTY’S INDEMNITY AND DEFENSE OBLIGATIONS AS SET FORTH IN SECTIONS 5.01, 5.02 AND 5.03 AND OTHER LIABILITIES TO UNAFFILIATED THIRD PARTIES, (B) ANY BREACH BY A PARTY OF ITS CONFIDENTIALITY OBLIGATIONS AND (III) ANY BREACH OF SECTION 1.10, IN NO EVENT SHALL EITHER PARTY, THEIR RESPECTIVE AFFILIATES, OR ITS OR THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, CONTRACTORS OR REPRESENTATIVES BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL OR PUNITIVE DAMAGES, LOSSES OR EXPENSES (INCLUDING BUSINESS INTERRUPTION, LOST BUSINESS, LOST PROFITS, LOST DATA, LOST SAVINGS, DAMAGES TO SOFTWARE OR FIRMWARE, OR COST OF PROCURING OR TRANSITIONING TO SUBSTITUTE SERVICES), REGARDLESS OF THE LEGAL THEORY UNDER WHICH SUCH LIABILITY IS ASSERTED, AND REGARDLESS OF WHETHER A PARTY HAD BEEN ADVISED OF THE POSSIBILITY OF SUCH LIABILITY. THE SOLE LIABILITY OF SHMC AND ITS AFFILIATES FOR ERRORS AND OMISSIONS IN THE SERVICES ARE LIMITED AS PROVIDED FOR IN SECTION 1.07, AND FOR ALL OTHER CLAIMS IN ANY MANNER RELATED TO THIS AGREEMENT ARE LIMITED TO THE PAYMENT OF DIRECT DAMAGES, NOT TO EXCEED (FOR ALL CLAIMS IN THE AGGREGATE) THE FEES RECEIVED BY SHMC UNDER THIS AGREEMENT DURING THE SIX MONTHS PRECEDING THE DATE SUCH CLAIM AROSE. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, SHMC SHALL NOT BE LIABLE FOR DAMAGES CAUSED BY SHMC’S VENDORS; PROVIDED, HOWEVER, THAT TO THE EXTENT PERMITTED IN A VENDOR AGREEMENT, SHMC SHALL PASS THROUGH TO SERITAGE APPLICABLE RIGHTS AND REMEDIES UNDER THE SUCH VENDOR AGREEMENT.

ARTICLE VI.

MISCELLANEOUS

6.01 Vendor Agreements. The Parties anticipate that SHMC shall be relying upon its and its Affiliates’ existing agreements with third parties to provide certain of the Services described herein (each, a “Vendor Agreement”) If (a) SHMC’s or its Affiliates’ costs, fees or expenses increase under the terms of a Vendor Agreement or (b) the Vendor demands or is entitled to additional costs, fees or expenses now or in the future, in each case, as a result of Seritage and/or its Affiliates receiving benefits under a Vendor Agreement, then, in addition to all other amounts due hereunder, Seritage shall be liable for its proportionate share of all increased or additional amounts under this Section 6.01, in each case as such amounts are determined by SHMC in Good Faith. SHMC shall notify Seritage promptly after it learns of any increased amounts due under the immediately preceding sentence and shall work with the Vendor in Good Faith to try to mitigate such increased or additional amounts. To the extent any such Vendor Agreement includes early termination fees or similar charges (the “Termination Fees”), Seritage shall be solely responsible for any such Termination Fees that SHMC or its Affiliates incur as a result of the Transaction and/or Seritage and/or its Affiliates ceasing to use the Services under this Agreement.

8

6.02 Computer Access. If either Party, its Affiliates or its or their respective Personnel are given access, whether on-site or through remote facilities, to any communications, computer, or electronic data storage systems (each, an “Electronic Resource”) of the other Party, its Affiliates or its or their respective Personnel in connection with this Agreement, then the Party on behalf of whom such access is given shall ensure that its Personnel’s use of such access shall be solely limited to performance or exercise of such Party’s duties and rights under this Agreement, and that such Personnel will not attempt to access any Electronic Resource other than those specifically required for the performance of such duties and/or exercise of such rights. The Party given access shall (a) limit such access to those of its and its Affiliates’ Personnel who need to have such access in connection with this Agreement, (b) advise the other Party in writing of the name of each of such Personnel who will be granted such access and (c) strictly follow all security rules and procedures for use of such Electronic Resources. All user identification numbers and passwords disclosed to a Party’s or its Affiliates’ Personnel and any information obtained by such Party’s or its Affiliates’ Personnel as a result of its access to, and use of, the other Party’s, its Affiliates’ or their respective Personnel’s Electronic Resources shall be deemed to be, and shall be treated as, Confidential Information of the Party on behalf of whom such access is granted. Each Party shall reasonably cooperate with the other Party in the investigation of any apparent unauthorized access by the other Party, its Affiliates or their respective Personnel to any Electronic Resources or unauthorized release of Confidential Information. Each Party shall promptly notify the other Party of any actual or suspected unauthorized access or disclosure of any Electronic Resource of the other Party, its Affiliates or their respective Personnel.

6.03 Survival. Each term of this Agreement that would, by its nature, survive the termination or expiration of this Agreement shall so survive, including the obligations of each Party to pay all amounts accrued hereunder and the provisions of Sections 1.10, 6.02 and 6.06 and Articles IV and V.

6.04 Equitable Relief. Each Party acknowledges that any breach by a Party of Section 1.10, 4 or 6.02 may cause the non-breaching Party and its Affiliates irreparable harm for which the non-breaching Party and its Affiliates have no adequate remedies at law. Accordingly, in the event of any actual or threatened default in, or breach of, the foregoing provisions, each Party shall be entitled to seek equitable relief, including specific performance, and injunctive relief, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative. A Party seeking such equitable relief is not obligated to comply with Section 6.05 and may seek such relief regardless of any cure rights for such actual or threatened breach. Each Party waives all claims for damages by reason of the wrongful issuance of an injunction and acknowledges that its only remedy in such event is the dissolution of such injunction. Any requirements for the securing or posting of any bond with such remedy are hereby waived.

6.05 Dispute Resolution. Except as provided for in Section 6.04, all Disputes related to this Agreement are subject to Article IV of the Separation Agreement.

6.06 Other Provisions. Sections 10.3 through 10.15 (other than the reference to Article IX of the Separation Agreement in Section 10.8), Sections 10.17 through 10.19 and 10.21 of the Separation Agreement shall apply to this Agreement as if set forth herein, mutatis mutandis.

9

[signature page follows]

10

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives.

SEARS HOLDINGS MANAGEMENT CORPORATION

By:

Name:

Title:

SERITAGE GROWTH PROPERTIES, L.P.

By:

Name:

Title:

EX-10.6

Exhibit 10.6

FORM OF

SERITAGE GROWTH PROPERTIES

2015 SHARE PLAN

SECTION 1. BACKGROUND AND PURPOSE

The name of this Plan is the Seritage Growth Properties 2015 Share Plan. The purpose of this Plan is to promote the interests of the Company and its Subsidiaries through grants to Eligible Individuals of Restricted Shares, Share Units, Other Share-Based Awards, Options, and Share Appreciation Rights in order (1) to attract and retain the services of Eligible Individuals, (2) to provide an additional incentive to each Eligible Individual to work to increase the value of the Shares and (3) to provide each Eligible Individual with a stake in the future of the Company which corresponds to the stake of each Company shareholder.

SECTION 2. DEFINITIONS

Each term set forth in this Section 2 shall have the meaning set forth opposite such term for purposes of this Plan and, for purposes of such definitions, the singular shall include the plural and the plural shall include the singular.

2.1. Board shall mean the Board of Trustees of the Company.

2.2. Code shall mean the Internal Revenue Code of 1986, as amended.

2.3. Committee shall mean the Compensation Committee of the Board to which the responsibility to administer this Plan is delegated by the Board and which shall consist of at least two members of the Board, each of whom shall be a non-employee director (within the meaning of Rule 16b-3 under the Exchange Act) and to the extent applicable, each of whom shall be an outside director for purposes of Code Section 162(m).

2.4. Company shall mean Seritage Growth Properties, a Maryland real estate investment trust, and any successor to such entity.

2.5. Employee shall mean any individual employed by the Company or a Subsidiary on the payroll records thereof. An Employee shall not include any individual during any period he or she is classified or treated by the Company (or any Subsidiary) as an independent contractor or any employee of an employment or temporary agency or firm, without regard to whether such individual is subsequently determined to have been or is subsequently retroactively reclassified as a common-law employee of the Company or any Subsidiary during such period.

2.6. Eligible Individual shall mean an Employee, Non-Employee Director or other individual performing advisory or consulting services for the Company or a Subsidiary, as determined and designated by the Committee. An award may be granted to an Eligible Individual, in connection with hiring, retention or otherwise, prior to the date the Employee, Non-Employee Director or service provider first performs service for the Company or the Subsidiaries, provided such award shall not become vested prior to the date the Employee, Non-Employee Director or other service provider first performs such service.

2.7. Exchange Act shall mean the Securities Exchange Act of 1934, as amended.

2.8. Fair Market Value shall mean, for any given date, the fair market value of the Shares as of such date, as determined by the Committee on a basis consistently applied by the Company based on actual transactions in Shares on the exchange on which the Shares generally have the greatest trading volume. If the Shares are not readily tradable on an established market, fair market value shall be determined by the Board based on a reasonable application of a reasonable valuation methodology.

2.9. Non-Employee Director shall mean a member of the Board who is not an Employee of the Company or a Subsidiary.

2.10. Option shall mean an option granted under Section 8 to purchase Shares and evidenced by an Option Agreement which Option shall not be treated as an incentive stock option under Code Section 422.

2.11. Option Agreement shall mean the written agreement or instrument which sets forth the terms of an Option granted to an Eligible Individual under this Plan.

2.12. Option Price shall mean the price which shall be paid to purchase one Share upon the exercise of an Option granted under this Plan.

2.13. Other Share-Based Award shall mean a grant under Section 7 to an Eligible Individual of Shares or other type of equity-based or equity-related award not otherwise described by the terms of this Plan, including without limitation, the grant or offer for sale of unrestricted Shares or the grant of Shares in settlement of an award under an incentive program of the Company or any Subsidiary, in such amounts and subject to such terms and conditions, as the Committee shall determine.

2.14. Performance Period shall mean the period selected by the Committee during which performance is measured for purpose of determining the extent to which an award of SARs, Options, Restricted Shares, Share Units or Other Share-Based Awards has been earned.

2.15. Plan shall mean this Seritage Growth Properties 2015 Share Plan, as amended from time to time.

2.16. Restricted Shares shall mean Shares granted to an Eligible Individual pursuant to Section 7.

2.17. SAR Agreement shall mean the written agreement or instrument which sets forth the terms of a SAR granted to an Eligible Individual under this Plan.

2.18. SAR Share Value shall mean the figure which is set forth in each SAR Agreement and which is no less than the Fair Market Value of a Share on the date the related SAR is granted.

2.19. Shares shall mean the Class A common shares of the Company, par value $0.01 per share.

2

2.20. Share Appreciation Right or SAR shall mean a right which is granted pursuant to the terms of Section 8 to the appreciation in the Fair Market Value of a Share in excess of the SAR Share Value for such a Share.

2.21. Share Award Agreement shall mean the written agreement or instrument which sets forth the terms of a Restricted Share, Share Unit or Other Share-Based Award grant to an Eligible Individual under this Plan.

2.22. Share Unit shall mean a right granted to an Eligible Individual pursuant to Section 7 to receive a payment in cash or Shares based on the Fair Market Value of the number of Shares described in such grant.

2.23. Subsidiary shall mean, with respect to the Company, any corporation, entity or other organization whether incorporated or unincorporated, of which (a) the Company directly or indirectly owns or controls at least a majority of the securities or other interests having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions, or (b) the Company is a general partner or managing member. For purposes of granting Options or SARs, an entity shall not be treated as a Subsidiary unless the Company holds a “controlling interest” in such entity, where the term “controlling interest” has the meaning provided in Treasury Regulation Section 1.414(c)-2(b)(2)(i), provided that the language “at least 50 percent” is used instead of “at least 80 percent” in Treasury Regulation Section 1.414(c)-2(b)(2)(i), and, provided further, that where the granting to such grantee of Options or SARs with respect to the Shares is based upon a legitimate business criteria, the language “at least 20 percent” is used instead of “at least 80 percent” each place it appears in Treasury Regulation Section 1.414(c)-2(b)(2)(i).

SECTION 3. SHARES RESERVED UNDER PLAN

3.1. Shares. There shall be reserved for issuance under this Plan [            ] Shares.

3.2. Share Counting. The Shares described in Section 3.1 shall be reserved to the extent that the Company deems appropriate from authorized but unissued Shares and from Shares which have been reacquired by the Company. Shares covered by an award under the Plan shall only be counted as used to the extent they are actually issued. Furthermore, any Shares issued pursuant to a Restricted Share or Other Share-Based Award grant which are forfeited or cancelled thereafter shall again become available for issuance under this Plan. The net number of Shares issued under a Share Unit or Other Share-Based Award, if applicable, shall not again become available under Section 3.1 for issuance under this Plan. If a Share Unit or Other Share-Based Award is forfeited or settled in cash, the related Shares shall again become available for issuance under this Plan. The net number of Shares issued under an Option or SAR, to the extent it is exercised, shall not again become available under Section 3.1 for issuance under this Plan. If an Option or SAR is forfeited or settled in cash, if applicable, the related Shares shall again become available for issuance under this Plan. Any Shares which are (a) tendered to the Company to pay the Option Price of an Option, (b) tendered to the Company in satisfaction of any condition to a grant of Restricted Shares or Other Share-Based Award, or (c) used to satisfy a withholding obligation under Section 14.4, shall again become available under Section 3.1 for issuance under this Plan.

3

3.3. Use of Proceeds. The proceeds which the Company receives from the sale of any Shares under this Plan shall be used for general corporate purposes and shall be added to the general funds of the Company.

3.4. Substitute Awards. Awards may be granted under the Plan from time to time in substitution for stock options and other awards held by employees or directors of other entities who are about to become Employees, whose employer is about to become an affiliate as the result of a merger or consolidation of the Company with another real estate investment trust or corporation, or the acquisition by the Company of substantially all the assets of another real estate investment trust or corporation, or the acquisition by the Company of at least fifty percent (50%) of the issued and outstanding stock of another real estate investment trust or corporation as the result of which such other real estate investment trust or corporation will become a Subsidiary. The terms and conditions of the substitute awards so granted may vary from the terms and conditions set forth in the Plan to such extent as the Committee at the time of grant may deem appropriate to conform, in whole or in part, to the provisions of the award in substitution for which they are granted. If Shares are issued under the Plan with respect to a substitute award granted under this Section 3.4, as described above, to the extent permitted by applicable law and exchange rules, such Shares will not count against the maximum number of Shares reserved for issuance under the Plan, as set forth in Section 3.1.

SECTION 4. EFFECTIVE DATE

This Plan shall become effective immediately prior to the closing date of the rights offering for the Shares of the Company by Sears Holdings Corporation to the holders of common stock of Sears Holdings Corporation.

SECTION 5. PLAN ADMINISTRATION

5.1. Authority of Committee. The Plan shall be administered by the Committee. Except as limited by law, or by the Declaration of Trust or By-Laws of the Company, and subject to the provisions of this Plan, the Committee shall have full power, authority, and sole and exclusive discretion to construe, interpret and administer this Plan, including without limitation, the power and authority to make determinations relating to Plan grants and correct mistakes in any Share Award, Option or SAR Agreement, and to take such other action in the administration and operation of this Plan as the Committee deems equitable under the circumstances. The Committee, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective. In addition, the Committee shall have full and exclusive power to adopt such rules, regulations and guidelines for carrying out the Plan as it may deem necessary or proper, all of which power shall be executed in the best interests of the Company and in keeping with the objectives of the Plan. This power includes, but is not limited to, selecting award recipients and establishing all award terms and conditions.

5.2. Amendment of Awards. The Committee, in its sole discretion, may amend any outstanding award at any time in any manner not inconsistent with the terms of the Plan, provided that no outstanding, vested award may be amended without the grantee’s consent if the amendment would have a materially adverse effect on the grantee’s rights under the award.

4

Notwithstanding the foregoing, the Committee, in its sole discretion, may amend an award if it determines such amendment is necessary or advisable for the Company to comply with applicable law (including Code Section 409A), regulation, rule, or accounting standard.

5.3. Delegation. To the extent permitted by applicable law, the Committee may delegate its authority as identified herein to one or more officers of the Company or members of the Board, including without limitation the authority to approve grants to Eligible Individuals other than any of the Company’s officers. To the extent that the Committee delegates its authority to make grants as provided by this Section 5.3, all references in the Plan to the Committee’s authority to make grants and determinations with respect thereto shall be deemed to include the Committee’s delegate(s). In addition, the Committee may delegate to one or more of its members, officers of the Company or agents or advisors such administrative duties or powers as it may deem advisable. Any such delegate shall serve at the pleasure of, and may be removed at any time by, the Committee.

5.4. Decisions Binding. In making any determination or in taking or not taking any action under the Plan or any Share, Option or SAR Agreement, the Committee or its delegate(s) may obtain and may rely on the advice of experts, including Employees of and professional advisors to the Company. Any action taken by, or inaction of, the Committee or its delegate(s) relating to or pursuant to the Plan or any Share, Option or SAR Agreement shall be within the absolute discretion of the Committee or its delegate. Such action or inaction of the Committee or its delegate(s) shall be conclusive and binding on the Company, on each affected Eligible Individual and on each other person directly or indirectly affected by such action.

SECTION 6. ELIGIBILITY

Eligible Individuals shall be eligible for the grant of awards under this Plan.

SECTION 7. RESTRICTED SHARE, SHARE UNITS AND OTHER SHARE-BASED AWARDS

7.1. Committee Action.

(a) General. The Committee, acting in its absolute discretion, shall have the right to grant Restricted Shares, Share Units and Other Share-Based Awards to Eligible Individuals from time to time.

(b) Limitations:

(1) Other than Non-Employee Directors. Except as provided herein and subject to subsection (b)(2) immediately below, no Restricted Share, Share Unit or Other Share-Based Award grants in any combination may be made to an Eligible Individual in any calendar year with respect to more than [—] Shares. Each grant of Restricted Shares, Share Units and Other Share-Based Awards shall be evidenced by a Share Award Agreement. Notwithstanding the foregoing, separate and in addition to the above limit, no more than [—] Shares may be awarded to any Eligible Individual in any calendar year with respect to Shares that are granted in settlement of an award under any incentive program of the Company or any Subsidiary established thereunder.

5

(2) Non-Employee Directors. Notwithstanding subsection (b)(1) immediately above, no Restricted Share, Share Unit and Other Share-Based Award grants in any combination may be made to a Non-Employee Director in any calendar year with respect to more than [$—] in aggregate value at grant date(s). Each grant of Restricted Shares, Share Units and Other Share-Based Awards to a Non-Employee Director shall be evidenced by a Share Award Agreement.

7.2. Forfeiture Conditions. The Committee may make a Restricted Share, Share Unit or Other Share-Based Award grant subject to one or more employment, performance or other forfeiture conditions which the Committee acting in its absolute discretion deems appropriate under the circumstances, and the related Share Award Agreement shall set forth each such forfeiture condition and the deadline for satisfying each such forfeiture condition. Any Restricted Share or Other Share-Based Award issued hereunder may be evidenced in such manner, as the Committee, in its sole discretion, shall deem appropriate, including without limitation, book entry registration or issuance of a share certificate or certificates. In the event any physical share certificate is issued in respect of Restricted Shares or Other Share-Based Award granted under the Plan, such certificates shall be registered in the name of the Eligible Individual, shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to the award, and shall be held by the Company as escrow agent until the restrictions on such award have lapsed.

7.3. Rights Under Awards.

(a) Cash Dividends. Each Share Award Agreement which evidences a Restricted Share or Other Share-Based Award grant shall state whether the Eligible Individual shall have a right to receive any cash dividends which are paid after any Restricted Shares or Other Share-Based Award are issued to him or her and before the first day that the Eligible Individual’s interest in such Shares are forfeited. If such a Share Award Agreement provides that an Eligible Individual has no right to receive a cash dividend when paid, such agreement shall set forth the conditions, if any, under which the Eligible Individual will be eligible to receive one, or more than one, payment in the future to compensate the Eligible Individual for the fact that he or she had no right to receive any cash dividends on his or her Restricted Shares or Other Share-Based Award when such dividends were paid. If such a Share Award Agreement calls for any such payments to be made, the Company shall make such payments from the Company’s general assets, and the Eligible Individual shall be no more than a general and unsecured creditor of the Company with respect to such payments. Unless otherwise set forth in the Share Award Agreement which evidences a Share Unit grant, if a cash dividend is paid on the Shares described in a Share Unit grant, such cash dividend shall be treated as reinvested in Shares and shall increase the number of Shares described in such Share Unit grant.

6

(b) Share and Other Dividends. Unless otherwise provided in the related Share Award Agreement, and subject to such rules as the Committee shall adopt with respect to each dividend, if a Share dividend is declared on a Restricted Share or Other Share-Based Award, such Share dividend shall be treated as part of the grant of the related Restricted Share or Other Share-Based Award, and an Eligible Individual’s interest in such Share dividend shall be forfeited or shall become nonforfeitable at the same time as the Share with respect to which the Share dividend was paid is forfeited or becomes nonforfeitable. Unless otherwise set forth in the Share Award Agreement which evidences a Share Unit grant, and subject to such rules as the Committee shall adopt with respect to each dividend, if a Share dividend is declared on any Shares described in a Share Unit grant, such dividend shall increase the number of Shares described in such Share Unit grant. If a dividend is paid on a Share of Restricted Shares or Other Share-Based Award or on a Share described in a Share Unit grant other than in cash or Shares, the disposition of such dividend with respect to such Restricted Shares or Other Share-Based Award grant and the treatment of such dividend with respect to such Share Unit grant shall be effected in accordance with the terms of the related Share Award Agreement or such rules as the Committee shall adopt with respect to each such dividend.

(c) Voting Rights. An Eligible Individual shall have the right to vote Restricted Shares or shares subject to any Other Share-Based Award unless otherwise provided in the related Share Award Agreement. An Eligible Individual receiving a Share Unit grant shall not possess any voting rights with respect to such Share Units.

(d) Effect of Termination. In the discretion of the Committee, a Share Award Agreement may provide for vesting, payment, or other applicable terms after the Eligible Individual ceases to be employed or provide services to the Company or Subsidiary for any reason whatsoever, including death or disability.

(e) Nontransferability. No Restricted Share or Other Share-Based Award grant and no Shares issued pursuant to a Restricted Share or Other Share-Based Award grant shall be transferable by an Eligible Individual other than by will or by the laws of descent and distribution before an Eligible Individual’s interest in such shares have become completely nonforfeitable, and no interests in a Share Unit grant shall be transferable other than by will or the laws of descent and distribution, except as otherwise provided in the related Share Award Agreement.

(f) Creditor Status. An Eligible Individual to whom a Share Unit is granted shall be no more than a general and unsecured creditor of the Company with respect to any payment due under such grant.

7.4. Satisfaction of Forfeiture Conditions. A Share shall cease to be a Restricted Share or Other Share-Based Award at such time as an Eligible Individual’s interest in such Share becomes nonforfeitable under this Plan and the terms of the related Share Award Agreement. Upon vesting of a Share Unit, the Eligible Individual shall receive payment in cash or Shares in accordance with the terms of the related Share Award Agreement.

7

SECTION 8. OPTIONS AND SARs

8.1. Options. The Committee acting in its absolute discretion shall have the right to grant Options to purchase Shares to Eligible Individuals from time to time, and Options may be granted for any reason the Committee deems appropriate under the circumstances. Each grant of an Option shall be evidenced by an Option Agreement, and each Option Agreement shall set forth that such Option is not an incentive stock option and shall set forth such other terms and conditions, including without limitation any performance-based vesting conditions or forfeiture provisions, of such grant, as the Committee acting in its absolute discretion deems consistent with the terms of this Plan.

8.2. Option Price, Exercise Period and No Dividend Equivalents.

(a) Option Price. The Option Price for each Share subject to an Option shall be no less than the Fair Market Value of a Share on the date the Option is granted. The Option Price shall be payable in full upon the exercise of any Option. Except in accordance with the provisions of Section 12, the Committee shall not, absent the approval of the Company’s shareholders, take any action, whether through amendment, cancellation, replacement grants, exchanges or any other means, to directly or indirectly reduce the Option Price of any outstanding Option.

(b) Exercise Period. Each Option granted under this Plan shall be exercisable in whole or in part at such time or times as set forth in the related Option Agreement, but no Option Agreement shall make an Option exercisable before the date such Option is granted or on or after the date which is the tenth anniversary of the date such Option is granted. In the discretion of the Committee, an Option Agreement may provide for the exercise of an Option after the Eligible Individual ceases to be employed or provide services to the Company or a Subsidiary for any reason whatsoever, including death or disability.

(c) No Dividend Equivalents. In no event shall any Option or Option Agreement granted under the Plan include any right to receive dividend equivalents with respect to such award.

8.3. Method of Exercise.

(a) Committee Rules. An Option may be exercised as provided in this Section 8.3 pursuant to procedures (including, without limitation, procedures restricting the frequency or method of exercise) as shall be established by the Committee or its delegate from time to time for the exercise of Options.

(b) Notice and Payment. An Option shall be exercised by delivering to the Committee or its delegate during the period in which such Option is exercisable, (1) written notice of exercise in a form acceptable to the Committee indicating the specific number of Shares subject to the Option which are being exercised and (2) payment in full of the Option Price for such specific number of Shares. An Option Agreement, at the discretion of the Committee, may provide for the payment of the Option Price by any of the following means:

(1) in cash, electronic funds transfer or a check acceptable to the Committee;

8

(2) in Shares which have been held by the Eligible Individual for a period acceptable to the Committee and which Shares are otherwise acceptable to the Committee, provided that the Committee may impose whatever restrictions it deems necessary or desirable with respect to such method of payment;

(3) through a broker-facilitated cashless exercise procedure acceptable to the Committee; or

(4) in any combination of the methods described in this Section 8.3(b) which is acceptable to the Committee.

Any payment made in Shares shall be treated as equal to the Fair Market Value of such Shares on the date the properly endorsed stock certificate for such Shares is delivered to the Committee (or to its delegate) or, if payment is effected through a certification of ownership of Shares in lieu of a Share certificate, on the date the Option is exercised.

(c) Restrictions. The Committee may from time to time establish procedures for restricting the exercise of Options on any given date as the result of excessive volume of exercise requests or any other problem in the established system for processing Option exercise requests or for any other reason the Committee or its delegate deems appropriate or necessary.

8.4. SARs.

(a) SARs and SAR Share Value.

(1) The Committee acting in its absolute discretion may grant an Eligible Individual a SAR which will give the Eligible Individual the right to the appreciation in one, or more than one, Share, and any such appreciation shall be measured from the related SAR Share Value; provided, however, in no event shall the SAR Share Value be less than the Fair Market Value of a Share on the date such SAR is granted. The Committee shall have the right to make any such grant subject to such additional terms, including without limitation any performance-based vesting conditions or forfeiture provisions, as the Committee deems appropriate and such terms shall be set forth in the related SAR Agreement.

(2) Each SAR granted under this Plan shall be exercisable in whole or in part at such time or times as set forth in the related SAR Agreement, but no SAR Agreement shall make a SAR exercisable before the date such SAR is granted or on or after the date which is the tenth anniversary of the date such SAR is granted. In the discretion of the Committee, a SAR Agreement may provide for the exercise of a SAR after the Eligible Individual ceases to be employed or provide services to the Company or Subsidiary for any reason whatsoever, including death or disability.

9

(3) Except in accordance with the provisions of Section 12, the Committee shall not, absent the approval of the Company’s shareholders, take any action, whether through amendment, cancellation, replacement grants, exchanges or any other means, to directly or indirectly reduce the SAR Share Value of any outstanding SAR.

(b) Procedure. The exercise of a SAR shall be effected by the delivery of the related SAR Agreement to the Committee together with a statement signed by the Eligible Individual which specifies the number of Shares as to which the Eligible Individual exercises his or her SAR.

(c) Payment. An Eligible Individual who exercises his or her SAR will receive a payment in cash or in Shares, or in a combination of cash and Shares, equal in amount to the product of (i) the number of Shares with respect to which the SAR is exercised multiplied by (ii) the excess of the Fair Market Value of a Share on the exercise date over the applicable SAR Share Value. The Committee acting in its absolute discretion shall determine the form of such payment. Any cash payment shall be made from the Company’s general assets, and an Eligible Individual shall be no more than a general and unsecured creditor of the Company with respect to such payment.

(d) No Dividend Equivalents. In no event shall any SAR or SAR Agreement granted under the Plan include any right to receive dividend equivalents with respect to such award.

8.5. Nontransferability. Except to the extent the Committee deems permissible and consistent with the best interests of the Company, no Option or SAR shall be transferable by an Eligible Individual other than by will or by the laws of descent and distribution, and any grant by the Committee of a request by an Eligible Individual for any transfer (other than a transfer by will or by the laws of descent and distribution) of an Option or SAR shall be conditioned on the transfer not being made for value or consideration. Any such Option or SAR granted under this Plan shall be exercisable during an Eligible Individual’s lifetime, as the case may be, only by (subject to the first sentence in this Section 8.5) the Eligible Individual, provided that in the event an Eligible Individual is incapacitated and unable to exercise such Eligible Individual’s Option or SAR, such Eligible Individual’s legal guardian or legal representative whom the Committee deems appropriate based on all applicable facts and circumstances presented to the Committee may exercise such Eligible Individual’s Option or SAR, in accordance with the provisions of this Plan and the applicable Option or SAR Agreement. The person or persons to whom an Option or SAR is transferred by will or by the laws of descent and distribution (or pursuant to the first sentence of this Section 8.5) thereafter shall be treated as the Eligible Individual under this Plan.

8.6. Share Limitations.

(a) Other than Non-Employee Directors. Subject to subsection (b) immediately below, an Eligible Individual may not be granted in any calendar year Options, or SARs, or one or more Options and SARs in any combination which in the aggregate relate to more than [—] Shares.

10

(b) Non-Employee Directors. Notwithstanding subsection (a) immediately above, a Non-Employee Director may not be granted in any calendar year Options, or SARs, or one or more Options and SARs in any combination which in the aggregate relate to more than [$—] in aggregate value at grant date(s), based on the accounting value as recognized by the Company.

SECTION 9. PERFORMANCE-BASED AWARDS

9.1. Establishment of Performance Goals. If, at the time of grant, the Committee intends an award to qualify as performance based compensation within the meaning of Code Section 162(m)(4), the Committee must establish in writing, objective performance goals for the applicable Performance Period no later than ninety (90) days after the Performance Period begins (but in no event after twenty-five percent (25%) of the Performance Period has elapsed), and while the outcome as to the performance goals is substantially uncertain. Such performance goals established by the Committee may be with respect to corporate performance, operating group or sub-group performance, individual company performance, other group or individual performance, or division performance, and shall be based on one or more of the criteria described in Section 9.2.

9.2. Performance Measures. A performance goal may be based on any one or more or any combination (in any relative proportion) of the following: share price, market share, cash flow, revenue, revenue growth, earnings per share, operating earnings per share, operating earnings, earnings before interest, taxes, depreciation and amortization, return on equity, return on assets, total shareholder return, return on capital, return on investment, net income, net income per share, economic value added, market value added, store sales growth, customer and member growth, maintenance and satisfaction performance goals and employee opinion survey results measured by an independent firm, and strategic business objectives, consisting of one or more objectives based on meeting specific cost or profit targets or margins, business expansion goals and goals relating to acquisitions or divestitures or leasing activities. Each goal, with respect to a performance period, may be expressed on an absolute and/or relative basis, may be based on the Company as a whole or on any one or more business units of the Company, or its Subsidiaries, and may be based on or otherwise employ comparisons based on internal targets, the past performance of the Company or of any one or more business units of the Company or its Subsidiaries, and/or the past or current performance of other companies, or an index.

9.3. Certification of Performance. A Participant otherwise entitled to receive an award intended to meet the requirements of performance-based compensation under Code Section 162(m) and the regulations thereunder for any Performance Period shall not receive a settlement of the award until the Committee has determined that the applicable performance goal(s) have been attained. To the extent that the Committee exercises discretion in making the determination required by this subsection, such exercise of discretion may not result in an increase in the amount of the payment with respect to such award.

9.4. Extraordinary Items. In establishing any performance goals, the Committee may, no later than the date such performance goals are established in accordance with Section 9.1, provide for the exclusion of the effects of the following items, to the extent identified in the audited financial statements of the Company, including footnotes, or in the Management

11

Discussion and Analysis of Financial Condition and Results of Operations accompanying such financial statements: (a) asset write-downs; (b) litigation or claim judgments or settlements; (c) extraordinary, unusual, and/or nonrecurring items of gain or loss; (d) gains or losses on acquisitions or divestitures or store closings; (e) domestic pension expenses; (f) noncapital, purchase accounting items; (g) changes in tax or accounting principles, regulations or laws; (h) mergers or acquisitions; (i) integration costs disclosed as merger related; (j) accruals for reorganization or restructuring programs; (k) investment income or loss; (l) foreign exchange gains and losses; and (m) tax valuation allowances and/or tax claim judgment or settlements. To the extent the exclusion of any item affects awards intended to constitute performance-based compensation under Code Section 162(m), such exclusion shall be specified in a manner that satisfies the requirements of Code Section 162(m) and the regulations thereunder, including without limitation the requirement that performance goals be objectively determinable.

SECTION 10. SECURITIES REGISTRATION

For Shares issued pursuant to this Plan, the Company at its expense shall take such action as it deems necessary or appropriate to register the original issuance of such Shares to an Eligible Individual under the Securities Act of 1933, as amended, or under any other applicable securities laws or to qualify such Shares for an exemption under any such laws prior to the issuance of such Shares to an Eligible Individual; however, the Company shall have no obligation whatsoever to take any such action in connection with the transfer, resale or other disposition of such Shares by an Eligible Individual.

SECTION 11. LIFE OF PLAN

No award shall be granted under this Plan on or after the earlier of: (a) the tenth (10th) anniversary of the date the Company adopts this Plan, in which event this Plan otherwise thereafter shall continue in effect until all Options and SARs have been exercised in full or no longer are exercisable and all Restricted Shares, Share Units and Other Share-Based Award grants under this Plan have been forfeited or the forfeiture conditions on the related Share or cash payments have been satisfied in full, or (b) the date on which all of the Shares reserved under Section 3 has been issued or is no longer available for use under this Plan and all cash payments due under any Share Unit grants have been paid or forfeited, in which event this Plan also shall terminate on such date.

SECTION 12. ADJUSTMENT

12.1. Corporate Transactions. The Committee shall make equitable adjustments to reflect any corporate transaction, which may include (a) adjusting the number, kind or class (or any combination thereof) of Shares reserved under Section 3, the grant limitations described in Section 7.1(b) and Section 8.6, the number, kind or class (or any combination thereof) of Shares subject to Options and SARs granted under this Plan and the applicable Option Price and SAR Share Value, as well as the number, kind or class of Shares subject to Restricted Share, Share Unit and Other Share-Based Award grants under this Plan, (b) replacing outstanding awards with other awards of comparable value (determined in the sole discretion of the Committee), (c) cancelling outstanding awards in return for a cash payment (the amount of which shall be determined in the sole discretion of the Committee), other than Options or SARs where the

12

Option Price or SAR Share Value, respectively, is greater than the Fair Market Value at the time of the transaction, and (d) any other adjustments that the Committee determines to be equitable. For purposes of this paragraph, a “corporate transaction” includes, without limitation, any dividend (other than a cash dividend that is not an extraordinary cash dividend) or other distribution (whether in the form of cash, Shares, securities of a subsidiary of the Company, other securities or other property), change in control, recapitalization, share split, reverse share split, combination of shares, reorganization, merger, consolidation, acquisition, split-up, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company, or other similar corporate transaction or event. Notwithstanding anything in this paragraph to the contrary, an adjustment to an Option or SAR under this paragraph shall be made in a manner that will not result in the grant of a new Option or SAR under Code Section 409A or cause the Option or SAR to fail to be exempt from Code Section 409A.

12.2. General. If any adjustment under this Section 12 would create a fractional Share or a right to acquire a fractional Share, such fractional Share shall be disregarded and the number of Shares reserved under this Plan and the number subject to any grant shall be the next lower number of Shares, rounding all fractions downward. Any adjustment made under this Section 12 by the Committee shall be conclusive and binding on all affected persons.

SECTION 13. AMENDMENT OR TERMINATION

The Board or the Committee may at any time in its sole discretion, for any reason whatsoever, terminate or suspend the Plan, and from time to time may amend or modify the Plan; provided that without the approval of shareholders of the Company, no amendment or modification to the Plan may materially modify the Plan in any way that would require shareholder approval under any regulatory requirement that the Committee determines to be applicable, including without limitation, the rules of any exchange. No amendment, modification, suspension or termination of the Plan shall have a materially adverse effect on any vested and outstanding award on the date of such amendment, modification, suspension or termination, without the written consent of the affected grantee. Notwithstanding the foregoing, no Eligible Individual consent shall be needed for an amendment, modification, or termination of the Plan if the Committee determines such amendment, modification, or termination is necessary or advisable for the Company to comply with applicable law (including Code Section 409A), regulation, rule, or accounting standard. Suspension or termination of the Plan shall not affect the Committee’s ability to exercise the powers granted to it with respect to awards under this Plan prior to the date of such suspension or termination.

SECTION 14. MISCELLANEOUS

14.1. Stockholder Rights. No Eligible Individual shall have any rights as a shareholder of the Company as a result of the grant of an Option or SAR under this Plan or his or her exercise of such Option or SAR pending the actual delivery of any Shares subject to such Option or SAR to such Eligible Individual. Except as otherwise provided in this Plan, an Eligible Individual’s rights as a shareholder in the Shares related to a Restricted Share or Other Share-Based Award grant shall be set forth in the related Share Award Agreement.

13

14.2. No Contract of Employment or Contract for Services. The grant of an award to an Eligible Individual under this Plan shall not constitute a contract of employment or contract for the performance of services or an agreement to continue his or her status as an Eligible Individual and shall not confer on an Eligible Individual any rights in addition to those rights, if any, expressly set forth in any Share, Option or SAR Agreement.

14.3. Coordination with Corporate Policies. Shares and cash acquired by an Eligible Individual under this Plan shall be subject to share retention, forfeiture, and clawback policies established by the Company in accordance with the terms of such policies.

14.4. Withholding. The exercise of any Option or SAR granted under this Plan and the acceptance of a Restricted Share, Share Unit or Other Share-Based Award grant shall constitute an Eligible Individual’s full and complete consent to whatever action the Committee deems necessary to satisfy the minimum tax withholding requirements, if any, which the Committee acting in its discretion deems applicable. Subject to applicable law, the Committee, in its discretion, shall have the right to condition the delivery of any Shares (or other benefit) under the Plan on the satisfaction of an Eligible Individual’s applicable withholding obligation and shall have the right to satisfy such tax withholding requirements, if any: (a) through cash payment by the Eligible Individual; (b) with the Committee’s consent, through the surrender of Shares which the Eligible Individual already owns (provided, however, that to the extent Shares described in this subsection (b) are used to satisfy more than the minimum statutory withholding obligation, then, except as otherwise provided by the Committee, payments made with Shares in accordance with this subsection (b) shall be limited to Shares held by the Eligible Individual for not less than six (6) months prior to the payment date); or (c) through the surrender of Shares to which the Eligible Individual is otherwise entitled under the Plan; provided, however, that such Shares under this subsection (c) may be used to satisfy not more than the Company’s minimum statutory withholding obligation.

14.5. Compliance with Code Section 409A. To the extent that amounts payable under this Plan are subject to Code Section 409A, the Plan is intended to comply with Code Section 409A and official guidance issued thereunder. Notwithstanding anything herein to the contrary, the Plan shall be interpreted, operated and administered in a manner consistent with this intention.

14.6. Requirements of Law. The granting of awards and the issuance of Shares under the Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

14.7. Indemnification. Each person who is or shall have been a member of the Committee and each delegate of such Committee shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be made a party or in which he or she may be involved in by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such action, suit, or proceeding against him or her, provided that the Company is given an opportunity, at its own expense, to handle and defend the

14

same before he or she undertakes to handle and defend it personally. Such foregoing right of indemnification shall not apply in circumstances involving such person’s bad faith or willful misconduct. The foregoing right of indemnification shall not be exclusive and shall be independent of any other rights of indemnification to which such persons may be entitled under the Company’s Declaration of Trust or By-laws, by contract, as a matter of law, or otherwise.

14.8. Headings and Captions. The headings and captions here are provided for reference and convenience only, shall not be considered part of this Plan, and shall not be employed in the construction of this Plan.

14.9. Governing Law. This Plan shall be governed under the internal laws of the state of Maryland without regard to principles of conflicts of laws, to the extent not superseded by federal law. The state and federal courts located in the state of Maryland shall have exclusive jurisdiction in any action, lawsuit or proceeding based on or arising out of the Plan.

14.10. Invalid Provisions. In the event any provision of this Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Plan, and this Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

14.11. Conflicts. In the event of a conflict between the terms of this Plan and any Share, Option or SAR Agreement, the terms of the Plan shall prevail.

14.12. Successors. All obligations of the Company under the Plan with respect to awards granted hereunder shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

14.13. Deferral of Awards. The Committee may, in a Share Award Agreement or otherwise, establish procedures for the deferral of Shares or cash deliverable upon settlement, vesting or other events with respect to Restricted Shares, Share Units or Other Share-Based Awards. Notwithstanding anything herein to the contrary, in no event will any deferral of Shares or any other payment with respect to any award granted under the Plan be allowed if the Committee determines, in its sole discretion, that the deferral would result in the imposition of the additional tax under Code Section 409A.

14.14. Employees in Foreign Jurisdictions. Notwithstanding any provision of this Plan to the contrary, in order to achieve the purposes of this Plan or to comply with provisions of the laws in countries outside the United Sates in which the Company operates or has Employees, the Committee, in its sole discretion, shall have the power and authority to (i) determine which Eligible Individuals (if any) employed by the Company outside the United States should participate in the Plan, (ii) modify the terms and conditions of any awards made to such Eligible Individuals, and (iii) establish sub-plans and other award terms, conditions and procedures to the extent such actions may be necessary or advisable to comply with provisions of the laws in such countries outside the United States in order to assure the lawfulness, validity and effectiveness of awards granted under this Plan.

15