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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________
FORM 10-Q
_________________________________
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from  _____ to _____       
Commission file number 000-54376
_________________________________
STRATEGIC REALTY TRUST, INC.
(Exact name of registrant as specified in its charter)
_________________________________
Maryland90-0413866
(State or Other Jurisdiction of
Incorporation or Organization)		(I.R.S. Employer Identification No.)
  
550 W Adams St, Suite 200
Chicago,Illinois60661
(Address of Principal Executive Offices)(Zip Code)
(312) 878-4860
(Registrant’s Telephone Number, Including Area Code)
_________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
NoneNoneNone
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   ý     No   ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes   ý     No   ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☐Accelerated filer☐
Non-accelerated filer
ý
Smaller reporting company☒
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ☐     No   ý
As of November 8, 2022, there were 10,752,966 shares of the registrant’s common stock issued and outstanding.

Table of Contents
STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
Page
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.

Table of Contents
PART I
FINANCIAL INFORMATION
The accompanying interim unaudited condensed consolidated financial statements as of and for the three and nine months ended September 30, 2022, have been prepared by Strategic Realty Trust, Inc. (the “Company”) pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements and should be read in conjunction with the audited consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2021, as filed with the SEC on March 25, 2022 (the “2021 Annual Report on Form 10-K”). The interim unaudited condensed consolidated financial statements herein should also be read in conjunction with the Notes to Condensed Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this Quarterly Report on Form 10-Q. The results of operations for the three and nine months ended September 30, 2022, are not necessarily indicative of the operating results expected for the full year. The information furnished in the Company’s accompanying unaudited condensed consolidated balance sheets and unaudited condensed consolidated statements of operations, equity, and cash flows reflects all adjustments that, in management’s opinion, are necessary for a fair presentation of the aforementioned financial statements. Such adjustments are of a normal recurring nature.
3
Table of Contents
ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except shares and per share amounts)
(unaudited)
September 30,December 31,
20222021
ASSETS
Investments in real estate
Land$12,374 $25,400 
Building and improvements22,078 27,550 
Tenant improvements896 1,753 
35,348 54,703 
Accumulated depreciation(4,619)(5,148)
Investments in real estate, net30,729 49,555 
Property under development and development costs
Land12,958 12,958 
Development costs687 3,189 
Property under development and development costs13,645 16,147 
Cash, cash equivalents and restricted cash1,076 2,407 
Prepaid expenses and other assets202 129 
Tenant receivables, net of $19 and $83 bad debt reserve
825 844 
Deferred leasing costs, net367 270 
Lease intangibles, net327 500 
Assets held for sale15,968 — 
TOTAL ASSETS (1)
$63,139 $69,852 
LIABILITIES AND EQUITY
LIABILITIES
Notes payable, net$42,206 $39,780 
Accounts payable and accrued expenses628 731 
Amounts due to affiliates28 63 
Other liabilities183 240 
Below-market lease liabilities, net113 130 
TOTAL LIABILITIES (1)
43,158 40,944 
Commitments and contingencies (Note 12)
EQUITY
Stockholders’ equity
Preferred stock, $0.01 par value; 50,000,000 shares authorized, none issued and outstanding
— — 
Common stock, $0.01 par value; 400,000,000 shares authorized; 10,752,966 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively
110 110 
Additional paid-in capital94,644 94,644 
Accumulated deficit(75,069)(66,307)
Total stockholders’ equity19,685 28,447 
Non-controlling interests296 461 
TOTAL EQUITY19,981 28,908 
TOTAL LIABILITIES AND EQUITY$63,139 $69,852 
(1)As of September 30, 2022 and December 31, 2021, includes approximately $30.0 million and $34.8 million, respectively, of assets related to consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities and approximately $21.6 million and $21.5 million, respectively, of liabilities of consolidated variable interest entities for which creditors do not have recourse to the general credit of the Company. Refer to Note 3. “Variable Interest Entities”.
See accompanying notes to condensed consolidated financial statements.
4
Table of Contents
STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except shares and per share amounts)
(unaudited)
Three Months Ended
September 30,		Nine Months Ended
September 30,
2022202120222021
Revenue:
Rental and reimbursements$734 $517 $2,189 $1,870 
Expense:
Operating and maintenance273 469 1,323 1,747 
General and administrative290 373 1,238 1,184 
Depreciation and amortization254 351 846 1,068 
Interest expense852 319 1,484 947 
Loss on early lease termination— 353 190 624 
Loss on impairment of real estate152 5,628 6,035 5,628 
1,821 7,493 11,116 11,198 
Operating loss(1,087)(6,976)(8,927)(9,328)
Other income:
Net gain on disposal of real estate— — — 422 
Net loss(1,087)(6,976)(8,927)(8,906)
Net loss attributable to non-controlling interests(19)(139)(165)(177)
Net loss attributable to common stockholders$(1,068)$(6,837)$(8,762)$(8,729)
Loss per common share - basic and diluted$(0.10)$(0.64)$(0.81)$(0.81)
Weighted average shares outstanding used to calculate loss per common share - basic and diluted10,752,966 10,739,729 10,752,966 10,739,729 
See accompanying notes to condensed consolidated financial statements.
5
Table of Contents
STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(in thousands, except shares)
(unaudited)
Nine Months Ended September 30, 2022 and 2021
Number of
Shares		Par ValueAdditional
Paid-in Capital		Accumulated
Deficit		Total
Stockholders’
Equity		Non-controlling
Interests		Total
Equity
BALANCE — December 31, 202110,752,966 $110 $94,644 $(66,307)$28,447 $461 $28,908 
Net loss— — — (8,762)(8,762)(165)(8,927)
BALANCE — September 30, 202210,752,966 $110 $94,644 $(75,069)$19,685 $296 $19,981 
BALANCE — December 31, 202010,739,814 $110 $94,602 $(55,771)$38,941 $714 $39,655 
Net loss— — — (8,729)(8,729)(177)(8,906)
BALANCE — September 30, 202110,739,814 $110 $94,602 $(64,500)$30,212 $537 $30,749 
Three Months Ended September 30, 2022 and 2021
Number of
Shares		Par ValueAdditional
Paid-in Capital		Accumulated
Deficit		Total
Stockholders’
Equity		Non-controlling
Interests		Total
Equity
BALANCE — June 30, 202210,752,966 $110 $94,644 $(74,001)$20,753 $315 $21,068 
Net loss— — — (1,068)(1,068)(19)(1,087)
BALANCE — September 30, 202210,752,966 $110 $94,644 $(75,069)$19,685 $296 $19,981 
BALANCE — June 30, 202110,739,814 $110 $94,602 $(57,663)$37,049 $676 $37,725 
Net loss— — — (6,837)(6,837)(139)(6,976)
BALANCE — September 30, 202110,739,814 $110 $94,602 $(64,500)$30,212 $537 $30,749 
See accompanying notes to condensed consolidated financial statements.
6
STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Nine Months Ended September 30,
20222021
Cash flows from operating activities:
Net loss$(8,927)$(8,906)
Adjustments to reconcile net loss to net cash used in operating activities:
Net gain on disposal of real estate— (422)
Loss on impairment of real estate6,035 5,628 
Straight-line rent(130)(11)
Amortization of deferred financing costs369 309 
Depreciation and amortization846 1,068 
Amortization of above and below-market leases(16)(16)
Provision for losses on tenant receivable19 588 
Loss on early lease termination190 624 
Other42 — 
Changes in operating assets and liabilities:
Prepaid expenses and other assets(73)(77)
Tenant receivables66 (627)
Accounts payable and accrued expenses(113)(41)
Amounts due to affiliates(35)41 
Other liabilities(57)67 
Net cash used in operating activities(1,784)(1,775)
Cash flows from investing activities:
Proceeds from the sale of real estate— 3,770 
Investment in properties under development and development costs(884)(1,291)
Improvements and capital expenditures(357)(410)
Payments for leasing costs(276)(231)
Net cash (used in ) provided by investing activities(1,517)1,838 
Cash flows from financing activities:
Proceeds from notes payable from investments in consolidated variable interest entities152 49 
Loan proceeds from an affiliate2,000 — 
Payment of loan fees from investments in consolidated variable interest entities(182)(87)
Net cash provided by financing activities1,970 (38)
Net (decrease) increase in cash, cash equivalents and restricted cash(1,331)25 
Cash, cash equivalents and restricted cash – beginning of period2,407 2,622 
Cash, cash equivalents and restricted cash – end of period$1,076 $2,647 
Supplemental disclosure of non-cash investing and financing activities and other cash flow information:
Change in accrued liabilities capitalized to investment in development$10 $110 
Amortization of deferred loan fees capitalized to investment in development87 131 
Changes in capital improvements and leasing costs, accrued but not paid— 14 
Cash paid for interest, net of amounts capitalized$990 $642 
See accompanying notes to condensed consolidated financial statements.
7
STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. ORGANIZATION AND BUSINESS
Strategic Realty Trust, Inc. (the “Company”) was formed on September 18, 2008, as a Maryland corporation. Effective August 22, 2013, the Company changed its name from TNP Strategic Retail Trust, Inc. to Strategic Realty Trust, Inc. The Company believes it qualifies as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), and has elected REIT status beginning with the taxable year ended December 31, 2009, the year in which the Company began material operations.
Since the Company’s inception, its business has been managed by an external advisor. The Company has no direct employees and all management and administrative personnel responsible for conducting the Company’s business are employed by its advisor. As of September 30, 2022, the Company was externally managed and advised by SRT Advisor, LLC, a Delaware limited liability company (the “Advisor”) pursuant to an advisory agreement with the Advisor (the “Advisory Agreement”) initially executed on August 10, 2013, and subsequently renewed every year through 2022. The current term of the Advisory Agreement terminates on August 9, 2023. The advisor is an affiliate of PUR Management LLC (“PUR”), which is an affiliate of L3 Capital, LLC. L3 Capital, LLC is a real estate investment firm focused on institutional quality, value-add, prime urban retail and mixed-use investment within first tier U.S. metropolitan markets.
Substantially all of the Company’s business is conducted through Strategic Realty Operating Partnership, L.P. (the “OP”). During the Company’s initial public offering (“Offering”), as the Company accepted subscriptions for shares of its common stock, it transferred substantially all of the net proceeds of the Offering to the OP as a capital contribution. The Company is the sole general partner of the OP. As of September 30, 2022 and December 31, 2021, the Company owned 98.1% of the limited partnership interests in the OP.
The Company’s principal demands for funds are currently the payment of operating expenses, interest on outstanding indebtedness, and investments in development of properties. The Company’s available capital resources, cash and cash equivalents on hand and sources of liquidity are currently limited. The Company expects its cash needs will be funded using cash from operations, future asset sales, debt financing and the proceeds to the Company from any sale of equity that it may conduct in the future.
The Company invests in and manages a portfolio of income-producing retail properties, located in the United States, real estate-owning entities and real estate-related assets. The Company has invested directly, and indirectly through joint ventures, in a portfolio of income-producing retail properties located throughout the United States, with a focus on multi-tenant retail centers, including neighborhood, community and lifestyle shopping centers, multi-tenant shopping centers and free standing single-tenant retail properties. During the first quarter of 2016, the Company invested, through joint ventures, in two significant retail projects under development. During the third quarter of 2020, construction of one of the development projects was completed and placed in service. As of September 30, 2022, this property was classified as held for sale and had approximately 12,000 rentable square feet of retail space, which was 42% leased.
As of September 30, 2022, in addition to one development project and the property placed in service and currently classified as held for sale, the Company’s portfolio of wholly-owned properties was comprised of six properties, with approximately 27,000 rentable square feet of retail space located in California, as well as an improved land parcel. As of September 30, 2022, the rentable space at the Company’s retail properties was 88% leased, excluding the property placed in service and currently classified as held for sale.
8
STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
COVID-19 Pandemic and Liquidity
Given the ongoing workforce shortages, global supply chain bottlenecks and shortages, and high inflation, the Company continues to monitor and address risks related to the COVID-19 pandemic and the general state of the economy. The Company believes that the actions taken to improve its financial position and maximize liquidity, including the suspension of distributions and the share redemption program, will continue to mitigate the impact to the Company’s cash flow caused by the adverse effects of the COVID-19 pandemic and the current impact of inflation and rising interests rates and the general state of the economy on the Company’s portfolio and retail tenants.
The Company’s cash demands have been primarily funded by cash provided by property operations, debt financings and the sales of properties. The COVID-19 pandemic had a material detrimental impact on the Company’s retail tenants and their ability to pay rent and consequently on the Company’s liquidity. As of September 30, 2022, the Company had approximately $0.5 million in cash and cash equivalents. In addition, the Company had approximately $0.6 million of restricted cash (funds held by the lenders for property taxes, insurance, tenant improvements, leasing commissions, capital expenditures, rollover reserves and other financing needs).
The Company is actively exploring options to provide additional liquidity, such as a sale of one or more assets that are not generating positive cash flow. On October 11, 2022, the Company consummated the disposition of the Wilshire Joint Venture Property for $16.5 million in cash, before customary closing and transaction costs, resulting in net cash proceeds of approximately $2.2 million. In connection with the disposition of the Wilshire Joint Venture Property, the Company repaid the Wilshire Construction Loan (as defined in Note 7) in the amount of $12.7 million, which was secured by a first Deed of Trust on the Wilshire Joint Venture Property. The Wilshire Joint Venture Property was classified as held for sale in the consolidated balance sheets as of September 30, 2022.
The Company obtained a $4.0 million unsecured loan from PUR Holdings Lender, LLC, an affiliate of the Advisor (the “Unsecured Loan”), to be used for working capital and other general corporate purposes. As of September 30, 2022, there was $1.0 million unadvanced.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation and Basis of Presentation
The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as contained within the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”), including the instructions to Form 10-K and Regulation S-X.
The interim unaudited condensed consolidated financial statements include the accounts of the Company, the OP, their direct and indirect owned subsidiaries, and the accounts of joint ventures that are determined to be variable interest entities for which the Company is the primary beneficiary. All significant intercompany balances and transactions are eliminated in consolidation. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the Company’s condensed consolidated financial position, results of operations and cash flows have been included.
The Company evaluates the need to consolidate joint ventures and variable interest entities based on standards set forth in ASC Topic 810, Consolidation (“ASC 810”). In determining whether the Company has a controlling interest in a joint venture or a variable interest entity and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the partners/members, as well as whether the entity is a variable interest entity for which the Company is the primary beneficiary. During the three and nine months ended September 30, 2022 and 2021, the Company held variable interests in two variable interest entities, one of which is classified as held for sale, and consolidated those entities. Refer to Note 3. “Variable Interest Entities” for additional information.
Cash, Cash Equivalents and Restricted Cash
Cash and cash equivalents represent current bank accounts and other bank deposits free of encumbrances and having maturity dates of three months or less from the respective dates of deposit. The Company limits cash investments to financial institutions with high credit standing; therefore, the Company believes it is not exposed to any significant credit risk in cash.
Restricted cash includes escrow accounts for real property taxes, insurance, capital expenditures and tenant improvements, debt service and leasing costs held by lenders.
9
STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported on the condensed consolidated balance sheets that sum to the total of the same such amounts shown on the condensed consolidated statement of cash flows (amounts in thousands):
September 30, 2022September 30, 2021
Cash and cash equivalents$477 $1,661 
Restricted cash599 986 
Total cash, cash equivalents, and restricted cash$1,076 $2,647 
Reclassifications
Certain prior period amounts have been reclassified to conform with current period’s presentation. The reclassifications had no effect on the Company’s condensed consolidated financial condition, results of operations, or cash flows.
Recent Accounting Pronouncements
The FASB issued the following ASUs, which could have potential impact to the Company’s condensed consolidated financial statements:
In July 2021, the FASB issued ASU No. 2021-05, Leases (Topic 842): Lessors - Certain Leases with Variable Lease Payments (“ASU 2021-05”). ASU 2021-05 amends the lease classification requirements for lessors to align them with practice under Topic 840. Lessors should classify and account for a lease with variable lease payments that do not depend on a reference index or a rate as an operating lease, if both of the following criteria are met: (1) the lease would have been classified as a sales-type lease or a direct financing lease; (2) the lessor would have otherwise recognized a day-one loss. ASU 2021-05 is effective for fiscal years beginning after December 31, 2021. The adoption of ASU 2021-05 on January 1, 2022, did not have an impact on the Company’s condensed consolidated financial statements.
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU No. 2020-04 is optional and may be elected over time through December 31, 2022. The Company is evaluating the impact of reference rate reform and whether it will apply any of these practical expedients.
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (“ASU 2016-13”). ASU 2016-13 requires a financial asset, measured at amortized cost basis to be presented at the net amount expected to be collected. ASU 2016-13 was effective for fiscal years beginning after December 15, 2019, with adoption permitted for fiscal years beginning after December 15, 2018. Adjustments resulting from adopting ASU 2016-13 shall be applied through a cumulative-effect adjustment to retained earnings. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) Effective Dates (“ASU 2019-10”). ASU 2019-10 extended the mandatory effective date for smaller reporting companies to beginning after December 15, 2022. The Company is evaluating the impact of Financial Instruments - Credit Losses on the Company’s condensed consolidated financial statements.
3. VARIABLE INTEREST ENTITIES
The Company has variable interests in, and is the primary beneficiary of, variable interest entities (“VIEs”) through its investments in (i) the Sunset & Gardner Joint Venture and (ii) the 3032 Wilshire Joint Venture. The Company has consolidated the accounts of these variable interest entities.
Through September 30, 2022, post the initial capital contributions, the Company made additional capital contributions totaling $9.2 million and $10.5 million to the Sunset & Gardner Joint Venture and the 3032 Wilshire Joint Venture, respectively.
Assets Held for Sale
At September 30, 2022, the Wilshire Joint Venture Property, located in Santa Monica, California, was classified as held for sale in the condensed consolidated balance sheets.
Since the sale of this property does not represent a strategic shift that will have a major effect on the Company’s operations and financial results, the results of operations of this property were not reported as discontinued operations in the Company’s condensed consolidated financial statements.
10
STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
The Company’s condensed consolidated statements of operations include net operating losses of approximately $0.4 million and $6.1 million for the three months ended September 30, 2022 and 2021, respectively, and approximately $3.6 million and $7.1 million for the nine months ended September 30, 2022 and 2021, respectively, related to the asset held for sale.
There were no assets classified as held for sale at December 31, 2021.
The major classes of assets related to assets held for sale included in the condensed consolidated balance sheets are as follows (amounts in thousands):
September 30,
2022
ASSETS
Investments in real estate
Land$13,026 
Building and improvements2,744 
Tenant improvements623 
16,393 
Accumulated depreciation(611)
Investments in real estate, net15,782 
Tenant receivables, net64 
Deferred leasing costs, net122 
Assets held for sale$15,968 
Amounts above are being presented at the lower of their carrying value or their estimated fair value less costs to sell.
11
STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Joint Ventures
The following table reflects the aggregate assets and liabilities of the Sunset & Gardner Joint Venture and the Wilshire Joint Venture, excluding assets held for sale, which were consolidated by the Company, as of September 30, 2022 and December 31, 2021 (amounts in thousands):
September 30,December 31,
20222021
ASSETS
Investments in real estate
Land$— $13,026 
Building and improvements— 5,218 
Tenant improvements— 467 
— 18,711 
Accumulated depreciation— (520)
Investments in real estate, net— 18,191 
Property under development and development costs:
Land12,958 12,958 
Development costs687 3,189 
Property under development and development costs13,645 16,147 
Cash, cash equivalents and restricted cash334 371 
Prepaid expenses and other assets, net23 13 
Other receivables, net— 69 
Deferred leasing costs, net— 29 
TOTAL ASSETS (1)
$14,002 $34,820 
LIABILITIES
Notes payable, net (2)
$21,278 $21,063 
Accounts payable and accrued expenses280 347 
Amounts due to affiliates— 4 
Other liabilities46 71 
TOTAL LIABILITIES$21,604 $21,485 
(1)The assets of the Sunset & Gardner Joint Venture and Wilshire Joint Venture can be used only to settle obligations of the respective consolidated joint ventures.
(2)As of both September 30, 2022 and December 31, 2021, includes approximately $0.1 million and $0.2 million, respectively, of deferred financing costs, net, as a contra-liability. The creditors of the consolidated joint ventures do not have recourse to the general credit of the Company. The notes payable of the 3032 Wilshire Joint Venture is partially guaranteed by the Company, refer to Note 7, “Notes Payable, Net”. The notes payable of the Sunset & Gardner Joint Venture is not guaranteed by the Company.
12
STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
4. LEASES
Operating Leases
The Company’s real estate properties are leased to tenants under operating leases for which the terms and expirations vary. As of September 30, 2022, the leases at the Company’s properties, excluding the property classified as held for sale, have remaining terms (excluding options to extend) of up to 9.6 years with a weighted-average remaining term (excluding options to extend) of approximately 6.0 years. The leases may have provisions to extend the lease agreements, options for early termination after paying a specified penalty, rights of first refusal to purchase the property at competitive market rates, and other terms and conditions as negotiated. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. Generally, upon the execution of a lease, the Company requires security deposits from tenants in the form of a cash deposit and/or a letter of credit. Amounts required as security deposits vary depending upon the terms of the respective leases and the creditworthiness of the tenant, but generally are not significant amounts. Therefore, exposure to credit risk exists to the extent that a receivable from a tenant exceeds the amount of its security deposit. Security deposits received in cash related to tenant leases are included in other liabilities in the accompanying condensed consolidated balance sheets and totaled approximately $0.1 million as of September 30, 2022 and December 31, 2021, respectively.
The following table presents the components of income from real estate operations for the three and nine months ended September 30, 2022 and 2021 (amounts in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
2022202120222021
Lease income - operating leases$583 $382 $1,640 $1,439 
Variable lease income (1)
151 135 549 431 
Rental and reimbursements income$734 $517 $2,189 $1,870 
(1)Primarily includes tenant reimbursements for real estate taxes, insurance, consideration based on sales, common area maintenance, utilities, marketing, and certain other items including negative variable lease income.
As of September 30, 2022 and December 31, 2021, approximately $650 thousand and $565 thousand of straight-line rent receivable was included in tenant receivables in the condensed consolidated balance sheets, respectively.
As of September 30, 2022, the future minimum rental income from the Company’s properties under non-cancelable operating leases, excluding the property classified as held for sale, was as follows (amounts in thousands):
Remainder 2022$452 
20231,830 
20241,860 
20251,763 
20261,475 
Thereafter5,841 
Total$13,221 
5. LEASE INTANGIBLES AND BELOW-MARKET LEASE LIABILITIES, NET
As of September 30, 2022 and December 31, 2021, the Company’s above-market lease intangibles, at-market lease intangibles and below-market lease liabilities were as follows (amounts in thousands):
September 30, 2022December 31, 2021
At-Market Lease IntangiblesAbove-Market Lease IntangiblesBelow-Market Lease IntangiblesAt-Market Lease IntangiblesAbove-Market Lease IntangiblesBelow-Market Lease Intangibles
Cost$765 $— $(246)$1,661 $82 $(388)
Accumulated amortization(438)— 133 (1,176)(67)258 
Total$327 $— $(113)$485 $15 $(130)
13
STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Amortization of at-market lease intangible assets is recorded in depreciation and amortization expense and amortization of above-market rent and below-market rent is recorded as a reduction to and increase to rental and reimbursements, respectively, in the consolidated statements of operations. The Company’s amortization of above-market lease intangibles, at-market lease intangibles and below-market lease liabilities for the three and nine months ended September 30, 2022 and 2021, were as follows (amounts in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
2022202120222021
Amortization
At-Market lease intangibles$(18)$(24)$(61)$(101)
Above-Market lease intangibles$— $(1)$(1)$(7)
Below-Market lease liabilities$6 $6 $17 $23 
6. DEFERRED LEASING COSTS, NET
Deferred leasing costs consist primarily of initial direct costs in connection with lease originations. We record amortization of deferred leasing costs on a straight-line basis over the terms of the related leases. As of September 30, 2022 and December 31, 2021, details of these deferred costs, excluding deferred leasing costs classified as held for sale, were as follows (amounts in thousands):
September 30, 2022December 31, 2021
Deferred leasing costs$440 $350 
Accumulated amortization(73)(80)
Deferred leasing costs, net$367 $270 
Amortization of deferred leasing costs is recorded in depreciation and amortization expense in the consolidated statements of operations. The Company’s deferred leasing costs amortization for the three and nine months ended September 30, 2022 and 2021, were as follows (amounts in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Amortization of deferred leasing costs$(19)$(12)$(41)$(25)
7. NOTES PAYABLE, NET
On December 24, 2019, the Company entered into a Loan Agreement (the “SRT Loan Agreement”) with PFP Holding Company, LLC (the “SRT Lender”) for a non-recourse secured loan (the “SRT Loan”).
The SRT Loan is secured by first deeds of trust on the Company’s five San Francisco assets (Fulton Shops, 8 Octavia, 400 Grove, 450 Hayes and 388 Fulton Street) as well as the Company’s Silverlake Collection located in Los Angeles. The SRT Loan matures on January 9, 2023. The Company has an option to extend the term of the loan for two additional twelve-month periods, subject to the satisfaction of certain covenants and conditions contained in the SRT Loan Agreement. The Company has the right to prepay the SRT Loan in whole at any time or in part from time to time, subject to the payment of certain expenses, costs or liabilities potentially incurred by the SRT Lender as a result of the prepayment and subject to certain other conditions contained in the loan documents. Individual properties may be released from the SRT Loan collateral in connection with bona fide third-party sales, subject to compliance with certain covenants and conditions contained in the SRT Loan Agreement.
As of September 30, 2022, the SRT Loan had a principal balance of approximately $18.0 million. The SRT Loan is a floating Secured Overnight Financing Rate (“SOFR”) rate loan which bears interest at 30-day SOFR (with a floor of 1.50%) plus 2.80%. The default rate is equal to 5% above the rate that otherwise would be in effect. Monthly payments are interest-only with the entire principal balance and all outstanding interest due at maturity. Effective December 24, 2019, the Company entered into a derivative transaction with a financial institution with a notional amount of $18,000,000, representing an interest rate cap. The Company will receive a payment from the counterparty if the rate on SOFR exceeds 3.5%. The instrument is measured at fair value using readily observable market inputs, such as quotations on interest rates, and classified as Level 2 as these instruments are custom, over-the-counter contracts with various bank counterparties that are not traded in an active
14
STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

market. The Company paid $17 thousand for the derivative and it matures on January 9, 2023.The impact of the interest rate cap is immaterial for all periods reported and is included as a component of interest expense in the consolidated statements of operations.
Pursuant to the SRT Loan, the Company must comply with certain matters contained in the loan documents including but not limited to, (i) requirements to deliver audited and unaudited financial statements, SEC filings, tax returns, pro forma budgets, and quarterly compliance certificates, and (ii) minimum limits on the Company’s liquidity and tangible net worth. The SRT Loan contains customary covenants, including, without limitation, covenants with respect to maintenance of properties and insurance, compliance with laws and environmental matters, covenants limiting or prohibiting the creation of liens, and transactions with affiliates. At September 30, 2022, the Company was in compliance with the loan requirements.
In connection with the SRT Loan, the Company executed customary non-recourse carveout and environmental guaranties, together with limited additional assurances with regard to the condominium structures of the San Francisco assets.
On May 7, 2019, the Company refinanced and repaid its financing from Lone Oak Fund, LLC with a new construction loan from ReadyCap Commercial, LLC (the “Lender”) (the “Wilshire Construction Loan”). As of September 30, 2022, the Wilshire Construction Loan had a principal balance of approximately $12.7 million, with future funding available up to a total of approximately $13.9 million, and bears an interest rate of 1-month LIBOR (with a floor of 2.467%) plus an interest margin of 4.25% per annum, payable monthly. On September 14, 2022, the Company entered into the Modification and Extension Agreement with the Lender to extend the maturity date of the Wilshire Construction Loan for an additional six-month period under the same terms and conditions. The new maturity date is November 10, 2022. On October 11, 2022, the Company consummated the disposition of the Wilshire Joint Venture Property for $16.5 million in cash, before customary closing and transaction costs. In connection with the disposition of the Wilshire Joint Venture Property, the Company repaid the Wilshire Construction Loan in the amount of $12.7 million, which was secured by a first Deed of Trust on the Wilshire Joint Venture Property. The Company executed a guaranty that guaranties that the loan interest reserve amounts are kept in compliance with the terms of the loan agreement. The Lender also required that a principal in the upstream owner of the Company’s joint venture partner in the Wilshire Joint Venture (the “Guarantor”), guarantees performance of borrower’s obligations under the loan agreement with respect to the completion of capital improvements to the property. The Company executed an Indemnity Agreement in favor of the Guarantor against liability under that completion guaranty except to the extent caused by gross negligence or willful misconduct, as well as for liabilities incurred under the Environmental Indemnity Agreement executed by the Guarantor in favor of the Lender. The Company used working capital funds of approximately $3.1 million to repay the difference between the Wilshire Construction Loan initial advance and the prior loan, to pay transaction costs, as well as to fund certain required interest and construction reserves.
Pursuant to the Wilshire Construction Loan, the Company must comply with certain matters contained in the loan documents including but not limited to minimum limits on the Company’s liquidity and tangible net worth. At September 30, 2022, the Company was in compliance with all the terms of the Wilshire Construction Loan.
On October 29, 2018, the Company entered into a loan agreement with Lone Oak Fund, LLC (the “Sunset & Gardner Loan”). The Sunset & Gardner Loan has a principal balance of approximately $8.7 million, and had an initial interest rate of 6.9% per annum. At each maturity date in October 2019, 2020, and 2021, in connection with an extension of the loan for an additional twelve-month period, the interest rate of the loan was changed to 6.5%, 7.3%, and 7.9%, respectively. On September 7, 2022, the Company extended the Sunset & Gardner Loan for an additional twelve-month period under the same terms, except an increase of the interest rate to 8.6% per annum. The new maturity date is October 31, 2023. The Sunset & Gardner Loan is secured by a first Deed of Trust on the Sunset & Gardner Property.
As of September 30, 2022, the Unsecured Loan from PUR Holdings Lender, LLC, an affiliate of the Advisor, had an outstanding balance of approximately $3.0 million. Refer to Note 11. “Related Party Transactions” for further information.
The following is a schedule of future principal payments for all of the Company’s notes payable outstanding as of September 30, 2022 (amounts in thousands): 
Remainder of 2022$15,711 
202326,700 
  Total future principal payments42,411 
Unamortized financing costs, net205 
Notes payable, net$42,206 
15
STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

The following table sets forth interest costs incurred by the Company for the periods presented (amounts in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
2022202120222021
Expensed
Interest costs, net of amortization of deferred financing costs$674 $216 $1,114 $638 
Amortization of deferred financing costs178 103 370 309 
Total interest expensed$852 $319 $1,484 $947 
Capitalized
Interest costs, net of amortization of deferred financing costs$— $356 $779 $1,063 
Amortization of deferred financing costs— 44 87 131 
Total interest capitalized$— $400 $866 $1,194 
As of September 30, 2022 and December 31, 2021, interest expense payable was approximately $0.3 million and $0.2 million, respectively, including an amount related to the variable interest entities of approximately $0.1 million, for each period.
8. FAIR VALUE DISCLOSURES
The Company believes the total carrying values reflected on its consolidated balance sheets for cash, cash equivalents and restricted cash, accounts receivable, accounts payable and accrued expenses, amounts due to affiliates, mortgage loan and construction loan secured by properties under development, and the Company’s multi-property secured financing, reasonably approximated their fair values based on their nature, terms, and interest rates that approximate current market rates at September 30, 2022.
As part of the Company’s ongoing evaluation of the Company’s real estate portfolio, the Company estimates the fair value of its investments in real estate by obtaining outside independent appraisals on all of the operating properties. The appraised values are compared with the carrying values of its real estate portfolio to determine if there are indications of impairment.
For the three and nine months ended September 30, 2022, the Company recorded impairment losses of approximately $0.2 million and $6.0 million, respectively, of which approximately $2.6 million related to the Wilshire Joint Venture Property and $3.5 million related to the development property owned by the Sunset & Gardner Joint Venture. For the Wilshire Joint Venture Property the impairment amount was determined using purchase price per the disposition consummated on October 11, 2022, less costs to sell. For the development property owned by the Sunset & Gardner Joint Venture the impairment amount was determined using Level 3 measurements, including the property’s discounted cash flow, which took into account the property’s expected cash flow from operations, anticipated holding period and estimated proceeds from disposition.
For the three and nine months ended September 30, 2021, the Company recorded an impairment loss of approximately $5.6 million related to the Wilshire Joint Venture Property.
9. EQUITY
Share Redemption Program
On April 1, 2015, the Company’s board of directors approved the reinstatement of the share redemption program (which had been suspended since January 15, 2013). Under the SRP as reinstated, only shares submitted for repurchase in connection with the death or “qualifying disability” (as defined in the SRP) of a stockholder are eligible for repurchase by the Company. Under the SRP, as amended to date, the number of shares to be redeemed is limited to the lesser of (i) a total of $3.8 million for redemptions sought upon a stockholder’s death and a total of $1.2 million for redemptions sought upon a stockholder’s qualifying disability, and (ii) 5% of the weighted-average number of shares of the Company’s common stock outstanding during the prior calendar year. Share repurchases pursuant to the SRP are made at the sole discretion of the Company. The Company reserves the right to reject any redemption request for any reason or no reason or to amend or terminate the share redemption program at any time subject to the notice requirements in the SRP.
The redemption price for shares that are redeemed is 100% of the Company’s most recent estimated net asset value per share as of the applicable redemption date. A redemption request must be made within one year after the stockholder’s death or qualifying disability.
16
STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
In order to preserve cash in response to the potential economic impact of COVID-19 on the Company, the board of directors approved the suspension of the SRP effective on May 21, 2020. The SRP will remain suspended and no further redemptions will be made until the board of directors approves the resumption of the SRP. There is no guarantee if or when the board of directors will lift the suspension, and if they do, what the terms will be.
There were no share redemptions during the three and nine months ended September 30, 2022 and 2021.
Cumulatively, through September 30, 2022, the Company has redeemed 878,458 shares for $6.2 million.
Quarterly Distributions
In order to qualify as a REIT, the Company is required to distribute at least 90% of its annual REIT taxable income, subject to certain adjustments, to its stockholders. Some or all of the Company’s distributions have been paid, and in the future may continue to be paid from sources other than cash flows from operations. The Company’s board of directors evaluates the Company’s ability to make quarterly distributions based on the Company’s operational cash needs.
In response to the COVID-19 pandemic, its impact on the economy and the related future uncertainty, on March 27, 2020, the board of directors of the Company voted to suspend the payment of any dividend for the quarter ending March 31, 2020, and to reconsider future dividend payments on a quarter by quarter basis. Dividend payments were not reinstated as of September 30, 2022. 
10. EARNINGS PER SHARE
EPS is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during each period.
The following table sets forth the computation of the Company’s basic and diluted earnings per share for the three and nine months ended September 30, 2022 and 2021 (amounts in thousands, except shares and per share amounts):
 Three Months Ended
September 30,		Nine Months Ended
September 30,
 2022202120222021
Numerator - basic and diluted
Net loss$(1,087)$(6,976)$(8,927)$(8,906)
Net loss attributable to non-controlling interests(19)(139)(165)(177)
Net loss attributable to common shares$(1,068)$(6,837)$(8,762)$(8,729)
Denominator - basic and diluted
Basic weighted average common shares10,752,966 10,739,729 10,752,966 10,739,729 
Common Units (1)
— — — — 
Diluted weighted average common shares10,752,966 10,739,729 10,752,966 10,739,729 
Loss per common share - basic and diluted
Net loss attributable to common shares$(0.10)$(0.64)$(0.81)$(0.81)
(1)For the three and nine months ended September 30, 2022 and 2021, the effect of 204,323 and 217,475 of convertible Common Units, respectively, pursuant to the redemption rights outlined in the Company’s registration statement on Form S-11 have not been included as they would not be dilutive.
11. RELATED PARTY TRANSACTIONS
On August 7, 2013, the Company entered into the Advisory Agreement with the Advisor, which has been renewed for successive terms with a current expiration date of August 9, 2023. The Advisor manages the Company’s business as the Company’s external advisor pursuant to the Advisory Agreement. Pursuant to the Advisory Agreement, the Company pays the Advisor specified fees for services related to the investment of funds in real estate and real estate-related investments, management of the Company’s investments and for other services. On August 12, 2022, the Company, the OP, and the Advisor, entered into the Tenth Amendment to the Advisory Agreement (the “Tenth Amendment”). The Tenth Amendment renews the term of the Advisory Agreement for an additional twelve-month period, beginning on August 10, 2022 and amends certain provisions in the Advisory Agreement with respect to the payment of certain fees as follows. The disposition fee payable to the Advisor will be reduced by half in connection with the sale of certain properties held by the Company. The financing coordination fee payable to the Advisor was waived in connection with the refinancing’s of the Wilshire Joint Venture Property and Sunset & Gardner Joint Venture property. The asset management fee payable to the Advisor for the twelve-month period
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STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
commencing August 2022 through July 2023 will be reduced to $250,000 in the aggregate. In all other material respects, the terms of the Advisory Agreement remain unchanged.
On December 30, 2021, the Company obtained the Unsecured Loan, a $4.0 million unsecured loan from PUR Holdings Lender, LLC, an affiliate of the Advisor. The Unsecured Loan has a term of 12 months with an interest rate of 7.0% per annum, compounding monthly with the ability to pay-off during the term of the loan. The Unsecured Loan requires draw downs in increments of no less than approximately $0.3 million. The Company has the right to prepay or repay the Unsecured Loan in whole or in part at any time without penalty. The Unsecured Loan will be due and payable upon the earlier of twelve months or the termination of the Advisory Agreement by the Company. On March 15, 2022, the Company and PUR Holdings Lender, LLC, amended the loan agreement to allow for an extension of the maturity date of the Unsecured Loan by six months, from December 30, 2022 to June 30, 2023, if the Company provides PUR Holdings Lender, LLC, with notice, pays an extension fee, and no event of default has occurred. On August 2, 2022, PUR Holdings Lender, LLC agreed to an additional six month extension at the option of the Company to extend the maturity date until December 31, 2023. The Unsecured Loan is guaranteed by the Company. The Company paid $20 thousand in financing fees, at the close of the loan. As of September 30, 2022 the Unsecured Loan had an outstanding balance of approximately $3.0 million.
The Company is party to property management agreements with respect to each of its properties pursuant to which PUR was engaged to serve as property manager. The property management agreements expire August 10, 2023 and will automatically renew every year, unless expressly terminated.
Summary of Related Party Fees
The following table sets forth the Advisor related-party costs incurred and payable by the Company for the periods presented (amounts in thousands):
IncurredPayable as of
Three Months Ended
September 30,		Nine Months Ended
September 30,		September 30,December 31,
Expensed202220212022202120222021
Legal leasing fees$— $— $— $2 $— $— 
Asset management fees90 144 377 446 21 48 
Reimbursement of operating expenses4 — 18 — — — 
Property management fees24 13 79 48 7 11 
Disposition fees— — — 50 — — 
Total$118 $157 $474 $546 $28 $59 
Capitalized
Acquisition fees$— $2 $— $7 $— $4 
Leasing fees— — — 20 — — 
Legal leasing fees— — — 10 — — 
Construction management fees— — — 35 — — 
Total$— $2 $— $72 $— $4 
Acquisition Fees
Under the Advisory Agreement, the Advisor is entitled to receive an acquisition fee equal to 1% of (1) the cost of each investment acquired directly by the Company or (2) the Company’s allocable cost of an investment acquired pursuant to a joint venture, in each case including purchase price, acquisition expenses and any debt attributable to such investments. An acquisition fee is capitalized by the Company when the related transaction does not qualify as a business combination; otherwise an acquisition fee is expensed.
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STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
Asset Management Fees
Under the Advisory Agreement in effect through August 10, 2022, the Advisor was entitled to receive an asset management fee equal to a monthly fee of one-twelfth (1/12th) of 0.6% of the higher of (1) aggregate cost on a GAAP basis (before non-cash reserves and depreciation) of all investments the Company owns, including any debt attributable to such investments, or (2) the fair market value of the Company’s investments (before non-cash reserves and depreciation) if the board of directors has authorized the estimate of a fair market value of the Company’s investments; provided, however, that the asset management fee will not be less than $250,000 in the aggregate during any one calendar year. The Tenth Amendment amended the asset management fee payable to the Advisor for the twelve-month period commencing August 2022 through July 2023 to $250,000 in the aggregate.
Reimbursement of Operating Expenses
The Company reimburses the Advisor for all expenses paid or incurred by the Advisor in connection with the services provided to the Company, subject to the limitation that the Company will not reimburse the Advisor for any amount by which the Company’s total operating expenses (including the asset management fee described above) at the end of the four preceding fiscal quarters exceeded the greater of (1) 2% of its average invested assets (as defined in the Company’s Articles of Amendment and Restatement (the “Charter”)); or (2) 25% of its net income (as defined in the Charter) determined without reduction for any additions to depreciation, bad debts or other similar non-cash expenses and excluding any gain from the sale of the Company’s assets for that period (the “2%/25% Guideline”). The Advisor is required to reimburse the Company quarterly for any amounts by which total operating expenses exceed the 2%/25% Guideline in the previous expense year that the independent directors do not approve. The Company will not reimburse the Advisor for any of its personnel costs or other overhead costs except for customary reimbursements for personnel costs under property management agreements entered into between the OP and the Advisor or its affiliates. Notwithstanding the above, the Company may reimburse the Advisor for expenses in excess of the 2%/25% Guideline if a majority of the independent directors determine that such excess expenses are justified based on unusual and non-recurring factors.
For the three and nine months ended September 30, 2022 and 2021, the Company’s total operating expenses (as defined in the Charter) did not exceed the 2%/25% Guideline.
Property Management Fees
Under the property management agreements the Company pays property management fees calculated at a maximum of up to 4% of the properties’ gross revenue.
Disposition Fees
Under the Advisory Agreement, if the Advisor or its affiliates provide a substantial amount of services, as determined by the Company’s independent directors, in connection with the sale of a real property, the Advisor or its affiliates may be paid disposition fees up to 50% of a customary and competitive real estate commission, but not to exceed 3% of the contract sales price of each property sold. Pursuant to the Tenth Amendment the disposition fee payable to the Advisor was reduced by half in connection with the sale of the Wilshire Joint Venture Property and will be reduced by half in connection with the sale of the Sunset and Gardner Joint Venture Property.
Leasing Fees
Under the property management agreements, the Company pays a separate fee for the leases of new tenants, and for expansions, extensions and renewals of existing tenants in an amount not to exceed the fee customarily charged by similarly situated parties rendering similar services in the same geographic area for similar properties.
Legal Leasing Fees
Under the property management agreements, the Company pays a market-based legal leasing fee for the negotiation and production of new leases, renewals, and amendments.
Construction Management Fees
In connection with the construction or repair in or about a property, the property manager is responsible for coordinating and facilitating the planning and the performance of all construction and in exchange the Company pays a fee equal to 5% of the hard costs for the project in question.
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STRATEGIC REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
12. COMMITMENTS AND CONTINGENCIES
Economic Dependency
The Company is dependent on the Advisor and its affiliates for certain services that are essential to the Company, including the identification, evaluation, negotiation, purchase, and disposition of real estate and real estate-related investments, management of the daily operations of the Company’s real estate and real estate-related investment portfolio, and other general and administrative responsibilities. In the event that the Advisor is unable to provide such services to the Company, the Company will be required to obtain such services from other sources.
Environmental
As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. The Company is not aware of any environmental liability that could have a material adverse effect on its condensed consolidated financial condition or results of operations. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s properties, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to the properties could result in future environmental liabilities.
13. SUBSEQUENT EVENTS
On October 11, 2022, the Company consummated the disposition of the Wilshire Joint Venture Property for $16.5 million in cash, before customary closing and transaction costs of $1.6 million, resulting in net cash proceeds of approximately $2.2 million. In connection with the disposition of the Wilshire Joint Venture Property, the Company repaid the construction loan from ReadyCap Commercial, LLC in the amount of $12.7 million, which loan was secured by a first Deed of Trust on the Wilshire Joint Venture Property.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with our accompanying consolidated financial statements and the notes thereto.
As used herein, the terms “we,” “our,” “us,” and “Company” refer to Strategic Realty Trust, Inc., and, as required by context, Strategic Realty Operating Partnership, L.P., a Delaware limited partnership, which we refer to as our “operating partnership” or “OP”, and to their respective subsidiaries. References to “shares” and “our common stock” refer to the shares of our common stock. 
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Special Note Regarding Forward-Looking Statements
Certain statements included in this Quarterly Report on Form 10-Q that are not historical facts (including any statements concerning investment objectives, other plans and objectives of management for future operations or economic performance, or assumptions or forecasts related thereto) are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements are only predictions. We caution that forward-looking statements are not guarantees. Actual events or our investments and results of operations could differ materially from those expressed or implied in any forward-looking statements. Forward-looking statements are typically identified by the use of terms such as “may,” “should,” “expect,” “could,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “continue,” “predict,” “potential” or the negative of such terms and other comparable terminology.
The forward-looking statements included herein are based upon our current expectations, plans, estimates, assumptions and beliefs, which involve numerous risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth in the forward-looking statements. The following are some of the risks and uncertainties, although not all of the risks and uncertainties, that could cause our actual results to differ materially from those presented in our forward-looking statements:
•The adverse effect of the public health crisis of the novel coronavirus disease (COVID-19) pandemic, or any future pandemic, epidemic or outbreak of infectious disease, on the financial condition, results of operations, cash flows and performance of the Company and its tenants, the real estate market, in particular with respect to retail commercial properties and the global economy and financial markets.
•Our executive officers and certain other key real estate professionals are also officers, directors, managers, key professionals and/or holders of a direct or indirect controlling interest in our advisor. As a result, they face conflicts of interest, including conflicts created by our advisor’s compensation arrangements with us and conflicts in allocating time among us and other programs and business activities.
•We are uncertain of our sources for funding our future capital needs. If we cannot obtain debt or equity financing on acceptable terms, our ability to continue to acquire real properties or other real estate-related assets, fund or expand our operations and pay distributions to our stockholders will be adversely affected.
•We depend on tenants for our revenue and, accordingly, our revenue is dependent upon the success and economic viability of our tenants. Revenues from our properties could decrease due to a reduction in tenants (caused by factors including, but not limited to, tenant defaults, tenant insolvency, early termination of tenant leases and non-renewal of existing tenant leases) and/or lower rental rates, making it more difficult for us to meet our financial obligations, including debt service and our ability to pay distributions to our stockholders.
•All our assets are concentrated in one state and in urban retail properties, any adverse economic, real estate or business conditions in this geographic area or in the urban retail market, including with respect to the current economic slowdown, the rising interest rate environment and inflation could affect our operating results and our ability to pay distributions to our stockholders.
•Our current and future investments in real estate and other real estate-related investments may be affected by unfavorable real estate market and general economic conditions, which could decrease the value of those assets and reduce the investment return to our stockholders. Revenues from our properties could decrease. Such events would make it more difficult for us to meet our debt service obligations and limit our ability to pay distributions to our stockholders.
•Certain of our debt obligations have variable interest rates with interest and related payments that vary with the movement of LIBOR or other indices. Increases in these indices could increase the amount of our debt payments and limit our ability to pay distributions to our stockholders.
All forward-looking statements should be read in light of the risks identified in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Annual Report on Form 10-K”). Any of the assumptions underlying the forward-looking statements included herein could be inaccurate, and undue reliance should not be placed upon on any forward-looking statements included herein. All forward-looking statements are made as of the date of this Quarterly Report on Form 10-Q, and the risk that actual results will differ materially from the expectations expressed herein will increase with the passage of time. Except as otherwise required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements made after the date of this Quarterly Report on Form 10-Q, whether as a result
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of new information, future events, changed circumstances or any other reason. In light of the significant uncertainties inherent in the forward-looking statements included in this Quarterly Report on Form 10-Q, and the risks described in Part I, Item 1A of the 2021 Annual Report on Form 10-K, the inclusion of such forward-looking statements should not be regarded as a representation by us or any other person that the objectives and plans set forth in this Quarterly Report on Form 10-Q will be achieved.
Overview
We are a Maryland corporation that was formed on September 18, 2008, to invest in and manage a portfolio of income-producing retail properties, located in the United States, real estate-owning entities and real estate-related assets, including the investment in or origination of mortgage, mezzanine, bridge and other loans related to commercial real estate. During the first quarter of 2016, we also invested, through joint ventures, in two significant retail projects under development, one of which was substantially completed during the year ended December 31, 2020. We have elected to be taxed as a real estate investment trust (“REIT”) for federal income tax purposes, commencing with the taxable year ended December 31, 2009, and we have operated and intend to continue to operate in such a manner. We own substantially all of our assets and conduct our operations through our operating partnership, of which we are the sole general partner. We also own a majority of the outstanding limited partner interests in the operating partnership.
Since our inception, our business has been managed by an external advisor. We do not have direct employees and all management and administrative personnel responsible for conducting our business are employed by our advisor. Currently we are externally managed and advised by SRT Advisor, LLC, a Delaware limited liability company (the “Advisor”) pursuant to an advisory agreement with the Advisor (the “Advisory Agreement”) initially executed on August 10, 2013, and subsequently renewed every year through 2022. The current term of the Advisory Agreement terminates on August 9, 2023. The Advisor is an affiliate of PUR Management LLC, which is an affiliate of L3 Capital, LLC. L3 Capital, LLC is a real estate investment firm focused on institutional quality, value-add, prime urban retail and mixed-use investment within first tier U.S. metropolitan markets.
Impact of COVID-19 and Market Outlook
Given the ongoing workforce shortages, global supply chain bottlenecks and shortages, recent macroeconomic trends, including inflation and rising interest rates, we continue to monitor and address risks related to the COVID-19 pandemic and the general state of the economy on our portfolio and retail tenants. As of September 30, 2022, all of our tenants have resumed paying rent and while we believe that the COVID-19 pandemic has and could continue to negatively impact our financial condition and results of operations, including but not limited to, declines in real estate rental revenues, the inability to sell certain properties at a favorable price, and a decrease in construction and leasing activity, we believe that the initial impacts from the pandemic to our portfolio and tenants have started to subside.
During the nine months ended September 30, 2022, inflation in the United States has accelerated and is currently expected to continue at an elevated level in the near-term. Rising inflation could have an adverse impact on our variable rate debt or the refinancing of our fixed rate debt, as well as general and administrative expenses, as these costs could increase at a rate higher than our rental and other revenue. In addition, our retail tenants may experience decreased revenue as a result of rising inflation and reduced consumer spending. The Federal Reserve has recently started raising interest rates to combat inflation and restore price stability and it is expected that rates will continue to rise throughout the remainder of 2022. As a result, to the extent our exposure to increases in interest rates is not eliminated through interest rate swaps or other protection agreements, such increases may result in higher debt service costs, which will adversely affect our cash flows.
We believe that the actions we have taken to improve our financial position and maximize our liquidity, as described further in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2021 Annual Report on Form 10-K, will continue to mitigate the impact to our cash flow caused by the current macroeconomic trends.

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Property Portfolio
As of September 30, 2022, our wholly-owned property portfolio included six retail properties, excluding a land parcel, which we refer to as “our properties” or “our portfolio,” comprising an aggregate of approximately 27,000 square feet of multi-tenant, commercial retail space located in one state. We purchased our properties for an aggregate purchase price of approximately $35.3 million. As of September 30, 2022 approximately 88% of our wholly-owned real estate investments were leased (based on rentable square footage), with a weighted-average remaining lease term of approximately 6.0 years. As of December 31, 2021, approximately 86% of our wholly-owned real estate investments were leased (based on rentable square footage as of December 31, 2021), with a weighted-average remaining lease term of approximately 6.3 years.
(dollars in thousands)Rentable Square
Feet
Percent Leased (2)
Effective
Rent (3)
(per Sq. Foot)
Date
Acquired		Original
Purchase
 Price
Debt (4)
Property Name (1)
Location
Wholly-owned Real Estate Investments
400 Grove StreetSan Francisco, CA2,000 100 %$48.00 6/14/2016$2,890 $1,450 
8 Octavia StreetSan Francisco, CA3,640 47 %65.31 6/14/20162,740 1,500 
Fulton ShopsSan Francisco, CA3,758 66 %58.43 7/27/20164,595 2,200 
450 HayesSan Francisco, CA3,724 100 %98.78 12/22/20167,567 3,650 
388 FultonSan Francisco, CA3,110 100 %61.96 1/4/20174,195 2,300 
Silver LakeLos Angeles, CA10,497 100 %84.25 1/11/201713,300 6,900 
26,729 35,287 18,000 
Real Estate Investments owned through Joint Ventures Held for Sale
3032 Wilshire Joint Venture PropertySanta Monica, CA12,208 42 %96.39 3/8/201613,500 12,711 
38,937 $48,787 $30,711 
(1)List of properties does not include a residual parcel at Topaz Marketplace as of September 30, 2022.
(2)Percentage is based on leased rentable square feet of each property as of September 30, 2022.
(3)Effective rent per square foot is calculated by dividing the annualized September 30, 2022 contractual base rent by the total square feet occupied at the property. The contractual base rent does not include other items such as tenant concessions (e.g., free rent), percentage rent, and expense recoveries.
(4) Debt represents the outstanding balance as of September 30, 2022, and excludes reclassification of approximately $0.1 million deferred financing costs, net, as a contra-liability. For more information on our financing, refer to Note 7. “Notes Payable, Net” to our condensed consolidated financial statements included in this Quarterly Report.
Properties Under Development
As of September 30, 2022, we had one property under development in Hollywood, California. This development project is still in the planning phase and construction has not commenced. During the third quarter of 2022 we expensed approximately $280 thousand in costs included in the condensed consolidated statement of operations.
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Results of Operations
Comparison of the three and nine months ended September 30, 2022, versus the three and nine months ended September 30, 2021.
The following table provides summary information about our results of operations for the three and nine months ended September 30, 2022 and 2021 (amounts in thousands):
Three Months Ended
September 30,
20222021$ Change% Change
Rental revenue and reimbursements$734 $517 $217 42.0 %
Operating and maintenance expenses273 469 (196)(41.8)%
General and administrative expenses290 373 (83)(22.3)%
Depreciation and amortization expenses254 351 (97)(27.6)%
Interest expense852 319 533 167.1 %
Loss on early lease termination— 624 (624)(100.0)%
Loss on impairment of real estate152 5,628 (5,476)(97.3)%
Operating loss(1,087)(7,247)6,160 (85.0)%
Net loss$(1,087)$(6,976)$6,160 (88.3)%
Nine Months Ended
September 30,
20222021$ Change% Change
Rental revenue and reimbursements$2,189 $1,870 $319 17.1 %
Operating and maintenance expenses1,323 1,747 (424)(24.3)%
General and administrative expenses1,238 1,184 54 4.6 %
Depreciation and amortization expenses846 1,068 (222)(20.8)%
Interest expense1,484 947 537 56.7 %
Loss on early lease termination190 624 (434)(69.6)%
Loss on impairment of real estate6,035 5,628 407 7.2 %
Operating loss(8,927)(9,328)401 (4.3)%
Other income, net— 422 (422)(100.0)%
Net loss$(8,927)$(8,906)$(21)0.2 %
Our results of operations for the three and nine months September 30, 2022, are not necessarily indicative of those expected in future periods.
Revenue
The increase in revenue during the three and nine months ended September 30, 2022, compared to the same periods in 2021, was primarily due to the receipt of key money from a new tenant as part of new lease agreement at the 388 Fulton property and new tenants paying rent at the Silverlake and Wilshire Joint Venture properties.
Operating and maintenance expenses
Operating and maintenance expenses decreased during the three and nine months ended September 30, 2022, compared to the same periods in 2021, primarily due to lower bad debt reserves, write-off of uncollectible rents and lower consulting fees related to Wilshire Joint Venture Property development. Increase partially offset by higher security costs and tenant legal costs.
General and administrative expenses
General and administrative expenses decreased during the three months ended September 30, 2022, compared to the same period in 2021, primarily due to lower audit and other professional fees and lower asset management fees.
General and administrative expenses increased during the nine months ended September 30, 2022, compared to the same period in 2021, primarily due to higher legal fees with the increase partially offset by lower asset management fees.
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Depreciation and amortization expenses
Depreciation and amortization expenses decreased during the three and nine months ended September 30, 2022, compared to the same periods in 2021, primarily due to the impairment charge incurred during the year ended December 31, 2021 at the Wilshire Joint Venture Property and the suspension of depreciation at the Wilshire Joint Venture Property due to the classification of the property as held for sale in the consolidated balance sheets as of June 30, 2022.
Interest expense
Interest expense remained increased during the three and nine months ended September 30, 2022, compared to the same period in 2021, primarily due to draw downs on the Unsecured loan from PUR Holdings Lender, LLC, an affiliate of the Advisor. Additional increase due to increase in the Secured Overnight Financing Rate resulting in a higher interest rate on the SRT Loan.
Loss on early lease termination
Loss on early lease termination during the three and nine months ended September 30, 2022 related to the disposal of assets due to the termination of a tenant lease at the 388 Fulton property.
Loss on early lease termination during the three and nine months ended September, 2021 related to the disposal of assets due to the termination of tenant leases at the 400 Grove, 450 Hayes, and Wilshire properties.
Loss on impairment of real estate
Loss on impairment of real estate during the three months ended September 30, 2022, related to the Wilshire Joint Venture of approximately $0.2 million. Loss on impairment of real estate during the nine months ended September 30, 2022, related to the Wilshire Joint Venture and Sunset & Gardner Joint Venture of approximately $2.6 million and $3.5 million, respectively.
Loss on impairment of real estate during the three and nine months ended September 30, 2021, related to the Wilshire Joint Venture.
Other income, net
Other income, net for the three and nine months ended September 30, 2021, consisted of a gain on sale of Shops at Turkey Creek of approximately $0.4 million.
Liquidity and Capital Resources
Since our inception, our principal demand for funds has been for the acquisition of real estate, the payment of operating expenses and interest on our outstanding indebtedness, the payment of distributions to our stockholders and investments in unconsolidated joint ventures and development properties. Prior to the termination of our initial public offering in February 2013 we used offering proceeds to fund our acquisition activities and our other cash needs. Currently we have used and expect to continue to use debt financing, net sales proceeds and cash flow from operations to fund our cash needs.
As of September 30, 2022, our cash and cash equivalents were approximately $0.5 million and we had $0.6 million of restricted cash (funds held by the lenders for property taxes, insurance, tenant improvements, leasing commissions, capital expenditures, rollover reserves and other financing needs).
Our aggregate borrowings, secured and unsecured, are reviewed by our board of directors at least quarterly. Under our Articles of Amendment and Restatement, as amended, which we refer to as our “charter,” we are prohibited from borrowing in excess of 300% of the value of our net assets. Net assets for purposes of this calculation is defined to be our total assets (other than intangibles), valued at cost prior to deducting depreciation, reserves for bad debts and other non-cash reserves, less total liabilities. However, we may temporarily borrow in excess of these amounts if such excess is approved by a majority of the independent directors and disclosed to stockholders in our next quarterly report, along with an explanation for such excess. As of September 30, 2022 and December 31, 2021, our borrowings were approximately 173.8% and 120.2%, respectively, of the value of our net assets.
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The following table summarizes, for the periods indicated, selected items in our condensed consolidated statements of cash flows (amounts in thousands):
Nine Months Ended
September 30,
20222021$ Change
Net cash provided by (used in):
Operating activities$(1,784)$(1,775)$(9)
Investing activities(1,517)1,838 (3,355)
Financing activities1,970 (38)2,008 
Net (decrease) increase in cash, cash equivalents and restricted cash$(1,331)$25 
Cash Flows from Operating Activities
The change in cash flows from operating activities was primarily due to lower provisions for losses on tenant receivables, lower depreciation and amortization expense and lower losses on early lease terminations due to fewer tenants terminating leases during the nine months ended September 30, 2022 as compared to the same period in 2021.
Cash Flows from Investing Activities
Cash flows used by investing activities during the nine months ended September 30, 2022, primarily consisted of $0.9 million of additional investment in the Sunset and Gardner Joint Venture and $0.4 million additional investment in tenant and building improvements at the Wilshire and Silverlake properties.
Cash flows provided by investing activities during the nine months ended September 30, 2021, primarily consisted of approximately $3.8 million in proceeds from the sale of Turkey Creek and partially offset by $1.3 million of additional investment in the Sunset and Gardner Joint Venture.
Cash Flows from Financing Activities
Cash flows provided by financing activities during the nine months ended September 30, 2022, primarily consisted of proceeds of $2.0 million from a draw down on the Unsecured Loan from PUR Holdings Lender, LLC, an affiliate of the Advisor. Additional cash was provided by construction loan proceeds of approximately $0.2 million. The increase was partially offset by payment of financing costs related to the extensions of the Sunset & Gardner and Wilshire Joint Venture loans.
Cash flows used in financing activities during the nine months ended September 30, 2021, primarily consisted of payment of financing costs related to the extension of the Sunset & Gardner loan, partially offset by construction loan proceeds
Short-term Liquidity and Capital Resources
Our principal short-term demand for funds is for the payment of operating expenses and the payment on our outstanding indebtedness. To date, our cash needs for operations have been funded by cash provided by property operations, the sales of properties, debt refinancing, and the sale of shares of our common stock. We may fund our short-term operating cash needs from operations, from the sales of properties and from debt.
On December 30, 2021, in order to fund our short-term liquidity needs we obtained a $4.0 million Unsecured Loan from PUR Holdings Lender, LLC, an affiliate of the Advisor. The Unsecured Loan has a term of 12 months with an interest rate of 7.0% per annum, compounding monthly with the ability to pay-off during the term of the loan. The Unsecured Loan requires draw downs in increments of no less than approximately $0.3 million. The Unsecured Loan will be due and payable upon the earlier of 12 months or the termination of the Advisory Agreement by us. On March 15, 2022, we and PUR Holdings Lender, LLC, amended the loan agreement to allow for an extension of the maturity date of the Unsecured Loan by six months, from December 30, 2022 to June 30, 2023, if we provide PUR Holdings Lender, LLC, with notice, pay an extension fee, and no event of default has occurred. On August 2, 2022, PUR Holdings Lender, LLC agreed to an additional six month extension at the option of the Company to extend the maturity date until December 31, 2023. The Unsecured Loan is guaranteed by us.
On August 10, 2022, the due diligence period expired under a Purchase and Sale Agreement we entered with an unrelated third-party for the sale of the Wilshire Joint Venture Property located in Santa Monica, California for a sale price of $16.5 million. On October 11, 2022, we consummated the disposition of the Wilshire Joint Venture Property for $16.5 million in cash, before customary closing and transaction costs, resulting in net cash proceeds of approximately $2.2 million. In connection with the disposition of the Wilshire Joint Venture Property, we repaid the Wilshire Construction Loan in the amount of $12.7 million, which was secured by a first Deed of Trust on the Wilshire Joint Venture Property. The Purchase and Sale
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Agreement was entered on June 30, 2022, and as a result, the Wilshire Joint Venture Property was classified as held for sale in the consolidated balance sheets as of September 30, 2022.
Long-term Liquidity and Capital Resources
On a long-term basis, our principal demand for funds will be for real estate and real estate-related investments, additional investment in our development projects and the payment of acquisition-related expenses, operating expenses, distributions to stockholders, future redemptions of shares and interest and principal payments on current and future indebtedness. Generally, we intend to meet cash needs for items other than acquisitions and acquisition-related expenses from our cash flow from operations, debt and sales of properties. On a long-term basis, we expect that substantially all cash generated from operations will be used to pay distributions to our stockholders after satisfying our operating expenses including interest and principal payments. We may consider future public offerings or private placements of equity. Refer to Note 7. “Notes Payable, Net” to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information on the maturity dates and terms of our outstanding indebtedness.
Our ability to access capital on favorable terms as well as to use cash from operations to continue to meet our liquidity needs could be affected by the continued effects of the COVID-19 pandemic, the current economic slowdown, the rising interest rate environment and inflation (or the public perception that any of these events may continue). The full impact of these events on our rental revenue and, as a result, future cash from operations cannot be determined at present.
We believe that our cash on hand, along with other potential aforementioned sources of liquidity that we may be able to obtain, will be sufficient to fund our working capital needs and debt obligations for at least the next twelve months and beyond. However, this forward-looking statement is subject to a number of uncertainties, including with respect to the duration of the COVID-19 pandemic, and the current economic environment and there can be no guarantee that we will be successful with our plan. Moreover, over the long term, if our cash flow from operations does not increase from current levels, we may have to address a liquidity deficiency. We are actively exploring options should cash flow from operations not sufficiently improve, including a sale of one or more assets that are not generating positive cash flow.
Recent Financing Transactions
Multi-Property Secured Financing
On December 24, 2019, we entered into a Loan Agreement (the “SRT Loan Agreement”) with PFP Holding Company, LLC (the “SRT Lender”) for a non-recourse secured loan (the “SRT Loan”).
The SRT Loan is secured by first deeds of trust on our five San Francisco assets (Fulton Shops, 8 Octavia, 400 Grove, 450 Hayes and 388 Fulton Street) as well as our Silverlake Collection located in Los Angeles. The SRT Loan matures on January 9, 2023. We have an option to extend the term of the loan for two additional twelve-month periods, subject to the satisfaction of certain covenants and conditions contained in the SRT Loan Agreement. We have the right to prepay the SRT Loan in whole at any time or in part from time to time, subject to the payment of certain expenses, costs or liabilities potentially incurred by the SRT Lender as a result of the prepayment and subject to certain other conditions contained in the loan documents. Individual properties may be released from the SRT Loan collateral in connection with bona fide third-party sales, subject to compliance with certain covenants and conditions contained in the SRT Loan Agreement.
As of September 30, 2022, the SRT Loan had a principal balance of approximately $18.0 million. The SRT Loan is a floating Secured Overnight Financing Rate (“SOFR”) rate loan which bears interest at 30-day SOFR (with a floor of 1.50%) plus 2.80%. The default rate is equal to 5% above the rate that otherwise would be in effect. Monthly payments are interest-only with the entire principal balance and all outstanding interest due at maturity.
Pursuant to the SRT Loan, we must comply with certain matters contained in the loan documents including but not limited to, (i) requirements to deliver audited and unaudited financial statements, SEC filings, tax returns, pro forma budgets, and quarterly compliance certificates, and (ii) minimum limits on our liquidity and tangible net worth. The SRT Loan contains customary covenants, including, without limitation, covenants with respect to maintenance of properties and insurance, compliance with laws and environmental matters, covenants limiting or prohibiting the creation of liens, and transactions with affiliates.
In connection with the SRT Loan, we executed customary non-recourse carveout and environmental guaranties, together with limited additional assurances with regard to the condominium structures of the San Francisco assets.
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Loans Secured by Properties
On May 7, 2019, we refinanced and repaid our financing with Lone Oak Fund, LLC with a new construction loan from ReadyCap Commercial, LLC (the “Lender”) (the “Wilshire Construction Loan”). As of September 30, 2022, the Wilshire Construction Loan had a principal balance of approximately $12.7 million, with future funding available up to a total of approximately $13.9 million, and bears an interest rate of 1-month LIBOR (with a floor of 2.467%) plus an interest margin of 4.25% per annum, payable monthly. On October 11, 2022, we consummated the disposition of the Wilshire Joint Venture Property for $16.5 million in cash, before customary closing and transaction costs. In connection with the disposition of the Wilshire Joint Venture Property, we repaid the Wilshire Construction Loan in the amount of $12.7 million, which was secured by a first Deed of Trust on the Wilshire Joint Venture Property. We executed a guaranty that guaranties that the loan interest reserve amounts are kept in compliance with the terms of the loan agreement. The Lender also required that a principal in the upstream owner of our joint venture partner in the Wilshire Joint Venture (the “Guarantor”), guarantees performance of borrower’s obligations under the loan agreement with respect to the completion of capital improvements to the property. We executed an Indemnity Agreement in favor of the Guarantor against liability under that completion guaranty except to the extent caused by gross negligence or willful misconduct, as well as for liabilities incurred under the Environmental Indemnity Agreement executed by the Guarantor in favor of the Lender. We used working capital funds of approximately $3.1 million to repay the difference between the Wilshire Construction Loan initial advance and the prior loan, to pay transaction costs, as well as to fund certain required interest and construction reserves.
Loans Secured by Properties Under Development
On October 29, 2018, we entered into a loan agreement with Lone Oak Fund, LLC (the “Sunset & Gardner Loan”). The Sunset & Gardner Loan has a principal balance of approximately $8.7 million, and had an interest rate of 6.9% per annum. At each maturity date in October 2019, 2020 and 2021, in connection with an extension of the loan for an additional twelve-month period, the interest rate of the loan was changed to 6.5%, 7.3% and 7.0%, respectively. On September 7, 2022, the Company extended the Sunset & Gardner Loan for an additional twelve-month period under the same terms, except an increase in the interest rate to 8.6% per annum. The new maturity date is October 31, 2023. The Sunset & Gardner Loan is secured by a first Deed of Trust on the Sunset & Gardner Property.
Loan with Affiliate
On December 30, 2021, we obtained a $4.0 million unsecured loan (the “Unsecured Loan”) from PUR Holdings Lender, LLC, an affiliate of the Advisor. The Unsecured Loan has a term of 12 months with an interest rate of 7.0% per annum, compounding monthly with the ability to pay-off during the term of the loan. The Unsecured Loan requires draw downs in increments of no less than approximately $0.3 million. The Unsecured Loan will be due and payable upon the earlier of 12 months or the termination of the Advisory Agreement by us. The Unsecured Loan is guaranteed by us. On March 15, 2022, we and PUR Holdings Lender, LLC, amended the loan agreement to allow for an extension of the maturity date of the Unsecured Loan by six months, from December 30, 2022 to June 30, 2023, if we provide PUR Holdings Lender, LLC, with notice, pay an extension fee, and no event of default has occurred. On August 2, 2022, PUR Holdings Lender, LLC agreed to an additional six month extension at the option of the Company to extend the maturity date until December 31, 2023. As of September 30, 2022 the Unsecured Loan had an outstanding balance of approximately $3.0 million.
Guidelines on Total Operating Expenses
We reimburse our Advisor for some expenses paid or incurred by our Advisor in connection with the services provided to us, except that we will not reimburse our Advisor for any amount by which our total operating expenses at the end of the four preceding fiscal quarters exceed the greater of (1) 2% of our average invested assets, as defined in our charter; and (2) 25% of our net income, as defined in our charter, or the “2%/25% Guidelines” unless a majority of our independent directors determines that such excess expenses are justified based on unusual and non-recurring factors. For the three and nine months ended September 30, 2022 and 2021, our total operating expenses did not exceed the 2%/25% Guidelines.
Our Advisory Agreement provides that the Advisor shall not be required to reimburse to us any operating expenses incurred during a given period that exceed the applicable limit on “Total Operating Expenses” (as defined in the Advisory Agreement) to the extent that such excess operating expenses are incurred as a result of certain unusual and non-recurring factors approved by our board of directors.
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Inflation
The majority of our leases at our properties contain inflation protection provisions applicable to reimbursement billings for common area maintenance charges, real estate tax and insurance reimbursements on a per square foot basis, or in some cases, annual reimbursement of operating expenses above a certain per square foot allowance. We expect to include similar provisions in our future tenant leases designed to protect us from the impact of inflation. Due to the generally long-term nature of these leases, annual rent increases, as well as rents received from acquired leases, may not be sufficient to cover inflation and rent may be below market rates.
REIT Compliance
To qualify as a REIT for tax purposes, we are required to annually distribute at least 90% of our REIT taxable income, subject to certain adjustments, to our stockholders. We must also meet certain asset and income tests, as well as other requirements. If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax (including any applicable alternative minimum tax) on our taxable income at regular corporate rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which our REIT qualification is lost unless the IRS grants us relief under certain statutory provisions. Such an event could materially adversely affect our net income and net cash available for distribution to our stockholders.
Quarterly Distributions
As set forth above, in order to qualify as a REIT, we are required to distribute at least 90% of our annual REIT taxable income, subject to certain adjustments, to our stockholders. Our board of directors will continue to evaluate the amount of future quarterly distributions based on our operational cash needs.
Some or all of our distributions have been paid, and in the future may continue to be paid, from sources other than cash flows from operations.
In light of the COVID-19 pandemic, its impact on the economy and the related future uncertainty, on March 27, 2020, our board of directors determined to suspend the payment of any dividend for the quarters ending March 31, 2020, and to reconsider future dividend payments on a quarter by quarter basis. Dividend payments were not reinstated as of September 30, 2022.
Funds From Operations
Funds from operations (“FFO”) is a supplemental non-GAAP financial measure of a real estate company’s operating performance. The National Association of Real Estate Investment Trusts, or “NAREIT”, an industry trade group, has promulgated this supplemental performance measure and defines FFO as net income, computed in accordance with GAAP, plus real estate related depreciation and amortization and excluding extraordinary items and gains and losses on the sale of real estate, and after adjustments for unconsolidated joint ventures (adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO.) It is important to note that not only is FFO not equivalent to our net income or loss as determined under GAAP, it also does not represent cash flows from operating activities in accordance with GAAP. FFO should not be considered an alternative to net income as an indication of our performance, nor is FFO necessarily indicative of cash flow as a measure of liquidity or our ability to fund cash needs, including the payment of distributions.
We consider FFO to be a meaningful, additional measure of operating performance and one that is an appropriate supplemental disclosure for an equity REIT due to its widespread acceptance and use within the REIT and analyst communities. Comparison of our presentation of FFO to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in the application of the NAREIT definition used by such REITs.
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Our calculation of FFO attributable to common shares and Common Units and the reconciliation of net income (loss) to FFO is as follows (amounts in thousands, except shares and per share amounts):
Three Months Ended
September 30,		Nine Months Ended
September 30,
FFO2022202120222021
Net loss$(1,087)$(6,976)$(8,927)$(8,906)
Adjustments:
Gain on disposal of assets— — — (422)
Depreciation of real estate205 309 710 932 
Amortization of in-place leases and leasing costs49 42 136 136 
Loss on impairment of real estate152 5,628 6,035 5,628 
FFO attributable to common shares and Common Units (1)
$(681)$(997)$(2,046)$(2,632)
FFO per share and Common Unit (1)
$(0.06)$(0.09)$(0.19)$(0.24)
Weighted average common shares and units outstanding (1)
10,957,289 10,957,204 10,957,289 10,957,204 
(1)Our common units have the right to convert a unit into common stock for a one-to-one conversion. Therefore, we are including the related non-controlling interest income/loss attributable to common units in the computation of FFO and including the common units together with weighted average shares outstanding for the computation of FFO per share and common unit.
Related Party Transactions and Agreements
We are currently party to the Advisory Agreement, pursuant to which the Advisor manages our business in exchange for specified fees paid for services related to the investment of funds in real estate and real estate-related investments, management of our investments and for other services. Refer to Note 11. “Related Party Transactions” to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for a discussion of the Advisory Agreement and other related party transactions, agreements and fees. 
Critical Accounting Policies and Estimates
Our interim unaudited condensed consolidated financial statements have been prepared in accordance with GAAP and in conjunction with the rules and regulations of the SEC. The preparation of our financial statements requires significant management judgments, assumptions and estimates about matters that are inherently uncertain. These judgments affect the reported amounts of assets and liabilities and our disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. With different estimates or assumptions, materially different amounts could be reported in our financial statements. Additionally, other companies may utilize different estimates that may impact the comparability of our results of operations to those of companies in similar businesses. A discussion of additional accounting policies that management considers critical in that they involve significant management judgments, assumptions and estimates is included in our 2021 Annual Report on Form 10-K.
Subsequent Events
On October 11, 2022, we consummated the disposition of the Wilshire Joint Venture Property for $16.5 million in cash, before customary closing and transaction costs of $1.6 million, resulting in net cash proceeds of approximately $2.2 million.. In connection with the disposition of the Wilshire Joint Venture Property, we repaid the construction loan from ReadyCap Commercial, LLC in the amount of $12.7 million, which loan was secured by a first Deed of Trust on the Wilshire Joint Venture Property.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Omitted as permitted under rules applicable to smaller reporting companies.
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ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
As of the end of the period covered by this report, management, including our chief executive officer and chief financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based upon, and as of the date of, the evaluation, our chief executive officer and chief financial officer concluded that the disclosure controls and procedures were effective as of the end of the period covered by this report to ensure that information required to be disclosed in the reports we file and submit under the Exchange Act is recorded, processed, summarized and reported as and when required. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file and submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and our chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
Omitted as permitted under rules applicable to smaller reporting companies.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the period covered by this Quarterly Report on Form 10-Q, we did not issue any equity securities that were not registered under the Securities Act of 1933, as amended.
Share Redemption Program
Our board of directors has adopted a share redemption program that may enable our stockholders to sell their shares of common stock to us in limited circumstances (the “SRP”), subject to the significant restrictions and limitations of the program. The current SRP is available only for shares submitted for repurchase in connection with the death or “qualifying disability” (as defined in the SRP) of a stockholder. In addition, under the SRP, the number of shares to be redeemed is limited to the lesser of (i) a total of $3.8 million for redemptions sought upon a stockholder’s death and a total of $1.2 million for redemptions sought upon a stockholder’s qualifying disability, and (ii) 5% of the weighted-average number of shares of our common stock outstanding during the prior calendar year. Share repurchases pursuant to the SRP are made at our sole discretion. We reserve the right to reject any redemption request for any reason or no reason or to amend or terminate the share redemption program at any time subject to the notice requirements in the SRP.
The redemption price for shares that are redeemed is 100% of our most recent estimated net asset value per share as of the applicable redemption date. A redemption request must be made within one year after the stockholder’s death or qualifying disability. Additional information regarding the terms and limitations of the SRP is available in our Amended and Restated Share Redemption Program which is included in this Quarterly Report on Form 10-Q as Exhibit 99.1.
In order to preserve cash in light of the uncertainty relating to the economic impact of COVID-19 on our operations, on April 21, 2020, the Board approved the suspension of the SRP, effective on May 21, 2020. The SRP will remain suspended and no further redemptions will be made until the board of directors approves the resumption of the SRP. During the suspension, we will continue to accept death and qualifying disability redemption filings from stockholders, but will not take any action with regard to those requests until the board of directors has elected to lift the suspension and provided the terms and conditions for any continuation of the SRP.
During the quarter ended September 30, 2022, we did not redeem shares. Cumulatively, through September 30, 2022, we have redeemed 878,458 shares for $6.2 million. We have not presented information regarding submitted and unfulfilled redemption requests for the quarter ended September 30, 2022, as our redemption program is suspended and we believe many stockholders who may otherwise desire to have their shares redeemed have not submitted a request due to the suspension of the program.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
As of the three months ended September 30, 2022, all items required to be disclosed under Form 8-K were reported under Form 8-K.
ITEM 6. EXHIBITS
The exhibits listed on the Exhibit Index (following the signatures section of this Quarterly Report on Form 10-Q) are included herewith, or incorporated herein by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on November 14, 2022.
Strategic Realty Trust, Inc.
By:/s/ Matthew Schreiber
Matthew Schreiber
Chief Executive Officer and Director
(Principal Executive Officer)
By:/s/ Ryan Hess
Ryan Hess
Chief Financial Officer
(Principal Financial and Accounting Officer)



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EXHIBIT INDEX
The following exhibits are included, or incorporated by reference, in this Quarterly Report on Form 10-Q for the nine months ended September 30, 2022 (and are numbered in accordance with Item 601 of Regulation S-K). 
Incorporated by Reference
Exhibit No.DescriptionFiled
Herewith		Form/File No.Filing Date
Articles of Amendment and Restatement of TNP Strategic Retail Trust, Inc. S-11/
No. 333-154975		7/10/2009
Articles of Amendment, dated August 22, 2013 8-K8/26/2013
Articles Supplementary, dated November 1, 20138-K11/4/2013
Articles Supplementary, dated January 22, 2014 8-K1/28/2014
Third Amended and Restated Bylaws of Strategic Realty Trust, Inc. 8-K1/28/2014
Loan Modification Agreement between Sunset & Gardner Investors LLC and Lone Oak Fund, LLC, dated August 1, 2022X
Tenth Amendment to the Advisory Agreement, dated August 15, 2022X
Loan Modification and Extension Agreement between 3032 Wilshire Investors LLC and ReadyCap Commercial, LLC, dated September 14, 2022X
Purchase and Sale Agreement as amended for Wilshire Joint Venture PropertyX
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002X
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002X
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002X
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002X
Strategic Realty Trust, Inc. Amended and Restated Share Redemption Program Adopted August 26, 20168-K8/30/2016
101.INSInline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.X
101.SCHInline XBRL Taxonomy Extension Schema DocumentX
101.CALInline XBRL Taxonomy Extension Calculation Linkbase DocumentX
101.DEFInline XBRL Taxonomy Extension Definition Linkbase DocumentX
101.LABInline XBRL Taxonomy Extension Label Linkbase DocumentX
101.PREInline XBRL Taxonomy Extension Presentation Linkbase DocumentX
104.1Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

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LOAN MODIFICATION AGREEMENT This Loan Modification Agreement (hereinafter “the Agreement”) is made August 1, 2022, by and between SUNSET & GARDNER INVESTORS LLC, a Colorado limited liability company (hereinafter ‘Borrower”) and LONE OAK FUND, LLC, a California limited liability company (hereinafter “Lender”) with respect to the following: RECITALS A. On October 26, 201 8, Lender funded a loan (the ‘Loan”) to Borrower in the original principal amount of $8,700,000.00. B. The Loan is evidenced by that certain Promissory Note dated October 18, 2018, executed by Borrower and payable to Lender in the principal sum of $8,700,000.00 (the ‘Note”). The Note is secured by a Deed of Trust with Absolute Assignment of Leases and Rents, Security Agreement and Fixture Filing dated October 18, 2018, executed by Borrower as Trustor for the benefit of Lender as Beneficiary, and recorded on October 29, 2018 as Instrument No. 20181094158 in Official Records of Los Angeles County, California (the “Deed of Trust”). The Deed of Trust presently encumbers that certain real property (the “Mortgaged Property”) situated in the City of Los Angeles, County of Los Angeles, State of California, described as follows: PARCEL 1: (PARCEL NO. 5550-013-022) THAT PORTION OF THE” LOS ANGELES AND PACIFIC RAILWAY, 35 FEET WIDE”, AS SHOWN ON PLAT OF “A, GARDNER’S WEST OF HOLLYWOOD SUBDIVISION”, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK I PAGE 20 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT IN THE WESTERLY LINE OF LOT 2 OF SAID “A”, GARDNER’S WEST OF HOLLYWOOD SUBDIVISION’, DISTANT NORTHERLY THEREON 122.90 FEET FROM THE SOUTHWESTERLY CORNER OF SAID LOT; THENCE EASTERLY ALONG A LINE DRAWN PARALLEL WITH THE NORTHERLY LINE OF THE LOT TO THE INTERSECTION OF SAID PARALLEL LINE WITH THE NORTHWESTERLY LINE OF THE SAID LOS ANGELES ND PACIFIC RAILWAY AND THE TRUE POINT OF BEGINNING; THENCE NOR,S1tRLY I __ Borrower Initials

 
ALONG THE SAID NORTHWESTERLY LINE TO A LINE PARALLEL WITH AND 50.00 FEET SOUTHERLY MEASURED AT RIGHT ANGLES FROM THE SOUTHERLY LINE OF THE LAND CONVEYED TO THE LOS ANGELES CITY SCHOOL DISTRICT OF LOS ANGELES COUNTY, BY DEED RECORDED IN BOOK 3510 PAGE 287, OF OFFICIAL RECORDS; THENCE SOUTHEASTERLY ALONG A LINE DRAWN AT RIGHT ANGLES FROM SAID NORTHWESTERLY LINE TO THE CENTERLINE OF SAID RAILWAY; THENCE SOUTHWESTERLY ALONG SAID CENTERLINE TO A LINE DRAWN AT RIGHT ANGLES FROM SAID NORTHWESTERLY LiNE AND WHICH PASSES THROUGH THE TRUE POINT OF BEGINNING;THENCE NORTHWESTERLY THEREON TO THE SAID TRUE POINT OF BEGINNING. PARCEL 2: (PARCEL NO. 5550-013-019) THAT PORTION OF THE LOS ANGELES AND PACIFIC RAILWAY, 35 FEET WIDE, AS SHOWN ON PLAT OF”A GARDNER’S WEST OF HOLLYWOOD SUBDIVISION”, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK I PAGE 20 OF MAPS, EN THE OFFICE OF TI-lB COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNiNG AT THE SOUTHWEST CORNER OF LOT 2 OF SAID “A, GARDNER’S WEST OF HOLLYWOOD SUBDIVISION’; THENCE NORTH ALONG ThE WEST LINE OF SAID LOT, A DISTANCE OF 122.90 FEET;THENCE EAST PARALLEL WITH THE SOUTH LINE OF SAID LOT TO THE NORTHWESTERLY LINE OF SAID LOS ANGELES AND PACIFIC RAILWAY AND THE TRUE POINT OF BEGINNING; THENCE SOUTHEASTERLY ALONG A LINE DRAWN AT RIGHT ANGLES TO SAiD NORTHWESTERLY LINE TO THE CENTERLINE OF SAID RAILWAY; THENCE SOUTHWESTERLY ALONG SAID CENTERLINE TO THE EASTERLY PROLONGATION OF THE SOUTH LINE OF SAID LOT 2; THENCE WESTERLY ALONG SAID PROLONGATION TO THE NORTHWESTERLY LINE OF SAID RAILWAY; THENCE NORTHEASTERLY ALONG SAID NORTHWESTERLY LINE TO TIlE TRUE POINT OF BEGINNING. PARCEL 3: (PARCEL NO. 5550-013-015) THAT PORTION OF LOT 2 OF “A, GARDNER’S WEST OF HOLLYWOOD SUBDIVISION”, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 1 PAGE 20 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAiD COUNTY. DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHWEST CORNER OF SAID LOT; THENCE NORTH ALONG THE WEST LINE OF SAID LOT, 122.90 FEET; THENCE EAST PARALLEL WITH THE SOUTH LINE OF SAID LOT TO A POINT IN THE NORTHWESTERLY LINE OF LOS ANGELES AND PACIFIC RAILWAY RIGHT OF WAY; THENCE IN A SOUTHWESTERLY DIRECTION ALONG THE NORTHWESTERLY LINE OF SAID RIGHT OF WAY TO THE SOUTHEAST CORNER OF SAID LOT; THENCE WEST ALONG THE SOUTH LINE OF SAID LOT TO THE POINT OF BEGINNING. PARCEL 4: (PARCEL NO. 5550-013-0 14) THAT PORTION OF LOT 2 OF “A, GARDNER’S WEST OF HOLLYWOOD SUBDIVISION”, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK I,PAGE 20 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: 2 _____ Borrower Initials

 
BEGINNING AT A POINT IN THE WESTERLY LINE OF LOT 2, DISTANT NORTHERLY THEREON, 122.90 FEET FROM THE SOUTHWESTERLY CORNER OF SAID LOT; THENCE FROM SAID POINT OF BEGINNING. EASTERLY ALONG A LINE DRAWN PARALLEL WITH THE NORTHERLY LINE OF SAID LOT TO THE INTERSECTION OF SAID PARALLEL WITH THE WESTERLY LINE OF THE RIGHT OF WAY OF THE PACIFIC ELECTRIC RAILROAD; THENCE NORTHEASTERLY ALONG SAID WESTERLY LINE OF SAID RIGHT OF WAY TO ITS INTERSECTION WITH A LINE DRAWN PARALLEL WITH AND DISTANT 50 FEET SOUTHERLY AT RIGHTS ANGLES FROM THE SOUTHERLY LINE OF THE LAND CONVEYED TO THE LOS ANGELES CITY SCHOOL DiSTRICT OF LOS ANGELES COUNTY, BY DEED RECORDED IN BOOK 3510, PAGE 287, OF OFFICIAL RECORDS OF SAID COUNTY; THENCE WESTERLY ALONG SAID LAST MENTIONED PARALLEL LINE TO A POINT IN THE WESTERLY LINE OF SAID LOT 2; THENCE SOUTHERLY ALONG SAiD WESTERLY LINE 80 FEET, MORE OR LESS, TO THE POINT OF BEGINNING. PARCEL 5: (PARCEL NO. 5550-013-021) THAT STRIP OF LAND (THE “STRIP”), THIRTY-FIVE FEET (35’) WIDE, MARKED “LOS ANGELES PACIFIC RAILWAY” BEING A PART OF SECTION 9. TOWNSHIP I SOUTH, RANGE 14 WEST, SAN BERNARDINO BASE AND MERIDIAN AND SHOWN AS EXTENDING NORTHEAST FROM THE NORTH LINE OF SUNSET BOULEVARD TO THE WEST LINE OF VISTA STREET ON THE MAP OF A. GARDNER’S WEST OF HOLLYWOOD SUBDIVISION, RECORDED IN BOOK I, PAGE 20 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF LOS ANGELES, STATE OF CALIFORNIA, AND ON THE MAP OF A. GARDNER TRACT RECORDED IN BOOK 6, PAGE 107 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY BEING A RESUBDI VISION OF LOTS 1, 3, AND 4 OF A. GARDNER’S WEST OF HOLLYWOOD SUBDIVISION AS RECORDED IN MAP BOOK I, PAGE 20 OF MAPS. EXCEPTING THEREFROM THAT PORTION OF THE “LOS ANGELES PACIFIC RAILWAY” STRIP OF LAND (35 FEET WIDE) A SHOWN ON THE MAP OF A GARDNER TRACT, EN THE CITY OF LOS ANGELES,CO(JNTY OF LOS ANGELES, STATE OF CALIFORNIA, RECORDED IN BOOK 6, PAGE 107 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDED OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE MOST WESTERLY CORNER OF LOT I, IN BLOCK I OF SAID A. GARDNER TRACT; THENCE EASTERLY ALONG THE SOUTHERLY LINE OF SAID LOT I A DISTANCE OF 110.92 FEET;ThENCE NORTHERLY ALONG A LINE DRAWN AT RIGHT ANGLES TO SAID SOUTHERLY LINE, TO THE SOUTHEASTERLY LINE OF SAID “LOS ANGELES PACIFIC RAILWAY” STRIP OF LAND (35 FEET WIDE)AND ‘EKE TRUE POINT OF BEGINNING; THENCE NORTHWESTERLY ALONG A LINE DRAWN AT RIGHT ANGLES TO SAID SOUTHEASTERLY LINE, TO THE CENTERLiNE OF SAID STRIP OF LAND; THENCE NORTHEASTERLY ALONG SAID CENTER LINE TO LINE DRAWN AT RIGHT ANGLES TO SAID SOUTHEASTERLY LINE FROM THE MOST NORThERLY CORNER OF SAID LOT I; THENCE SOUTHEASTERLY ALONG SAID LINE SO DRAWN, TO SAID MOST NORTHERLY CORNER; THENCE SOUTHWESTERLY ALONG SAID SOUTHEASTERLY LINE OF SAID STRIP OF LAND TO THE TRUE POINT OF BEGINNING. ALSO EXCEPTING THEREFROM THAT PORTION OF THE “LOS ANGELES AND PACIFIC RAILWAY, 35 FEET WIDE”, AS SHOWN ON PLAT OF “A. GARDNER’S WEST OF HOLLYWOOD SUBDIVISION”, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED TN BOOK 1, PAGE 20 OF MAPS, TN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: Borrower Initials

 
BEGINNING AT A POINT IN THE WESTERLY LINE OF LOT 2 OF SAID A. GARDNER’S WEST OF HOLLYWOOD SUBDIVISION, DISTANT NORTHERLY THEREON 122.90 FEET FROM THE SOUTHWESTERLY CORNER OF SAID LOT; THENCE EASTERLY ALONG A LINE DRAWN PARALLEL WITH THE NORTHERLY LINE OF THE LOT, TO THE INTERSECTION OF SAID PARALLEL WITH TI-IF NORTHWESTERLY LINE OF THE SAID LOS ANGELES AND PACIFIC RAILWAY AND THE TRUE POiNT OF BEGINNING; THENCE NORTHEASTERLY ALONG THE SAID NORTHWESTERLY LINE TO A LINE PARALLEL WITH AND 50.00 FEET SOUTHERLY, MEASURED AT RIGI-IT ANGLES, FROM THE SOUTHERLY LINE OF THE LAND CONVEYED TO THE LOS ANGELES CITY SCHOOL DISTRICT OF LOS ANGELES COUNTY BY DEED RECORDED IN BOOK 3510, PAGE 287 OF OFFICIAL RECORDS; THENCE SOUTHEASTERLY ALONG A LINE DRAWN AT RIGHT ANGLES FROM SAID NORTHWESTERLY LINE TO THE CENTER LINE OF SAID RAiLWAY; THENCE SOUTHWESTERLY ALONG SAID CENTER LINE TO A LINE DRAWN AT RiGHT ANGLES FROM SAID NORTHWESTERLY LINE AND WHICH PASSES THROUGH THE TRUE POINT OF BEGINNING; THENCE NORTHWESTERLY THEREON TO THE SAID TRUE POINT OF BEGINNING. ALSO EXCEPTING THEREFROM THAT PORTION OF THE LOS ANGELES AND PACIFJC RAILWAY, 35 FEET WIDE, AS SHOWN ON PLAT OF ‘A. GARDNER’S WEST OF HOLLYWOOD SUBDIVISiON”, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED iN BOOK I ,PAGE 20 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHWEST CORNER OF LOT 2 OF SAID “A, GARDNER’S WEST OF HOLLYWOOD SUBDIVISION”; THENCE NORTH ALONG THE WEST LINE OF SAID LOT, A DiSTANCE OF 122.90 FEET;THENCE EAST PARALLEL WITH THE SOUTH LINE OF SAID LOT TO THE NORTHWESTERLY LINE OF SAID LOS ANGELES AND PACIFIC RAILWAY AND THE TRUE POINT OF BEGINNING; THENCE SOUTHEASTERLY ALONG A LINE DRAWN AT RIGHT ANGLES TO SAID NORTHWESTERLY LINE TO THE CENTER LINE OF SAID RAILWAY; THENCE SOUTHWESTERLY ALONG SAID CENTER LINE TO THE EASTERLY PROLONGATION OF THE SOUTH LINE OF SAID LOT 2: THENCE WESTERLY ALONG SAID PROLONGATION TO THE NORTHWESTERLY LINE OF SAID RAILWAY; THENCE NORTHEASTERLY ALONG SAID NORTHWESTERLY LINE TO THE TRUE POINT OF BEGINNING. ALSO EXCEPTING THEREFROM THAT PORTION OF THE LOS ANGELES AND PACIFIC RAILWAY, 35 FEET WIDE, AS SHOWN ON PLAT OF “A. GARDNER’S WEST OF HOLLYWOOD SUBDIVISION”, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 1, PAGE 20 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE MOST WESTERLY CORNER OF LOT 1 OF SAID ‘A. GARDNER’S WEST OF HOLLYWOOD SUBDIVISION”; THENCE EASTERLY ALONG THE SOUTH LINE OF SAID LOT 1, A DISTANCE OF 60.92 FEET; THENCE NORTHERLY ALONG, A LINE DRAWN AT RIGHT ANGLES TO SAID SOUTH LINE TO THE SOUTHEASTERLY LINE OF SAID LOS ANGELES AND PACIFIC RAILWAY AND THE TRUE POINT OF BEGINNING; THENCE NORTHWESTERLY ALONG A LINE DRAWN AT RIGHT ANGLES TO SAID SOUTHEASTERLY LINE, TO THE CENTER LINE OF SAID RAILWAY; THENCE SOUTHWESTERLY ALONG SAID CENTER LINE TO THE WESTERLY PROLONGATION OF THE SOUTH LINE OF SAID LOT 1; THENCE EASTERLY ALONG SAID PROLONGATION TO THE SOUTHEASTERLY LINE OF SAID RAILWAY; THENCE NORTHEASTERLY ALONG SAID SOUTHEASTERLY LINE TO THE TRUE POINT OF BEGINNING. 4 _______ Borrower Initials

 
ALSO EXCEPT THAT PORTION LYING WITHIN PARCEL MAP L.A. NO. 2005-7700, FILED IN BOOK 362 PAGES 34 AND 35 OF PARCEL MAPS OF SAID COUNTY. PARCEL 6: (PARCEL NO. 5550-013-001) THAT PORTION OF LOT 1 IN BLOCK OF A. GARDNER TRACT, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 6, PAGE 107 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYiNG WESTERLY OF A LINE EXTENDING NORTHERLY AT RIGHT ANGLES FROM THE SOUTH LINE OF SAID LOT I FROM A POINT IN SAID SOUTH LINE THAT IS DISTANT EASTERLY 60.92 FEET FROM THE MOST WESTERLY CORNER OF SAID LOT. PARCEL 7: AN EASEMENT TO BE USED IN COMMON WITH OTHERS FOR WALKWAY PURPOSES, OVER THE EASTERLY 5 FEET OF THAT PORTION OF LOT I IN BLOCK I OF A. GARDNER TRACT, IN THE CITY OF LOS ANGELES, AS PER MAP RECORDED IN BOOK 6, PAGE 107 OF SAID MAP RECORDS, LYING WESTERLY OF A LINE EXTENDING NORTHERLY AT RIGHT ANGLES FROM THE SOUTH LINE OF SAID LOT I FROM A POINT IN SAID SOUTH LINE TI-TAT IS DISTANT EASTERLY 65.92 FEET FROM THE MOST WESTERLY CORNER OF SAID LOT. PARCEL 8: (PARCEL NO. 5550-013-020) THAT PORTION OF THE LOS ANGELES AND PACIFIC RAILWAY, 35 FEET WIDE, AS SHOWN ON PLAT OF “A. GARNER’S WEST OF HOLLYWOOD SUBDIVISION”, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 1, PAGE 20 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE MOST WESTERLY CORNER OF LOT 1 OF SAID ‘A. GARDNER’S WEST OF HOLLYWOOD SUBDIVISION”; THENCE EASTERLY ALONG THE SOUTH LINE OF SAID LOT 1, A DISTANCE OF 60.92 FEET; THENCE NORTHERLY ALONG A LINE DRAWN AT RIGHT ANGLES TO SAID SOUTH LINE, TO THE SOUTHEASTERLY LINE OF SAID LOS ANGELES AND PACIFIC RAILWAY AND THE TRUE POINT OF BEGINNING; THENCE NORTHWESTERLY ALONG A LINE DRAWN AT RIGHT ANGLES TO SAID SOUTHEASTERLY LINE, TO THE CENTER LINE OF SAID RAILWAY; THENCE SOUTHWESTERLY ALONG SAID CENTER LINE TO THE WESTERLY PROLONGATION OF THE SOUTH LINE OF SAID LOT I; THENCE EASTERLY ALONG SAID PROLONGATION TO THE SOUTHEASTERLY LINE OF SAID RAiLWAY; THENCE NORTHEASTERLY ALONG SAID SOUTHEASTERLY LINE TO THE TRUE POINT OF BEGINNING. C. As used herein, the term “Loan Documents” means the Note, Deed of Trust, the Real Property Loan Agreement and Escrow Instructions dated October 18, 201 8, Assignment of Plans and Permits, the Loan Modification Agreements dated August 22, 2019 and July 20, 2020 and July 21, 2021, and any other documents executed in connection with the Loan. 5 _____ Borrower Initials

 
D. The current outstanding principal balance is $8,700,000.00. E. Borrower has requested an extension of the Maturity Date (as defined in the Loan Documents), and Lender is willing to grant an extension of the Maturity Date upon the terms and conditions set forth in this Agreement. AGREEMENT NOW, THEREFORE, it is agreed as follows: I. Incorporation of Recitals. The Recitals set forth above are true and correct. 2. Affirmation of Loan and Release. Borrower reaffirms all of its obligations under the Loan Documents, and Borrower acknowledges that it has rio claims, offsets or defenses with respect to the payment of sums due under the Loan Documents. 3. Amendment of Loan Documents. The Loan Documents are hereby amended in the following particulars only: (a) MATURITY DATE: The Maturity Date as set forth in the Note and all other Loan Documents is changed to October 31, 2023. (b) INTEREST RATE: Borrower shall pay interest on the unpaid principal balance of the Loan from and including November 1. 2022 until paid, at the rate of EIGHT and SIX TENTHS per cent (8.60%) per annum, payable interest only, or more, monthly, continuing up to and including October 31, 2023 when the balance of principal and interest remaining unpaid shall be due and payable. 4. Conditions Precedent to Loan Modification. Before this Agreement becomes effective and any party becomes obligated under it, all of the following conditions precedent shall have been satisfied at Borrower’s sole cost and expense in a manner acceptable to Lender: (a) Lender shall have received a fully executed original of this Agreement on or before August 30, 2022. 6 __ Borrower Initials

 
(b) A $87,000.00 fee shall have been paid to Lender (‘Extension Fee”). Said Extension Fee is non-refundable. Upon execution of this Agreement, Borrower authorizes Lender to debit $87,000.00 from Borrower’s account (on (lie) in payment of said Extension Fee. 5. Lender Without Cost. Lender shall be without cost or expense in this transaction, and Borrower shall reimburse Lender for any costs or fees incurred in connection with this Amendment. 6. No Prejudice. This Agreement shall not prejudice any rights or remedies of Lender under the Loan Documents. 7. Loan Documents. Except as specifically hereby amended, the Loan Documents shall remain unaffected by this Agreement and all such documents shall remain in full force and effect. Nothing in this Agreement shall impair the priority of the lien of the Deed of Trust, which as hereby amended shall remain one deed of trust with one power of sale, creating a first lien encumbering the Property. 8. General Release. In consideration ot among other things, the forbearance provided herein, Borrower and each of their heirs, assigns, successors, representatives and affiliated corporations, partnerships, companies, associations, entities and persons release Lender and any parent, subsidiary and affiliated corporations and entities, owners, shareholders, directors, officers. employees, partners, members, managers, agents, attorneys and representatives from any and all actual or potential claims, obligations, debts and causes of action of any kind or nature whatsoever, direct or indirect, whether known or unknown, anticipated. suspected, fixed, conditional, or contingent that in any way relate to the Loan Documents or the Action through the date of this Agreement, excepting only claims arising from a breach of this Agreement. This release is meant to address and settle all claims known or unknown that exist by Borrower against Lender. Borrower expressly waives any provisions of application law in the State of çplornia that Borrower Initials

 
contemplates otherwise. Borrower acknowledges that they have been advised by legal counsel and is familiar with the provisions of California Civil Code Section 1542, which provides as follows: “A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or herfavor at the time of executing this release and that, f known by him or her, would have materially affected his or her settlement with the debtor or releasedparty.” Being aware of this code section, Borrower expressly waives and relinquishes all rights and benefits which he may have thereunder as well as under any other statute or common law principle of similar effect and that the releases provided for in the Agreement are general releases in favor of the Lender. 9. Manner of Payment. All monthly payments of interest made under this Note, and such other payments as directed by Lender under the Loan Documents, shall be made by electronic funds transfer (‘EFT”) debit entries to an account designated by Borrower in the Loan Documents at an Automated Clearing House (“ACH”) member bank (“Debit Account”). Each payment shall be initiated by Lender through the ACH network for settlement on the designated date. Prior to each payment due date, Borrower shaLl deposit and/or maintain sufficient funds in the Debit Account to cover each debit entry. The Debit Account shall be vested in Borrower’s name only. Only payments drawn on the Debit Account or an escrow established for payment of funds due Borrower on account of a sale or refinance of the Property will be accepted by Lender. 10. Entire Agreement. The Loan Documents, including this Agreement: (a) integrate all the terms and conditions mentioned in or incidental to the Loan Documents; (b) supersede all oral negotiations and prior and other writings with respect to their subject matter; and (c) are intended by the parties as the final expression of the agreement with respect to the terms and conditions set forth in those documents and as the complete and exclusive statement of the terms agreed to by the parties. If there is any conflict between the terms, conditions and provisions of 8 /fJ/Z Borrower Initials

 
this Agreement and those of any other agreement or instrument, including any of the other Loan Documents, the terms, conditions and provisions of this Agreement shall prevail. This Agreement shall form a part of each Loan Document, arid all references to a given Loan Document shall mean that document as hereby modified. 11. Counterparts. This Agreement and any attached consents requiring signatures may be executed in counterparts, and all counterparts shall constitute but one and the same document. 12. Miscellaneous. If any court of competent jurisdiction determines any provision of this Agreement or any of the other Loan Documents to be invalid, illegal or unenforceable, that portion shall be deemed severed from the rest, which shall remain in full force and effect as though the invalid, illegal or unenforceable portion had never been a part of the Loan Documents, unless to do so would materially impair the rights of Lender. This Agreement shall be governed by the laws of the State of California. Executed as of the date first above written at Los Angeles, California. BORROWER: SUNSET & GARDNER INVESTORS LLC, a Colorado limited liability company By: SUNSET & GARDNER LA LLC, a Colorado limited liability company, Manager By__________________ William R. Rothacker, Manager 9 _____ Borrower Initials

 
LENDER: LONE OAK FUND, LLC, a California limited liability company By: LONE OAK TNDUSTRIES INC., a California corporation, Manager 10 L Rothstein, President Borrower Initials

 
TENTH AMENDMENT TO ADVISORY AGREEMENT AMONG STRATEGIC REALTY TRUST, INC. STRATEGIC REALTY OPERATING PARTNERSHIP, LP, AND SRT ADVISOR, LLC THIS TENTH AMENDMENT TO THE ADVISORY AGREEMENT (“TENTH AMENDMENT”), effective as of August 9, 2022 (the “Effective Date”) is entered into by and among Strategic Realty Trust Inc., a Maryland corporation (the “Company”), Strategic Realty Operating Partnership, LP, a Delaware limited partnership (the “Operating Partnership”), and SRT Advisor, LLC, a Delaware limited liability company (the “Advisor”). Capitalized terms used herein but not otherwise defined shall have the meanings ascribed to them in the Advisory Agreement. W I T N E S S E T H WHEREAS, the Company, the Operating Partnership and the Advisor entered into that certain Advisory Agreement dated as of August 10, 2013, which was amended by that certain First Amendment to Advisory Agreement dated as of July 15, 2014, that Second Amendment to Advisory Agreement dated as of August 3, 2015, that Third Amendment to Advisory Agreement dated as of July 19, 2016, that Fourth Amendment to Advisory Agreement dated as of July 25, 2017, that Fifth Amendment to Advisory Agreement dated as of July 19, 2018, that Sixth Amendment to Advisory Agreement dated as of August 2nd, 2018, that Seventh Amendment to Advisory Agreement dated as of August 1, 2019, that Eighth Amendment to Advisory Agreement dated July 30, 2020, that Ninth Amendment to Advisory Agreement dated as of August 5, 2021 (as amended by this Tenth Amendment the “Advisory Agreement”) which by its current terms expired on August 9, 2022; WHEREAS, the Company, the Operating Partnership and the Advisor desire to amend the Advisory Agreement to (i) reflect a reduction in the Disposition Fee with respect to certain sales as described below, (ii) reflect the waiver by the Advisor of the Financing Coordination Fee with respect to certain financing extensions as described below, and (iii) an adjustment to the Asset Management Fee to be paid during the twelve-month period commencing August 2022 through July 2023; and WHEREAS, the parties hereto desire to renew the Advisory Agreement effective as of August 9, 2022 for an additional twelve months from August 10, 2022, on the terms and conditions set forth below during the renewal period.

 
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and agreements contained herein and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that the Advisory Agreement is hereby amended as follows: 1. Disposition Fee: The parties agree that a Disposition Fee as contemplated in Section 9(d) of the Advisory Agreement shall be paid in connection with the Sale of the Company’s interests in the joint ventures referred to as the 3032 Wilshire Joint Venture and the Sunset & Gardner Joint Venture in an amount equal to 0.25% of the brokerage commission paid to the third-party broker in connection with the Sale. 2. Financing Coordination Fee: The parties agree that no Financing Coordination Fee as contemplated by Section 9(i) of the Advisory Agreement shall be due and payable with respect to the extension of the financings referred to as the Wilshire Construction Loan and the Sunset & Gardner Loan. 3. Amendment of Section 9(e): Section 9(e) of the Advisory Agreement shall be deleted in its entirety and replaced as follows: The Advisor shall receive the Asset Management fee as compensation for services rendered in connection with the management of the Company’s assets. During the twelve-month period commencing August 2022 and ending July 2023, the Asset Management Fee shall be equal to a monthly fee of one-twelfth (1/12th) of $250,000. The Asset Management fee shall be payable in arrears on the first business day of each month. 4. Term: The Advisory Agreement is renewed for an additional term of 12 months, effective as of August 10, 2022. 5. Except as specifically set forth above, the Advisory Agreement shall remain unmodified, and in full force and effect.

 
IN WITNESS WHEREOF, the parties hereto have executed this Tenth Amendment as of August __, 2022. Strategic Realty Trust, Inc. By: ____________________________ Matthew Schreiber, President Strategic Realty Operating Partnership, L.P. By: Strategic Realty Trust, Inc. Its General Partner By: _________________________________ Matthew Schreiber, President SRT Advisor, LLC By: ________________________________ Its: _________________________ Matthew Schreiber (Aug 15, 2022 07:40 HST) Matthew Schreiber (Aug 15, 2022 07:40 HST) Matthew Schreiber (Aug 15, 2022 07:40 HST) CEO

 
tenth Amendment to SRT Advisory Agreement (003) Final Audit Report 2022-08-15 Created: 2022-08-15 By: Kaylyn McClaran (Kaylyn.McClaran@L3capital.com) Status: Signed Transaction ID: CBJCHBCAABAAiNtN22iAz0FPmXpbe48VUt-H0RQ0ICeC "tenth Amendment to SRT Advisory Agreement (003)" History Document created by Kaylyn McClaran (Kaylyn.McClaran@L3capital.com) 2022-08-15 - 4:20:07 PM GMT- IP address: 99.35.131.81 Document emailed to matthew.schreiber@l3capital.com for signature 2022-08-15 - 4:22:31 PM GMT Email viewed by matthew.schreiber@l3capital.com 2022-08-15 - 5:39:13 PM GMT- IP address: 172.226.77.30 Signer matthew.schreiber@l3capital.com entered name at signing as Matthew Schreiber 2022-08-15 - 5:40:49 PM GMT- IP address: 173.197.99.27 Document e-signed by Matthew Schreiber (matthew.schreiber@l3capital.com) Signature Date: 2022-08-15 - 5:40:51 PM GMT - Time Source: server- IP address: 173.197.99.27 Agreement completed. 2022-08-15 - 5:40:51 PM GMT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
4593201.3 1 AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS This AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS ("Agreement") is made and entered into as of June 30, 2022 ("Execution Date"), by and between 3032 WILSHIRE INVESTORS LLC, a Colorado limited liability company ("Seller"), and GD REALTY GROUP INC., a California corporation, and/or its permitted assignee ("Buyer"). Recitals A. Seller owns certain real property located in the City of Santa Monica ("City"), County of Los Angeles ("County"), State of California ("State"), which is more particularly described on Exhibit A attached hereto (the "Land"), together with the building and certain other improvements located on the Land (the "Improvements") (collectively, the "Property"). B. Seller desires to sell all of its interest in the Property to Buyer, and Buyer desires to purchase Seller's interest in the Property, upon the terms and conditions set forth in this Agreement. Basic Provisions I. Buyer: GD Realty Group Inc. 2834 W. Imperial Hwy. Inglewood, CA 90303 Attn: Arash Danialifar Telephone No.: (310) 308-1308 Email: arashbus@gmail.com II. Buyer's Counsel: Meyers Nave 707 Wilshire Boulevard, 24th Floor Los Angeles, CA 90017 Attn: Russell Morse Telephone No. (213) 626-2906 Email: rmorse@meyersnave.com III. Seller: 3032 Wilshire Investors LLC c/o L3 Capital, LLC 550 W. Adams Street, Suite 200 Chicago, IL 60661 Attn: Matthew Schreiber and Nate Cronin Mr. Schreiber Telephone No.: (847) 997-0377 Email: matthew.schreiber@l3capital.com and Mr. Cronin Telephone No.: (312) 477-3031 Email: nathan.cronin@l3capital.com

 
4593201.3 2 IV. Seller's Counsel: Elkins Kalt Weintraub Reuben Gartside LLP 10345 West Olympic Boulevard Los Angeles, California 90064 Attn: Scott M. Kalt, Esq. Telephone No. (310) 746-4402 Email: skalt@elkinskalt.com V. Broker: Jones Lang LaSalle, representing both Buyer and Seller. VI. Escrow Holder: Stewart Title Guaranty Company 525 N. Brand Blvd. Glendale, California 91203 Attn: Andrea Mendoza, Senior Commercial Escrow Officer Escrow No. 22000110896 Telephone No. (818) 500-5680 Email:amendoza@stewart.com VII. Title Company: Commonwealth Land Title Company 601 S. Figueroa Street Ste 4000 Los Angeles, California 90017 Attn: Eric Gile, Title Officer Order No. 01909166 Telephone No. (213) 330-3100 Email:titleunit27@cltic.com VIII. Purchase Price: Sixteen Million Five Hundred Thousand Dollars ($16,500,000.00) (the "Purchase Price"). IX. Deposit: Five Hundred Thousand Dollars ($500,000.00) (together with interest thereon while held in Escrow, the "Deposit"), payable in accordance with Paragraph 3.1 below. X. Contingency Date: 5:00 p.m. Pacific time on July 27, 2022 (the "Contingency Date"). XI. Closing Date: Sixty (60) days following the Contingency Date (the "Closing Date").

 
4593201.3 3 Agreement NOW, THEREFORE, incorporating the foregoing recitals, and in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, Seller and Buyer agree that the terms and conditions of this Agreement and the instructions to Escrow Holder, with regard to the escrow ("Escrow") created pursuant hereto are as follows: 1. Purchase and Sale. Seller agrees to sell the Property to Buyer, and Buyer agrees to purchase the Property from Seller, upon the terms and conditions set forth in this Agreement. The Property shall include the following: (a) all of terest, if any, in and to all rights, privileges, tenements, hereditaments, rights-of-way, easements, licenses, appurtenances, mineral rights, development rights, permits, approvals, air rights, and water and riparian rights belonging or appertaining to the Property or any improvements thereon, and (b) a intangible (including, without limitation, trade names, trademarks or intellectual property, warranties, guarantees, plans, spec governmental approvals obtained or applied for as of the date of this Agreement relating to the Property or any improvements thereon, subject to the rights of third parties and to the extent assignable without cost or penalty to Seller) located on or relating to the Property and/or any improvements thereon. 2. Reserved. 3. Payment of Purchase Price. The Purchase Price for the Property shall be paid by Buyer as set forth below in this Paragraph 3. 3.1 Deposit. Within one (1) business day after the Execution Date, Buyer shall deposit or cause to be deposited with Escrow Holder the Deposit. Escrow Holder shall immediately invest the Deposit in a federally-insured, interest-bearing account. Buyer hereby irrevocably authorizes and directs Escrow Holder to immediately release a portion of the Deposit in the sum of Twenty Five Thousand and NO/100 Dollars ($25,000.00) (the "Released Portion") to Seller or Seller's designee. Notwithstanding anything to the contrary in the Agreement, the Released Portion: (i) shall be fully-earned by Seller as of the Execution Date, (ii) shall constitute Seller's sole and separate property, and (iii) shall be non-refundable to Buyer, including, without limitation, in the event that Buyer terminates the Agreement prior to the Contingency Date, except as provided in Paragraph 15.2 hereof. The Released Portion shall be applicable to the Purchase Price at the Closing. If this Agreement has not been previously terminated by Buyer by delivery to Seller and Escrow Holder of a written notice of termination in accordance with the terms hereof prior to 5:00 p.m. Pacific time on the Contingency Date, then the remainder of the Deposit after the release of the Released Portion shall not be refundable unless the transaction contemplated by this Agreement is not consummated as the result of Seller's default or the failure of an express condition precedent set forth in Paragraph 7.4 or 7.5 below. Upon the Close of Escrow (as defined below in Paragraph 4.2), the Deposit shall be credited toward payment of the Purchase Price. Notwithstanding any provision set forth in this Agreement, One Hundred Dollars ($100.00) of the Deposit shall be non-refundable in all events (other than Seller's default) and shall be paid to Seller in the event that this Agreement is terminated (other than due to Seller's default) at any time prior to the Close of Escrow (the "Independent Consideration"). The Independent Consideration shall be applicable to the Purchase Price at Closing (as defined below). 3.2 Cash Balance. Not less than one (1) business day prior to the Closing Date, Buyer shall deposit or cause to be deposited, with Escrow Holder, in immediately available funds, the balance of the Purchase Price, and such other funds as may be necessary in accordance with the terms hereof to pay for

 
4593201.3 4 Buyer's share of closing costs and charges set forth in Paragraph 10 below and Buyer's share of prorations set forth on the Proration and Expense Schedule (as defined below in Paragraph 11) payable pursuant to this Agreement. 3.3 Assumption of Obligations. As additional consideration for the purchase and sale of the Property, at Closing Buyer will: (a) assume and perform all of the covenants and obligations of Seller and Seller's affiliates (i) pursuant to the assumed contracts and leases of tenants at the Property, including without limitation, those relating to any tenant deposits, to the extent arising on or after the Closing Date, and (ii) pursuant to the leases of tenants at the Property regarding the physical, environmental or legal compliance status of the Property, to the extent arising on or after the Closing Date; and (b) assume and agree to discharge, perform and comply with each and every liability, duty, covenant, debt or obligation of Seller or any of its affiliates (I) to the extent resulting from, arising out of, or in any way related to the Materials (as defined below in Paragraph 7.3), on or after the Closing Date, and (II) resulting from, arising out of, or in any way related to any licenses and permits, approvals, applications, certificates of occupancy, dedications, subdivision maps and entitlements now or hereafter issued, approved or granted by any governmental entity in connection with the Property and arising on or after the Closing Date. Buyer hereby indemnifies and holds Seller harmless from and against any and all claims, liens, damages, demands, causes of action, liabilities, lawsuits, judgments, losses, costs and expenses (including but not limited to attorneys' fees and expenses) asserted against or incurred by Seller and arising out of the failure of Buyer to perform its obligations pursuant to this Paragraph 3.3; provided, further, that Seller shall have no obligation to indemnify Buyer for any costs or expenses incurred by Buyer in its performance of its obligations pursuant to this Paragraph 3.3. The provisions of this Paragraph 3.3 shall survive the Closing without limitation. 4. Escrow. 4.1 Opening of Escrow. For the purposes of this Agreement, the Escrow shall be deemed opened ("Opening of Escrow") on the date Escrow Holder receives an original or electronic copy of this Agreement fully executed by Buyer and Seller, which shall occur no later than within two (2) business days after this Agreement is executed and delivered by the parties. Escrow Holder shall promptly notify Buyer and Seller in writing of the Opening of Escrow. Buyer and Seller agree to execute, deliver and be bound by any reasonable or customary supplemental escrow instructions or other instruments reasonably required by Escrow Holder to consummate the transaction contemplated by this Agreement; provided, however, that no such instruments shall be inconsistent or in conflict with, amend or supersede any portion of this Agreement. If there is any conflict or inconsistency between the terms of such instruments and the terms of this Agreement, then the terms of this Agreement shall control. Pursuant to Section 6045(e) of the Internal Revenue Code of 1986, as amended, Escrow Holder shall be designated the "Reporting Person" hereunder and shall be solely responsible for complying with the Tax Reform Act of 1986, as amended, with regard to reporting all settlement information to the Internal Revenue Service. 4.2 Close of Escrow. The Closing shall occur on the Closing Date. For purposes of this Agreement, the "Close of Escrow" or the "Closing" shall be the date that the Deed (as defined below in Paragraph 9.1.1) is recorded in the Official Records of the County (the "Official Records") or, if earlier, the date that the Title Company (as defined below) is irrevocably committed to issue the Title Policy (as defined below). Unless changed in writing by Buyer and Seller, the Close of Escrow shall occur on the Closing Date. 5. Condition of Title. Title to the Land shall be conveyed to Buyer by the Deed subject to the following approved conditions of title (collectively, the "Approved Title Conditions"). 5.1 Taxes. A lien to secure payment of real estate taxes and a lien for any assessments not delinquent.

 
4593201.3 5 5.2 Approved Matters. Matters affecting the Property created by or with the written consent of Buyer or any affiliates thereof. 5.3 Additional Matters. Exceptions that are disclosed by the Report (as defined below in Paragraph 7.1) or any updates thereto and that are approved or deemed approved by Buyer in accordance with the terms of Paragraph 7.1, any other exceptions to title disclosed by the public records, and matters set forth in the Deed. 5.4 Survey Matters. All matters that would be revealed or disclosed in an accurate survey or inspection of the Property. 5.5 Tenants. Interests of tenants in possession under leases. 5.6 Laws. All laws, ordinances, rules, regulations and restrictions affecting the Property. 6. Buyer's Title Insurance. At the Close of Escrow, the Title Company shall issue to Buyer its standard Owner's Policy of Title Insurance ("Title Policy") in the amount of the Purchase Price showing title to the Land vested in Buyer and subject to the Approved Title Conditions. Buyer shall have the right, at its sole expense, to request and obtain an ALTA extended coverage policy of title insurance, provided that such additional coverage shall not be a condition precedent to, or otherwise excuse or delay any of, Buyer's obligations under this Agreement. Buyer shall have sole responsibility for obtaining, and bearing the cost of, any survey required by the Title Company or desired by Buyer. 7. Conditions Precedent to the Close of Escrow for the Benefit of Buyer. The Close of Escrow and Buyer's obligation to consummate the transaction contemplated by this Agreement are subject to the timely satisfaction or written waiver of the following conditions precedent for Buyer's benefit by the dates designated below: 7.1 Title. Buyer shall have approved the legal description of the Land and any matters of title disclosed by the following documents (collectively, the "Title Documents") prepared and delivered to Buyer by the Title Company: (a) a standard preliminary title report prepared and issued by the Title Company with respect to the Land (the "Report"); and (b) copies of all recorded documents referred to in the Report. Seller shall endeavor to deliver to Buyer the Title Documents within five (5) business days after the Execution Date. Buyer shall have until 5:00 p.m. Pacific time on the date which is seven (7) days prior to the Contingency Date to deliver to Seller written notice ("Buyer's Title Notice") of Buyer's disapproval or conditional approval of any matters shown in or disclosed by the Title Documents. Buyer's failure to timely deliver Buyer's Title Notice shall be deemed to constitute Buyer's disapproval of all matters of title. If Buyer timely delivers to Seller Buyer's Title Notice, then Seller shall have the right, but not the obligation, to indicate which matters, if any, identified in Buyer's Title Notice will be satisfied or cured (and the manner in which such matters will be satisfied or cured) by the Closing Date by delivering written notice thereof to Buyer ("Seller's Title Notice") within five (5) business days after Seller's receipt of Buyer's Title Notice. Seller's failure to deliver Seller's Title Notice shall be deemed to constitute Seller's election not to satisfy or cure any of the matters set forth in Buyer's Title Notice. Buyer shall have until the first to occur of: the Contingency Date or three (3) to either (y) deliver written notice to Seller approving Seller's Title Notice (or deemed notice), in which case Seller shall satisfy or cure, as applicable, the matters set forth in Seller's Title Notice in the manner set forth therein, if applicable, and the matters set forth in Buyer's Title Notice which are not addressed in Seller's Title Notice shall be deemed to constitute Approved Title Conditions, or (z) disapprove Seller's Title Notice (or deemed notice), in which case this Agreement shall terminate, Escrow Holder shall promptly refund the Deposit (less the Released Portion, Independent Consideration and any title and escrow cancellation charges) and neither party hereunder shall have any further obligations or liabilities under this Agreement, except as specifically set forth herein. If

 
4593201.3 6 Seller in its sole discretion elects to cure any matters set forth in Buyer's Title Notice, Seller shall have until the Closing Date to do so, provided failure to do so shall in no way be deemed a default by Seller hereunder. If such cure cannot be accomplished within such time, and Buyer has not waived its objections by the Closing Date, this Agreement shall terminate, the Deposit (less the Released Portion, the Independent Consideration and any title and escrow cancellation charges) shall be returned to Buyer and neither party shall have any further obligations under this Agreement except as specifically set forth in this Agreement. Buyer's failure to timely notify Seller in writing on or before 5:00 p.m. (Pacific time) on the Contingency Date of its disapproval of any matters set forth in Seller's Title Notice (or deemed notice) shall be deemed Buyer's election to . 7.2 Physical Inspections and Studies. Subject to Paragraph 14 below, Buyer shall have the right to approve or disapprove, in Buyer's sole discretion, the results of Buyer's inspections, investigations, tests and studies, including, without limitation, investigations with regard to zoning, building codes and other governmental regulations, architectural inspections, engineering tests, and soils, seismic and geologic reports with respect to the Land, inspections of all or any portion of the Improvements (including, without limitation, structural, mechanical and electrical systems, roofs, pavement, landscaping and public utilities), and any other physical inspections and/or investigations (collectively, the "Tests") as Buyer may elect to make or obtain in accordance with the terms of this Agreement by delivering written notice thereof to Seller and Escrow Holder on or before 5:00 p.m. Pacific time on the Contingency Date. Buyer's timely notice of disapproval of any of the Tests shall constitute Buyer's election to terminate this Agreement. Buyer's failure to timely disapprove the results of the Tests shall be deemed to constitute Buyer's approval thereof and waiver of this condition. 7.3 Review and Approval of Materials. Prior to 5:00 p.m. Pacific time on the Contingency Date, Buyer may, on at least one (1) business days' notice to Seller, review any documents (other than the Excluded Materials (as defined below) relating to the physical or environmental condition of the Land, (other than the Excluded Materials), a rent roll for the Property, the leases for tenants occupying the Property, and service contracts for the Property, that are located at Seller's offices or at the offices of Seller's property manager for the Property (such documents available for Buyer's review that are located at the offices of Seller or at the offices of Seller's property manager, are collectively referred to as the "Materials"). Seller makes no representations or warranties of any kind whatsoever to Buyer as to the accuracy or completeness of the content of the Materials or any other information delivered to or made available to Buyer pursuant to this Agreement, and Seller shall not have any liability or responsibility to Buyer with respect to the accuracy or completeness of any of the Materials or other information or based upon or arising out of any use Buyer may make of the Materials or other information. Buyer shall have the right to approve or disapprove the Materials in Buyer's sole discretion by delivering written notice thereof to Seller and Escrow Holder on or before 5:00 p.m. Pacific time on the Contingency Date. Buyer's timely notice of disapproval of any of the Materials shall constitute Buyer's election to terminate this Agreement. Buyer's failure to timely disapprove the Materials shall be deemed to constitute Buyer's approval thereof and waiver of this condition. For purposes of this Agreement, the term "Excluded Materials" shall mean any appraisals, internal reports, valuations, other offers or agreements relating to the acquisition or sale of the Property, economic evaluations of the Property, documents pertaining to Seller's entity, reports regarding the Property prepared by Seller or any affiliate of Seller for the internal use or for the information of the investors in Seller, and any other proprietary information not relating to the physical condition of the Property. Buyer acknowledges that it has no right to review any of the Excluded Materials. 7.4 Tenant Estoppel Certificates. Buyer shall have received estoppel certificates ("Tenant Estoppel Certificates") prior to the Closing Date, duly executed by tenants such that Buyer shall have received Tenant Estoppel Certificates from tenants under all of the leases in the Property. The Tenant Estoppel Certificates shall be substantially in the form of Exhibit F or in such other form which a particular

 
4593201.3 7 tenant is required to execute pursuant to its lease. To the extent received by Seller, Seller shall deliver the original executed Tenant Estoppel Certificates to Buyer no later than two (2) business days prior to the Closing Date; provided, however, if Seller is unable to deliver timely to Buyer the appropriate Tenant Estoppel Certificate executed by the tenant named Bobae Tea, Seller may (but is not obligated to) deliver to Buyer, in lieu thereof, the Tenant Estoppel Certificate executed by Seller on behalf of Bobae Tea to meet the requirement set forth above; any Tenant Estoppel Certificate executed by Seller on behalf of a tenant shall be subject to the limitations contained in Paragraphs 13 and 22.13 and shall be deemed automatically null and void upon the delivery of any Tenant Estoppel Certificate from the tenant for whom Seller delivered the Seller estoppel. 7.5 Representations and Warranties. Subject to any Representation Matters (as defined in Paragraph 13.1) discovered by Buyer or Seller, all representations and warranties of Seller contained in Paragraph 13.1 of this Agreement shall be true and correct in all material respects as of the date made and as of the Close of Escrow with the same effect as if those representations and warranties were made at and as of the Close of Escrow. 7.6 Covenants. By the Closing Date, Seller shall not be in material default in the performance of any material covenant or agreement to be performed by Seller under this Agreement. 7.7 No Material and Adverse Change in Condition. On the Closing Date, the condition of the Property (including, without limitation, the Improvements), with respect to the contingency set forth in Paragraph 7.2, has not materially and adversely changed from the date of Buyer's prior approval of said contingency, and there shall be no material and adverse change in the occupancy of the tenants at the Property since the Contingency Date. The conditions set forth in this Paragraph 7 are solely for the benefit of Buyer and may be waived only by Buyer. Buyer shall at all times have the right to waive any condition. Nothing contained in this Agreement shall require Seller to bring any suit or other proceeding or to pay any substantial sum, to satisfy any of such conditions. If any of the conditions in this Paragraph 7 is not timely satisfied or waived by Buyer, Buyer shall deliver written notice to Escrow Holder and Seller on or before the applicable date relating to such condition and describing the condition that has not been satisfied or waived, and unless such failure is due to a material default by Seller in which case the provisions of Paragraph 15 of this Agreement shall apply, Buyer shall have the right by such notice to terminate this Agreement and the Escrow. If Buyer timely terminates this Agreement in accordance with the foregoing, the Deposit (less the Released Portion and Independent Consideration), or such portion thereof that has theretofore been deposited by Buyer with Escrow Holder (less one-half of any escrow and title cancellation fees and costs) shall either be refunded to Buyer or paid over to Seller as provided herein, all documents deposited into Escrow shall be returned to the party depositing such documents, and neither party shall have any further rights or obligations under this Agreement, except for those rights or obligations which expressly survive the termination of this Agreement. If Buyer does not timely deliver notice of such failed conditions, Buyer shall be deemed to have waived the same. Buyer hereby acknowledges and agrees that, except as otherwise provided under this Agreement, notwithstanding the failure of any condition under this Agreement, the occurrence of the Closing shall constitute conclusive evidence that Buyer has waived any such condition. 8. Conditions Precedent to the Close of Escrow for the Benefit of Seller. The Close of Escrow and Seller's obligations with respect to the transaction contemplated by this Agreement are subject to the timely satisfaction or written waiver of the following conditions precedent for Seller's benefit by the dates designated below:

 
4593201.3 8 8.1 Buyer's Deliveries. At least one (1) business day prior to the Closing Date, Buyer shall have delivered to Escrow Holder the funds and documents described in Paragraph 9.2. 8.2 Representations and Warranties. All representations and warranties of Buyer contained in Paragraph 13.2 of this Agreement shall be true and correct in all material respects as of the date made and as of the Close of Escrow with the same effect as if those representations and warranties were made at and as of the Close of Escrow. 8.3 Covenants. By the Closing Date, Buyer shall not be in material default in the performance of any material covenant or agreement to be performed by Buyer under this Agreement. The conditions set forth in this Paragraph 8 are solely for the benefit of Seller and may be waived only by Seller. Seller shall at all times have the right to waive any condition. Any such waiver or waivers shall be in writing and shall be delivered to Buyer and Escrow Holder. If any of the conditions in this Paragraph 8 is not satisfied or has not been so waived by Seller prior to the scheduled Closing Date, Seller shall deliver written notice to Buyer describing the condition that has not been satisfied or waived, and if such condition remains unsatisfied as of the scheduled Closing Date, then, subject to the provisions of Paragraph 15 of this Agreement, if applicable, Seller shall have the right to terminate this Agreement and the Escrow by written notice to Buyer and Escrow Holder. If Seller terminates this Agreement in accordance with the foregoing, the Deposit shall be paid over to Seller, all documents deposited into Escrow shall be returned to the party depositing such documents, and neither party shall have any further rights or obligations under this Agreement, except for those rights or obligations which expressly survive the termination of this Agreement. 9. Deliveries to Escrow Holder. 9.1 Deliveries by Seller. At least one (1) business day prior to the Closing Date, Seller shall deposit or cause to be deposited with Escrow Holder the following documents and instruments: 9.1.1 Deed. Seller shall deliver to Escrow Holder a grant deed in the form attached as Exhibit B, duly executed by Seller and acknowledged ("Deed"). 9.1.2 FIRPTA. Seller shall deliver to Escrow Holder a Transferor's Certification of Non-Foreign Status in the form attached as Exhibit C, duly executed by Seller and a California Form RE- 593 duly executed by Seller (collectively, "FIRPTA Certificate"). 9.1.3 Lease Assignment. Seller shall deliver to Escrow Holder four (4) original counterparts of an Assignment and Assumption of Leases in the form attached hereto as Exhibit D ("Lease Assignment"), duly executed by Seller. 9.1.4 General Assignment. Seller shall deliver to Escrow Holder four (4) original counterparts of a General Assignment and Bill of Sale in the form attached hereto as Exhibit E ("General Assignment"), duly executed by Seller. 9.1.5 Tenant Estoppel Certificates. To the extent received by and in the possession of Seller, Seller shall deliver to Escrow Holder original executed Tenant Estoppel Certificates. 9.2 Deliveries by Buyer. At least one (1) business day prior to the Closing Date, Buyer shall deposit or cause to be deposited with Escrow Holder the following:

 
4593201.3 9 9.2.1 Funds. Buyer shall deliver to Escrow Holder funds which are to be applied toward payment of the Purchase Price in the amounts and at the times designated above in Paragraph 3 (as adjusted by the Proration and Expense Schedule). 9.2.2 Lease Assignment. Buyer shall deliver to Escrow Holder four (4) original counterparts of the Lease Assignment duly executed by Buyer. 9.2.3 General Assignment. Buyer shall deliver to Escrow Holder four (4) original counterparts of the General Assignment duly executed by Buyer. 9.2.4 PCOR. Buyer shall deliver to Escrow Holder a duly executed Preliminary Change in Ownership Report, in a form approved by the Title Company and Seller. 10. Costs and Expenses. If the transaction contemplated by this Agreement is consummated, then Seller shall bear the following costs and expenses: (A) one-half (1/2) of Escrow Holder's fees; (B) all of the documentary transfer taxes payable in connection with the recording of the Deed; (C) the premium for a standard coverage owner's policy of title insurance in the amount of the Purchase Price; and (D) Seller's share of prorations. If the transaction contemplated by this Agreement is consummated, then Buyer shall bear the following costs and expenses: (W) all costs of the Title Policy in excess of the portion of the premium described in (C) above, including any cost attributable to ALTA coverage, if any, the cost of any survey and the cost of any endorsements to the Title Policy; (X) all document recording charges payable in connection with the recording of the Deed; (Y) one-half (1/2) of Escrow Holder's fees; and (Z) Buyer's share of prorations. If, as a result of no fault of Buyer or Seller, Escrow fails to close, Buyer and Seller shall share equally all of Escrow Holder's fees and charges; however, if the transaction fails to close as the result of the default of either party, then such defaulting party shall bear all Escrow Holder's fees and expenses. Buyer shall bear all costs associated with its due diligence inspections regarding the Property. Subject to the provisions of Paragraph 18 below, each party shall bear the cost of its own attorneys and consultants. All other costs and expenses shall be allocated between Buyer and Seller in accordance with the customary practice of the City and County for transactions of this type. 11. Prorations. All revenues and expenses relating to the Property, including without limitation, real property taxes and assessments, utility charges and the like, shall be prorated on an accrual basis as of the Close of Escrow; provided, however, rentals shall be prorated on a cash received basis. Such proration shall be made as of 12:01 A.M. (Pacific time) on the Closing Date (the "Proration Time"). If any rents under any of the leases for space at the Property shall be accrued and unpaid at the Closing Date, the rents collected by Buyer on or after the Closing Date shall first be applied to rents due at the time of such collection on or after the Closing Date, with the balance payable to the Seller to the extent of rents delinquent as of the Closing Date; provided that Buyer shall use commercially reasonable diligent efforts to collect any delinquent rents, but shall not be required to institute any proceeding or incur any material out-of-pocket costs to collect any rents accrued and unpaid on the Closing Date. Seller, at its sole cost, shall be entitled to bring such actions or proceedings against tenants provided that such actions do not affect such tenant's possession. Seller shall pay over to or credit Buyer at Closing all cash security deposits (together with any interest required to be paid thereon) held by Seller pursuant to the leases of tenants at the Property. All tenant improvement costs and allowances and all brokerage commissions and finders fees shall be prorated with respect to all leases and lease modifications entered into between the Execution Date and the Closing Date based on the portion of the lease term that pertains to periods on or after the Closing, with Seller only being responsible for such costs multiplied by a fraction, the numerator of which is the number of days prior to the Closing that Seller has received rent from such tenant under the new lease or lease modification and the denominator of which is the total number of days in such new lease term, and Buyer being solely responsible for the balance of such costs. If the parties are unable to obtain final meter readings from all applicable meters as of the Close of Escrow, such expenses shall be reasonably estimated as of the Close of Escrow on the basis of the prior operating

 
4593201.3 10 history of the Property. All monthly prorations shall be calculated on actual days of the applicable month and all annual prorations shall be calculated based on a 365-day year. Not less than five (5) business days prior to the Close of Escrow, Seller and Buyer shall agree upon a schedule of expenses and prorations ("Proration and Expense Schedule"). If any prorations, apportionments or computations made under this Paragraph 11 shall require final adjustment because the information is unavailable at the Proration Time, then the parties shall make the appropriate adjustments promptly when accurate information becomes available and either party hereto shall be entitled to an adjustment to correct the same. Such adjustments shall be made as soon as complete and accurate information becomes available, but in all events no later than 180 days after the Closing. Any corrected adjustment or proration shall be paid promptly in cash to the party entitled thereto. The obligations of the parties under this Paragraph 11 shall survive the Close of Escrow for six (6) months and shall not merge with the Deed. 12. Disbursements and Other Actions by Escrow Holder. Upon the Close of Escrow, Escrow Holder shall promptly undertake all of the following in the manner and order set forth. 12.1 Disburse Funds. Escrow Holder shall credit all matters addressed in Paragraphs 3 and 10 and prorate all matters addressed in Paragraph 11 based upon the Proration and Expense Schedule and disburse the balance of the Purchase Price to Seller promptly upon the Close of Escrow and remaining funds, if any, to Buyer. 12.2 Recording. Escrow Holder shall cause the Deed, and any other documents which the parties hereto may mutually direct, to be recorded in the Official Records and obtain conformed copies thereof for distribution to Buyer and Seller. 12.3 Documents to Seller. Escrow Holder shall disburse to Seller two (2) originals of the Lease Assignment, two (2) originals of the General Assignment and one (1) conformed copy of the Deed. 12.4 Documents to Buyer. Escrow Holder shall deliver to Buyer the original FIRPTA Certificate executed by Seller, two (2) originals of the Lease Assignment, two (2) originals of the General Assignment, originals of any Tenant Estoppel Certificates, and one (1) conformed copy of the Deed. 12.5 Title Company. Escrow Holder shall direct the Title Company to issue the Title Policy to Buyer. 13. Representations and Warranties. 13.1 Seller's Representations and Warranties. In consideration of Buyer entering into this Agreement and as an inducement to Buyer to buy the Property, Seller makes the following representations and warranties, each of which is material and is being relied upon by Buyer (and the truth and accuracy of which shall constitute a condition precedent to Buyer's obligations hereunder). 13.1.1 Power. Seller has the legal power, right and authority to enter into this Agreement and the instruments referenced herein, and to consummate the transaction contemplated by this Agreement. 13.1.2 Requisite Action. All requisite action (corporate, trust, partnership or otherwise) has been taken by Seller in connection with entering into this Agreement, the instruments referenced herein, and the consummation of the transaction contemplated by this Agreement. No consent of any partner, shareholder, trustee, trustor, beneficiary, creditor, investor, judicial or administrative body, governmental authority or other party is required for Seller to consummate the transaction contemplated by this Agreement.

 
4593201.3 11 13.1.3 Individual Authority. The individuals executing this Agreement and the instruments referenced herein on behalf of Seller and the partners of Seller, if any, have the legal power, right, and actual authority to bind Seller to the terms and conditions hereof and thereof. 13.1.4 No Conflict. Neither the execution and delivery of this Agreement and the documents and instruments referenced herein, nor the occurrence of the obligations set forth herein, nor the consummation of the transaction contemplated herein, nor compliance with the terms of this Agreement and the documents and instruments referenced herein conflict with or result in the material breach of any terms, conditions or provisions of, or constitute a default under, any bond, note, or other evidence of indebtedness or any contract, indenture, mortgage, deed of trust, loan, partnership agreement, lease or other agreement or instrument to which Seller is a party or affecting the Property. 13.1.5 Bankruptcy. Seller has not (a) commenced a voluntary case, or had entered against it a petition, for relief under any federal bankruptcy act or any similar petition, order or decree under any federal or state law or statute relative to bankruptcy, insolvency or other relief for debtors, (b) caused, suffered or consented to the appointment of a receiver, trustee, administrator, conservator, liquidator, or similar official in any federal, state, or foreign judicial or non-judicial proceeding, to hold, administer and/or liquidate all or substantially all of its assets, or (c) made an assignment for the benefit of creditors. 13.1.6 Litigation. Except as otherwise disclosed to Buyer in writing, there is no pending, or, to Se governmental action with respect to the Property. 13.1.7 Disclosure. To the best knowledge of Seller, Seller has disclosed all material facts with respect to the Property of which Seller has actual knowledge, and Seller further represents that it has performed a reason place of business for non-privileged documents relevant and material to the condition of the Property and provided a copy of such documents in Seller's possession to Buyer. Notwithstanding the foregoing, Seller is not making and has not made any representation or warranty with respect to all or any matters contained in documents made available or delivered to Buyer in connection with this Agreement. 13.1.8 Encumbrances. Seller has not alienated, encumbered, transferred, mortgaged, assigned, pledged, or otherwise conveyed its interest in the Property or any portion thereof, nor entered into any agreement to do so, and there are no liens, encumbrances, mortgages, covenants, conditions, reservations, restrictions, easements or other matters affecting the Property, except as disclosed in the Preliminary Report or as otherwise disclosed by Seller to Buyer in writing. Seller will not, directly or indirectly, alienate, encumber, transfer, mortgage, assign, pledge, or otherwise convey its interest in the Property or any portion thereof, which is not removed prior to the Close of Escrow, as long as this Agreement is in full force and effect and so long as Buyer is not in default. 13.1.9 Lease Termination and Violations no notice of termination of any of the leases of the Property has been provided by or to Seller or by or to the tenants of the Property, and except as otherwise disclosed to Buyer, there are no current violations of any of the leases of the Property which are, or would with the passage of time, be events of default under such leases. 13.1.10 Other Agreements. To Seller's knowledge, there are no agreements affecting the Property except those which have been disclosed by Seller to Buyer. To Seller's knowledge and except as otherwise disclosed to Buyer in writing, there are no agreements which will be binding on the Buyer or the Property after the Close of Escrow which cannot be terminated on thirty (30) days prior written notice.

 
4593201.3 12 13.1.11 Non-Foreign Person. Seller is not a foreign person as defined in Internal Revenue Code section 1445(f)(3). 13.1.12 Disclosure of Hazardous Substances. California Health & Safety Code Section 25359.7 requires owners of real property who know, or have reasonable cause to believe, that any release of hazardous substances are located on or beneath the real property to provide written notice of same to the buyer of real property. Other applicable laws require Seller to provide certain disclosures regarding natural hazards affecting the Property. Except as set forth in any environmental reports or studies obtained or conducted by Buyer or delivered to Buyer by Seller, Seller represents and warrants to Buyer that Seller has no actual knowledge with respect to the deposit of hazardous substances on the Property, and Seller agrees to make all disclosures required by law within ten (10) days after the Opening of Escrow. Seller's responsibility and obligations of this paragraph are solely limited to Seller's knowledge of, or Seller's reasonable cause to believe, that hazardous substances have been stored upon or released upon or under the Property. The representations and warranties of Seller set forth in this Paragraph 13.1 shall survive the Close of Escrow for a period of one (1) year, but not thereafter, it being the intention of the parties that all suits or actions for breach of any such representations and warranties must be commenced, if at all, within said one (1) year of the Close of Escrow or they shall be forever barred. Notwithstanding the foregoing, if, prior to the Closing Date, Buyer or Seller should learn, discover or become aware of any existing or new item, fact or circumstance which renders a representation or warranty of Seller set forth herein incorrect or untrue in any material respect (collectively, the "Representation Matter"), then the party who has learned, discovered or become aware of such Representation Matter shall promptly give written notice thereof to the other party and Seller's representations and warranties shall be automatically limited to account for the Representation Matter. If, prior to the Closing Date, Buyer discovers or is notified of a Representation Matter that has a material, adverse impact on the value of the Property, then, subject to Paragraph 15.2 (if applicable), Buyer shall have the right, as its sole remedy to terminate this Agreement and obtain a refund of the Deposit (less the Released Portion and Independent Consideration) by providing written notice thereof to Seller no later than five (5) business days after Buyer learns or is notified of such Representation Matter; provided, however, Buyer shall have no right to terminate this Agreement for any Representation Matter arising from a change in circumstances that is otherwise permitted under this Agreement. Upon such termination, neither party hereunder shall have any further obligations or liabilities under this Agreement except as specifically set forth herein. If Buyer does not timely terminate this Agreement, then Seller's representations and warranties shall be automatically limited to account for the Representation Matter, Buyer shall be deemed to have waived Buyer's right to pursue any remedy for breach of the representation or warranty made untrue on account of such Representation Matter, and the parties shall proceed to the Close of Escrow. 13.2 Buyer's Representations and Warranties. In consideration of Seller entering into this Agreement and as an inducement to Seller to sell the Property, Buyer makes the following representations and warranties, each of which is material and is being relied upon by Seller (and the truth and accuracy of which shall constitute a condition precedent to Seller's obligations hereunder). 13.2.1 Power. Buyer has the legal power, right and authority to enter into this Agreement and the instruments referenced herein, and to consummate the transaction contemplated by this Agreement. 13.2.2 Requisite Action. All requisite action (corporate, trust, partnership or otherwise) has been taken by Buyer in connection with entering into this Agreement and the instruments referenced herein; and, by the Close of Escrow all such necessary action will have been taken to authorize the consummation of the transaction contemplated by this Agreement. By the Close of Escrow no additional consent of any partner, shareholder, trustee, trustor, beneficiary, creditor, investor, judicial or administrative

 
4593201.3 13 body, governmental authority or other party shall be required for Buyer to consummate the transaction contemplated by this Agreement. 13.2.3 Individual Authority. The individuals executing this Agreement and the instruments referenced herein on behalf of Buyer have the legal power, right, and actual authority to bind Buyer to the terms and conditions hereof and thereof. 13.2.4 No Conflict. Neither the execution and delivery of this Agreement and the documents and instruments referenced herein, nor the occurrence of the obligations set forth herein, nor the consummation of the transaction contemplated herein, nor compliance with the terms of this Agreement and the documents and instruments referenced herein conflict with or result in the material breach of any terms, conditions or provisions of, or constitute a default under, any bond, note, or other evidence of indebtedness or any contract, indenture, mortgage, deed of trust, loan, partnership agreement, lease or other agreement or instrument to which Buyer is a party. 13.2.5 Bankruptcy. Buyer has not (a) commenced a voluntary case, or had entered against it a petition, for relief under any federal bankruptcy act or any similar petition, order or decree under any federal or state law or statute relative to bankruptcy, insolvency or other relief for debtors, (b) caused, suffered or consented to the appointment of a receiver, trustee, administrator, conservator, liquidator, or similar official in any federal, state, or foreign judicial or non-judicial proceeding, to hold, administer and/or liquidate all or substantially all of its assets, or (c) made an assignment for the benefit of creditors. 13.2.6 Prohibited Persons and Transactions. Neither Buyer nor any of its affiliates, nor any of their respective members, and none of their respective officers or directors is, nor prior to Closing or the earlier termination of this Agreement, will they become, a person or entity with whom U.S. persons or entities are restricted from doing business under regulations of the Office of Foreign Asset Control OFAC of the Treasury (including those named on OF y Designated Blocked Persons List) or under any U.S. statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support Terrorism) or other governmental action and is not and prior to Closing or the earlier termination of this Agreement will not engage in any dealings or transactions with or be otherwise associated with such persons or entities. 13.3 As-Is/Release. AS A MATERIAL INDUCEMENT TO THE EXECUTION AND DELIVERY OF THIS AGREEMENT BY SELLER AND THE PERFORMANCE BY SELLER OF ITS DUTIES AND OBLIGATIONS HEREUNDER, BUYER DOES HEREBY ACKNOWLEDGE, REPRESENT, WARRANT AND AGREE, TO AND WITH THE SELLER, THAT, (A) EXCEPT AS EXPRESSLY SET FORTH IN PARAGRAPH 13.1 AND FOR THE DURATION THEREOF, BUYER IS PURCHASING THE PROPERTY IN AN "AS- CONDITION, WITH ALL FAULTS, AS OF THE DATE OF THE CLOSE OF ESCROW WITH RESPECT TO ANY FACTS, CIRCUMSTANCES, CONDITIONS AND DEFECTS; (B) SELLER HAS NO OBLIGATION TO REPAIR OR CORRECT ANY SUCH FACTS, CIRCUMSTANCES, CONDITIONS OR DEFECTS OR COMPENSATE BUYER FOR SAME; (C) BY THE CLOSE OF ESCROW, BUYER SHALL HAVE UNDERTAKEN ALL SUCH PHYSICAL INSPECTIONS AND EXAMINATIONS OF THE PROPERTY AS BUYER DEEMS NECESSARY OR APPROPRIATE UNDER THE CIRCUMSTANCES, AND THAT BASED UPON SAME, BUYER IS AND WILL BE RELYING STRICTLY AND SOLELY UPON SUCH INSPECTIONS AND EXAMINATIONS AND THE ADVICE AND COUNSEL OF ITS AGENTS AND OFFICERS (AND EXCEPT FOR SELLER'S REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN PARAGRAPH 13.1, NOT UPON ANY OTHER REPRESENTATIONS OR WARRANTIES OF SELLER), AND BUYER IS AND WILL BE FULLY SATISFIED THAT THE PURCHASE PRICE IS FAIR AND ADEQUATE CONSIDERATION FOR THE PROPERTY; (D) EXCEPT

 
4593201.3 14 AS EXPRESSLY SET FORTH IN PARAGRAPH 13.1 AND FOR THE DURATION THEREOF, SELLER IS NOT MAKING AND HAS NOT MADE ANY WARRANTY OR REPRESENTATION WITH RESPECT TO ALL OR ANY PART OF THE PROPERTY (INCLUDING, BUT NOT LIMITED TO, ANY MATTERS CONTAINED IN DOCUMENTS MADE AVAILABLE OR DELIVERED TO BUYER IN CONNECTION WITH THIS AGREEMENT), AND ANY WARRANTY OR REPRESENTATION MADE IN PARAGRAPH 13.1 HAS NOT BEEN MADE AS AN INDUCEMENT TO BUYER TO ENTER INTO THIS ESCROW AND THEREAFTER TO PURCHASE THE PROPERTY OR FOR ANY OTHER PURPOSE; (E) IN FURTHERANCE OF, AND NOT IN LIMITATION OF, THE FOREGOING, SELLER HAS AND HEREBY SPECIFICALLY DISCLAIMS, AND NEITHER IT NOR ANY OTHER PERSON IS MAKING, ANY REPRESENTATION, WARRANTY, ASSURANCE , PROMISE, COVENANT, AGREEMENT OR GUARANTY WHATSOEVER TO BUYER AND NO WARRANTIES, REPRESENTATIONS, ASSURANCES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTEES OF ANY KIND OR CHARACTER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, ARE MADE BY SELLER OR RELIED UPON BY BUYER WITH RESPECT TO THE PROPERTY (OR ANY PORTION THEREOF), THE STATUS OF TITLE TO OR THE MAINTENANCE, REPAIR, CONDITION, DESIGN, LEASING OR MARKETABILITY OF THE PROPERTY, OR ANY PORTION THEREOF; (F) THE FOREGOING DISCLAIMERS OF REPRESENTATIONS, WARRANTIES, ASSURANCES, PROMISES, COVENANTS, AGREEMENTS AND GUARANTEES INCLUDE, BUT ARE NOT LIMITED TO, DISCLAIMERS IN CONNECTION WITH, AND/OR WITH RESPECT TO, THE FOLLOWING MATTERS (ALL OF WHICH ARE HEREBY SPECIFICALLY DISCLAIMED BY SELLER, AND ALL OF WHICH BUYER HEREBY ACKNOWLEDGES IT IS NOT RELYING UPON): (I) ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY OR MARKETABILITY, (II) ANY IMPLIED OR EXPRESS WARRANTY OF HABITABILITY OR FITNESS FOR A PARTICULAR PURPOSE, (III) ANY IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO MODELS OR SAMPLES OF MATERIALS, (IV) ANY RIGHTS OF BUYER UNDER APPROPRIATE STATUTES TO CLAIM DIMINUTION OF CONSIDERATION, (V) ANY CLAIM BY BUYER FOR DAMAGES BECAUSE OF DEFECTS, WHETHER KNOWN OR UNKNOWN, NOW OR HEREAFTER EXISTING, WITH RESPECT TO THE IMPROVEMENTS OR THE PERSONAL PROPERTY RELATING TO THE PROPERTY, (VI) THE FINANCIAL CONDITION OR PROSPECTS OF THE PROPERTY AND, (VII) LEASES OR OCCUPANCY AGREEMENTS WITH RESPECT TO THE PROPERTY OR THE ABILITY TO LEASE THE PROPERTY OR ANY PORTION THEREOF, (VIII) THE COMPLIANCE OR LACK THEREOF OF THE PROPERTY OR ANY PORTION THEREOF (OR THE OPERATION THEREOF) WITH GOVERNMENTAL OR QUASI-GOVERNMENTAL LAWS, RULES, ORDINANCES OR REGULATIONS (INCLUDING, WITHOUT LIMITATION, ANY ZONING LAWS, ORDINANCES OR REQUIREMENTS), (IX) THE NATURE, QUALITY OR PHYSICAL CONDITION OF THE PROPERTY, (X) THE CONSTRUCTION OF THE IMPROVEMENTS OR WHETHER THERE EXISTS ANY CONSTRUCTION DEFECTS THEREIN, (XI) THE WATER, SOIL AND GEOLOGY OF THE PROPERTY OR RELATING THERETO, (XII) THE INCOME TO BE DERIVED FROM THE PROPERTY, (XIII) THE SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH BUYER MAY CONDUCT THEREON, (XIV) THE COMPLIANCE OF OR BY THE PROPERTY (OR THE OPERATION THEREOF) WITH ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY OTHER BODY HAVING JURISDICTION THEREOVER, (XV) THE STATUS OR CONDITION OF ENTITLEMENTS PERTAINING TO THE PROPERTY, (XVI) ANY MATTER REGARDING TERMITES OR WASTES, AS DEFINED BY THE U.S. ENVIRONMENTAL PROTECTION AGENCY REGULATIONS AT 40 C.F.R., (XV) ANY MATTERS RELATING TO HAZARDOUS MATERIALS, HAZARDOUS SUBSTANCES OR ENVIRONMENTAL LAWS, RULES, REGULATIONS OR REQUIREMENTS, AND (XVI) THE ADEQUACY OF PARKING IN CONNECTION WITH THE PROPERTY, AND (G) BY REASON OF ALL OF THE FOREGOING, BUYER SHALL ASSUME THE FULL RISK OF ANY LOSS OR DAMAGE OCCASIONED BY ANY FACT, CIRCUMSTANCE, CONDITION OR DEFECT PERTAINING TO THE PROPERTY, INCLUDING WITHOUT LIMITATION THE PRESENCE OF ANY ASBESTOS CONTAINING MATERIAL,

 
4593201.3 15 HAZARDOUS, TOXIC OR RADIOACTIVE WASTE, SUBSTANCE OR MATERIALS IN, ON, UNDER OR ABOUT THE PROPERTY, AND BUYER HEREBY EXPRESSLY AND UNCONDITIONALLY WAIVES AND RELEASES SELLER AND ALL OF ITS PARENTS, SUBSIDIARIES, AFFILIATES AND PARTNERSHIPS, OFFICERS, DIRECTORS, PROPERTY MANAGERS, ASSET MANAGERS, MANAGERS, SHAREHOLDERS, PARTNERS, MEMBERS, REPRESENTATIVES, AGENTS AND EMPLOYEES, AND THEIR RESPECTIVE SUCCESSORS, HEIRS AND ASSIGNS AND EACH OF THEM (INDIVIDUALLY AND COLLECTIVELY, THE "RELEASED PARTIES") FROM ANY AND ALL RIGHTS AND CLAIMS AGAINST SELLER AND/OR THE RELEASED PARTIES WITH RESPECT TO THE PROPERTY OR MATTERS RELATING TO THE PROPERTY (INCLUDING WITHOUT LIMITATION (I) THE CONDITION, VALUATION, MARKETABILITY OR UTILITY OF THE PROPERTY, (II) IN CONNECTION WITH ANY LEASES OR OCCUPANCY AGREEMENTS RELATING TO THE PROPERTY, (III) ANY RIGHTS OF BUYER UNDER THE STATE OR FEDERAL COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT, AS AMENDED FROM TIME TO TIME, ANY OTHER ENVIRONMENTAL OR HAZARDOUS MATERIAL LAWS OR OTHER SIMILAR LAWS, (IV) IN CONNECTION WITH LATENT, PATENT, ALLEGED OR ACTUAL DESIGN OR CONSTRUCTION DEFICIENCIES OR DEFECTS (WHETHER RESULTING FROM ANY ACTS OR OMISSIONS OF SELLER, ANY SELLER PARTY, ANY PRIOR OWNER OF ALL OR ANY PORTION OF THE PROPERTY, OR ANY OTHER PARTY), AND (VI) ANY OTHER MATTERS REFERENCED IN THIS PARAGRAPH 13.3). BUYER ACKNOWLEDGES AND AGREES THAT THE FOREGOING WAIVER AND RELEASE INCLUDES ALL RIGHTS AND CLAIMS OF BUYER (AND ANY PERSON OR ENTITY CLAIMING BY, OR THROUGH, BUYER) AGAINST SELLER AND/OR ANY OTHER RELEASED PARTIES PERTAINING TO THE PROPERTY, WHETHER HERETOFORE OR NOW EXISTING OR HEREAFTER ARISING, OR WHICH COULD, MIGHT, OR MAY BE CLAIMED TO EXIST, OF WHATEVER KIND OR NATURE, WHETHER KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, LIQUIDATED OR UNLIQUIDATED, EACH AS THOUGH FULLY SET FORTH HEREIN AT LENGTH, WHICH IN ANY WAY ARISE OUT OF, OR ARE CONNECTED WITH, OR RELATE TO, THE PROPERTY. THIS RELEASE INCLUDES CLAIMS OF WHICH BUYER IS PRESENTLY UNAWARE OF WHICH BUYER DOES NOT PRESENTLY SUSPECT TO EXIST WHICH, IF KNOWN BY BUYER, WOULD MATERIALLY AFFECT BUYER'S RELEASE TO SELLER AND/OR THE OTHER RELEASED PARTIES. IN CONNECTION AND TO THE EXTENT PERMITTED BY LAW, BUYER HEREBY AGREES, REPRESENTS AND WARRANTS THAT BUYER REALIZES AND ACKNOWLEDGES THAT FACTUAL MATTERS NOW UNKNOWN TO IT MAY HAVE GIVEN OR MAY HEREAFTER GIVE RISE TO CAUSES OF ACTION, CLAIMS, DEMANDS, DEBTS, CONTROVERSIES, DAMAGES, COSTS, LOSSES AND EXPENSES WHICH ARE PRESENTLY UNKNOWN, UNANTICIPATED AND UNSUSPECTED, AND BUYER FURTHER AGREES, REPRESENTS AND WARRANTS THAT THE WAIVERS AND RELEASES HEREIN HAVE BEEN NEGOTIATED AND AGREED UPON IN LIGHT OF THAT REALIZATION AND THAT BUYER NEVERTHELESS HEREBY INTENDS TO RELEASE, DISCHARGE AND ACQUIT SELLER AND THE OTHER RELEASED PARTIES FROM ANY SUCH UNKNOWN CAUSES OF ACTION, CLAIMS, DEMANDS, DEBTS, CONTROVERSIES, DAMAGES, COSTS, LOSSES AND EXPENSES. THE FOREGOING WAIVERS AND RELEASES BY BUYER SHALL SURVIVE (A) THE CLOSING AND THE RECORDATION OF THE DEED, AND SHALL NOT BE DEEMED MERGED INTO THE DEED UPON ITS RECORDATION, AND/OR (B) ANY TERMINATION OF THIS AGREEMENT.

 
4593201.3 16 BUYER EXPRESSLY WAIVES THE BENEFITS OF SECTION 1542 OF THE CALIFORNIA CIVIL CODE, WHICH PROVIDES AS FOLLOWS: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, AND THAT, IF KNOWN BY HIM OR HER WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY." _________________ BUYER'S INITIALS 14. Access. Provided that Buyer is not in default of its obligations under this Agreement, then from and after the Opening of Escrow through the earlier of the termination of this Agreement or the Closing Date, Buyer, its agents, consultants, contractors and subcontractors shall have the right, at reasonable times upon at least 48 hours prior written notice to Seller, subject to the rights of all tenants and occupants of the Property, and provided that Buyer has coordinated with Seller so as to afford Seller a reasonable opportunity to have a representative present at all such times, to enter upon the Property to conduct or make any and all non-intrusive and non-invasive inspections and Tests as may be necessary or desirable, subject to the limitations set forth below in this Paragraph 14. The scope of any analysis which requires physical sampling or any other invasive or intrusive testing of all or any part of the Property shall be subject to: (a) the prior written approval of Seller, which Seller may withhold or condition in its reasonable discretion, (b) Seller's receipt of written evidence that Buyer has procured the insurance required pursuant to this Paragraph 14, and (c) the requirement that Buyer dispose of all such test samples in accordance with applicable law and at no cost or liability to Seller. Nothing herein shall authorize any subsurface testing or drilling on the Property by Buyer or its environmental consultant unless specifically approved in writing by Seller, which Seller may condition or deny in its reasonable discretion. Buyer shall obtain or cause its consultants to obtain (and provide evidence to Seller), at Buyer's sole cost and expense, prior to commencement of any investigative activities on the Property, a policy of commercial general liability insurance covering any and all liability of Buyer and Seller with respect to or arising out of any investigative activities. Such policy of insurance shall be from an insurance company reasonably acceptable to Seller and name Seller as an additional insured and shall be kept and maintained in force during the term of this Agreement and so long thereafter as necessary to cover any claims of damages suffered by persons or property resulting from any acts or omissions of Buyer, Buyer's employees, agents, contractors, suppliers, consultants or other related parties. Such policy of insurance shall have liability limits of not less than Two Million Dollars ($2,000,000.00) combined single limit per occurrence for bodily injury, personal injury and property damage liability. Buyer hereby agrees to provide to Seller, upon request of Seller, a true and complete copy of all tests, reports, studies and the like generated by such vendor in connection with Buyer's inspection of the Property. Buyer shall keep all documents and information received from Seller and/or its agents and the results of all of its inspections, studies, investigations, analysis, reports and the like confidential except as required by law and except for disclosures made to Buyer's agents, consultants and employees. Buyer hereby indemnifies, defends and holds the Property, Seller and their respective officers, directors, shareholders, members, participants, affiliates, employers, representatives, invitees, agents and contractors free and harmless from and against any and all claims, costs, losses, liabilities, damages or expenses arising out of or resulting from such entry by Buyer, its agents, consultants, contractors and subcontractors or Buyer's breach of its obligations under this Paragraph 14. Additionally, Buyer shall immediately, at its sole cost and expense, repair any and all damage arising out of or resulting from such entry and any acts or omissions by Buyer, its agents, employees, consultants, contractors and subcontractors, and shall immediately, at its sole cost and expense, restore the Property to the condition that existed immediately prior to such entry by Buyer, its agents, employees, consultants, contractors and subcontractors. Furthermore, Buyer hereby agrees not to contact any tenants or

 
4593201.3 17 other occupants of the Property nor any governmental agencies with respect to the Property without Seller's prior written consent, which Seller shall provide in its reasonable discretion. Buyer shall keep the Property free and clear of any mechanics' liens or materialmen's liens related to Buyer's inspection and the other activities contemplated in this Paragraph 14. All of Buyer's obligations set forth in this Paragraph 14 shall survive the Close of Escrow and shall not be merged with the Deed, and shall survive the termination of this Agreement and Escrow prior to the Close of Escrow, and shall not be limited by any provision of this Agreement. 15. Default. 15.1 BUYER'S DEFAULT. IF BUYER FAILS TO COMPLETE THE PURCHASE OF THE PROPERTY AS PROVIDED IN THIS AGREEMENT BY REASON OF ANY DEFAULT OF BUYER, AFTER SELLER GIVES BUYER FIVE (5) DAYS' NOTICE AND AN OPPORTUNITY TO CURE AND BUYER FAILS TO CURE ITS DEFAULT WITHIN THE APPLICABLE CURE PERIOD (WHICH NOTICE AND CURE PROVISION SHALL NOT APPLY IN THE EVENT OF BUYER'S FAILURE TO DEPOSIT OR DELIVER THE BALANCE OF THE PURCHASE PRICE PURSUANT TO PARAGRAPH 3.2 OR DOCUMENTS PURSUANT TO PARAGRAPH 9.2), SELLER'S SOLE REMEDY (EXCEPT AS PROVIDED BELOW) SHALL BE TO TERMINATE THIS AGREEMENT AND RECEIVE THE DEPOSIT AS LIQUIDATED DAMAGES AND SELLER SHALL BE RELEASED FROM ITS OBLIGATION TO SELL THE PROPERTY TO BUYER. BUYER AND SELLER AGREE THAT IT WOULD BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTIMATE THE DAMAGES WHICH SELLER MAY SUFFER IN THE EVENT BUYER DEFAULTS HEREUNDER AND FAILS TO COMPLETE THE PURCHASE OF THE PROPERTY AS HEREIN PROVIDED. BUYER AND SELLER THEREFORE AGREE THAT A REASONABLE PRESENT ESTIMATE OF THE NET DETRIMENT THAT SELLER WOULD SUFFER IN THE EVENT OF BUYER'S DEFAULT OR BREACH HEREUNDER IS AN AMOUNT OF MONEY EQUAL TO THE DEPOSIT WHICH SHALL BE THE FULL, AGREED AND LIQUIDATED DAMAGES. THE PARTIES ACKNOWLEDGE THAT THE PAYMENT OF SUCH LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND 1677. THE FOREGOING SHALL NOT LIMIT SELLER'S REMEDIES WITH RESPECT TO BUYER'S OBLIGATIONS (INCLUDING, WITHOUT LIMITATION, ITS INDEMNIFICATION OBLIGATIONS) UNDER PARAGRAPHS 14 AND 17 OF THIS AGREEMENT AND THE ATTORNEYS' FEES PROVISION SET FORTH IN PARAGRAPH 18 BELOW. _____________________ ____________________ SELLER'S INITIALS BUYER'S INITIALS 15.2 SELLER'S DEFAULT. IF SELLER DEFAULTS UNDER THIS AGREEMENT AND FAILS TO COMPLETE THE PURCHASE AS PROVIDED HEREIN, AFTER BUYER GIVES SELLER FIVE (5) DAYS' NOTICE AND AN OPPORTUNITY TO CURE AND SELLER FAILS TO CURE ITS DEFAULT WITHIN THE APPLICABLE CURE PERIODS, THEN BUYER SHALL BE ENTITLED, AS ITS SOLE AND EXCLUSIVE REMEDY, WHETHER AT LAW OR IN EQUITY, EITHER (A) TO TERMINATE THIS AGREEMENT AND RECOVER THE FULL AMOUNT OF ITS DEPOSIT (INCLUDING THE RELEASED PORTION AND ANY INTEREST ACCRUED UPON THE DEPOSIT) OR (B) IN LIEU OF TERMINATING THE AGREEMENT AND RECOVERING ITS DEPOSIT, BUYER SHALL BE ENTITLED TO PURSUE SPECIFIC PERFORMANCE OF THE CONVEYANCE OF THE PROPERTY WITHOUT RIGHT TO ANY DAMAGES OR OTHER EQUITABLE RELIEF WHATSOEVER, PROVIDED BUYER DEPOSITS

 
4593201.3 18 WITH ESCROW HOLDER ON OR BEFORE THE SCHEDULED CLOSING DATE (BUT NOT PRIOR TO BUYER PREVAILING ON THE SPECIFIC PERFORMANCE ACTION AND ANY APPLICABLE APPEALS OR APPEAL PERIOD THERETO), THE CASH BALANCE OF THE PURCHASE PRICE, TOGETHER WITH ALL CLOSING DOCUMENTS REQUIRED HEREUNDER FROM BUYER, AND PROVIDED BUYER FILES SUCH SPECIFIC PERFORMANCE ACTION WITHIN SIXTY (60) DAYS FOLLOWING THE SCHEDULED CLOSING DATE AND DILIGENTLY PROSECUTES SUCH ACTION TO COMPLETION. THE FOREGOING SHALL NOT LIMIT BUYER'S REMEDIES WITH RESPECT TO SELLER'S OBLIGATIONS (INCLUDING, WITHOUT LIMITATION, ITS INDEMNIFICATION OBLIGATIONS) UNDER PARAGRAPH 17 OF THIS AGREEMENT AND THE ATTORNEYS' FEES PROVISION SET FORTH IN PARAGRAPH 18 BELOW. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, EXCEPT WITH RESPECT TO BUYER'S ELECTION TO PURSUE AN ACTION FOR SPECIFIC PERFORMANCE OF THE CONVEYANCE OF THE PROPERTY, BUYER SHALL NOT BE ENTITLED TO RECORD A LIEN OR LIS PENDENS AGAINST THE PROPERTY AND BUYER HEREBY WAIVES ANY SUCH RIGHT. ____________________ ____________________ SELLER'S INITIALS BUYER'S INITIALS 16. Notices. Any notice, demand, consent, approval, request, or other communication or document to be provided hereunder to a party hereto shall be in writing and shall be given to such party at its address set forth above or such other address such party may hereafter specify for that purpose by notice to the other party. Each such notice, request, or communication shall, for all purposes, be deemed given and received (a) if given by email, when such email (inclusive of a pdf attachment containing the substantive content of the notice) is transmitted to the email address specified above during normal business hours (i.e. 8:00 a.m. to 5:00 p.m.) and confirmation of complete receipt is received during normal business hours, (b) if hand delivered against receipted copy, when the copy thereof is receipted, (c) if given by a recognized overnight delivery service, the day on which such notice, request, or other communication is actually received, or (d) or if given by certified mail, return receipt requested, postage prepaid, two (2) days after it is posted with the United States Postal Service, to the addresses specified in the Basic Provisions. Notices to Seller shall be directed to Seller and Seller's Counsel and notices to Buyer shall be directed to Buyer and Buyer's Counsel. Notice of change of address shall be given by written notice in the manner detailed in this Paragraph 16. Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given shall be deemed to constitute receipt of the notice, demand, request or communication sent. 17. Brokers. Upon the Close of Escrow (but not otherwise), Seller shall pay a real estate brokerage commission to Broker with respect to this transaction in accordance with Seller's separate written agreement. Each party hereto agrees to indemnify and hold harmless the other party from and against any and all losses, liens, claims, judgments, liabilities, costs, expenses or damages (including reasonable attorneys' fees and court costs) of any kind or character arising out of or resulting from any agreement, arrangement or understanding (except as set forth above with respect to Broker) alleged to have been made by such party or on its behalf with any broker or finder in connection with this Agreement or transaction contemplated under this Agreement. The foregoing indemnity shall survive the Close of Escrow or the earlier termination of this Agreement and shall not be limited by any provision of this Agreement. 18. Legal Fees. If either Buyer or Seller brings any action, arbitration or suit against the other for any matter relating to or arising out of this Agreement, then the prevailing party in such action or dispute, whether by final judgment or settlement, shall be entitled to recover from the other party all costs and

 
4593201.3 19 expenses of suit, including actual attorneys' fees. Any judgment or order entered in any final judgment shall contain a specific provision providing for the recovery of all costs and expenses of suit, including actual attorneys' fees incurred in enforcing, perfecting and executing such judgment. For the purposes of this paragraph, such costs shall include, without limitation, in-house or outside attorneys' fees, costs and expenses incurred in the following: (a) postjudgment motions; (b) contempt proceedings; (c) garnishment, levy, and debtor and third party examination; (d) discovery; and (e) bankruptcy litigation. 19. Assignment. Buyer may not assign, transfer or convey its rights or obligations under this Agreement at any time without the prior written consent of Seller, which Seller may withhold in its sole and absolute discretion; provided, however, Buyer may assign this Agreement to a Buyer Affiliate (as defined below) without the requirement of obtaining Seller's prior written consent (but nevertheless requiring at least five (5) business days prior written notice) and satisfy the requirements set forth below. The term "Buyer Affiliate" shall mean any entity of which Buyer is the managing member, managing partner or majority shareholder and owns or controls such entity. Notwithstanding the foregoing, no assignment by Buyer (whether to a Buyer Affiliate or otherwise) shall release Buyer from any of its obligations hereunder, and any assignment by Buyer (even to a Buyer Affiliate) shall require the full assumption by the assignee (on a joint and several basis) of all of Buyer's obligations hereunder, and the assignment and assumption agreement must be delivered to Seller at least five (5) business days prior to the Closing. 20. Damage or Destruction, Condemnation, Insurance. 20.1 Condemnation. If at any time prior to the Closing Date any "material" portion of the Property is condemned or taken by eminent domain proceedings by any public authority, then at Buyer's option, to be exercised within ten (10) days after receipt of notice of such taking, this Agreement shall terminate, and the Deposit (less the Released Portion and Independent Consideration) shall be promptly returned to Buyer, and except as expressly set forth herein, neither party shall have any further liability or obligation to the other hereunder. As used in this Paragraph 20.1, the term "material" shall mean a taking which materially and adversely affects the value or operations of the Property and adversely affects the value of the Property by more than ten percent (10%) of the Purchase Price. Seller shall give Buyer written notice of any taking promptly after Seller obtains knowledge thereof. If less than a material portion of the Property is condemned or taken by eminent domain proceedings or if Buyer does not timely notify Seller in writing of its election to terminate this Agreement, Buyer shall be deemed to have elected not to terminate this Agreement. If Buyer elects or is deemed to have elected not to terminate this Agreement, the parties shall proceed to the Closing without a reduction in the Purchase Price and, upon the Closing, all condemnation proceeds paid or payable to Seller (other than losses pertaining to periods prior to the Closing) shall belong to Buyer and shall be paid over and assigned to Buyer. Seller shall have no obligation to make any repairs to the Property in the event of a condemnation. 20.2 Damage and Destruction. If at any time prior to the Closing Date a material portion of the Property is destroyed or damaged as a result of fire or any other casualty whatsoever, then at Buyer's option, to be exercised within ten (10) days after receipt of notice of such destruction or damage, this Agreement shall terminate, the Deposit (less the Released Portion and Independent Consideration) shall be returned to Buyer, and except as expressly set forth herein, neither party shall have any further liability or obligation to the other hereunder. If Buyer does not timely notify Seller in writing of its election to terminate this Agreement, Buyer shall be deemed to have elected not to terminate this Agreement. For purposes hereof, the term "material" shall be deemed to mean damage which a general contractor (who shall be acceptable to both parties) estimates will cost in excess of $500,000.00 to repair or which will take longer than sixty (60) days to repair. If less than a material portion of the Property is damaged or destroyed or if a material portion is damaged or destroyed and Buyer elects or is deemed to have elected not to terminate this Agreement, the parties shall proceed to the Closing without reduction in the Purchase Price and, upon the Closing, all property insurance proceeds paid or payable to Seller as a result of such casualty shall belong to Buyer and

 
4593201.3 20 shall be paid over and assigned to Buyer, and Seller shall pay or credit to Buyer the amount equal to the lesser of: (i) the estimated cost of repairing the damage or destruction as reasonably determined by said general contractor and (ii) the deductible which is not paid through property insurance proceeds. Seller shall have no obligation to make any repairs to the Property in the event of a damage or destruction. 21. New Leases and Contracts 21.1 New Leases. Seller hereby agrees that, after the Contingency Date, Seller will not modify, extend or otherwise change any of the terms, covenants or conditions of the leases or enter into new leases affecting the Property without the prior written consent of Buyer, which consent shall not be unreasonably withheld (in the event Buyer has not responded to Seller's written request for consent within three (3) business days after Seller's delivery to Buyer of all pertinent information concerning such lease, obligation or agreement, Buyer shall be deemed to have consented thereto). Seller shall not collect any rent from any tenant of the Property for the period extending beyond the month of the Closing Date. 21.2 Service Contracts. Except as otherwise provided herein, after the Contingency Date, Seller will not extend, renew, modify or replace any of the service contracts without the prior written consent of Buyer. If Buyer does not disapprove any request of Seller regarding a service contract within three (3) business days after Buyer's receipt of such written request, Buyer shall be deemed to have approved such request. 22. Miscellaneous. 22.1 Not an Offer. Seller's delivery of unsigned copies of this Agreement is solely for the purpose of review by the party to whom delivered, and neither the delivery nor any prior communications between the parties shall in any way imply that Seller is under any obligation to enter the transaction which is the subject of this Agreement. The signing of this Agreement by Buyer constitutes an offer which shall not be deemed accepted by Seller unless and until Seller has signed this Agreement and delivered a duplicate original or electronic copy to Buyer. 22.2 Computation of Time Periods. If the date upon which the Contingency Date, the Closing Date or any other date or time period provided for in this Agreement is or ends on a Saturday, Sunday or federal or state legal holiday, then such date shall automatically be extended until 5:00 p.m. Pacific time of the next day which is not a Saturday, Sunday or legal holiday. The term "business day" shall mean any day other than a Saturday, Sunday or legal holiday. 22.3 Captions; Severability. Any captions to, or headings of, the paragraphs or subparagraphs of this Agreement are solely for the convenience of the parties hereto, are not a part of this Agreement, and shall not be used for the interpretation or determination of the validity of this Agreement or any provision hereof. In case any one or more of the provisions contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby, but this Agreement shall be reformed and construed and enforced to the maximum extent permitted by applicable law. 22.4 No Obligations to Third Parties. Except as otherwise expressly provided herein, the execution and delivery of this Agreement shall not be deemed to confer any rights upon, nor obligate any of the parties hereto, to any person or entity other than the parties hereto. 22.5 Exhibits and Schedules. The exhibits and schedules attached to this Agreement are incorporated in this Agreement by this reference for all purposes.

 
4593201.3 21 22.6 Amendment to this Agreement. The terms of this Agreement may not be modified or amended except by an instrument in writing executed by each of the parties hereto. 22.7 Waiver. The waiver or failure to enforce any provision of this Agreement shall not operate as a waiver of any future breach of any such provision or any other provision hereof. 22.8 Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California. Seller and Buyer hereby irrevocably submit to the jurisdiction of any state or federal court sitting in the State in any action or proceeding arising out of or relating to this Agreement and hereby irrevocably agree that all claims in respect of such action or proceeding shall be heard and determined in a state or federal court sitting in the State. Buyer and Seller agree that the provisions of this Paragraph 22.8 shall survive the Closing. 22.9 Fees and Other Expenses. Except as otherwise provided herein, each of the parties hereto shall pay its own fees and expenses in connection with this Agreement. 22.10 Entire Agreement. This Agreement (including all Exhibits attached hereto) supersedes any prior agreements, negotiations and communications, oral or written, and contains the entire agreement between, and the final expression of, Buyer and Seller with respect to the subject matter hereof. No subsequent agreement, representation, or promise made by either party hereto, or by or to an employee, officer, agent or representative of either party hereto shall be of any effect unless it is in writing and executed by the party to be bound thereby. 22.11 Successors and Assigns. Subject to the restrictions set forth in Paragraph 19 hereof, this Agreement shall be binding upon and shall inure to the benefit of the permitted successors and assigns of the parties hereto. 22.12 Construction. The parties acknowledge and agree that (A) each party hereto is of equal bargaining strength, (B) each such party has actively participated in the drafting, preparation and negotiation of this Agreement, (C) each such party has consulted with such party's own, independent counsel, and such other professional advisors as such party has deemed appropriate, relating to any and all matters contemplated under this Agreement, (D) each such party and such party's counsel and advisors have reviewed this Agreement, (E) each such party has agreed to enter into this Agreement following such review and the rendering of such advice, (F) any rule of construction to the effect that ambiguities are to be resolved against the drafting parties shall not apply in the interpretation of this Agreement, or any portions hereof, or any amendments hereto, and (G) except as expressly stated to survive the Closing in this Agreement, all terms and provisions of this Agreement shall not survive the Closing and shall be deemed merged with the Deed at Closing. 22.13 Limitation of Liability. Buyer acknowledges and agrees that neither the trustees, shareholders, members, affiliates, officers, directors, investment managers, employees, partners, agents nor advisors of Seller, assume any personal liability for obligations entered into by or on behalf of Seller. Notwithstanding any other provision of this Agreement to the contrary (or any rights that Buyer may have at law or in equity), (a) in no event shall Seller have any liability for lost profits, speculative, special, consequential or punitive damages, (b) in no event will Seller's liability under or otherwise in connection with this Agreement, any documents executed in connection herewith and/or otherwise in connection with the Property exceed the sum of Five Hundred Thousand Dollars ($500,000.00), and (c) Buyer shall have no right to assert any claim against Seller, and Seller shall have no liability to Buyer whatsoever, unless the valid claims for all breaches of Seller collectively aggregate more than Twenty Five Thousand Dollars ($25,000.00). Notwithstanding anything to the contrary contained in this Agreement, Buyer hereby agrees that any action or claim asserted by Buyer against Seller or any of the Released Parties must be filed (if at all)

 
4593201.3 22 and properly served to Seller within one (1) year following the Closing in a court of competent jurisdiction, and Buyer hereby waives any right to bring any such claim or action thereafter. Buyer's remedies prior to Closing shall be limited as set forth in Paragraph 15.2. Any and all liability beyond that which may be asserted under this Paragraph 22.13 is expressly waived and released by Buyer and by all persons claiming by, through or under Buyer. The provisions of this Paragraph 22.13 shall survive the Closing. 22.14 Time of the Essence. All times provided for in this Agreement for the performance of any act will be strictly construed, time being of the essence. 22.15 Recording. The parties agree that this Agreement shall not be recorded. If Buyer causes this Agreement or any notice or memorandum thereof to be recorded, this Agreement shall be null and void at the option of Seller. 22.16 Confidentiality. Until the Close of Escrow, Buyer will keep confidential the Purchase Price, the other terms of this Agreement, the Materials and all other information concerning the Property (as disclosed, discovered or determined in connection with this transaction); provided, however, Buyer may disclose such information to (a) those employed by Buyer (subject to their agreement to abide by the terms of this paragraph); (b) those who are actively and directly participating in the evaluation of the Property and the negotiation and execution of this Agreement or financing of the purchase of the Property (subject to their agreement to abide by the terms of this paragraph); (c) third parties as required under applicable law; and (d) Buyer's potential financial partners and lenders (subject to their agreement to abide by the terms of this paragraph). 22.17 Natural Hazard Disclosure. Natural Hazard Disclosure. As of the Closing, to the extent permitted by law, Buyer shall be deemed to have knowingly, voluntarily and intentionally waived the right to the disclosu Natural Hazards Disclosures ment Code Section 8589.3 (a special flood area); (b) California Government Code Section 8589.4 (dam failure inundation area); (c) California Government Code Section 51183.5 (earthquake fault zone); (d) California Public Resources Code Section 2621.9 (seismic hazard zone); (e) California Public Resources Code Section 4136 (wildland fire area); and (f) California Public Resources Code Section 2694 (high fire severity area). Buyer acknowledges and represents that it has extensive experience acquiring and conducting due diligence for commercial properties. This waiver by Buyer includes, to the extent permitted by law, any remedies Buyer may have for Seller's nondisclosure of the Natural Hazards Disclosures. In no way limiting the foregoing waiver by Buyer, Buyer acknowledges that Seller shall employ the services of the Escrow Agent or another third party selected by Seller (as applicable, th Natural Hazard Expert to examine the maps and other information specifically made available to the public by government agencies for the purposes of enabling Seller to fulfill Seller's disclosure obligations, if any, and to report the result of the Natural Hazard Expe ination ( Natural Hazards Report Buyer and Seller in writing. Seller has not verified, and Seller is not obligated to verify, the information contained in the Natural Hazards Report. The Natural Hazards Report fully and completely discharges Seller from Seller's disclosure obligations referred to herein, if and to the extent any such obligations exist, and, for the purpose of this Agreement, the provisions of Section 1103.4 of the California Civil Code regarding non-liability of Seller for errors or omissions not within Seller's personal knowledge shall be deemed to apply and the Natural Hazard Expert shall be deemed to be an expert, dealing with matters within the scope of the Natural Hazard Expert's expertise with respect to the examination and written report regarding the natural hazards referred to above. Seller makes no representation or warranty as to the truth or accuracy of any information contained in the Natural Hazards Report. ANY NATURAL HAZARDS DISCLOSED BY THE NATURAL HAZARDS REPORT MAY LIMIT THE BUYER'S ABILITY TO REDEVELOP OR UTILIZE THE PROPERTY, TO OBTAIN INSURANCE, OR TO RECEIVE ASSISTANCE AFTER A DISASTER. THE MAPS ON WHICH THESE DISCLOSURES ARE BASED ESTIMATE WHERE NATURAL HAZARDS EXIST.

 
4593201.3 23 THEY ARE NOT DEFINITIVE INDICATORS OF WHETHER OR NOT THE PROPERTY WILL BE AFFECTED BY A NATURAL DISASTER. BUYER MAY WISH TO OBTAIN PROFESSIONAL ADVICE REGARDING THESE HAZARDS AND OTHER HAZARDS THAT MAY AFFECT THE PROPERTY. 22.18 Section 1101.5 Disclosure. Seller hereby discloses to Buyer that Section 1101.5 of the California Civil Code requires that all noncompliant plumbing fixtures in any commercial real property shall be replaced with water-conserving plumbing fixtures. Pursuant to Section 1101.5(e) of the California Civil Code, Seller hereby discloses to Buyer that the Property may include noncompliant plumbing fixtures. 22.19 Counterparts; Electronic Signatures. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which, together, shall constitute but one and the same instrument. Electronic signatures, including signature delivered in a PDF, jpeg, or other electronic document, shall be deemed binding as originals. 22.20 Exclusivity. Provided that Buyer is not in default of its obligations under this Agreement, Buyer will have an exclusive right to conduct its Tests of the Property (as described in Paragraph 7.2 above), until the earlier of (i) the Contingency Date and (ii) such date, if any, that Buyer notifies in writing to Seller and Escrow Holder of its disapproval of the Tests and the termination of this Agreement. Prior to said time, Seller shall not initiate or complete due diligence or enter into discussions or a contract with any other potential buyer during Buyer's due diligence period. [Signature Page Follows]

 
4593201.3 24 IN WITNESS WHEREOF, Buyer and Seller have executed this Agreement as of the day and year first written above. BUYER: GD Realty Group Inc., a California corporation By: Name: Position: By: Name: Position: SELLER: 3032 Wilshire Investors LLC, a Colorado limited liability company By: Name: Position: By: Name: Position:

 
4593201.3 25 ACCEPTANCE BY ESCROW HOLDER ________________________ acknowledges that it has received a fully executed original or original executed counterparts of the foregoing Agreement of Purchase and Sale and Joint Escrow Instructions (the "Agreement") and agrees to act as Escrow Holder under the Agreement and to be bound by and strictly perform the terms thereof as such terms apply to Escrow Holder. Dated: __________, _________ By: Name: Position:

 
4593201.3 EXHIBIT A LEGAL DESCRIPTION [ATTACHED]

 
4532580v7 EXHIBIT A LEGAL DESCRIPTION

 
4593201.3 EXHIBIT B GRANT DEED WHEN RECORDED MAIL TO: MAIL TAX STATEMENTS TO: (Space above this line is for recorder's use) GRANT DEED THE UNDERSIGNED GRANTOR DECLARES: DOCUMENTARY TRANSFER TAX is $___________. CITY TAX $___________. Computed on full value of property conveyed, or Computed on full value less value of liens or encumbrances remaining at time of sale, Unincorporated area: City of _______________, and FOR VALUE RECEIVED, ______________________________ ("Grantor"), hereby grants to __________________________________("Grantee"), that certain real property (the "Property") situated in the City of _______________, County of _____________, State of California, described in Exhibit A attached hereto and incorporated by reference. THE PROPERTY IS CONVEYED TO GRANTEE SUBJECT TO: A. All liens, encumbrances, easements, covenants, conditions and restrictions, whether on- or off-record; B. Any other matters of record and other matters of which Grantee has knowledge or notice; C. All matters which would be revealed or disclosed in an accurate survey or inspection of the Property; D. Liens for taxes on real property not yet delinquent, and liens for any general or special assessments of record against the Property not yet delinquent; and E. All laws, ordinances and governmental rules, regulations and restrictions affecting the Property.

 
4593201.3 IN WITNESS WHEREOF, the undersigned Grantor has executed this Grant Deed as of _____________, ___________. By: Its:

 
4593201.3 EXHIBIT "A" TO GRANT DEED LEGAL DESCRIPTION OF PROPERTY [TO BE INSERTED]

 
4593201.3 ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California ) County of _____________________ ) On ____________________, before me, ____________________________, a Notary Public, personally appeared _______________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature

 
4593201.3 EXHIBIT C TRANSFEROR'S CERTIFICATION OF NON-FOREIGN STATUS To inform ______________________, a _________________ ("Transferee"), that Section 1445 of the Internal Revenue Code provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person. For U.S. tax purposes (including section 1445), the owner of a disregarded entity (which has legal title to a U.S. real property interest under local law) will be the transferor of the property and not the disregarded entity. To inform the transferee that withholding of tax is not required upon the disposition of a U.S. real property interest, the undersigned hereby certifies the following on behalf of the transferor/seller: 1. Transferor is not a foreign corporation, foreign partnership, foreign trust, foreign estate or foreign person (as those terms are defined in the Code and the Income Tax Regulations promulgated thereunder); and 2. Transferor is not a disregarded entity as defined in §1.1445-2(b)(2)(iii); and 3. Transferor's U.S. employer or tax (social security) identification number is ______________; and 4. The office address of Transferor is: ____________________________. Transferor understands that this Certification may be disclosed to the Internal Revenue Service by Transferee and that any false statement contained herein could be punished by fine, imprisonment, or both. Under penalty of perjury I declare that I have examined this Certification and to the best of my knowledge and belief it is true, correct and complete, and I further declare that I have authority to sign this document on behalf of Transferor. Dated: ______________, 20__ TRANSFEROR: _____________________________, a _____________________ By: ________________________ Name: _____________________ Its: ________________________

 
4593201.3 EXHIBIT D ASSIGNMENT AND ASSUMPTION OF LEASES THIS ASSIGNMENT AND ASSUMPTION OF LEASES ("Assignment") is made this _____ day of __________, _________, by and between ______________________, a ________________("Assignor"), and __________________________________, a ______________________ ("Assignee"). Recitals Assignor and Assignee entered into that certain Agreement of Purchase and Sale and Joint Escrow Instructions, dated as of ___________, _______ (the "Agreement"), respecting the sale of certain "Property" (as defined in the Agreement). Unless otherwise indicated herein, all capitalized terms in this Assignment shall have the meaning ascribed to them in the Agreement. Assignor, as Lessor, and those certain tenants of the Property (collectively, the "Tenants") have entered into leases for space at the Property (collectively, the "Leases") covering certain premises located on the Property. Under the Agreement, Assignor is obligated to assign to Assignee any and all of its right, title and interest in and to all Leases and Tenants' deposits held by Assignor under the Leases (collectively, "Tenant Deposits"). Agreement NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows. Assignor assigns, sells, transfers, sets over and delivers unto Assignee all of Assignor's estate, right, title and interest in and to the Leases and Tenant Deposits and Assignee accepts such assignment; provided, however, that such assignment, sale and transfer shall not include any rights or claims arising prior to the date hereof which Assignor may have against any party under the Leases. Assignee accepts said assignment, sale and transfer and assumes the performance of all of the terms, covenants and conditions imposed upon the landlord under the Leases and with respect to the Tenant Deposits. In the event of the bringing of any action or suit by a party hereto against another party hereunder by reason of any breach of any of the covenants, conditions, agreements or provisions on the part of the other party arising out of this Assignment, then in that event the prevailing party shall be entitled to have and recover of and from the other party all costs and expenses of the action or suit, including actual attorneys' fees and costs.

 
4593201.3 This Assignment may be executed simultaneously in counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument. This Assignment shall be binding upon and inure to the benefit of the successors, assignees, personal representatives, heirs and legatees of all the respective parties hereto. This Assignment shall be governed by, interpreted under, and construed and enforceable in accordance with, the laws of the State of ___________. IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment as of the day and year first written above. ASSIGNEE: __________________________________, a ____________________________ By: Name: Position: By: Name: Position: ASSIGNOR: __________________________________, a _________________ By: Name: Position: By: Name: Position:

 
4593201.3 EXHIBIT E GENERAL ASSIGNMENT AND BILL OF SALE THIS GENERAL ASSIGNMENT AND BILL OF SALE ("Assignment") is made this _____ day of __________, _________, by and between ______________________, a ______________ ("Assignor"), and __________________, a ______________________ ("Assignee"). Recitals Assignor and Assignee entered into that certain Agreement of Purchase and Sale and Joint Escrow Instructions dated as of __________, ________ (the "Agreement"), respecting the sale of certain "Property" (as described and defined in the Agreement). Unless otherwise indicated herein, all capitalized terms in this Assignment shall have the meaning ascribed to them in the Agreement. Under the Agreement, Assignor is obligated to assign (to the extent assignable) any and all of its right, title and interest (if any) and delegate any and all of its obligations and responsibilities in each of the following to Assignee, but only to the extent solely pertaining to the Property and only to the extent assignable: (a) any and all service contracts, warranties, guarantees, management contracts and bonds, together with all supplements, amendments and modifications thereto, solely relating to the Property ("Contract(s)"); (b) development rights and other intangible rights, titles, interests, privileges and appurtenances owned by Assignor and housed in connection with the Property and its operation (collectively "License(s)"); and (c) all fixtures, fittings, furniture, furnishings, appliances, apparatus, equipment, machinery, building materials, and other items of tangible personal property owned by Assignor and affixed or attached to the Property (all of such properties and assets being collectively called the "Assigned Properties"). Agreement NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows: Assignor assigns, sells, transfers, sets over and delivers unto Assignee (to the extent assignable) all of Assignor's estate, right, title and interest (if any) in and to the Contracts, Licenses and Assigned Properties; provided, however, that such assignment, sale and transfer shall not include any rights or claims arising prior to the date hereof which Assignor may have against any party with respect to the Contracts, Licenses and Assigned Properties. Assignee accepts such assignment and assumes the performance of all of the terms, covenants and conditions imposed upon Assignor with respect to the Contracts, Licenses and Assigned Properties. In the event of the bringing of any action or suit by a party hereto against another party hereunder by reason of any breach of any of the covenants, conditions, agreements or provisions on the part of the other party arising out of this Assignment, then in that event the prevailing party shall be entitled to

 
4593201.3 have and recover of and from the other party all costs and expenses of the action or suit, including reasonable attorneys' fees. This Assignment shall be binding upon and inure to the benefit of the successors, assignees, personal representatives, heirs and legatees of all the respective parties hereto. This Assignment shall be governed by, interpreted under, and construed and enforceable in accordance with, the laws of the State of California. This Assignment may be executed in counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument. IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this Assignment as of the day and year first above written. ASSIGNEE: a By: Name: Position: By: Name: Position: ASSIGNOR: , a __________________ By: Name: Position: By: Name: Position:

 
4593201.3 EXHIBIT F FORM OF TENANT ESTOPPEL CERTIFICATE The undersigned, the tenant ("Tenant") under a certain lease agreement dated __________________ between _____________ ("Landlord") and Tenant ("Lease"), certifies as follows: 1. The Lease is presently in full force and affect and unmodified except as set forth on Exhibit A attached hereto. The Lease constitutes the only agreement between the Landlord and Tenant with respect to the premises. 2. The lease term has commenced on _______ [[and full rental is now accruing thereunder]] OR [[rental will commence on _____]]. The Lease term shall end on ____________, 20__. The Tenant has the following options to extend the term: . 3. Tenant has accepted possession of the leased premises under the Lease and [[is paying]] OR [[will pay upon commencement of rental]] $___________ per month as base rental under the Lease. Tenant has not assigned, transferred, or hypothecated its interest under the Lease. 4. No rent under said lease has been paid more than thirty (30) days in advance of its due date. 5. To Tenant's knowledge, as of the date hereof, Tenant has no claim, charge, defense or offset under the Lease against rents or other charges due or to become due thereunder. As of the date hereof, Tenant has not asserted any such offset or credit. To Tenant's knowledge, there are no defaults under the Lease. 6. Tenant has not made any payment to Landlord as a security deposit or rental deposit except any payment expressly provided for in the Lease as follows: $____________. Tenant makes this Certificate with the understanding that Landlord is contemplating selling the property which includes the premises, and Landlord and the potential buyer of the property which includes the premises are each entitled to rely on this Certificate. Dated: ___________, ____ [TENANT] By: Name: Title:

 

 

 

 
4709040.1 1 SECOND AMENDMENT TO AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS (3032 Wilshire Boulevard, Santa Monica, California) THIS SECOND AMENDMENT TO AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS (this “Second Amendment”), dated as of August 9, 2022 (“Effective Date”), is entered into by and between GD Realty Group, Inc., a California corporation, and/or its permitted assign (“Buyer”), and 3032 Wilshire Investors LLC, a Colorado limited liability company (“Seller”). Recitals A. Buyer and Seller are parties to that certain Agreement of Purchase and Sale and Joint Escrow Instructions, dated as of June 30, 2022 (the “Original Purchase Agreement”), as amended by that certain First Amendment to Agreement of Purchase and Sale and Joint Escrow Instructions, dated as of July 18, 2022 (the "First Amendment", and together with the Original Purchase Agreement, the "Purchase Agreement"), pursuant to which Seller agreed to sell to Buyer, and Buyer agreed to purchase from Seller, that certain real property located at 3032 Wilshire Boulevard, Santa Monica, California 90403, as more particularly described in the Purchase Agreement (the “Property”). Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Purchase Agreement. B. Pursuant to Item X. of the Basic Provisions set forth in the Original Purchase Agreement, the Contingency Date deadline was 5:00 p.m. Pacific Time on July 27, 2022. The Contingency Date was later extended to 5:00 p.m. Pacific time on August 9, 2022 pursuant to Section 2 of the First Amendment. C. Prior to Buyer's Contingency Date deadline, the parties now request that the Contingency Date be further extended, by one (1) day, in order to give both parties additional time to finalize Buyer's due diligence period. D. Buyer and Seller therefore desire to amend certain terms of the Purchase Agreement to reflect the foregoing as set forth herein. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Buyer and Seller agree as follows: 1. Reaffirmation. Except as hereby modified and amended, all other terms, provisions, covenants and conditions of the Purchase Agreement are hereby ratified and reaffirmed and shall remain in full force and effect. In the event that there is a conflict between any terms of this Second Amendment and any of the terms set forth in the Purchase Agreement, the terms of this Second Amendment shall control. 2. Contingency Date. The parties have mutually agreed to extend the Contingency Date as described in the Purchase Agreement. Item X. of the Basic Provisions of the Purchase DocuSign Envelope ID: E4924F8C-D2D5-4260-971F-F629C25DF82D

 
4709040.1 2 Agreement, and all further references thereto, is hereby replaced and amended as follows: X. Contingency Date: 5:00 p.m. Pacific time on August 10, 2022 (the “Contingency Date”). 3. No Further Changes. Except as expressly amended herein, all terms of the Purchase Agreement shall remain unchanged and in full force and effect. 4. Counterparts. This Second Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute but one and the same instrument and may be delivered by way of email. [SIGNATURES ON FOLLOWING PAGE] DocuSign Envelope ID: E4924F8C-D2D5-4260-971F-F629C25DF82D

 
DocuSign Envelope ID: E4924F8C-D2D5-4260-971F-F629C25DF82D

 
4734141.8 1 THIRD AMENDMENT TO AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS (3032 Wilshire Boulevard, Santa Monica, California) THIS THIRD AMENDMENT TO AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS (this "Third Amendment"), dated as of September 30, 2022 ("Effective Date"), is entered into by and between 3032 Wilshire Properties GD LLC, a California limited liability company, as assignee under the Assignment (defined in Recital A below) ("Buyer"), and 3032 Wilshire Investors LLC, a Colorado limited liability company ("Seller"). Recitals A. GD Realty Group, Inc., a California corporation ("Original Buyer") and Seller are parties to that certain Agreement of Purchase and Sale and Joint Escrow Instructions, dated as of June 30, 2022 (the "Original Purchase Agreement"), as amended by that certain First Amendment to Agreement of Purchase and Sale and Joint Escrow Instructions, dated as of July 18, 2022 (the "First Amendment"), and as further amended by that certain Second Amendment to Agreement of Purchase and Sale and Joint Escrow Instructions, dated as of August 9, 2022 (the "Second Amendment", and together with the Original Purchase Agreement and First Amendment, the "Purchase Agreement"), pursuant to which Seller agreed to sell to Original Buyer, and Original Buyer agreed to purchase from Seller, that certain real property located at 3032 Wilshire Boulevard, Santa Monica, California 90403, as more particularly described in the Purchase Agreement (the "Property"). Pursuant to that certain Assignment and Assumption of Real Estate Purchase Agreement and Escrow Instructions, dated September 14, 2022 (the "Assignment"), Original Buyer assigned all of its right, title and interest under the Purchase Agreement to Buyer, subject to the terms, covenants and conditions of the Purchase Agreement. Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Purchase Agreement. B. Pursuant to Item X. of the Basic Provisions set forth in the Original Purchase Agreement, the Contingency Date deadline was originally 5:00 p.m. Pacific Time on July 27, 2022. The Contingency Date was later extended to 5:00 p.m. Pacific time on August 9, 2022 pursuant to Section 2 of the First Amendment. Subsequently, the Contingency Date was further extended to 5:00 p.m. Pacific time on August 10, 2022 pursuant to Section 2 of the Second Amendment. C. On August 10, 2022, Original Buyer provided written notice to Seller regarding Original Buyer's approval of (i) Seller's Title Notice as defined in Paragraph 7.1 of the Purchase Agreement, (ii) the Tests as defined in Paragraph 7.2 of the Purchase Agreement, and (iii) the Materials as defined in paragraph 7.3 of the Purchase Agreement. D. Pursuant to Item XI. of the Basic Provisions set forth in the Original Purchase Agreement, the Closing Date shall be sixty (60) days following the Contingency Date. Because the Contingency Date was extended to August 10, 2022 per the Second Amendment, the Closing Date is scheduled to be on Monday, October 10, 2022 (which is the next business day after Sunday, October 9, 2022, the date that is 60 days following the August 10, 2022 Contingency Date). DocuSign Envelope ID: 4494F5D2-D6B9-4B44-80FA-05FEB0DDF5BA

 
4734141.8 2 E. The last paragraph of Paragraph 13.1 of the Purchase Agreement provides, in part, that "if, prior to the Closing Date, Buyer or Seller should learn, discover or become aware of any existing or new item, fact or circumstance which renders a representation or warranty of Seller set forth herein incorrect or untrue in any material respect (collectively, the "Representation Matter"), then the party who has learned, discovered or become aware of such Representation Matter shall promptly give written notice thereof to the other party and Seller's representations and warranties shall be automatically limited to account for the Representation Matter." In accordance with the foregoing, on or about September 9, 2022, Seller provided written notice to Original Buyer that one of the elevators (as depicted in Exhibit A attached hereto and made a part hereof, the "Rear Elevator"), which services the parking lot entrance to the 2nd floor retail space at the Property, is damaged and has been out of order (the "Elevator Damage") and that Seller has been working diligently to get the issue resolved as quickly as possible. F. Buyer now desires to try and close the acquisition of the Property prior to the scheduled Closing Date and Seller is willing to accommodate same so long as the repair of the Rear Elevator can be completed post-closing through certain Seller funds to be held in an escrow holdback following Closing. Buyer and Seller therefore desire to amend certain terms of the Purchase Agreement to reflect the foregoing and the contemplated resolution of the Rear Elevator issue as set forth herein. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Buyer and Seller agree as follows: 1. Reaffirmation. Except as hereby modified and amended, all other terms, provisions, covenants and conditions of the Purchase Agreement are hereby ratified and reaffirmed and shall remain in full force and effect. Original Buyer, as a signatory to this Third Amendment, acknowledges and agrees that pursuant to and in accordance with Paragraph 19 (Assignment) of the Purchase Agreement, and notwithstanding Original Buyer's assignment of all of its right, title and interest under the Purchase Agreement to Buyer, Original Buyer has not been released from any of its obligations under the Purchase Agreement and both Original Buyer and Buyer shall remain jointly and severally liable for all of Buyer's obligations under the Purchase Agreement. In the event that there is a conflict between any terms of this Third Amendment and any of the terms set forth in the Purchase Agreement, the terms of this Third Amendment shall control. 2. Seller's Disclosure of Representation Matter. Buyer hereby acknowledges that it previously received Seller's sufficient written notice regarding the Elevator Damage in accordance with Paragraph 13.1 of the Purchase Agreement. 3. Service Contract and Escrow Holdback. Prior to the Closing Date, Seller shall enter into a service contract ("Service Contract") with Schindler Elevator Corporation or its affiliate ("Vendor") for the repair of the Elevator Damage and Seller shall holdback such sums in connection with the Elevator Damage repair work as are provided herein below. The Service Contract shall be substantially similar to the "Upgrade Order Agreement" provided by Vendor in the form attached hereto as Exhibit B, which represents Vendor's price estimate for repair of the Elevator Damage. With reference to Paragraph 21.2 (Service Contracts) of the Purchase Agreement, Buyer hereby provides its prior written consent for Seller to enter into said Service DocuSign Envelope ID: 4494F5D2-D6B9-4B44-80FA-05FEB0DDF5BA

 
4734141.8 3 Contract and Buyer acknowledges and agrees that at Closing, the Service Contract shall not be assigned from Seller to Buyer and shall not be included in the General Assignment (as defined in Paragraph 9.1.4 of the Purchase Agreement, which shall be entered into between Seller and Buyer and delivered to the Escrow Holder prior to the Closing Date). Notwithstanding anything to the contrary in the Purchase Agreement, Seller and Buyer hereby authorize Escrow Holder at Closing to retain from Seller's net proceeds of the Purchase Price, an amount equal to One Hundred Thousand Dollars ($100,000) to complete the repair of the Elevator Damage ("Holdback Funds") and to transfer the Holdback Funds into a segregated holdback escrow account (Escrow No. 22000110896A) (the "Escrow Holdback") and Seller and Buyer agree to enter into such escrow agreement (the "Escrow Holdback Agreement") substantially in accordance with the form attached hereto as Exhibit C. The Holdback Funds shall be held by Escrow Holder pursuant to the Escrow Holdback Agreement for the Repair Period (as defined in Section 6 below) (subject to the periodic release to Seller, as provided in Section 5 below); provided, however, that if there is a pending Disbursement Notice (as defined in Section 5 below) (i.e., Seller has delivered the Disbursement Notice but the relevant funds from the Escrow Holdback have not been disbursed to Seller or an objection is pending with respect to the same) at the expiration of the Repair Period, Escrow Holder shall continue to hold the amount claimed by Seller until resolution of such claim. Upon Closing and the full execution of the Escrow Holdback Agreement, Escrow Holder will remit to itself from the Escrow Holdback a one-time, non-refundable $1,000.00 fee ("Escrow Fee") for the Escrow Holdback, provided that Buyer shall be responsible for the Escrow Fee if Buyer is in default hereunder or under the terms of the Escrow Holdback Agreement. The Escrow Fee shall be deemed earned upon Closing and the full execution of the Escrow Holdback Agreement. 4. Buyer's Agreements regarding Escrow Holdback. Buyer hereby acknowledges that (i) the holdback of the Holdback Funds in accordance herewith shall supersede any obligation on the part of Seller (if any) to assign all or a portion of any insurance claim or insurance proceeds with respect to the Elevator Damage, and Seller shall retain all rights to pursue any claim and to receive any insurance proceeds therefrom following the Closing Date, (ii) intentionally omitted, (iii) Buyer shall waive and relinquish any rights to receive or use any such insurance proceeds of Seller, and Buyer shall reasonably cooperate, upon request, with Seller in connection with Seller's pursuit of any rights to any insurance proceeds (but at no material out-of-pocket cost to Buyer), (iv) any rebate or discount agreed to be provided by the Vendor in connection with the Service Contract charges shall be payable directly by Vendor to Seller or deducted from Vendor's charges, (v) upon the deposit of the Holdback Funds in the Escrow Holdback, Buyer will not be entitled to a credit, re-proration or purchase price adjustment due to or in connection with the Elevator Damage and/or repair costs related to the Elevator Damage (the "Repair Costs"), provided that Seller agrees that if the actual Repair Costs (and the Escrow Fee) are higher than the Holdback Funds, then Seller shall be financially responsible for funding same except to the extent that such increased Repair Costs arise out of the failure of Buyer to perform its obligations pursuant to this Third Amendment (collectively, "Repair Costs Overrun Obligation"), (vi) in no event shall Buyer have the right to terminate the Purchase Agreement in accordance with Paragraph 7.7 or any other provision therein as a result of the Elevator Damage, (vii) during the Repair Period, Buyer shall grant Seller and Vendor access to the Rear Elevator (and any other areas of the Property that Vendor will need to access in order to repair the Rear Elevator) during normal business hours and Seller shall be permitted to have one or more representatives present at the Property to observe Vendor's repair and inspections of the Rear Elevator, provided that Seller or Vendor shall give DocuSign Envelope ID: 4494F5D2-D6B9-4B44-80FA-05FEB0DDF5BA

 
4734141.8 4 Buyer at least one (1) Business Day advance written notice regarding any scheduled dates and times in which Vendor desires to have one or more employees at the Property to repair and service the Rear Elevator, (viii) Seller shall periodically update Buyer as to the progress of Vendor's repair of the Rear Elevator, (ix) during the Repair Period, Buyer shall use commercially reasonable efforts to ensure the safety and security of the Rear Elevator such that it remains out of service and closed off to public use and that any parts or materials relating to the repair of the Rear Elevator remain covered and secured from any weather elements, threat of theft and any other common risks that would pose any threat of harm or damage to persons or property, (x) Buyer shall use commercially reasonable efforts to follow any written instructions or recommendations received from Vendor to secure the Rear Elevator and the area surrounding it and to assist with Vendor's repair of the Rear Elevator and Seller's coordination of same, and (xi) certain property and liability insurance relating to the Property is required under Section 9 of the Service Contract and because Seller will no longer be in control of the Property after Closing, Buyer hereby covenants that from Closing and until the end of the Repair Period, Buyer shall maintain such required insurance and shall add Seller and maintain Seller as an additional insured under each insurance policy required in order to comply with the Service Contract's insurance requirements. Buyer hereby indemnifies and holds Seller and Seller's officers, directors, shareholders, members, participants, affiliates, employees, representatives, and agents (collectively, "Seller Parties") harmless from and against any and all claims, liens, damages, demands, causes of action, liabilities, lawsuits, judgments, losses, costs and expenses (including but not limited to reasonable attorneys' fees and expenses) asserted against or incurred by Seller or Seller Parties arising out of the failure of Buyer to perform its obligations pursuant to this Section 4, except to the extent of Seller or Seller Parties' own negligence or willful misconduct. The foregoing indemnity shall survive the Repair Period and shall not be limited by any provision of the Purchase Agreement. 5. Disbursement of Holdback Funds. The Holdback Funds shall be used to reimburse Seller for documented Repair Costs relating to the Service Contract incurred by Seller prior to and following the Closing Date ("Repair Costs") in accordance with the Service Contract. To receive some or all of the Holdback Funds, Seller may make written requests (a "Disbursement Notice") for disbursement to Escrow Holder (with a copy to Buyer), which Disbursement Notice shall specify the amount of Repair Costs for which Seller is seeking reimbursement, accompanied by written invoices (or other reasonably acceptable documentation) evidencing prior payment by Seller of outstanding amounts due to Vendor. If Buyer reasonably objects to a Disbursement Notice (or the Repair Costs described therein), Buyer shall provide Seller and Escrow Holder written notice of such objection (including reasonable details for the basis of such objection) on or prior to the date which is five (5) business days following Seller's delivery of such Disbursement Notice, and if Buyer timely provides such written objection, Escrow Holder shall hold such Holdback Funds requested by such Disbursement Notice until (i) Seller and Buyer issue a joint direction to Escrow Holder directing Escrow Holder to pay the amount set forth in the Disbursement Notice to Seller (or portion thereof), or (ii) Escrow Holder receives a final order of a court of competent jurisdiction in Los Angeles County directing Escrow Holder to pay the amount set forth in the Disbursement Notice to the applicable party(ies). If Seller submits a Disbursement Notice and Buyer fails to timely object or Buyer provides to Escrow Holder written consent to the disbursement, Escrow Holder shall then immediately disburse the amount set forth in such Disbursement Notice to Seller or directly to the Vendor (as requested by Seller), without requiring further review, approval or instructions from Buyer or Seller. DocuSign Envelope ID: 4494F5D2-D6B9-4B44-80FA-05FEB0DDF5BA

 
4734141.8 5 6. Completion of Repair. No later than two (2) Business Days after Escrow Holder is notified in writing by Seller (with a copy to Buyer) regarding Vendor's completion and final inspection of the Elevator Damage repair and receipt of any required elevator permit from the applicable governmental authority ("Completion of Repair"), Escrow Holder shall release and disburse any then-remaining Holdback Funds (including any accrued interest, if applicable) to Seller (taking into account the prior deduction of the Escrow Fee from the Holdback Funds) without the need for any further instruction or authorization. Notwithstanding the foregoing, if the Completion of Repair fails to occur within one hundred eighty (180) days after the Closing (the "Repair Period"), subject to delays due to force majeure, then so long as such failure is not due to any fault of Buyer, all remaining Holdback Funds (including any accrued interest, if applicable) remaining in the Escrow Holdback that are not subject to a pending Disbursement Notice (i.e., Seller has delivered the Disbursement Notice but the relevant funds from the Escrow Holdback have not been disbursed to Seller or an objection is pending with respect to the same) shall be disbursed by Escrow Holder to Buyer after (i) Escrow Holder deducts from the Escrow Holdback and disburses to Seller the amount of money necessary to reimburse Seller for all Repair Costs that have not been previously disbursed (after Seller provides Escrow Holder with written invoices or other reasonably acceptable documentation evidencing the payment by Seller of any expenses under the Service Contract, including, without limitation, any payment made by Seller upon acceptance of the Service Contract proposal prior to Closing), and (ii) Escrow Holder takes into account the prior deduction of the Escrow Fee from the Holdback Funds; and at such time, Buyer shall then proceed to finalize the Completion of Repair and Seller shall have no further responsibility whatsoever for the repair or any subsequent maintenance of the Rear Elevator except to the extent of its Repair Costs Overrun Obligation (as defined in Section 4 above). 7. Counterparts. This Third Amendment may be executed in one or more counterparts (including .PDF), each of which shall be deemed an original, but all of which together shall constitute but one and the same instrument and may be delivered by way of email. [SIGNATURES ON FOLLOWING PAGE] DocuSign Envelope ID: 4494F5D2-D6B9-4B44-80FA-05FEB0DDF5BA

 
4734141.8 [SIGNATURE PAGE FOR THIRD AMENDMENT] IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment as of the Effective Date. BUYER: SELLER: 3032 WILSHIRE PROPERTIES GD LLC, a California limited liability company By: Name: Arash Danialifar Position: Manager Acknowledged and agreed to by Original Buyer: ORIGINAL BUYER: GD REALTY GROUP, INC, a California corporation By: Name: Arash Danialifar Position: President 3032 WILSHIRE INVESTORS LLC, a Colorado limited liability company By: _________________________________ Name: Matthew Schreiber Position: Authorized Signatory DocuSign Envelope ID: 4494F5D2-D6B9-4B44-80FA-05FEB0DDF5BA

 
4734141.8 [SIGNATURE PAGE FOR THIRD AMENDMENT] ACCEPTANCE BY ESCROW HOLDER Stewart Title Guaranty Company acknowledges that it has received a fully executed copy or original executed counterparts of the foregoing Third Amendment and agrees to be bound by and strictly perform the terms thereof as such terms apply to Escrow Holder. Dated: __________, 2022 STEWART TITLE GUARANTY COMPANY By: Name: Andrea Mendoza Position: Commercial Escrow Officer DocuSign Envelope ID: 4494F5D2-D6B9-4B44-80FA-05FEB0DDF5BA

 
4734141.8 Exhibit A-1 EXHIBIT A Depiction of Rear Elevator (circled in red) per Property's Floor Plans DocuSign Envelope ID: 4494F5D2-D6B9-4B44-80FA-05FEB0DDF5BA

 
4734141.8 Exhibit B-1 EXHIBIT B ELEVATOR DAMAGE REPAIR ESTIMATE FROM VENDOR [Attached.] DocuSign Envelope ID: 4494F5D2-D6B9-4B44-80FA-05FEB0DDF5BA

 
Page 1 of 5 RHAS-CDMVD5 2022.1.1 Schindler Elevator Corporation 16450 Foothill Blvd. Suite 200 Sylmar, CA 91342-1036 Phone: 818-336-3009 Fax: 818-336-3076 UPGRADE ORDER AGREEMENT Date: 05/05/2022 Estimate Number: RHAS-CDMVD5 (2022.1.1) To: 3032 Wilshire 3032 Wilshire Blvd Santa Monica, CA 90405 Customer: 3032 Wilshire 3032 Wilshire Blvd Santa Monica, CA 90405 Attn: Property Manager Schindler hereby proposes to furnish and install the following with respect to the equipment located at the above building: Pit Water Damage - 1 Elevator After attempting to replace the elevator packings that are failing the crew surveyed and determined that the pistons have rusted due to water saturation and will need to be replaced. The feedline, rupture valve, shutoff valve, and pistons are showing significant signs of rust and this equipment will need to be replaced to eliminate failure of the pressurized system and extended downtime. Further to that, the remaining hoistway equipment is also showing signs of rust from the top floor to the bottom, including on top of the elevator. Schindler will provide labor and material to perform the following scope of work during normal working hours of the elevator trade:  Prep work area for installation  Raise, hang, and secure the elevator  Remove and store oil from the system  Remove the dual high pressure hydraulic feedline, rupture valve, shutoff valve & cylinder assembly  Provide and install new feedline, rupture valve, shutoff valve & cylinder assembly  Replace & replenish oil as needed  Clean, remove, and protect against further rusting throughout the hoistway  Perform required load test DocuSign Envelope ID: 4494F5D2-D6B9-4B44-80FA-05FEB0DDF5BA

 
Page 2 of 5 RHAS-CDMVD5 2022.1.1  Clean work area and return the elevator to service Note: Any and all permits as required by the elevator division including inspection and testing are covered under the scope of this agreement. Labor: $65,370.00 Material: $33,405.00 Less Discount: ($40,000.00) Price: $58,775.00, plus applicable taxes. (Quotations valid for 30 days; price based upon work during regular working hours of regular working days.) *Financing available (see below) Payment: 50% of the price is due upon acceptance of this proposal; 40% of the price is due as work progresses within 30 days of invoice; Balance due upon completion, within 30 days of invoice. Schindler reserves the right not to source material or schedule labor for the above quoted work until initial payment has been received. Schindler retains title to any equipment furnished hereunder until final payment is made. Late or non-payment will result in assessment of interest charged at a rate of 1 1/2% per month or the highest legal rate available, and any attorneys' fees, expenses, and costs of collection. The customer understands that this is a fixed price proposal. Supporting documentation for materials and/or labor shall not be a condition precedent for payment in full to be made to Schindler. Available Financing: Schindler understands that the cost of capital improvements can put a strain on a property’s budget. For this reason, Schindler has teamed with leading financial organizations (Lender) in an effort to help our customers sort through the best options to fund these capital improvements. The financing is done directly between the Lender and you, our customer. In return, Schindler requires that you enter into a new 5-year maintenance agreement with Schindler. Often times, other building systems will need upgrades as a part of the elevator or escalator improvements. The cost of the related work can be rolled into the total finance package with the Lender. As an example, if you finance $25,000.00 for 60 months, your monthly payment would be approximately $510.00 plus any applicable state and federal tax. The monthly finance payment is an approximation and will be finalized between you and the Lender. Financing is subject to the borrower’s qualifications, including income, property evaluation, sufficient equity and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines. Loans are subject to change without notice based upon eligibility and market conditions. This is not a commitment to make a loan as financing options are subject to credit checks and approval. This program is offered and provided through third-party financial organizations and are dependent upon those entities’ rules, regulations, and restrictions. If the maintenance agreement is cancelled for any reason prior to the 60-month term, all remaining balances become due immediately. DocuSign Envelope ID: 4494F5D2-D6B9-4B44-80FA-05FEB0DDF5BA

 
Page 3 of 5 RHAS-CDMVD5 2022.1.1 Your sales representative will be happy to facilitate the process moving forward if you are interested in our financing option. The finance credit approval form can be found attached to this document. References as to credit must be furnished and be acceptable to Schindler Elevator Corporation. Please provide the following information with regard to payment for work under the enclosed Repair Contract: Name of Insurance Company: Agent’s Name: Telephone Number: Source of other guaranteed financing: DocuSign Envelope ID: 4494F5D2-D6B9-4B44-80FA-05FEB0DDF5BA

 
Page 4 of 5 RHAS-CDMVD5 2022.1.1 The attached terms and conditions are incorporated herein by reference. Acceptance by you as owner’s agent or authorized representative and subsequent approval by our authorized representative will be required to validate this agreement. Proposed: Accepted: By: Ryan Haines By: For: Schindler Elevator Corporation For: 3032 Wilshire Title: Sales Representative Title: Date: 5/5/2022 Date: Approved: By: Denis Davis Title: General Manager Service Date: DocuSign Envelope ID: 4494F5D2-D6B9-4B44-80FA-05FEB0DDF5BA

 
Page 5 of 5 RHAS-CDMVD5 2022.1.1 TERMS AND CONDITIONS 1. Any changes to the building to meet local or state codes are to be made by Purchaser. Any changes in the Work required due to building conditions discovered in the performance of the Work will be paid by Purchaser. 2. No work, service materials or equipment other than as specified hereunder is included or intended. This proposal is based upon performing the work described above in accordance with the requirements of the authorities having jurisdiction. This proposal does not include any work other than that specifically enumerated herein, or repair or replacement of retained apparatus other than as described above. If any additional repairs or replacements are required after further examination of conditions encountered in the performance of the work, or by the authorities having jurisdiction, we will provide a supplemental proposal at that time. 3. Purchaser retains its normal responsibilities as Owner of the equipment which is subject of this Agreement. 4. Schindler will not be liable for damages of any kind, in excess of the Price of this Agreement, nor in any event for special, indirect, consequential or liquidated damages. 5. Any cutting and patching is by others and not included in this work. 6. Neither party shall be responsible for any loss, damage, detention or delay caused by labor trouble or disputes, strikes, lockouts, fire, explosion, theft, lightning, wind storm, earthquake, floods, epidemics, pandemics, storms, riot, civil commotion, malicious mischief, embargoes, shortages of materials or workmen, unavailability of material from usual sources, government priorities or requests or demands of the National Defense Program, civil or military authority, war, insurrection, failure to act on the part of either party's suppliers or subcontractors, orders or instructions of any federal, state, or municipal government or any department or agency thereof, acts of God, or by any other cause beyond the reasonable control of either party. Dates for the performance or completion of the work shall be extended by such delay of time as may be reasonably necessary to compensate for the delay. 7. We warrant that the work will comply with the specifications and that there will be no defects in materials or workmanship for one year after completion of the work or acceptance thereof by beneficial use, whichever is earlier. Our duty under this warranty is to correct nonconformance or defect at our expense within a reasonable time after the receipt of notice. THE EXPRESS WARRANTIES CONTAINED HEREIN ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Purchaser's remedies hereunder are exclusive. 8. Purchaser agrees to defend, indemnify and hold Schindler harmless from and against any claims, lawsuits, demands, judgments, damages, costs and expenses arising out of this Agreement except to the extent caused by or resulting from the sole and direct fault of Schindler. 9. For non-maintenance contract customers, Customer hereby agrees, without limitation, to defend, indemnify, release and hold harmless Schindler and its employees, affiliates, divisions, parent entities, predecessors and successors, representatives and agents from and against all claims, liabilities, losses, injuries, death, damages, fines, penalties, payments, costs, and expenses (including reasonable attorneys’ fees and expenses) arising out of or relating to the Work performed by Schindler under this Agreement. INSURANCE: At a minimum, Customer shall provide to Schindler, insurance coverages as set forth within, and a certificate of insurance evidencing such coverage: Comprehensive General Liability (including Products Liability, Completed Operations, Broad Form Property damage, and Blanket Contractual Liability) in the amounts of $2M per occurrence, $5M aggregate. Schindler Holding, Ltd., Schindler Elevator Corporation, and Schindler Enterprises, Inc. shall be named as additional insureds on the above referenced policies, pursuant to ISO Form CG 2010 11/85, and shall appear as such on the Certificate of Insurance. Insurance shall provide a waiver of subrogation in favor of the entities named as additional insureds. Insurance shall be primary over any other valid and collectible insurance. Any deductible / retention is the responsibility of the Named Insured. 10. Any proprietary material, information, data or devices contained in the equipment or work provided hereunder, or any component or feature thereof, remains our property. This includes, but is not limited to, any tools, devices, manuals, software, modems, source/ access/ object codes, passwords. In the event Schindler’s maintenance obligation is terminated, the Schindler Ahead features ("SA") (if applicable) will be deactivated and Schindler reserves the right to remove the Schindler Ahead hardware. If Schindler is no longer the maintenance provider, Customer is responsible for obtaining alternative telephone service for the elevator phones. 11. In the event of governmental changes to applicable tariffs, tax rates, including but not limited to sales tax, use tax, excise tax, privilege tax, transaction tax and similar changes, or loss of tax exempt status, Schindler reserves the rights to adjust the contract price accordingly to account for all additional cost impacts. DocuSign Envelope ID: 4494F5D2-D6B9-4B44-80FA-05FEB0DDF5BA

 
Exhibit C-1 EXHIBIT C ESCROW HOLDBACK AGREEMENT THIS ESCROW HOLDBACK AGREEMENT (this "Agreement") is made as of __________________, 2022 (the "Effective Date"), by and among 3032 WILSHIRE INVESTORS LLC, a Colorado limited liability company ("Seller"), and 3032 WILSHIRE PROPERTIES GD LLC, a California limited liability company, as assignee under the Assignment (defined in Recital A) ("Buyer"), and accepted and agreed to by STEWART TITLE GUARANTY COMPANY ("Escrow Holder"). RECITALS A. GD Realty Group, Inc., a California corporation ("Original Buyer") and Seller are parties to that certain Agreement of Purchase and Sale and Joint Escrow Instructions, dated as of June 30, 2022 (the "Original Purchase Agreement"), pursuant to which Seller agreed to sell to Original Buyer, and Original Buyer agreed to purchase from Seller, that certain real property located at 3032 Wilshire Boulevard, Santa Monica, California 90403, as more particularly described in the Original Purchase Agreement (the "Property"). The Original Purchase Agreement was amended by that certain First Amendment to Agreement of Purchase and Sale and Joint Escrow Instructions, dated as of July 18, 2022 (the "First Amendment"), and further amended by that certain Second Amendment to Agreement of Purchase and Sale and Joint Escrow Instructions, dated as of August 9, 2022 (the "Second Amendment"), each between Original Buyer and Seller. Pursuant to that certain Assignment and Assumption of Real Estate Purchase Agreement and Escrow Instructions, dated September 14, 2022 (the "Assignment"), Original Buyer assigned all of its right, title and interest under the Original Purchase Agreement (as amended) to Buyer, subject to the terms, covenants and conditions of such Original Purchase Agreement, as amended. Subsequently, Buyer and Seller entered into that certain Third Amendment to Agreement of Purchase and Sale and Joint Escrow Instructions, dated as of September 30, 2022 (the "Third Amendment", and together with the Original Purchase Agreement, First Amendment, and Second Amendment, the "Purchase Agreement"). All capitalized terms used herein and not otherwise defined shall have the same meanings set forth in the Purchase Agreement. B. The parties have agreed that, at Closing, Seller shall deposit in a segregated escrow account the amount of One Hundred Thousand Dollars ($100,000) from the proceeds of the sale of the Property, which shall constitute the "Holdback Funds." As used in this Agreement, the term "Funds" shall refer to the Holdback Funds. NOW, THEREFORE, IN CONSIDERATION OF the foregoing recitals, the mutual agreements, covenants and promises set forth in this Agreement, and other good and valuable consideration, the receipt, sufficiency and validity of which is hereby acknowledged, Seller and Buyer agree as follows: DocuSign Envelope ID: 4494F5D2-D6B9-4B44-80FA-05FEB0DDF5BA

 
Exhibit C-2 1. Holdback Funds Escrow Account. Seller and Buyer hereby agree that at Closing, Escrow Holder shall hold back from Seller's proceeds from the sale of the Property an amount equal to the Holdback Funds. Escrow Holder shall maintain the Holdback Funds in a segregated escrow account (Escrow No. 22000110896A) (the "Holdback Funds Escrow Account"), and disburse the Holdback Funds only in accordance with the terms of this Agreement. Escrow Holder shall not commingle the Holdback Funds with any funds of Escrow Holder or others. 2. Disbursement of Funds. Each of the parties agrees that the Holdback Funds in the Holdback Funds Escrow Account shall be disbursed by Escrow Holder only in accordance with Sections 3, 4, 5 and 6 of the Third Amendment. 3. Wire Instructions. Escrow Holder acknowledges that Buyer and Seller have previously provided separate written wire instructions to Escrow Holder for disbursement of all or any portion of the Funds that may become due and owing to such party pursuant to the terms of this Agreement. 4. Liability of Escrow Holder. Buyer and Seller acknowledge that Escrow Holder is acting solely as a stakeholder at their request and for their convenience, and that Escrow Holder shall not be deemed to be the agent of either of the parties, and that Escrow Holder shall not be liable to either of the parties for (a) any action or omission on its part taken or made in good faith, and not in willful disregard of this Agreement, (b) any losses, costs, damages, claims, liabilities, demands or obligations in connection with the Funds if such losses, costs, damages, claims, liabilities, demands or obligations result from the failure, insolvency or suspension of the bank holding the Funds ("Escrow Bank"), or (c) interest on the Funds, including, without limitation, any loss of interest due to any delays in the withdrawal of the Funds that may be imposed by Escrow Bank as a result of the depositing or redeeming of the Funds pursuant to Escrow Holder's instructions; provided, however, that Escrow Holder shall be liable for any actual, out-of-pocket losses, costs, damages, claims, liabilities, expenses (including reasonable attorneys' fees, expenses and disbursements), demands or obligations ("Liabilities") incurred by Seller or Buyer resulting from actions or omissions taken or made by Escrow Holder in bad faith, in willful disregard of this Agreement or involving gross negligence or willful misconduct on the part of Escrow Holder. Notwithstanding the foregoing, if Escrow Holder believes in good faith at any time that a disagreement or dispute has arisen between the parties hereto over entitlement to the portion of the Funds to be distributed (whether or not litigation has been instituted), Escrow Holder shall have the right, upon written notice to both Seller and Buyer, (i) to deposit the disputed amount of the Funds with the Clerk of the Court in which any litigation is pending and/or (ii) to take such reasonable affirmative steps as it may, at its reasonable option, elect in order to terminate its duties as Escrow Holder, including, without limitation, the depositing of the disputed amount of the Funds with a court of competent jurisdiction and the commencement of an action for interpleader, the costs thereof to be borne by whichever of Seller or Buyer is the losing party, and thereupon Escrow Holder shall be released of and from all liability hereunder except for any previous actions or omissions taken or made by Escrow Holder in bad faith, in willful disregard of this Agreement or involving gross negligence or willful misconduct on the part of Escrow Holder. Seller and Buyer hereby jointly agree to indemnify, defend and hold Escrow Holder DocuSign Envelope ID: 4494F5D2-D6B9-4B44-80FA-05FEB0DDF5BA

 
Exhibit C-3 harmless against any and all loss, damage or expense (including, but not limited to, reasonable attorneys' fees and expenses, if any, and the enforcement of this indemnity) which it may incur by reason of its good faith performance of its obligations and duties under this Agreement, except to the extent of the gross negligence or willful misconduct of Escrow Holder. 5. Assignment; Successors and Assigns. This Agreement may not be assigned by any party hereto and shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns. 6. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California. 7. Severability. If any term or provision of this Agreement shall, to any extent, be held invalid or unenforceable, the remaining terms and provisions of this Agreement shall not be affected thereby, but each remaining term and provision shall be valid and enforced to the fullest extent permitted by law. 8. Counterparts. This Agreement may be executed in any number of counterparts, all of which shall be deemed to be an original and all of which shall be deemed to constitute one and the same instrument. Signatures to this Agreement transmitted by .pdf or other electronic transmission shall be valid and effective to bind the party so signing. 9. Notices (a) Method of Delivery. All notices, requests, demands and other communications (each, a "Notice") required to be provided by any party to any other party pursuant to this Agreement shall be in writing and shall be delivered pursuant to the notice provisions in the Purchase Agreement. For Notice purposes, the address for Escrow Holder is the following: Stewart Title Guaranty Company Address: 525 N. Brand Blvd., Glendale, California 91203 Attn: Andrea Mendoza, Senior Commercial Escrow Officer Email: amendoza@stewart.com Telephone: (818) 500-5680 Escrow No. 22000110896A (b) Change of Address. The parties (and the Persons to whom copies of Notices are to be delivered pursuant to Section 9(a) hereof) shall have the right to change their respective address and/or email address for the purposes of this Section 9 by providing a Notice of such change in address and/or email address as required under this Section 9. (c) Delivery by Party's Counsel. The parties agree that the attorney for such party shall have the authority to deliver Notices on such party's behalf to the other parties hereto. 10. Prevailing Party. If any litigation or other court action, arbitration or similar adjudicatory proceeding is commenced by any party to enforce its rights under this Agreement against any other party, all fees, costs and expenses, including, without limitation, reasonable DocuSign Envelope ID: 4494F5D2-D6B9-4B44-80FA-05FEB0DDF5BA

 
Exhibit C-4 attorneys' fees and court costs, incurred by the prevailing party in such litigation, action, suit or proceeding shall be reimbursed by the losing party; provided, that if a party to such litigation, action, arbitration or proceeding prevails in part, and loses in part, the court, arbitrator or other adjudicator presiding over such litigation, action, arbitration or proceeding shall award a reimbursement of the fees, costs and expenses incurred by such Party on an equitable basis. This Section 10 shall survive the termination of this Agreement. 11. Time of Essence. Time is of the essence of this Agreement. 12. No Modification. This Agreement shall not be modified or amended except in a written document signed by all parties hereto. 13. General Provisions. This Agreement shall be subject in all respects to those certain General Provisions of Escrow Holder from Seller and Buyer, as amended by the Amendment to Escrow Instructions, dated July 5, 2022 (collectively, the "General Provisions"). Notwithstanding anything herein to the contrary, if there is any conflict between any terms and conditions in this Agreement and any terms and conditions in the General Provisions, the terms and conditions of this Agreement shall control and prevail. 14. Escrow Fee. Upon Closing and after the Holdback Funds Escrow Account is opened to accept the Funds, Escrow Holder will remit to itself from the Funds a one-time, non- refundable $1,000.00 fee ("Escrow Fee") for its services under this Agreement. The Escrow Fee shall be deemed earned upon Closing and the full execution of this Agreement. 15. Investment of Funds. Escrow Holder shall promptly invest the Funds (less the Escrow Fee) in an interest-bearing money market account for the benefit of Seller upon Escrow Holder's receipt of a completed and signed Form W-9 from Seller. Any interest earned thereon shall be for the benefit of Seller's Funds and subject in all respects to the Third Amendment (including Section 6 thereof). [Signature Pages Follow] DocuSign Envelope ID: 4494F5D2-D6B9-4B44-80FA-05FEB0DDF5BA

 
Exhibit C-5 IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date. BUYER: SELLER: 3032 WILSHIRE PROPERTIES GD LLC, a California limited liability company By: Name: Arash Danialifar Position: Manager Acknowledged and agreed to by Original Buyer: ORIGINAL BUYER: GD REALTY GROUP, INC, a California corporation By: Name: Arash Danialifar Position: President 3032 WILSHIRE INVESTORS LLC, a Colorado limited liability company By: _________________________________ Name: Matthew Schreiber Position: Authorized Signatory DocuSign Envelope ID: 4494F5D2-D6B9-4B44-80FA-05FEB0DDF5BA

 
Exhibit C-6 ESCROW HOLDER JOINDER Escrow Holder hereby accepts the foregoing instructions and agrees to comply therewith. STEWART TITLE GUARANTY COMPANY By:______________________________ Name: ___________________________ Its: ___________________________ DocuSign Envelope ID: 4494F5D2-D6B9-4B44-80FA-05FEB0DDF5BA

 

EXHIBIT 31.1
 
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
 
I, Matthew Schreiber, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Strategic Realty Trust, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): 
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 14, 2022
/s/ Matthew Schreiber
Matthew Schreiber
Chief Executive Officer and Director
(Principal Executive Officer)

EXHIBIT 31.2
 
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
 
I, Ryan Hess, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Strategic Realty Trust, Inc.; 
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): 
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 14, 2022
/s/ Ryan Hess
Ryan Hess
Chief Financial Officer
(Principal Financial Officer)

EXHIBIT 32.1
 
 
 
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and in connection with the Quarterly Report on Form 10-Q of Strategic Realty Trust, Inc. (the “Company”) for the period ended September 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, the Chief Executive Officer of the Company, certifies, to his knowledge, that:
 
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2022
/s/ Matthew Schreiber
Matthew Schreiber
Chief Executive Officer and Director
(Principal Executive Officer)

EXHIBIT 32.2
 
 
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and in connection with the Quarterly Report on Form 10-Q of Strategic Realty Trust, Inc. (the “Company”) for the period ended September 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, the Chief Financial Officer of the Company, certifies, to his knowledge, that:
 
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2022
/s/ Ryan Hess
Ryan Hess
Chief Financial Officer
(Principal Financial Officer)