Document:

EX-10.1

 Exhibit 10.1 

SECURITIES PURCHASE AGREEMENT 

SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of February 26, 2020, by and among Great Elm Capital Group,
Inc., a Delaware corporation (the “Company”), and the investors listed on the Schedule of Buyers attached hereto (each individually, a “Buyer” and together, the “Buyers”). 

WHEREAS: 
 A.    The
Company and the Buyers are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(a)(2) under the Securities Act of 1933, as amended (the “Securities Act”), and
Rule 506(b) of Regulation D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act; 

B.    The Buyers, severally, and not jointly, wish to purchase from the Company, and the Company wishes to sell to the Buyers,
upon the terms and conditions stated in this Agreement, the aggregate principal amount of 5.0% Convertible Senior PIK Notes due 2030 (the “Securities”), which Securities are convertible into cash or shares of the Company’s
common stock, par value $0.001 per share (the “Common Stock,” and the shares of Common Stock issuable pursuant to the terms of the Securities upon conversion, the “Conversion Shares”), set forth on the Schedule
of Buyers hereto; 
 C.    The Company intends to use the net proceeds from the transaction contemplated herein for general
corporate purposes, to fund future acquisitions and to pay related transaction fees and expenses; and 

D.    Contemporaneously with the execution and delivery of this Agreement, the parties hereto are executing and delivering a
Registration Rights Agreement, substantially in the form attached as Exhibit A (as the same may be amended, restated, modified or supplemented and in effect from time to time, the “Registration Rights Agreement”; and together
with this Agreement and the Securities, the “Transaction Documents”), pursuant to which the Company has agreed to provide certain registration rights in respect of the Conversion Shares under the Securities Act and the rules and
regulations promulgated thereunder, and applicable state securities laws. 
 NOW THEREFORE, the Company and the Buyers hereby agree as
follows: 
 1.    PURCHASE AND SALE OF SECURITIES. 

a.    Purchase of the Securities. Subject to the terms and conditions of this Agreement, and in reliance on the
representations, warranties and covenants contained herein, the Company will issue and sell to each Buyer, and each Buyer severally agrees to purchase from the Company, the principal amount of Securities (the “Purchase Price”) as is
set forth opposite each such Buyer’s name on the Schedule of Buyers. 
 b.    Form of Payment.
Simultaneously with the parties’ execution of this Agreement, (i) each Buyer shall pay the applicable Purchase Price to the Company for the Securities to be issued and sold to such Buyer, by wire transfer of immediately available funds in
accordance with the Company’s written wire instructions, and (ii) the Company shall deliver the Securities which such Buyer is purchasing hereunder, duly executed on behalf of the Company and registered in the name of such Buyer or its
designee. The closing of the purchase and sale of the Securities shall take place simultaneously with the execution of this Agreement (the “Closing”) at the offices of Jones Day, 250 Vesey Street, New York, NY 10281 or at such other
place as the Company and the Buyers may mutually agree. 
 2.    BUYER’S REPRESENTATIONS AND
WARRANTIES. 
 Each Buyer represents and warrants, severally and not jointly, as of the date of this Agreement, with respect to only itself, to
the Company that: 
 a.    Investment Purpose. Such Buyer understands that the Securities are “restricted
securities” and have not been registered under the Securities Act or any applicable state securities law and such 

 
Buyer is acquiring the Securities hereunder for its own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales
registered under, or exempted from, the registration requirements of the Securities Act; provided, however, that by making the representations herein, such Buyer does not agree to hold any of the Securities for any minimum or other specific
term and reserves the right to assign, transfer or otherwise dispose of any of the Securities at any time in accordance with or pursuant to a registration statement or an exemption under the Securities Act. Such Buyer is acquiring the Securities
hereunder in the ordinary course of its business. Such Buyer does not presently have any agreement or understanding, directly or indirectly, with any Person (as defined below) to distribute any of the Securities. For purposes of this Agreement,
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization or a government or any department or agency thereof or any other legal entity. 

b.    Accredited Investor Status. Such Buyer is an “accredited investor” as that term is defined in Rule 501(a)
of Regulation D. 
 c.    Reliance on Exemptions. Such Buyer understands that the Securities are being offered and sold
to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and such Buyer’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings of such Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of such Buyer to acquire the Securities. 

d.    Information. Such Buyer acknowledges that it has had the opportunity to review the SEC Documents (as defined below)
and such Buyer and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities sufficient in its view to enable it to
evaluate its investment. Such Buyer and its advisors, if any, have been afforded the opportunity to ask questions as it has deemed necessary of, and to receive answers from, the Company or its representatives concerning the terms and conditions of
the offering of the Securities and the merits and risks of investing in the Securities. Neither such inquiries nor any other due diligence investigations conducted by such Buyer or its advisors, if any, or its representatives shall modify, amend or
affect such Buyer’s right to rely on the Company’s representations and warranties contained in Section 3 below. The Buyer has received no representations or warranties from the Company, its employees, agents, or
attorneys in making this investment decision other than as set forth in Section 3 below. 

e.    General Solicitation. Such Buyer is not purchasing the Securities as a result of any advertisement, article, notice
or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general advertisement. 

f.    Experience of Such Buyer. Such Buyer, either alone or together with its representatives, has such knowledge,
sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment. Such Buyer is able
to bear the economic risks of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment. 

g.    Independent Investment Decision. Such Buyer, together with any of its advisors, has independently evaluated the
merits of its decision to purchase Securities pursuant to the Transaction Documents, and such Buyer confirms that it has not relied on the advice of any other Buyer’s business and/or legal counsel in making such decision. Such Buyer understands
that nothing in this Agreement or any other materials presented by or on behalf of the Company to the Buyer in connection with the purchase of the Securities constitutes legal, tax or investment advice. Such Buyer has consulted such legal, tax and
investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of the Securities. 

h.    Acknowledgment of Risks. Such Buyer acknowledges and understands that its investment in the Securities involves a
significant degree of risk, including, without limitation: (i) an investment in the Company is speculative, and only Buyers who can afford the loss of their entire investment should consider investing in the Company and the Securities;
(ii) such Buyer may not be able to liquidate its investment; (iii) transferability of the Securities is extremely limited; (iv) in the event of a disposition of the Securities, such Buyer

  
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could sustain the loss of its entire investment; (v) the Company does not currently pay dividends on its Common Stock and does not anticipate the payment of dividends in the foreseeable
future; and (vi) that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the
Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities. 
 i.    Transfer
or Resale. Such Buyer understands that, except as provided in the Registration Rights Agreement, (i) the Securities have not been and are not being registered under the Securities Act or any state securities laws, and may not be offered for
sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) such Buyer shall have delivered to the Company an opinion of counsel, in form and substance reasonably acceptable to the Company, to the effect that
such Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, or (C) such Buyer provides the Company with reasonable assurance that such Securities have been or can be
sold, assigned or transferred pursuant to Rule 144 promulgated under the Securities Act (or a successor rule thereto) (“Rule 144”); and (ii) neither the Company nor any other Person is under any obligation to register the
Securities under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder. 

j.    Brokers and Finders. No Person will have, as a result of the transactions contemplated by this Agreement, any valid
right, interest or claim against or upon the Company or any Buyer for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Buyer. 

k.    Certain Trading Activities. Other than with respect to the transactions contemplated herein, since the time that
such Buyer was first contacted by the Company or any other Person regarding the transactions contemplated hereby, neither the Buyer nor, to Buyer’s knowledge, any Affiliate of such Buyer which (i) had knowledge of the transactions
contemplated hereby, (ii) has or shares discretion relating to such Buyer’s investments or trading or information concerning such Buyer’s investments, including in respect of the Securities, and (iii) is subject to such
Buyer’s review or input concerning such Affiliate’s investments or trading (each a “Trading Affiliate”) has directly or indirectly, nor has any Person acting on behalf of such Buyer or Trading Affiliate, effected or agreed
to effect any purchases or sales of the securities of the Company (including, without limitation, any short sales involving the Company’s securities). Notwithstanding the foregoing, in the case of a Buyer and/or Trading Affiliate that is,
individually or collectively, a multi-managed investment bank or vehicle whereby separate portfolio managers manage separate portions of such Buyer’s or Trading Affiliate’s assets and the portfolio managers have no direct knowledge of the
investment decisions made by the portfolio managers managing other portions of such Buyer’s or Trading Affiliate’s assets, the representation set forth above shall apply only with respect to the portion of assets managed by the portfolio
managers that have knowledge about the financing transaction contemplated by this Agreement. Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with
respect to the identification of the availability of, or securing of, available shares to borrow in order to effect short sales or similar transactions in the future. 

l.    Legends. Such Buyer understands that the original issuance of the certificates or other instruments representing the
Securities, and all certificates or other instruments issued in exchange therefor or in substitution thereof, will bear the restrictive legend(s) set forth in the Securities until such time as the same is no longer required under applicable
requirements of the Securities Act and the rules and regulations promulgated thereunder or applicable state securities laws, and that the Company will make a notation on their records the restrictions on transfer set forth and described therein.

 m.    Authorization; Enforcement; Validity. To the extent a Buyer is a corporation, partnership, limited liability
company or other entity, such Buyer is a validly existing corporation, partnership, limited liability company or other entity and has the requisite corporate, partnership, limited liability or other organizational power and authority to enter into
the transactions contemplated by the Transaction Documents. To the extent a Buyer is an individual, such Buyer has the legal capacity to enter into the transactions contemplated by the Transaction Documents. The Transaction Documents have each been
duly and validly authorized (as applicable), executed and delivered on behalf of such Buyer and are the legal, valid and binding agreements of such Buyer, enforceable against such Buyer in accordance with their respective terms, except as may be
limited by bankruptcy, insolvency, fraudulent conveyance or similar laws affecting creditors’ rights generally and general principles of equity (the “Enforceability Exceptions”). 

  
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 n.    No Conflicts. The execution, delivery and performance by such
Buyer of the Transaction Documents and the consummation by such Buyer of the transactions contemplated thereby will not (i) in the case that Buyer is a corporation, partnership, limited liability company or other entity, result in a violation
of the organizational documents of Buyer, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which such Buyer is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to such
Buyer, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such
Buyer to perform its obligations hereunder. 
 o.    Residency. Such Buyer’s residence (if an individual) or
offices in which its investment decision with respect to the Securities was made (if an entity) are located at its respective address listed on the Schedule of Buyers. 

p.    No “Bad Actor” Disqualification Events. Such Buyer represents that it is not a person of the type
described in Section 506(d) of Regulation D that would disqualify the Company from engaging in a transaction pursuant to Section 506 of Regulation D. 

q.    Anti-Money Laundering Laws. Such Buyer represents and warrants to, and covenants with, the Company that:
(i) such Buyer, its parents, subsidiaries, officers, directors and partners (other than limited partners), and to such Buyer’s knowledge, its affiliated companies, stockholders, owners, employees, and agents, are not on the List of
Specially Designated Nationals and Blocked Persons maintained by the U.S. Department of the Treasury (“Treasury”) and have not been designated by Treasury as a financial institution of primary money laundering concern subject to
special measures under Section 311 of the USA PATRIOT Act, Pub. L. 107-56; (ii) to such Buyer’s knowledge, the funds to be used to acquire the Securities are not derived from activities that
contravene applicable anti-money laundering laws and regulations; and (iii) to the best of its knowledge, none of the funds to be provided by such Buyer are being tendered on behalf of a person or entity who has not been identified to such
Buyer. 
 3.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY. 

The Company represents and warrants, as of the date of this Agreement, to each of the Buyers that: 

a.    No Registration. Subject to compliance by the Buyers with the representations and warranties set forth in
Section 2 hereof, it is not necessary in connection with the offer, sale and delivery of the Securities to the Buyers in the manner contemplated by this Agreement to register the Securities under the Securities Act. 

b.    Organization and Qualification. Each of the Company and its subsidiaries has been duly incorporated, organized, or formed, as applicable, and is validly existing in good standing, in jurisdictions where such concept exists, under the laws of the jurisdiction in which it is
incorporated, organized or formed, as applicable, and has the requisite power and authority to own its properties, and to carry on its business as now being conducted. The Company is duly qualified to do business and is in good standing in every
jurisdiction which requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not be reasonably expected to have a Material Adverse Effect. As used in this Agreement, “Material Adverse
Effect” means any material adverse effect on (i) the condition (financial or otherwise), earnings, assets, business, operations, results of operations, prospects or properties of the Company and its subsidiaries, taken as a whole,
(ii) the authority or ability of the Company to perform its obligations under the Transaction Documents or (iii) the rights and remedies of any Buyer under the Transaction Documents. 

c.    Authorization; Enforcement; Validity. The Company has the requisite corporate power and authority to enter into and
perform its obligations under each of the Transaction Documents in connection with the transactions contemplated hereby and thereby, and to issue and deliver the Securities in accordance with the 

  
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terms hereof and thereof. The execution and delivery of the Transaction Documents by the Company, and the consummation by the Company of the transactions contemplated hereby and thereby,
including the issuance of the Securities and the reservation for issuance and the issuance of the Conversion Shares, have been duly authorized by the Board of Directors of the Company (the “Company Board”) and no further consent or
authorization is required by the Company or its stockholders. This Agreement and the other Transaction Documents dated of even date herewith have been duly executed and delivered by the Company, and constitute the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with their terms, except as may be limited by the Enforceability Exceptions. 

d.    Capitalization. The authorized capital stock of the Company consists of (i) 350,000,000 shares of Common Stock,
of which, as of the date hereof, 25,429,897 shares were outstanding and 3,384,122 shares are currently reserved for issuance pursuant to the Company’s stock option, restricted stock and stock purchase plans, including, stock options
representing 2,474,979 shares of Common Stock that have been granted to employees and are currently outstanding, and restricted stock awards and restricted stock units representing 909,143 shares of Common Stock that are currently reserved and (ii)
5,000,000 shares of preferred stock, $0.001 par value, of which, as of the date hereof, zero shares are issued and outstanding. All of such outstanding or issuable shares of the Company have been, or upon issuance will be, validly issued and are, or
upon issuance will be, fully paid and non-assessable. No shares of the capital stock of the Company are subject to preemptive rights or any other similar rights or any liens suffered or permitted by the
Company. Except as disclosed in the SEC Documents, and/or waived prior to the date hereof, (A) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into or exchangeable or exercisable for, any shares of capital stock of the Company, or contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional shares of
capital stock of the Company, or options, warrants or scrip for rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into or exchangeable or exercisable for, any shares of capital
stock of the Company (in each case, except for the Securities); (B) there are no agreements or arrangements under which the Company is obligated to register the sale of any of its securities under the Securities Act (except the Registration Rights
Agreement); (C) there are no outstanding securities or instruments of the Company that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company is or may become bound
to redeem a security of the Company and no other stockholder or similar agreement to which the Company is a party; (D) there are no securities or instruments containing anti-dilution or similar provisions that will or may be triggered by the
issuance of the Securities; and (E) the Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. 

e.    Authorization of the Securities. The Securities have been duly and validly authorized for issuance and sale pursuant
to this Agreement by the Company and, when executed by the Company at the Closing and delivered against payment of the Purchase Price therefor as provided in this Agreement, will constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, subject to the Enforceability Exceptions. 
 f.    The Conversion
Shares. The maximum number of Conversion Shares initially issuable upon conversion of the Securities (assuming the (x) maximum Conversion Rate (as defined in the Securities) as it may be increased in accordance with the terms of the
Securities and (y) Company elects, upon each conversion of Securities, to deliver solely Conversion Shares, other than cash in lieu of any fractional shares, in settlement of such conversion and the Company elects to pay all interest on the
Securities by issuing additional Securities) (the “Reserved Amount”) have been duly and validly authorized and reserved for issuance upon conversion of the Securities and, when issued upon conversion, will be validly issued, fully
paid and non-assessable and free from all taxes, liens, claims and encumbrances with respect to the issue thereof; and the issuance of the Conversion Shares upon such conversion will not be subject to any
preemptive or similar rights. 
 g.    Ranking; No Conflicts. The Securities shall rank senior to all subordinated debt
and pari passu with all senior unsecured debt of the Company. The execution and delivery of the Transaction Documents by the Company, the performance by the Company of its obligations thereunder and the consummation by the Company of the
transactions contemplated hereby and thereby will not (i) result in a violation of the Company’s Amended and Restated Certificate of Incorporation, as amended and as in effect on the date hereof (the “Certificate 

  
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of Incorporation”) or the Company’s Amended and Restated Bylaws, as amended and as in effect on the date hereof (the “Bylaws”); (ii) conflict with, or constitute
a breach or default (or an event which, with the giving of notice or lapse of time or both, constitutes or would constitute a breach or default) under, or give to others any right of termination, amendment, acceleration or cancellation of, or other
remedy with respect to, any agreement, indenture or instrument to which the Company is a party; or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations)
applicable to the Company or by which any property or asset of the Company is bound or affected, except in the case of both (ii) and (iii) above, as would not reasonably be expected to have a Material Adverse Effect. The execution, delivery and
performance by the Company of the Transaction Documents and the filings contemplated by the Registration Rights Agreement and the offer, issuance and sale of the Securities require no consent of, action by or in respect of, or filing with, any
Person, governmental body, agency, court, or official other than (a) filings required pursuant to applicable state and federal securities laws, (b) filings pursuant to the rules and regulations of any securities exchange on which the
Securities may be listed and (c) filing of the registration statement required to be filed by the Registration Rights Agreement, each of which the Company has filed or undertakes to file within the applicable time. All consents, authorizations,
orders, filings and registrations that the Company is or has been required to obtain as described in the preceding sentence have been obtained or effected on or prior to the date of this Agreement or shall be obtained or effected prior to the
applicable due date thereafter, as provided by applicable law, this Agreement or otherwise. 
 h.    SEC Documents;
Financial Statements; Sarbanes-Oxley. 
 (i)    Since January 1, 2019, the Company has filed in a timely manner all
reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (all of the foregoing
filed prior to the date this representation is made (including all exhibits included therein and financial statements and schedules thereto and documents incorporated by reference therein), collectively being hereinafter referred to as the
“SEC Documents”). The Company has made the SEC Documents available to the Buyers or their respective representatives, or filed and made the SEC Documents publicly available on the SEC’s Electronic Data Gathering, Analysis, and
Retrieval system (or successor thereto) (“EDGAR”). As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC promulgated
thereunder applicable to the SEC Documents. None of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which they were made, not misleading. Since the filing of the SEC Documents, no event has occurred that would require an amendment or supplement to any of the SEC Documents
and as to which such an amendment has not been filed and made publicly available on the SEC’s EDGAR system. The Company has not received any written comments from the SEC staff that have not been resolved to the satisfaction of the SEC staff.
As of their respective filing dates, the consolidated financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto. Such financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”), consistently applied during the periods involved (except (i) as may
be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all
material respects the consolidated financial position of the Company as of the dates thereof and the consolidated results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). 
 (ii)    The Company is in all material respects in
compliance with applicable provisions of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations thereunder (collectively, “Sarbanes-Oxley”). 

i.    Internal Accounting Controls; Disclosure Controls and Procedures. The Company and each of its subsidiaries maintain
a system of internal accounting controls designed to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. 

  
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 Except as set forth in the SEC Documents, the Company maintains disclosure controls and procedures
(as such term is defined in Rule 13a-15 under the Exchange Act) that are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC, including, without limitation, controls and procedures designed to ensure that information required to be disclosed by
the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer or officers and its principal financial officer or officers, as
appropriate, to allow timely decisions regarding required disclosure. 
 j.    Absence of Certain Changes. Since
September 30, 2019, there have been no events, occurrences or developments that have or would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. The Company has not taken any steps to seek
protection pursuant to any bankruptcy law nor, to the Company’s Knowledge, do any creditors of the Company intend to initiate involuntary bankruptcy proceedings nor, to the Company’s Knowledge, is there any fact that would reasonably lead
a creditor to do so. The Company has not, since the date of the latest financial statements included within its SEC Documents, materially altered its method of accounting or the manner in which it keeps its books and records. 

As used in this Agreement, the “Company’s Knowledge” and similar language means, unless otherwise specified, the actual
knowledge of any “officer” (as such term is defined in Rule 16a-1 under the Exchange Act) of the Company, and the knowledge any such Person would be expected to have after reasonable due diligence
inquiry. 
 k.    Absence of Litigation. Except as set forth in the SEC Documents, there is no action, suit, proceeding,
inquiry or investigation before or by any court, public board or other governmental authority pending or, to the Company’s Knowledge, threatened against or affecting the Company or any of its subsidiaries, the Common Stock or any of the
Company’s or its subsidiaries’ officers or directors in their capacities as such. The SEC has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company under the Exchange Act
or the Securities Act. To the Company’s Knowledge, there are no facts or circumstances which might give rise to any of the foregoing. 

l.    Acknowledgment Regarding Buyer’s Purchase of the Shares. The Company acknowledges and agrees that each of the
Buyers is acting solely in the capacity of an arm’s-length purchaser with respect to the Company in connection with the Transaction Documents and the transactions contemplated hereby and thereby. The
Company further acknowledges that each Buyer is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby, and any advice
given by any of the Buyers or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to such Buyer’s purchase of the Securities.
The Company further represents to each Buyer that the Company’s decision to enter into the Transaction Documents has been based solely on the independent evaluation by the Company and its representatives. 

m.    General Solicitation. Neither the Company, nor any of its affiliates, nor any Person acting on its or their behalf,
has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with the offer or sale of the Securities. 

n.    No Integrated Offering. Neither the Company, nor any of its affiliates, nor any Person acting on its or their behalf
has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration of any of the Securities under the Securities Act or cause this offering of the
Securities to be integrated with prior offerings by the Company for purposes of the Securities Act or any applicable stockholder approval provisions of any authority. 

o.    Employee Relations. No material labor problem or dispute with the employees of the Company or any of its
subsidiaries exists or, to the Company’s Knowledge, is threatened or imminent. Further, to the Company’s Knowledge, there are no existing or imminent labor disturbance by the employees of any of its or its subsidiaries’ principal
suppliers, contractors or customers, that would not reasonably be expected to have a Material Adverse Effect. 

  
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 p.    Intellectual Property Rights. 

(i)    Except as set forth in the SEC Documents, or as would not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect, (i) the Company and its subsidiaries own or possess adequate rights to use all patents, trademarks, service marks, trade names, copyrights, licenses, inventions, trade secrets, technology, know-how and other intellectual property (including all registrations and applications for registration of the foregoing) (collectively, the “Intellectual Property”) that is used in the conduct of
their respective businesses as now conducted or as proposed in the SEC Documents to be conducted; (ii) to the Company’s Knowledge, no third party has infringed, misappropriated or otherwise violated any Intellectual Property of the Company
or any of its subsidiaries; (iii) to the Company’s Knowledge, the Company’s and its subsidiaries’ conduct of their respective businesses does not infringe, misappropriate or otherwise violate any Intellectual Property of any
third party; and (iv) the Company and its subsidiaries have not received any written notice of any claim of infringement, misappropriation or conflict with any such Intellectual Property. 

(ii)    To the Company’s Knowledge, there has been no (x) material security breach or other material compromise of or
relating to any of the Company’s or its subsidiaries’ information technology and computer systems, networks, hardware, software, data (including the data of their respective customers, employees, suppliers, vendors and any third party data
maintained by or on behalf of them), equipment or technology (collectively, “IT Systems and Data”) or (y) event or condition that would reasonably be expected to result in, any material security breach or other material
compromise to their IT Systems and Data. The IT Systems and Data are adequate in all material respects for the operation of the business of the Company and its subsidiaries as currently conducted, and the Company has purchased sufficient number of
licenses or seats for all software used by the Company and its subsidiaries that are material for the operation of the business of the Company and its subsidiaries as currently conducted. The Company and its subsidiaries are presently in compliance
with all applicable laws or statutes, all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of their IT
Systems and Data and to the protection of such IT Systems and Data from unauthorized use, access, misappropriation or modification, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and
the Company and its subsidiaries have implemented backup and disaster recovery technology consistent with industry standards and practices. 

q.    Real Property. Each of the Company and each of its subsidiaries owns or leases all such properties as are necessary
to the conduct of its operations as presently conducted, except as would not reasonably be expected to have a Material Adverse Effect. 

r.    Insurance. The Company and each of its subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as management of the Company reasonably believes are prudent and customary in the businesses in which the Company and its subsidiaries are engaged. All policies of insurance and fidelity or surety
bonds insuring the Company or any of its subsidiaries or their respective businesses, assets, employees, officers and directors are in full force and effect; the Company and its subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; and there are no material claims by the Company or any of its subsidiaries under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights
clause. Neither the Company nor any such subsidiary has been refused any insurance coverage sought or applied for and neither the Company nor any such subsidiary has any reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not reasonably be expected to have a Material Adverse Effect. 

s.    Regulatory Permits and Other Regulatory Matters. The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations required to be issued by all applicable authorities necessary to conduct their respective businesses, except for any such failure to possess as would not reasonably be expected to have a Material
Adverse Effect. Neither the Company nor any such subsidiary has received any notice of proceedings relating to the revocation or modification of any such license, certificate, permit or authorization which, individually or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect. 

  
 8 

 t.    Listing. The Common Stock is registered pursuant to
Section 12(b) of the Exchange Act, and the Company has taken no action designed to, or which to its Knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received
any notification that the SEC is contemplating terminating such registration. The Company has not, in the 12 months preceding the date hereof, received notice from the Nasdaq Global Select Market (the “Principal Market”) that the
Company is not in compliance with the listing or maintenance requirements of such Principal Market. The Company is as of the date hereof and will as of the date of the issuance of the Securities pursuant to the Transaction Documents, continue to be
in compliance with all such listing and maintenance requirements. The Common Stock is eligible for clearing through DTC, through its Deposit/Withdrawal At Custodian (DWAC) system, and the Company is eligible and participating in the Direct
Registration System (DRS) of DTC with respect to the Common Stock. 
 u.    Tax Status. The Company has filed all U.S.
federal, state and foreign tax returns that are required to be filed by any jurisdiction to which it is subject or has requested extensions thereof (except in any case where such failure to file would not reasonably be expected to have a Material
Adverse Effect) and has paid all taxes required to be paid by it and any other related assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable, except where any such failure to pay such assessment,
fine or penalty is currently being contested in good faith or would not reasonably be expected to have a Material Adverse Effect. 

v.    Transactions With Affiliates. Except as set forth in the SEC Documents, none of the officers, directors or employees
of the Company or any of its subsidiaries is presently, or has been within the past two years, a party to any transaction, contract, agreement, instrument, commitment, understanding or other arrangement or relationship with the Company or any of its
subsidiaries (other than directly for services as an employee, officer and/or director), whether for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments or consideration
to or from any such officer, director or employee or, to the knowledge of the Company or any of its subsidiaries, any corporation, partnership, trust or other entity in which any such officer, director, or employee has a substantial interest or is
an officer, director, trustee or partner. Except as set forth in the SEC Documents, no officer, director or employee of the Company or any of its subsidiaries or any of their respective Affiliates, has any direct or indirect ownership interest in
any Person (other than ownership of less than 1% of the outstanding common stock of a publicly traded corporation) in which the Company or any of its subsidiaries has any direct or indirect ownership interest or has a business relationship or with
which the Company or any of its subsidiaries competes. “Affiliate” for purposes hereof means, with respect to any Person, another Person that, (i) is a director, officer, manager, managing member, general partner or 5% or
greater owner of equity interests in such Person, or (ii) directly or indirectly, (1) has a common ownership with that Person, (2) controls that Person, (3) is controlled by that Person or (4) shares common control with that
Person. “Control” or “controls” for purposes hereof means that a person or entity has the power, direct or indirect, to conduct or govern the policies of another Person. 

w.    Foreign Corrupt Practices and Certain Other Federal Regulations. 

(i)    Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent,
affiliate or employee of the Company or any of its subsidiaries is aware of or has taken any action, directly or indirectly, that could result in a violation or a sanction for violation by such persons of the Foreign Corrupt Practices Act of 1977 or
the U.K. Bribery Act 2010, each as may be amended, or similar law of any other relevant jurisdiction, or the rules or regulations thereunder to which the Company and its subsidiaries are subject; and the Company and its subsidiaries have instituted
and maintain policies and procedures designed to ensure compliance therewith. No part of the proceeds of the offering will be used, directly or indirectly, in violation of the Foreign Corrupt Practices Act of 1977 or the U.K. Bribery Act 2010, each
as may be amended, or similar law of any other relevant jurisdiction, or the rules or regulations thereunder. 
 (ii)    The
operations of the Company and its subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements and the money laundering statutes and the rules and regulations thereunder and
any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering  

  
 9 

 
Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with
respect to the Money Laundering Laws is pending or, to the Company’s Knowledge, threatened. 
 (iii)    Neither the
Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, affiliate or employee of the Company or any of its subsidiaries (i) is, or is controlled or 50% or more owned in the aggregate by or is
acting on behalf of, one or more individuals or entities that are currently the subject of any sanctions administered or enforced by the United States (including any administered or enforced by the Office of Foreign Assets Control of the U.S.
Department of the Treasury, the U.S. Department of State or the Bureau of Industry and Security of the U.S. Department of Commerce), the United Nations Security Council, the European Union, a member state of the European Union (including sanctions
administered or enforced by Her Majesty’s Treasury of the United Kingdom) or other relevant sanctions authority (collectively, “Sanctions” and such persons, “Sanctioned Persons” and each such person, a
“Sanctioned Person”), (ii) is located, organized or resident in a country or territory that is, or whose government is, the subject of Sanctions that broadly prohibit dealings with that country or territory (collectively,
“Sanctioned Countries” and each, a “Sanctioned Country”) or (iii) will, directly or indirectly, use the proceeds of this offering, or lend, contribute or otherwise make available such proceeds to any
subsidiary, joint venture partner or other individual or entity in any manner that would result in a violation of any Sanctions by, or could result in the imposition of Sanctions against, any individual or entity (including any individual or entity
participating in the offering, whether as advisor, investor or otherwise). 
 (iv)    Neither the Company nor any of its
subsidiaries has engaged in any dealings or transactions with or for the benefit of a Sanctioned Person, or with or in a Sanctioned Country, in the preceding three years, nor does the Company or any of its subsidiaries have any plans to engage in
dealings or transactions with or for the benefit of a Sanctioned Person, or with or in a Sanctioned Country. 
 x.    No
Other Agreements. The Company has not, directly or indirectly, made any agreements with any Buyers relating to the terms or conditions of the transactions contemplated by the Transaction Documents except as set forth in the Transaction Documents
and the Securities. 
 y.    Investment Company. The Company is not, and upon the Closing will not be, an
“investment company,” a company controlled by an “investment company,” or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company,” as such terms are
defined in the Investment Company Act of 1940, as amended. 
 z.    No Disqualification Events. None of the Company, any
director, officer, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, or any “promoter” (as that term is defined in Rule 405 under the Securities Act)
connected with the Company in any capacity at the time of the Closing (each, a “Covered Person” and, together, “Covered Persons”) is subject to any of the “Bad Actor” disqualifications described in Rule
506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”). The Company has exercised reasonable care to determine whether any Covered Person is subject to a Disqualification Event. The Company has complied,
to the extent applicable, with its disclosure obligations under Rule 506(e). 
 aa.    Manipulation of Prices. The
Company has not, and to its Knowledge no one acting on its behalf has, (A) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of any of the Securities, (B) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (C) paid or agreed to pay to any Person any compensation for soliciting another to
purchase any other securities of the Company. 
 bb.    Disclosure. The Company understands and confirms that each of
the Buyers will rely on the foregoing representations in effecting transactions in Securities of the Company. Taken as a whole, all disclosure provided to the Buyers regarding the Company, its business and the transactions contemplated hereby
furnished by or on behalf of the Company is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. 

  
 10 

 cc.    No Undisclosed Liabilities. Other than (i) the liabilities
assumed or created pursuant to this Agreement and the other Transaction Documents, (ii) liabilities accrued for in the latest balance sheet included in the Company’s most recent periodic report (on Form
10-Q or Form 10-K) (the date of such balance sheet, the “Latest Balance Sheet Date”) and (iii) liabilities incurred in the ordinary course of
business consistent with past practices since the Latest Balance Sheet Date, the Company and the subsidiaries do not have any other liabilities (whether fixed or unfixed, known or unknown, absolute or contingent, asserted or unasserted, choate or
inchoate, liquidated or unliquidated, or secured or unsecured, and regardless of when any action, claim, suit or proceeding with respect thereto is instituted). 

dd.    Application of Takeover Protections. The Company Board, including the independent directors, has: 

(i)    granted each Buyer and its affiliates a limited waiver under (i) Article XIV, Part III of the Company’s Amended
and Restated Certificate of Incorporation, as amended and as in effect on the date hereof (the “Certificate of Incorporation”) and (ii) Section 23.4 of the Stockholders’ Rights Agreement, dated as of January 28, 2018,
by and between the Issuer and Computershare Trust Company, N.A. (the “Rights Agreement”) (the limited waivers under clauses (i) and (ii), collectively, the “Waiver”), in each case, to permit each Buyer to
acquire and beneficially own shares of Common Stock in an aggregate amount up to the number of shares of the Common Stock beneficially owned by such Purchaser as of the date hereof plus the maximum number of shares of Common Stock such
Purchaser’s Note(s) could convert into in accordance with the terms hereof (the “Ownership Cap”) (for the avoidance of doubt, any acquisition of shares of Common Stock in excess of the Ownership Cap shall be subject to the
restrictions set forth in the Certificate of Incorporation and the Rights Agreement); and 
 (ii)    taken all action
necessary to exempt (i) the issuance and sale of the Securities and the issuance of additional Securities for the payment of interest on the Securities, (ii) the issuance of the Conversion Shares upon due conversion of the Securities and
the issuance of Common Stock upon conversion of any additional Securities issued for the payment of interest on the Securities and (iii) the other transactions contemplated by the Transaction Documents from the provisions of Section 203 of
the Delaware General Corporation Law that is applicable to the Buyers as a result of the transactions contemplated by the Transaction Documents (the “Anti-Takeover Provisions Exemption”). 

4.    COVENANTS. 

a.    Best Efforts. Each party shall use its best efforts to timely satisfy each of the conditions to be satisfied by it as
provided in Sections 5 and 6 of this Agreement. 
 b.    Form D and Blue Sky. The Company agrees to timely
file a Form D with respect to the Securities as required under Regulation D. The Company shall, on or before date hereof, take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the
Securities for, sale to the Buyers at the Closing occurring on the Closing Date pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states of the United States, and shall provide promptly upon the request of
any Buyers evidence of any such action so taken. The Company shall make all filings and reports relating to the offer and sale of the Securities required under applicable securities or “Blue Sky” laws of the states of the United States
following the Closing Date. 
 c.    Reporting Status. From the date of this Agreement until the first date on which the
Securities cease to be Registrable Securities (as defined in the Registration Rights Agreement), the Company shall timely (including by giving effect to any extensions pursuant to Rule 12b-25 of the Exchange
Act) file all reports required to be filed with the SEC pursuant to the Exchange Act. 
 d.    Expenses. At the Closing,
the Company shall reimburse the Buyers for the reasonable and documented out-of-pocket expenses of retaining legal counsel to the Buyers collectively relating to
negotiating and preparing the Transaction Documents and the Securities. The Buyers shall each pay any other of their respective expenses, including due diligence and additional legal expenses. 

e.    Disclosure of Transactions and Other Material Information. The Company shall (i) issue a press release
disclosing all the material terms of the transactions contemplated by the Transaction Documents and 

  
 11 

 
(ii) file, within the timeframe required under applicable SEC rules, a Current Report on Form 8-K with the SEC describing the terms of the transactions
contemplated by the Transaction Documents and including as exhibits to such Form 8-K the material Transaction Documents. Unless required by applicable law or a rule of the Principal Market, the Company shall
not make any public announcement regarding the transactions contemplated hereby or the other Transaction Documents prior to the date hereof. 

f.    Regulation M. Neither the Company, nor any of its subsidiaries nor any Affiliates of the foregoing, has taken or
shall take any action prohibited by Regulation M under the Exchange Act, in connection with the offer, sale and delivery of the Securities contemplated hereby. 

g.    No Integrated Offering. Neither the Company nor any of its subsidiaries, nor any Affiliates of the foregoing or any
Person acting on the behalf of any of the foregoing, shall, directly or indirectly, make any offers or sales of any security or solicit any offers to purchase any security, under any circumstances that would require registration of any of the
Securities under the Exchange Act or require stockholder approval of the issuance of any of the Securities. 

h.    Conversion Shares. The Company will reserve and keep available at all times, free of preemptive rights, a number of
shares of Common Stock equal to the Reserved Amount for the purpose of enabling the Company to satisfy all obligations to issue Conversion Shares upon conversion of the Securities. The Company will have complied on or prior to the date hereof with
the Nasdaq Global Select Market Listing Rule 5250(e)(2)(D) for the Reserved Amount of Conversion Shares and will use its best efforts to maintain the listing of such number of shares of Common Stock on The Nasdaq Global Select Market. 

i.    Register. The Company shall maintain at its principal executive offices (or such other office or agency of the
Company as it may designate by notice to each holder of Securities), a register for the Securities in which the Company shall record the name and address of the Person in whose name the Securities have been issued (including the name and address of
each transferee), the principal amount of Securities held by such Person and the number of Conversion Shares issuable pursuant to the terms of the Securities held by such Person. The Company shall keep the register open and available at all times
during business hours for inspection of any Buyer or its legal representatives. 
 5.    CONDITIONS TO THE
COMPANY’S OBLIGATION TO SELL. The obligation of the Company to issue and sell the Securities to each Buyer at the Closing is subject to the satisfaction, at or before the date hereof, of each of the following conditions: 

a.    Such Buyer shall have executed each of the Transaction Documents to which it is a party and delivered the same to the
Company. 
 b.    Such Buyer shall have delivered to the Company the Purchase Price for the Securities being purchased by such
Buyer at the Closing by wire transfer of immediately available funds pursuant to the wire instructions provided by the Company. 

c.    No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents. 

d.    The Company shall have complied with the Nasdaq Global Select Market Listing Rule 5250(e)(2)(D) for the Reserved Amount of
Conversion Shares. 
 6.    CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE. The obligation of each
Buyer hereunder to purchase the Securities from the Company at the Closing is subject to the satisfaction, at or before the date hereof, of each of the following conditions: 

a.    The Company shall have executed each of the Transaction Documents to which it is a party and delivered the same to such
Buyer. 

  
 12 

 b.    Such Buyer shall have received the opinion of Jones Day, counsel for the
Company, dated as of the date hereof and addressed to the Buyers, in the form and substance reasonably satisfactory to the Buyers. 

c.    The Company shall have delivered to such Buyer a certificate evidencing the incorporation and good standing of the Company
in its state of incorporation, as well as a certificate evidencing the Company’s qualification as a foreign corporation and good standing in the state of its principal place of business, in each case issued by the Secretary of State (or other
applicable authority) of such state, dates as of a date within five (5) Business Days of the date hereof. For purposes of this Agreement, “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks
in the City of New York are authorized or required by law to remain closed. 
 d.    The Company shall have delivered to such
Buyer a certificate, executed by the Secretary of the Company and dated as of the date hereof, as to (A) the Company Board resolutions relating to (i) the execution, delivery and performance by the Company of the Transaction Documents and
the transactions contemplated thereunder, (ii) the Waiver and (iii) the Anti-Takeover Provisions Exemption; (B) the Certificate of Incorporation; and (C) the Bylaws. 

e.    The Company shall have complied with the Nasdaq Global Select Market Listing Rule 5250(e)(2)(D) for the Reserved Amount of
Conversion Shares. 
 f.    No statute, rule, regulation, executive order, decree, ruling or injunction shall have been
enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents. 

7.    INDEMNIFICATION. 

a.    Company Indemnification Obligation. In consideration of each Buyer’s execution and delivery of the Transaction
Documents and acquiring the Securities thereunder and in addition to all of the Company’s other obligations under the Transaction Documents, the Company shall defend, protect, indemnify and hold harmless each Buyer and its Affiliates, officers,
directors, members, managers and employees, as applicable (collectively, the “Indemnitees”), from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and
expenses in connection therewith, and including reasonable and documented attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitees as a result of, or arising out of, or relating to
(a) any material misrepresentation or material breach of any representation or warranty made by the Company in the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (b) any material
breach of any covenant, agreement or obligation of the Company contained in the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby or (c) any cause of action, suit or claim brought or made
against such Indemnitee and arising out of or resulting from the execution, delivery, performance or enforcement of the Transaction Documents in accordance with the terms hereof or thereof or any other certificate, instrument or document
contemplated hereby or thereby in accordance with the terms thereof (other than a cause of action, suit or claim brought or made against an Indemnitee by such Indemnitee’s owners, investors or affiliates), except, in each case, to the extent
any Indemnified Liabilities resulted from such Indemnitee’s gross negligence, willful misconduct or fraud or to the extent that a loss, claim, damage or liability is attributable to such Buyer’s breach of any of the representations,
warranties, covenants or agreements made by such Buyer in this Agreement or in the other Transaction Documents. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified Liabilities that is permissible under applicable law. 

b.    Indemnification Procedures. Each Indemnitee shall (i) give prompt written notice to the Company of any claim
with respect to which it seeks indemnification or contribution pursuant to this Agreement (provided, however, that the failure of the Indemnitee to promptly deliver such notice shall not relieve the Company of any liability, except to the
extent that the Company is prejudiced in its ability to defend such claim) and (ii) permit the Company to assume the defense of such claim with counsel selected by the Company and reasonably satisfactory to the Indemnitee; provided,
however, that any Indemnitee entitled to indemnification hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses 

  
 13 

 
of such counsel shall be at the expense of the Indemnitee unless (A) the Company has agreed in writing to pay such fees and expenses, or (B) in the reasonable judgment of the
Indemnitee, based upon advice of its counsel, a conflict of interest may exist between the Indemnitee and the Company with respect to such claims (in which case, if the Indemnitee notifies the Company in writing that it elects to employ separate
counsel at the expense of the Company, the Company shall not have the right to assume the defense of such claim on behalf of the Indemnitee). If the Company assumes the defense of the claim, it shall not be subject to any liability for any
settlement or compromise made by the Indemnitee without its consent (but such consent shall not be unreasonably withheld, conditioned or delayed). In connection with any settlement negotiated by the Company, the Company shall not, and no Indemnitee
shall be required by the Company to, (I) enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to the Indemnitee of a release from all liability in respect to such claim or
litigation, (II) enter into any settlement that attributes by its terms any liability, culpability or fault to the Indemnitee, or (III) consent to the entry of any judgment that does not include as a term thereof a full dismissal of the
litigation or proceeding with prejudice. In addition, without the consent of the Indemnitee, the Company shall not consent to entry of any judgment or enter into any settlement which provides for any obligation or restriction on the part of the
Indemnitee other than the payment of money damages which are to be paid in full by the Company. If requested by the Company, the Indemnitee agrees (at no expense to the Indemnitee) to reasonably cooperate with the Company and its counsel in
contesting any claim that the Company elects to contest. 
 8.    GOVERNING LAW; MISCELLANEOUS. 

a.    Governing Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive
jurisdiction of any New York State court or federal court of the United States of America sitting in New York County, and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that all
claims in respect of any such action, litigation or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by applicable law, in such federal court. Each of the parties hereto agrees that a final
judgment in any such action, litigation or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that any Buyer may
otherwise have to bring any action or proceeding relating to this Agreement against the Company or its properties in the courts of any other jurisdiction. 

Each of the parties hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection
which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any New York State or federal court of the United States of America sitting in New York County. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. 

EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR
IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. 
 b.    Counterparts;
Execution. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other
party. A PDF or other reproduction of this Agreement may be executed by one or more parties hereto, and an executed copy of this Agreement may be delivered by one or more parties hereto by e-mail or other
electronic transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered legal, valid, binding and effective for all purposes. The parties hereto hereby agree that
no party shall raise the execution of a PDF or other reproduction of this Agreement, or the fact that any signature or document was transmitted or communicated by e-mail or other electronic transmission
device, as a defense to the formation of this Agreement. 

  
 14 

 c.    Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this Agreement. 
 d.    Severability. If any
provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction. 
 e.    Entire Agreement; Amendments;
Waivers. This Agreement supersedes all other prior oral or written agreements among each Buyer, the Company, their affiliates and Persons acting on their behalf with respect to the matters discussed herein, and this Agreement and the instruments
referenced herein contain the entire understanding of the parties hereto with respect to the matters covered herein and therein. No provision of this Agreement may be waived, modified, supplemented or amended other than by an instrument in writing
signed by the Company and by each of the Buyers listed on the Schedule of Buyers (the “Required Buyers”). Any such amendment shall bind all holders of the Securities. No such amendment shall be effective to the extent that it
applies to less than all of the holders of the Securities then outstanding. No failure or delay on the part of a party in either exercising or enforcing any right under this Agreement shall operate as a waiver of, or impair, any such right. No
single or partial exercise or enforcement of any such right shall preclude any other or further exercise or enforcement thereof or the exercise or enforcement of any other right. No waiver of any such right shall be deemed a waiver of any other
right. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification or supplement of any provision of any of the Transaction Documents unless the same consideration also is offered to all of the parties
hereto or to the other Transaction Documents or holders of the Securities, as the case may be. For clarification purposes, this provision constitutes a separate right granted to each Buyer and is not intended for the Company to treat the Buyers as a
class and shall not be construed in any way as the Buyers acting in concert or otherwise as a group with respect to the purchase, disposition or voting of securities or otherwise. 

f.    Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of
this Agreement must be in writing and will be deemed to have been delivered upon receipt, when delivered via email, personally or by a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the
same. Further, any such notices, consents, waivers or other communications to a Buyer must include notice via electronic mail. The addresses for such communications shall be: 

If to the Company: 
 Great Elm Capital Group,
Inc. 
 800 South Street, Suite 230 

Waltham, MA 02453 
 Attention: Adam M.
Kleinman 
 Email: akleinman@greatelmcap.com 

With an additional copy to: 
 Jones Day 

250 Vesey Street 
 New York, NY 10281 

Attention: Rory T. Hood 
 Email:
rhood@jonesday.com 
 If to a Buyer, to it at the address set forth across such Buyer’s name on the Schedule of Buyers, or, in the case of a Buyer or
any other party named above, at such other address and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party five days prior to the effectiveness of such change. Written
confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication; (B) provided by affidavit of personal delivery by a delivery service selected by the Company; or (C) provided by a nationally
recognized overnight delivery service shall be rebuttable evidence of personal service or deposit with a nationally recognized overnight delivery service. 

  
 15 

 g.    Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and assigns, including any purchasers of the Securities. The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent
of the Required Buyers. A Buyer may assign some or all of its rights hereunder without the consent of the Company; provided, however, that any such assignment shall not release such Buyer from its obligations hereunder unless such obligations
are assumed by such assignee and the Company has consented to such assignment and assumption, which consent shall not be unreasonably withheld. 

h.    No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns and, to the extent provided in Section 7 hereof, each Indemnitee, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person. 

i.    Survival. The representations and warranties of the Company and the Buyers contained in Sections 2 and
3 hereof, the agreements and covenants set forth in Section 4 hereof and this Section 8, and the indemnification provisions set forth in Section 7 hereof, shall
survive the Closing. Each Buyer shall be responsible only for its own representations, warranties, agreements and covenants hereunder. 

j.    Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and
things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation
of the transactions contemplated hereby. 
 k.    Remedies. The parties hereto agree that (i) irreparable harm
would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached, and (ii) money damages or other legal remedies would not be an adequate remedy for any
such harm. Each Buyer and each holder of the Securities shall have all rights and remedies set forth in the Transaction Documents and all rights and remedies that such Buyers and holders have been granted at any time under any other agreement or
contract and all of the rights that such Buyers and holders have under any law. Any Person having any rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security or
proving actual damages), to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. 

l.    Payment Set Aside. To the extent that the Company makes a payment or payments to any Buyer pursuant to any
Transaction Document or a Buyer enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, state or federal law,
common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or
such enforcement or setoff had not occurred. 
 m.    Independent Nature of Buyers. The obligations of each Buyer
hereunder are several and not joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the obligations of any other Buyer hereunder. Each Buyer shall be responsible only for its own
representations, warranties, agreements and covenants hereunder. The decision of each Buyer to purchase the Securities pursuant to this Agreement has been made by such Buyer independently of any other Buyer and independently of any information,
materials, statements or opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition (financial or otherwise) or prospects of the Company which may have been made or given by any other Buyer or
by any agent or employee of any other Buyer, and no Buyer or any of its agents or employees shall have any liability to any other Buyer (or any other Person or entity) relating to or arising from any such information, materials, statements or
opinions. Nothing contained herein, and no action taken by any Buyer pursuant hereto or thereto (including a Buyer’s purchase of Securities at the Closing at the same time as any other Buyer or Buyers), shall be deemed to constitute the Buyers
as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Buyers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated hereby. Each
Buyer shall be entitled to independently protect and enforce its rights, including the rights arising out of this Agreement and the other Transaction 

  
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Documents, and it shall not be necessary for any other Buyer to be joined as an additional party in any proceeding for such purpose. The Company has elected to provide all Buyers with the same
terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by any Buyer. 
 * * * * *
* 

  
 17 

 IN WITNESS WHEREOF, the Buyers and the Company have caused this Securities Purchase
Agreement to be duly executed as of the date first written above. 
  

			
	COMPANY:
	
	GREAT ELM CAPITAL GROUP, INC.
		
	By:	 	  

		 	Name:
		 	Title:

 
			
	BUYER:
		
	By:	 	      

		 	Name:
		 	Title:

 
			
	BUYER:
		
	By:	 	      

		 	Name:
		 	Title:

 
			
	BUYER:
		
	By:	 	      

		 	Name:
		 	Title:

 
			
	BUYER:
		
	By:	 	      

		 	Name:
		 	Title:

 
			
	BUYER:
		
	By:	 	      

		 	Name:
		 	Title:srg-ex43_275.htm

Exhibit 4.3 

 

Description of Securities Registered Pursuant to 

Section 12 of the Securities Exchange Act of 1934

 

The following summary is a brief description of the shares of beneficial interest of Seritage Growth Properties, a Maryland real estate investment trust formed under Title 8 of the Corporations and Associations Article of the Annotated Code of Maryland.  Unless the context requires otherwise, references to “we,” “us,” “our”, “Seritage Growth” and “our company” refer to Seritage Growth Properties. Capitalized terms used and not defined herein have the meaning ascribed to them in our annual report on Form 10-K to which this Description of Securities is an exhibit.  As of December 31, 2019 and the date hereof, our Class A common shares of beneficial interest, $0.01 par value per share (the “Class A Common Shares”), and our 7.00% Series A cumulative redeemable preferred shares, $0.01 par value per share (the “Series A Preferred Shares”), are the only securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

The following description of our shares of beneficial interest does not purport to be complete and is subject to and qualified in its entirety by reference to our declaration of trust, including the Articles Supplementary establishing the Series A Preferred Shares (the “declaration of trust”), and our Amended and Restated Bylaws (the “bylaws”), copies of which are filed as exhibits to this Annual Report on Form 10-K and are incorporated by reference herein, and to the applicable provisions of Maryland and U.S. federal law. We encourage you to read our declaration of trust and bylaws, and the applicable provisions of Maryland and U.S. federal law for additional information. 

General 

Our declaration of trust provides that we may issue (a) up to 100,000,000 Class A Common Shares, (b) up to 5,000,000 Class B common shares of beneficial interest, $0.01 par value per share, referred to as “Seritage Growth non-economic shares,” (c) up to 50,000,000 Class C common shares of beneficial interest, $0.01 par value per share, which we refer to as “Seritage Growth non-voting shares,” and (d) up to 10,000,000 preferred shares of beneficial interest, $0.01 par value per share, of which 3,220,000 are classified as Series A Preferred Shares.  The Class A Common Shares, the Seritage Growth non-economic shares and the Seritage Growth non-voting shares are collectively referred to as the “common shares.” The Seritage Growth declaration of trust authorizes a majority of the entire Seritage Growth Board of Trustees, without shareholder approval, to amend Seritage Growth’s declaration of trust to increase or decrease the aggregate number of shares that we are authorized to issue or the number of authorized shares of any class or series of shares of beneficial interest. Under Maryland law, Seritage Growth shareholders generally are not liable for our debts or obligations solely as a result of their status as shareholders. 

Class A Common Shares 

Subject to the preferential rights, if any, of holders of any other class or series of Seritage Growth shares of beneficial interest and to the provisions of Seritage Growth’s declaration of trust relating to the restrictions on ownership and transfer of its shares of beneficial interest, holders of Class A Common Shares and Seritage non-voting shares are entitled under our declaration of trust to receive distributions when authorized by our Board of Trustees and declared by Seritage Growth out of assets legally available for distribution to shareholders and will be entitled to share ratably in assets legally available for distribution to shareholders in the event of Seritage Growth’s liquidation, dissolution or winding up after payment of or adequate provision for all of its known debts and liabilities.  Under our declaration of trust, Holders of Seritage Growth non-economic shares are not entitled to any regular or special dividend payments or other distributions, including any dividends or other distributions declared or paid with respect to the Class A Common Shares and Seritage Growth non-voting shares or any other class or series of our shares of beneficial interest, and are not entitled to receive any distributions in the event of our liquidation, dissolution or winding up.  

Subject to the provisions of Seritage Growth’s declaration of trust regarding the restrictions on ownership and transfer of Seritage Growth shares of beneficial interest and except as may be otherwise specified in the terms of any class or series of Seritage Growth shares of beneficial interest, under our declaration of trust each outstanding Class A Common Share entitles the holder to one vote and each Seritage Growth non-economic share entitles the 

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holder to one vote on each matter on which holders of Class A Common Shares are entitled to vote, provided, however, that upon any transfer of a Seritage Growth non-economic share to any person other than an affiliate of the initial holder, such share shall thereafter entitle the holder thereof to one one-hundredth of a vote on each matter on which holders of Class A Common Shares are entitled to vote on all matters submitted to a vote of shareholders, including the election of trustees, and, except as may be provided with respect to any other class or series of Seritage Growth shares of beneficial interest, the holders of Class A Common Shares and Seritage Growth non-economic shares, voting together as a single class, will possess the exclusive voting power, provided that the holders of Seritage Growth non-economic shares will have exclusive voting rights with respect to amendments to the Seritage Growth declaration of trust that would materially and adversely affect any right or voting power of the Seritage Growth non-economic shares. The holders of Seritage Growth non-voting shares have no voting rights except with regard to amendments to Seritage Growth’s declaration of trust that would materially and adversely affect any of the rights of the Seritage Growth non-voting shares.  

Holders of Class A Common Shares and Seritage Growth non-economic shares and, except for the conversion rights discussed below, holders of Seritage Growth non-voting shares have no preference, conversion, exchange, sinking fund, redemption or appraisal rights and have no preemptive rights to subscribe for the sale or issuance of any securities of our company. Subject to the provisions of Seritage Growth’s declaration of trust regarding the restrictions on ownership and transfer of its shares of beneficial interest, Class A Common Shares will have equal distribution, liquidation and other rights. 

The Seritage Growth declaration of trust provides that (i) in the event the number of issued and outstanding Class A Common Shares is increased or decreased as a result of any share distribution, share split, reverse share split or certain other changes, the number of votes per Seritage Growth non-economic share shall be adjusted to preserve the then existing voting power of the holders of Seritage Growth non-economic shares and (ii) in the event the number of issued and outstanding Class A Common Shares is increased or decreased as a result of any share split, reverse share split or certain other changes, the number of Seritage Growth non-voting shares shall be adjusted to preserve the holders of Seritage Growth non-voting shares then existing economic rights. 

ESL Partners, L.P. and Edward S. Lampert (collectively, “ESL”) have agreed with us that upon any sale or other transfer to a non-affiliate of any of its units in Seritage Growth Properties, L.P., a Delaware limited partnership (the “Operating Partnership”), ESL will surrender to us a pro rata portion of the Seritage Growth non-economic shares that it holds prior to the sale or other transfer, whereupon the surrendered Seritage Growth non-economic shares will be cancelled and the aggregate voting power of the non-economic shares held by ESL proportionately reduced.

In addition, our declaration of trust provides that (i) upon any transfer of a Seritage Growth non-economic share to any person other than an affiliate of the holder of such share, such non-economic share will thereafter be entitled to only one one-hundredth of a vote per share and (ii) upon any transfer of a non-voting share to any person other than an affiliate of the holder of such share, such non-voting share shall automatically convert into one Class A Common Share.

Seritage Growth Non-Economic Shares

Seritage Growth non-economic shares are not entitled to receive distributions when distributions to the Class A Common Shares and Seritage Growth non-voting shares are authorized by the Board of Trustees and declared by us, nor are they entitled to share ratably in assets legally available for distribution to shareholders in the event of our liquidation, dissolution or winding up after payment of or adequate provision for all of our known debts and liabilities.

Seritage Growth Non-Voting Shares

Seritage Growth non-voting shares having identical preferences, rights, restrictions, limitations as to dividends and other distributions, qualifications, and terms and conditions of redemption as the Class A Common Shares; provided that in the event that our Board of Trustees authorizes and we declare a regular or special dividend payment or other distribution in the form of Class A Common Shares, the holders of Seritage Growth non-voting shares shall be entitled to receive Seritage Growth non-voting shares in lieu of such Class A Common Shares 

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and provided further, that the holders of Seritage Growth non-voting shares will have no voting rights except with regard to amendments to our declaration of trust that would materially and adversely affect any of the rights of the Seritage Growth non-voting shares. In addition, each Seritage Growth non-voting share will automatically convert into one Class A Common Share upon a transfer to any person other than an affiliate of the holder of such share.

Preferred Shares

Pursuant to our declaration of trust, the Board of Trustees is empowered, without any approval of our shareholders, to issue preferred shares in one or more classes or series, to establish the number of shares in each class or series, and to set the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of each such class or series.

Power to Increase or Decrease Authorized Shares, Reclassify Unissued Shares and Issue Additional Common Shares and Preferred Shares of Beneficial Interest 

The Seritage Growth declaration of trust authorizes our Board of Trustees, with the approval of a majority of the entire Board of Trustees and without shareholder approval, to amend Seritage Growth’s declaration of trust to increase or decrease the aggregate number of shares of beneficial interest or the number of shares of any class or series of shares of beneficial interest that Seritage Growth is authorized to issue. In addition, the declaration of trust authorizes the Board of Trustees to authorize the issuance from time to time of shares of beneficial interest of any class or series, including preferred shares. 

The Seritage Growth declaration of trust also authorizes the Board of Trustees to classify and reclassify any unissued common shares or preferred shares of beneficial interest into other classes or series of shares of beneficial interest, including one or more classes or series of shares of beneficial interest that have priority over Class A Common Shares, Seritage Growth non-economic shares and Seritage Growth non-voting shares with respect to voting rights, distributions or upon liquidation, and authorize us to issue the newly classified shares. Prior to the issuance of shares of each new class or series of shares of beneficial interest, the Board of Trustees is required by Maryland law and by Seritage Growth’s declaration of trust to set, subject to the provisions of Seritage Growth’s declaration of trust regarding the restrictions on ownership and transfer of shares of beneficial interest, the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms and conditions of redemption for each class or series. Therefore, the Board of Trustees could authorize the issuance of common shares or preferred shares of beneficial interest with terms and conditions that could have the effect of delaying, deferring or preventing a change in control or other transaction that might involve a premium price for common shares or otherwise be in the best interests of Seritage Growth shareholders. 

Series A Preferred Shares 

Ranking 

With respect to the payment of dividends and the distribution of assets in the event of any liquidation, dissolution or winding up of our affairs, the Series A Preferred Shares rank: 

•senior to our Class A Common Shares and Seritage Growth non-voting shares and to all other equity securities issued by us ranking junior to such Series A Preferred Shares; 

 

•pari passu with any class or series of our equity securities issued by us, the terms of which specifically provide that such class or series are of equal rank with the Series A Preferred Shares; and 

 

•junior to all our existing and future indebtedness and to all equity securities issued by us, the terms of which specifically provide that such securities rank senior to the Series A Preferred Shares. 

Dividends 

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Holders of Series A Preferred Shares are entitled to receive, when and as authorized by our Board of Trustees and declared by us, out of assets legally available for the payment of dividends, cumulative cash dividends at the rate of 7.00% per year of the $25.00 liquidation preference per share, equivalent to a fixed annual amount of $1.75 per share. Dividends on the Series A Preferred Shares are payable quarterly in arrears on January 15th, April 15th, July 15th and October 15th of each year, and if such day is not a business day, the next succeeding business day. We refer to each of these dates as a “dividend payment date” in this exhibit, and the period beginning on, and including, each dividend payment date and ending on, but excluding, the next succeeding dividend payment date is referred to as the “dividend period.” 

Dividends are payable in arrears to holders of record as they appear in our records at the close of business on the applicable record date, which is the first day of the calendar month in which the applicable dividend payment date falls or on such other date designated by our Board of Trustees for the payment of dividends that is not more than 30 nor less than 10 days prior to such dividend payment date. 

No dividends on Series A Preferred Shares may be authorized by our Board of Trustees or declared by us or paid or set apart for payment by us if such declaration or payment is restricted or prohibited by law, or at any time at which one or more of our contractual agreements, including any agreement relating to our outstanding indebtedness: 

•prohibits the declaration, payment or setting apart for payment of dividends; or 

 

•provides that the declaration, payment or setting apart for payment of dividends would constitute a breach thereof or a default thereunder. 

Notwithstanding the foregoing, dividends on the Series A Preferred Shares will accrue regardless of whether:  

•our agreements at any time prohibit the current payment of dividends; 

 

•we have earnings; 

 

•there are funds legally available for the payment of such dividends; or 

 

•such dividends are authorized by our Board of Trustees or declared by us.

 

Accrued but unpaid dividends on the Series A Preferred Shares accumulate from, and including, the dividend payment date on which they first become payable. Except as set forth in the immediately succeeding paragraph, no dividends will be declared or paid or set apart for payment, and no distribution will be made, on any of our Class A Common Shares or Seritage Growth non-voting shares or any other series of preferred shares ranking, as to dividends, on a parity with or junior to the Series A Preferred Shares, other than a dividend that consists of our Class A Common Shares or Seritage Growth non-voting shares or shares of any other class of shares ranking junior to the Series A Preferred Shares as to dividends and upon liquidation, for any period unless full cumulative dividends on the Series A Preferred Shares have been, or contemporaneously are, declared and paid, or declared and a sum sufficient for the payment thereof is set apart for such payment for all past dividend periods. 

When dividends are not paid in full (or a sum sufficient for such full payment is not so set apart) with respect to the Series A Preferred Shares and any other class or series of preferred shares ranking on a parity as to dividends with the Series A Preferred Shares, all dividends declared upon the Series A Preferred Shares and such other class or series of preferred shares ranking on a parity as to dividends with the Series A Preferred Shares will be declared pro rata so that the amount of dividends declared per share of Series A Preferred Shares and such other class or series of preferred shares shall in all cases bear to each other the same ratio that accrued dividends per share on the Series A Preferred Shares and such other class or series of preferred shares (which shall not include any accrual in respect of unpaid dividends for prior dividend periods if such other class or series of preferred shares do not have a cumulative dividend) bear to each other. No interest, or sum of money in lieu of interest, will be payable in respect of any dividend payment or payments on the Series A Preferred Shares which may be in arrears. 

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Except as provided in the immediately preceding paragraph, unless full cumulative dividends on the Series A Preferred Shares have been, or contemporaneously are, declared and paid, or declared and a sum sufficient for the payment thereof is set apart for payment, for all past dividend periods: 

•no dividends (other than in our Class A Common Shares, Seritage Growth non-voting shares or other shares of beneficial interest ranking junior to the Series A Preferred Shares as to dividends and upon liquidation) shall be declared or paid or set apart for payment; 

 

•no other distribution may be declared or made upon our Class A Common Shares, Seritage Growth non-voting shares or any other shares of beneficial interest ranking junior to or on a parity with the Series A Preferred Shares as to dividends or upon liquidation; and 

 

•none of our Class A Common Shares, Seritage Growth non-voting shares or any other shares of beneficial interest ranking junior to or on a parity with the Series A Preferred Shares as to dividends or upon liquidation may be redeemed, purchased or otherwise acquired by us for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any such shares) (except by conversion into or exchange for other of our shares of beneficial interest ranking junior to the Series A Preferred Shares as to dividends and upon liquidation, and except for our redemption, purchase or acquisition of shares of beneficial interest under incentive, benefit or share purchase plans for officers, trustees or employees or others performing or providing similar services or for the purposes of enforcing restrictions upon ownership and transfer of our shares of beneficial interest contained in our declaration of trust in order to preserve our status as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”)). 

Holders of the Series A Preferred Shares are not be entitled to any dividend, whether payable in cash, property or shares of beneficial interest, in excess of full cumulative dividends on the Series A Preferred Shares. Any dividend payment made on the Series A Preferred Shares will first be credited against the earliest accrued but unpaid dividend due with respect to such shares which remains payable. 

Liquidation Preference 

Upon any voluntary or involuntary liquidation, dissolution or winding up of our affairs, holders of the Series A Preferred Shares will be entitled to be paid out of our assets legally available for distribution to our shareholders a liquidation preference of $25.00 per share, plus an amount equal to all accrued and unpaid dividends (whether or not earned or declared) to, but excluding, the date of payment, before any distribution of assets is made to holders of our Class A Common Shares, Seritage Growth non-voting shares or any other class or series of our shares of beneficial interest that ranks junior to the Series A Preferred Shares as to liquidation rights.

In the event that, upon any voluntary or involuntary liquidation, dissolution or winding up of our affairs, our available assets are insufficient to pay in full the amount of the liquidating distributions on all outstanding Series A Preferred Shares and the corresponding amounts payable on all other classes or series of our shares of beneficial interest ranking on a parity with the Series A Preferred Shares in the distribution of assets upon liquidation, then the holders of the Series A Preferred Shares and the holders of all other such classes or series will share ratably in any such distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled. 

Our consolidation, conversion, combination or merger with or into any other corporation, trust or entity or consolidation, conversion or merger of any other corporation, trust or entity with or into us, the sale, lease or conveyance of all or substantially all of our assets, property or business or any statutory share exchange, will not be deemed to constitute a liquidation, dissolution or winding up of our affairs. 

Optional Redemption 

Except with respect to the special optional redemption described below and in certain limited circumstances relating to our maintenance of our ability to qualify as a REIT as described in “—Restrictions on Ownership and Transfer” below, we are not entitled to redeem the Series A Preferred Shares prior to December 14, 

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2022. 

 On and after December 14, 2022, we may, at our option upon not less than 30 nor more than 60 days’ prior written notice, redeem the Series A Preferred Shares, in whole or in part, at any time or from time to time, for cash by paying $25.00 per share, plus all accrued and unpaid dividends on such shares to, but excluding, the redemption date, without interest (except as provided below), without interest. Holders of Series A Preferred Shares to be redeemed must surrender the certificates evidencing the Series A Preferred Shares (if any) at the place designated in the notice and will be entitled to the redemption price and any accrued and unpaid dividends payable upon the redemption following surrender. 

If notice of redemption of any Series A Preferred Shares has been given and if the funds necessary for such redemption have been set apart by us in trust for the benefit of the holders of any Series A Preferred Shares called for redemption, then from and after the redemption date: 

•dividends will cease to accrue on the Series A Preferred Shares; 

 

•the Series A Preferred Shares will no longer be deemed outstanding; and 

 

•all rights of the holders of the Series A Preferred Shares will terminate, except the holders’ right to receive the redemption price and all accrued and unpaid dividends through, but excluding, the redemption date. 

If less than all of the outstanding Series A Preferred Shares are to be redeemed, the Series A Preferred Shares to be redeemed will be selected pro rata (as nearly as may be practicable without creating fractional shares) in compliance with applicable procedures of Depository Trust Company (“DTC”). 

Unless full cumulative dividends on all Series A Preferred Shares have been, or contemporaneously are, declared and paid, or declared and a sum sufficient for the payment thereof is set apart for payment for all dividend periods ending on or prior to the date of any applicable redemption, purchase or acquisition, no Series A Preferred Shares may be redeemed unless all outstanding Series A Preferred Shares are simultaneously redeemed, and we may not purchase or otherwise acquire directly or indirectly any Series A Preferred Shares (except by exchange for shares of beneficial interest ranking junior to the Series A Preferred Shares as to dividends and upon liquidation). This requirement will not prevent us from redeeming, purchasing or otherwise acquiring the Series A Preferred Shares pursuant to our declaration of trust in order to assist us in qualifying as a REIT for federal income tax purposes. 

Subject to applicable law and the limitation on purchases when dividends on the Series A Preferred Shares are in arrears, we, at any time and from time to time, may purchase Series A Preferred Shares or any other class or series of our shares of beneficial interest in the open market, by tender or by private agreement. 

Notice of redemption will be mailed by us, postage prepaid, not less than 30 nor more than 60 days before the redemption date, addressed to each of the holders of record of the Series A Preferred Shares to be redeemed at their respective addresses as they appear on our share transfer records. If the Series A Preferred Shares are held in global form, the notice of redemption and/or the notice of withdrawal, as applicable, must comply with applicable procedures of DTC. No failure to give such notice or any defect therein or in the mailing thereof will affect the validity of the proceedings for the redemption of any Series A Preferred Shares except as to the holder to whom notice was defective or not given. Any notice that was mailed as described above shall be conclusively presumed to have been duly given on the date mailed, whether or not the holder actually receives the notice. Each notice will state: 

•the redemption date; 

 

•the redemption price; 

 

•the number of Series A Preferred Shares to be redeemed; 

 

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•the place or places where certificates for the Series A Preferred Shares (if any) are to be surrendered for payment of the redemption price; and 

 

•that dividends on the Series A Preferred Shares to be redeemed will cease to accrue on such redemption date, except as otherwise provided in the articles supplementary. 

If fewer than all of the Series A Preferred Shares held by any holder are to be redeemed, the notice mailed to the holder will also specify the number of shares to be redeemed. 

Holders of the Series A Preferred Shares at the close of business on a dividend record date will be entitled to receive the dividend payable with respect to the Series A Preferred Shares on the corresponding dividend payment date notwithstanding the redemption thereof between the dividend record date and the corresponding dividend payment date. Except as provided above, we will make no payment or allowance for unpaid dividends, whether or not in arrears, on Series A Preferred Shares that are called for redemption. 

The Series A Preferred Shares have no stated maturity and will not be subject to any sinking fund or mandatory redemption. 

Special Optional Redemption 

Upon the occurrence of a Change of Control (as defined below), we may, at our option and upon giving notice, redeem the Series A Preferred Shares, in whole or in part and within 120 days after the first date on which such Change of Control occurred, by paying $25.00 per share, plus all accrued and unpaid dividends to, but excluding, the redemption date. If, prior to the Change of Control Conversion Date (as described below), we have provided or provide notice of redemption with respect to the Series A Preferred Shares (whether pursuant to our optional redemption right or our special optional redemption right), holders of the Series A Preferred Shares will not have the conversion right described below under “—Change of Control Rights,” below. 

A “Change of Control” is when, after the original issuance of the Series A Preferred Shares, the following have occurred and are continuing: 

•the acquisition by any person, including any syndicate or group deemed to be a “person” under Section 13(d)(3) of the Exchange Act, of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions of shares of our company entitling that person to exercise more than 50% of the total voting power of all shares of our company entitled to vote generally in elections of trustees (except that such person will be deemed to have beneficial ownership of all securities that such person has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition); and 

 

•following the closing of any transaction referred to in the bullet point above, neither we nor the acquiring or surviving entity has a class of common securities (or American Depositary Receipts  representing such securities) listed on the New York Stock Exchange (the “NYSE”), the NYSE American LLC (the “NYSE American”) or the Nasdaq Stock Market (“Nasdaq”), or listed or quoted on an exchange or quotation system that is a successor to the NYSE, the NYSE American or Nasdaq. 

We will mail to you, if you are a record holder of the Series A Preferred Shares, a notice of redemption no fewer than 30 days nor more than 60 days before the redemption date. We will send the notice to your address shown on our share transfer books. A failure to give notice of redemption or any defect in the notice or in its mailing will not affect the validity of the redemption of any Series A Preferred Shares except as to the holder to whom notice was defective. Any notice that was mailed as described above shall be conclusively presumed to have been duly given on the date mailed, whether or not the holder actually receives the notice. Each notice will state the following: 

•the redemption date; 

 

•the redemption price; 

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•the number of Series A Preferred Shares to be redeemed; 

 

•the place or places where the certificates for the Series A Preferred Shares (if any) are to be surrendered for payment of the redemption price; 

 

•that the Series A Preferred Shares are being redeemed pursuant to our special optional redemption right in connection with the occurrence of a Change of Control and a brief description of the transaction or transactions constituting such Change of Control; 

 

•that the holders of the Series A Preferred Shares to which the notice relates will not be permitted to tender such Series A Preferred Shares for conversion in connection with the Change of Control and each Series A Preferred Share tendered for conversion that is selected, prior to the Change of Control Conversion Date, for redemption will be redeemed on the related redemption date instead of converted on the Change of Control Conversion Date; and 

 

•that dividends on the Series A Preferred Shares to be redeemed will cease to accrue on the redemption date, except as otherwise provided in the articles supplementary. 

If we redeem fewer than all of the outstanding Series A Preferred Shares, the notice of redemption mailed to each shareholder will also specify the number of Series A Preferred Shares that we will redeem from each shareholder. In this case, we will determine the number of Series A Preferred Shares to be redeemed on a pro rata basis (as nearly as may be practicable without creating fractional shares) in compliance with applicable procedures of DTC. 

Unless full cumulative dividends on all Series A Preferred Shares have been, or contemporaneously are, declared and paid, or declared and a sum sufficient for the payment thereof is set apart for payment for all dividend periods ending on or prior to the date of any applicable redemption, purchase or acquisition, no Series A Preferred Shares may be redeemed unless all outstanding Series A Preferred Shares are simultaneously redeemed, and we may not purchase or otherwise acquire directly or indirectly any Series A Preferred Shares (except by exchange for shares of beneficial interest ranking junior to the Series A Preferred Shares as to dividends and upon liquidation). This requirement will not prevent us from redeeming, purchasing or otherwise acquiring the Series A Preferred Shares pursuant to our declaration of trust in order to assist us in qualifying as a REIT for federal income tax purposes. 

If we have given a notice of redemption and have set apart sufficient funds for the redemption in trust for the benefit of the holders of the Series A Preferred Shares called for redemption, then from and after the redemption date, those Series A Preferred Shares will be treated as no longer being outstanding, no further dividends will accrue and all other rights of the holders of those Series A Preferred Shares will terminate. The holders of those Series A Preferred Shares will retain their right to receive the redemption price for their shares and all accrued and unpaid dividends through, but excluding, the redemption date. 

Holders of the Series A Preferred Shares at the close of business on a dividend record date will be entitled to receive the dividend payable with respect to the Series A Preferred Shares on the corresponding payment date notwithstanding the redemption of the Series A Preferred Shares between such record date and the corresponding payment date or our default in the payment of the dividend due. Except as provided above, we will make no payment or allowance for unpaid dividends, whether or not in arrears, on Series A Preferred Shares to be redeemed. 

Notwithstanding the foregoing, if the Series A Preferred Shares are held in global form, the notice of redemption and/or the notice of withdrawal, as applicable, must comply with applicable procedures of DTC. 

Change of Control Rights 

Except as provided below in connection with a Change of Control, the Series A Preferred Shares are not convertible into or exchangeable for any other securities or property. 

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Upon the occurrence of a Change of Control, each holder of Series A Preferred Shares will have the right, unless, prior to the Change of Control Conversion Date, we have provided or provide notice of our election to redeem the Series A Preferred Shares as described above under “—Optional Redemption” or “—Special Optional Redemption,” to convert some or all of the Series A Preferred Shares held by such holder (the “Change of Control Conversion Right”) on the Change of Control Conversion Date into a number of our Class A Common Shares per Series A Preferred Share (the “Common Share Conversion Consideration”) equal to the lesser of: 

•the quotient obtained by dividing (i) the sum of the $25.00 liquidation preference plus the amount of any accrued and unpaid dividends to, but excluding, the Change of Control Conversion Date (unless the Change of Control Conversion Date is after a dividend record date for a Series A Preferred Share dividend payment and prior to the corresponding Series A Preferred Share dividend payment date, in which case no additional amount for such accrued and unpaid dividend will be included in this sum) by (ii) the Common Share Price (such quotient, the “Conversion Rate”); and 

 

•1.26008 (the “Share Cap”). 

The Share Cap is subject to pro rata adjustments for any share splits (including those effected pursuant to a distribution of our Class A Common Shares), subdivisions or combinations (in each case, a “Share Split”) with respect to our Class A Common Shares. The adjusted Share Cap as the result of a Share Split will be the number of our Class A Common Shares that is equivalent to the product obtained by multiplying (i) the Share Cap in effect immediately prior to such Share Split by (ii) a fraction, the numerator of which is the number of our Class A Common Shares outstanding after giving effect to such Share Split and the denominator of which is the number of our Class A Common Shares outstanding immediately prior to such Share Split. 

For the avoidance of doubt, subject to the immediately succeeding sentence, the aggregate number of our common shares (or equivalent Alternative Conversion Consideration (as defined below), as applicable) issuable in connection with the exercise of the Change of Control Conversion Right will not exceed 3,528,224 Class A Common Shares (or equivalent Alternative Conversion Consideration, as applicable), subject to increase to the extent the underwriters’ option to purchase additional Series A Preferred Shares is exercised, not to exceed 4,057,457 Class A Common Shares (or equivalent Alternative Conversion Consideration, as applicable) (the “Exchange Cap”). The Exchange Cap is subject to pro rata adjustments for any Share Splits on the same basis as the corresponding adjustment to the Share Cap and is subject to increase in the event that additional Series A Preferred Shares are issued in the future. 

In the case of a Change of Control pursuant to which our Class A Common Shares will be converted into cash, securities or other property or assets (including any combination thereof) (the “Alternative Form Consideration”), a holder of Series A Preferred Shares will receive upon conversion of such Series A Preferred Shares the kind and amount of Alternative Form Consideration which such holder of Series A Preferred Shares would have owned or been entitled to receive upon the Change of Control had such holder of Series A Preferred Shares held a number of our Class A Common Shares equal to the Common Share Conversion Consideration immediately prior to the effective time of the Change of Control (the “Alternative Conversion Consideration,” and the Common Share Conversion Consideration or the Alternative Conversion Consideration, as may be applicable to a Change of Control, is referred to as the “Conversion Consideration”). 

If the holders of our Class A Common Shares have the opportunity to elect the form of consideration to be received in the Change of Control, the consideration that the holders of the Series A Preferred Shares will receive will be the form and proportion of the aggregate consideration elected by the holders of our Class A Common Shares who participate in the determination (based on the weighted average of elections) and will be subject to any limitations to which all holders of our Class A Common Shares are subject, including, without limitation, pro rata reductions applicable to any portion of the consideration payable in the Change of Control. 

We will not issue fractional Class A Common Shares upon the conversion of the Series A Preferred Shares. Instead, we will pay the cash value of such fractional shares based on the Common Share Price. 

Within 15 days following the occurrence of a Change of Control, we will provide to holders of Series A 

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Preferred Shares a notice of occurrence of the Change of Control that describes the resulting Change of Control Conversion Right. No failure to give such notice or any defect therein or in the mailing thereof will affect the validity of the proceedings for the redemption of any Series A Preferred Shares except as to the holder to whom notice was defective or not given. Any notice that was mailed as described above shall be conclusively presumed to have been duly given on the date mailed, whether or not the holder actually receives the notice. This notice will state the following: 

•the events constituting the Change of Control; 

 

•the date of the Change of Control; 

 

•the Change of Control Conversion Date; 

 

•the method and period for calculating the Common Share Price; 

 

•that if, prior to the Change of Control Conversion Date, we provide notice of our election to redeem all or any portion of the Series A Preferred Shares, holders of the Series A Preferred Shares will not be permitted to convert Series A Preferred Shares and such shares will be redeemed on the related redemption date, even if such shares have already been tendered for conversion pursuant to the Change of Control Conversion Right;

 

•if applicable, the type and amount of Alternative Conversion Consideration entitled to be received per Series A Preferred Share; 

 

•the name and address of the paying agent and the conversion agent; and 

 

•the procedures that holders of the Series A Preferred Shares must follow to exercise the Change of Control Conversion Right. 

We will issue a press release for publication on the Dow Jones & Company, Inc., The Wall Street Journal, Business Wire, PR Newswire, Bloomberg Business News or such other news or press organization as is reasonably calculated to broadly disseminate the relevant information to the public, or post a notice on our website, in any event prior to the opening of business on the first business day following any date on which we provide the notice described above to holders of the Series A Preferred Shares. 

To exercise the Change of Control Conversion Right, the holder of Series A Preferred Shares will be required to deliver, on or before the close of business on the Change of Control Conversion Date, the certificates (if any) evidencing the Series A Preferred Shares, to the extent such shares are certificated, to be converted, duly endorsed for transfer, together with a written conversion notice completed, to our transfer agent. The conversion notice must state: 

•the relevant Change of Control Conversion Date; 

 

•the number of Series A Preferred Shares to be converted; and 

 

•that the Series A Preferred Shares are to be converted pursuant to the applicable provisions of the Series A Preferred Shares. 

The “Change of Control Conversion Date” is the date fixed by our Board of Trustees, in its sole discretion, as the date the Series A Preferred Shares are to be converted, which will be a business day that is no fewer than 20 days nor more than 35 days after the date on which we provide the notice described above to holders of the Series A Preferred Shares. 

The “Common Share Price” will be: (i) the amount of cash consideration per Class A Common Share, if the consideration to be received in the Change of Control by the holders of our Class A Common Shares is solely cash; and (ii) the average of the closing prices for our Class A Common Shares on the NYSE for the ten consecutive 

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trading days immediately preceding, but excluding, the effective date of the Change of Control, if the consideration to be received in the Change of Control by the holders of our Class A Common Shares is other than solely cash. 

Holders of Series A Preferred Shares may withdraw any notice of exercise of a Change of Control Conversion Right (in whole or in part) by a written notice of withdrawal delivered to our transfer agent prior to the close of business on the business day prior to the Change of Control Conversion Date. The notice of withdrawal must state: 

•the number of withdrawn Series A Preferred Shares; 

 

•if certificated Series A Preferred Shares have been issued, the certificate numbers of the withdrawn Series A Preferred Shares; and

 

•the number of Series A Preferred Shares, if any, which remain subject to the conversion notice. 

Notwithstanding the foregoing, if the Series A Preferred Shares are held in global form, the notice of redemption and/or the notice of withdrawal, as applicable, must comply with applicable procedures of DTC. 

Series A Preferred Shares as to which the Change of Control Conversion Right has been properly exercised and for which the conversion notice has not been properly withdrawn will be converted into the applicable Conversion Consideration in accordance with the Change of Control Conversion Right on the Change of Control Conversion Date, unless prior to the Change of Control Conversion Date we have provided or provide notice of our election to redeem such Series A Preferred Shares, whether pursuant to our optional redemption right or our special optional redemption right. If we elect to redeem Series A Preferred Shares that would otherwise be converted into the applicable Conversion Consideration on a Change of Control Conversion Date, such Series A Preferred Shares will not be so converted and the holders of such shares will be entitled to receive on the applicable redemption date $25.00 per share, plus all accrued and unpaid dividends thereon to, but excluding, the redemption date, in accordance with our optional redemption right or special optional redemption right. See “—Optional Redemption” and “—Special Optional Redemption” above. 

We will deliver amounts owing upon conversion no later than the third business day following the Change of Control Conversion Date. 

In connection with the exercise of any Change of Control Conversion Right, we will comply with all federal and state securities laws and stock exchange rules in connection with any conversion of Series A Preferred Shares into our Class A Common Shares. Notwithstanding any other provision of the Series A Preferred Shares, no holder of Series A Preferred Shares will be entitled to convert such Series A Preferred Shares for our Class A Common Shares to the extent that receipt of such Class A Common Shares would cause such holder (or any other person) to exceed the share ownership limits contained in our declaration of trust and the articles supplementary setting forth the terms of the Series A Preferred Shares, unless we provide an exemption from this limitation for such holder. See “—Restrictions on Ownership and Transfer” below. 

These Change of Control conversion and redemption features may make it more difficult for a party to take over control of our company or discourage a party from taking over control of our company.  

Voting Rights 

Holders of the Series A Preferred Shares will not have any voting rights, except as set forth below. 

If and whenever we fail to pay dividends on any Series A Preferred Shares for six or more quarterly periods, whether or not consecutive, which we refer to in this description as a “preferred dividend default,” the number of trustees then constituting our Board of Trustees will be increased by two, if not already increased by reason of similar provisions with respect to another series of parity preferred, and holders of the Series A Preferred Shares (voting together as a single class with the holders of all other series of parity preferred, if any, upon which like voting rights have been conferred and are exercisable) will be entitled to vote, if not already elected by the 

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holders of parity preferred by reason of similar types of provisions with respect to preferred share trustees, for the election of a total of two members of our Board of Trustees, referred to in this description as “preferred trustees”: 

•at a special meeting of the shareholders called by the holders of record of at least 20% of the Series A Preferred Shares or the holders of 20% of any other series of such parity preferred so in arrears (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of the shareholders); and

 

•at each subsequent annual meeting of shareholders until all dividends accrued on Series A Preferred Shares for all dividend periods ending on or prior to the date of any applicable annual meeting shall have been fully paid. 

The preferred trustees will be elected by a plurality of the votes cast by the holders of the Series A Preferred Shares and the holders of all other classes or series of parity preferred upon which like voting rights have been conferred and are exercisable (voting together as a single class). 

If and when all accrued dividends on the Series A Preferred Shares shall have been declared and paid in full, the holders thereof shall be divested of the foregoing voting rights (subject to revesting in the event of each and every preferred dividend default) and, if all accrued dividends have been paid in full on all series of parity preferred upon which like voting rights have been conferred and are exercisable, each preferred trustee so elected shall cease to be a trustee. 

Any preferred trustee may be removed at any time with or without cause by, and shall not be removed otherwise than by the vote of, the holders of record of a majority of the outstanding Series A Preferred Shares (voting together as a single class with all other series of parity preferred, if any, upon which like voting rights have been conferred and are exercisable). So long as a preferred dividend default shall continue, any vacancy among the preferred trustees may be filled by written consent of the remaining preferred trustee, or if none remains in office, by a vote of the holders of record of a majority of the outstanding Series A Preferred Shares when they have the voting rights described above (voting together as a single class with all other series of parity preferred, if any, upon which like voting rights have been conferred and are exercisable). The preferred trustees will each be entitled to one vote per trustee on any matter considered by the board. 

So long as any Series A Preferred Shares remain outstanding, we will not, without the affirmative vote or consent of the holders of at least two-thirds of the Series A Preferred Shares outstanding at the time, given in person or by proxy, either in writing or at a meeting (voting separately as a class): 

•authorize or create, or increase the number of authorized or issued shares of any class or series of shares of beneficial interest ranking senior to Series A Preferred Shares with respect to payment of dividends or the distribution of assets upon liquidation, dissolution or winding up of our affairs or reclassify any authorized shares of our equity securities into such shares, or create, authorize or issue any obligation or security convertible into or evidencing the right to purchase any such shares; or 

 

•amend, alter or repeal the provisions of our declaration of trust, including the articles supplementary creating the Series A Preferred Shares, whether by merger, consolidation or otherwise (an “event”), so as to materially and adversely affect any right, preference, privilege or voting power of the Series A Preferred Shares or the holders thereof, 

provided, however, with respect to the occurrence of any event set forth in the second bullet point above, (a) the occurrence of any such event will not be deemed to materially and adversely affect any right, preference, privilege or voting power of the Series A Preferred Shares or the holders thereof so long as the Series A Preferred Shares remain outstanding with the terms thereof materially unchanged, or (b) if we are not the surviving entity in any merger, consolidation or other event and the successor entity issues to holders of Series A Preferred Shares preferred shares with substantially identical rights, preferences, privileges and voting powers as the Series A Preferred Shares. Any increase in the number of the authorized common shares or preferred shares or the creation or issuance of any other class or series of common shares or preferred shares, ranking on a parity with or junior to Series A Preferred Shares with respect to payment of dividends and the distribution of assets upon liquidation, dissolution or winding 

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up of our affairs, or any change to the number or classification of our trustees, will not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers. In addition, any amendment to Article VII of our declaration of trust, including the ownership limits, will not be deemed to materially and adversely affect the rights, preferences, privileges or voting powers of holders of the Series A Preferred Shares.  

With respect to the exercise of the above described voting rights, each Series A Preferred Share shall have one vote, except that when holders of any other class or series of preferred shares shall have the right to vote with the Series A Preferred Shares as a single class, then holders of the Series A Preferred Shares and such other class or series shall have one vote per $25.00 of stated liquidation preference. The holders of Series A Preferred Shares will have exclusive voting rights on any amendment to our declaration of trust that would alter the contract rights, as expressly set forth in the declaration of trust, of only the Series A Preferred Shares. 

The foregoing voting provisions will not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required to be effected, all outstanding Series A Preferred Shares have been redeemed or called for redemption upon proper notice and sufficient funds have been deposited in trust to effect such redemption. 

Restrictions on Ownership and Transfer 

In order for us to qualify to be taxed as a REIT under the Code, Seritage Growth shares of beneficial interest must be owned by 100 or more persons during at least 335 days of a taxable year of 12 months (other than the first year for which an election to qualify as a REIT has been made) or during a proportionate part of a shorter taxable year. Also, not more than 50% of the value of the outstanding Seritage Growth shares of beneficial interest (after taking into account options to acquire shares of beneficial interest) may be owned, directly or indirectly, by five or fewer individuals (as defined in the Code to include certain entities such as qualified pension plans) during the last half of a taxable year (other than the first year for which an election to be a REIT has been made).

In addition, rent from related party tenants (generally, a tenant of a REIT owned, actually or constructively, 10% or more by (1) the REIT or (2) a 10% owner of the REIT) is not qualifying income for purposes of the gross income tests under the Code (the “related party tenant rule”). To qualify to be taxed as a REIT, we must satisfy other requirements as well.

Seritage Growth’s declaration of trust contains restrictions on the ownership and transfer of Seritage Growth shares of beneficial interest that are intended to, among other purposes, assist us in complying with these requirements. The relevant sections of Seritage Growth’s declaration of trust provide that, subject to the exceptions described below, no person or entity may own, or be deemed to own, beneficially or by virtue of the applicable constructive ownership provisions of the Code, more than 9.6%, in value or in number of shares, whichever is more restrictive, of all outstanding shares, or all outstanding common shares of beneficial interest of Seritage Growth (the “ownership limits”). We refer to the person or entity that, but for operation of the ownership limits or another restriction on ownership and transfer of Class A Common Shares as described below, would beneficially own or constructively own Class A Common Shares in violation of such limits or restrictions and, if appropriate in the context, a person or entity that would have been the record owner of such Class A Common Shares as a “prohibited owner.” 

The constructive ownership rules under the Code are complex and may cause shares of beneficial interest owned beneficially or constructively by a group of related individuals and/or entities to be owned beneficially or constructively by one individual or entity. As a result, the acquisition of less than 9.6% of the outstanding shares of beneficial interest of Seritage Growth (or the acquisition by an individual or entity of an interest in an entity that owns, beneficially or constructively, such shares), could, nevertheless, cause that individual or entity, or another individual or entity, to own beneficially or constructively shares of beneficial interest of Seritage Growth in excess of the ownership limits. In addition, a person that did not acquire more than 9.6% of the outstanding shares of beneficial interest of Seritage Growth may become subject to these restrictions if repurchases by us cause such person’s holdings to exceed 9.6%, in value or in number of shares, whichever is more restrictive, of all outstanding shares, or all outstanding common shares (including Class A Common Shares, Seritage Growth non-economic shares and Seritage Growth non-voting shares), of beneficial interest of Seritage Growth. 

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Pursuant to our declaration of trust, the Board of Trustees, in its sole and absolute discretion, may exempt, prospectively or retroactively, a particular shareholder from either or both of the ownership limits or establish a different limit on ownership (the “excepted holder limit”) if the Board of Trustees determines that: 

•no individual’s beneficial or constructive ownership of Seritage Growth shares of beneficial interest will result in our being “closely held” under Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year) or otherwise failing to qualify to be taxed as a REIT; 

 

•no person shall constructively own Seritage Growth shares of beneficial interest to the extent that such person’s constructive ownership will cause any of Seritage Growth’s income that would otherwise qualify as “rents from real property” for purposes of Section 856(d) of the Code to fail to qualify as such; and 

 

•such shareholder does not and represents that it will not own, actually or constructively, an interest in a tenant of ours (or a tenant of any entity owned or controlled by us, including the Operating Partnership) that would cause us to own, actually or constructively, more than a 9.8% interest (as set forth in Section 856(d)(2)(B) of the Code) in such tenant (or the Board of Trustees in its sole and absolute discretion, determines that revenue derived from such tenant will not affect our ability to qualify to be taxed as a REIT). 

Any violation or attempted violation of the representations or undertakings discussed above will result in such shareholder’s shares being automatically transferred to a charitable trust. As a condition of granting the waiver or establishing the excepted holder limit, our Board of Trustees may require an opinion of counsel or a ruling from the Internal Revenue Service, in either case in form and substance satisfactory to the Board of Trustees, in its sole discretion, in order to determine or ensure Seritage Growth’s status as a REIT and such representations and undertakings from the person requesting the exception as the Board of Trustees may require in its sole discretion to make the determinations above. The Board of Trustees may impose such conditions or restrictions as it deems appropriate in connection with granting such a waiver or establishing an excepted holder limit. 

At any time, the Board of Trustees may from time to time increase or decrease the ownership limits for all other persons, unless, after giving effect to such increase, five or fewer individuals could beneficially own, in the aggregate, more than 49.9% in value of our outstanding shares of beneficial interest or we would otherwise fail to qualify as a REIT. A reduced ownership limit will not apply to any person or entity whose percentage ownership of common shares (including Class A Common Shares, Seritage Growth non-economic shares and Seritage Growth non-voting shares) of beneficial interest, or all shares of beneficial interest, as applicable, of Seritage Growth is, at the effective time of such reduction, in excess of such decreased ownership limit until such time as such person’s or entity’s percentage ownership, equals or falls below the decreased ownership limit, but any further acquisition of shares of beneficial interest of Seritage Growth will violate the decreased ownership limit. 

Seritage Growth’s declaration of trust further prohibits: 

•any person from beneficially or constructively owning, applying certain attribution rules of the Code, our shares of beneficial interest that would result in our being “closely held” under Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year) or otherwise cause us to fail to qualify to be taxed as a REIT; 

 

•any person from transferring our shares of beneficial interest if the transfer would result in our shares of beneficial interest being beneficially owned by fewer than 100 persons (determined with reference to the rules of attribution under Section 544 of the Code); 

 

•any person from constructively owning our shares of beneficial interest to the extent that such constructive ownership would cause any of our income that would otherwise qualify as “rents from real property” for purposes of Section 856(d) of the Code to fail to qualify as such; and 

 

•any person from beneficially owning or constructively owning our shares of beneficial interest to the extent such ownership would result in our failing to qualify as a “domestically controlled qualified investment entity” within the meaning of Section 897(h) of the Code. 

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Any person who acquires or attempts or intends to acquire beneficial or constructive ownership of our shares of beneficial interest that will or may violate either or both of the ownership limits or any of the other restrictions on ownership and transfer of Seritage Growth shares of beneficial interest described above, or who would have owned our shares of beneficial interest transferred to the charitable trust as described below, must immediately give notice to Seritage Growth of such event or, in the case of an attempted or proposed transaction, give Seritage Growth at least 15 days’ prior written notice and provide Seritage Growth with such other information as it may request in order to determine the effect of such transfer on Seritage Growth’s status as a REIT. 

The foregoing restrictions on ownership and transfer of Seritage Growth shares of beneficial interest will not apply if the Board of Trustees determines that it is no longer in Seritage Growth’s best interests to attempt to qualify, or to continue to qualify, to be taxed as a REIT or that compliance with the restrictions and limits on ownership and transfer of Seritage Growth shares of beneficial interest described above is no longer required in order for us to qualify to be taxed as a REIT. 

If any purported transfer of our shares of beneficial interest or any other event would otherwise result in any person violating the ownership limits or any other restriction on ownership and transfer of our shares of beneficial interest described above, then that number of shares (rounded up to the nearest whole share) that would cause the violation will be automatically transferred to, and held by, a trust for the exclusive benefit of one or more charitable organizations selected by us, and the intended transferee or other prohibited owner will acquire no rights in the shares. The automatic transfer will be effective as of the close of business on the business day prior to the date of the violative transfer or other event that results in a transfer to the trust. If the transfer to the trust as described above is not automatically effective, for any reason, to prevent violation of the applicable ownership limit or any other restriction on ownership and transfer of our shares of beneficial interest described above, then Seritage Growth’s declaration of trust provides that the transfer of the shares will be null and void and the intended transferee will acquire no rights in such shares. 

Our shares of beneficial interest held in the trust will be issued and outstanding shares. The prohibited owner will not be permitted to benefit economically from ownership of any our shares of beneficial interest held in the trust and will not be permitted to have any rights to distributions or any rights to vote or other rights attributable to our shares of beneficial interest held in the trust. The trustee of the trust will exercise all voting rights and receive all distributions with respect to shares held in the trust for the exclusive benefit of the charitable beneficiary of the trust. Any distribution made before we discover that the shares have been transferred to a trust as described above must be repaid by the recipient to the trustee upon demand by us. Subject to Maryland law, effective as of the date that the shares have been transferred to the trust, the trustee will have the authority to rescind as void any vote cast by a prohibited owner before our discovery that the shares have been transferred to the trust and to recast the vote in accordance with the desires of the trustee acting for the benefit of the charitable beneficiary of the trust. However, if we have already taken irreversible corporate action, then the trustee may not rescind and recast the vote. 

Our shares of beneficial interest transferred to the trustee will be deemed offered for sale to us, or our designee, at a price per share equal to the lesser of (i) the price paid by the prohibited owner for the shares (or, in the case of a devise or gift, the market price at the time of the devise or gift), or (ii) the market price on the date we, or our designee, accepts such offer. We may reduce the amount so payable to the prohibited owner by the amount of any distribution that we made to the prohibited owner before we discovered that the shares had been automatically transferred to the trust and that are then owed by the prohibited owner to the trustee as described above, and we may pay the amount of any such reduction to the trustee for the benefit of the charitable beneficiary. We have the right to accept such offer until the trustee has sold our shares of beneficial interest held in the trust as discussed below. Upon a sale to us, the interest of the charitable beneficiary in the shares sold terminates, and the trustee must distribute the net proceeds of the sale to the prohibited owner and must distribute any distributions held by the trustee with respect to such shares to the charitable beneficiary. 

If we do not buy the shares, the trustee must, within 20 days of receiving notice from us of the transfer of shares to the trust, sell the shares to a person or entity designated by the trustee that could own the shares without violating either of the ownership limits or the other restrictions on ownership and transfer of Seritage Growth shares of beneficial interest. After the sale of the shares, the interest of the charitable beneficiary in the shares sold will terminate and the trustee must distribute to the prohibited owner an amount equal to the lesser of (i) the price paid by the prohibited owner for the shares (or, if the prohibited owner did not give value for the shares in connection with 

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the event causing the shares to be held in the trust (for example, in the case of a gift, devise or other such transaction), the market price of the shares on the day of the event causing the shares to be held in the trust) and (ii) the sales proceeds (net of any commissions and other expenses of sale) received by the trust for the shares. The trustee may reduce the amount payable to the prohibited owner by the amount of any distribution that we paid to the prohibited owner before we discovered that the shares had been automatically transferred to the trust and that are then owed by the prohibited owner to the trustee as described above. Any net sales proceeds in excess of the amount payable to the prohibited owner must be paid immediately to the charitable beneficiary, together with any distributions thereon. In addition, if, prior to the discovery by us that shares of beneficial interest have been transferred to a trust, such shares are sold by a prohibited owner, then such shares will be deemed to have been sold on behalf of the trust and, to the extent that the prohibited owner received an amount for or in respect of such shares that exceeds the amount that such prohibited owner was entitled to receive, such excess amount will be paid to the trustee upon demand. The prohibited owner has no rights in the shares held by the trustee. 

In addition, if the Seritage Growth Board of Trustees determines that a transfer or other event has occurred that would violate the restrictions on ownership and transfer of Seritage Growth shares of beneficial interest described above or that a person or entity intends to acquire or has attempted to acquire beneficial or constructive ownership of any of our shares of beneficial interest in violation of the restrictions on ownership and transfer of Seritage Growth shares of beneficial interest described above, the Board of Trustees shall take such action as it deems advisable to refuse to give effect to or to prevent such transfer or other event, including, but not limited to, causing us to redeem our shares of beneficial interest, refusing to give effect to the transfer on our books or instituting proceedings to enjoin the transfer or other event. 

Every person or entity who will be a beneficial or constructive owner of more than 5% (or such lower percentage as required by the Code or the regulations promulgated thereunder) in number or value of Seritage Growth shares of beneficial interest, whichever is more restrictive, within 30 days after the end of each taxable year, and within 30 days of initially reaching such threshold must give Seritage Growth written notice stating the person’s or entity’s name and address, the number of shares of each class and series of Seritage Growth shares of beneficial interest that the shareholder beneficially or constructively owns and a description of the manner in which the shares are held. Each such owner must provide to Seritage Growth in writing such additional information as we may request in order to determine the effect, if any, of the shareholder’s beneficial ownership on Seritage Growth’s status as a REIT and to ensure compliance with the applicable ownership limits. In addition, any person or entity that is a beneficial owner or constructive owner of our shares of beneficial interest and any person or entity (including the shareholder of record) that is holding our shares of beneficial interest for a beneficial owner or constructive owner must provide to us such information as we may request in order to determine Seritage Growth’s status as a REIT and to comply with the requirements of any taxing authority or governmental authority or to determine such compliance and to ensure compliance with the ownership limits. 

Any certificates evidencing our shares of beneficial interest will bear a legend referring to the restrictions on ownership and transfer of Seritage Growth shares of beneficial interest described above and elsewhere in this prospectus. 

These restrictions on ownership and transfer of Seritage Growth shares of beneficial will not apply if the Seritage Growth Board of Trustees determines that it is no longer in our best interests to attempt to qualify, or to continue to qualify, as a REIT or that compliance is no longer required in order for us to qualify as a REIT. 

Provisions of Maryland Law and of Seritage Growth’s Declaration of Trust and Bylaws 

The Seritage Growth Board of Trustees 

The Board of Trustees of Seritage Growth consists of seven trustees. In accordance with the terms of Seritage Growth’s declaration of trust, the Board of Trustees is divided into three classes of as nearly equal size as possible, with the trustees of each class serving until the third annual meeting of shareholders after their election and until their successors are duly elected and qualify. At each annual meeting of shareholders, upon the expiration of the term of a class of trustees, the successor to each such trustee in the class will be elected to serve from the time of election and qualification until the third annual meeting following his or her election and until his or her successor is 

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duly elected and qualifies. 

Seritage Growth’s declaration of trust and bylaws provide that the number of our trustees may be established, increased or decreased only by a majority of the entire Board of Trustees but, unless our bylaws are amended, may not be more than 15. 

Election of Trustees; Removals; Vacancies 

Seritage Growth’s bylaws provide that trustees will be elected by a vote of at least two-thirds of the votes of the Class A Common Shares and Seritage Growth non-economic shares, voting together as a single class, cast in both contested and uncontested elections. In the event that an incumbent trustee does not receive a sufficient percentage of votes entitled to be cast for election, he or she will continue to serve on the Board of Trustees until a successor is duly elected and qualifies.  

Seritage Growth’s declaration of trust provides that, subject to the rights, if any, of holders of any class or series of preferred shares of beneficial interest to elect or remove one or more trustees, our trustees may be removed only for cause, as such term is defined in our declaration of trust, and only by the affirmative vote of not less than 75% of the votes of Class A Common Shares and Seritage Growth non-economic shares, voting together as a single class, entitled to be cast generally in the election of trustees. 

We have elected by a provision of Seritage Growth’s declaration of trust to be subject to provisions of Maryland law requiring that, except as otherwise provided in the terms of any class or series of Seritage Growth shares of beneficial interest, vacancies on the Board of Trustees may be filled only by a majority of the remaining trustees, even if the remaining trustees do not constitute a quorum, and that any individual elected to fill a vacancy will serve for the remainder of the full term of the trusteeship in which the vacancy occurred and until his or her successor is duly elected and qualifies. 

Business Combinations 

Under certain provisions of the Maryland General Corporation Law (“MGCL”) that are applicable to Maryland REITs, certain “business combinations” (including a merger, consolidation, statutory share exchange and, in certain circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities) between a Maryland REIT and an interested shareholder (defined generally as any person who beneficially owns, directly or indirectly, 10% or more of the voting power of the Maryland REIT’s outstanding voting shares of beneficial interest or an affiliate or associate of the Maryland REIT who, at any time during the two-year period immediately prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then-outstanding shares of beneficial interest of the Maryland REIT) or an affiliate of such an interested shareholder are prohibited for five years after the most recent date on which the interested shareholder becomes an interested shareholder. Thereafter, any such business combination must generally be recommended by the board of trustees of the Maryland REIT and approved by the affirmative vote of at least (i) 80% of the votes entitled to be cast by the holders of outstanding voting shares of beneficial interest of the REIT, voting together as a single class, and (ii) two-thirds of the votes entitled to be cast by holders of voting shares of beneficial interest of the Maryland REIT, other than shares held by the interested shareholder with whom (or with whose affiliate) the business combination is to be effected or held by an affiliate or associate of the interested shareholder, unless, among other conditions, the Maryland REIT’s common shareholders receive a minimum price (as defined in the MGCL) for their shares and the consideration is received in cash or in the same form as previously paid by the interested shareholder for its shares. A person is not an interested shareholder under the statute if the board of trustees exempted or approved in advance the transaction by which the person otherwise would have become an interested shareholder. A Maryland REIT’s board of trustees may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions determined by the board of trustees. 

Pursuant to the statute, the Seritage Growth Board of Trustees has by resolution exempted business combinations (a) between us and (i) Sears Holdings or its affiliates or (ii) ESL or Fairholme Capital Management L.L.C. (“FCM”) and/or certain clients of FCM (the “Fairholme Clients”) or their respective affiliates and (b) between us and any other person, provided that in the latter case the business combination is first approved by the Seritage Growth Board of Trustees (including a majority of our trustees who are not affiliates or associates of such 

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person). Consequently, the five-year prohibition and the supermajority vote requirements will not apply to a business combination between us and Sears Holdings, ESL or FCM and/or Fairholme Clients or their respective affiliates or to a business combination between us and any other person, in the latter case, if the Board of Trustees has first approved the combination. As a result, any person described in the preceding sentence may be able to enter into business combinations with us that may not be in the best interests of Seritage Growth shareholders, without compliance with the supermajority vote requirements and other provisions of the statute. We cannot assure you that the Seritage Growth Board of Trustees will not amend or repeal this resolution in the future. 

Control Share Acquisitions 

The MGCL provides with regards to Maryland REITs that holders of “control shares” of a Maryland REIT acquired in a “control share acquisition” have no voting rights with respect to such shares except to the extent approved by the affirmative vote of at least two-thirds of the votes entitled to be cast on the matter. Shares owned by the acquirer, an officer of the Maryland REIT or an employee of the Maryland REIT who is also a trustee of the Maryland REIT are excluded from shares entitled to vote on the matter. 

“Control shares” are voting shares of beneficial interest that, if aggregated with all other such shares owned by the acquirer, or in respect of which the acquirer is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquirer to exercise voting power in electing trustees within one of the following ranges of voting power: 

•one-tenth or more but less than one-third; 

 

•one-third or more but less than a majority; or 

 

•a majority or more of all voting power. 

Control shares do not include shares that the acquiring person is then entitled to vote as a result of having previously obtained shareholder approval or shares acquired directly from the Maryland REIT. A “control share acquisition” means the acquisition of issued and outstanding control shares, subject to certain exceptions. 

A person who has made or proposes to make a control share acquisition, upon satisfaction of certain conditions (including an undertaking to pay expenses and making an “acquiring person statement” as described in the MGCL), may compel the board of trustees to call a special meeting of shareholders to be held within 50 days of demand to consider the voting rights of the shares. If no request for a meeting is made, the Maryland REIT may itself present the question at any shareholders meeting. 

If voting rights are not approved at the meeting or if the acquiring person does not deliver an “acquiring person statement” as required by the statute, then, subject to certain conditions and limitations, the Maryland REIT may redeem any or all of the control shares (except those for which voting rights have previously been approved) for fair value determined, without regard to the absence of voting rights for the control shares, as of the date of the last control share acquisition by the acquirer or, if a meeting of shareholders is held at which the voting rights of such shares are considered and not approved, as of the date of such meeting. If voting rights for control shares are approved at a shareholders meeting and the acquirer becomes entitled to vote a majority of the shares entitled to vote, all other shareholders may exercise appraisal rights. The fair value of the shares as determined for purposes of such appraisal rights may not be less than the highest price per share paid by the acquirer in the control share acquisition. 

The control share acquisition statute does not apply to shares acquired in a merger, consolidation or statutory share exchange if the Maryland REIT is a party to the transaction or acquisitions approved or exempted by the declaration of trust or bylaws of the Maryland REIT. 

Seritage Growth’s bylaws contain a provision exempting from the control share acquisition statute any and all acquisitions by any person of our shares of beneficial interest. This provision may be amended or eliminated at any time in the future by the Seritage Growth Board of Trustees. 

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Subtitle 8 

Subtitle 8 of Title 3 of the MGCL (“Subtitle 8”) permits a Maryland REIT with a class of equity securities registered under the Exchange Act and at least three independent trustees to elect to be subject, by provision in its declaration of trust or bylaws or a resolution of its board of trustees and notwithstanding any contrary provision in the declaration of trust or bylaws, to any or all of five provisions of the MGCL that provide, respectively, for:  

•a classified board of trustees; 

 

•a two-thirds vote requirement for removing a trustee; 

 

•a requirement that the number of trustees be fixed only by vote of the board of trustees; 

 

•a requirement that a vacancy on the board of trustees be filled only by the remaining trustees in office for the remainder of the full term of the class of trustees in which the vacancy occurred; and 

 

•a majority requirement for the calling of a shareholder-requested special meeting of shareholders. 

We have elected by a provision in our declaration of trust to be subject to the provisions of Subtitle 8 relating to the filling of vacancies on our Board of Trustees. Through provisions in the declaration of trust and bylaws unrelated to Subtitle 8, we (i) have a classified board of trustees, (ii) vest in the Board of Trustees the exclusive power to fix the number of trusteeships and (iii) provide that only our chairman, our chief executive officer, president or our Board of Trustees, may call a special meeting. Under the declaration of trust, trustees may be removed only for cause by the affirmative vote of not less than 75% of the votes of the Class A Common Shares and Seritage Growth non-economic shares, voting together as a single class, entitled to be cast generally in the election of trustees.  

Special Meetings of Shareholders 

Pursuant to Seritage Growth’s bylaws, the chairman, the chief executive officer, the president or the Board of Trustees may call a special meeting of Seritage Growth shareholders. Under the provisions of Seritage Growth’s bylaws, a special meeting of Seritage Growth shareholders may not be called by shareholders.  

Shareholder Actions by Unanimous Consent 

Under the Seritage Growth declaration of trust and bylaws, shareholder action may be taken only at an annual or special meeting of shareholders or by unanimous consent in lieu of a meeting. 

Approval of Extraordinary REIT Action; Amendment of Declaration of Trust and Bylaws 

Under Maryland law, a Maryland REIT generally may not amend its declaration of trust, merge, or convert unless advised by its board of trustees and approved by the affirmative vote of shareholders entitled to cast at least two-thirds of the votes entitled to be cast on the matter, unless the REIT provides in its declaration of trust for approval of these matters by a lesser percentage, but not less than a majority, of all of the votes entitled to be cast on the matter. The Seritage Growth declaration of trust does not provide for a lesser percentage.  Our declaration of trust also provides that we may only sell or transfer all or substantially all of our assets or terminate if approved by our Board of Trustees and by the affirmative vote of shareholders entitled to cast two-thirds of all the votes entitled to be cast on the matter.

Seritage Growth’s declaration of trust and bylaws provide that the Board of Trustees will have the exclusive power to make, alter, amend or repeal any provision of Seritage Growth’s bylaws. 

Advance Notice of Trustee Nominations and New Business 

Seritage Growth’s bylaws provide that nominations of individuals for election as trustees and proposals of 

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business to be considered by shareholders at any annual meeting may be made only (1) pursuant to notice of the meeting, (2) by or at the direction of the Board of Trustees or (3) by any shareholder who was a shareholder of record at the time of giving the notice required by Seritage Growth’s bylaws and at the time of the meeting, who is entitled to vote at the meeting in the election of each of the individuals so nominated or on such other proposed business and who has complied with the advance notice procedures of Seritage Growth’s bylaws. Shareholders generally must provide notice to our secretary not earlier than the 150th day or later than the close of business on the 120th day before the first anniversary of the date of our proxy statement for the preceding year’s annual meeting. 

Only the business specified in the notice of the meeting may be brought before a special meeting of Seritage Growth shareholders. Nominations of individuals for election as trustees at a special meeting of shareholders may be made only (1) by or at the direction of the Board of Trustees or (2) if the special meeting has been called in accordance with Seritage Growth’s bylaws for the purpose of electing trustees, by a shareholder who is a shareholder of record both at the time of giving the notice required by Seritage Growth’s bylaws and at the time of the special meeting, who is entitled to vote at the meeting in the election of each individual so nominated and who has complied with the advance notice procedures of Seritage Growth’s bylaws. Shareholders generally must provide notice to Seritage Growth’s secretary not earlier than the 120th day before such special meeting or later than the later of the close of business on the 90th day before the special meeting or the tenth day after the first public announcement of the date of the special meeting and the nominees of Seritage Growth’s Board of Trustees to be elected at the meeting.  

A shareholder’s notice must contain certain information specified by Seritage Growth’s bylaws about the shareholder, its affiliates and any proposed business or nominee for election as a trustee, including information about the economic interest of the shareholder, its affiliates and any proposed nominee in Seritage Growth. 

Forum Selection Clause 

Seritage Growth’s bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Circuit Court for Baltimore City, Maryland, or, if that court does not have jurisdiction, the United States District Court for the District of Maryland, Baltimore Division, will be the sole and exclusive forum for (a) any derivative action or proceeding brought on our behalf, (b) any action asserting a claim of breach of any duty owed by any of our trustees, officers or other employees to us or to our shareholders, (c) any action asserting a claim against us or any of our trustees, officers or other employees arising pursuant to any provision of the MGCL, the Maryland REIT Law (the “MRL”) or Seritage Growth’s declaration of trust or bylaws or (d) any action asserting a claim against us or any of our trustees, officers or other employees that is governed by the internal affairs doctrine.  

REIT Qualification 

The Seritage Growth declaration of trust provides that the Board of Trustees may authorize us to revoke or otherwise terminate its REIT election, without approval of Seritage Growth shareholders, if it determines that it is no longer in Seritage Growth’s best interests to attempt to qualify, or to continue to qualify, as a REIT. 

Limitation of Trustees’ and Officers’ Liability and Indemnification 

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

The MRL permits a Maryland REIT to indemnify and advance expenses to its trustees, officers, employees and agents to the same extent as permitted by the MGCL for directors, officers, employees and agents of a Maryland corporation. The MGCL requires a Maryland corporation (unless its charter provides otherwise, which our declaration of trust does not) to indemnify a director or officer who has been successful, on the merits or otherwise, in the defense of any proceeding to which he or she is made or threatened to be made a party by reason of his or her 

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service in that capacity. The MGCL permits a Maryland corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made or threatened to be made a party by reason of their service in those or other capacities unless it is established that: 

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

 

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

 

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

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

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

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

 

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

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

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

 

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

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

Stock Exchange Listing 

The Class A Common Shares are listed on the NYSE under the symbol “SRG”. The Series A Preferred Shares are listed on the NYSE under the symbol “SRG-PA.”

 

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Transfer Agent and Registrar 

The transfer agent and registrar for the common shares of beneficial interest and the preferred shares of Seritage Growth is Computershare Trust Company, N.A. 

 

 

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