To the Members of the Board:

I’d like to share my concerns with you about Transform’s plan to acquire the remaining 41.2% of Sears Hometown and Outlets (SHO) for $2.25 per share. I’m writing on behalf of Crossroads Capital, a Kansas City-based value-oriented investment manager that specializes in uncovering underappreciated, high-quality businesses undergoing transformative, valueunlocking change. I also write to represent a number of other funds and individual shareholders that have expressed interest in this letter.

As a longtime significant shareholder with a multi-year history of carefully studying SHO, engaging in thoughtful conversation with many of its senior executives, and building my own demonstrable track record of public advocacy and support for both management and Mr. Lampert, I think I have some standing to discuss the issues presented in these pages.