Common use of Certain Adjustments Clause in Contracts

Certain Adjustments. Notwithstanding sections 4.02 and 6.02, in the event there is a Pricing Adjustment with respect to any Tax Return that results in additional taxable income to Sears Holdings, SHO or any of their respective Subsidiaries (or any tax group that includes any such person), (i) if such adjustment is with respect to a State Combined or Consolidated Tax Return, the adjustments arising from such Pricing Adjustment shall be disregarded in applying sections 4.02 and 6.02 to the extent necessary in order to put Sears Holdings (and its Subsidiaries) or SHO (and its Subsidiaries), as the case may be, in the same after tax position with respect to such State Combined or Consolidated Tax Return as such person would have occupied if there had been no such additional taxable income (as determined by Sears Holdings in good faith) and (ii) after the application of clause (i) (but without duplication) or if clause (i) does not apply, as the case may be, (A) SHO shall indemnify Sears Holdings for any additional Tax that Sears Holdings (or any of its Subsidiaries) would otherwise bear as a result of such additional taxable income and (b) Sears Holdings shall indemnify SHO for any additional Tax that the SHO Companies would otherwise bear as a result of such additional taxable income. The amount of any payment under this section 7.03 shall be increased by any Taxes incurred by the person receiving such payment as a result of the receipt of such payment. Any payment required under this section 7.03 shall be made within 15 days after the indemnified party makes a payment to any Taxing Authority as a result of a Pricing Adjustment. In the event that, following a Pricing Adjustment with respect to a Tax Return, Sears Holdings determines that it is appropriate to apply that Pricing Adjustment to another Tax Return or in filing other Tax Returns going forward, this section 7.03 (and sections 4.02 and 6.02) shall be applied as if a Pricing Adjustment had been made with respect to such other Tax Returns.

Certain Adjustments. Notwithstanding sections 4.02 (a) If, and 6.02whenever, in prior to the event there is termination of this Agreement and the distribution to the Optionee of Ordinary Shares underlying the Option, the Company shall effect a Pricing Adjustment subdivision or consolidation of Ordinary Shares or the payment of a share dividend on Ordinary Shares without receipt of consideration by the Company, (X) the number of Ordinary Shares with respect to any Tax Return that results in additional taxable income to Sears Holdingswhich the Option may thereafter be exercised or satisfied, SHO or any of their respective Subsidiaries (or any tax group that includes any such person)as applicable, (i) if such adjustment is with respect to a State Combined or Consolidated Tax Returnin the event of an increase in the number of outstanding shares, the adjustments arising from such Pricing Adjustment shall be disregarded in applying sections 4.02 proportionately increased, and 6.02 to the extent necessary in order to put Sears Holdings (and its Subsidiaries) or SHO (and its Subsidiaries)purchase price per Ordinary Shares shall be proportionately reduced, as the case may be, in the same after tax position with respect to such State Combined or Consolidated Tax Return as such person would have occupied if there had been no such additional taxable income (as determined by Sears Holdings in good faith) and (ii) after in the application event of clause a reduction in the number of outstanding shares, shall be proportionately reduced, and the purchase price per Ordinary Share shall be proportionately increased, and (iY) (but without duplication) any other share numbers contained in this Agreement shall be appropriately adjusted. Notwithstanding the foregoing or if clause (i) does not applyany other provision of this Section 8, any adjustment shall comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the case may be, (A“Code”) SHO and in no event shall indemnify Sears Holdings for any additional Tax that Sears Holdings (or any adjustment be made which would render the Option subject to Section 409A of its Subsidiaries) would otherwise bear as a result of such additional taxable income and the Code. (b) Sears Holdings shall indemnify SHO for If the Company recapitalizes or otherwise changes its capital structure, thereafter upon any additional Tax that exercise or satisfaction, as applicable, of the SHO Companies would otherwise bear as a result of such additional taxable income. The amount of any payment under this section 7.03 Option, the Optionee shall be increased by any Taxes incurred entitled to purchase, in lieu of the number of Ordinary Shares then covered by the person receiving such payment as a result Option, the number and class of shares and securities to which the Optionee would have been entitled pursuant to the terms of the receipt recapitalization if, immediately prior to such recapitalization, the Optionee had been the holder of such payment. Any payment required under this section 7.03 shall be made within 15 days after record of the indemnified party makes a payment to any Taxing Authority as a result number of a Pricing Adjustment. Ordinary Shares then covered by the Option. (c) In the event thatof changes to the outstanding Ordinary Shares by reason of extraordinary cash dividend, following a Pricing Adjustment with respect to a Tax Returnreorganization, Sears Holdings determines that it is appropriate to apply that Pricing Adjustment to another Tax Return mergers, consolidations, combinations, split-ups, spin-offs, exchanges or other relevant changes in filing other Tax Returns going forwardcapitalization occurring after the date of this Agreement and not otherwise provided for under this section, this section 7.03 (and sections 4.02 and 6.02) the Option shall be applied adjusted by the Board in its discretion as if a Pricing Adjustment had been made with respect to such the number and price of Ordinary Shares, other Tax Returnsconsideration subject to the Option, and/or other share numbers contained in this Agreement. (d) The number of Ordinary Shares subject to the option shall be rounded to the nearest whole number. (e) Any and all adjustments or actions taken by the Board of the Company pursuant to this Section shall be conclusive and binding for all purposes.

Certain Adjustments. Notwithstanding sections 4.02 and 6.02(a) To preserve the actual or potential ------------------- economic value of the Rights, if at any time after the date of this Rights Agreement there shall be any change in the event there is a Pricing Adjustment with respect Common Shares or the Preferred Shares, whether by reason of stock dividends, stock splits, recapitalizations, mergers, consolidations, combinations or exchanges of securities, split-ups, split-offs, spin-offs, liquidations, other similar changes in capitalization, any distribution or issuance of cash, assets, evidences of indebtedness or subscription rights, options or warrants to any Tax Return that results in additional taxable income to Sears Holdings, SHO holders of Common Shares or any of their respective Subsidiaries (or any tax group that includes any such person), (i) if such adjustment is with respect to a State Combined or Consolidated Tax Return, the adjustments arising from such Pricing Adjustment shall be disregarded in applying sections 4.02 and 6.02 to the extent necessary in order to put Sears Holdings (and its Subsidiaries) or SHO (and its Subsidiaries)Preferred Shares, as the case may bebe (other than the Rights or regular quarterly cash dividends) or otherwise, then, in each such event the same after tax position Board of Directors of the Company shall make such appropriate adjustments in the number of Preferred Shares (or the number and kind of other securities) issuable upon exercise of each Right, the Purchase Price and Redemption Price in effect at such time and the number of Rights outstanding at such time (including the number of Rights or fractional Rights associated with respect to each Common Share) such State Combined that following such adjustment such event shall not have had the effect of reducing or Consolidated Tax Return as such person limiting the benefits the holders of the Rights would have occupied if there had been no absent such additional taxable income event. (as determined by Sears Holdings in good faithb) and (ii) after the application of clause (i) (but without duplication) or if clause (i) does not applyIf, as the case may be, (A) SHO shall indemnify Sears Holdings for any additional Tax that Sears Holdings (or any of its Subsidiaries) would otherwise bear as a result of such additional taxable income and (b) Sears Holdings an adjustment made pursuant to Section 12(a), the holder of any Right thereafter exercised shall indemnify SHO for become entitled to receive any additional Tax that securities other than Preferred Shares, thereafter the SHO Companies would otherwise bear as a result number of such additional taxable income. The amount securities so receivable upon exercise of any payment under this section 7.03 Right shall be increased by any Taxes incurred by subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the person receiving such payment as a result provisions of Sections 11(a) and 12(a) and the receipt provisions of such payment. Any payment required under this section 7.03 shall be made within 15 days after the indemnified party makes a payment to any Taxing Authority as a result of a Pricing Adjustment. In the event thatSections 7, following a Pricing Adjustment 9 and 10 with respect to the Preferred Shares shall apply, as nearly as reasonably may be, on like terms to any such other securities. (c) All Rights originally issued by the Company subsequent to any adjustment made to the amount of Preferred Shares or other securities relating to a Tax ReturnRight shall evidence the right to purchase, Sears Holdings determines for the Purchase Price, the adjusted number and kind of securities purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein. (d) Irrespective of any adjustment or change in the Purchase Price or the number of Preferred Shares or number or kind of other securities issuable upon the exercise of the Rights, the Right Certificates theretofore and thereafter issued may continue to express the terms which were expressed in the initial Right Certificates issued hereunder. (e) In any case in which action taken pursuant to Section 12(a) requires that it is appropriate an adjustment be made effective as of a record date for a specified event, the Company may elect to apply that Pricing Adjustment defer until the occurrence of such event the issuing to another Tax Return or in filing the holder of any Right exercised after such record date the Preferred Shares and/or other Tax Returns going forwardsecurities, this section 7.03 (if any, issuable upon such exercise over and sections 4.02 and 6.02) shall be applied as above the Preferred Shares and/or other securities, if a Pricing Adjustment had been made with respect any, issuable before giving effect to such adjustment; Provided, however, that the Company shall deliver to such --------- ------- holder a due ▇▇▇▇ or other Tax Returnsappropriate instrument evidencing such holder's right to receive such additional securities upon the occurrence of the event requiring such adjustment.

Certain Adjustments. Notwithstanding sections 4.02 and 6.02(a) To preserve the actual or potential economic value of the Rights, if at any time after the date of this Rights Agreement there shall be any change in the event there is a Pricing Adjustment with respect Common Shares or the Preferred Shares, including any change in the number of Common Shares or Preferred Shares outstanding, whether by reason of stock dividends, stock splits, reclassifications, recapitalizations, mergers, consolidations, combinations or exchanges of securities, split-ups, split-offs, spin-offs, liquidations, other similar changes in capitalization, any distribution or issuance of cash, assets, evidences of indebtedness or subscription rights, options or warrants to any Tax Return that results in additional taxable income to Sears Holdingsholders of Common Shares, SHO or any of their respective Subsidiaries (or any tax group that includes any such person), (i) if such adjustment is with respect to a State Combined or Consolidated Tax Return, the adjustments arising from such Pricing Adjustment shall be disregarded in applying sections 4.02 and 6.02 to the extent necessary in order to put Sears Holdings (and its Subsidiaries) or SHO (and its Subsidiaries)Preferred Shares, as the case may bebe (other than distribution of the Rights or regular quarterly cash dividends), or otherwise, then, in each such event the same after tax position Board shall make such appropriate adjustments in the number of Preferred Shares (or the number and kind of other securities) issuable upon exercise of each Right, the Purchase Price and Redemption Price in effect at such time and the number of Rights outstanding at such time (including the number of Rights or fractional Rights associated with respect to each Common Share) such State Combined that following such adjustment such event shall not have had the effect of reducing or Consolidated Tax Return as such person limiting the benefits the holders of the Rights would have occupied if there had been no absent such additional taxable income event. (as determined by Sears Holdings in good faithb) and (ii) after the application of clause (i) (but without duplication) or if clause (i) does not applyIf, as the case may be, (A) SHO shall indemnify Sears Holdings for any additional Tax that Sears Holdings (or any of its Subsidiaries) would otherwise bear as a result of such additional taxable income and (b) Sears Holdings an adjustment made pursuant to Section 12(a), the holder of any Right thereafter exercised shall indemnify SHO for become entitled to receive any additional Tax that securities other than Preferred Shares, thereafter the SHO Companies would otherwise bear as a result number of such additional taxable income. The amount securities so receivable upon exercise of any payment under this section 7.03 Right shall be increased by any Taxes incurred by subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the person receiving such payment as a result provisions of Sections 11 and 12 and the receipt other provisions of such payment. Any payment required under this section 7.03 shall be made within 15 days after the indemnified party makes a payment to any Taxing Authority as a result of a Pricing Adjustment. In the event thatRights Agreement (including Sections 7, following a Pricing Adjustment 9 and 10) with respect to the Preferred Shares shall apply, as nearly as reasonably may be, on like terms to any such other securities. (c) All Rights originally issued by the Company subsequent to any adjustment made to the amount of Preferred Shares or other securities relating to a Tax ReturnRight shall evidence the right to purchase, Sears Holdings determines for the Purchase Price, the adjusted number and kind of securities purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided in this Rights Agreement. (d) Irrespective of any adjustment or change in the Purchase Price or the number of Preferred Shares or number or kind of other securities issuable upon the exercise of the Rights, the Right Certificates theretofore and thereafter issued may continue to express the terms that it is appropriate were expressed in the initial Right Certificates issued hereunder. (e) In any case in which action taken pursuant to apply Section 12(a) requires that Pricing Adjustment an adjustment be made effective as of a record date for a specified event, the Company may elect to another Tax Return or in filing defer until the occurrence of such event the issuing to the holder of any Right exercised after such record date the Preferred Shares and/or other Tax Returns going forwardsecurities, this section 7.03 (if any, issuable upon such exercise over and sections 4.02 and 6.02) shall be applied as above the Preferred Shares and/or other securities, if a Pricing Adjustment had been made with respect any, issuable before giving effect to such adjustment; provided, however, that the Company shall deliver to such holder a due ▇▇▇▇ or other Tax Returnsappropriate instrument evidencing such holder’s right to receive such additional securities upon the occurrence of the event requiring such adjustment.

Certain Adjustments. Notwithstanding sections 4.02 and 6.02(a) To preserve the actual or potential economic value of the Rights, if at any time after the date of this Rights Agreement there shall be any change in the event there is a Pricing Adjustment with respect Common Shares or the Preferred Shares, whether by reason of stock dividends, stock splits, reclassifications, recapitalizations, mergers, consolidations, combinations or exchanges of securities, split-ups, split-offs, spin-offs, liquidations, other similar changes in capitalization, any distribution or issuance of cash, assets, evidences of indebtedness or subscription rights, options or warrants to any Tax Return that results in additional taxable income to Sears Holdingsholders of Common Shares, SHO or any of their respective Subsidiaries (or any tax group that includes any such person), (i) if such adjustment is with respect to a State Combined or Consolidated Tax Return, the adjustments arising from such Pricing Adjustment shall be disregarded in applying sections 4.02 and 6.02 to the extent necessary in order to put Sears Holdings (and its Subsidiaries) or SHO (and its Subsidiaries)Preferred Shares, as the case may bebe (other than distribution of the Rights or regular quarterly cash dividends), or otherwise, then, in each such event the same after tax position Board shall make such appropriate adjustments in the number of Preferred Shares (or the number and kind of other securities) issuable upon exercise of each Right, the Purchase Price and Redemption Price in effect at such time and the number of Rights outstanding at such time (including the number of Rights or fractional Rights associated with respect to each Common Share) such State Combined that following such adjustment such event shall not have had the effect of reducing or Consolidated Tax Return as such person limiting the benefits the holders of the Rights would have occupied if there had been no absent such additional taxable income event. (as determined by Sears Holdings in good faithb) and (ii) after the application of clause (i) (but without duplication) or if clause (i) does not applyIf, as the case may be, (A) SHO shall indemnify Sears Holdings for any additional Tax that Sears Holdings (or any of its Subsidiaries) would otherwise bear as a result of such additional taxable income and (b) Sears Holdings an adjustment made pursuant to Section 12(a), the holder of any Right thereafter exercised shall indemnify SHO for become entitled to receive any additional Tax that securities other than Preferred Shares, thereafter the SHO Companies would otherwise bear as a result number of such additional taxable income. The amount securities so receivable upon exercise of any payment under this section 7.03 Right shall be increased by any Taxes incurred by subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the person receiving such payment as a result provisions of Sections 11 and 12 and the receipt other provisions of such payment. Any payment required under this section 7.03 shall be made within 15 days after the indemnified party makes a payment to any Taxing Authority as a result of a Pricing Adjustment. In the event thatRights Agreement (including Sections 7, following a Pricing Adjustment 9 and 10) with respect to the Preferred Shares shall apply, as nearly as reasonably may be, on like terms to any such other securities. (c) All Rights originally issued by the Company subsequent to any adjustment made to the amount of Preferred Shares or other securities relating to a Tax ReturnRight shall evidence the right to purchase, Sears Holdings determines for the Purchase Price, the adjusted number and kind of securities purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided in this Rights Agreement. (d) Irrespective of any adjustment or change in the Purchase Price or the number of Preferred Shares or number or kind of other securities issuable upon the exercise of the Rights, the Right Certificates theretofore and thereafter issued may continue to express the terms that it is appropriate were expressed in the initial Right Certificates issued hereunder. (e) In any case in which action taken pursuant to apply Section 12(a) requires that Pricing Adjustment an adjustment be made effective as of a record date for a specified event, the Company may elect to another Tax Return or in filing defer (with prompt written notice thereof to the Rights Agent) until the occurrence of such event the issuing to the holder of any Right exercised after such record date the Preferred Shares and/or other Tax Returns going forwardsecurities, this section 7.03 (if any, issuable upon such exercise over and sections 4.02 and 6.02) shall be applied as above the Preferred Shares and/or other securities, if a Pricing Adjustment had been made with respect any, issuable before giving effect to such adjustment; provided, however, that the Company shall deliver to such holder a due b▇▇▇ or other Tax Returnsappropriate instrument evidencing such holder’s right to receive such additional securities upon the occurrence of the event requiring such adjustment.

Certain Adjustments. Notwithstanding sections 4.02 and 6.02(a) To preserve the actual or potential economic value of the Rights, if at any time after the date of this Rights Agreement there shall be any change in the event there is a Pricing Adjustment with respect Common Stock or the Preferred Shares, whether by reason of stock dividends, stock splits, recapitalizations, mergers, consolidations, combinations or exchanges of securities, split-ups, split-offs, spin-offs, liquidations, other similar changes in capitalization, any distribution or issuance of cash, assets, evidences of indebtedness or subscription rights, options or warrants to any Tax Return that results in additional taxable income to Sears Holdings, SHO holders of Common Stock or any of their respective Subsidiaries (or any tax group that includes any such person), (i) if such adjustment is with respect to a State Combined or Consolidated Tax Return, the adjustments arising from such Pricing Adjustment shall be disregarded in applying sections 4.02 and 6.02 to the extent necessary in order to put Sears Holdings (and its Subsidiaries) or SHO (and its Subsidiaries)Preferred Shares, as the case may bebe (other than distribution of the Rights or regular quarterly cash dividends), or otherwise, then, in each such event the same after tax position Company's Board of Directors shall make such appropriate adjustments in the number of Preferred Shares (or the number and kind of other securities) issuable upon exercise of each Right, the Purchase Price and Redemption Price in effect at such time and the number of Rights outstanding at such time (including the number of Rights or fractional Rights associated with respect to each share of Common Stock) such State Combined that following such adjustment such event shall not have had the effect of reducing or Consolidated Tax Return as such person limiting the benefits the holders of the Rights would have occupied if there had been no absent such additional taxable income event. (as determined by Sears Holdings in good faithb) and (ii) after the application of clause (i) (but without duplication) or if clause (i) does not applyIf, as the case may be, (A) SHO shall indemnify Sears Holdings for any additional Tax that Sears Holdings (or any of its Subsidiaries) would otherwise bear as a result of such additional taxable income and (ban adjustment made pursuant to Section 12(a) Sears Holdings hereof, the holder of any Right thereafter exercised shall indemnify SHO for become entitled to receive any additional Tax that securities other than Preferred Shares, then the SHO Companies would otherwise bear as a result number of such additional taxable income. The amount securities so receivable upon exercise of any payment under this section 7.03 Right thereafter shall be increased by any Taxes incurred by subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the person receiving such payment as a result provisions of Sections 11 and 12 hereof, and the receipt provisions of such payment. Any payment required under this section 7.03 shall be made within 15 days after the indemnified party makes a payment to any Taxing Authority as a result of a Pricing Adjustment. In the event thatSections 7, following a Pricing Adjustment 9 and 10 hereof with respect to the Preferred Shares shall apply, as nearly as reasonably may be possible, on like terms to any such other securities. (c) All Rights originally issued by the Company subsequent to any adjustment made to the amount of Preferred Shares or other securities relating to a Tax ReturnRight shall evidence the right to purchase, Sears Holdings determines for the Purchase Price, the adjusted number and kind of securities purchasable from time to time under this Rights Agreement upon exercise of the Rights, all subject to further adjustment as provided in this Rights Agreement. (d) Irrespective of any adjustment or change in the Purchase Price or the number of Preferred Shares or number or kind of other securities issuable upon the exercise of the Rights, the Rights Certificates theretofore and thereafter issued may continue to express the terms that it is appropriate were expressed in the initial Rights Certificates issued under this Rights Agreement. (e) In any case in which action taken pursuant to apply Section 12(a) hereof requires that Pricing Adjustment an adjustment be made effective as of a record date for a specified event, the Company may elect to another Tax Return or in filing other Tax Returns going forward, this section 7.03 defer (and sections 4.02 shall give prompt written notice of such election to the Rights Agent), until the occurrence of such event, issuing to the holder of any Right exercised after such record date the Preferred Shares and/or other securities, if any, issuable upon such exercise over and 6.02) shall be applied as above the Preferred Shares and/or other securities, if a Pricing Adjustment had been made with respect any, issuable before giving effect to such adjustment; provided, however, that the Company shall deliver to such holder a due ▇▇▇▇ or other Tax Returnsappropriate instrument evidencing such holder's right to receive such additional securities upon the occurrence of the event requiring such adjustment.

Certain Adjustments. Notwithstanding sections 4.02 (a) If, and 6.02whenever, in prior to the event there is termination of this Agreement and the distribution to the Optionee of shares of Common Stock underlying the Option, the Company shall effect a Pricing Adjustment subdivision or consolidation of shares of Common Stock or the payment of a stock dividend on Common Stock without receipt of consideration by the Company, (X) the number of shares of Common Stock with respect to any Tax Return that results in additional taxable income to Sears Holdingswhich the Option may thereafter be exercised or satisfied, SHO or any of their respective Subsidiaries (or any tax group that includes any such person)as applicable, (i) if such adjustment is with respect to a State Combined or Consolidated Tax Returnin the event of an increase in the number of outstanding shares, the adjustments arising from such Pricing Adjustment shall be disregarded in applying sections 4.02 proportionately increased, and 6.02 to the extent necessary in order to put Sears Holdings (and its Subsidiaries) or SHO (and its Subsidiaries)purchase price per share of the Common Stock shall be proportionately reduced, as the case may be, in the same after tax position with respect to such State Combined or Consolidated Tax Return as such person would have occupied if there had been no such additional taxable income (as determined by Sears Holdings in good faith) and (ii) after in the application event of clause a reduction in the number of outstanding shares, shall be proportionately reduced, and the purchase price per share of the Common Stock shall be proportionately increased, and (iY) (but without duplication) any other share numbers contained in this Agreement shall be appropriately adjusted. Notwithstanding the foregoing or if clause (i) does not applyany other provision of this Section 9, any adjustment shall comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the case may be, (A“Code”) SHO and in no event shall indemnify Sears Holdings for any additional Tax that Sears Holdings (or any adjustment be made which would render the Option subject to Section 409A of its Subsidiaries) would otherwise bear as a result of such additional taxable income and the Code. (b) Sears Holdings shall indemnify SHO for If the Company recapitalizes or otherwise changes its capital structure, thereafter upon any additional Tax that exercise or satisfaction, as applicable, of the SHO Companies would otherwise bear as a result of such additional taxable income. The amount of any payment under this section 7.03 Option, the Optionee shall be increased by any Taxes incurred entitled to purchase, in lieu of the number of shares of Common Stock then covered by the person receiving such payment as a result Option, the number and class of shares of stock and securities to which the Optionee would have been entitled pursuant to the terms of the receipt recapitalization if, immediately prior to such recapitalization, the Optionee had been the holder of such payment. Any payment required under this section 7.03 shall be made within 15 days after record of the indemnified party makes a payment to any Taxing Authority as a result number of a Pricing Adjustment. shares of Common Stock then covered by the Option. (c) In the event thatof changes to the outstanding Common Stock by reason of extraordinary cash dividend, following a Pricing Adjustment with respect reorganization, mergers, consolidations, combinations, split-ups, spin-offs, exchanges or other relevant changes in capitalization occurring after the date of this Agreement and not otherwise provided for under this section, the Option shall be adjusted by the Company’s Board of Directors in its discretion as to a Tax Returnthe number and price of shares of Common Stock, Sears Holdings determines that it is appropriate other consideration subject to apply that Pricing Adjustment the Option, and/or other share numbers contained in this Agreement. (d) The number of shares of Common Stock subject to another Tax Return the option shall be rounded to the nearest whole number. (e) Any and all adjustments or in filing other Tax Returns going forward, actions taken by the board of directors of the Company pursuant to this section 7.03 (and sections 4.02 and 6.02) shall be applied as if a Pricing Adjustment had been made with respect to such other Tax Returnsconclusive and binding for all purposes.

Certain Adjustments. Notwithstanding sections 4.02 and 6.02, in the event there is a Pricing Adjustment with respect to any Tax Return that results in additional taxable income to Sears Holdings, SHO or any of their respective Subsidiaries (or any tax group that includes any such person), (i) if In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (including any such adjustment reclassification in connection with a consolidation or merger in which the Company is with respect to a State Combined the continuing or Consolidated Tax Returnsurviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e), the adjustments arising from Purchase Price in effect at the time of the record date for such Pricing Adjustment shall be disregarded in applying sections 4.02 dividend or of the effective date of such subdivision, combination or reclassification, and 6.02 to the extent necessary in order to put Sears Holdings (number and its Subsidiaries) kind of shares of Preferred Stock or SHO (and its Subsidiaries)capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the same after tax position with respect to such State Combined aggregate number and kind of shares of Preferred Stock or Consolidated Tax Return as such person would have occupied if there had been no such additional taxable income (as determined by Sears Holdings in good faith) and (ii) after the application of clause (i) (but without duplication) or if clause (i) does not applycapital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, that holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii). (Aii) SHO In the event: (1) any Acquiring Person or Adverse Person or any Associate or Affiliate of an Acquiring Person or Adverse Person, at any time after the date of this Agreement, directly or indirectly, shall indemnify Sears Holdings merge into the Company or otherwise combine with the Company, and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and unchanged, or (2) subject to Section 23, any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any additional Tax such plan), alone or together with its Affiliates and Associates, shall, at any time after the Rights Dividend Declaration Date, become an Acquiring Person or Adverse Person, unless the event causing that Sears Holdings Person to become an Acquiring Person or Adverse Person is a Flip-over Event or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by the Board, with the concurrence of at least a majority of the Disinterested Directors and who are not representatives, nominees, Affiliates or Associates of the Person making such tender or exchange offer, after receiving advice from one or more investment banking firms selected by the Board, to be (a) at a price which is fair to shareholders of the Company (taking into account all factors which the Board, with the concurrence of a majority of the Disinterested Directors, deems relevant including, without limitation, prices which could reasonably be achieved if the Company or its assets were sold on an orderly basis designed to realize maximum value) and (b) otherwise in the best interests of the Company and its shareholders other than such Acquiring Person or Adverse Person, its Affiliates and its Associates, or (B) during such time as there is an Acquiring Person or Adverse Person, there shall be any reclassification of securities (including any reverse stock split) or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries, other than a transaction or transactions to which the provisions of Section 13(a) would apply (whether or not with or into or otherwise bear involving an Acquiring Person or Adverse Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its subsidiaries which is directly or indirectly beneficially owned by any Acquiring Person or Adverse Person or any Associate or Affiliate of any Acquiring Person or Adverse Person, then, promptly following the occurrence of any such event described in (11(a)(ii)(A) or (B) hereof, proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e)) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one- thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Flip-over Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by 50% of the Current Market Price (determined pursuant to Section 11(d)) per share of Common Stock on the date of such first occurrence (such number of shares, the "Adjustment Shares"). (iii) In the event that the number of shares of Common Stock which are authorized by the Company's certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall (A) determine the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value"), and (B) with respect to each Right (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon the exercise of a Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock, such as the Preferred Stock, which the Board has deemed to have essentially the same value or economic rights as shares of Common Stock (such shares of preferred stock being referred to as "Common Stock Equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value (less the amount of any reduction in the Purchase Price), where such aggregate value has been determined by the Board based upon the advice of a nationally recognized investment banking firm selected by the Board; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Flip-in Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Flip-in Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. For purposes of the preceding sentence, the term "Spread" shall mean the excess of (i) the Current Value over (ii) the Purchase Price. If the Board determines in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Flip-in Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional taxable income shares (such period, as extended, is herein called the "Substitution Period"). To the extent that action is to be taken pursuant to the first and/or third sentences of this Section 11(a)(iii), the Company (1) shall provide, subject to Section 7(e), that such action shall apply uniformly to all outstanding Rights, and (b2) Sears Holdings shall indemnify SHO for any additional Tax that may suspend the SHO Companies would otherwise bear as a result of such additional taxable income. The amount of any payment under this section 7.03 shall be increased by any Taxes incurred by the person receiving such payment as a result exercisability of the receipt Rights until the expiration of the Substitution Period in order to seek such payment. Any payment required under this section 7.03 shall shareholder approval for such authorization of additional shares and/or to decide the appropriate form of distribution to be made within 15 days after pursuant to such first sentence and to determine the indemnified party makes a payment to any Taxing Authority as a result of a Pricing Adjustmentvalue thereof. In the event thatof any such suspension, following the Company shall issue a Pricing public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of each Adjustment with respect to a Tax Return, Sears Holdings determines that it is appropriate to apply that Pricing Adjustment to another Tax Return or in filing other Tax Returns going forward, this section 7.03 (and sections 4.02 and 6.02) Share shall be applied as if a Pricing Adjustment had been made with respect the Current Market Price per share of the Common Stock on the Flip-in Trigger Date and the per share or per unit value of any Common Stock Equivalent shall be deemed to equal the Current Market Price per share of the Common Stock on such other Tax Returnsdate.

Certain Adjustments. Notwithstanding sections 4.02 and 6.02, in the event there is a Pricing Adjustment with respect to any Tax Return that results in additional taxable income to Sears Holdings, SHO or any of their respective Subsidiaries (or any tax group that includes any such person), (i) if In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide or split the outstanding Preferred Stock, (C) combine the shares of the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (including any such adjustment reclassification in connection with a consolidation or merger in which the Company is with respect to a State Combined the continuing or Consolidated Tax Returnsurviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e), the adjustments arising from Purchase Price in effect at the time of the record date for such Pricing Adjustment shall be disregarded in applying sections 4.02 dividend or at the time of the effective date of such subdivision, split, combination or reclassification, and 6.02 to the extent necessary in order to put Sears Holdings (number and its Subsidiaries) kind of shares of Preferred Stock or SHO (and its Subsidiaries)capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the aggregate adjusted Purchase Price then in effect necessary to exercise a Right in full, the same after tax position with respect to such State Combined aggregate number and kind of shares of Preferred Stock or Consolidated Tax Return as such person would have occupied if there had been no such additional taxable income (as determined by Sears Holdings in good faith) and (ii) after the application of clause (i) (but without duplication) or if clause (i) does not applycapital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, split, combination or reclassification; provided, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii). (ii) Subject to Section 23 and Section 24, in the event that any Person alone or together with its Affiliates and Associates, shall, at any time after the Rights Dividend Declaration Date, become an Acquiring Person (a "Flip-In Event") then, promptly following the occurrence of any such Flip-in Event, proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e)) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of the number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Flip-in Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by 50% of the Current Market Price per share of Common Stock on the date of such first occurrence (such number of shares being referred to as the "Adjustment Shares"). (iii) In the event that the number of shares of Common Stock that are authorized by the Company's Articles of Incorporation, as amended, but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) SHO determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each Right, subject to Section 7(e), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have substantially the same dividend, voting and liquidation rights as shares of Common Stock and are deemed in good faith by the Board of Directors to have substantially the same value as the shares of Common Stock (such shares of preferred stock being referred to as "Common Stock Equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value (less the amount of any reduction in the Purchase Price), where such aggregate value has been determined by the Board, or, at the option of the Board, determined by the Board based upon the advice of a nationally recognized investment banking firm selected by the Board; provided, however, that if the Company shall indemnify Sears Holdings not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) calendar days following the first occurrence of a Flip-in Event (the date of such Flip-in Event being referred to herein as the "Flip-in Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for any exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional Tax shares of Common Stock or other equity securities could be authorized for issuance upon exercise in full of the Rights, the thirty (30) calendar day period set forth above may be extended to the extent necessary, but not more than one hundred twenty (120) calendar days after the Flip-in Trigger Date, in order that Sears Holdings (or any of its Subsidiaries) would otherwise bear as a result the Company may seek stockholder approval for the authorization of such additional taxable income shares (such period, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e), that such action shall apply uniformly to all outstanding Rights, and (by) Sears Holdings shall indemnify SHO for any additional Tax that may suspend the SHO Companies would otherwise bear as exercisability of a result of such additional taxable income. The amount of any payment under this section 7.03 shall be increased by any Taxes incurred by the person receiving such payment as a result proportionate part or all of the receipt Rights until the expiration of such payment. Any payment required under this section 7.03 shall the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made within 15 days after pursuant to such first sentence and to determine the indemnified party makes a payment to any Taxing Authority as a result of a Pricing Adjustmentvalue thereof. In the event thatof any such suspension, following the Company shall issue a Pricing Adjustment public announcement stating that the exercisability of a proportionate part or all of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the shares of Common Stock shall be the Current Market Price per share of the Common Stock on the Flip-in Trigger Date and the value of any Common Stock Equivalent shall be deemed to have the same value as the Common Stock on such date. (iv) If the rules of the national securities exchange, registered as such pursuant to Section 6 of the Exchange Act, or of the national securities association, registered as such pursuant to Section 15A of the Exchange Act, on which the Common Stock is principally traded or quoted would prohibit such exchange or association from listing or continuing to list, or from authorizing for or continuing quotation and/or transaction reporting through an inter-dealer quotation system, the Common Stock or other equity securities of the Company if the Rights were to be exercised for shares of Common Stock in accordance with subparagraph (ii) of this Section 11(a) because such issuance would nullify, restrict or disparately reduce the per share voting rights of holders of Common Stock, the Company shall: (A) determine the Spread, and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a Tax Returnreduction in the Purchase Price, Sears Holdings (3) equity securities of the Company, including, without limitation, Common Stock Equivalents, other than securities which would have the effect of nullifying, restricting or disparately reducing the per share voting rights of holders of Common Stock, (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board or, at the option of the Board, determined by the Board based upon the advice of a recognized investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) calendar days following the Flip-in Trigger Date, then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, cash having an aggregate value equal to the Spread. To the extent that the Company determines that it is appropriate some action need be taken pursuant to apply that Pricing Adjustment to another Tax Return or in filing other Tax Returns going forwardthe first sentence of this Section 11(a)(iv), this section 7.03 the Company (and sections 4.02 and 6.02x) shall provide, subject to Section 7(e), that such action shall apply uniformly to all outstanding Rights and (y) may suspend the exercisability of the Rights, but not longer than ninety (90) calendar days after the Flip-in Trigger Date, in order to decide the appropriate form of distribution to be applied as if a Pricing Adjustment had been made with respect pursuant to such other Tax Returnsfirst sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iv), the value of the shares of Common Stock shall be the Current Market Price per share of the Common Stock on the Flip-in Trigger Date and the value of any Common Stock Equivalent shall be deemed to have the same value as the Common Stock on such date.

Certain Adjustments. Notwithstanding sections 4.02 8.1 Subject to any required action by the shareholders of the Corporation, the number of Shares covered by the Option and 6.02, the exercise price of the Option shall be proportionately adjusted for any increase or decrease in the event there is number of issued Shares resulting from a Pricing Adjustment with respect to any Tax Return that results in additional taxable income to Sears Holdingsstock split, SHO reverse stock split, stock dividend, combination or reclassification of the Shares, or any of their respective Subsidiaries (other increase or any tax group that includes any such person), (i) if such adjustment is with respect to a State Combined or Consolidated Tax Return, the adjustments arising from such Pricing Adjustment shall be disregarded in applying sections 4.02 and 6.02 to the extent necessary in order to put Sears Holdings (and its Subsidiaries) or SHO (and its Subsidiaries), as the case may be, decrease in the same after tax position with respect to such State Combined or Consolidated Tax Return as such person would have occupied if there had been no such additional taxable income (as determined number of issued Shares effected without receipt of consideration by Sears Holdings in good faith) and (ii) after the application of clause (i) (but without duplication) or if clause (i) does not applyCorporation; provided, as the case may behowever, (A) SHO shall indemnify Sears Holdings for any additional Tax that Sears Holdings (or any of its Subsidiaries) would otherwise bear as a result of such additional taxable income and (b) Sears Holdings shall indemnify SHO for any additional Tax that the SHO Companies would otherwise bear as a result of such additional taxable income. The amount conversion of any payment under this section 7.03 shall be increased by any Taxes incurred by the person receiving such payment as a result convertible securities of the Corporation shall not be deemed to have been "effected without receipt of such payment. Any payment required under this section 7.03 consideration." Such adjustment shall be made within 15 by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided in the Plan, no issuance by the Corporation of shares of any class, or securities convertible into shares of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of Shares subject to and exercise price of the Option. 8.2 In the event of the proposed dissolution or liquidation of the Corporation, the Board shall notify the Optionee as soon as practicable prior to the effective date of such proposed transaction. The Board in its discretion may provide for the Optionee to have the right to exercise the Option until twenty (20) days after prior to such transaction as to all of the indemnified party makes a payment Shares covered thereby, including Shares as to any Taxing Authority as a result which the Option would not otherwise be exercisable. To the extent it has not been previously exercised, the Option will terminate immediately prior to the consummation of such proposed action. 8.3 In the event of a Pricing Adjustmentmerger of the Corporation with or into another corporation, or the sale of substantially all of the assets of the Corporation, the Option shall be assumed or an equivalent option or right substituted by the successor corporation or an affiliate (within the meaning of the Ontario Business Corporations Act (the "OBCA")) of the successor corporation. In the event thatthat the successor corporation refuses to assume or substitute for the Option, the Optionee shall fully vest in and have the right to exercise the Option as to all of the Optioned Shares, including Shares as to which it would not otherwise be vested or exercisable. If the Option becomes fully vested and exercisable in lieu of assumption or substitution in the event of a merger or sale of assets, the Board shall notify the Optionee in writing or electronically that the Option shall be fully vested and exercisable for a period of twenty (20) days from the date of such notice, and the Option shall terminate upon the expiration of such period. For the purposes of this paragraph, the Option shall be considered assumed if, following a Pricing Adjustment with respect the merger or sale of assets, the option or right confers the right to a Tax Returnpurchase or receive, Sears Holdings determines that it is appropriate for each Share of Optioned Shares subject to apply that Pricing Adjustment the Option immediately prior to another Tax Return the merger or sale of assets, the consideration (whether shares, cash, or other securities or property) received in filing other Tax Returns going forward, this section 7.03 the merger or sale of assets by holders of Shares for each Share held on the effective date of the transaction (and sections 4.02 and 6.02if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the merger or sale of assets is not solely common shares of the successor corporation or its affiliate (within the meaning of the OBCA), the Board may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Option, for each Share of Optioned Shares subject to the Option, to be solely common shares of the successor corporation or its affiliate (within the meaning of the OBCA) shall be applied as if a Pricing Adjustment had been made with respect equal in fair market value to such other Tax Returnsthe per share consideration received by holders of Shares in the merger or sale of assets.

Certain Adjustments. Notwithstanding sections 4.02 (a) In case the Company shall hereafter (i) pay a dividend or make a distribution on its Common Stock in shares of Common Stock, (ii) subdivide its outstanding shares of Common Stock into a greater number of shares, (iii) combine or reverse-split its outstanding shares of Common Stock into a smaller number of shares or (iv) issue by reclassification of its Common Stock any shares of capital stock of the Company, then the Per Share Warrant Price and 6.02the number of Warrant Shares shall forthwith be proportionately decreased and increased, respectively, in the event there case of a subdivision, distribution or stock dividend, or proportionately increased and decreased, respectively, in the case of a combination or reverse stock split. The Aggregate Warrant Price payable for the then total number Warrant Shares available for exercise under this Warrant shall remain the same. Adjustments made pursuant to this subsection 3(a) shall become effective on the record date in the case of a dividend or distribution, and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification. If such dividend, distribution, subdivision or combination is not consummated in full, the Per Share Warrant Price and Warrant Shares shall be readjusted accordingly. (b) In case of any capital reorganization or reclassification, or any consolidation or merger to which the Company is a Pricing Adjustment party other than a merger or consolidation in which the Company is the continuing corporation, or in case of any sale or conveyance to another entity of all or substantially all of the assets of the Company, or in the case of any statutory exchange of securities with another corporation (including any exchange effected in connection with a merger of a third corporation into the Company but excluding any exchange of securities or merger with another corporation in which the Company is a continuing corporation and that does not result in any reclassification of or similar change in the Common Stock), the Holder of this Warrant shall have the right thereafter to receive on the exercise of this Warrant the kind and amount of securities, cash or other property which the Holder would have owned or have been entitled to receive immediately after such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance had this Warrant been exercised immediately prior to the effective date of such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance and in any such case, if necessary, appropriate adjustment shall be made in the application of the provisions set forth in this Section 3 with respect to the rights and interests thereafter of the Holder of this Warrant to the end that the provisions set forth in this Section 3 shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any Tax Return that results shares of stock or other securities or property thereafter deliverable on the exercise of this Warrant. The above provisions of this subsection 3(b) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, statutory exchanges, sales or conveyances. The Company shall require the issuer of any shares of stock or other securities or property thereafter deliverable on the exercise of this Warrant to be responsible for all of the agreements and obligations of the Company hereunder. A sale of all or substantially all of the assets of the Company for a consideration consisting primarily of securities shall be deemed a consolidation or merger for the foregoing purposes. (c) No adjustment in additional taxable income to Sears Holdings, SHO or any of their respective Subsidiaries (or any tax group that includes any such person), (i) if the Per Share Warrant Price shall be required unless such adjustment is with respect would require an increase or decrease of at least $0.01 per share of Common Stock; provided, however, that any adjustments which by reason of this subsection 3(c) are not required to a State Combined or Consolidated Tax Return, the adjustments arising from such Pricing Adjustment be made shall be disregarded carried forward and taken into account in applying sections 4.02 any subsequent adjustment; provided, further, however, that adjustments shall be required and 6.02 to made in accordance with the extent necessary provisions of this Section 3 (other than this subsection 3(c)) not later than such time as may be required in order to put Sears Holdings (and its Subsidiaries) preserve the tax-free nature of a distribution, if any, to the Holder of this Warrant or SHO (and its Subsidiaries)Common Stock issuable upon the exercise hereof. All calculations under this Section 3 shall be made to the nearest cent or to the nearest 1/100th of a share, as the case may be. Anything in this Section 3 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Per Share Warrant Price, in addition to those required by this Section 3, as it in its discretion shall deem to be advisable in order that any stock dividend, subdivision of shares or distribution of rights to purchase stock or securities convertible or exchangeable for stock hereafter made by the Company to its stockholders shall not be taxable. (d) Whenever the Per Share Warrant Price is adjusted as provided in this Section 3 and upon any modification of the rights of a Holder of Warrants in accordance with this Section 3, the Company shall promptly prepare a brief statement of the facts requiring such adjustment or modification and the manner of computing the same and cause copies of such certificate to be mailed to the Holders of the Warrants. The Company may, but shall not be obligated to unless requested by a Majority of the Holders, obtain, at its expense, a certificate of a firm of independent public accountants of recognized standing selected by the Board of Directors (who may be the regular auditors of the Company) setting forth the Per Share Warrant Price and the number of Warrant Shares in effect after tax position such adjustment or the effect of such modification, a brief statement of the facts requiring such adjustment or modification and the manner of computing the same and cause copies of such certificate to be mailed to the Holders of the Warrants. (e) If the Board of Directors of the Company shall declare any dividend or other distribution with respect to the Common Stock other than a cash distribution out of earned surplus, the Company shall mail notice thereof to the Holders of the Warrants not less than ten (10) days prior to the record date fixed for determining stockholders entitled to participate in such State Combined dividend or Consolidated Tax Return other distribution. (f) If, as a result of an adjustment made pursuant to this Section 3, the Holder of any Warrant thereafter surrendered for exercise shall become entitled to receive shares of two or more classes of capital stock or shares of Common Stock and other capital stock of the Company, the Board of Directors (whose determination shall be conclusive and shall be described in a written notice to the Holder of any Warrant promptly after such person would have occupied if there had been no such additional taxable income (as determined by Sears Holdings adjustment) shall determine, in good faith, the allocation of the adjusted Per Share Warrant Price between or among shares or such classes of capital stock or shares of Common Stock and other capital stock. (g) Upon the expiration of any rights, options, warrants or conversion privileges with respect to the issuance of which an adjustment to the Per Share Warrant Price had been made, if such option, right warrant or conversion shall not have been exercised, the number of Warrant Shares purchasable upon exercise of this Warrant, to the extent this Warrant has not then been exercised, shall, upon such expiration, be readjusted and shall thereafter be such as they would have been had they been originally adjusted (ii) after or had the application of clause (i) (but without duplication) or if clause (i) does original adjustment not applybeen required, as the case may be, ) on the basis of (A) SHO shall indemnify Sears Holdings for any additional Tax the fact that Sears Holdings (Common Stock, if any, actually issued or any of its Subsidiaries) would otherwise bear as a result sold upon the exercise of such additional taxable income rights, options, warrants or conversion privileges, and (bB) Sears Holdings the fact that such shares of Common Stock, if any, were issued or sold for the consideration actually received by the Company upon such exercise plus the consideration, if any, actually received by the Company for the issuance, sale or grant of all such rights, options, warrants or conversion privileges whether or not exercised; provided, however, that no such readjustment shall indemnify SHO for any additional Tax that have the SHO Companies would otherwise bear as a result effect of decreasing the number of Warrant Shares purchasable upon exercise of this Warrant by an amount in excess of the amount of the adjustment initially made in respect of the issuance, sale or grant of such additional taxable income. The amount rights, options, warrants or conversion privileges. (h) In case any event shall occur as to which the other provisions of this Section 3 are not strictly applicable but as to which the failure to make any payment under adjustment would not fairly protect the purchase rights represented by this section 7.03 Warrant in accordance with the essential intent and principles of the adjustments set forth in this Section 3 then, in each such case, the Board of Directors of the Company shall be increased by any Taxes incurred in good faith determine the adjustment, if any, on a basis consistent with the essential intent and principles established herein, necessary to preserve the purchase rights represented by the person receiving Warrants. Upon such payment as determination, the Company will promptly mail a result copy thereof to the Holder of this Warrant and shall make the receipt of such payment. Any payment required under this section 7.03 shall be made within 15 days after the indemnified party makes a payment to any Taxing Authority as a result of a Pricing Adjustment. In the event that, following a Pricing Adjustment with respect to a Tax Return, Sears Holdings determines that it is appropriate to apply that Pricing Adjustment to another Tax Return or in filing other Tax Returns going forward, this section 7.03 (and sections 4.02 and 6.02) shall be applied as if a Pricing Adjustment had been made with respect to such other Tax Returnsadjustments described therein.

Certain Adjustments. Notwithstanding sections 4.02 and 6.02, in the event there is a Pricing Adjustment with respect (a) The Exercise Price shall be subject to any Tax Return that results in additional taxable income adjustment from time to Sears Holdings, SHO or any of their respective Subsidiaries (or any tax group that includes any such person), time as follows: (i) if In the event that the Company shall (A) pay a dividend or make a distribution to all its stockholders, in shares of Common Stock, on any class of capital stock of the Company or any subsidiary which is not directly or indirectly wholly owned by the Company, (B) split or subdivide its outstanding Common Stock into a greater number of shares, or (C) combine its outstanding Common Stock into a smaller number of shares, then in each such adjustment is with respect to a State Combined or Consolidated Tax Return, case the adjustments arising from such Pricing Adjustment Exercise Price in effect immediately prior thereto shall be disregarded in applying sections 4.02 and 6.02 adjusted so that the Holder of a Warrant thereafter surrendered for Exercise shall be entitled to receive the number of shares of Common Stock that such Holder would have owned or have been entitled to receive after the occurrence of any of the events described above had such Warrant been exercised immediately prior to the extent necessary occurrence of such event. An adjustment made pursuant to this Section 6(a)(i) shall become effective immediately after the close of business on the record date in order to put Sears Holdings the case of a dividend or distribution (except as provided in Section 6(e) below) and its Subsidiaries) shall become effective immediately after the close of business on the effective date in the case of such subdivision, split or SHO (and its Subsidiaries)combination, as the case may be, . Any shares of Common Stock issuable in payment of a dividend shall be deemed to have been issued immediately prior to the same after tax position with respect to close of business on the record date for such State Combined or Consolidated Tax Return as such person would have occupied if there had been no such additional taxable income dividend for purposes of calculating the number of outstanding shares of Common Stock under clauses (as determined by Sears Holdings in good faithc) and (c) below. (ii) after No adjustment in the application Exercise Price shall be required unless the adjustment would require an increase or decrease of clause (iat least 1% in the Exercise Price then in effect; provided, however, that any adjustments that by reason of this Section 6(a) (but without duplication) or if clause (i) does are not apply, as the case may be, (A) SHO required to be made shall indemnify Sears Holdings for be carried forward and taken into account in any additional Tax that Sears Holdings (or any of its Subsidiaries) would otherwise bear as a result of such additional taxable income and (b) Sears Holdings shall indemnify SHO for any additional Tax that the SHO Companies would otherwise bear as a result of such additional taxable incomesubsequent adjustment. The amount of any payment All calculations under this section 7.03 shall be increased by any Taxes incurred by the person receiving such payment as a result of the receipt of such payment. Any payment required under this section 7.03 Section 6(a) shall be made within 15 days after to the indemnified party makes a payment to any Taxing Authority as a result nearest cent or nearest 1/100th of a Pricing Adjustmentshare. (iii) The Company from time to time may reduce the Exercise Price by any amount for any period of time in the discretion of the Board of Directors. A voluntary reduction of the Exercise Price does not change or adjust the Exercise Price otherwise in effect for purposes of this Section 6(a). (iv) In the event that, following at any time as a Pricing Adjustment result of an adjustment made pursuant to Sections 6(a)(i) through 6(a) (ii) above, the Holder of any Warrant thereafter surrendered for exercise shall become entitled to receive any shares of the Company other than shares of the Common Stock, thereafter the number of such other shares so receivable upon exercise of any such Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to a Tax Returnthe Common Stock contained in Sections 6(a)(i) through 6(a)(iv) above, Sears Holdings determines that it is appropriate to apply that Pricing Adjustment to another Tax Return or in filing and the other Tax Returns going forward, provisions of this section 7.03 (and sections 4.02 and 6.02Section 6(a) shall be applied as if a Pricing Adjustment had been made with respect to the Common Stock shall apply on like terms to any such other Tax Returnsshares. (b) In case of any reclassification of the Common Stock (other than in a transaction to which Section 6(a)(i) applies), any consolidation of the Company with, or merger of the Company into, any other entity, any merger of another entity into the Company (other than a merger that does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of Common Stock of the Company), any sale or transfer of all or substantially all of the assets of the Company or any compulsory share exchange, pursuant to which share exchange the Common Stock is converted into other securities, cash or other property, then lawful provision shall be made as part of the terms of such transaction whereby the Holder of a Warrant then outstanding shall have the right thereafter, during the period such Warrant shall be exercisable, to exercise such Warrant only for the kind and amount of securities, cash and other property receivable upon the reclassification, consolidation, merger, sale, transfer or share exchange by a holder of the number of shares of Common Stock of the Company into which a Warrant might have been able to exercise for immediately prior to the reclassification, consolidation, merger, sale, transfer or share exchange assuming that such holder of Common Stock failed to exercise rights of election, if any, as to the kind or amount of securities, cash or other property receivable upon consummation of such transaction subject to adjustment as provided in Section 6(a) above following the date of consummation of such transaction. The provisions of this Section 6(b) shall similarly apply to successive reclassifications, consolidations, mergers, sales, transfers or share exchanges. (c) If (i) the Company shall take any action which would require an adjustment in the Exercise Price pursuant to Section 6(a); (ii) the Company shall authorize the granting to the holders of its Common Stock generally of rights, warrants or options to subscribe for or purchase any shares of any class or any other rights, warrants or options; (iii) there shall be any reclassification or change of the Common Stock (other than a subdivision or combination of its outstanding Common Stock or a change in par value) or any consolidation, merger or statutory share exchange to which the Company is a party and for which approval of any stockholders of the Company is required, or the sale or transfer of all or substantially all of the assets of the Company; or (iv) there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company; then, in each such case, the Company shall cause to be filed with the transfer agent for the Warrants and shall cause to be mailed to each Holder at such Holder's address as shown on the books of the transfer agent for the Warrants, as promptly as possible, but at least 30 days prior to the applicable date hereinafter specified, a notice stating (A) the date on which a record is to be taken for the purpose of such dividend, distribution or granting of rights, warrants or options, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution or rights, warrants or options are to be determined, or (B) the date on which such reclassification, change, consolidation, merger, statutory share exchange, sale, transfer, dissolution, liquidation or winding-up is expected to become effective or occur, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reclassification, change, consolidation, merger, statutory share exchange, sale, transfer, dissolution, liquidation or winding up. Failure to give such notice or any defect therein shall not affect the legality or validity of the proceedings described in this Section 6(c). (d) Whenever the Exercise Price is adjusted as herein provided, the Company shall promptly file with the transfer agent for the Warrants a certificate of an officer of the Company setting forth the Exercise Price after the adjustment and setting forth a brief statement of the facts requiring such adjustment and a computation thereof. The Company shall promptly cause a notice of the adjusted Exercise Price to be mailed to each Holder. (e) In any case in which Section 6(a) provides that an adjustment shall become effective immediately after a record date for an event and the date fixed for such adjustment pursuant to Section 6(a) occurs after such record date but before the occurrence of such event, the Company may defer until the actual occurrence of such event (i) issuing to the Holder of any Warrants exercised after such record date and before the occurrence of such event the additional shares of Common Stock issuable upon such conversion by reason of the adjustment required by such event over and above the Common Stock issuable upon such exercise before giving effect to such adjustment, and (ii) paying to such holder any amount in cash in lieu of any fraction pursuant to Section 6(h). (f) In case the Company shall take any action affecting the Common Stock, other than actions described in this Section 6, which in the opinion of the Board of Directors would materially adversely affect the exercise right of the Holders, the Exercise Price may be adjusted, to the extent permitted by law, in such manner, if any, and at such time, as the Board of Directors may determine to be equitable in the circumstances; provided, however, that in no event shall the Board of Directors be required to take any such action. (g) For the purpose of any computation under Section 2(b) or this Section 6, the "Current Market Price" per share of Common Stock shall mean the VWAP of the Common Stock on the day in question. (h) The Company shall not be required to issue fractions of shares of Common Stock or other capital stock of the Company upon the exercise of this Warrant. If any fraction of a share would be issuable on the exercise of this Warrant (or specified portions thereof), the Company shall purchase such fraction for an amount in cash equal to the same fraction of the Current Market Price of such share of Common Stock on the date of exercise of this Warrant.

Certain Adjustments. Notwithstanding sections 4.02 If, during the period between the date of this Agreement and 6.02the Effective Time, any change in the event there is a Pricing Adjustment with respect to any Tax Return that results in additional taxable income to Sears Holdings, SHO or any of their respective Subsidiaries (or any tax group that includes any such person), (i) if such adjustment is with respect to a State Combined or Consolidated Tax Return, the adjustments arising from such Pricing Adjustment Parent Common Stock shall be disregarded in applying sections 4.02 and 6.02 to the extent necessary in order to put Sears Holdings (and its Subsidiaries) or SHO (and its Subsidiaries), as the case may be, in the same after tax position with respect to such State Combined or Consolidated Tax Return as such person would have occupied if there had been no such additional taxable income (as determined by Sears Holdings in good faith) and (ii) after the application of clause (i) (but without duplication) or if clause (i) does not apply, as the case may be, (A) SHO shall indemnify Sears Holdings for any additional Tax that Sears Holdings (or any of its Subsidiaries) would otherwise bear occur as a result of any reverse stock split with a record date during such additional taxable income period, the Merger Consideration, the Fortitude Voting Unit Contribution Consideration, the Fortitude Property Contribution Consideration, the Fortitude Property Contribution, the Exchange Ratio and (b) Sears Holdings the Closing Parent Common Stock VWAP shall indemnify SHO for any additional Tax that be appropriately adjusted to eliminate the SHO Companies would otherwise bear as a result effect of such additional taxable incomeevent on the Merger Consideration, the Fortitude Voting Unit Contribution Consideration, the Fortitude Property Contribution Consideration, the Fortitude Property Contribution, the Exchange Ratio or the Closing Parent Common Stock VWAP.” 2. The amount All of any payment under the provisions of this section 7.03 Amendment shall be increased by any Taxes incurred by the person receiving such payment effective as a result of the receipt date of such paymentthis Amendment. Any payment required under Except as otherwise specifically amended, modified or supplemented by this section 7.03 Amendment, all terms of the Merger Agreement shall remain unchanged and continue in full force and effect until the expiration or earlier termination of the Merger Agreement unless the same be made within 15 days otherwise sooner amended. From and after the indemnified party makes a payment date hereof, each reference in the Merger Agreement to any Taxing Authority “this Agreement,” “hereof,” “hereunder”, “herein” or words of like import, and all references to the Merger Agreement and all agreements, instruments, documents, notes, certificates and other writings of every kind or nature that refer to the Merger Agreement will be deemed to mean the Merger Agreement as a result modified by this Amendment, whether or not this Amendment is expressly referenced; provided, that references in the Merger Agreement to “as of a Pricing Adjustmentthe date hereof” or “as of the date of this Agreement” or words of like import shall continue to refer to the date of June 23, 2026. 3. In Article X (General Provisions) of the event that, following a Pricing Adjustment with respect Merger Agreement is incorporated herein by reference and shall apply mutatis mutandis to a Tax Return, Sears Holdings determines that it is appropriate to apply that Pricing Adjustment to another Tax Return or in filing other Tax Returns going forward, this section 7.03 (and sections 4.02 and 6.02) shall be applied as if a Pricing Adjustment had been made with respect to such other Tax ReturnsAmendment.

Certain Adjustments. Notwithstanding sections 4.02 (a) In case the Company shall hereafter (i) pay a dividend or make a distribution on its Common Stock in shares of Common Stock, (ii) subdivide its outstanding shares of Common Stock into a greater number of shares, (iii) combine or reverse-split its outstanding shares of Common Stock into a smaller number of shares or (iv) issue by reclassification of its Common Stock any shares of capital stock of the Company, then the Per Share Warrant Price and 6.02the number of Warrant Shares shall forthwith be proportionately decreased and increased, respectively, in the event there case of a subdivision, distribution or stock dividend, or proportionately increased and decreased, respectively, in the case of a combination or reverse stock split. The Aggregate Warrant Price payable for the then total number of Warrant Shares available for exercise under this Warrant shall remain the same. Adjustments made pursuant to this Section 3(a) shall become effective on the record date in the case of a dividend or distribution, and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification. If such dividend, distribution, subdivision or combination is not consummated in full, the Per Share Warrant Price and Warrant Shares shall be readjusted accordingly. (b) In case of any capital reorganization or reclassification, or any consolidation or merger to which the Company is a Pricing Adjustment party other than a merger or consolidation in which the Company is the continuing corporation, or in case of any sale or conveyance to another entity of all or substantially all of the assets of the Company, or in the case of any statutory exchange of securities with another corporation (including any exchange effected in connection with a merger of a third corporation into the Company but excluding any exchange of securities or merger with another corporation in which the Company is a continuing corporation and that does not result in any reclassification of or similar change in the Common Stock), the Holder of this Warrant shall have the right thereafter to receive on the exercise of this Warrant the kind and amount of securities, cash or other property which the Holder would have owned or have been entitled to receive immediately after such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance had this Warrant been exercised immediately prior to the effective date of such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance and in any such case, if necessary, appropriate adjustment shall be made in the application of the provisions set forth in this Section 3 with respect to the rights and interests thereafter of the Holder of this Warrant to the end that the provisions set forth in this Section 3 shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any Tax Return that results in additional taxable income shares of stock or other securities or property thereafter deliverable on the exercise of this Warrant. The above provisions of this Section 3(b) shall similarly apply to Sears Holdingssuccessive reorganizations, SHO reclassifications, consolidations, mergers, statutory exchanges, sales or conveyances. The Company shall require the issuer of any shares of their respective Subsidiaries (stock or any tax group that includes other securities or property thereafter deliverable on the exercise of this Warrant to be responsible for all of the agreements and obligations of the Company hereunder. Notice of any such person)reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance and of said provisions so proposed to be made, shall be mailed to the Holders of the Warrants not less than twenty (i20) if days prior to such event. A sale of all or substantially all of the assets of the Company for a consideration consisting primarily of securities shall be deemed a consolidation or merger for the foregoing purposes. (c) No adjustment in the Per Share Warrant Price shall be required unless such adjustment is with respect would require an increase or decrease of at least $0.01 per share of Common Stock; provided, however, that any adjustments which by reason of this Section 3(c) are not required to a State Combined or Consolidated Tax Return, the adjustments arising from such Pricing Adjustment be made shall be disregarded carried forward and taken into account in applying sections 4.02 any subsequent adjustment; provided, further, however, that adjustments shall be required and 6.02 to made in accordance with the extent necessary provisions of this Section 3 (other than this subsection 3(i)) not later than such time as may be required in order to put Sears Holdings (and its Subsidiaries) preserve the tax-free nature of a distribution, if any, to the Holder of this Warrant or SHO (and its Subsidiaries)Common Stock issuable upon the exercise hereof. All calculations under this Section 3 shall be made to the nearest cent or to the nearest 1/100th of a share, as the case may be. Anything in this Section 3 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Per Share Warrant Price, in addition to those required by this Section 3, as it in its discretion shall deem to be advisable in order that any stock dividend, subdivision of shares or distribution of rights to purchase stock or securities convertible or exchangeable for stock hereafter made by the Company to its stockholders shall not be taxable. (d) Whenever the Per Share Warrant Price or the number of Warrant Shares is adjusted as provided in this Section 3 and upon any modification of the rights of a Holder of Warrants in accordance with this Section 3, the Company shall promptly prepare a brief statement of the facts requiring such adjustment or modification and the manner of computing the same and cause copies of such certificate to be mailed to the Holders of the Warrants. The Company may, but shall not be obligated to unless requested by a Majority of the Holders, obtain, at its expense, a certificate of a firm of independent public accountants of recognized standing selected by the Board of Directors (who may be the regular auditors of the Company) setting forth the Per Share Warrant Price and the number of Warrant Shares in effect after tax position such adjustment or the effect of such modification, a brief statement of the facts requiring such adjustment or modification and the manner of computing the same and cause copies of such certificate to be mailed to the Holders of the Warrants. (e) If the Board of Directors of the Company shall declare any dividend or other distribution with respect to the Common Stock other than a cash distribution out of earned surplus, the Company shall mail notice thereof to the Holders of the Warrants not less than ten (10) days prior to the record date fixed for determining stockholders entitled to participate in such State Combined dividend or Consolidated Tax Return other distribution. (f) If, as a result of an adjustment made pursuant to this Section 3, the Holder of any Warrant thereafter surrendered for exercise shall become entitled to receive shares of two or more classes of capital stock or shares of Common Stock and other capital stock of the Company, the Board of Directors (whose determination shall be conclusive and shall be described in a written notice to the Holder of any Warrant promptly after such person would have occupied if there had been no such additional taxable income (as determined by Sears Holdings adjustment) shall determine, in good faith, the allocation of the adjusted Per Share Warrant Price between or among shares or such classes of capital stock or shares of Common Stock and other capital stock. (g) Upon the expiration of any rights, options, warrants or conversion privileges with respect to the issuance of which an adjustment to the Per Share Warrant Price had been made, if such option, right, warrant or conversion shall not have been exercised, the number of Warrant Shares purchasable upon exercise of this Warrant, to the extent this Warrant has not then been exercised, shall, upon such expiration, be readjusted and shall thereafter be such as they would have been had they been originally adjusted (ii) after or had the application of clause (i) (but without duplication) or if clause (i) does original adjustment not applybeen required, as the case may be, ) on the basis of (A) SHO shall indemnify Sears Holdings for any additional Tax the fact that Sears Holdings (Common Stock, if any, actually issued or any of its Subsidiaries) would otherwise bear as a result sold upon the exercise of such additional taxable income rights, options, warrants or conversion privileges, and (bB) Sears Holdings the fact that such shares of Common Stock, if any, were issued or sold for the consideration actually received by the Company upon such exercise plus the consideration, if any, actually received by the Company for the issuance, sale or grant of all such rights, options, warrants or conversion privileges whether or not exercised; provided, however, that no such readjustment shall indemnify SHO for any additional Tax that have the SHO Companies would otherwise bear as a result effect of decreasing the number of Warrant Shares purchasable upon exercise of this Warrant by an amount in excess of the amount of the adjustment initially made in respect of the issuance, sale or grant of such additional taxable income. The amount rights, options, warrants or conversion privileges. (h) In case any event shall occur as to which the other provisions of this Section 3 are not strictly applicable but as to which the failure to make any payment under adjustment would not fairly protect the purchase rights represented by this section 7.03 Warrant in accordance with the essential intent and principles of the adjustments set forth in this Section 3 then, in each such case, the Board of Directors of the Company shall be increased by any Taxes incurred in good faith determine the adjustment, if any, on a basis consistent with the essential intent and principles established herein, necessary to preserve the purchase rights represented by the person receiving Warrants. Upon such payment as determination, the Company will promptly mail a result copy thereof to the Holder of this Warrant and shall make the receipt of such payment. Any payment required under this section 7.03 shall be made within 15 days after the indemnified party makes a payment to any Taxing Authority as a result of a Pricing Adjustment. In the event that, following a Pricing Adjustment with respect to a Tax Return, Sears Holdings determines that it is appropriate to apply that Pricing Adjustment to another Tax Return or in filing other Tax Returns going forward, this section 7.03 (and sections 4.02 and 6.02) shall be applied as if a Pricing Adjustment had been made with respect to such other Tax Returnsadjustments described therein.

Certain Adjustments. Notwithstanding sections 4.02 and 6.02, in the event there is a Pricing Adjustment with respect (a) The Exercise Price shall be subject to any Tax Return that results in additional taxable income adjustment from time to Sears Holdings, SHO or any of their respective Subsidiaries (or any tax group that includes any such person), time as follows: (i) if In the event that the Company shall (A) pay a dividend or make a distribution to all its stockholders, in shares of Common Stock, on any class of capital stock of the Company or any subsidiary which is not directly or indirectly wholly owned by the Company, (B) split or subdivide its outstanding Common Stock into a greater number of shares, or (C) combine its outstanding Common Stock into a smaller number of shares, then in each such adjustment is with respect to a State Combined or Consolidated Tax Return, case the adjustments arising from such Pricing Adjustment Exercise Price in effect immediately prior thereto shall be disregarded in applying sections 4.02 and 6.02 adjusted so that the Holder of a Warrant thereafter surrendered for Exercise shall be entitled to receive the number of shares of Common Stock that such Holder would have owned or have been entitled to receive after the occurrence of any of the events described above had such Warrant been exercised immediately prior to the extent necessary occurrence of such event. An adjustment made pursuant to this Section 6(a)(i) shall become effective immediately after the close of business on the record date in order to put Sears Holdings the case of a dividend or distribution (except as provided in Section 6(e) below) and its Subsidiaries) shall become effective immediately after the close of business on the effective date in the case of such subdivision, split or SHO (and its Subsidiaries)combination, as the case may be, . Any shares of Common Stock issuable in payment of a dividend shall be deemed to have been issued immediately prior to the same after tax position with respect to close of business on the record date for such State Combined or Consolidated Tax Return as such person would have occupied if there had been no such additional taxable income dividend for purposes of calculating the number of outstanding shares of Common Stock under clauses (as determined by Sears Holdings in good faithc) and (c) below. (ii) after No adjustment in the application Exercise Price shall be required unless the adjustment would require an increase or decrease of clause (iat least 1% in the Exercise Price then in effect; provided, however, that any adjustments that by reason of this Section 6(a) (but without duplication) or if clause (i) does are not apply, as the case may be, (A) SHO required to be made shall indemnify Sears Holdings for be carried forward and taken into account in any additional Tax that Sears Holdings (or any of its Subsidiaries) would otherwise bear as a result of such additional taxable income and (b) Sears Holdings shall indemnify SHO for any additional Tax that the SHO Companies would otherwise bear as a result of such additional taxable incomesubsequent adjustment. The amount of any payment All calculations under this section 7.03 shall be increased by any Taxes incurred by the person receiving such payment as a result of the receipt of such payment. Any payment required under this section 7.03 Section 6(a) shall be made within 15 days after to the indemnified party makes a payment to any Taxing Authority as a result nearest cent or nearest 1/100th of a Pricing Adjustmentshare. (iii) The Company from time to time may reduce the Exercise Price by any amount for any period of time in the discretion of the Board of Directors. A voluntary reduction of the Exercise Price does not change or adjust the Exercise Price otherwise in effect for purposes of this Section 6(a). (iv) In the event that, following at any time as a Pricing Adjustment result of an adjustment made pursuant to Sections 6(a)(i) through 6(a)(ii) above, the Holder of any Warrant thereafter surrendered for exercise shall become entitled to receive any shares of the Company other than shares of the Common Stock, thereafter the number of such other shares so receivable upon exercise of any such Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to a Tax Returnthe Common Stock contained in Sections 6(a)(i) through 6(a)(iv) above, Sears Holdings determines that it is appropriate to apply that Pricing Adjustment to another Tax Return or in filing and the other Tax Returns going forward, provisions of this section 7.03 (and sections 4.02 and 6.02Section 6(a) shall be applied as if a Pricing Adjustment had been made with respect to the Common Stock shall apply on like terms to any such other Tax Returnsshares. (b) In case of any reclassification of the Common Stock (other than in a transaction to which Section 6(a)(i) applies), any consolidation of the Company with, or merger of the Company into, any other entity, any merger of another entity into the Company (other than a merger that does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of Common Stock of the Company), any sale or transfer of all or substantially all of the assets of the Company or any compulsory share exchange, pursuant to which share exchange the Common Stock is converted into other securities, cash or other property, then lawful provision shall be made as part of the terms of such transaction whereby the Holder of a Warrant then outstanding shall have the right thereafter, during the period such Warrant shall be exercisable, to exercise such Warrant only for the kind and amount of securities, cash and other property receivable upon the reclassification, consolidation, merger, sale, transfer or share exchange by a holder of the number of shares of Common Stock of the Company into which a Warrant might have been able to exercise for immediately prior to the reclassification, consolidation, merger, sale, transfer or share exchange assuming that such holder of Common Stock failed to exercise rights of election, if any, as to the kind or amount of securities, cash or other property receivable upon consummation of such transaction subject to adjustment as provided in Section 6(a) above following the date of consummation of such transaction. The provisions of this Section 6(b) shall similarly apply to successive reclassifications, consolidations, mergers, sales, transfers or share exchanges. (c) If (i) the Company shall take any action which would require an adjustment in the Exercise Price pursuant to Section 6(a); (ii) the Company shall authorize the granting to the holders of its Common Stock generally of rights, warrants or options to subscribe for or purchase any shares of any class or any other rights, warrants or options; (iii) there shall be any reclassification or change of the Common Stock (other than a subdivision or combination of its outstanding Common Stock or a change in par value) or any consolidation, merger or statutory share exchange to which the Company is a party and for which approval of any stockholders of the Company is required, or the sale or transfer of all or substantially all of the assets of the Company; or (iv) there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company; then, in each such case, the Company shall cause to be filed with the transfer agent for the Warrants and shall cause to be mailed to each Holder at such Holder’s address as shown on the books of the transfer agent for the Warrants, as promptly as possible, but at least 30 days prior to the applicable date hereinafter specified, a notice stating (A) the date on which a record is to be taken for the purpose of such dividend, distribution or granting of rights, warrants or options, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution or rights, warrants or options are to be determined, or (B) the date on which such reclassification, change, consolidation, merger, statutory share exchange, sale, transfer, dissolution, liquidation or winding-up is expected to become effective or occur, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reclassification, change, consolidation, merger, statutory share exchange, sale, transfer, dissolution, liquidation or winding up. Failure to give such notice or any defect therein shall not affect the legality or validity of the proceedings described in this Section 6(c). (d) Whenever the Exercise Price is adjusted as herein provided, the Company shall promptly file with the transfer agent for the Warrants a certificate of an officer of the Company setting forth the Exercise Price after the adjustment and setting forth a brief statement of the facts requiring such adjustment and a computation thereof. The Company shall promptly cause a notice of the adjusted Exercise Price to be mailed to each Holder. (e) In any case in which Section 6(a) provides that an adjustment shall become effective immediately after a record date for an event and the date fixed for such adjustment pursuant to Section 6(a) occurs after such record date but before the occurrence of such event, the Company may defer until the actual occurrence of such event (i) issuing to the Holder of any Warrants exercised after such record date and before the occurrence of such event the additional shares of Common Stock issuable upon such conversion by reason of the adjustment required by such event over and above the Common Stock issuable upon such exercise before giving effect to such adjustment, and (ii) paying to such holder any amount in cash in lieu of any fraction pursuant to Section 6(h). (f) In case the Company shall take any action affecting the Common Stock, other than actions described in this Section 6, which in the opinion of the Board of Directors would materially adversely affect the exercise right of the Holders, the Exercise Price may be adjusted, to the extent permitted by law, in such manner, if any, and at such time, as the Board of Directors may determine to be equitable in the circumstances; provided, however, that in no event shall the Board of Directors be required to take any such action. (g) For the purpose of any computation under Section 2(b) or this Section 6, the “Current Market Price” per share of Common Stock shall mean the VWAP of the Common Stock on the day in question. (h) The Company shall not be required to issue fractions of shares of Common Stock or other capital stock of the Company upon the exercise of this Warrant. If any fraction of a share would be issuable on the exercise of this Warrant (or specified portions thereof), the Company shall purchase such fraction for an amount in cash equal to the same fraction of the Current Market Price of such share of Common Stock on the date of exercise of this Warrant.

Certain Adjustments. Notwithstanding sections 4.02 and 6.02, in the event there is a Pricing Adjustment with respect to any Tax Return that results in additional taxable income to Sears Holdings, SHO or any of their respective Subsidiaries (or any tax group that includes any such person), (i) if In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide or split the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (including any such adjustment reclassification in connection with a consolidation or merger in which the Company is with respect to a State Combined the continuing or Consolidated Tax Returnsurviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e), the adjustments arising from Purchase Price in effect at the time of the record date for such Pricing Adjustment shall be disregarded in applying sections 4.02 dividend or of the effective date of such subdivision, split, combination or reclassification, and 6.02 to the extent necessary in order to put Sears Holdings (number and its Subsidiaries) kind of shares of Preferred Stock or SHO (and its Subsidiaries)capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the aggregate adjusted Purchase Price then in effect necessary to exercise a Right in full, the same after tax position with respect to such State Combined aggregate number and kind of shares of Preferred Stock or Consolidated Tax Return as such person would have occupied if there had been no such additional taxable income (as determined by Sears Holdings in good faith) and (ii) after the application of clause (i) (but without duplication) or if clause (i) does not applycapital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock (Aor other capital stock, as the case may be) SHO transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, split, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) the adjustment provided for in this Section 11(a)(i) shall indemnify Sears Holdings be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii). (ii) In the event: (1) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and unchanged, or (2) subject to Section 23, any Person shall, at any time after the Rights Dividend Declaration Date, become an Acquiring Person, unless the event causing such Person to become an Acquiring Person is a Flip-over Event, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by the Board, prior to the public announcement of such tender offer or exchange offer, after receiving advice from one or more investment banking firms selected by the Board, to be (a) at a price which is fair to the stockholders of the Company (taking into account all factors which the Board deems relevant including, without limitation, prices which could reasonably be achieved if the Company or its assets were sold on an orderly basis designed to realize maximum value) and (b) otherwise in the best interests of the Company and its stockholders, other than such Acquiring Person, its Affiliates and its Associates; or (B) during such time as there is an Acquiring Person, there shall be any additional Tax that Sears Holdings reclassification of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries, other than a transaction or transactions to which the provisions of Section 13(a) would apply (whether or not with or into or otherwise bear involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its subsidiaries which is directly or indirectly beneficially owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, promptly following the occurrence of any such Flip-in Event (whether described in Section 11(a)(ii)(A) or (B)), proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of the number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Flip-in Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by 50% of the Current Market Price per share of Common Stock on the date of such first occurrence (such number of shares being referred to as the "Adjustment Shares"). (iii) In the event that the number of shares of Common Stock that are authorized by the Company's Certificate of Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each Right, subject to Section 7(e), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have essentially the same value or economic rights as shares of Common Stock (such shares of preferred stock being referred to as "Common Stock Equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value (less the amount of any reduction in the Purchase Price), where such aggregate value has been determined by the Board based upon the advice of a nationally recognized investment banking firm selected by the Board; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) calendar days following the first occurrence of a Flip-in Event (the date of such Flip-in Event being referred to herein as the "Flip-in Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional shares of Common Stock or other equity securities could be authorized for issuance upon exercise in full of the Rights, the thirty (30) calendar day period set forth above may be extended to the extent necessary, but not more than ninety (90) calendar days after the Flip-in Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional taxable income shares (such period, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e), that such action shall apply uniformly to all outstanding Rights, and (by) Sears Holdings shall indemnify SHO for any additional Tax that may suspend the SHO Companies would otherwise bear as a result of such additional taxable income. The amount of any payment under this section 7.03 shall be increased by any Taxes incurred by the person receiving such payment as a result exercisability of the receipt Rights until the expiration of such payment. Any payment required under this section 7.03 shall the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made within 15 days after pursuant to such first sentence and to determine the indemnified party makes a payment to any Taxing Authority as a result of a Pricing Adjustmentvalue thereof. In the event thatof any such suspension, following the Company shall promptly notify the Rights Agent thereof and shall issue a Pricing Adjustment public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement (with prompt notice to the Rights Agent) at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Stock shall be the Current Market Price per share of the Common Stock on the Flip-in Trigger Date and the value of any Common Stock Equivalent shall be deemed to have the same value as the Common Stock on such date. (iv) If the rules of the national securities exchange, registered as such pursuant to Section 6 of the Exchange Act, or of the national securities association, registered as such pursuant to Section 15A of the Exchange Act, on which the Common Stock is principally traded or quoted would prohibit such exchange or association from listing or continuing to list, or from authorizing for or continuing quotation and/or transaction reporting through an inter-dealer quotation system, the Common Stock or other equity securities of the Company if the Rights were to be exercised for shares of Common Stock in accordance with subparagraph (ii) of this Section 11(a) because such issuance would nullify, restrict or disparately reduce the per share voting rights of holders of Common Stock, the Company shall: (A) determine the Spread, and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a Tax Returnreduction in the Purchase Price, Sears Holdings (3) equity securities of the Company, including, without limitation, Common Stock Equivalents, other than securities which would have the effect of nullifying, restricting or disparately reducing the per share voting rights of holders of Common Stock, (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon the advice of a recognized investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) calendar days following the Flip-in Trigger Date, then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, cash having an aggregate value equal to the Spread. To the extent that the Company determines that it is appropriate some action need be taken pursuant to apply that Pricing Adjustment to another Tax Return or in filing other Tax Returns going forwardthe first sentence of this Section 11(a)(iv), this section 7.03 the Company (and sections 4.02 and 6.02x) shall provide, subject to Section 7(e), that such action shall apply uniformly to all outstanding Rights and (y) may suspend the exercisability of the Rights, but not longer than ninety (90) calendar days after the Flip-in Trigger Date, in order to decide the appropriate form of distribution to be applied as if a Pricing Adjustment had been made with respect pursuant to such other Tax Returnsfirst sentence and to determine the value thereof. In the event of any such suspension, the Company shall promptly notify the Rights Agent thereof and shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement (with prompt notice to the Rights Agent) at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iv), the value of the Common Stock shall be the Current Market Price per share of the Common Stock on the Flip-in Trigger Date and the value of any Common Stock Equivalent shall be deemed to have the same value as the Common Stock on such date.

Certain Adjustments. Notwithstanding sections 4.02 The applicable Conversion Price and 6.02, in the event there is a Pricing Adjustment with respect number of securities issuable upon conversion of this Note shall be subject to any Tax Return that results in additional taxable income adjustment from time to Sears Holdings, SHO or any of their respective Subsidiaries (or any tax group that includes any such person), time as follows: (i) if In case Borrower shall at any time after the date hereof (1) pay a dividend or make a distribution on its capital stock that is paid or made in shares of stock of Borrower, (2) subdivide its outstanding shares of Common Stock into a greater number of shares or (3) combine its outstanding shares of Common Stock into a smaller number of shares, then in each such adjustment is case the applicable Conversion Price in effect immediately prior thereto and the securities issuable shall be adjusted retroactively as provided below so that Holder thereafter shall be entitled to receive the number of shares of Common Stock of Borrower and other shares and rights to purchase stock or other securities which Holder would have owned or have been entitled to receive after the happening of any of the events described above had this Note been converted immediately prior to the happening of such event or any record date with respect thereto. In the event of the redemption of any shares referred to a State Combined or Consolidated Tax Return, the adjustments arising from such Pricing Adjustment shall be disregarded in applying sections 4.02 and 6.02 to the extent necessary in order to put Sears Holdings clause (and its Subsidiaries) or SHO (and its Subsidiaries1), as Holder shall have the right to receive, in lieu of any such shares or rights, any cash, property or securities paid in respect of such redemption. An adjustment made pursuant to this subsection (i) shall become effective immediately after the record date in the case may be, of a dividend or distribution and shall become effective immediately after the effective date in the same after tax position with respect to such State Combined case of a subdivision or Consolidated Tax Return as such person would have occupied if there had been no such additional taxable income (as determined by Sears Holdings in good faith) and combination. (ii) after Whenever the application of clause Conversion Price is adjusted as provided above, Borrower shall compute the adjusted Conversion Price in accordance herewith and mail to Holder a notice stating that the Conversion Price has been adjusted and setting forth the adjusted Conversion Price. (iiii) (but without duplication) or if clause (i) does not applyIn the event that at any time, as the case may be, (A) SHO shall indemnify Sears Holdings for any additional Tax that Sears Holdings (or any of its Subsidiaries) would otherwise bear as a result of such additional taxable income and (b) Sears Holdings any adjustment made pursuant to this Section, Holder shall indemnify SHO for become entitled to receive any additional Tax that shares of Borrower other than shares of Common Stock or to receive any other securities, the SHO Companies would otherwise bear as a result number of such additional taxable income. The amount other shares or securities so receivable upon conversion of any payment under this section 7.03 Note shall be increased by any Taxes incurred by subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the person receiving such payment as a result of the receipt of such payment. Any payment required under this section 7.03 shall be made within 15 days after the indemnified party makes a payment to any Taxing Authority as a result of a Pricing Adjustment. In the event that, following a Pricing Adjustment provisions contained in these provisions with respect to a Tax Return, Sears Holdings determines that it is appropriate to apply that Pricing Adjustment to another Tax Return or in filing other Tax Returns going forward, this section 7.03 (and sections 4.02 and 6.02) shall be applied as if a Pricing Adjustment had been made with respect to such other Tax ReturnsCommon Stock.

Certain Adjustments. Notwithstanding sections 4.02 (a) In case the Company shall hereafter (i) pay a dividend or make a distribution on its Common Stock in shares of Common Stock, (ii) subdivide its outstanding shares of Common Stock into a greater number of shares, (iii) combine or reverse-split its outstanding shares of Common Stock into a smaller number of shares, or (iv) issue by reclassification of its Common Stock any shares of capital stock of the Company, then the Per Share Warrant Price and 6.02the number of Warrant Shares shall forthwith be proportionately decreased and increased, respectively, in the event there case of a subdivision, distribution or stock dividend, or proportionately increased and decreased, respectively, in the case of a combination or reverse stock split. The Aggregate Warrant Price payable for the then total number of Warrant Shares available for exercise under this Warrant shall remain the same. Adjustments made pursuant to this Section 3(a) shall become effective on the record date in the case of a dividend or distribution, and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification. If such dividend, distribution, subdivision or combination is not consummated in full, the Per Share Warrant Price and Warrant Shares shall be readjusted accordingly. (b) In case of any capital reorganization or reclassification, or any consolidation or merger to which the Company is a Pricing Adjustment party other than a merger or consolidation in which the Company is the continuing corporation, or in case of any sale or conveyance to another entity of all or substantially all of the assets of the Company, or in the case of any statutory exchange of securities with another corporation (including any exchange effected in connection with a merger of a third corporation into the Company but excluding any exchange of securities or merger with another corporation in which the Company is a continuing corporation and that does not result in any reclassification of or similar change in the Common Stock), the Holder of this Warrant shall have the right thereafter to receive on the exercise of this Warrant the kind and amount of securities, cash or other property which the Holder would have owned or have been entitled to receive immediately after such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance had this Warrant been exercised immediately prior to the effective date of such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance and in any such case, if necessary, appropriate adjustment shall be made in the application of the provisions set forth in this Section 3 with respect to any Tax Return that results in additional taxable income to Sears Holdings, SHO or any the rights and interests thereafter of their respective Subsidiaries (or any tax group that includes any such person), (i) if such adjustment is with respect to a State Combined or Consolidated Tax Return, the adjustments arising from such Pricing Adjustment shall be disregarded in applying sections 4.02 and 6.02 Holder of this Warrant to the extent necessary end that the provisions set forth in order to put Sears Holdings (and its Subsidiaries) or SHO (and its Subsidiaries)this Section 3 shall thereafter correspondingly be made applicable, as the case nearly as may reasonably be, in relation to any shares of stock or other securities or property thereafter deliverable on the exercise of this Warrant. The above provisions of this Section 3(b) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, statutory exchanges, sales or conveyances. The Company shall require the issuer of any shares of stock or other securities or property thereafter deliverable on the exercise of this Warrant to be responsible for all of the agreements and obligations of the Company hereunder. Notice of any such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance and of said provisions so proposed to be made, shall be provided to the Holder not more than five business days after such event. A sale of all or substantially all of the assets of the Company for a consideration consisting primarily of securities shall be deemed a consolidation or merger for the foregoing purposes. (c) Whenever the Per Share Warrant Price or the number of Warrant Shares is adjusted as provided in this Section 3 and upon any other modification of the rights of the Holder in accordance with this Section 3, the Company shall promptly prepare a brief statement of the facts requiring such adjustment or modification and the manner of computing the same after tax position and provide such statement to Holder. (d) In case any event shall occur as to which the other provisions of this Section 3 are not strictly applicable but as to which the failure to make any adjustment would not fairly protect the purchase rights represented by this Warrant in accordance with respect to the essential intent and principles of the adjustments set forth in this Section 3 then, in each such State Combined or Consolidated Tax Return as such person would have occupied if there had been no such additional taxable income (as determined by Sears Holdings case, the board of directors of the Company shall in good faith) faith determine the adjustment, if any, on a basis consistent with the essential intent and (ii) after principles established herein, necessary to preserve the application of clause (i) (but without duplication) or if clause (i) does not apply, as the case may be, (A) SHO shall indemnify Sears Holdings for any additional Tax that Sears Holdings (or any of its Subsidiaries) would otherwise bear as a result of such additional taxable income and (b) Sears Holdings shall indemnify SHO for any additional Tax that the SHO Companies would otherwise bear as a result of such additional taxable income. The amount of any payment under this section 7.03 shall be increased by any Taxes incurred purchase rights represented by the person receiving Warrants. Upon such payment as a result of determination, the receipt of such payment. Any payment required under this section 7.03 Company will promptly notify the Holder and shall be made within 15 days after make the indemnified party makes a payment to any Taxing Authority as a result of a Pricing Adjustment. In the event that, following a Pricing Adjustment with respect to a Tax Return, Sears Holdings determines that it is appropriate to apply that Pricing Adjustment to another Tax Return or in filing other Tax Returns going forward, this section 7.03 (and sections 4.02 and 6.02) shall be applied as if a Pricing Adjustment had been made with respect to such other Tax Returnsadjustments described therein.

Certain Adjustments. Notwithstanding sections 4.02 and 6.02, in the event there is a Pricing Adjustment with respect to any Tax Return that results in additional taxable income to Sears Holdings, SHO or any of their respective Subsidiaries (or any tax group that includes any such person), (i) if In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (including any such adjustment reclassification in connection with a consolidation or merger in which the Company is with respect to a State Combined the continuing or Consolidated Tax Returnsurviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e), the adjustments arising from Purchase Price in effect at the time of the record date for such Pricing Adjustment shall be disregarded in applying sections 4.02 dividend or of the effective date of such subdivision, combination or reclassification, and 6.02 to the extent necessary in order to put Sears Holdings (number and its Subsidiaries) kind of shares of Preferred Stock or SHO (and its Subsidiaries)capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the same after tax position with respect to such State Combined aggregate number and kind of shares of Preferred Stock or Consolidated Tax Return as such person would have occupied if there had been no such additional taxable income (as determined by Sears Holdings in good faith) and (ii) after the application of clause (i) (but without duplication) or if clause (i) does not applycapital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, that such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii). (Aii) SHO In the event: (1) any Acquiring Person or Adverse Person or any Associate or Affiliate of an Acquiring Person or Adverse Person, at any time after the date of this Agreement, directly or indirectly, shall indemnify Sears Holdings merge into the Company, enter into a share exchange with the Company, or otherwise combine with the Company, and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and unchanged, or (2) subject to Section 23, any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any additional Tax that Sears Holdings such plan), alone or together with its Affiliates and Associates, shall, at any time after the Rights Dividend Declaration Date, become an Acquiring Person or Adverse Person, or (B) during such time as there is an Acquiring Person or Adverse Person, there shall be any reclassification of securities (including any reverse stock split) or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries, other than a transaction or transactions to which the provisions of Section 13(a) would apply (whether or not with or into or otherwise bear involving an Acquiring Person or Adverse Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its subsidiaries which is directly or indirectly beneficially owned by any Acquiring Person or Adverse Person or any Associate or Affiliate of any Acquiring Person or Adverse Person, then, promptly following the occurrence of any such event described in Section 11(a)(ii)(A) or (B) hereof, proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e)) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Flip-over Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by 50% of the Current Market Price (determined pursuant to Section 11(d)) per share of Common Stock on the date of such first occurrence (such number of shares, the "Adjustment Shares"). (iii) In the event that the number of shares of Common Stock which are authorized by the Company's Charter but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall (A) determine the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value"), and (B) with respect to each Right (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon the exercise of a Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock, such as the Preferred Stock, which the Board has deemed to have essentially the same value or economic rights as shares of Common Stock (such shares of preferred stock being referred to as "Common Stock Equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value (less the amount of any reduction in the Purchase Price), where such aggregate value has been determined by the Board based upon the advice of a nationally recognized investment banking firm selected by the Board; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Flip-in Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Flip-in Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. For purposes of the preceding sentence, the term "Spread" shall mean the excess of (i) the Current Value over (ii) the Purchase Price. If the Board determines in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Flip-in Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional taxable income shares (such period, as extended, is herein called the "Substitution Period"). To the extent that action is to be taken pursuant to the first and/or third sentences of this Section 11(a)(iii), the Company (1) shall provide, subject to Section 7(e), that such action shall apply uniformly to all outstanding Rights, and (b2) Sears Holdings shall indemnify SHO for any additional Tax that may suspend the SHO Companies would otherwise bear as a result of such additional taxable income. The amount of any payment under this section 7.03 shall be increased by any Taxes incurred by the person receiving such payment as a result exercisability of the receipt Rights until the expiration of the Substitution Period in order to seek such payment. Any payment required under this section 7.03 shall stockholder approval for such authorization of additional shares and/or to decide the appropriate form of distribution to be made within 15 days after pursuant to such first sentence and to determine the indemnified party makes a payment to any Taxing Authority as a result of a Pricing Adjustmentvalue thereof. In the event thatof any such suspension, following the Company shall issue a Pricing public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of each Adjustment with respect to a Tax Return, Sears Holdings determines that it is appropriate to apply that Pricing Adjustment to another Tax Return or in filing other Tax Returns going forward, this section 7.03 (and sections 4.02 and 6.02) Share shall be applied as if a Pricing Adjustment had been made with respect the Current Market Price per share of the Common Stock on the Flip-in Trigger Date and the per share or per unit value of any Common Stock Equivalent shall be deemed to equal the Current Market Price per share of the Common Stock on such other Tax Returnsdate.

Certain Adjustments. Notwithstanding sections 4.02 and 6.02(a) If the Corporation shall, in the event there is a Pricing Adjustment with respect at any time or from time to any Tax Return that results in additional taxable income time prior to Sears Holdings, SHO or any conversion of their respective Subsidiaries (or any tax group that includes any such person)shares of Series C Preferred Stock, (i) if such adjustment is with respect to pay a State Combined dividend or Consolidated Tax Returnmake a distribution on the outstanding shares of Common Stock payable in cash, Common Stock or other assets, rights or property of the adjustments arising from such Pricing Adjustment shall be disregarded in applying sections 4.02 and 6.02 to the extent necessary in order to put Sears Holdings (and its Subsidiaries) or SHO (and its Subsidiaries)Company, as the case may be, in the same after tax position with respect to such State Combined or Consolidated Tax Return as such person would have occupied if there had been no such additional taxable income (as determined by Sears Holdings in good faith) and (ii) after subdivide the application outstanding shares of clause Common Stock into a larger number of shares, (iiii) combine the outstanding shares of Common Stock into a smaller number of shares, (but without duplicationiv) issue any shares of its capital stock in a reclassification, recapitalization or if clause other similar event affecting the Common Stock, (iv) does not applydeclare a redemption or repurchase of the Common Stock, as or (vi) authorize the case may begranting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of Common Stock or of any rights, then, and in each such case, the Conversion Price in effect immediately prior to such event shall be adjusted (and/or any other appropriate actions shall be taken by the Corporation) so that the holder of any share of Series C Preferred Stock thereafter converted shall be entitled to receive the number of shares of Common Stock or other securities of the Corporation, cash or other assets, rights or property that such holder would have owned or would have been entitled to receive upon or by reason of any of the events described above, had such share of Series C Preferred Stock been converted immediately prior to the occurrence of such event. An adjustment made pursuant to this Section 7(a) shall become effective retroactively (A) SHO shall indemnify Sears Holdings in the case of any such dividend or distribution, to a date immediately following the close of business on the record date for the determination of holders of Common Stock entitled to receive such dividend or distribution, or (B) in the case of any additional Tax that Sears Holdings (such subdivision, combination or any reclassification, recapitalization or other similar event, to the close of its Subsidiaries) would otherwise bear as a result of business on the day upon which such additional taxable income and corporate action becomes effective. (b) Sears Holdings shall indemnify SHO for any additional Tax that the SHO Companies would otherwise bear as a result of such additional taxable income. The amount of any payment under this section 7.03 shall be increased by any Taxes incurred by the person receiving such payment as a result No adjustment of the receipt of such payment. Any payment required under this section 7.03 applicable Conversion Price for the Series C Preferred Stock shall be made within 15 days after in an amount less than one cent per share; provided, however, that any adjustments which are not required to be made by reason of this sentence shall be carried forward and shall be either taken into account in any subsequent adjustment made prior to three years from the indemnified party makes a payment to any Taxing Authority as a result date of a Pricing Adjustment. In the event that, following a Pricing Adjustment with respect giving rise to a Tax Return, Sears Holdings determines that it is appropriate to apply that Pricing Adjustment to another Tax Return or in filing other Tax Returns going the adjustment being carried forward, this section 7.03 (and sections 4.02 and 6.02) or shall be applied as if a Pricing Adjustment had been made with respect at the end of three years from the date of the event giving rise to such other Tax Returnsthe adjustment being carried forward.

Certain Adjustments. Notwithstanding sections 4.02 and 6.02, in the event there is a Pricing Adjustment with respect to any Tax Return that results in additional taxable income to Sears Holdings, SHO or any of their respective Subsidiaries (or any tax group that includes any such person), (i) if In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (including any such adjustment reclassification in connection with a consolidation or merger in which the Company is with respect to a State Combined the continuing or Consolidated Tax Returnsurviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e), the adjustments arising from Purchase Price in effect at the time of the record date for such Pricing Adjustment shall be disregarded in applying sections 4.02 dividend or of the effective date of such subdivision, combination or reclassification, and 6.02 to the extent necessary in order to put Sears Holdings (number and its Subsidiaries) kind of shares of Preferred Stock or SHO (and its Subsidiaries)capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the same after tax position with respect to such State Combined aggregate number and kind of shares of Preferred Stock or Consolidated Tax Return as such person would have occupied if there had been no such additional taxable income (as determined by Sears Holdings in good faith) and (ii) after the application of clause (i) (but without duplication) or if clause (i) does not applycapital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, that such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii). (Aii) SHO In the event: (1) any Acquiring Person or Adverse Person or any Associate or Affiliate of an Acquiring Person or Adverse Person, at any time after the date of this Agreement, directly or indirectly, shall indemnify Sears Holdings merge into the Company, enter into a share exchange with the Company, or otherwise combine with the Company, and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and unchanged, or (2) subject to Section 23, any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any additional Tax that Sears Holdings such plan), alone or together with its Affiliates and Associates, shall, at any time after the Rights Dividend Declaration Date, become an Acquiring Person or Adverse Person, or (B) during such time as there is an Acquiring Person or Adverse Person, there shall be any reclassification of securities (including any reverse stock split) or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries, other than a transaction or transactions to which the provisions of Section 13(a) would apply (whether or not with or into or otherwise bear involving an Acquiring Person or Adverse Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its subsidiaries which is directly or indirectly beneficially owned by any Acquiring Person or Adverse Person or any Associate or Affiliate of any Acquiring Person or Adverse Person, then, promptly following the occurrence of any such event described in Section 11(a)(ii)(A) or (B) hereof, proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e)) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Flip-over Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by 50% of the Current Market Price (determined pursuant to Section 11(d)) per share of Common Stock on the date of such additional taxable income first occurrence (such number of shares, the "Adjustment Shares"). (iii) In the event that the number of shares of Common Stock which are authorized by the Company's Charter but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall (A) determine the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value"), and (bB) Sears Holdings shall indemnify SHO with respect to each Right (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon the exercise of a Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock, such as the Preferred Stock, which the Board has deemed to have essentially the same value or economic rights as shares of Common Stock (such shares of preferred stock being referred to as "Common Stock Equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any additional Tax that combination of the SHO Companies would otherwise bear as a result of such additional taxable income. The foregoing, having an aggregate value equal to the Current Value (less the amount of any payment under this section 7.03 reduction in the Purchase Price), where such aggregate value has been determined by the Board based upon the advice of a nationally recognized investment banking firm selected by the Board; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Flip-in Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Flip-in Trigger Date"), then the Company shall be increased by any Taxes incurred by obligated to deliver, upon the person receiving such surrender for exercise of a Right and without requiring payment as a result of the receipt Purchase Price, shares of such paymentCommon Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. Any payment required under this section 7.03 shall be made within 15 days after the indemnified party makes a payment to any Taxing Authority as a result of a Pricing Adjustment. In the event that, following a Pricing Adjustment with respect to a Tax Return, Sears Holdings determines that it is appropriate to apply that Pricing Adjustment to another Tax Return or in filing other Tax Returns going forward, this section 7.03 (and sections 4.02 and 6.02) shall be applied as if a Pricing Adjustment had been made with respect to such other Tax Returns.For

Certain Adjustments. Notwithstanding sections 4.02 and 6.02, in the event there is a Pricing Adjustment with respect to any Tax Return that results in additional taxable income to Sears Holdings, SHO or any of their respective Subsidiaries (or any tax group that includes any such person), (i) if such adjustment is with respect to a State Combined or Consolidated Tax Return, the adjustments arising from such Pricing Adjustment shall be disregarded in applying sections 4.02 and 6.02 to the extent necessary in order to put Sears Holdings (and its Subsidiaries) or SHO (and its Subsidiaries), as the case may be, in the same after tax position with respect to such State Combined or Consolidated Tax Return as such person would have occupied if there had been no such additional taxable income (as determined by Sears Holdings in good faith) and (ii) after the application of clause (i) (but without duplication) or if clause (i) does not apply, as the case may be, (A) SHO If the Company, at any time while this Note is outstanding, shall indemnify Sears Holdings for any additional Tax that Sears Holdings (or any a) subdivide outstanding shares of its Subsidiaries) would otherwise bear as Common Stock into a result larger number of such additional taxable income and shares, (b) Sears Holdings combine (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (c) issue by reclassification of shares of the Common Stock any shares of capital stock of the Company, then the Conversion Price shall indemnify SHO be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding before such event and of which the denominator shall be the number of shares of Common Stock outstanding after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for any additional Tax that the SHO Companies would determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification. (B) Upon a conversion hereunder, the Company shall not be required to issue stock certificates representing fractions of shares of the Common Stock, but may if otherwise bear as permitted, make a result of such additional taxable income. The amount cash payment in respect of any payment under this section 7.03 final fraction of a share based on the Closing Bid Price at such time. If the Company elects not, or is unable, to make such a cash payment, the Holder shall be increased by any Taxes incurred by the person receiving such payment as a result entitled to receive, in lieu of the receipt final fraction of such payment. Any payment required under a share, one whole share of Common Stock. (C) The issuance of certificates for shares of the Common Stock on conversion of this section 7.03 Note shall be made within 15 days after without charge to the indemnified party makes Holder thereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificate, provided that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a payment name other than that of the Holder of such Note so converted and the Company shall not be required to any Taxing Authority as a result issue or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to the Company the amount of a Pricing Adjustment. In such tax or shall have established to the event that, following a Pricing Adjustment with respect to a Tax Return, Sears Holdings determines satisfaction of the Company that it is appropriate to apply that Pricing Adjustment to another Tax Return or in filing other Tax Returns going forward, this section 7.03 (and sections 4.02 and 6.02) shall be applied as if a Pricing Adjustment had such tax has been made with respect to such other Tax Returnspaid.

Certain Adjustments. Notwithstanding sections 4.02 The number of Conversion Shares issuable upon conversion of this Debenture or any portion thereof (or any shares of stock or other securities or property at the time receivable or issuable upon conversion of this Debenture or any portion thereof) and 6.02the Conversion Price therefor are subject to adjustment upon the occurrence of any of the following events between the Original Issue Date and the date that all obligations hereunder are repaid or this Debenture is converted into Conversion Shares: a) The Conversion Price of this Debenture will be proportionally adjusted to reflect any stock dividend, stock split, reverse stock split, reclassification, recapitalization or other similar event affecting the number of outstanding Conversion Shares. b) In case of any Change of Control Transaction or Fundamental Transaction then, the Holder, upon the conversion of this Debenture at any time after the consummation of such Change of Control Transaction or Fundamental Transaction (as the case may be), will be entitled to receive, in lieu of the event there is a Pricing Adjustment stock or other securities and property receivable upon the conversion of this Debenture prior to such consummation, the stock or other securities or property to which the Holder would have been entitled upon the consummation of such Change of Control Transaction or Fundamental Transaction (as the case may be) if the Holder had converted this Debenture immediately prior thereto, subject to further adjustment as provided in this Debenture, and, in such case, appropriate adjustment (as determined in good faith by the Board of Directors of the Company) will be made in the application of the provisions in this Section with respect to the rights and interests thereafter of the Holder, to the end that the provisions set forth in this Section will thereafter be applicable, as nearly as reasonably may be, in relation to any Tax Return that results securities or other property thereafter deliverable upon the conversion of this Debenture. The Company will cause the successor or purchasing corporation in additional taxable income to Sears Holdings, SHO or any of their respective Subsidiaries (or any tax group that includes any such personreorganization, consolidation or merger (if other than the Company) to duly execute and deliver to the Holder a supplement hereto reasonably acceptable to the Holder acknowledging such entity’s obligations under this Debenture and, in each such case, the terms of the Debenture will be applicable to the shares of stock or other securities or property receivable upon the conversion of this Debenture after the consummation of such reorganization, consolidation or merger. c) In case all the authorized Conversion Shares of the Company are converted, pursuant to the Company’s Certificate of Incorporation, into other securities or property, or the Common Stock otherwise ceases to exist, then, in such case, the Holder, upon conversion of this Debenture at any time after the date on which the Common Stock is so converted or ceases to exist (the “End Date”), will receive, in lieu of the number of Conversion Shares that would have been issuable upon such exercise immediately prior to the End Date (i) the “Former Number of Conversion Shares”), the stock and other securities and property which the Holder would have been entitled to receive upon the End Date if such adjustment is the Holder had converted this Debenture with respect to a State Combined or Consolidated Tax Return, the adjustments arising from such Pricing Adjustment shall be disregarded in applying sections 4.02 and 6.02 Former Number of Conversion Shares immediately prior to the extent necessary End Date (all subject to further adjustment as provided in order this Debenture). The Company will, at its expense, cause an authorized officer promptly to put Sears Holdings (prepare a written certificate showing each adjustment or readjustment of the Conversion Price, or the number of Conversion Shares or other securities issuable upon conversion of this Debenture and its Subsidiaries) cause such certificate to be delivered to the Holder in accordance with the notice provisions set forth in this Debenture. The certificate will describe the adjustment or SHO (readjustment and its Subsidiaries)include a description in reasonable detail of the facts on which the adjustment or readjustment is based. The form of this Debenture need not be changed because of any adjustment in the Conversion Price, as the case may be, or in the same after tax position with respect number of Conversion Shares issuable upon its conversion, unless the Holder determines in its reasonable judgment that a change to such State Combined or Consolidated Tax Return as such person would have occupied if there had been no such additional taxable income (as determined by Sears Holdings the form of this Debenture is necessary in good faith) and (ii) after order to effect the application provisions of clause (i) (but without duplication) or if clause (i) does not apply, as the case may be, (A) SHO shall indemnify Sears Holdings for any additional Tax that Sears Holdings (or any of its Subsidiaries) would otherwise bear as a result of such additional taxable income and (b) Sears Holdings shall indemnify SHO for any additional Tax that the SHO Companies would otherwise bear as a result of such additional taxable income. The amount of any payment under this section 7.03 shall be increased by any Taxes incurred by the person receiving such payment as a result of the receipt of such payment. Any payment required under this section 7.03 shall be made within 15 days after the indemnified party makes a payment to any Taxing Authority as a result of a Pricing Adjustment. In the event that, following a Pricing Adjustment with respect to a Tax Return, Sears Holdings determines that it is appropriate to apply that Pricing Adjustment to another Tax Return or in filing other Tax Returns going forward, this section 7.03 (and sections 4.02 and 6.02) shall be applied as if a Pricing Adjustment had been made with respect to such other Tax ReturnsSection 5.

Certain Adjustments. Notwithstanding sections 4.02 and 6.02, in the event there is a Pricing Adjustment with respect (a) The Exercise Price shall be subject to any Tax Return that results in additional taxable income adjustment from time to Sears Holdings, SHO or any of their respective Subsidiaries (or any tax group that includes any such person), time as follows: (i) if In the event that the Company shall (A) pay a dividend or make a distribution to all its stockholders, in shares of Common Stock, on any class of capital stock of the Company or any subsidiary which is not directly or indirectly wholly owned by the Company, (B) split or subdivide its outstanding Common Stock into a greater number of shares, or (C) combine its outstanding Common Stock into a smaller number of shares, then in each such adjustment is with respect to a State Combined or Consolidated Tax Return, case the adjustments arising from such Pricing Adjustment Exercise Price in effect immediately prior thereto shall be disregarded in applying sections 4.02 and 6.02 adjusted so that the Holder of a Warrant thereafter surrendered for Exercise shall be entitled to receive the number of shares of Common Stock that such Holder would have owned or have been entitled to receive after the occurrence of any of the events described above had such Warrant been exercised immediately prior to the extent necessary occurrence of such event. An adjustment made pursuant to this Section 6(a)(i) shall become effective immediately after the close of business on the record date in order to put Sears Holdings the case of a dividend or distribution (except as provided in Section 6(e) below) and its Subsidiaries) shall become effective immediately after the close of business on the effective date in the case of such subdivision, split or SHO (and its Subsidiaries)combination, as the case may be, . Any shares of Common Stock issuable in payment of a dividend shall be deemed to have been issued immediately prior to the same after tax position with respect to close of business on the record date for such State Combined or Consolidated Tax Return as such person would have occupied if there had been no such additional taxable income dividend for purposes of calculating the number of outstanding shares of Common Stock under clauses (as determined by Sears Holdings in good faithc) and (d) below. (ii) after No adjustment in the application Exercise Price shall be required unless the adjustment would require an increase or decrease of clause (iat least 1% in the Exercise Price then in effect; provided, however, that any adjustments that by reason of this Section 6(a) (but without duplication) or if clause (i) does are not apply, as the case may be, (A) SHO required to be made shall indemnify Sears Holdings for be carried forward and taken into account in any additional Tax that Sears Holdings (or any of its Subsidiaries) would otherwise bear as a result of such additional taxable income and (b) Sears Holdings shall indemnify SHO for any additional Tax that the SHO Companies would otherwise bear as a result of such additional taxable incomesubsequent adjustment. The amount of any payment All calculations under this section 7.03 shall be increased by any Taxes incurred by the person receiving such payment as a result of the receipt of such payment. Any payment required under this section 7.03 Section 6(a) shall be made within 15 days after to the indemnified party makes a payment to any Taxing Authority as a result nearest cent or nearest 1/100th of a Pricing Adjustmentshare. (iii) The Company from time to time may reduce the Exercise Price by any amount for any period of time in the discretion of the Board of Directors. A voluntary reduction of the Exercise Price does not change or adjust the Exercise Price otherwise in effect for purposes of this Section 6(a). (iv) In the event that, following at any time as a Pricing Adjustment result of an adjustment made pursuant to Section 6(a)(i) or 6(a)(ii) above, the Holder of any Warrant thereafter surrendered for exercise shall become entitled to receive any shares of the Company other than shares of the Common Stock, thereafter the number of such other shares so receivable upon exercise of any such Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to a Tax Returnthe Common Stock contained in Section 6(a)(i) or 6(a)(ii) above, Sears Holdings determines that it is appropriate to apply that Pricing Adjustment to another Tax Return or in filing and the other Tax Returns going forward, provisions of this section 7.03 (and sections 4.02 and 6.02Section 6(a) shall be applied as if a Pricing Adjustment had been made with respect to the Common Stock shall apply on like terms to any such other Tax Returnsshares. (b) In case of any reclassification of the Common Stock (other than in a transaction to which Section 6(a)(i) applies), any consolidation of the Company with, or merger of the Company into, any other entity, any merger of another entity into the Company (other than a merger that does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of Common Stock of the Company), any sale or transfer of all or substantially all of the assets of the Company or any compulsory share exchange, pursuant to which share exchange the Common Stock is converted into other securities, cash or other property, then lawful provision shall be made as part of the terms of such transaction whereby the Holder of a Warrant then outstanding shall have the right thereafter, during the period such Warrant shall be exercisable, to exercise such Warrant only for the kind and amount of securities, cash and other property receivable upon the reclassification, consolidation, merger, sale, transfer or share exchange by a holder of the number of shares of Common Stock of the Company into which a Warrant might have been able to exercise for immediately prior to the reclassification, consolidation, merger, sale, transfer or share exchange assuming that such holder of Common Stock failed to exercise rights of election, if any, as to the kind or amount of securities, cash or other property receivable upon consummation of such transaction subject to adjustment as provided in Section 6(a) above following the date of consummation of such transaction. The provisions of this Section 6(d) shall similarly apply to successive reclassifications, consolidations, mergers, sales, transfers or share exchanges. (c) If (i) the Company shall take any action which would require an adjustment in the Exercise Price pursuant to Section 6(a); (ii) the Company shall authorize the granting to the holders of its Common Stock generally of rights, warrants or options to subscribe for or purchase any shares of any class or any other rights, warrants or options; (iii) there shall be any reclassification or change of the Common Stock (other than a subdivision or combination of its outstanding Common Stock or a change in par value) or any consolidation, merger or statutory share exchange to which the Company is a party and for which approval of any stockholders of the Company is required, or the sale or transfer of all or substantially all of the assets of the Company; or (iv) there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company; then, in each such case, the Company shall cause to be filed with the transfer agent for the Warrants and shall cause to be mailed to each Holder at such Holder’s address as shown on the books of the transfer agent for the Warrants, as promptly as possible, but at least 30 days prior to the applicable date hereinafter specified, a notice stating (A) the date on which a record is to be taken for the purpose of such dividend, distribution or granting of rights, warrants or options, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution or rights, warrants or options are to be determined, or (B) the date on which such reclassification, change, consolidation, merger, statutory share exchange, sale, transfer, dissolution, liquidation or winding-up is expected to become effective or occur, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reclassification, change, consolidation, merger, statutory share exchange, sale, transfer, dissolution, liquidation or winding up. Failure to give such notice or any defect therein shall not affect the legality or validity of the proceedings described in this Section 6(e). (d) Whenever the Exercise Price is adjusted as herein provided, the Company shall promptly file with the transfer agent for the Warrants a certificate of an officer of the Company setting forth the Exercise Price after the adjustment and setting forth a brief statement of the facts requiring such adjustment and a computation thereof. The Company shall promptly cause a notice of the adjusted Exercise Price to be mailed to each Holder. (e) In any case in which Section 6(a) provides that an adjustment shall become effective immediately after a record date for an event and the date fixed for such adjustment pursuant to Section 6(a) occurs after such record date but before the occurrence of such event, the Company may defer until the actual occurrence of such event (i) issuing to the Holder of any Warrants exercised after such record date and before the occurrence of such event the additional shares of Common Stock issuable upon such conversion by reason of the adjustment required by such event over and above the Common Stock issuable upon such exercise before giving effect to such adjustment, and (ii) paying to such holder any amount in cash in lieu of any fraction pursuant to Section 6(g). (f) In case the Company shall take any action affecting the Common Stock, other than actions described in this Section 6, which in the opinion of the Board of Directors would materially adversely affect the exercise right of the Holders, the Exercise Price may be adjusted, to the extent permitted by law, in such manner, if any, and at such time, as the Board of Directors may determine to be equitable in the circumstances; provided, however, that in no event shall the Board of Directors be required to take any such action. (g) For the purpose of any computation under this Section 7, the “Current Market Price” per share of Common Stock shall mean the VWAP of the Common Stock on the day in question. As used herein, “VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company. “Trading Market” means the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American LLC, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the OTC Bulletin Board, the OTCQX or OTCQB as maintained by OTC Markets, Inc.

Certain Adjustments. Notwithstanding sections 4.02 (a) In case the Company shall hereafter (i) pay a dividend or make a distribution on its Common Stock in shares of Common Stock, (ii) subdivide its outstanding shares of Common Stock into a greater number of shares, (iii) combine or reverse-split its outstanding shares of Common Stock into a smaller number of shares or (iv) issue by reclassification of its Common Stock any shares of capital stock of the Company, then the Per Share Warrant Price and 6.02the number of Warrant Shares shall forthwith be proportionately decreased and increased, respectively, in the event there case of a subdivision, distribution or stock dividend, or proportionately increased and decreased, respectively, in the case of a combination or reverse stock split. The Aggregate Warrant Price payable for the then total number of Warrant Shares available for exercise under this Warrant shall remain the same. Adjustments made pursuant to this subsection 3(a) shall become effective on the record date in the case of a dividend or distribution, and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification. If such dividend, distribution, subdivision or combination is not consummated in full, the Per Share Warrant Price and Warrant Shares shall be readjusted accordingly. (b) In case of any capital reorganization or reclassification, or any consolidation or merger to which the Company is a Pricing Adjustment party other than a merger or consolidation in which the Company is the continuing corporation, or in case of any sale or conveyance to another entity of all or substantially all of the assets of the Company, or in the case of any statutory exchange of securities with another corporation (including any exchange effected in connection with a merger of a third corporation into the Company but excluding any exchange of securities or merger with another corporation in which the Company is a continuing corporation and that does not result in any reclassification of or similar change in the Common Stock), the Holder of this Warrant shall have the right thereafter to receive on the exercise of this Warrant the kind and amount of securities, cash or other property which the Holder would have owned or have been entitled to receive immediately after such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance had this Warrant been exercised immediately prior to the effective date of such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance and in any such case, if necessary, appropriate adjustment shall be made in the application of the provisions set forth in this Section 3 with respect to the rights and interests thereafter of the Holder of this Warrant to the end that the provisions set forth in this Section 3 shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any Tax Return that results in additional taxable income shares of stock or other securities or property thereafter deliverable on the exercise of this Warrant. The above provisions of this subsection 3(b) shall similarly apply to Sears Holdingssuccessive reorganizations, SHO reclassifications, consolidations, mergers, statutory exchanges, sales or conveyances. The Company shall require the issuer of any shares of their respective Subsidiaries (stock or any tax group that includes other securities or property thereafter deliverable on the exercise of this Warrant to be responsible for all of the agreements and obligations of the Company hereunder. Notice of any such person)reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance and of said provisions so proposed to be made, shall be mailed to the Holders of the Warrants not less than twenty (i20) if days prior to such event. A sale of all or substantially all of the assets of the Company for a consideration consisting primarily of securities shall be deemed a consolidation or merger for the foregoing purposes. (c) No adjustment in the Per Share Warrant Price shall be required unless such adjustment is with respect would require an increase or decrease of at least $0.01 per share of Common Stock; provided , however , that any adjustments which by reason of this subsection 3(c) are not required to a State Combined or Consolidated Tax Return, the adjustments arising from such Pricing Adjustment be made shall be disregarded carried forward and taken into account in applying sections 4.02 any subsequent adjustment; provided , further , however, that adjustments shall be required and 6.02 to made in accordance with the extent necessary provisions of this Section 3 (other than this subsection 3(c)) not later than such time as may be required in order to put Sears Holdings (and its Subsidiaries) preserve the tax-free nature of a distribution, if any, to the Holder of this Warrant or SHO (and its Subsidiaries)Common Stock issuable upon the exercise hereof. All calculations under this Section 3 shall be made to the nearest cent or to the nearest 1/100th of a share, as the case may be. Anything in this Section 3 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Per Share Warrant Price, in addition to those required by this Section 3, as it in its discretion shall deem to be advisable in order that any stock dividend, subdivision of shares or distribution of rights to purchase stock or securities convertible or exchangeable for stock hereafter made by the Company to its stockholders shall not be taxable. (d) Whenever the Per Share Warrant Price or the number of Warrant Shares is adjusted as provided in this Section 3 and upon any modification of the rights of a Holder of Warrants in accordance with this Section 3, the Company shall promptly prepare a brief statement of the facts requiring such adjustment or modification and the manner of computing the same and cause copies of such certificate to be mailed to the Holders of the Warrants. The Company may, but shall not be obligated to unless requested by a Majority of the Holders, obtain, at its expense, a certificate of a firm of independent public accountants of recognized standing selected by the Board of Directors (who may be the regular auditors of the Company) setting forth the Per Share Warrant Price and the number of Warrant Shares in effect after tax position such adjustment or the effect of such modification, a brief statement of the facts requiring such adjustment or modification and the manner of computing the same and cause copies of such certificate to be mailed to the Holders of the Warrants. (e) If the Board of Directors of the Company shall declare any dividend or other distribution with respect to the Common Stock other than a cash distribution out of earned surplus, the Company shall mail notice thereof to the Holders of the Warrants not less than ten (10) days prior to the record date fixed for determining stockholders entitled to participate in such State Combined dividend or Consolidated Tax Return other distribution. (f) If, as a result of an adjustment made pursuant to this Section 3, the Holder of any Warrant thereafter surrendered for exercise shall become entitled to receive shares of two or more classes of capital stock or shares of Common Stock and other capital stock of the Company, the Board of Directors (whose determination shall be conclusive and shall be described in a written notice to the Holder of any Warrant promptly after such person would have occupied if there had been no such additional taxable income (as determined by Sears Holdings adjustment) shall determine, in good faith, the allocation of the adjusted Per Share Warrant Price between or among shares or such classes of capital stock or shares of Common Stock and other capital stock. (g) Upon the expiration of any rights, options, warrants or conversion privileges with respect to the issuance of which an adjustment to the Per Share Warrant Price had been made, if such option, right warrant or conversion shall not have been exercised, the number of Warrant Shares purchasable upon exercise of this Warrant, to the extent this Warrant has not then been exercised, shall, upon such expiration, be readjusted and shall thereafter be such as they would have been had they been originally adjusted (ii) after or had the application of clause (i) (but without duplication) or if clause (i) does original adjustment not applybeen required, as the case may be, ) on the basis of (A) SHO shall indemnify Sears Holdings for any additional Tax the fact that Sears Holdings (Common Stock, if any, actually issued or any of its Subsidiaries) would otherwise bear as a result sold upon the exercise of such additional taxable income rights, options, warrants or conversion privileges, and (bB) Sears Holdings the fact that such shares of Common Stock, if any, were issued or sold for the consideration actually received by the Company upon such exercise plus the consideration, if any, actually received by the Company for the issuance, sale or grant of all such rights, options, warrants or conversion privileges whether or not exercised; provided , however , that no such readjustment shall indemnify SHO for any additional Tax that have the SHO Companies would otherwise bear as a result effect of decreasing the number of Warrant Shares purchasable upon exercise of this Warrant by an amount in excess of the amount of the adjustment initially made in respect of the issuance, sale or grant of such additional taxable income. The amount rights, options, warrants or conversion privileges. (h) In case any event shall occur as to which the other provisions of this Section 3 are not strictly applicable but as to which the failure to make any payment under adjustment would not fairly protect the purchase rights represented by this section 7.03 Warrant in accordance with the essential intent and principles of the adjustments set forth in this Section 3 then, in each such case, the Board of Directors of the Company shall be increased by any Taxes incurred in good faith determine the adjustment, if any, on a basis consistent with the essential intent and principles established herein, necessary to preserve the purchase rights represented by the person receiving Warrants. Upon such payment as determination, the Company will promptly mail a result copy thereof to the Holder of this Warrant and shall make the receipt of such payment. Any payment required under this section 7.03 shall be made within 15 days after the indemnified party makes a payment to any Taxing Authority as a result of a Pricing Adjustment. In the event that, following a Pricing Adjustment with respect to a Tax Return, Sears Holdings determines that it is appropriate to apply that Pricing Adjustment to another Tax Return or in filing other Tax Returns going forward, this section 7.03 (and sections 4.02 and 6.02) shall be applied as if a Pricing Adjustment had been made with respect to such other Tax Returnsadjustments described therein.

Certain Adjustments. Notwithstanding sections 4.02 (a) In case the Company shall hereafter (i) pay a dividend or make a distribution on its Common Stock in shares of Common Stock, (ii) subdivide its outstanding shares of Common Stock into a greater number of shares, (iii) combine or reverse-split its outstanding shares of Common Stock into a smaller number of shares or (iv) issue by reclassification of its Common Stock any shares of capital stock of the Company, then the Per Share Warrant Price and 6.02the number of Warrant Shares shall forthwith be proportionately decreased and increased, respectively, in the event there case of a subdivision, distribution or stock dividend, or proportionately increased and decreased, respectively, in the case of a combination or reverse stock split. The Aggregate Warrant Price payable for the then total number of Warrant Shares available for exercise under this Warrant shall remain the same. Adjustments made pursuant to this subsection 3(a) shall become effective on the record date in the case of a dividend or distribution, and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification. If such dividend, distribution, subdivision or combination is not consummated in full, the Per Share Warrant Price and Warrant Shares shall be readjusted accordingly. (b) In case of any capital reorganization or reclassification, or any consolidation or merger to which the Company is a Pricing Adjustment party other than a merger or consolidation in which the Company is the continuing corporation, or in case of any sale or conveyance to another entity of all or substantially all of the assets of the Company, or in the case of any statutory exchange of securities with another corporation (including any exchange effected in connection with a merger of a third corporation into the Company but excluding any exchange of securities or merger with another corporation in which the Company is a continuing corporation and that does not result in any reclassification of or similar change in the Common Stock), the Holder of this Warrant shall have the right thereafter to receive on the exercise of this Warrant the kind and amount of securities, cash or other property which the Holder would have owned or have been entitled to receive immediately after such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance had this Warrant been exercised immediately prior to the effective date of such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance and in any such case, if necessary, appropriate adjustment shall be made in the application of the provisions set forth in this Section 3 with respect to the rights and interests thereafter of the Holder of this Warrant to the end that the provisions set forth in this Section 3 shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any Tax Return that results in additional taxable income shares of stock or other securities or property thereafter deliverable on the exercise of this Warrant. The above provisions of this subsection 3(b) shall similarly apply to Sears Holdingssuccessive reorganizations, SHO reclassifications, consolidations, mergers, statutory exchanges, sales or conveyances. The Company shall require the issuer of any shares of stock or other securities or property thereafter deliverable on the exercise of this Warrant to be responsible for all of the agreements and obligations of the Company hereunder. Notice of any such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance and of said provisions so proposed to be made, shall be mailed to the Holders of the Warrants not less than twenty (20) days prior to such event. A sale of all or substantially all of the assets of the Company for a consideration consisting primarily of securities shall be deemed a consolidation or merger for the foregoing purposes. (c) If the Company at any time while this Warrant is outstanding, shall sell or grant any option to purchase, or sell or grant any right to reprice its securities, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any Common Stock or Common Stock Equivalents (as defined below) entitling any Person to acquire shares of their respective Subsidiaries Common Stock, at an effective price per share less than the then Per Share Warrant Price (such lower price, the “Base Share Price” and such issuances collectively, a “Dilutive Issuance”) (if the holder of the Common Stock or Common Stock Equivalents so issued shall at any tax group time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share which is less than the Per Share Warrant Price, such issuance shall be deemed to have occurred for less than the Per Share Warrant Price on such date of the Dilutive Issuance), then the Per Share Warrant Price shall be reduced and only reduced to equal the Base Share Price and the number of Warrant Shares issuable hereunder shall be increased such that includes the aggregate Per Share Warrant Price payable hereunder, after taking into account the decrease in the Per Share Warrant Price, shall be equal to the aggregate Per Share Warrant Price prior to such adjustment. If shares of Common Stock or Common Stock Equivalents are issued or sold together with other stock or securities or other assets of the Company for a consideration which covers both, the effective price per share shall be computed with regard to the portion of the consideration so received that may be reasonably determined in good faith by the Board of Directors, to be allocable to such Common Stock or Common Stock Equivalents. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued. Notwithstanding the foregoing, no adjustments shall be made, paid or issued under this Section 3(c) in respect of an Exempt Issuance (as defined below). The Company shall notify the Holder in writing, no later than the Trading Day following the issuance of any Common Stock or Common Stock Equivalents subject to this Section 3(c), indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such personnotice the “Dilutive Issuance Notice”). For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 3(c), upon the occurrence of any Dilutive Issuance, after the date of such Dilutive Issuance the Holder is entitled to receive a number of Warrant Shares based upon the Base Share Price regardless of whether the Holder accurately refers to the Base Share Price in the Notice of Exercise. “Common Stock Equivalents” means any securities of the Company which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock. “Exempt Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company pursuant to any stock or option plan in effect on the date hereof or hereafter duly adopted for such purpose by a majority of the non-employee members of the Board of Directors of the Company or a majority of the members of a committee of non-employee directors established, (b) securities upon the exercise or exchange of or conversion of any securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date hereof, provided that such securities have not been amended since the date hereof to increase the number of such securities or to decrease the exercise, exchange or conversion price of such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, but not securities issued in a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities and (d) less than 50,000 shares of Common Stock (subject to appropriate adjustment in the event of stock splits, stock combinations, and the like), in the aggregate, which do not otherwise meet the conditions of clauses (a), (i) if such adjustment is with respect to a State Combined or Consolidated Tax Return, the adjustments arising from such Pricing Adjustment shall be disregarded in applying sections 4.02 and 6.02 to the extent necessary in order to put Sears Holdings (and its Subsidiariesb) or SHO (and its Subsidiaries), as the case may be, in the same after tax position with respect to such State Combined or Consolidated Tax Return as such person would have occupied if there had been no such additional taxable income (as determined by Sears Holdings in good faithc) and (ii) after the application of clause (i) (but without duplication) or if clause (i) does not apply, as the case may be, (A) SHO shall indemnify Sears Holdings for any additional Tax that Sears Holdings (or any of its Subsidiaries) would otherwise bear as a result of such additional taxable income and (b) Sears Holdings shall indemnify SHO for any additional Tax that the SHO Companies would otherwise bear as a result of such additional taxable income. The amount of any payment under this section 7.03 shall be increased by any Taxes incurred by the person receiving such payment as a result of the receipt of such payment. Any payment required under this section 7.03 shall be made within 15 days after the indemnified party makes a payment to any Taxing Authority as a result of a Pricing Adjustment. In the event that, following a Pricing Adjustment with respect to a Tax Return, Sears Holdings determines that it is appropriate to apply that Pricing Adjustment to another Tax Return or in filing other Tax Returns going forward, this section 7.03 (and sections 4.02 and 6.02) shall be applied as if a Pricing Adjustment had been made with respect to such other Tax Returnsdefinition.

Certain Adjustments. Notwithstanding sections 4.02 and 6.02, in the event there is a Pricing Adjustment with respect to any Tax Return that results in additional taxable income to Sears Holdings, SHO or any of their respective Subsidiaries (or any tax group that includes any such person), (i) if such adjustment is with respect All per share price numbers and numbers of shares set forth in Sections 2.4(a)(ii) and 2.4(c)(ii) shall be appropriately adjusted in the case of stock splits, stock dividends, combinations or similar events affecting ABIOMED Common Stock. (ii) In the event that at any time after the Closing Date ABIOMED Common Stock shall be changed into the same or a different number of shares of any class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than a subdivision or combination of shares or stock dividend provided for in the preceding subsection, or a merger, consolidation or sale of assets provided for in the next subsection), then the Impella Stockholders shall be entitled to a State Combined or Consolidated Tax Returnreceive, in lieu of the ABIOMED Common Stock they would otherwise be entitled to receive pursuant to Sections 2.4(a)(ii) and 2.4(c)(ii), the adjustments arising from kind and amount of shares of stock and other securities and property receivable upon such Pricing Adjustment reorganization, reclassification or other change, by a holder of the number of shares of ABIOMED Common Stock which the Impella Stockholders would otherwise have received; and in such case, appropriate adjustment (as determined in good faith by ABIOMED’s Board of Directors and the Stockholders’ Representative ) shall be disregarded in applying sections 4.02 and 6.02 made to the extent necessary per share price numbers and number of shares set forth in order Sections 2.4(a)(ii) and 2.4(c)(ii) and the application of the other provisions of such sections to put Sears Holdings (and its Subsidiaries) or SHO (and its Subsidiaries), the end that the provisions of such sections shall thereafter be applicable as the case nearly as reasonably may be, in the same after tax position with respect relation to any shares of stock or other property thereafter deliverable pursuant to such State Combined sections. (iii) In the event that at any time after the Closing Date ABIOMED shall merge or Consolidated Tax Return as consolidate with or into another entity or sell substantially all of its assets, then the Impella Stockholders shall be entitled to receive, in lieu of the ABIOMED Common Stock they would otherwise be entitled to receive pursuant to Sections 2.4(a) and 2.4(c), the kind and amount of shares of stock or other securities or property receivable upon such person merger, consolidation, or sale of assets, by a holder of the number of shares of ABIOMED Common Stock which the Impella Stockholders would otherwise have occupied if there had been no received; and in such additional taxable income case, appropriate adjustment (as determined by Sears Holdings in good faithfaith by the Board of Directors of ABIOMED and the Stockholders’ Representative) shall be made to the per share price numbers and number of shares set forth in Sections 2.4(a)(ii) and (ii2.4(c)(ii) after and the application of clause (i) (but without duplication) or if clause (i) does not apply, the other provisions of such sections to the end that the provisions of such sections shall thereafter be applicable as the case nearly as reasonably may be, (A) SHO shall indemnify Sears Holdings for any additional Tax that Sears Holdings (or any of its Subsidiaries) would otherwise bear as a result of such additional taxable income and (b) Sears Holdings shall indemnify SHO for any additional Tax that the SHO Companies would otherwise bear as a result of such additional taxable income. The amount of any payment under this section 7.03 shall be increased by any Taxes incurred by the person receiving such payment as a result of the receipt of such payment. Any payment required under this section 7.03 shall be made within 15 days after the indemnified party makes a payment in relation to any Taxing Authority as a result shares of a Pricing Adjustment. In the event that, following a Pricing Adjustment with respect to a Tax Return, Sears Holdings determines that it is appropriate to apply that Pricing Adjustment to another Tax Return stock or in filing other Tax Returns going forward, this section 7.03 (and sections 4.02 and 6.02) shall be applied as if a Pricing Adjustment had been made with respect property thereafter deliverable pursuant to such other Tax Returnssections.

Certain Adjustments. Notwithstanding sections 4.02 and 6.02, in 1. In the event there is that the Shares are at any time changed or affected as a Pricing Adjustment result of the declaration of a stock dividend thereon or their subdivision or consolidation, the number of Shares reserved for the Option shall be adjusted accordingly by the Board or the Committee to such extent as they deem proper in their discretion. In such event, the number of, and the price payable for, the Shares that are then subject to the Option may also be adjusted by the Board or the Committee to such extent, if any, as they deem proper in their discretion. 2. If at any time after the date of this Agreement and prior to the expiration of the term of the Option, the Shares shall be reclassified, reorganized or otherwise changed, otherwise than as specified in Section 8.1 of this Agreement or, subject to the provisions of subsection 8.1(a) of this Agreement, the Corporation shall consolidate, merge or amalgamate with respect to any Tax Return that results in additional taxable income to Sears Holdingsor into another corporation (the corporation resulting or continuing from such consolidation, SHO merger or any of their respective Subsidiaries (or any tax group that includes any such personamalgamation being herein called the “Successor Corporation”), (i) if the Optionee shall be entitled to receive upon the subsequent exercise of the Option in accordance with the terms of this Agreement and shall accept in lieu of the number of Shares to which he was theretofore entitled upon such adjustment is with respect to a State Combined or Consolidated Tax Returnexercise but for the same aggregate consideration payable therefor, the adjustments arising aggregate number of shares of the appropriate class and/or other securities of the Corporation or the Successor Corporation (as the case may be) and/or other consideration from the Corporation or the Successor Corporation (as the case may be) that the Optionee would have been entitled to receive as a result of such Pricing Adjustment shall be disregarded in applying sections 4.02 and 6.02 reclassification, reorganization or other change or, subject to the extent necessary in order to put Sears Holdings (and its Subsidiariesprovisions of subsection 8.1(a) of this Agreement, as a result of such consolidation, merger or SHO (and its Subsidiaries)amalgamation, if on the record date of such reclassification, reorganization or other change or the effective date of such consolidation, merger or amalgamation, as the case may be, in the same after tax position with respect to such State Combined or Consolidated Tax Return as such person would have occupied if there he had been no such additional taxable income (as determined by Sears Holdings in good faith) and (ii) after the application of clause (i) (but without duplication) or if clause (i) does not apply, as the case may be, (A) SHO shall indemnify Sears Holdings for any additional Tax that Sears Holdings (or any of its Subsidiaries) would otherwise bear as a result of such additional taxable income and (b) Sears Holdings shall indemnify SHO for any additional Tax that the SHO Companies would otherwise bear as a result of such additional taxable income. The amount of any payment under this section 7.03 shall be increased by any Taxes incurred by the person receiving such payment as a result registered holder of the receipt number of Shares to which he was theretofore entitled upon such payment. Any payment required under this section 7.03 shall be made within 15 days after the indemnified party makes a payment to any Taxing Authority as a result of a Pricing Adjustment. In the event that, following a Pricing Adjustment with respect to a Tax Return, Sears Holdings determines that it is appropriate to apply that Pricing Adjustment to another Tax Return or in filing other Tax Returns going forward, this section 7.03 (and sections 4.02 and 6.02) shall be applied as if a Pricing Adjustment had been made with respect to such other Tax Returnsexercise.

Certain Adjustments. Notwithstanding sections 4.02 and 6.02(a) Subject to any required action by the stockholders of the Company, in the event there that the outstanding shares of Common Stock are hereafter increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company or of another corporation by reason of reorganization, merger, consolidation, recapitalization, reclassification, stock split, combination of shares or share dividends, the Board of Directors of the Company shall adjust the number and kind of securities subject to the Stock Option. In any such case, the Board of Directors of the Company shall make such adjustment to the Stock Option without change in the total price applicable to the unexercised portion of the Stock Option and with a corresponding adjustment in the Option Price. In the event that the number of shares of Common Stock is a Pricing Adjustment with respect to any Tax Return that results in increased by sale of additional taxable income to Sears Holdings, SHO shares or conversion of securities convertible into such shares or any other similar event not referred to in the first sentence of their respective Subsidiaries this Section 5 (a) , the Board of Directors of the Company may in its discretion, but shall not be obligated to, adjust the number or any tax group that includes kind of securities subject to the Stock Option. (b) Should the Company sell all or substantially all of its assets and discontinue its business, or merge or consolidate with another entity, or liquidate or dissolve in connection with those events, then, in lieu of its obligation under Section 5 (a), the Board of Directors of the Company may amend or adjust the Stock Option so as to terminate it completely, or to continue the Stock Option if exercisable at the date the Board of Directors of the Company adopted the plan of sale, merger, consolidation or liquidation, or may take other actions as it deems desirable and appropriate. In any such person)case, however, the Optionee will be given either (i) if such adjustment is with respect a reasonable time in which to a State Combined exercise the Stock Option before the effectiveness of the sale and discontinuation, merger, consolidation or Consolidated Tax Returnliquidation, the adjustments arising from such Pricing Adjustment shall be disregarded in applying sections 4.02 and 6.02 to the extent necessary in order to put Sears Holdings (and its Subsidiaries) or SHO (and its Subsidiaries), as the case may be, in the same after tax position with respect to such State Combined or Consolidated Tax Return as such person would have occupied if there had been no such additional taxable income (as determined by Sears Holdings in good faith) and (ii) after the application right to obtain for his payment of clause the Option Price, an equivalent amount of any securities the Optionee would have been entitled to obtain in consequence of that- event, had he exercised the Stock Option immediately before the plan of sale and discontinuation, merger, consolidation or liquidation was adopted. (ic) Should the Company be recapitalized in a transaction not covered by Section 5(a) by the issuance of any other class or classes of securities in exchange for the Common Stock, the Board of Directors of the Company shall amend the Stock Option to reflect an adjusted option price per unit of such securities as would equitably be obtained in accordance with the terms otherwise applicable to the actual exchange. (but without duplicationd) The Company shall not be required upon the exercise of the Stock Option to issue or if clause (i) does not apply, as the case may be, (A) SHO shall indemnify Sears Holdings for any additional Tax that Sears Holdings (or any of its Subsidiaries) would otherwise bear deliver fractional shares as a result of such additional taxable income and (b) Sears Holdings any adjustment pursuant to this Section 5. The Optionee shall indemnify SHO for any additional Tax that the SHO Companies would otherwise bear as be entitled to receive a result cash payment in lieu of such additional taxable income. The amount of any payment under this section 7.03 shall be increased by any Taxes incurred by the person receiving such payment as a result of the receipt of such payment. Any payment required under this section 7.03 shall be made within 15 days after the indemnified party makes a payment to any Taxing Authority as a result of a Pricing Adjustment. In the event that, following a Pricing Adjustment with respect to a Tax Return, Sears Holdings determines that it is appropriate to apply that Pricing Adjustment to another Tax Return or in filing other Tax Returns going forward, this section 7.03 (and sections 4.02 and 6.02) shall be applied as if a Pricing Adjustment had been made with respect to such other Tax Returnsfractional shares.

Certain Adjustments. Notwithstanding sections 4.02 and 6.02, in the event there is a Pricing Adjustment with respect to any Tax Return that results in additional taxable income to Sears Holdings, SHO or any of their respective Subsidiaries (or any tax group that includes any such person), (i) if such adjustment is with respect to a State Combined or Consolidated Tax Return, the adjustments arising from such Pricing Adjustment shall be disregarded in applying sections 4.02 and 6.02 to the extent necessary in order to put Sears Holdings (and its Subsidiaries) or SHO (and its Subsidiaries), as the case may be, in the same after tax position with respect to such State Combined or Consolidated Tax Return as such person would have occupied if there had been no such additional taxable income (as determined by Sears Holdings in good faith) and (ii) after the application of clause (i) (but without duplication) or if clause (i) does not apply, as the case may be, (A) SHO If the Company, at any time while this Note is outstanding, shall indemnify Sears Holdings for any additional Tax that Sears Holdings (or any a) subdivide outstanding shares of its Subsidiaries) would otherwise bear as Common Stock into a result larger number of such additional taxable income and shares, (b) Sears Holdings combine (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (c) issue by reclassification of shares of the Common Stock any shares of capital stock of the Company, then the Conversion Price shall indemnify SHO be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding before such event and of which the denominator shall be the number of shares of Common Stock outstanding after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for any additional Tax that the SHO Companies would determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification. (B) Upon a conversion hereunder the Company shall not be required to issue stock certificates representing fractions of shares of the Common Stock, but may if otherwise bear as permitted, make a result of such additional taxable income. The amount cash payment in respect of any payment under this section 7.03 final fraction of a share based on the Closing Bid Price at such time. If the Company elects not, or is unable, to make such a cash payment, the Holder shall be increased by any Taxes incurred by the person receiving such payment as a result entitled to receive, in lieu of the receipt final fraction of such payment. Any payment required under a share, one whole share of Common Stock. (C) The issuance of certificates for shares of the Common Stock on conversion of this section 7.03 Note shall be made within 15 days after without charge to the indemnified party makes Holder thereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificate, provided that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a payment name other than that of the Holder of such Note so converted and the Company shall not be required to any Taxing Authority as a result issue or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to the Company the amount of a Pricing Adjustment. In such tax or shall have established to the event that, following a Pricing Adjustment with respect to a Tax Return, Sears Holdings determines satisfaction of the Company that it is appropriate to apply that Pricing Adjustment to another Tax Return or in filing other Tax Returns going forward, this section 7.03 (and sections 4.02 and 6.02) shall be applied as if a Pricing Adjustment had such tax has been made with respect to such other Tax Returnspaid.

Certain Adjustments. Notwithstanding sections 4.02 and 6.02, in 9.1 In the event there is that the Shares are at any time changed or affected as a Pricing Adjustment result of the declaration of a stock dividend thereon or their subdivision or consolidation, the number of Shares reserved for the Option shall be adjusted accordingly by the Board or the Committee to such extent as they deem proper in their discretion. In such event, the number of, and the price payable for, the Shares that are then subject to the Option may also be adjusted by the Board or the Committee to such extent, if any, as they deem proper in their discretion. 9.2 If at any time after the date of this Agreement and prior to the expiration of the term of the Option, the Shares shall be reclassified, reorganized or otherwise changed, otherwise than as specified in Section 9.1 of this Agreement or, subject to the provisions of subsection 10.1(a) of this Agreement, the Corporation shall consolidate, merge or amalgamate with respect to any Tax Return that results in additional taxable income to Sears Holdingsor into another corporation (the corporation resulting or continuing from such consolidation, SHO merger or any of their respective Subsidiaries (or any tax group that includes any such personamalgamation being herein called the "Successor Corporation"), (i) if the Optionee shall be entitled to receive upon the subsequent exercise of the Option in accordance with the terms of this Agreement and shall accept in lieu of the number of Shares to which he was theretofore entitled upon such adjustment is with respect to a State Combined or Consolidated Tax Returnexercise but for the same aggregate consideration payable therefore, the adjustments arising aggregate number of shares of the appropriate class and/or other securities of the Corporation or the Successor Corporation (as the case may be) and/or other consideration from the Corporation or the Successor Corporation (as the case may be) that the Optionee would have been entitled to receive as a result of such Pricing Adjustment shall be disregarded in applying sections 4.02 and 6.02 reclassification, reorganization or other change or, subject to the extent necessary in order to put Sears Holdings (and its Subsidiariesprovisions of subsection 10.1(a) of this Agreement, as a result of such consolidation, merger or SHO (and its Subsidiaries)amalgamation, if on the record date of such reclassification, reorganization or other change or the effective date of such consolidation, merger or amalgamation, as the case may be, in the same after tax position with respect to such State Combined or Consolidated Tax Return as such person would have occupied if there he had been no such additional taxable income (as determined by Sears Holdings in good faith) and (ii) after the application of clause (i) (but without duplication) or if clause (i) does not apply, as the case may be, (A) SHO shall indemnify Sears Holdings for any additional Tax that Sears Holdings (or any of its Subsidiaries) would otherwise bear as a result of such additional taxable income and (b) Sears Holdings shall indemnify SHO for any additional Tax that the SHO Companies would otherwise bear as a result of such additional taxable income. The amount of any payment under this section 7.03 shall be increased by any Taxes incurred by the person receiving such payment as a result registered holder of the receipt number of Shares to which he was theretofore entitled upon such payment. Any payment required under this section 7.03 shall be made within 15 days after the indemnified party makes a payment to any Taxing Authority as a result of a Pricing Adjustment. In the event that, following a Pricing Adjustment with respect to a Tax Return, Sears Holdings determines that it is appropriate to apply that Pricing Adjustment to another Tax Return or in filing other Tax Returns going forward, this section 7.03 (and sections 4.02 and 6.02) shall be applied as if a Pricing Adjustment had been made with respect to such other Tax Returnsexercise.

Certain Adjustments. Notwithstanding sections 4.02 and 6.02, in (a) In case the event there is a Pricing Adjustment with respect to any Tax Return that results in additional taxable income to Sears Holdings, SHO or any of their respective Subsidiaries (or any tax group that includes any such person), Company shall (i) if such adjustment is with respect pay a stock dividend (in excess of 5% of the issued and outstanding Common Stock) or make a distribution to holders of Common Stock in shares of its Common Stock, (ii) subdivide its outstanding shares of Common Stock, (iii) split its outstanding shares of Common Stock into a State Combined larger number of shares (iv) combine its outstanding shares of Common Stock into a smaller number of shares, or Consolidated Tax Return(v) issue by reclassification of its shares of Common Stock any shares of capital stock of the Company, (A) the adjustments arising from such Pricing Adjustment Warrant Exercise Price shall be disregarded in applying sections 4.02 and 6.02 to the extent necessary in order to put Sears Holdings (and its Subsidiaries) increased or SHO (and its Subsidiaries)decreased, as the case may be, in to any amount which shall bear the same relation to the Exercise Price in effect immediately prior to such action as the total number of shares outstanding immediately prior to such action shall bear to the total number of shares outstanding immediately after tax position such action and (B) the Warrants automatically shall be adjusted so that they shall thereafter evidence the right to purchase the kind and number of Warrant Shares or other securities which the holder of the Warrants would have owned and would have been entitled to receive after such action if the Warrants had been exercised immediately prior to such action or any record date with respect to such State Combined or Consolidated Tax Return as such person thereto. By way of example, and not in limitation, if the Company declares a stock split on a two for one basis, the number of Warrant Shares that may then be purchased, under each of the SERIES F-1 Warrant and SERIES F-2 warrant respectively, would have occupied if there had been no such additional taxable income (as determined by Sears Holdings in good faith) be two Warrant Shares at a price per share of $0.275 and (ii) after the application of clause (i) (but without duplication) or if clause (i) does not apply$0.375, as the case may be, (A) SHO shall indemnify Sears Holdings for any additional Tax that Sears Holdings (or any of its Subsidiaries) would otherwise bear as a result of such additional taxable income and respectively. (b) Sears Holdings If during term of this Warrant the Company shall indemnify SHO offer, sell, grant any option to purchase or offer, sell or grant any right to re-price its securities, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition), Additional Shares of Common Stock (as hereinafter defined) without consideration or for any additional Tax that a consideration per share less than the SHO Companies would otherwise bear as a result Exercise Price (subject to proportional adjustment in the event of such additional taxable income. The amount combinations, subdivisions, recapitalizations and the like), then forthwith upon the occurrence of any payment under this section 7.03 such event, then the Exercise Price shall be increased by any Taxes incurred by the person receiving reduced to match such payment as a result of the receipt of such payment. Any payment required under this section 7.03 shall be made within 15 days after the indemnified party makes a payment to any Taxing Authority as a result of a Pricing Adjustmentlower conversion price, warrant strike price or stock price. In the event that the Company issues a security with a conversion price or strike price that varies with market conditions, then the price governing this “full-ratchet anti-dilute” provision will include in its choice-set from which to choose the lowest price for ratcheting the lowest price available to any investor in a security with such a variable conversion or strike price as indicated by market conditions or, at Holder’s option, the right to alter his conversion feature, strike price or stock price to be governed by that same variable price formula. (c) Unless the Holder delivers to the Company irrevocable written notice prior to the date hereof or sixty-one days prior to the effective date of such notice that this Section 6(c) shall not apply to such Purchaser, the Investor may not acquire a number of shares of Common Stock pursuant to this Section 6 to the extent that, following upon such exercise, the number of shares of Common Stock then beneficially owned by such holder and its affiliates and any other persons or entities whose beneficial ownership of Common Stock would be aggregated with the Investor’s for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (including shares held by any “group” of which the holder is a Pricing Adjustment with respect member, but excluding shares beneficially owned by virtue of the ownership of securities or rights to a Tax Returnacquire securities that have limitations on the right to convert, Sears Holdings determines that it is appropriate exercise or purchase similar to apply that Pricing Adjustment to another Tax Return or the limitation set forth herein) exceeds 9.99% of the total number of shares of Common Stock of the Company then issued and outstanding. For purposes hereof, “group” has the meaning set forth in filing other Tax Returns going forwardSection 13(d) of the Securities Exchange Act of 1934, this section 7.03 (as amended, and sections 4.02 applicable regulations of the Securities and 6.02) Exchange Commission, and the percentage held by the holder shall be applied determined in a manner consistent with the provisions of Section 13(d) of the Securities Exchange Act of 1934, as if a Pricing Adjustment had been made with respect to such other Tax Returnsamended.

Certain Adjustments. Notwithstanding sections 4.02 and 6.02If the Company shall subdivide or split (whether by distribution or otherwise) the outstanding Common Units, in OUS Units or Profits Interest Units into a greater number of Units or combine or reclassify the event there is outstanding Common Units, OUS Units or Profits Interest Units into a Pricing Adjustment with respect to any Tax Return that results in additional taxable income to Sears Holdings, SHO or any smaller number of their respective Subsidiaries (or any tax group that includes any such person)Units, (ia) if such adjustment is with respect to a State Combined the same subdivision, split, combination or Consolidated Tax Return, the adjustments arising from such Pricing Adjustment shall be disregarded in applying sections 4.02 and 6.02 to the extent necessary in order to put Sears Holdings (and its Subsidiaries) or SHO (and its Subsidiaries)reclassification, as the case may be, in shall be carried out on the same after tax position with respect to such State Combined or Consolidated Tax Return as such person would have occupied if there had been no such additional taxable income (as determined by Sears Holdings in good faith) and (ii) after the application of clause (i) (but without duplication) or if clause (i) does not apply, as the case may be, (A) SHO shall indemnify Sears Holdings for any additional Tax that Sears Holdings (or any of its Subsidiaries) would otherwise bear as a result of such additional taxable income outstanding Preferred Units and (b) Sears Holdings the Liquidation Preference shall indemnify SHO for be appropriately adjusted. By way of example, if the Common Units, OUS Units or Profits Interest Units are split 10 to 1, then the Preferred Units will also be split 10 to 1 and the Liquidation Preference then in effect will be multiplied by 1/10. Upon the occurrence of any additional Tax that such adjustment to the SHO Companies would otherwise bear as Preferred Units, the Company shall (i) compute such adjustment in accordance with the terms hereof and furnish to the holders of the Preferred Units a result certificate setting forth such adjustment and showing in reasonable detail the facts upon which such adjustment is based, (ii) appropriately adjust Schedule I hereto and (iii) issue to each holder of Preferred Units, upon the surrender of the Certificate or Certificates representing such holder’s Preferred Units at the time of such additional taxable incomeadjustment, a new Certificate or Certificates appropriately reflecting such adjustment. The amount of any payment under this section 7.03 shall be increased by any Taxes incurred by the person receiving such payment as a result of the receipt of such payment. Any payment required under this section 7.03 Adjustments shall be made within 15 days after the indemnified party makes a payment to successively whenever any Taxing Authority as a result of a Pricing Adjustment. In the event that, following a Pricing Adjustment with respect to a Tax Return, Sears Holdings determines that it is appropriate to apply that Pricing Adjustment to another Tax Return or in filing other Tax Returns going forward, this section 7.03 (and sections 4.02 and 6.02) shall be applied as if a Pricing Adjustment had been made with respect giving rise to such other Tax Returnsan adjustment under this Section 5 of this Annex C shall occur.

Certain Adjustments. Notwithstanding sections 4.02 (a) In case the Company shall hereafter (i) pay a dividend or make a distribution on its Common Stock in shares of Common Stock, (ii) subdivide its outstanding shares of Common Stock into a greater number of shares, (iii) combine or reverse-split its outstanding shares of Common Stock into a smaller number of shares or (iv) issue by reclassification of its Common Stock any shares of capital stock of the Company, then the Per Share Warrant Price and 6.02the number of Warrant Shares shall forthwith be proportionately decreased and increased, respectively, in the event there case of a subdivision, distribution or stock dividend, or proportionately increased and decreased, respectively, in the case of a combination or reverse stock split. The Aggregate Warrant Price payable for the then total number of Warrant Shares available for exercise under this Warrant shall remain the same. Adjustments made pursuant to this Section 3(a) shall become effective on the record date in the case of a dividend or distribution, and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification. If such dividend, distribution, subdivision or combination is not consummated in full, the Per Share Warrant Price and Warrant Shares shall be readjusted accordingly. (b) In case of any capital reorganization or reclassification, or any consolidation or merger to which the Company is a Pricing Adjustment party other than a merger or consolidation in which the Company is the continuing corporation, or in case of any sale or conveyance to another entity of all or substantially all of the assets of the Company, or in the case of any statutory exchange of securities with another corporation (including any exchange effected in connection with a merger of a third corporation into the Company but excluding any exchange of securities or merger with another corporation in which the Company is a continuing corporation and that does not result in any reclassification of or similar change in the Common Stock), the Holder of this Warrant shall have the right thereafter to receive on the exercise of this Warrant the kind and amount of securities, cash or other property which the Holder would have owned or have been entitled to receive immediately after such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance had this Warrant been exercised immediately prior to the effective date of such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance and in any such case, if necessary, appropriate adjustment shall be made in the application of the provisions set forth in this Section 3 with respect to the rights and interests thereafter of the Holder of this Warrant to the end that the provisions set forth in this Section 3 shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any Tax Return that results in additional taxable income shares of stock or other securities or property thereafter deliverable on the exercise of this Warrant. The above provisions of this Section 3(b) shall similarly apply to Sears Holdingssuccessive reorganizations, SHO reclassifications, consolidations, mergers, statutory exchanges, sales or conveyances. The Company shall require the issuer of any shares of their respective Subsidiaries (stock or any tax group that includes other securities or property thereafter deliverable on the exercise of this Warrant to be responsible for all of the agreements and obligations of the Company hereunder. Notice of any such person)reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance and of said provisions so proposed to be made, shall be mailed to the Holders of the Warrants not less than twenty (i20) if days prior to such event. A sale of all or substantially all of the assets of the Company for a consideration consisting primarily of securities shall be deemed a consolidation or merger for the foregoing purposes. (c) No adjustment in the Per Share Warrant Price shall be required unless such adjustment is with respect would require an increase or decrease of at least $0.01 per share of Common Stock; provided, however, that any adjustments which by reason of this Section 3(c) are not required to a State Combined or Consolidated Tax Return, the adjustments arising from such Pricing Adjustment be made shall be disregarded carried forward and taken into account in applying sections 4.02 any subsequent adjustment; provided, further, however, that adjustments shall be required and 6.02 to made in accordance with the extent necessary provisions of this Section 3 (other than this subsection 3(i)) not later than such time as may be required in order to put Sears Holdings (and its Subsidiaries) preserve the tax-free nature of a distribution, if any, to the Holder of this Warrant or SHO (and its Subsidiaries)Common Stock issuable upon the exercise hereof. All calculations under this Section 3 shall be made to the nearest cent or to the nearest 1/100th of a share, as the case may be. Anything in this Section 3 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Per Share Warrant Price, in addition to those required by this Section 3, as it in its discretion shall deem to be advisable in order that any stock dividend, subdivision of shares or distribution of rights to purchase stock or securities convertible or exchangeable for stock hereafter made by the Company to its stockholders shall not be taxable. (d) Whenever the Per Share Warrant Price or the number of Warrant Shares is adjusted as provided in this Section 3 and upon any modification of the rights of a Holder of Warrants in accordance with this Section 3, the Company shall promptly prepare a brief statement of the facts requiring such adjustment or modification and the manner of computing the same and cause copies of such certificate to be mailed to the Holders of the Warrants. The Company may, but shall not be obligated to unless requested by a Majority of the Holders, obtain, at its expense, a certificate of a firm of independent public accountants of recognized standing selected by the Board of Directors (who may be the regular auditors of the Company) setting forth the Per Share Warrant Price and the number of Warrant Shares in effect after tax position such adjustment or the effect of such modification, a brief statement of the facts requiring such adjustment or modification and the manner of computing the same and cause copies of such certificate to be mailed to the Holders of the Warrants. (e) If the Board of Directors of the Company shall declare any dividend or other distribution with respect to the Common Stock other than a cash distribution out of earned surplus, the Company shall mail notice thereof to the Holders of the Warrants not less than ten (10) days prior to the record date fixed for determining stockholders entitled to participate in such State Combined dividend or Consolidated Tax Return as such person would have occupied if there had been no such additional taxable income other distribution. (as determined by Sears Holdings in good faithf) and (ii) after the application of clause (i) (but without duplication) or if clause (i) does not applyIf, as the case may be, (A) SHO shall indemnify Sears Holdings for any additional Tax that Sears Holdings (or any of its Subsidiaries) would otherwise bear as a result of such additional taxable income and (b) Sears Holdings shall indemnify SHO for any additional Tax that an adjustment made pursuant to this Section 3, the SHO Companies would otherwise bear as a result of such additional taxable income. The amount Holder of any payment under this section 7.03 Warrant thereafter surrendered for exercise shall become entitled to receive shares of two or more classes of capital stock or shares of Common Stock and other capital stock of the Company, the Board of Directors (whose determination shall be increased conclusive and shall be described in a written notice to the Holder of any Warrant promptly after such adjustment) shall determine, in good faith, the allocation of the adjusted Per Share Warrant Price between or among shares or such classes of capital stock or shares of Common Stock and other capital stock. (g) In case any event shall occur as to which the other provisions of this Section 3 are not strictly applicable but as to which the failure to make any adjustment would not fairly protect the purchase rights represented by any Taxes incurred this Warrant in accordance with the essential intent and principles of the adjustments set forth in this Section 3 then, in each such case, the Board of Directors of the Company shall in good faith determine the adjustment, if any, on a basis consistent with the essential intent and principles established herein, necessary to preserve the purchase rights represented by the person receiving Warrants. Upon such payment as determination, the Company will promptly mail a result copy thereof to the Holder of this Warrant and shall make the receipt of such payment. Any payment required under this section 7.03 shall be made within 15 days after the indemnified party makes a payment to any Taxing Authority as a result of a Pricing Adjustment. In the event that, following a Pricing Adjustment with respect to a Tax Return, Sears Holdings determines that it is appropriate to apply that Pricing Adjustment to another Tax Return or in filing other Tax Returns going forward, this section 7.03 (and sections 4.02 and 6.02) shall be applied as if a Pricing Adjustment had been made with respect to such other Tax Returnsadjustments described therein.

Certain Adjustments. Notwithstanding sections 4.02 and 6.02, in the event there is a Pricing Adjustment with respect to any Tax Return that results in additional taxable income to Sears Holdings, SHO or any of their respective Subsidiaries (or any tax group that includes any such person), (i) if In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (including any such adjustment reclassification in connection with a consolidation or merger in which the Company is with respect to a State Combined the continuing or Consolidated Tax Returnsurviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e), the adjustments arising from Purchase Price in effect at the time of the record date for such Pricing Adjustment shall be disregarded in applying sections 4.02 dividend or of the effective date of such subdivision, combination or reclassification, and 6.02 to the extent necessary in order to put Sears Holdings (number and its Subsidiaries) kind of shares of Preferred Stock or SHO (and its Subsidiaries)capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the same after tax position with respect to such State Combined aggregate number and kind of shares of Preferred Stock or Consolidated Tax Return as such person would have occupied if there had been no such additional taxable income (as determined by Sears Holdings in good faith) and (ii) after the application of clause (i) (but without duplication) or if clause (i) does not applycapital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, that holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii). (ii) In the event: (A) SHO (1) any Acquiring Person or any Associate or Affiliate of an Acquiring Person, at any time after the date of this Agreement, directly or indirectly, shall indemnify Sears Holdings merge into the Company or otherwise combine with the Company, and the Company shall be the continuing or surviving corporation of such merger or combination and the Common Stock of the Company shall remain outstanding and unchanged, or (2) subject to Section 23, any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any additional Tax such plan), alone or together with its Affiliates and Associates, shall, at any time after the Rights Dividend Declaration Date, become an Acquiring Person, unless the event causing that Sears Holdings Person to become an Acquiring Person is a Flip-over Event or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by the Board after receiving advice from one or more investment banking firms selected by the Board, to be (a) at a price which is fair to shareholders of the Company (taking into account all factors which the Board deems relevant including, without limitation, prices which could reasonably be achieved if the Company or its assets were sold on an orderly basis designed to realize maximum value) and (b) otherwise in the best interests of the Company and its shareholders other than such Acquiring Person, its Affiliates and its Associates, or (B) during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split) or recapitalization of the Company, or any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries, other than a transaction or transactions to which the provisions of Section 13(a) would apply (whether or not with or into or otherwise bear involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Company or any of its subsidiaries which is directly or indirectly beneficially owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, then, promptly following the occurrence of any such event described in (11(a)(ii)(A) or (B) hereof, proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e)) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Flip-over Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by 50% of the Current Market Price (determined pursuant to Section 11(d)) per share of Common Stock on the date of such first occurrence (such number of shares, the "Adjustment Shares"). (iii) In the event that the number of shares of Common Stock which are authorized by the Company's Articles of Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall (A) determine the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value"), and (B) with respect to each Right (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon the exercise of a Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock, such as the Preferred Stock, which the Board has deemed to have essentially the same value or economic rights as shares of Common Stock (such shares of preferred stock being referred to as "Common Stock Equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value (less the amount of any reduction in the Purchase Price), where such aggregate value has been determined by the Board based upon the advice of a nationally recognized investment banking firm selected by the Board; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Flip-in Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Flip-in Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. For purposes of the preceding sentence, the term "Spread" shall mean the excess of (i) the Current Value over (ii) the Purchase Price. If the Board determines in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Flip-in Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional taxable income shares (such period, as extended, is herein called the "Substitution Period"). To the extent that action is to be taken pursuant to the first and/or third sentences of this Section 11(a)(iii), the Company (1) shall provide, subject to Section 7(e), that such action shall apply uniformly to all outstanding Rights, and (b2) Sears Holdings shall indemnify SHO for any additional Tax that may suspend the SHO Companies would otherwise bear as a result of such additional taxable income. The amount of any payment under this section 7.03 shall be increased by any Taxes incurred by the person receiving such payment as a result exercisability of the receipt Rights until the expiration of the Substitution Period in order to seek such payment. Any payment required under this section 7.03 shall shareholder approval for such authorization of additional shares and/or to decide the appropriate form of distribution to be made within 15 days after pursuant to such first sentence and to determine the indemnified party makes a payment to any Taxing Authority as a result of a Pricing Adjustmentvalue thereof. In the event thatof any such suspension, following the Company shall issue a Pricing public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of each Adjustment Share shall be the Current Market Price per share of the Common Stock on the Flip-in Trigger Date and the per share or per unit value of any Common Stock Equivalent shall be deemed to equal the Current Market Price per share of the Common Stock on such date. (iv) If the rules of the national securities exchange, registered as such pursuant to Section 6 of the Exchange Act, or of the national securities association, registered as such pursuant to Section 15A of the Exchange Act, on which the Common Stock is principally traded or quoted would prohibit such exchange or association from listing or continuing to list, or from authorizing for or continuing quotation and/or transaction reporting through an inter-dealer quotation system, the Common Stock or other equity securities of the Company if the Rights were to be exercised for shares of Common Stock in accordance with subparagraph (ii) of this Section 11(a) because such issuance would nullify, restrict or disparately reduce the per share voting rights of holders of Common Stock, the Company shall: (A) determine the Spread, and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a Tax Returnreduction in the Purchase Price, Sears Holdings (3) equity securities of the Company, including, without limitation, Common Stock Equivalents, other than securities which would have the effect of nullifying, restricting or disparately reducing the per share voting rights of holders of Common Stock, (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon the advice of a recognized investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) calendar days following the Flip-in Trigger Date, then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, cash having an aggregate value equal to the Spread. To the extent that the Company determines that it is appropriate some action need be taken pursuant to apply that Pricing Adjustment to another Tax Return or in filing other Tax Returns going forwardthe first sentence of this Section 11(a)(iv), this section 7.03 the Company (and sections 4.02 and 6.02x) shall provide, subject to Section 7(e), that such action shall apply uniformly to all outstanding rights and (y) may suspend the exercisability of the Rights, but not longer than ninety (90) calendar days after the Flip-in Trigger Date, in order to decide the appropriate form of distribution to be applied as if a Pricing Adjustment had been made with respect pursuant to such other Tax Returnsfirst sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iv), the value of the Common Stock shall be the Current Market Price per share of the Common Stock on the Flip-in Trigger Date and the value of any Common Stock Equivalent shall be deemed to have the same value as the Common Stock on such date.

Certain Adjustments. Notwithstanding sections 4.02 and 6.02, in the event there is a Pricing Adjustment with respect to any Tax Return that results in additional taxable income to Sears Holdings, SHO or any of their respective Subsidiaries (or any tax group that includes any such person), (i) if In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide or split the outstanding Preferred Stock, (C) combine the shares of the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (including any such adjustment reclassification in connection with a consolidation or merger in which the Company is with respect to a State Combined the continuing or Consolidated Tax Returnsurviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e), the adjustments arising from Purchase Price in effect at the time of the record date for such Pricing Adjustment shall be disregarded in applying sections 4.02 dividend or of the effective date of such subdivision, split, combination or reclassification, and 6.02 to the extent necessary in order to put Sears Holdings (number and its Subsidiaries) kind of shares of Preferred Stock or SHO (and its Subsidiaries)capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the aggregate adjusted Purchase Price then in effect necessary to exercise a Right in full, the same after tax position with respect to such State Combined aggregate number and kind of shares of Preferred Stock or Consolidated Tax Return as such person would have occupied if there had been no such additional taxable income (as determined by Sears Holdings in good faith) and (ii) after the application of clause (i) (but without duplication) or if clause (i) does not applycapital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, split, combination or reclassification; provided, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii). (ii) Subject to Section 23 and Section 24, in the event that any Person alone or together with its Affiliates and Associates, shall, at any time after the Rights Dividend Declaration Date, become an Acquiring Person (a “Flip-In Event”) then, promptly following the occurrence of any such Flip-in Event, proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e)) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of the number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Flip-in Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the “Purchase Price” for each Right and for all purposes of this Agreement) by 50% of the “Current Market Price” per share of Common Stock on the date of such first occurrence (such number of shares being referred to as the “Adjustment Shares”). (iii) In the event that the number of shares of Common Stock that are authorized by the Company’s Certificate of Incorporation, as amended, but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) SHO determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the “Current Value”) over (2) the Purchase Price (such excess, the “Spread”), and (B) with respect to each Right, subject to Section 7(e), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board has deemed to have substantially the same dividend, voting and liquidation rights as shares of Common Stock and are deemed in good faith by the Board of Directors to have substantially the same value as the shares of Common Stock (such shares of preferred stock being referred to as “Common Stock Equivalents”)), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value (less the amount of any reduction in the Purchase Price), where such aggregate value has been determined by the Board based upon the advice of a nationally recognized investment banking firm selected by the Board; provided, however, that if the Company shall indemnify Sears Holdings not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) calendar days following the first occurrence of a Flip-in Event (the date of such Flip-in Event being referred to herein as the “Flip-in Trigger Date”), then the Company shall be obligated to deliver, upon the surrender for any exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional Tax shares of Common Stock or other equity securities could be authorized for issuance upon exercise in full of the Rights, the thirty (30) calendar day period set forth above may be extended to the extent necessary, but not more than ninety (90) calendar days after the Flip-in Trigger Date, in order that Sears Holdings (or any of its Subsidiaries) would otherwise bear as a result the Company may seek stockholder approval for the authorization of such additional taxable income shares (such period, the “Substitution Period”). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e), that such action shall apply uniformly to all outstanding Rights, and (by) Sears Holdings shall indemnify SHO for any additional Tax that may suspend the SHO Companies would otherwise bear as a result of such additional taxable income. The amount of any payment under this section 7.03 shall be increased by any Taxes incurred by the person receiving such payment as a result exercisability of the receipt Rights until the expiration of such payment. Any payment required under this section 7.03 shall the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made within 15 days after pursuant to such first sentence and to determine the indemnified party makes a payment to any Taxing Authority as a result of a Pricing Adjustmentvalue thereof. In the event thatof any such suspension, following the Company shall issue a Pricing Adjustment public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the shares of Common Stock shall be the Current Market Price per share of the Common Stock on the Flip-in Trigger Date and the value of any Common Stock Equivalent shall be deemed to have the same value as the Common Stock on such date. (iv) If the rules of the national securities exchange, registered as such pursuant to Section 6 of the Exchange Act, or of the national securities association, registered as such pursuant to Section 15A of the Exchange Act, on which the Common Stock is principally traded or quoted would prohibit such exchange or association from listing or continuing to list, or from authorizing for or continuing quotation and/or transaction reporting through an inter-dealer quotation system, the Common Stock or other equity securities of the Company if the Rights were to be exercised for shares of Common Stock in accordance with subparagraph (ii) of this Section 11(a) because such issuance would nullify, restrict or disparately reduce the per share voting rights of holders of Common Stock, the Company shall: (A) determine the Spread, and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a Tax Returnreduction in the Purchase Price, Sears Holdings (3) equity securities of the Company, including, without limitation, Common Stock Equivalents, other than securities which would have the effect of nullifying, restricting or disparately reducing the per share voting rights of holders of Common Stock, (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon the advice of a recognized investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) calendar days following the Flip-in Trigger Date, then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, cash having an aggregate value equal to the Spread. To the extent that the Company determines that it is appropriate some action need be taken pursuant to apply that Pricing Adjustment to another Tax Return or in filing other Tax Returns going forwardthe first sentence of this Section 11(a)(iv), this section 7.03 the Company (and sections 4.02 and 6.02x) shall provide, subject to Section 7(e), that such action shall apply uniformly to all outstanding Rights and (y) may suspend the exercisability of the Rights, but not longer than ninety (90) calendar days after the Flip-in Trigger Date, in order to decide the appropriate form of distribution to be applied as if a Pricing Adjustment had been made with respect pursuant to such other Tax Returnsfirst sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iv), the value of the shares of Common Stock shall be the Current Market Price per share of the Common Stock on the Flip-in Trigger Date and the value of any Common Stock Equivalent shall be deemed to have the same value as the Common Stock on such date.

Certain Adjustments. Notwithstanding sections 4.02 and 6.02, in 9.1 In the event there is that the Shares are at any time changed or affected as a Pricing Adjustment result of the declaration of a stock dividend thereon or their subdivision or consolidation, the number of Shares reserved for the Option shall be adjusted accordingly by the Board to such extent as they deem proper in their discretion. In such event, the number of, and the price payable for, the Shares that are then subject to the Option may also be adjusted by the Board to such extent, if any, as they deem proper in their discretion. 9.2 If at any time after the date of this Option Agreement and prior to the expiration of the term of the Option, the Shares shall be reclassified, reorganized or otherwise changed, otherwise than as specified in Section 9 of this Option Agreement, or the Corporation shall consolidate, merge or amalgamate with respect to any Tax Return that results in additional taxable income to Sears Holdingsor into another corporation (the corporation resulting or continuing from such consolidation, SHO merger or any of their respective Subsidiaries (or any tax group that includes any such personamalgamation being herein called the “Successor Corporation”), (i) if the Option Holder shall be entitled to receive upon the subsequent exercise of the Option in accordance with the terms of this Option Agreement and shall accept in lieu of the number of Shares to which he was theretofore entitled upon such adjustment is with respect to a State Combined or Consolidated Tax Returnexercise but for the same aggregate consideration payable therefor, the adjustments arising aggregate number of shares of the appropriate class and/or other securities of the Corporation or the Successor Corporation (as the case may be) and/or other consideration from the Corporation or the Successor Corporation (as the case may be) that the Option Holder would have been entitled to receive as a result of such Pricing Adjustment shall be disregarded in applying sections 4.02 and 6.02 reclassification, reorganization or other change or, subject to the extent necessary in order to put Sears Holdings (and its Subsidiaries) provisions of subsection 9.1 of this Option Agreement, as a result of such consolidation, merger or SHO (and its Subsidiaries)amalgamation, if on the record date of such reclassification, reorganization or other change or the effective date of such consolidation, merger or amalgamation, as the case may be, in the same after tax position with respect to such State Combined or Consolidated Tax Return as such person would have occupied if there he had been no such additional taxable income (as determined by Sears Holdings in good faith) and (ii) after the application of clause (i) (but without duplication) or if clause (i) does not apply, as the case may be, (A) SHO shall indemnify Sears Holdings for any additional Tax that Sears Holdings (or any of its Subsidiaries) would otherwise bear as a result of such additional taxable income and (b) Sears Holdings shall indemnify SHO for any additional Tax that the SHO Companies would otherwise bear as a result of such additional taxable income. The amount of any payment under this section 7.03 shall be increased by any Taxes incurred by the person receiving such payment as a result registered holder of the receipt number of Shares to which he was theretofore entitled upon such payment. Any payment required under this section 7.03 shall be made within 15 days after the indemnified party makes a payment to any Taxing Authority as a result of a Pricing Adjustment. In the event that, following a Pricing Adjustment with respect to a Tax Return, Sears Holdings determines that it is appropriate to apply that Pricing Adjustment to another Tax Return or in filing other Tax Returns going forward, this section 7.03 (and sections 4.02 and 6.02) shall be applied as if a Pricing Adjustment had been made with respect to such other Tax Returnsexercise.

Certain Adjustments. Notwithstanding sections 4.02 (a) In case the Company shall hereafter (i) pay a dividend or make a distribution on its Common Stock in shares of Common Stock, (ii) subdivide its outstanding shares of Common Stock into a greater number of shares, (iii) combine or reverse-split its outstanding shares of Common Stock into a smaller number of shares or (iv) issue by reclassification of its Common Stock any shares of capital stock of the Company, then the Per Share Warrant Price and 6.02the number of of Warrant Shares shall forthwith be proportionately decreased and increased, respectively, in the event there case of a subdivision, distribution or stock dividend, or proportionately increased and decreased, respectively, in the case of a combination or reverse stock split. The Aggregate Warrant Price payable for the then total number Warrant Shares available for exercise under this Warrant shall remain the same. Adjustments made pursuant to this subsection 3(a) shall become effective on the record date in the case of a dividend or distribution, and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification. If such dividend, distribution, subdivision or combination is not consummated in full, the Per Share Warrant Price and Warrant Shares shall be readjusted accordingly. (b) In case of any capital reorganization or reclassification, or any consolidation or merger to which the Company is a Pricing Adjustment party other than a merger or consolidation in which the Company is the continuing corporation, or in case of any sale or conveyance to another entity of all or substantially all of the assets of the Company, or in the case of any statutory exchange of securities with another corporation (including any exchange effected in connection with a merger of a third corporation into the Company but excluding any exchange of securities or merger with another corporation in which the Company is a continuing corporation and that does not result in any reclassification of or similar change in the Common Stock), the Holder of this Warrant shall have the right thereafter to receive on the exercise of this Warrant the kind and amount of securities, cash or other property which the Holder would have owned or have been entitled to receive immediately after such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance had this Warrant been exercised immediately prior to the effective date of such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance and in any such case, if necessary, appropriate adjustment shall be made in the application of the provisions set forth in this Section 3 with respect to the rights and interests thereafter of the Holder of this Warrant to the end that the provisions set forth in this Section 3 shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any Tax Return that results in additional taxable income shares of stock or other securities or property thereafter deliverable on the exercise of this Warrant. The above provisions of this subsection 3(b) shall similarly apply to Sears Holdingssuccessive reorganizations, SHO reclassifications, consolidations, mergers, statutory exchanges, sales or conveyances. The Company shall require the issuer of any shares of their respective Subsidiaries (stock or any tax group that includes other securities or property thereafter deliverable on the exercise of this Warrant to be responsible for all of the agreements and obligations of the Company hereunder. Notice of any such person)reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance and of said provisions so proposed to be made, shall be mailed to the Holder not less than twenty (i20) if days prior to such event. A sale of all or substantially all of the assets of the Company for a consideration consisting primarily of securities shall be deemed a consolidation or merger for the foregoing purposes. (c) No adjustment in the Per Share Warrant Price shall be required unless such adjustment is with respect would require an increase or decrease of at least $0.01 per share of Common Stock; provided, however, that any adjustments which by reason of this subsection 3(c) are not required to a State Combined or Consolidated Tax Return, the adjustments arising from such Pricing Adjustment be made shall be disregarded carried forward and taken into account in applying sections 4.02 any subsequent adjustment; provided, further, however, that adjustments shall be required and 6.02 to made in accordance with the extent necessary provisions of this Section 3 (other than this subsection 3(c)) not later than such time as may be required in order to put Sears Holdings (and its Subsidiaries) preserve the tax-free nature of a distribution, if any, to the Holder of this Warrant or SHO (and its Subsidiaries)Common Stock issuable upon the exercise hereof. All calculations under this Section 3 shall be made to the nearest cent or to the nearest 1/100th of a share, as the case may be. Anything in this Section 3 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Per Share Warrant Price, in addition to those required by this Section 3, as it in its discretion shall deem to be advisable in order that any stock dividend, subdivision of shares or distribution of rights to purchase stock or securities convertible or exchangeable for stock hereafter made by the Company to its stockholders shall not be taxable. (d) Whenever the Per Share Warrant Price or the number of Warrant Shares is adjusted as provided in this Section 3 and upon any modification of the rights of the Holder in accordance with this Section 3, the Company shall promptly prepare a brief statement of the facts requiring such adjustment or modification and the manner of computing the same and cause copies of such certificate to be mailed to the Holder. The Company may, but shall not be obligated to obtain, at its expense, a certificate of a firm of independent public accountants of recognized standing selected by the Board of Directors (who may be the regular auditors of the Company) setting forth the Per Share Warrant Price and the number of Warrant Shares in effect after tax position such adjustment or the effect of such modification, a brief statement of the facts requiring such adjustment or modification and the manner of computing the same and cause copies of such certificate to be mailed to the Holder. (e) If the Board of Directors of the Company shall declare any dividend or other distribution with respect to the Common Stock other than a cash distribution out of earned surplus, the Company shall mail notice thereof to the Holder not less than ten (10) days prior to the record date fixed for determining stockholders entitled to participate in such State Combined dividend or Consolidated Tax Return other distribution. (f) If, as a result of an adjustment made pursuant to this Section 3, the Holder of any Warrant thereafter surrendered for exercise shall become entitled to receive shares of two or more classes of capital stock or shares of Common Stock and other capital stock of the Company, the Board of Directors (whose determination shall be conclusive and shall be described in a written notice to the Holder promptly after such person would have occupied if there had been no such additional taxable income (as determined by Sears Holdings adjustment) shall determine, in good faith, the allocation of the adjusted Per Share Warrant Price between or among shares or such classes of capital stock or shares of Common Stock and other capital stock. (g) Upon the expiration of any rights, options, warrants or conversion privileges with respect to the issuance of which an adjustment to the Per Share Warrant Price had been made, if such option, right warrant or conversion shall not have been exercised, the number of Warrant Shares purchasable upon exercise of this Warrant, to the extent this Warrant has not then been exercised, shall, upon such expiration, be readjusted and shall thereafter be such as it would have been had it been originally adjusted (ii) after or had the application of clause (i) (but without duplication) or if clause (i) does original adjustment not applybeen required, as the case may be, ) on the basis of (A) SHO shall indemnify Sears Holdings for any additional Tax that Sears Holdings (the number of shares of Common Stock, if any, actually issued or any of its Subsidiaries) would otherwise bear as a result sold upon the exercise of such additional taxable income rights, options, warrants or conversion privileges, and (bB) Sears Holdings the amount of consideration actually received by the Company upon such exercise plus the amount of consideration, if any, actually received by the Company for the issuance, sale or grant of all such rights, options, warrants or conversion privileges whether or not exercised; provided, however, that no such readjustment shall indemnify SHO for any additional Tax that have the SHO Companies would otherwise bear as a result effect of decreasing the number of Warrant Shares purchasable upon exercise of this Warrant by an amount in excess of the amount of the adjustment initially made in respect of the issuance, sale or grant of such additional taxable income. The amount rights, options, warrants or conversion privileges. (h) In case any event shall occur as to which the other provisions of this Section 3 are not strictly applicable but as to which the failure to make any payment under adjustment would not fairly protect the purchase rights represented by this section 7.03 shall be increased by any Taxes incurred by Warrant in accordance with the person receiving such payment as a result essential intent and principles of the receipt adjustments set forth in this Section 3 then, in each such case, the Board of Directors of the Company shall in good faith determine the adjustment, if any, on a basis consistent with the essential intent and principles established herein, necessary to preserve the purchase rights represented by this Warrant. Upon such payment. Any payment required under this section 7.03 determination, the Company will promptly mail a copy thereof to the Holder and shall be made within 15 days after make the indemnified party makes a payment to any Taxing Authority as a result of a Pricing Adjustment. In the event that, following a Pricing Adjustment with respect to a Tax Return, Sears Holdings determines that it is appropriate to apply that Pricing Adjustment to another Tax Return or in filing other Tax Returns going forward, this section 7.03 (and sections 4.02 and 6.02) shall be applied as if a Pricing Adjustment had been made with respect to such other Tax Returnsadjustments described therein.

Certain Adjustments. Notwithstanding sections 4.02 and 6.02, in (a) In case the event there is a Pricing Adjustment with respect to any Tax Return that results in additional taxable income to Sears Holdings, SHO or any of their respective Subsidiaries (or any tax group that includes any such person), Company shall (i) if such adjustment is with respect pay a stock dividend (in excess of 5% of the issued and outstanding Common Stock) or make a distribution to holders of Common Stock in shares of its Common Stock, (ii) subdivide its outstanding shares of Common Stock, (iii) split its outstanding shares of Common Stock into a State Combined larger number of shares (iv) combine its outstanding shares of Common Stock into a smaller number of shares, or Consolidated Tax Return(v) issue by reclassification of its shares of Common Stock any shares of capital stock of the Company, (A) the adjustments arising from such Pricing Adjustment Warrant Exercise Price shall be disregarded in applying sections 4.02 and 6.02 to the extent necessary in order to put Sears Holdings (and its Subsidiaries) increased or SHO (and its Subsidiaries)decreased, as the case may be, in to any amount which shall bear the same relation to the Exercise Price in effect immediately prior to such action as the total number of shares outstanding immediately prior to such action shall bear to the total number of shares outstanding immediately after tax position such action and (B) the Warrants automatically shall be adjusted so that they shall thereafter evidence the right to purchase the kind and number of Warrant Shares or other securities which the holder of the Warrants would have owned and would have been entitled to receive after such action if the Warrants had been exercised immediately prior to such action or any record date with respect to such State Combined or Consolidated Tax Return as such person thereto. By way of example, and not in limitation, if the Company declares a stock split on a two for one basis, the number of Warrant Shares that may then be purchased, under each of the SERIES F-1 Warrant and SERIES F-2 warrant respectively, would have occupied if there had been no such additional taxable income (as determined by Sears Holdings in good faith) be two Warrant Shares at a price per share of $0.275 and (ii) after the application of clause (i) (but without duplication) or if clause (i) does not apply$0.375, as the case may be, (A) SHO shall indemnify Sears Holdings for any additional Tax that Sears Holdings (or any of its Subsidiaries) would otherwise bear as a result of such additional taxable income and respectively. (b) Sears Holdings If during term of this Warrant the Company shall indemnify SHO offer, sell, grant any option to purchase or offer, sell or grant any right to re-price its securities, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition), Additional Shares of Common Stock (as hereinafter defined) without consideration or for any additional Tax that a consideration per share less than the SHO Companies would otherwise bear as a result Exercise Price (subject to proportional adjustment in the event of such additional taxable income. The amount combinations, subdivisions, recapitalizations and the like), then forthwith upon the occurrence of any payment under this section 7.03 such event, then the Exercise Price shall be increased by any Taxes incurred by the person receiving reduced to match such payment as a result of the receipt of such payment. Any payment required under this section 7.03 shall be made within 15 days after the indemnified party makes a payment to any Taxing Authority as a result of a Pricing Adjustmentlower conversion price, warrant strike price or stock price. In the event that the Company issues a security with a conversion price or strike price that varies with market conditions, then the price governing this “full-ratchet anti-dilute” provision will include in its choice-set from which to choose the lowest price for ratcheting the lowest price available to any investor in a security with such a variable conversion or strike price as indicated by market conditions or, at Holder’s option, the right to alter his conversion feature, strike price or stock price to be governed by that same variable price formula. (c) Unless the Holder delivers to the Company irrevocable written notice prior to the date hereof or sixty-one days prior to the effective date of such notice that this Section 6(c) shall not apply to such Purchaser, the Investor may not acquire a number of shares of Common Stock pursuant to this Section 6 to the extent that, following upon such exercise, the number of shares of Common Stock then beneficially owned by such holder and its affiliates and any other persons or entities whose beneficial ownership of Common Stock would be aggregated with the Investor’s for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (including shares held by any “group” of which the holder is a Pricing Adjustment with respect member, but excluding shares beneficially owned by virtue of the ownership of securities or rights to a Tax Returnacquire securities that have limitations on the right to convert, Sears Holdings determines that it is appropriate exercise or purchase similar to apply that Pricing Adjustment to another Tax Return or the limitation set forth herein) exceeds 9.99% of the total number of shares of Common Stock of the Company then issued and outstanding. For purposes hereof, “group” has the meaning set forth in filing other Tax Returns going forwardSection 13(d) of the Securities Exchange Act of 1934, this section 7.03 (as amended, and sections 4.02 applicable regulations of the Securities and 6.02) Exchange Commission, and the percentage held by the holder shall be applied determined in a manner consistent with the provisions of Section 13(d) of the Securities Exchange Act of 1934, as if a Pricing Adjustment had been made with respect to such other Tax Returnsamended. 7.