On April 7, 2019, representatives of Sears Hometown and Outlet Stores, Inc. communicated to representatives of Transform Holdco and ESL Investments, Inc. that the Special Committee of the Board formed to evaluate the Offer was unable to conclude that a transaction on the terms proposed in the Offer Letter would be in the best interest of the Company’s stockholders unaffiliated with ESL Investments, Inc. Subsequent to this communication, representatives of Transform Holdco and ESL Investments, Inc. and representatives of the Company engaged in additional discussions regarding the terms of a potential transaction.