13G Filing: Fairholme (FAIRX) and Sears Canada Inc. (SRSCQ)

16,201,677 Common
Shares of Sears Canada Inc. (the “Common Shares”) are owned, in the aggregate, by Bruce R. Berkowitz (“Mr. Berkowitz”)
and various investment vehicles managed by Fairholme Capital Management, L.L.C. (“FCM”) of which 1,469,243 are owned
by The Fairholme Allocation Fund and 10,075,672 are owned by The Fairholme Fund, each a series of Fairholme Funds, Inc. Because
Mr. Berkowitz, in his capacity as the controlling person of the sole member of FCM or as President of Fairholme Funds, Inc., has
voting or dispositive power over all shares beneficially owned by FCM, he is deemed to have beneficial ownership of all such shares
so reported herein.

While the advisory relationship causes attribution
to Mr. Berkowitz, Fairholme Funds, Inc. or FCM of certain indicia of beneficial ownership for the limited purpose of this Schedule
13G, Mr. Berkowitz, Fairholme Funds, Inc. and FCM hereby disclaim ownership of these Common Shares for purposes of interpretations
under the Internal Revenue Code of 1986, as amended, or for any other purpose, except to the extent of their pecuniary interest.

Mr. Berkowitz additionally beneficially owns
342,960 Common Shares in his individual capacity.