MARY MAGNER and PATRICK MAGNER, on behalf of themselves and all others similarly situated,

Plaintiffs,

v.

SEARS, ROEBUCK & CO., and DOES 1 through 50, inclusive,

Defendants.

Case No. GIC 735554

NOTICE OF PENDENCY OF CLASS ACTION

THIS NOTICE MAY AFFECT YOUR RIGHTS - PLEASE READ CAREFULLY

TO: ALL PERSONS RESIDING IN CALIFORNIA WHO LAWFULLY ACQUIRED, FOR PERSONAL, FAMILY OR HOUSEHOLD USE, A HORIZONTAL FURNACE SOLD BY SEARS, ROEBUCK AND CO. ("SEARS") MANUFACTURED BY CONSOLIDATED INDUSTRIES, AND/OR A RELATED WARRANTY FROM SEARS FOR SUCH FURNACE.

This notice is directed to you because your rights may be affected by the above-captioned action pending in the San Diego Superior Court (the "Court"). The purpose of this notice is to inform you of the existence of this class action and its potential effect on your rights.

The plaintiffs in this action allege that SEARS sold horizontal furnaces that were manufactured by Consolidated Industries, including related warranties. These furnaces are alleged to have caused fires, to be prone to deadly carbon monoxide leaks and to have caused injury throughout California and the United States. Plaintiffs further allege that despite knowledge of these dangerous defects and conditions and its market position as one of the nation’s largest home appliance dealers and service contractors, SEARS has failed and refused to give notice to its customers of these dangerous conditions and has dishonored its warranties. Plaintiffs further allege that SEARS engaged in false advertising, unfair competition and violations of the Consumer Legal Remedies Act in connection with SEARS’ deceptive description and /or false and misleading representations and advertisements, and course of conduct arising out of the sale of these furnaces to the public. Plaintiffs allege SEARS sold dangerous, defective and unmerchantable furnaces, and that as a result of SEARS’ conduct, consumers are endangered by SEARS’ sale of these furnaces and were deceived about the safety and quality of the heating system they purchased, the quality of service they will receive, and the level of coverage afforded by purchased warranties. By this lawsuit, plaintiffs seek, inter alia, to require SEARS give consumers proper notice of these dangerous and defective conditions; to require SEARS to cease and desist from past, present and future sale of the dangerous and defective furnaces; to require SEARS to cease and desist from past, present and future deceptive advertising; to require SEARS to compensate members of the Class for SEARS’ failure to repair or replace the furnaces; and to make an example of SEARS for its disregard for public safety and the rights of the Plaintiff Class.

SEARS has denied that it engaged in any such, false, deceptive or misleading advertising. The Court has not yet ruled on the merits of the plaintiffs’ allegations or on the denial and other defenses asserted by SEARS.

THE CLASS ACTION RULING

On August 18, 2000 the Court entered an order granting Plaintiffs’ Motion for Class

Certification for the purpose of litigating these claims. The certified class is defined as all persons residing in California who lawfully acquired, for personal, family or household use, a horizontal furnace, sold by SEARS, manufactured by Consolidated Industries, and/or a related warranty for such furnace. Specifically excluded from the Plaintiff Class are SEARS, its officers, directors and employees, and any entity in which SEARS has a controlling interest; the agents, affiliates, legal representative, heirs, attorneys or assignees of SEARS; and any federal, state or local government entity. The Court has certified Plaintiffs Mary Magner and Patrick Magner as Class Representatives. Plaintiffs’ counsel, listed below, are designated as counsel for the Class.

Because there are contested issues which have not yet been decided, establishment of the Class by the Court does not mean that any money will be obtained for Class Members. The ruling means that the ultimate outcome of this litigation - whether favorable to plaintiffs or to defendants - will apply in a like manner to the Class Members who do not timely elect to be excluded from the Class.

ELECTION BY CLASS MEMBERS

If you fit the above description of a Class Member you have a choice whether or not to remain a member of the Class. Either choice will have consequences which you should understand before making your decision.

If you want to remain a member of the Class you are not required to do anything at this time. By remaining a Class Member you are agreeing that any claims you may have against SEARS arising from the alleged unlawful conduct will be determined in this case and cannot be presented in any other action. As a member of the Class, you may be entitled to share in the benefits, if any, of any judgment favorable to the Class or any settlement entered into between the Class and SEARS. You will not be personally responsible for costs or attorney’s fees for the maintenance of this lawsuit. If the judgment is beneficial to the Class or if a Class-wide settlement is obtained, Class Counsel will petition the Court for an award of attorneys’ fees and for reimbursement of the costs.

If you want to be excluded from the Class you must state in writing your request to be excluded, signing your name and dating your correspondence. Send your request, no later than March 12, 2001 to THE MOGIN LAW FIRM, P.C., 701 C Street, Suite 200, San Diego, CA 92101. By electing to be excluded, the ultimate decision in this case will not be binding on you. You will not share in any recovery that might be obtained and you will not be bound by any decision in this lawsuit. If you request exclusion from the Class, you have the right, at your own expense and with your own attorneys, to proceed individually against SEARS.

RIGHTS AND OBLIGATION OF CLASS MEMBERS

If you remain a member of the Class the Class Representatives and Class Counsel will act as your representative and counsel for the presentation of the claims against SEARS. Your participation in any recovery which may be obtained from SEARS through any favorable judgment or settlement will depend upon the results of this lawsuit. If no recovery is obtained for the Class, you will also be bound by that result.

You may be entitled to further notice concerning this case. For this reason, as well as to participate in any recovery, you are requested to notify Class Counsel of any corrections or changes in your name or address.

ADDITIONAL INFORMATION REGARDING THE CLASS ACTION

All references in this Notice to pleadings and Court orders are only summaries. Complete copies of the pleadings, orders and other documents filed in this litigation may be examined and copied at any time during regular office hours at the office of the Clerk of the Court, 330 Broadway, San Diego, CA 92101 under case number GIC 735554. DO NOT CONTACT THE COURT OR THE CLERK’S OFFICE FOR INFORMATION ABOUT THE LITIGATION.

If you have any questions concerning any matter raised in this Notice or any corrections or changes of name and address you may write to Class Counsel at the addresses listed below. Any other inquiries may be directed, toll free, to (888) 557-2545.

Attorneys for Plaintiffs and the Class

Daniel J. Mogin, Esq. Terry Gross, Esq. John W. Dalton, Esq.

THE MOGIN LAW FIRM Gross & Belsky, LLP Law Offices of John W. Dalton

701 C Street, Suite 200 One Maritime Plaza, Suite 1040 1010 2nd Avenue, Suite 1350

San Diego, CA 92101 San Francisco, CA 94111 San Diego, California 92101-5307

(619) 687-6611 Telephone: (415) 544-0200 Telephone: (619) 702-2410

Bruce S. Rosen, Esq.

Law Offices of Bruce S. Rosen

110 W "C" Street, Suite 2202

San Diego, CA 92101-3946

Telephone: (619) 702-5754

Dated: December 22, 2000
The Honorable Vincent P. Di Figlia

Judge of the Superior Court