Exhibit 10(c)

*** Certain portions of this exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions have been filed separately with the
Securities and Exchange Commission.

MASTER SERVICES AGREEMENT

between

Sears, Roebuck and Co.

and

Computer Sciences Corporation

DATED: June 1, 2004

 

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                              Page        
1.
               
BACKGROUND AND OBJECTIVES
        1.1   Information Technology Services     1   1.2   Goals and Objectives
    1          
2.
               
DEFINITIONS AND DOCUMENTS
        2.1   Definitions     3   2.2   Master Agreement and Associated Contract
Documents     3       (a)  
General
    3       (b)  
Exhibits
    3       (c)  
Statements of Work
    4       (d)  
Service Addenda
    4       (e)  
Appendices
    4       (f)  
Transaction Document
    4       (g)  
Interpretation and Precedence
    4       (h)  
Ordering Affiliates
    5   2.3   Appendices to this Master Agreement     5          
3.
               
TERM
        3.1   Term of Master Agreement, Exhibits, SOWs and Service Addenda     5
      (a)  
Master Agreement
    5       (b)  
Exhibits
    6       (c)  
Service Addenda and SOWs
    6   3.2   Extension     6          
4.
               
SERVICES
        4.1   Overview     6       (a)  
Services
    6       (b)  
Included Services
    8       (c)  
TI Exhibit
    8       (d)  
Off-Shore Services
    8  

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                              Page 4.2   Eligible Recipient Services     9      
(a)  
Eligible Recipients
    9       (b)  
Eligible Recipient Requests
    9   4.3   Acquisition and Divestiture Services     9       (a)  
Acquisition Support
    10       (b)  
Migration of Systems
    10       (c)  
On-Site Support
    10       (d)  
Divestitures
    10   4.4   Access to Specialized CSC Skills and Resources     10   4.5  
Additional Services     10       (a)  
General
    10       (b)  
New Services
    11       (c)  
Efforts to Reduce Costs and Charges
    13       (d)  
Charges for Contract Changes
    14       (e)  
Additional Work or Reprioritization
    14          
5.
               
GOVERNANCE
        5.1   Operational Procedures Manual     14       (a)  
Delivery and Contents
    14       (b)  
Revision and Maintenance
    15       (c)  
Compliance
    15       (d)  
Modification and Updating
    16   5.2   Change Control     16       (a)  
Compliance with Change Control Procedures
    16       (b)  
System Change Costs
    16       (c)  
Sears Approval — Cost, Adverse Impact
    17       (d)  
Temporary Emergency Changes
    17       (e)  
Implementation of System Changes
    17       (f)  
Planning and Tracking
    17       (g)  
Comparisons
    17  

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                              Page 5.3   Reports     18       (a)  
Reports
    18       (b)  
Back-Up Documentation
    18   5.4   Meetings     18       (a)  
Meetings
    18       (b)  
Agenda and Minutes
    18       (c)  
Eligible Recipient Meetings
    19       (d)  
Telephone/Video Conferences
    19          
6.
               
CSC RESPONSIBILITIES
        6.1   Cooperation with Sears Personnel     19   6.2   Subcontractors    
20       (a)  
Use of Subcontractors
    20       (b)  
Exempt Subcontractors
    20       (c)  
Minority/Women-Owned Businesses
    20   6.3   Quality Assurance     21   6.4   Architecture, Standards and
Information Technology Planning     21       (a)  
CSC Support
    21       (b)  
CSC Familiarity with Sears Standards
    22       (c)  
Sears Authority and CSC Compliance
    22       (d)  
Compliance with Sears Standards
    22       (e)  
Financial, Forecasting and Budgeting Support
    23   6.5   Technology     23       (a)  
CSC Briefings
    23       (b)  
Currency
    23       (c)  
Evaluation and Testing
    24       (d)  
Approval by Sears
    24       (e)  
Updates by Sears
    25       (f)  
Unanticipated IT Change
    25       (g)  
CSC Developed Advances
    25  

 iii 

 

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                              Page     (h)  
Services Evolution and Modification
    25   6.6   Financial Filings and Notice of Change of Financial Condition    
25       (a)  
Financial Filings
    25       (b)  
Notice
    26          
7.
               
SEARS’ RESPONSIBILITIES
        7.1   General Sears Responsibilities     26       (a)  
Sears Relationship Manager
    26       (b)  
Cooperation
    26       (c)  
Sears Personnel
    26       (d)  
Contract Waivers
    26   7.2   Sears’ Responsibilities     26       (a)  
Nature of Responsibilities
    26       (b)  
Exception to CSC Performance
    27       (c)  
Notice of Problems
    27       (d)  
***
    27          
8.
               
SEARS AND CSC FACILITIES
        8.1   Service Facilities     27   8.2   Sears Facilities     28      
(a)  
General
    28       (b)  
Use of Sears Facilities
    29   8.3   Access to Sears’ Networks     29   8.4   CSC’s Responsibilities  
  30   8.5   Physical Security     30          
9.
               
REQUIRED CONSENTS
        9.1   Administrative Responsibility     31       (a)  
General
    31       (b)  
Cooperation
    31   9.2   Financial Responsibility     31  

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.

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                              Page 9.3   Contingent Arrangements     32      
(a)  
General
    32          
10.
            SOFTWARE,  
EQUIPMENT, CONTRACTS AND ASSETS ASSOCIATED WITH THE
PROVISION OF SERVICES
        10.1   CSC Designated Contracts     32       (a)  
Assignment and Assumption
    32       (b)  
CSC Designated Contracts Not Assignable by Commencement Date
    32       (c)  
Non-Assignable CSC Designated Contracts
    33       (d)  
Modification and Substitution
    33       (e)  
Unidentified Third Party Contracts
    34       (f)  
Managed Third Parties
    34       (g)  
Notice of Defaults
    34   10.2   Acquired Assets     34   10.3   Sears Provided Systems and CSC
Provided Systems     35       (a)  
Inventory
    35       (b)  
Non-Commercially Available Software
    35       (c)  
CSC Managed Systems
    36       (d)  
Financial Responsibility
    37       (e)  
Operational Responsibility
    37       (f)  
Benefits Pass-Through
    38       (g)  
UCITA and CISG
    38       (h)  
Other Matters
    38       (i)  
Evaluation of Third Party Software, Equipment
    39   10.4   Notice of Decommissioning     40   10.5   License to CSC
Provided Systems     40   10.6   License to Sears Provided Systems and CSC
Managed Systems     41       (a)  
License to Sears Owned Materials
    41       (b)  
License to Third Party Materials
    41  

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                              Page        
11.
               
SERVICE LEVELS
        11.1   Description of Service Levels     42       (a)  
Purpose of Service Levels
    42       (b)  
Service Level Performance Standards
    42   11.2   Service Level Credits     42   11.3   Problem Analysis     42  
11.4   Continuous Improvement Reviews     43   11.5   Measurement and Monitoring
    43   11.6   Satisfaction Surveys     44       (a)  
General
    44       (b)  
Sears Conducted Surveys
    44       (c)  
Survey Follow-up
    44   11.7   Excessive Service Level Failure     44          
12.
               
PROJECT PERSONNEL
        12.1   Key Personnel     45       (a)  
Approval of Key Personnel
    45       (b)  
Continuity of Key Personnel
    45       (c)  
Succession
    46       (d)  
Location of Key Personnel
    46       (e)  
Restrictions on Performing Services to Sears’ Competitors
    46   12.2   CSC Account Executive     46   12.3   Compensation of CSC
Account Executive and Key Personnel     46       (a)  
CSC Account Executive
    46       (b)  
Key Personnel
    47       (c)  
Evaluation Input
    47   12.4   Qualifications and Retention of CSC Personnel     47       (a)  
Sufficiency and Suitability of Personnel
    47       (b)  
Turnover Rate and Data
    47       (c)  
Drug Testing
    47  

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                              Page     (d)  
Background Checks
    47       (e)  
Fingerprinting
    49   12.5   Identification of CSC Personnel     49   12.6   Substance Abuse
    49   12.7   Union Agreements     49   12.8   CSC Responsibility     49      
   
13.
               
CHARGES
        13.1   General     50       (a)  
Payment of Charges
    50       (b)  
No Charge for Reperformance
    50   13.2   Pass-Through Expenses     50       (a)  
Procedures and Payment
    50       (b)  
No Markup; No Fees
    51       (c)  
Efforts to Minimize
    51       (d)  
Disbursements
    51       (e)  
Limited Agency
    51       (f)  
Reimbursement for Substitute Payment
    51   13.3   Reimbursable Expenses and Sears Expense Policy     51   13.4  
Taxes     52       (a)  
Income Taxes
    52       (b)  
Sales, Use and Property Taxes
    52       (c)  
Taxes on Goods or Services Used by CSC
    52       (d)  
Service Taxes
    52       (e)  
Notice of New Taxes and Charges
    53       (f)  
Efforts to Minimize Taxes
    53       (g)  
Tax Audits or Proceedings
    54   13.5   Tax Filings     54   13.6   Extraordinary Events     54      
(a)  
Definition
    54  

 vii 

 

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                              Page     (b)  
Consequence
    55   13.7   Proration     56   13.8   Refundable Items     56       (a)  
Prepaid Amounts
    56       (b)  
Refunds and Credits
    56   13.9   Repricing     56   13.10   Benchmarking     57       (a)  
Required Benchmark Reviews
    57       (b)  
Other Price Reviews
    57       (c)  
General
    58       (d)  
Results of Required Benchmarking
    58       (e)  
Non-Competitive Charges
    58   13.11   Most Favored Customer     58          
14.
               
INVOICING AND PAYMENT
        14.1   Invoicing     59       (a)  
Invoice
    59       (b)  
Form and Data
    59       (c)  
Credits
    60       (d)  
Time Limitation
    60   14.2   Payment     60       (a)  
Timing
    60       (b)  
Interest
    60   14.3   Set Off     60   14.4   Disputed Charges     60       (a)  
Description and Explanation
    61       (b)  
No Waiver
    61       (c)  
***
    61       (d)  
***
    61  

***  
CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.

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                              Page        
15.
               
SEARS DATA AND OTHER CONFIDENTIAL INFORMATION
        15.1   Sears Ownership of Sears Data     61   15.2   Safeguarding Sears
Data     62       (a)  
Safeguarding Procedures
    62       (b)  
Reconstruction Procedures
    62   15.3   Confidentiality     63       (a)  
Confidential Information
    63       (b)  
Confidential Business Information
    63       (c)  
Confidential Personal Information
    65       (d)  
Return or Destruction of Confidential Information
    67       (e)  
Loss of Confidential Information
    67       (f)  
No Implied Rights
    67   15.4   File Access     68          
16.
               
OWNERSHIP
        16.1   CSC Provided Systems     68       (a)  
Ownership of CSC Provided Systems
    68       (b)  
*** – Patents
    68   16.2   Sears Provided Systems     70   16.3   Deliverables     70      
(a)  
License to Sears
    70       (b)  
Restrictions
    71       (c)  
Source Code and Documentation
    71   16.4   General Knowledge     71   16.5   Other Rights     71   16.6  
Copyright Legends     71          
17.
               
REPRESENTATIONS, WARRANTIES AND COVENANTS
        17.1   By CSC     71       (a)  
Work Standards
    72  

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.

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                              Page     (b)  
Maintenance
    72       (c)  
Efficiency and Cost Effectiveness
    72       (d)  
CSC Provided Systems/CSC Managed Systems/Deliverables
    73       (e)  
Deliverables
    73       (f)  
Non-Infringement
    73       (g)  
Authorization
    74       (h)  
Sears Code of Conduct and Privacy Policies
    74       (i)  
Unauthorized Code
    74       (j)  
Compliance with Laws
    76       (k)  
Notice of Adverse Impact
    77       (l)  
Interoperability
    77       (m)  
Pass-Through
    77   17.2   By Sears     77       (a)  
Non-Infringement
    77       (b)  
Authorization
    78   17.3   Disclaimer     78   17.4   Effect     79          
18.
               
Audit Rights
        18.1   Contract Records     79   18.2   Sears Audit     79       (a)  
General
    79       (b)  
Operational and Financial Audits
    79   18.3   SAS 70 Audit     80   18.4   Governmental or Other Non-Sears
Audits     80   18.5   Audit Process     81   18.6   Security Testing     81  
18.7   Remedial Obligations     81   18.8   General Procedures     82       (a)
 
Access
    82  

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                              Page     (b)  
Notice
    82       (c)  
Exit Conference
    82       (d)  
Audit Workspace
    82   18.9   CSC Breach     82          
19.
               
INSURANCE AND RISK OF LOSS
        19.1   Insurance     83       (a)  
Requirements
    83       (b)  
Endorsements
    84       (c)  
Certificates
    85       (d)  
No Implied Limitation
    85       (e)  
Insurance Subrogation
    85       (f)  
Material Breach
    85   19.2   Risk of Loss     86       (a)  
General
    86       (b)  
Waiver
    86          
20.
               
INDEMNITIES
        20.1   Indemnity by CSC     86       (a)  
Breach of This Agreement
    86       (b)  
CSC Designated Contracts
    87       (c)  
Licenses, Leases or Contracts
    87       (d)  
Sears Data or Confidential Information
    87       (e)  
Infringement
    87       (f)  
Government Claims
    87       (g)  
Taxes
    87       (h)  
Shared Facility Services
    87       (i)  
Affiliate, CSC Personnel or Assignee Claims
    88       (j)  
Background and Drug Checks
    88       (k)  
CSC Acts or Omissions
    88       (l)  
Employment Claims
    88  

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                              Page     (m)  
Environmental Claims
    89       (n)  
Violation of Laws
    89   20.2   Indemnity by Sears     89       (a)  
Breach of This Agreement
    89       (b)  
Licenses, Leases or Contracts
    89       (c)  
Pre-Commencement Date Matters
    89       (d)  
CSC’s Confidential Business Information
    89       (e)  
Infringement
    89       (f)  
Taxes
    90       (g)  
Eligible Recipients’ Acts or Omissions
    90       (h)  
Eligible Recipient Claims
    90       (i)  
Violation of Laws
    90   20.3   Infringement     90       (a)  
CSC Provided Systems, CSC Managed Systems or Deliverables
    90       (b)  
Sears Provided Systems
    91   20.4   Indemnification Procedures     91       (a)  
Notice
    92       (b)  
Procedure Following Notice of Defense
    92       (c)  
Procedure Where No Notice of Assumption Is Delivered
    92   20.5   Indemnification Procedures — Governmental Claims     92   20.6  
Mixed Claims     93   20.7   Independent Obligations     93          
21.
               
LIABILITY
        21.1   Force Majeure     93       (a)  
General
    93       (b)  
Duration and Notification
    94       (c)  
Substitute Services; Termination
    94       (d)  
Disaster Recovery
    95       (e)  
Payment Obligation
    95  

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                              Page     (f)  
Allocation of Resources
    95   21.2   Limitation of Liability     96       (a)  
Exclusions from Liability
    96       (b)  
Liability Cap
    96       (c)  
Other
    96       (d)  
Exceptions to Limitations of Liability
    96       (e)  
Items Not Considered Damages
    97       (f)  
Waiver of Liability Cap
    98       (g)  
Acknowledged Direct Damages
    98   21.3   Public Telecommunications Transmissions     99          
22.
               
DISPUTE RESOLUTION
        22.1   Informal Dispute Resolution     99       (a)  
Initial Effort
    99       (b)  
Escalation
    100       (c)  
Provision of Information
    100       (d)  
Prerequisite to Formal Proceedings
    100   22.2   Arbitration     101       (a)  
Arbitration
    101       (b)  
Location and Decision
    101       (c)  
Selection and Qualification of Arbitrators
    101       (d)  
General
    102   22.3   Continued Performance     102       (a)  
General
    102       (b)  
Non-Interruption of Services
    103          
23.
               
TERMINATION
        23.1   Termination for Cause     103       (a)  
Termination By Sears
    103       (b)  
By CSC
    105   23.2   Termination for Convenience     105  

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                              Page 23.3   Termination Charges     106   23.4  
Termination Upon CSC Change of Control     106   23.5   Termination Upon Sears’
Mergers and Acquisitions     107   23.6   Termination for Insolvency     107  
23.7   Termination for Change in Laws     108   23.8   Sears’ Rights Upon CSC’s
Bankruptcy     108       (a)  
General Rights
    108       (b)  
Sears’ Rights in Event of Bankruptcy Rejection
    108   23.9   Right to Assume Licenses in Bankruptcy     109          
24.
               
Rights Upon Expiration or Termination
        24.1   Certain Rights     109   24.2   Hiring     109   24.3   Sears
Provided Systems and Deliverables     110       (a)  
Deliver
    110       (b)  
Destroy
    110   24.4   Sears Facilities     110   24.5   CSC Provided Systems     110
      (a)  
CSC Provided Circuits and Other Items
    110       (b)  
CSC Provided Equipment
    110       (c)  
CSC Provided Software
    111   24.6   CSC Subcontracts and Third Party Contracts     113   24.7  
Effect on Termination Charge     114          
25.
               
Termination Assistance Services
        25.1   Duration     114       (a)  
Period of Provision
    114       (b)  
Extension(s) of Services and Termination Assistance Services
    114       (c)  
Firm Commitment
    115       (d)  
Performance
    116   25.2   Scope of Termination Assistance Service     116  

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                              Page 25.3   General Support     116   25.4   Rates
and Charges     117          
26.
               
GENERAL
        26.1   Binding Nature and Assignment     117       (a)  
Binding Nature
    117       (b)  
Assignment
    117       (c)  
Impermissible Assignment
    118   26.2   Entire Agreement; Amendment     118   26.3   Notices     118  
26.4   Legal Expenses     119   26.5   Counterparts     120   26.6   Headings  
  120   26.7   Severability     120   26.8   Jurisdiction     120   26.9  
Governing Law     121   26.10   Relationship of the Parties     121   26.11  
Consents and Approval     122       (a)  
General
    122       (b)  
Written Approval
    122   26.12   Waiver of Default; Cumulative Remedies     122       (a)  
Waiver of Default
    122       (b)  
Cumulative Remedies
    123   26.13   Survival     123   26.14   Publicity     123   26.15  
Equitable Remedies     123   26.16   Parties To This Agreement     124   26.17  
Covenant Against Pledging and Liens     124   26.18   Hiring of Employees    
124       (a)  
Hiring Restriction
    124  

 xv 

 

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TABLE OF CONTENTS
(continued)

                              Page     (b)  
Permitted Hiring
    124   26.19   Further Assurances     125   26.20   No Commitment and No
Exclusivity     125   26.21   Sears Rules and Compliance     125   26.22  
Interpretation     125   26.23   Export Controls     126   26.24   Covenant of
Good Faith     126  

 xvi 

 

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MASTER SERVICES AGREEMENT

THIS MASTER SERVICES AGREEMENT (this “Master Agreement”) is made as of June 1,
2004 (the “Effective Date”) by and between Computer Sciences Corporation, a
Nevada corporation (“CSC”), and Sears, Roebuck and Co., a New York corporation
(“Sears”).

WHEREAS, Sears and CSC wish to set forth the terms and conditions under which
CSC may provide Sears and the other Eligible Recipients with certain services
through one or more Transaction Documents pursuant to this Master Agreement;

NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Sears and CSC
(collectively, the “Parties” and each, a “Party”) hereby agree as follows:

1.  
BACKGROUND AND OBJECTIVES
  1.1  
Information Technology Services.
     
Sears desires that certain information technology services presently performed
and managed by or for Sears and the other Eligible Recipients by their
respective Personnel, and certain additional information technology services, as
each is described in a Transaction Document, be performed and managed by CSC.
CSC has carefully reviewed Sears’ requirements, has performed all due diligence
it deems necessary, and desires to perform and manage such information
technology services for Sears and the other Eligible Recipients.
  1.2  
Goals and Objectives.
     
The Parties acknowledge and agree that the goals and objectives of the Parties
in entering into this Agreement are to create a special relationship between CSC
and Sears, where CSC’s Personnel work cooperatively and proactively with Sears’
Personnel in a “badge neutral” environment with the common goals of:

  (a)  
Transforming the underlying architecture of Sears’ and the other Eligible
Recipients’ technical infrastructure to improve services;
    (b)  
Significantly reducing the current and ongoing cost to Sears and the other
Eligible Recipients for information technology services and delivery;
    (c)  
Providing a flexible, reliable, high-performance architecture for Sears and the
other Eligible Recipients’ technical infrastructure, that provides:

  (i)  
Common processes across the Eligible Recipients;
    (ii)  
Elimination of duplication across the Eligible Recipients;

 

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  (iii)  
Simplified end user interactions;
    (iv)  
Scalable and modular solutions;
    (v)  
Flexibility and speed in changing service delivery to meet the Eligible
Recipients’ evolving business requirements; and
    (vi)  
Technology currency;

  (d)  
Performing all of the Services at or above existing service levels while
reducing costs, including providing:

  (i)  
Improved quality and efficiency of information technology delivery to the
Eligible Recipients;
    (ii)  
Predictable and consistent service delivery;
    (iii)  
Industry best practices and delivery processes; and
    (iv)  
The right capability at the right time;

  (e)  
Standardizing, simplifying and integrating the Eligible Recipients’ technical
infrastructure, including:

  (i)  
Modernization and sustained infrastructure support of the Eligible Recipients’
evolving business requirements;
    (ii)  
Access to current and evolving technologies;
    (iii)  
Rapid transformation to future state initiatives within defined time frames; and
    (iv)  
Uniform technical infrastructure prioritized over best-of-class for creation of
future state;

  (f)  
Continuously innovating and improving the performance and delivery of technical
services to the Eligible Recipients and the Eligible Recipients’ technical
infrastructure cost and Service Level metrics, including:

  (i)  
Achieving and maintaining best-in-class pricing for the technical capabilities
and Service Levels for the Services received by the Eligible Recipients under
this Agreement;
    (ii)  
Utilizing enabling technologies to add value to the Eligible Recipients’
business processes;
    (iii)  
Keeping Sears apprised of new and advanced technologies to enhance the
performance of the Eligible Recipients; and

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  (iv)  
Providing thought leadership in the selection and use of enabling technologies;

  (g)  
Allowing Sears to focus on its core competencies and allowing Sears’ technical
infrastructure management to focus on business relationships and requirements,
including:

  (i)  
Delivering information technology services by proactively and willingly
participating on teams comprising CSC, Sears enterprise leadership and staff,
and Third Party vendors; and
    (ii)  
Providing flexibility to allow Sears and its Affiliates to meet their changing
business needs, align incentives, protect Sears Data and vital business
interests, allocate risks and to allow effective management of the Services.

2.  
DEFINITIONS AND DOCUMENTS
  2.1  
Definitions.
     
Certain capitalized terms used in this Agreement are defined in Appendix A
(Glossary). Other capitalized terms used in this Master Agreement, the
Appendices to this Master Agreement or any Transaction Documents are defined in
the context in which they are used and have the respective meanings there
indicated.
  2.2  
Master Agreement and Associated Contract Documents.

  (a)  
General. This Master Agreement is a master agreement that sets forth the general
terms and conditions upon which Sears and the other Eligible Recipients may from
time to time procure Services from CSC. Services shall be provided by CSC
pursuant to Transaction Documents entered into by CSC and Sears and/or
Affiliate(s) of Sears. The Parties intend that they shall enter into a
Transaction Document before CSC or its Affiliates provides any Services to Sears
or the other Eligible Recipients. If CSC or its Affiliates provides Services to
Sears or the other Eligible Recipients in the absence of such a Transaction
Document or other written agreement signed by each Party, this Agreement shall
nevertheless apply to such Services. However, Sears shall not be required to
compensate CSC or its Affiliates for Services not described in a Transaction
Document or other written agreement executed by the duly authorized
representatives of both Parties, except as and to the extent expressly provided
otherwise in Section 4.5 (Additional Services).
    (b)  
Exhibits. If Sears elects to procure Services from CSC that are unrelated to the
subject matter of any existing Exhibit (and CSC elects to provide such
Services), the Parties shall enter into an Exhibit for such Services. Separate
Exhibits may be entered into for discrete Services. Exhibits can be either:
(i) commitments to procure Services; or (ii) general descriptions of Services
without a commitment to

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procure Services, in which case Services shall not be deemed to have been
ordered under such Exhibit unless and until the Parties shall have entered into
a subsequent Statement of Work or Service Addendum that expressly references
such Exhibit and whereby Sears agrees to procure Services. Each Exhibit shall be
subject to the terms and conditions of this Master Agreement. All references in
this Agreement to “Exhibits” shall include Appendices, SOWs and Service Addenda
thereunder.
    (c)  
Statements of Work. “Statements of Work” or “SOWs” are transaction-level
documents that are entered into pursuant to an Exhibit. Each SOW shall be
subject to the terms and conditions of the applicable Exhibit and this Master
Agreement. All references in this Agreement to “SOWs” shall include all
Appendices and Service Addenda thereunder.
    (d)  
Service Addenda. “Service Addenda” are transaction-level documents that are
entered into to add Services to an Exhibit or a SOW. Each Service Addendum shall
be subject to the terms and conditions of the applicable SOW, the applicable
Exhibit and this Master Agreement. All references in this Agreement to a
“Service Addendum” shall include all Appendices thereunder.
    (e)  
Appendices. “Appendices” are ancillary documents attached to this Master
Agreement, an Exhibit, a SOW or a Service Addendum and the term Appendices shall
include “Schedules” and “Attachments”. Each Appendix shall be deemed
incorporated by reference into the Transaction Document that references it and
shall be subordinate in priority to such Transaction Document.
    (f)  
Transaction Document. “Transaction Document” means the applicable Exhibit, SOW
and/or Service Addendum.
    (g)  
Interpretation and Precedence. This Master Agreement and any Transaction
Documents are to be interpreted so that all of their respective provisions are
given as full effect as possible. In the event of a conflict between any of the
documents comprising this Agreement, the following order of precedence shall
apply: (i) first, a Service Addendum; (ii) second, a SOW; (iii) third, the
applicable Exhibit; and (iv) fourth, this Master Agreement; provided, however,
that absent an express statement therein to the contrary, no provision in a SOW,
a Service Addendum or an Appendix to any contract document shall be deemed to
amend this Master Agreement or any Exhibit (e.g., a different provision in an
Exhibit would control over this Master Agreement, but such a provision in a SOW
shall not control over this Master Agreement unless there is an express
statement in such SOW that such provision was to control over a particular
Section of this Master Agreement). Notwithstanding the foregoing, if a
Transaction Document provides a more specific description of CSC’s obligations
or the requirements relating to the Services to be performed by CSC or sets
higher standards than the terms of this Master Agreement or the applicable
Exhibit, then such more specific description, requirements or higher standard,
as the case may be, shall not be deemed to

4

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conflict, or be inconsistent, with such terms of this Master Agreement or the
applicable Exhibit.
    (h)  
Ordering Affiliates. Subject to Section 4.2(b) (Eligible Recipient Requests),
Affiliates of Sears may procure Services directly from CSC under this Master
Agreement by entering into a Transaction Document with CSC for such Services
that references this Master Agreement. Each Transaction Document, together with
this Master Agreement, shall be deemed to constitute a separate agreement
between CSC and the Affiliate of Sears that executed such Transaction Document.
Any Affiliate of Sears that executes a Transaction Document with CSC shall be
deemed to be “Sears” hereunder for purposes of such Transaction Document. Only
the Affiliate of Sears that executes such a Transaction Document shall be liable
for Sears’ obligations under such Transaction Document and CSC shall look solely
to such Affiliate (and not to Sears) for satisfaction of any liability arising
thereunder or relating thereto.

2.3  
Appendices to this Master Agreement.
     
This Master Agreement includes the following Appendices:
     
Appendix A      Glossary
Appendix B      Sears Expense Policy
Appendix C      CSC Drug Testing Policy

  3.  
TERM
  3.1  
Term of Master Agreement, Exhibits, SOWs and Service Addenda.

  (a)  
Master Agreement. The term of this Master Agreement (the “Term”) shall commence
as of 12:00:01 a.m., Eastern Time, on the Effective Date and continue until
11:59:59 p.m., Eastern Time, on May 31, 2009, unless this Master Agreement is
extended or terminated earlier in accordance with the terms and conditions of
this Master Agreement. Upon any expiration or termination of this Master
Agreement, the terms and conditions of this Master Agreement shall survive for
purposes of any Transaction Document still in effect as of such expiration or
termination; provided, however, that no new Exhibit shall be entered into after
such expiration or Termination. For purposes of clarity, the purpose of the
preceding sentence is to cause the parties to evaluate whether changes should be
made to this Master Agreement prior to entering into a new Exhibit after such
five (5) year period. Absent the express written agreement of the Parties, for
Transaction Documents that have a Term that extends past the expiration of this
Master Agreement: (i) no renegotiation of this Master Agreement upon its
expiration shall affect such Transaction Document; and (ii) the expiration or
termination of this Master Agreement shall not affect the ability of the Parties
to enter into additional Exception Project Work, No Impact Proposals, Service
Addenda, SOWs or any other schedule or subsidiary document pursuant to such a
Transaction Document after such expiration or termination.

5

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  (b)  
Exhibits. The Term of each Exhibit (the “Exhibit Term”) shall be set forth
therein, unless such Exhibit is extended or terminated earlier in accordance
with the terms and conditions of such Exhibit or this Master Agreement. Upon any
expiration or termination of an Exhibit, the terms and conditions of such
Exhibit shall survive for purposes of any SOW and Service Addendum thereunder
still in effect as of such expiration or termination; provided, however, that no
new SOW or Service Addendum shall be entered into thereunder after such
expiration or termination.
    (c)  
Service Addenda and SOWs. Except as otherwise set forth in a Service Addendum or
SOW, the Term of each Service Addendum and SOW shall be coterminous with the
Exhibit pursuant to which it was entered into.

3.2  
Extension.
     
CSC shall notify Sears in writing whether it desires to renew each Exhibit, and
of the proposed prices and other terms and conditions to govern such renewal,
not less than eighteen (18) months prior to the expiration of the applicable
Exhibit Term. If CSC so notifies Sears that it desires to renew such Exhibit,
Sears shall inform CSC in writing whether it also desires to renew such Exhibit
not less than twelve (12) months prior to the expiration of the applicable
Exhibit Term, whereupon CSC shall promptly meet with Sears to agree upon the
prices and other terms and conditions for such renewal. Failure by either CSC or
Sears to provide notice at the time specified above shall be deemed to be notice
of intent not to extend such Exhibit, subject to the other rights of Sears under
this Agreement. If either Sears or CSC does not wish to renew such Exhibit, such
Exhibit shall expire at the end of the applicable Exhibit Term. IF BOTH CSC AND
SEARS DESIRE TO RENEW SUCH EXHIBIT BUT ARE UNABLE TO AGREE IN WRITING UPON
RENEWAL PRICES AND OTHER TERMS AND CONDITIONS AT LEAST SIX (6) MONTHS PRIOR TO
THE EXPIRATION OF THE APPLICABLE EXHIBIT TERM, SEARS MAY, UPON NOTICE TO CSC,
ELECT TO EXTEND SUCH EXHIBIT TERM FOR ONE (1) YEAR AT THE PRICES, TERMS AND
CONDITIONS IN EFFECT DURING THE LAST YEAR OF THE THEN-CURRENT APPLICABLE EXHIBIT
TERM. If CSC and Sears are unable to reach agreement on renewal during such
extension period, if any, such Exhibit shall expire at the end of such extension
period unless earlier terminated in accordance with the terms and conditions of
such Exhibit or this Master Agreement, or further extended pursuant to
Section 25.1(b) (Extension of Services).
  4.  
SERVICES
  4.1  
Overview.

  (a)  
Services. Commencing on the applicable Commencement Date, (i) CSC shall provide
the Services to Sears, and, upon Sears’ request, to other Eligible Recipients
designated by Sears, in each case, at levels of accuracy, quality, completeness,
timeliness, responsiveness and resource efficiency that are (1) at

6

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least equal to those received by Sears or the other Eligible Recipients,
respectively, prior to the Commencement Date and (2) equal to or higher than the
applicable Service Levels and the accepted industry standards of first tier
providers of information technology services performing similar services, and
(ii) the Services that CSC shall provide under such Transaction Document shall
consist of the following, as they may evolve during the Term of such Transaction
Documents or be supplemented, enhanced, modified or replaced:

  (i)  
General. The services, functions and responsibilities described in such
Transaction Document and the applicable portions of this Master Agreement.
    (ii)  
Displaced Functions. The services, functions and responsibilities performed
during the twelve (12) months preceding such Commencement Date by Sears
Personnel who were displaced or whose functions were displaced as a result of
such Transaction Document, even if the service, function or responsibility is
not specifically described in this Master Agreement or such Transaction
Documents; provided, however, that express statements in such Transaction
Document that such services, functions or responsibilities are out of scope
shall control over this Section 4.1(a)(ii) Displaced Functions);
    (iii)  
Sears IT Base Case. The services, functions and responsibilities reflected in
those categories of the Sears IT Base Case that CSC is assuming pursuant to such
Transaction Document; provided, however, that express statements in such
Transaction Document that such services, functions or responsibilities are out
of scope shall control over this Section 4.1(a)(iii) (Sears IT Base Case);
    (iv)  
Non-Retained Functions. The services, functions and responsibilities that are
not retained by Sears or the other Eligible Recipients and that are reasonably
related to the Services and of a nature and type that would ordinarily be
performed by the information technology department of a generally comparable,
major, multi-division retail merchandising and services company, even if such
services, functions and responsibilities are not specifically described in this
Agreement; and
    (v)  
Compliance Functions. All information technology and telecommunication support
services reasonably related to the Services that are required for Sears and its
Affiliates to meet (A) requirements imposed by federal, state and local laws and
regulations, and (B) their internal and external audit and compliance
requirements.
    (vi)  
Peak Business Season Readiness. All peak business season readiness services
(a/k/a holiday readiness) reasonably related to the Services that Sears and its
Affiliates deem prudent to prepare for their peak business

7

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periods. These include such things as forward deployment of important spare
parts, stress testing of various Systems, etc.

  (b)  
Included Services. If any services, functions or responsibilities not
specifically described in this Agreement or any Transaction Document are an
inherent, necessary or customary part of the Services, including any Migration
Services, Interim Services, Termination Assistance Services and/or
Transformation Services under any Exhibit, and are (i) reasonably related to
CSC’s performance of the Services or (ii) are required for proper performance or
provision of the Services in accordance with this Agreement, they shall be
deemed to be included within the scope of the Services to be delivered for the
Charges, as if such services, functions or responsibilities were specifically
described in this Agreement or the applicable Transaction Document.
    (c)  
TI Exhibit. For purposes of the TI Exhibit, the Services shall consist of four
(4) components: (i) the Migration Services; (ii) the Interim Services; (iii) the
Transformation Services; and (iv) the Future State Services, in each case as
described in greater detail therein.
    (d)  
Off-Shore Services. Except as otherwise provided in a Transaction Document and
subject to the other terms and conditions of this Agreement, CSC may provide the
Services using services or facilities outside the United States (collectively,
“Foreign Based Services”), or install, transfer or otherwise use Sears Provided
Systems, CSC Managed Systems or Sears Data from outside the United States
(collectively, “Foreign Use of Certain Systems”), subject to the following.

  (i)  
Foreign Based Services. CSC shall notify Sears at least *** in advance of the
commencement of such Foreign Based Service and such notice shall specifically
describe what Services will be performed in each foreign jurisdiction. Sears
shall have the right to reject the use of such Foreign Based Service; ***.

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.

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  (ii)  
Foreign Use of Certain Systems. CSC shall notify Sears at least *** in advance
of the commencement of any Foreign Use of Certain Systems and such notice shall
specifically describe which Systems will be used in each foreign jurisdiction.
Sears shall have the right to reject, *** any proposal that involves Foreign Use
of Certain Systems. If Sears does approve such a proposal, CSC shall be
responsible for obtaining, prior to commencement of such foreign use, at its
expense, any Required Consents required from Third Parties in connection with
such Foreign Use of Certain Systems (e.g., approval from Software licensors,
etc.).
    (iii)  
Data Communications. Except as otherwise expressly set forth in a Transaction
Document, to the extent necessary to provide Foreign Based Services, CSC shall,
without separate Charge, provide data network connectivity between: (i) CSC’s
data connection to the Eligible Recipients’ United States facilities and
(ii) the Foreign Based Services.
    (iv)  
Further Information. CSC shall promptly provide to Sears any information Sears
reasonably requests, in connection with any proposal for Foreign Based Services
or Foreign Use of Certain Systems.

4.2  
Eligible Recipient Services.

  (a)  
Eligible Recipients. CSC shall provide the Services to Eligible Recipients
designated by Sears from time to time. Except as provided in Section 4.5
(Additional Services) or otherwise agreed by the Parties, such Services shall be
performed in accordance with the terms, conditions and prices (excluding any
non-recurring transition or start-up activities specific to such Eligible
Recipients which shall be subject to Section 4.5 (Additional Services)) then
applicable to the provisions of the same Services to existing Eligible
Recipients. To the extent a designated Eligible Recipient shall receive less
than all of the Services, Sears shall designate the categories of Services to be
provided by CSC to such Eligible Recipient.
    (b)  
Eligible Recipient Requests. CSC shall promptly inform the Sears Relationship
Manager of requests for New Services from Eligible Recipients and shall submit
any proposals for such New Services to the Sears Relationship Manager. Neither
CSC nor its Affiliates shall provide New Services to any Eligible Recipients
without the prior written approval of the Sears Relationship Manager.

4.3  
Acquisition and Divestiture Services.
     
CSC shall provide the following Services, at no additional charge and as part of
the base Services, related to acquisitions or divestitures by Sears or any other
Eligible Recipient. Services that would require CSC to create a new
infrastructure to support an acquired Entity or to migrate Sears to an acquired
Entity’s Systems shall be subject to Section 4.5(b) (New Services).

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.

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  (a)  
Acquisition Support. With respect to a potential acquisition by any Eligible
Recipient, upon Sears’ request, CSC shall provide acquisition support (including
assessments of the current technology environments to be acquired, potential
integration approaches and the potential net economic impact of the acquisition
in connection with the Services) as reasonably necessary to assist any Eligible
Recipient’s assessment of the portion of the acquisition to which the Services
shall relate. Such support shall be provided within the time frame reasonably
requested by Sears or as required by the timing of the transaction.
    (b)  
Migration of Systems. As requested by Sears, CSC shall migrate all or some of
the Systems, applications and data of the acquired Entity to the Eligible
Recipients’ existing environment and/or migrate all or some of the Systems,
applications and data of Eligible Recipients to the environment of the acquired
Entity. As requested by Sears, CSC shall, following the integration, provide the
Services as they apply to the newly integrated acquired Entity or business.
    (c)  
On-Site Support. As requested by Sears, CSC shall provide CSC Personnel to staff
vacancies and to provide management for the information technology functions
needed to support an acquisition, including on-site support at the location of
the acquired Entity or business.
    (d)  
Divestitures. From time to time, any Eligible Recipient may divest business
units. In such cases, as and to the extent requested by Sears, CSC shall provide
transition support services to the Eligible Recipients, the divested business
unit and the acquirer, and shall continue to provide such Services for a period
of up to twenty-four (24) months after such divestitures as requested by Sears.
Any revenues, resources or other similar usage measures in connection with
services that are the same as, or similar to, the Services and that are obtained
by any Eligible Recipient’s divested business unit under a separate agreement
between such business unit (or any acquiring entity or successor thereof) and
CSC, shall count toward the satisfaction of any revenue, resource or other
similar usage requirements under this Agreement.

4.4  
Access to Specialized CSC Skills and Resources.
     
Upon Sears’ request, CSC shall provide the Eligible Recipients with prompt
access to CSC’s specialized services, CSC Personnel and resources and associated
Software, Equipment and Systems. The foregoing shall be provided on an expedited
basis, taking into account the relevant circumstances, in the event of a service
disruption (the “Specialized Services”).
  4.5  
Additional Services.

  (a)  
General. If Sears requests CSC to perform any services not already included in
the Services, then CSC shall perform such services at no additional Charge to
any Eligible Recipient, except to the extent such services constitute New
Services. If

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CSC’s performance of such services results in a net reduction in CSC’s costs of
providing the Services, CSC shall provide Sears a credit in the amount of such
savings. If Sears requests that CSC provide Services that CSC believes to be New
Services, CSC may make a proposal for New Services in accordance with Section
4.5(b) (New Services).
    (b)  
New Services.

  (i)  
No Impact Proposal. If Sears requests that CSC perform New Services, CSC shall
first perform an analysis to determine the means, if any, by which CSC can
complete such New Services without (1) additional charges to Sears,
(2) modifications to any Transaction Document, or (3) any adverse impact to
other Services under this Agreement, and, if CSC can do so, CSC shall then:
(A) document in writing such a proposal (each a “No Impact Proposal”),
(B) deliver a written copy of any such No Impact Proposal to Sears, and (C)
shall promptly proceed to provide such New Services in accordance with such
proposal.
    (ii)  
Service Addendum.

  (1)  
Development of Service Addendum. If CSC determines that CSC cannot formulate a
No Impact Proposal, CSC shall promptly complete a Service Addendum for such New
Services. CSC shall deliver to Sears with such Service Addendum a specific list
of alternatives that were explored as possible No Impact Proposals as well as
any adverse consequence CSC anticipates under such Service Addendum. CSC shall
prepare and deliver any Service Addendum required by this Agreement, at no
additional charge to Sears, within ten (10) days of its receipt of Sears’
request; provided, however, that CSC shall use all commercially reasonable
efforts to respond more quickly in the case of a pressing business need or an
emergency situation. Sears shall provide such information as CSC reasonably
requests in order to prepare such proposed Service Addendum. Such proposed
Service Addendum shall include, among other things, the following at a level of
detail sufficient to permit Sears to make an informed business decision for
those New Services not already covered by this Agreement: (A) a project plan;
(B) a fixed price or a time and materials price estimate for new Charges
required for the New Service, if any, and a breakdown of such Charges by items
of consumption (e.g., license and maintenance fees for CSC Provided Software,
number of hours of services, price, service type, etc.); (C) a description of
any additional Service Levels to be associated with such New Service (or changes
to existing Service Levels); (D) a schedule, including major milestones, for
commencing and completing the New Service; (E) a description of the new CSC
Provided Systems to be provided by CSC in connection with the New Service; (F) a

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description of any other software, hardware and other resources, including
resource unit utilization, necessary to provide the New Service; (G) any
additional or different Sears Provided Systems, facilities or labor resources to
be provided by the Eligible Recipients in connection with the proposed New
Service; and (H) in the case of any Deliverables to be created through the
provision of the proposed New Services, any ownership rights therein that differ
from the provisions of Section 16.1(a)(Ownership of CSC Provided Systems).
     

  (2)  
Acceptance of Service Addendum. Sears may accept or reject any proposed Service
Addendum in its sole discretion. CSC shall not be obligated to perform any New
Services for which a Service Addenda is required unless the proposed Service
Addendum is signed by Sears, or Sears re-prioritizes or eliminates other
Services CSC is to provide such that CSC is not required to incur any
incremental resources. Upon the execution by the Parties of a proposed Service
Addendum for New Services, the scope of the Services in the applicable
Transaction Document shall be expanded to include such New Services. Except as
provided for in Section 4.5(b)(iii) (Exception Project Work), CSC shall not
receive any additional compensation for New Services unless the Sears
Relationship Manager and CSC Account Executive, or their authorized designees,
have executed a Service Addendum for such New Services. Sears’ execution of a
proposed Service Addendum shall not waive Sears’ right to challenge the
appropriateness of any or all of CSC’s Charges provided for in such Service
Addendum. If Sears authorizes CSC to proceed with any work, such as by executing
a Service Addendum, but the Parties disagree as to whether the authorized work
constitutes New Services or the amount of the Charges for such work, CSC shall
proceed with such work and the disagreement shall be submitted to dispute
resolution ***.

  (iii)  
Exception Project Work. The Sears Vice President of Operations/Engineering may
authorize CSC to perform New Services (for which an additional charge will
apply) on a project-by-project basis, without the need to execute a Service
Addendum; provided that:

  (1)  
Such New Services are for a specific project of a limited duration (rather than
the addition of ongoing Services to be performed for the Term of the applicable
Transaction Document);
    (2)  
The Charges applicable to such New Services are non-recurring and do not exceed
(A) *** per incident, (B) *** in the

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.

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aggregate per Contract Year, or (C) the hourly rates set forth in the applicable
Transaction Document;
    (3)  
Neither CSC nor Sears are seeking any changes to the ownership provisions set
forth in this Agreement with respect to any Deliverables relating to such New
Services; and
    (4)  
CSC provides a written summary of such New Services that contains the
information in Section 4.5(b)(ii) (Service Addendum) to the extent requested by
Sears.
   
By the fifth (5th) day of each month during the Term, CSC shall provide to the
Sears Relationship Manager a report listing (A) each New Service subject to this
Section 4.5(b)(iii) (Exception Project Work), (B) the amount of Charges then
incurred to date for each New Service and (C) the total amount approved by Sears
for each New Service. For the avoidance of doubt, each such New Service shall be
subject to the terms of this Master Agreement and the applicable Transaction
Document.

  (iv)  
Charges. CSC shall act reasonably and in good faith in formulating its pricing
proposal for such New Services and shall use commercially reasonable efforts to
identify potential means of reducing or eliminating the cost to Sears, including
delaying expenditures in other areas under this Agreement, utilizing
Subcontractors, etc. CSC’s pricing proposal shall be competitive to the fair
market value for such services and no less favorable to Sears than the pricing
and labor rates set forth in this Agreement for comparable Services and shall
take into account the existing and future volume of overall business between
Sears and its Affiliates and CSC and its Affiliates.

  (c)  
Efforts to Reduce Costs and Charges. The Parties shall work together (throughout
the Term) to identify ways of achieving reductions in the cost of service
delivery and corresponding reductions in the Charges to be paid by Sears by
modifying or reducing the nature or scope of the Services to be performed by
CSC, the applicable Service Levels or other contract requirements. If requested
by Sears, CSC shall promptly prepare a proposal at a level of detail sufficient
to permit Sears to make an informed business decision identifying all viable
means of achieving the desired reductions without adversely impacting business
objectives or requirements identified by Sears (or, if such adverse impacts
cannot be avoided, identifying such adverse impacts and any means of mitigating
them). In preparing such a proposal, CSC shall give due consideration to any
means of achieving such reductions proposed by Sears. CSC shall negotiate in
good faith with Sears about each requested reduction in Charges and, without
disclosing the actual cost of providing the Services, CSC shall identify for
Sears if and to what extent the cost of service delivery may be reduced by
implementing various changes in the contract requirements, taking into account
all avoided costs plus CSC’s average profit on such Services. If CSC rejects any
such change in the

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Service delivery, CSC shall demonstrate to Sears why technically such proposal
cannot work. Sears shall not be obligated to accept or implement any proposal,
and CSC shall not be obligated to implement any change that affects the Terms of
this Agreement, unless and until such change is reflected in a Service Addendum
or a written amendment to this Agreement.

     

  (d)  
Charges for Contract Changes. Unless otherwise agreed, System Changes, changes
in the Services (including changes in the Sears Standards) and changes in the
rights or obligations of the Parties under this Agreement (collectively,
“Contract Changes”) shall result in changes in the applicable Charges only if
and to the extent (i) this Agreement expressly provides for a change in the CSC
Charges in such circumstances, (ii) the agreed-upon Charges or pricing
methodology expressly provides for a price change in such circumstances (for
example, where the applicable Transaction Document specifies a number of full
time equivalents or hours of coverage to be provided for the quoted price, or
defines units of consumption for increased or decreased usage), or (iii) the
Contract Change constitutes New Services for purposes of Section 4.5(b)(New
Services) and additional Charges are applicable in accordance therewith.
    (e)  
Additional Work or Reprioritization. The Sears Relationship Manager may, in the
sole discretion of Sears, identify new or additional work activities to be
performed by CSC Personnel, reprioritize or reset the schedule for existing
Services or New Services, and designate which problems shall be resolved
immediately versus those that may be deferred due to the priority of other
Services to be performed by such CSC Personnel. The foregoing shall not relieve
CSC of its responsibility for identifying and addressing problems and otherwise
prioritizing its work flow absent specific direction to the contrary by Sears.
CSC shall use commercially reasonable efforts to perform such work activities
without impacting the established schedule for other tasks or the performance of
the Services in accordance with the Service Levels. If it is not possible to
avoid such impact, CSC shall notify Sears of the anticipated impact and obtain
Sears’ consent under Section 7.2(d)prior to proceeding with any work activities
that would cause such impact. Sears, in its sole discretion, may forego or delay
such work activities or temporarily adjust the work to be performed by CSC, the
schedules associated therewith or the Service Levels to permit such
reprioritization.

5.  
GOVERNANCE
  5.1  
Operational Procedures Manual.

  (a)  
Delivery and Contents. CSC shall create, as part of the Services, and at no
additional cost to Sears, an operational procedures manual that documents the
processes and procedures that underlie each Service (the “Operational Procedures
Manual” or “OPM”). CSC shall deliver to Sears for its review, comment and
approval both an outline of the topics to be addressed in the Operational
Procedures Manual and a final draft of the OPM for each Exhibit, in each case
within the time periods set forth in the applicable Exhibit. At a

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minimum, the Operational Procedures Manual for each Exhibit shall include the
following:

  (i)  
a detailed description of the Services and the manner in which each shall be
performed by CSC under the Exhibit, including (1) all CSC Provided Systems, CSC
Managed Systems and Sears Provided Systems, as well as the functional and
operational characteristics of each of the foregoing, (2) documentation
(including operations manuals, user guides, specifications, policies/procedures
and disaster recovery plans) providing further details regarding such Services,
and (3) the specific activities to be undertaken by CSC in connection with each
Service, including, where appropriate, service responsibilities matrices, the
direction, supervision, monitoring, staffing, reporting, planning and oversight
activities to be performed by CSC and the time period in which tasks are to be
completed under the Exhibit;
    (ii)  
the procedures for Sears/CSC interaction and communication, including (1) call
lists, (2) procedures for and limits on direct communication by CSC with Sears
Personnel, (3) problem management and escalation procedures, (4) priority and
project procedures, (5) acceptance testing and procedures, (6) quality assurance
procedures and checkpoint reviews, and (7) annual and quarterly financial
objectives, budgets and performance goals; and
    (iii)  
practices and procedures addressing such other issues and matters as Sears shall
require.
   
CSC shall incorporate Sears’ then-current policies and procedures in the
Operational Procedures Manual to the extent Sears directs CSC to do so.

  (b)  
Revision and Maintenance. CSC shall incorporate any comments or suggestions of
Sears into the OPM and shall deliver a final revised version to Sears within
fifteen (15) days of its receipt of such comments and suggestions for Sears’
approval. The OPM shall be delivered and maintained by CSC in hard copy and
electronic formats and shall be accessible electronically to Sears Personnel in
a manner consistent with Sears’ security policies.
    (c)  
Compliance. CSC shall perform the Services in accordance with Sears’
then-current policies and procedures until the Operational Procedures Manual is
finalized and mutually agreed upon by the Parties. Thereafter, CSC shall perform
the Services in accordance with the Operational Procedures Manual. In the event
of a conflict between the provisions of this Agreement, including any
Transaction Document, and the Operational Procedures Manual, the provisions of
this Agreement shall control. The Operational Procedures Manual shall not be
considered an amendment to this Agreement.

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  (d)  
Modification and Updating. CSC shall modify and update the Operational
Procedures Manual monthly to comply with Sears Standards as described in
Section 6.4 (Architecture, Standards and Information Technology Planning) and to
reflect changes in the operations or procedures described therein and/or changes
to the features or functionality of the Services, including any CSC Provided
Systems and/or CSC Managed Systems. All updated versions of the OPM shall be
accurate and at least as detailed as the documentation originally delivered to
Sears. In addition, CSC shall meet with Sears on at least an annual basis to
review and discuss the OPM and any changes to the OPM proposed by CSC. In
advance of each such meeting, and in advance of making any change to the OPM,
CSC shall provide Sears, for Sears’ review, comment and approval, a revised copy
of the OPM marked to show the proposed changes by CSC. To the extent any such
change could (i) increase Sears’ total costs of receiving the Services,
(ii) require changes to the facilities, Software or Equipment or Systems of the
Eligible Recipients (including the installation of any Upgrades), (iii) have an
adverse impact on the functionality, interoperability, performance, accuracy,
speed, responsiveness, quality, security or resource efficiency of the Services,
or (iv) violate or be inconsistent with the Sears Standards, neither CSC nor its
Personnel shall implement such change without first obtaining Sears’ approval
(pursuant to a written amendment to this Master Agreement or a Service
Addendum), which approval Sears may withhold in its sole discretion.

5.2  
Change Control.

  (a)  
Compliance with Change Control Procedures. In requesting or making any System
Change, both Parties shall comply with the change control procedures specified
in the OPM (or, with respect to System Changes prior to the Parties mutually
agreeing on the OPM, Sears’ then-current change control procedures). Prior to
making any System Change or using any new (e.g., not tested in or for the Sears
environment) Software or Equipment to provide the Services, CSC shall verify by
appropriate testing that the change or item has been properly installed, is
operating in accordance with its specifications, is performing its intended
functions in a reliable manner and is compatible with and capable of operating
as part of the Eligible Recipients’ environment. This obligation shall be in
addition to any unit testing to be performed by CSC as part of the routine
deployment or installation of Software or Equipment.
    (b)  
System Change Costs. Unless otherwise set forth in the applicable Transaction
Document or approved by Sears in accordance with Section 5.2(c) (Sears Approval
— Cost, Adverse Impact) or otherwise, CSC shall bear all charges, fees and costs
associated with any System Change made by CSC or the CSC Personnel, including
all charges, fees and costs associated with (i) the design, installation,
implementation, testing and rollout of such System Change, (ii) any
modification, enhancement to, or substitution for, any CSC Provided Systems, CSC
Managed Systems or Sears Provided Systems, (iii) any increase in the cost to the
Eligible Recipients of operating, maintaining or supporting any CSC Provided
Systems, CSC Managed Systems or Sears Provided Systems, and (iv) subject to

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Section 5.2(g) (Comparisons), any increase in resource usage to the extent it
results from a System Change.
     

  (c)  
Sears Approval — Cost, Adverse Impact. Neither CSC nor the CSC Personnel shall
make any System Change that may (i) increase the Eligible Recipients’ total cost
of receiving the Services, (ii) require changes to an Eligible Recipient’s
facilities, Software, Equipment or other Systems (including the installation of
any Upgrades), (iii) have an adverse impact on the functionality,
interoperability, performance, accuracy, speed, responsiveness, quality,
security or resource efficiency of the Services or on any applications run by
the Eligible Recipients, or (iv) violate or be inconsistent with Sears Standards
or plans as specified in Section 6.4(Architecture, Standards and Information
Technology Planning), without first obtaining Sears’ approval, which approval:
(x) Sears may withhold in its sole discretion and (y) shall be effective only if
in writing (in the form of an amendment to this Master Agreement or a Service
Addendum), if any such change would increase the Eligible Recipients’ costs over
the remaining Term of the applicable Transaction Document by more than $10,000
or require a change to any provision of this Agreement (including waivers of
Service Level(s)). If CSC desires to make such a System Change, it shall provide
to Sears a written proposal describing in detail the extent to which the desired
System Change may affect the functionality, performance, security, price or
resource efficiency of the Services and any benefits, savings or risks to the
Eligible Recipients associated with such System Change.
    (d)  
Temporary Emergency Changes. Notwithstanding the foregoing, CSC may make
temporary System Changes required by an emergency if it has been unable to
contact the Sears Relationship Manager to obtain approval after making
reasonable efforts. CSC shall document and report such emergency changes to
Sears not later than the next Business Day after the change is made. Such System
Changes shall not be implemented on a permanent basis unless and until approved
by Sears.
    (e)  
Implementation of System Changes. CSC shall schedule and implement all System
Changes so as not to (i) disrupt or adversely impact the business or operations
of the Eligible Recipients, (ii) degrade the Services then being received by
them or (iii) interfere with their ability to obtain the full benefit of the
Services.
    (f)  
Planning and Tracking. On a monthly basis, CSC shall prepare a rolling quarterly
“look ahead” schedule for ongoing and planned System Changes for the next three
(3) months in accordance with the OPM. The status of System Changes shall be
monitored and tracked by CSC against the applicable schedule.
    (g)  
Comparisons. For any System Change, CSC shall, upon Sears’ request, perform a
comparison, at a reasonable and mutually agreed level of detail, between the
amount of resources required by the affected Software or Equipment to perform a
representative sample of the processing being performed for the Eligible
Recipients immediately prior to the System Change and immediately after the

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System Change. Sears shall not be required to pay for increased resource usage
due to a System Change, except to the extent that such System Change is
requested or approved by Sears after notice from CSC of such increased resource
usage.

5.3  
Reports.

  (a)  
Reports. CSC shall provide Sears with reports pertaining to the performance of
the Services and CSC’s other obligations under this Agreement sufficient to
permit Sears to monitor and manage CSC’s performance (“Reports”). The Reports to
be provided by CSC shall include those described in each Transaction Document in
the format and at the frequencies provided therein. At no additional charge, CSC
shall provide Sears with data and reports in CSC’s possession necessary for the
Eligible Recipients to comply with all Laws. In addition, from time to time,
Sears may identify additional Reports, to a commercially reasonable extent, to
be generated by CSC and delivered to Sears on an ad hoc or periodic basis. All
Reports shall be provided to Sears as part of the Services and at no additional
charge to Sears. The Reports described in each Transaction Document and, to the
extent reasonably possible, all other Reports, shall be (i) capable of being
accessed by Sears through a secure on-line connection, (ii) exportable (together
with the underlying data) by Sears in an electronic, ODBC format capable of
being accessed by Microsoft Office components and modified by Sears (e.g., not
in “read only” form), with the information contained therein capable of being
displayed graphically and accessed from a web browser, and (iii) provided to
Sears in traditional printed form.
    (b)  
Back-Up Documentation. As part of the Services, CSC shall provide Sears with
such documentation and other information as may be reasonably requested by Sears
from time to time in order to verify the accuracy of the Reports provided by CSC
and the CSC Personnel. In addition, CSC shall provide Sears with all
documentation and other information reasonably requested by Sears from time to
time to verify that CSC’s performance of the Services is in compliance with the
Service Levels and this Agreement.

5.4  
Meetings.

  (a)  
Meetings. During each Exhibit Term, representatives of the Parties shall meet
periodically or as requested by Sears or as set forth in the applicable
Transaction Document to discuss matters arising under this Agreement and each
Transaction Document, including any such meetings provided for under each
Migration Plan and Transformation Plan. Each Party shall bear its own costs in
connection with the attendance and participation of such Party’s representatives
in such meetings. Such meetings shall include, at a minimum, the following:
    (b)  
Agenda and Minutes. For each such meeting CSC shall prepare and distribute an
agenda, which shall incorporate the topics designated by Sears. CSC shall

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distribute such agenda in advance of each meeting so that the meeting
participants may prepare for the meeting. In addition, CSC shall record and
promptly distribute minutes for every meeting for review and approval by Sears.
     

  (c)  
Eligible Recipient Meetings. CSC shall notify the Sears Relationship Manager (or
her/his delegates) in advance of scheduled meetings with Eligible Recipients
(other than meetings pertaining to the provision of specific Services on a
day-to-day basis) and shall invite the Sears Relationship Manager and the
applicable Exhibit Project Executives to attend such meetings or to designate
representatives to do so.
    (d)  
Telephone/Video Conferences. Telephone/video conferences can be used in place of
meetings with the prior approval of the participants. Unless otherwise agreed to
by the participants, all meetings shall occur at Sears Facilities.

6.  
CSC RESPONSIBILITIES
     
In addition to CSC’s responsibilities as expressly set forth elsewhere in this
Agreement or any Transaction Document, CSC shall be responsible for the
following.
  6.1  
Cooperation with Sears Personnel.
     
CSC shall fully cooperate with and work in good faith with the Eligible
Recipients and Sears Personnel as described in this Agreement or as otherwise
requested by Sears. Such cooperation shall include timely providing: (a) all
cooperation and assistance reasonably required or requested by Sears, the other
Eligible Recipients or the Sears Personnel in connection with Sears’ evaluation
or testing of the Services and Deliverables and/or services Sears is to receive
from such third parties (including the integration of such Third Party services
with the Services Sears is to receive under this Agreement); (b) access to any
facilities being used to provide the Services, as necessary for Sears Personnel
to perform the work assigned to them; (c) reasonable electronic and physical
access to business processes and associated CSC Provided Systems, CSC Managed
Systems and Sears Provided Systems to the extent necessary and appropriate for
the Sears Personnel to perform the work assigned to them (including oversight of
CSC); (d) written requirements, standards, policies or other documentation for
the Services, and the business processes and associated CSC Provided Systems,
CSC Managed Systems and Sears Provided Systems; (e) access to CSC Facilities to
permit Sears, its Affiliates or Sears Personnel to install, maintain or manage
Third Party Software, Equipment and other Systems Sears desires to use in
connection with the Services; and (f) any other cooperation or assistance
reasonably necessary for Sears Personnel to perform the work in question. Sears
Personnel shall comply with CSC’s reasonable security requirements, and shall,
to the extent performing work on CSC Provided Systems or CSC Managed Systems,
comply with CSC’s reasonable standards, methodologies and procedures, in each
case, to the extent such requirements are provided in advance and in writing to
such Personnel.

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6.2  
Subcontractors.

  (a)  
Use of Subcontractors. Except as set forth in Section 6.2(a) (Exempt
Subcontractors) or elsewhere in this Agreement, CSC shall not subcontract any of
its responsibilities under this Agreement without Sears’ prior written
approval;. Prior to entering into a subcontract with a Third Party or a CSC
Affiliate for the Services, for whom approval is required under this subsection,
CSC shall (i) give Sears reasonable prior notice specifying the Transaction
Documents and components of the Services affected, the scope of the proposed
subcontract, the identity and qualifications of the proposed Subcontractor and
the reasons for subcontracting the work in question and (ii) obtain Sears’ prior
written approval of such Subcontractor.
    (b)  
Exempt Subcontractors. CSC may, without Sears’ approval, subcontract in the
ordinary course of business:

  (i)  
for services that do not involve: (1) *** (2) regular direct contact with Sears
Personnel, including any Services that are to be performed at Sears Sites; or
(3) off-site remote services and help desk support; or
    (ii)  
for services to the extent they consist of the provision of Equipment or
Software maintenance and do not involve regular direct contact with Sears
Personnel; or
    (iii)  
with temporary personnel firms for the provision of temporary contract labor
(collectively, “Exempt Subcontractors”); or

In addition, the parties agree that the prohibition in Section 6.2(a) do not
apply to third parties to the extent CSC is procuring Equipment or Software from
such third parties.

  (c)  
Minority/Women-Owned Businesses. CSC acknowledges that it is the commitment of
Sears to successfully bring minorities and women into the American economic
system by doing business with qualified minority and women sources. In
furtherance of Sears’ aforesaid commitment, if CSC utilizes the services of
Subcontractors, CSC shall use reasonable efforts to utilize Subcontractors that
are qualified minority-owned and/or women-owned sources. Upon Sears’ request,
from time to time, CSC shall, and shall require each of its Subcontractors to,
provide Sears with a detailed listing of all Subcontractors involved in the
provision of the Services (including any CSC Provided Systems), listing:
(i) which, if any, are qualified minority-owned or women-owned Entities, and
(ii) the dollar amount of Charges under this Agreement attributable to qualified
minority-owned or women-owned Subcontractors and suppliers versus Subcontractors
and suppliers that are not qualified minority-owned or women-owned Entities over
the period of time specified by Sears; to assist Sears in reporting on the level
of minority-owned and/or women-owned entities involved in the provision of the
Services (including any CSC Provided Systems). CSC has

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informed Sears that *** Subcontractors be qualified minority-owned or
women-owned Entities and CSC will inform Sears of any changes in this goal.

6.3  
Quality Assurance.
     
CSC shall develop, implement and fully document in the OPM quality assurance
processes and procedures to ***. Such procedures shall include verification,
checkpoint reviews, testing, acceptance and other procedures to assure the
quality and timeliness of CSC’s performance. No failure or inability of the
quality assurance procedures to disclose any errors or problems with the
Services shall excuse CSC’s failure to comply with the terms of this Agreement,
including the Service Levels. In addition, CSC must integrate such quality
assurance procedures with Sears’ application development/enterprise service
delivery teams. ***.
  6.4  
Architecture, Standards and Information Technology Planning.

  (a)  
CSC Support. As requested by Sears from time to time, CSC shall assist Sears in
defining information technology architectures and standards applicable to the
activities that are the subject of the Services on an ongoing basis
(collectively, the “Sears Standards”) and in annually preparing long-term
strategic information technology plans and short-term implementation plans based
thereon. The assistance to be provided by CSC shall include: (i) active
participation with Sears representatives on permanent and ad hoc committees and
working groups addressing such issues as further specified in the Transaction
Document, or otherwise agreed to by the Parties; (ii) assessments of the
then-current Sears Standards at a level of detail sufficient to permit Sears to
make informed business decisions; (iii) analyses of the appropriate direction
for such Sears Standards in light of business priorities, business strategies,
competitive market forces and changes in technology; (iv) the provision of
information to Sears regarding CSC’s information technology strategies for its
own business; (v) technology briefings from an industry perspective,
(vi) accompanying Sears, upon Sears’ request, at meetings with other technology
vendors (e.g., Microsoft), and (vii) recommendations regarding information
technology architectures and platforms, software and hardware products,
information technology strategies, standards and directions, and other enabling
technologies. With respect to each recommendation Sears’ elects to investigate
further, CSC shall provide the

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.

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following at a level of detail sufficient to permit Sears to make an informed
business decision: (A) cost projections and cost/benefit analyses; (B) the
changes, if any, in the Software, Equipment, Materials, Personnel and other
resources required to operate and support the changed environment; (C) the
resulting impact on Sears’ information technology costs; and (D) the expected
performance, quality, responsiveness, efficiency, reliability, security risks
and other Service Levels. CSC shall, and shall cause the CSC Personnel to,
perform their respective obligations under this Agreement without any preference
for or bias toward any Software, Equipment or other products licensed or sold by
CSC, its Affiliates or any other CSC Personnel, including in connection with any
recommendations that CSC or the CSC Personnel may make regarding business
processes, technologies or specific solutions that Sears should adopt.
    (b)  
CSC Familiarity with Sears Standards. CSC acknowledges and agrees that as of the
applicable Commencement Date, it is fully informed of and familiar with the
Sears Standards, Code of Conduct and Privacy Policies, both through due
diligence and its hiring of Transitioned Personnel pursuant to the applicable
Transaction Document. CSC shall be responsible for documenting the Sears
Standards in the Operational Procedures Manual in accordance with Section 5.1
(Operational Procedures Manual). Additions, deletions or modifications to the
Sears Standards shall be communicated in writing by Sears to CSC.
    (c)  
Sears Authority and CSC Compliance. Sears shall have final authority to
promulgate Sears Standards and to modify or grant waivers from such Sears
Standards. CSC shall (i) comply with and implement the Sears Standards in
providing the Services, (ii) work with Sears to enforce the Sears Standards,
(iii) modify the Services as and to the extent necessary to conform to such
Sears Standards and (iv) obtain Sears’ prior written approval for any deviations
from such Sears Standards. CSC’s compliance with new Sears Standards and its
modification of the Services in accordance therewith may or may not constitute
New Services.
    (d)  
Compliance with Sears Standards. The Parties acknowledge and agree that
(i) Sears shall not incur additional Charges in connection with changes in the
Sears Standards applicable to Software if the new or changed Software can be
distributed remotely (in such event, the distribution of new or changed Software
in this manner and the setup of the distribution system to accommodate such new
or changed Software shall be deemed included in the Charges), (ii) Sears shall
not incur additional Charges in connection with changes in the Sears Standards
applicable to Equipment and Software if such changes are implemented through the
refresh of such Equipment and Software in the ordinary course in accordance with
the refresh schedule set forth in the applicable Transaction Document, and
(iii) to the extent Sears requires that changes in the Sears Standards
applicable to Equipment and Software be implemented on an accelerated basis, and
not through the refresh of such Equipment and Software in the ordinary course,
and the implementation of such changes requires CSC to perform tasks that
satisfy the

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definition of New Services, the implementation of changes shall be subject to
Section 4.5(b)(New Services).

     

  (e)  
Financial, Forecasting and Budgeting Support. On a monthly basis, CSC shall
provide to Sears, for Sears’ forecasting and budgeting purposes, a report that
shall include (i) a summary of the Charges for the Services current year to
date, by pricing element, under each Transaction Document, (ii) a forecast of
the utilization of the Services, by pricing element, under each Transaction
Document, of the remainder of the current calendar year, as well as the next
calendar year, and (ii) changes to the environment impacting Sears’ costs or
utilization, including general plans and projected time schedules for
development and implementation. In addition, on each anniversary of the
Effective Date, CSC shall provide information to Sears regarding opportunities
to modify or improve the Services and reduce the Charges and/or total cost to
the Eligible Recipients of receiving the Services.

6.5  
Technology.

  (a)  
CSC Briefings. CSC shall meet with Sears at least semi-annually to brief Sears
regarding technological developments and advances as well as new or enhanced
services, software, tools, products, methodologies, trends and directions which
CSC is developing or is otherwise aware of that could reasonably be expected to
have an impact on Eligible Recipients’ businesses, or are otherwise of possible
interest or applicability to Sears. Such briefing shall include CSC’s assessment
of the business impact, performance improvements and cost savings to Sears
associated with each.
    (b)  
Currency. Subject to Section 6.4(Architecture, Standards and Information
Technology Planning), throughout each Exhibit Term, CSC shall provide the
Services using current technologies that shall enable Sears and the other
Eligible Recipients to take advantage of technological advancements in Sears’
and its Affiliates’ businesses and support Sears’ and its Affiliates’ efforts to
maintain competitiveness in the markets in which Sears and its Affiliates
compete. Without limiting the generality of the foregoing, and subject to and in
accordance with Sections 10.3(Sears Provided Systems and CSC Provided Systems),
Section 6.4(Architecture, Standards and Information Technology Planning),
Section 5.2(Change Control), Section 6.5(d) (Approval by Sears) and the terms of
the applicable Transaction Document, CSC shall maintain reasonable currency for
Software for which it is financially responsible under this Agreement and
provide maintenance and support for new releases and versions of Software for
which it is operationally responsible. *** For purposes of this Section 6.5
(Technology), “reasonable currency” means that, unless expressly provided

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otherwise in the applicable Exhibit or otherwise directed by Sears, (i) CSC
shall maintain Software within one (1) Major Release of the then-current Major
Release, and (ii) CSC shall install Minor Releases promptly or, if earlier, as
requested by Sears.

  (c)  
Evaluation and Testing. Prior to installing a new Major Release or Minor
Release, CSC shall evaluate and test such release to verify that it shall
perform in accordance with this Agreement and the Sears Standards and that it
shall not violate clauses (i) — (iv) of Section 5.2(c) (Sears Approval — Cost,
Adverse Impact). The evaluation and testing performed by CSC in accordance with
the OPM shall be at least consistent with the reasonable and accepted industry
norms applicable to the performance of such Services and shall be at least as
rigorous and comprehensive as the evaluation and testing usually performed by
highly qualified service providers under such circumstances.
    (d)  
Approval by Sears. Notwithstanding Section 6.5(b) (Currency), CSC shall confer
with Sears prior to CSC or the CSC Personnel installing any Major Release or
Minor Release, shall provide Sears with the results of its testing and
evaluation of such release and a detailed implementation plan and shall not
install such release if directed not to do so by Sears. Neither CSC nor the CSC
Personnel shall install new Software releases or make other System Changes other
than in accordance with Section 5.2 (Change Control); provided, however, that if
requested by Sears, neither CSC nor the CSC Personnel shall install new Software
releases or make other Software changes until Sears has completed and provided
formal sign-off on successful user acceptance testing. CSC shall install,
operate and support multiple versions of the same Software as and to the extent
directed to do so by Sears. ***

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  (e)  
Updates by Sears. The Eligible Recipients shall have the right, but not the
obligation, to install new releases of, replace or make other changes to
Software for which Sears is financially responsible under this Agreement.
    (f)  
Unanticipated IT Change. If an Unanticipated IT Change occurs, and if Sears
requests that such Unanticipated IT Change be substituted or added by CSC to the
Services, the Parties shall use the procedures in Section 13.6(b) (Extraordinary
Events; Consequence) to equitably adjust the Charges and other relevant
provisions of this Agreement to take such Unanticipated IT Change into account.
An “Unanticipated IT Change” means a material shift and improvement in
technology capable of providing all or part of the Services that is outside the
normal evolution of technology experienced by the information technology
industry, was not generally available as of the applicable Commencement Date, is
reasonably reliable and relevant and can be technically substituted or added by
CSC to the Services.
    (g)  
CSC Developed Advances. If CSC or its Affiliates develop technological advances
or changes to CSC’s Systems to be offered to other CSC customers to provide
services that are the same or similar to the Services or CSC or its Affiliates
develop new or enhanced processes, services, software, tools, products or
methodologies to be offered to other CSC customers (collectively, “New
Advances”), CSC shall, subject to Section 4.5 (Additional Services), (i) offer
Sears the opportunity to serve as a pilot customer in connection with the
implementation of such New Advances, and (ii) if Sears declines such
opportunity, offer Sears preferred access to such New Advances and the
opportunity to be among the first ten percent (10%) of the CSC customer base to
implement and receive the benefits of any New Advances.
    (h)  
Services Evolution and Modification. The Parties anticipate that the Services
shall evolve and be supplemented, modified, enhanced or replaced over time to
keep pace with technological advancements and improvements in the methods of
delivering services and changes in the businesses of the Eligible Recipients.
The Parties acknowledge and agree that these changes shall modify the Services
and shall not be deemed to result in New Services as provided in Section 4.5(b)
(New Services) unless the changed services otherwise meet the definition of New
Services.

6.6  
Financial Filings and Notice of Change of Financial Condition.

  (a)  
Financial Filings. Promptly, but in no event later than fourteen (14) days after
CSC files any quarterly, annual or special report with the (i) SEC, including
10-Q, 10-K and 8-K reports, Proxy Statements pursuant to Section 14(a) of the
Securities Exchange Act of 1934, or Annual Reports to CSC’s shareholders, or
(ii) applicable listing stock exchange for Supplier’s publicly traded equities,
CSC

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shall provide copies of such reports, statements or filings to (1) Sears’ Chief
Information Officer, and (2) Sears’ Chief Financial Officer.

     

  (b)  
Notice. CSC shall, within fourteen (14) days after obtaining actual knowledge of
the occurrence of a Credit Trigger Event, provide notice to Sears of the
occurrence of such Credit Trigger Event. Promptly following the date Sears
receives such notice, senior executives of the Parties shall meet to discuss
CSC’s and CSC’s parent Entity’s (to the extent CSC has a parent Entity)
financial condition and their ability to continue to perform their obligations
hereunder.

7.  
SEARS’ RESPONSIBILITIES
  7.1  
General Sears Responsibilities.
     
In addition to Sears’ responsibilities as expressly set forth elsewhere in this
Agreement, Sears shall be responsible for the following:

  (a)  
Sears Relationship Manager. Sears shall designate one (1) individual to whom all
CSC communications concerning this Agreement may be addressed, as provided in
Section 26.3 (Notices) (the “Sears Relationship Manager”), who shall have the
authority to act on behalf of the Eligible Recipients in all day-to-day matters
pertaining to this Agreement. Sears may change the designated Sears Relationship
Manager from time to time by providing notice to CSC.
    (b)  
Cooperation. Sears shall cooperate with CSC by, among other things, making
available, as reasonably requested by CSC, management decisions, information,
approvals and acceptances so that CSC may accomplish its obligations and
responsibilities hereunder.
    (c)  
Sears Personnel. Subject to Section 7.2 (Sears Responsibilities), Sears may
elect to perform any of its obligations under this Agreement through any Sears
Personnel; provided that such election by Sears shall not limit or affect Sears
responsibilities under this Agreement for the performance of such obligations.
    (d)  
Contract Waivers. At CSC’s request, the Parties will meet, from time to time, to
discuss *** implementation of appropriate contract waivers, through which the
Parties can, limit both Sears and CSC’s liability to Third Parties ***.

7.2  
Sears’ Responsibilities.

  (a)  
Nature of Responsibilities. Without limiting Sears’ obligations under this
Agreement, such as Sears’ payment obligation as provided in Section 14
(Invoicing and Payment) and Sears’ obligations regarding CSC’s Confidential
Business Information under Section 15.3(b) (Confidential Business Information),

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references in this Agreement to Sears’ responsibilities are intended solely for
the purpose of indicating items that are not CSC’s responsibility, and shall not
in any circumstance give rise to, or constitute grounds for, a claim of breach
by Sears.
    (b)  
Exception to CSC Performance. CSC’s failure to perform its responsibilities
under this Agreement or to meet the Service Levels shall be excused if and to
the extent such CSC non-performance is directly caused by Sears’ or Sears
Personnel’s (excluding for purposes of this Section 7.2(b) (Exception to CSC
Performance) Sears Personnel under the direction or management of CSC or CSC
Personnel) breach of Sears’ obligations under this Agreement or Sears’ failure
(other than as a result of CSC’s failure to complete its obligations on a timely
basis) to timely complete any necessary predecessor Sears’ obligation under this
Agreement, but only if (i) CSC immediately notifies Sears in accordance with
Section 7.2(c) (Notice of Problems) of such a breach or Sears’ failure to
perform such obligation and its inability to perform under such circumstances,
(ii) CSC provides Sears with every reasonable opportunity to correct such breach
or Sears’ failure to perform such obligation and thereby avoid such CSC
non-performance, and (iii) CSC uses commercially reasonable efforts to perform
notwithstanding Sears’ breach or Sears’ failure to perform such obligation.
    (c)  
Notice of Problems. CSC shall immediately notify Sears in writing when it
becomes aware that an act or omission of any Eligible Recipient shall cause, or
has caused, a problem or delay in providing the Services, and shall use
commercially reasonable efforts to work with the Eligible Recipients to prevent
or circumvent such problem or delay. CSC shall cooperate with the Eligible
Recipients to resolve differences and conflicts regarding the Services and other
activities undertaken by the Eligible Recipients.
    (d)  
***

8.  
SEARS AND CSC FACILITIES
  8.1  
Service Facilities.

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The Services shall be provided at or from (a) the Sears Facilities described in
the applicable Transaction Document, (b) the CSC Facilities described in the
applicable Transaction Document or (c) any other service location approved in
writing by Sears. CSC shall obtain Sears’ prior written approval for any
proposed relocation by CSC or CSC Personnel of the provision of a Service from
or to a new or different Sears Facility. CSC shall be financially responsible
for all additional costs, taxes or expenses related to or resulting from any
CSC-initiated relocation to a new or different Sears Facility or CSC Facility,
including any costs or expenses incurred or experienced by any Eligible
Recipient as a result of such relocation (e.g., increases in taxes,
telecommunications charges, etc.).
  8.2  
Sears Facilities.

  (a)  
General. To the extent expressly provided in a Transaction Document, Sears shall
provide CSC and the CSC Personnel with the use of and access to the Sears
Facilities (or equivalent space) and office furniture described in such
Transaction Document for the periods specified therein solely as necessary for
CSC to perform its obligations thereunder. Notwithstanding anything to the
contrary in this Section 8.2 (Sears Facilities), Sears will provide office space
only to CSC Personnel directly involved in providing the Services and dedicated
to Sears. In addition, all improvements or modifications to Sears Facilities
requested by CSC shall be (i) subject to review and approval in advance by
Sears, (ii) in strict compliance with applicable Laws and Sears’ then-current
policies, standards, rules and procedures, and (iii) performed by and through
Sears at CSC’s expense. CSC acknowledges and agrees that the facilities to be
provided by Sears are sufficient for performing the Services and for satisfying
CSC’s responsibilities under this Agreement. THE SEARS FACILITIES ARE PROVIDED
BY THE ELIGIBLE RECIPIENTS TO CSC AND THE CSC PERSONNEL ON AN AS-IS, WHERE-IS
BASIS. THE ELIGIBLE RECIPIENTS EXPRESSLY DISCLAIM ANY WARRANTIES, EXPRESS OR
IMPLIED, AS TO THE SEARS FACILITIES OR THEIR CONDITION OR SUITABILITY FOR USE BY
CSC OR CSC PERSONNEL. It is understood that CSC and the CSC Personnel’s use of
the Sears Facilities does not constitute or create a leasehold interest. When
the Sears Facilities, or any portion of the Sears Facilities, are no longer to
be used by CSC or the CSC Personnel as contemplated by this Section 8 (Sears and
CSC Facilities) or are otherwise no longer required for performance of the
Services, CSC shall notify Sears as soon as practicable and shall vacate and
return such Sears Facilities (including any improvements to such facilities made
by or at the request of CSC) to Sears in substantially the same condition as
when such facilities were first provided to CSC, subject to reasonable wear and
tear. CSC Personnel using the office facilities provided by Sears shall be
accorded reasonable use of (A) certain employee facilities (e.g., parking
facilities (other than paid parking facilities), cafeteria and common
facilities) to the extent generally made available to similarly situated Sears
employees, and (B) certain shared office equipment and services (such as local
telephone service for Sears-related calls, mail service, office support service
(e.g., janitorial not including

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secretarial services), heat, light and air conditioning). The foregoing employee
facilities, and the extent of CSC Personnel’s permitted use thereof, may be
modified in Sears’ sole discretion without advance notice, but in a manner
generally applicable to Sears Personnel.

     

  (b)  
Use of Sears Facilities.

  (i)  
No Use for Shared Services. Unless CSC obtains Sears’ prior written agreement,
which Sears may withhold in its sole discretion, CSC shall use the Sears
Facilities, and the Equipment and Software located therein, and the Sears
Provided Systems solely to provide the Services to the Eligible Recipients and
not to CSC’s other customers.
    (ii)  
Relocation by Sears. Sears reserves the right to relocate any Sears Facility
from which the Services are then being provided by CSC Personnel to another
geographic location; provided, however, that, in such event, Sears shall provide
CSC with comparable office space in the new location. In such event, Sears shall
reimburse CSC for: (1) any reasonable incremental Out-of-Pocket Expenses
incurred by CSC, and (2) CSC’s internal labor costs (subject to Section 4.5
(Additional Services)); in each such case, incurred in physically relocating to
such new geographic location; provided, however, that such relocation is not
expressly contemplated in this Agreement, and that CSC notifies Sears of such
incremental expenses, obtains Sears’ approval prior to incurring such expenses
and uses commercially reasonable efforts to minimize such expenses.
    (iii)  
Re-Use of Space. Sears also reserves the right to direct CSC to cease using all
or part of the space in any Sears Facility from or in which the Services are
then being provided by the CSC Personnel and to thereafter use such space for
Sears’ own purposes. In such event, Sears shall reimburse CSC for: *** incurred
in leasing required substitute new space; provided, however, that such
relocation direction is not expressly contemplated in this Agreement and that
CSC notifies Sears of such incremental expenses, obtains Sears’ approval prior
to incurring such expenses, and uses commercially reasonable efforts to minimize
such expenses. Except for office space provided by Sears in a Sears Facility for
CSC’s Personnel pursuant to the TI Exhibit and any Systems that are required to
be located at a Sears Facility for the proper performance of the Services, CSC
shall relocate to a CSC Facility all other CSC Personnel, CSC Provided Systems
and CSC Managed Systems as part of the Transformation Services. Sears shall be
entitled to charge CSC rent for any such space that is not vacated by CSC
Personnel within the timelines set forth in the Transformation Plan.

8.3  
Access to Sears’ Networks.

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If CSC or any CSC Personnel has access, whether on-site or through remote
facilities, to any Eligible Recipient’s Equipment, Software, electronic data
storage Systems or other electronic Systems (each, an “Electronic System”), in
connection with this Agreement, CSC shall limit such access and use by CSC
Personnel solely to: (a) those Electronic Systems and data contained therein
that Sears has authorized CSC’s Personnel to access; (b) those CSC Personnel who
need access to such Electronic Systems to accomplish CSC’s obligations under the
applicable Transaction Document, and CSC’s Personnel shall not attempt to access
any Electronic Systems and data contained therein other than those specifically
required to accomplish its obligations under the applicable Transaction
Document; and (c) performing CSC’s obligations within the scope of the
applicable Transaction Document. CSC shall, upon Sears’ request, advise Sears in
writing of the name of each such Personnel who have been granted such access,
and shall strictly follow all Sears Rules. CSC is responsible for any
unauthorized access or use by CSC Personnel. All user identification numbers and
passwords disclosed to CSC Personnel and any information obtained by CSC
Personnel as a result of CSC Personnel’s access to, and use of, Eligible
Recipients’ Electronic Systems shall be Sears’ Confidential Information, without
the need to mark it as such. CSC shall cooperate with Sears in the investigation
of any apparent unauthorized access by CSC Personnel to any Eligible Recipient’s
Electronic Systems and/or the data contained therein. CSC shall not install or
permit the installation or connection of any Software or Equipment on any
Eligible Recipient’s network(s) without Sears’ prior review and approval.
  8.4  
CSC’s Responsibilities.
     
Except for the Sears Provided Systems and as provided in Section 8.2 (Sears
Facilities), CSC shall be responsible for all office, data processing, and
desktop and other computing Software, Equipment and services, long-distance
telephone service, space, furniture, fixtures, facilities and other items, as
well as all personnel, technical knowledge, expertise and other resources,
needed by CSC or CSC Personnel (including Transitioned Personnel hired by CSC)
to provide the Services, and for all Upgrades, replacements and additions
thereto. Without limiting the foregoing, CSC shall (i) provide all maintenance,
site management, site administration and similar services for the CSC
Facilities, and (ii) provide uninterrupted power supply services for the CSC
Facilities and for the Software, Equipment and Systems in Sears Facilities as
designated in the applicable Transaction Document.
  8.5  
Physical Security.
     
CSC shall be responsible for physical security, including safety and physical
access and control, for the CSC Facilities that CSC is using in performing the
Services. CSC shall not permit any person to have access to, or control of, any
Sears Facilities unless such access or control is permitted in accordance with
control procedures approved by Sears. If CSC provides the Services to the
Eligible Recipients from a CSC Facility, CSC shall develop and implement the
processes and controls *** unauthorized access in any such CSC Facility to Sears
Confidential Information and prevent CSC Personnel servicing Third Parties at or
from such CSC Facility from having access to

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             Sears Confidential Information. ***.

9.  
REQUIRED CONSENTS
  9.1  
Administrative Responsibility.

  (a)  
General. Unless otherwise elected by Sears, CSC shall, commencing on the
effective date of the applicable Transaction Document, undertake all
administrative activities necessary to obtain all Required Consents, including
those necessary to transfer Acquired Assets to CSC and to permit CSC’s Personnel
to access and use the Acquired Assets in connection with providing the Services
if consent to transfer them to CSC is not received. Notwithstanding the
foregoing, Sears shall undertake all administrative activities necessary to
obtain any Required Consents for CSC’s use of Sears Facilities as contemplated
hereby.
    (b)  
Cooperation. At CSC’s request, Sears shall cooperate with CSC in obtaining the
Required Consents by executing appropriate Sears-approved written communications
and other documents prepared or provided by CSC. Upon CSC’s request, Sears will
provide to CSC any information CSC reasonably requests that is in Sears’
possession and that Sears is permitted to share with CSC under the terms of the
applicable Third Party Contract and Law. In connection with any Required
Consents for Sears Facilities, at Sears’ request, CSC shall cooperate with Sears
in obtaining the Required Consents by executing appropriate CSC approved written
communications and other documents prepared or provided by Sears. With Sears’
approval, CSC shall exercise for the benefit of the Eligible Recipients any
rights CSC, its Affiliates or the other CSC Personnel have to utilize or
transfer license rights or other applicable rights under any existing Third
Party licenses, leases or contracts, including licenses, leases and/or contracts
relating to functionally equivalent Systems, and the Parties shall cooperate in
minimizing or eliminating any costs associated therewith.

9.2  
Financial Responsibility.
     
Except as set forth in a Transaction Document, (a) CSC shall pay all transfer,
relicensing or termination fees or expenses associated with obtaining any
Required Consents (including the rights provided for under Section 10.3(h)
(Other Matters) for Sears Provided Systems, CSC Provided Systems, including
Acquired Assets, CSC Managed Systems, CSC Designated Contracts and CSC
Facilities or terminating any licenses, leases or agreements as to which CSC is
unable to obtain such Required Consents, and (b) Sears shall be responsible for
any fees or expenses for Required Consents for CSC’s use of Sears Facilities.

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9.3  
Contingent Arrangements.

  (a)  
General. If, despite using all commercially reasonable efforts, CSC is unable to
obtain a Required Consent for any Acquired Asset, CSC Designated Contract, or
Sears Provided System, then, unless and until such Required Consent is obtained,
CSC shall use all commercially reasonable efforts to determine and adopt,
subject to Sears’ prior approval, such alternative approaches as are necessary
and sufficient to provide the Services without such Required Consent(s) and
without violating the Third Party Contracts applicable to the foregoing. If such
alternative approaches are required for a period longer than six (6) months
following the applicable Commencement Date, ***. The Parties shall work together
to negotiate in good faith any other appropriate adjustments to this Agreement
during such interim period. Except as otherwise expressly provided herein, the
failure to obtain any Required Consent shall not relieve CSC of its obligations
under this Agreement and CSC shall not be entitled to any additional
compensation or reimbursement amounts in connection with obtaining or failing to
obtain any Required Consent or implementing any alternative approach.

10.  
SOFTWARE, EQUIPMENT, CONTRACTS AND ASSETS ASSOCIATED WITH THE PROVISION OF
SERVICES
  10.1  
CSC Designated Contracts.

  (a)  
Assignment and Assumption. On and as of the applicable Commencement Date, Sears
shall assign to CSC, and CSC shall assume and agree to perform all obligations
related to, the Software licenses, Equipment leases and Third Party Contracts
associated with Acquired Assets and/or identified as “CSC Designated Contracts”
in the applicable Transaction Document (collectively, “CSC Designated
Contracts”). With respect to each CSC Designated Contract requiring a Required
Consent for assignment to CSC, CSC shall use commercially reasonable efforts to
cause the applicable Third Party to enter into a mutually satisfactory novation
agreement among such Third Party, Sears and CSC evidencing the assignment and
assumption by CSC of Sears’ obligations and the release of Sears as provided for
in this Agreement. With respect to CSC Designated Contracts not requiring a
Required Consent for assignment or for which CSC is unable to obtain such
novation agreement, then subject to CSC obtaining the applicable Required
Consents, Sears and CSC shall execute and deliver a mutually satisfactory
assignment and assumption agreement with respect to such CSC Designated
Contracts, evidencing the assignment and assumption provided for in this
Agreement.
    (b)  
CSC Designated Contracts Not Assignable by Commencement Date. With respect to
any CSC Designated Contracts that cannot, as of the applicable Commencement
Date, be assigned to CSC without breaching their terms or

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otherwise adversely affecting the rights or obligations of Sears or CSC
thereunder, but for which any Required Consent necessary for CSC to access and
use the underlying Software, Equipment or services has been received, the
performance obligations thereunder shall be deemed to be subcontracted or
delegated to CSC until any requisite consent, notice or other prerequisite to
assignment can be obtained, given or satisfied by CSC. It is understood that,
from and after the Commencement Date, CSC, as a Subcontractor or delegate, shall
be and remain financially and operationally responsible for such CSC Designated
Contract as Sears’ agent pursuant to Section 13.2(e) (Limited Agency) and, if
applicable, the underlying Acquired Asset shall not be transferred to CSC, but
instead shall be considered part of the CSC Managed Systems. CSC shall use all
commercially reasonable efforts to satisfy the consent, notice or other
prerequisites to assignment and, upon CSC doing so, the CSC Designated Contract
and, if applicable, the underlying Acquired Asset shall immediately be assigned
and transferred to and assumed by CSC (and shall thereafter no longer be part of
the CSC Managed Systems).

  (c)  
Non-Assignable CSC Designated Contracts. If, after CSC using commercially
reasonable efforts for a reasonable period of time, a CSC Designated Contract
cannot be assigned to CSC without breaching its terms or otherwise adversely
affecting the rights or obligations of Sears or CSC thereunder, the Parties
shall take such actions and execute and deliver such documents as may be
necessary to cause the Parties to realize the practical effects of the
allocation of responsibilities intended to be effected by this Agreement.
    (d)  
Modification and Substitution. Unless otherwise agreed to by the Parties in
writing, CSC may terminate, shorten, modify or extend the CSC Designated
Contracts and may substitute or change suppliers relating to Equipment, Software
or other goods or services covered thereby, so long as such change(s) do not, in
connection with such CSC Designated Contract or the Services hereunder:
(i) constitute a breach of any obligation of the Eligible Recipients under any
CSC Designated Contract; (ii) result in additional financial obligations, or
Losses to Sears Related Businesses arising out of such CSC Designated Contract;
and (iii) provide, if assumable by Sears, for less favorable terms, conditions
or prices for the Eligible Recipients following the expiration or termination of
the applicable Transaction Document than would otherwise be applicable to CSC
(except for terms, conditions or prices available to CSC because of its volume
purchases). CSC’s rights under the immediately preceding sentence are:
(i) conditioned upon CSC paying all applicable termination or cancellation
charges, Losses and other amounts due to the applicable supplier associated with
such action, and (ii) are subject to Section 10.1(d) (System Change Costs).
Notwithstanding anything to the contrary in this Agreement, CSC shall not
terminate, shorten or modify without Sears’ prior written consent any license
for Third Party Software either created exclusively for the Eligible Recipients
or otherwise not commercially available. CSC shall reimburse the Eligible
Recipient(s) for any termination

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charges, cancellation charges, or other amounts paid by them at CSC’s direction
in connection with obtaining any such modification.

    (e)  
Unidentified Third Party Contracts. With respect to any Third Party Contract
that (i) is related to any of the Acquired Assets or functions, responsibilities
or services to be performed by CSC under this Agreement, (ii) is not identified
in a Transaction Document and (iii) was not discovered by CSC during their due
diligence and negotiations preceding the execution of such Transaction Document
(an “Unidentified Third Party Contract”), the following shall apply: (1) the
Unidentified Third Party Contract shall be added to the applicable Transaction
Document as a CSC Designated Contract as soon as it has been identified, subject
to Sears’ prior approval; (2) CSC shall obtain any Required Consents with
respect to any Unidentified Third Party Contract; and (3) the costs of all
transfers, upgrade and other fees necessary to obtain such Required Consent with
respect to the Unidentified Third Party Contracts shall be the responsibility of
CSC. ***.
    (f)  
Managed Third Parties. If a Transaction Document provides for Managed Third
Parties, CSC shall be responsible for those Managed Third Parties perform in
accordance with this Agreement, including Service Levels, and comply with all
applicable duties and obligations imposed on CSC under this Agreement. Unless
otherwise specified in the applicable Transaction Document or agreed to in
writing by the Parties, CSC shall be responsible for all costs and charges
associated with such Managed Third Parties and for any failure by any Managed
Third Party or its Personnel to perform in accordance with this Agreement or to
comply with any duties or obligations imposed on CSC under this Agreement to the
same extent as if such failure to perform or comply was committed by CSC or CSC
Personnel. CSC shall be the Eligible Recipients’ sole point of contact regarding
the services provided by such Managed Third Parties.
    (g)  
Notice of Defaults. CSC shall promptly inform Sears in writing of any material
breach of, or misuse or fraud in connection with, any Third Party Contract,
Equipment lease or Third Party Software license used in connection with the
Services of which CSC becomes aware and shall cooperate with Sears to prevent or
stay any such breach, misuse or fraud.

10.2  
Acquired Assets.
     
If a Transaction Document provides for Acquired Assets, Sears agrees to convey
(or shall cause the applicable Eligible Recipient to convey) to CSC (either
directly or through an

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entity purchase transaction mutually approved by the Parties), subject to CSC
receiving any Required Consents, and CSC agrees (or shall cause an Affiliate to
agree) to accept, as of the applicable Commencement Date, all of Sears’ (or the
applicable Eligible Recipient’s) right, title and interest in and to the
Acquired Assets specified in the applicable Transaction Document (or entity
purchase transaction document). In consideration for such conveyance, CSC shall
pay Sears on the Commencement Date the Acquired Assets Credit specified in the
applicable Transaction Document (or entity purchase transaction document). In
addition, CSC shall be responsible for, and shall pay, or provide evidence of
exemption from, all sales, use, Equipment, Software or other goods and services
and other similar taxes arising out of the conveyance of such Acquired Assets.
Subject to CSC receiving any Required Consents, Sears represents and warrants to
CSC that CSC (or its Affiliates) shall take good title to such Acquired Assets
as of the Commencement Date, free and clear of all liens. Except as otherwise
expressly provided in this Section 10.2 (Acquired Assets), SEARS CONVEYS
ACQUIRED ASSETS TO CSC ON AN “AS IS,” “WHERE IS” AND “WITH ALL FAULTS” BASIS.
SEARS HEREBY DISCLAIMS ALL IMPLIED WARRANTIES, WITH RESPECT TO ACQUIRED ASSETS,
OR THE CONDITION OR SUITABILITY OF SUCH ACQUIRED ASSETS FOR USE BY CSC TO
PROVIDE THE SERVICES, INCLUDING WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE.

10.3  
Sears Provided Systems and CSC Provided Systems.

  (a)  
Inventory. Except as may be set forth in a Transaction Document, with respect to
the Services to be provided under such Transaction Document, such Transaction
Document shall contain an inventory (the “Inventory”) of all: (i) Sears Provided
Systems that the Eligible Recipients are to provide for use by CSC Personnel
under such Transaction Document; (ii) CSC Provided Systems; (iii) CSC Managed
Systems; and (iv) CSC Designated Contracts. The Inventory shall be incorporated
into the OPM and shall be regularly updated by CSC as changes occur. CSC shall
review all such changes with Sears, upon Sears’ request, and at least once per
year. All changes to the Inventory shall be subject to Sears’ approval.
    (b)  
Non-Commercially Available Software. CSC shall indicate on the Inventory which
of the CSC Software and Third Party Software used in providing the Services are
not commercially available. CSC shall avoid, after the Commencement Date, using
non-commercially available CSC Software and Third Party Software where practical
and shall not introduce any non-commercially available CSC Software or Third
Party Software where a reasonably functionally equivalent commercially available
alternative exists, unless otherwise agreed to in advance in writing by Sears.
Prior to CSC or the CSC Personnel introducing non-commercially available CSC
Software or Third Party Software, CSC shall notify Sears thereof and CSC shall
work with Sears in good faith to ensure that, to the extent requested by Sears,
Sears Related Businesses are able to procure a license

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for such Software. CSC’s inability to obtain maintenance or support for any CSC
Provided Systems shall not excuse CSC’s performance under this Agreement.

    (c)  
CSC Managed Systems.

  (i)  
CSC Managed Systems Generally. For all CSC Managed Systems that are not provided
under Excluded Agreements; CSC’s responsibility for such Systems shall be the
same under this Agreement as if the Third Party provider of such System was a
subcontractor to CSC, including end to end management of such Systems and
integration of such Systems into CSC’s overall Service delivery; provided that
CSC shall not be responsible for the failure of any such Third Party services
provider to pay service credits, if any, as required under the Third Party
Contract between such service provider and Sears for such CSC Managed System.
    (ii)  
IBM Lotus Notes Agreement. CSC shall have the same responsibility for the IBM
Lotus Notes Agreement, as CSC has for other CSC Managed Systems under Section
10.3(c)(i); ***.
    (iii)  
Excluded Agreements. CSC’s responsibility for CSC Managed Systems provided under
Excluded Agreements shall be limited to ***.
    (iv)  
Terms Applicable to All CSC Managed Systems. Upon CSC’s request, Sears shall
assist CSC in any contractual matters under the Third Party Contracts between
Sears and such Third Party providers of such CSC Managed Systems by, among other
things, sending, in appropriate circumstances, a notice of breach or termination
(prepared by CSC in a format acceptable to Sears); provided that Sears shall not
terminate such agreements (except for cause) with out CSC’s concurrence. CSC
shall be responsible for replacing each CSC Managed System, including those
provided for under the Excluded Agreements and the IBM Lotus Notes Agreement, on
or before the expiration or termination (for any reason) of the Third Party
Contract for such CSC Managed System, either: (a) with a new CSC Provided
System, or (b) by removal of the need for such System from the Services (as may
be further set forth in the applicable Transaction Document), without any
Charges to Sears not set forth in the Transaction Document.

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.

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  (d)  
Financial Responsibility. Except as set forth in a Transaction Document, CSC
shall be responsible for all costs and expenses incurred on or after the
applicable Commencement Date associated with the CSC Provided Systems, CSC
Managed Systems and CSC Designated Contracts (excluding the Excluded Agreements
and Third Party Contracts administered by CSC on a pass-through basis, which are
addressed in Section 13.2 (Pass-Through Expenses)), used by CSC to provide the
Services. Subject to CSC’s obligations with respect to Required Consents, Sears
shall be responsible for Third Party fees or expenses associated with Sears
Provided Systems. Unless otherwise expressly provided, each Party also shall be
responsible for any Third Party fees or expenses on or after the applicable
Commencement Date associated with new, substitute or replacement Software,
Equipment, Equipment leases, circuits, Systems, services or Third Party
Contracts (including Upgrades, enhancements, new versions or new releases of
such Software, Equipment, circuits or services) for which such Party or any of
its Affiliates is financially responsible under this Agreement or the applicable
Transaction Document.
    (e)  
Operational Responsibility. Except as set forth in a Transaction Document, with
respect to the CSC Provided Systems, CSC Managed Systems (except for Excluded
Agreements) and CSC Designated Contracts (excluding the charges under Third
Party Contracts administered by CSC on a pass-through basis, which are addressed
in Section 13.2 (Pass-Through Expenses)), used by CSC to provide the Services,
CSC shall be responsible for: (i) the evaluation, procurement, testing,
installation, rollout, use, repair, support, management, administration,
operation and maintenance of such Software, Equipment or Systems, including
Equipment leases, circuits, services and Third Party Contracts, (ii) the
disposal of broken or replaced Equipment, Software or Systems; (iii) the
evaluation, procurement, testing, installation, rollout, use, repair, support,
management, administration, operation and maintenance of new, substitute or
replacement Software, Equipment, Equipment leases, circuits, services and Third
Party Contracts (including Upgrades); (iv) the performance, availability,
reliability, compatibility and interoperability of such Software, Equipment,
circuits, services and Third Party Contracts each in accordance with this
Agreement, including the Service Levels and change management procedures;
(v) the compliance with and performance of all operational, administrative and
contractual obligations specified in such licenses, leases and contracts; (vi)
the administration and exercise as appropriate of all rights available under
such licenses, leases and contracts; and (vii) the payment of any fees,
penalties, charges, interest or other expenses due and owing under or with
respect to such Software licenses, Equipment, Equipment leases, circuits,
services and Third Party Contracts that are incurred, caused by or result from
CSC’s failure to comply with or perform its obligations under this
Section 10.3(e) (Operational Responsibility) (except to the extent such failure
is relieved due to Sears’ failure to perform its responsibilities as set forth
in Section 7 (Sears Responsibilities)). CSC shall establish a schedule to
evaluate all such Systems on a rolling twelve (12) month basis so that each
System is reviewed at least annually.

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  (f)  
Benefits Pass-Through. With respect to any products and services acquired by CSC
for an Eligible Recipient on a Pass-Through Expense basis during the course of
performing the Services, CSC shall use all commercially available efforts to
pass-through to Sears and the other Eligible Recipients all benefits offered by
the manufacturers and/or suppliers of such products and services (including all
warranties, refunds, credits, rebates, discounts, training, technical support
and other consideration offered by such manufacturers and suppliers) except to
the extent otherwise agreed by Sears. If CSC is unable to pass through such
benefit to Sears or the other Eligible Recipients, it shall notify Sears in
advance and shall not purchase such product or service without Sears’ prior
written approval.

    (g)  
UCITA and CISG. CSC shall use commercially reasonable efforts to ensure that any
Third Party Contracts (i) related to Software, Equipment or services procured by
CSC or any CSC Personnel in connection with this Agreement, and (ii) that may be
transferred to Sears upon the termination or expiration of this Agreement or any
Transaction Document, shall include provisions stating that the parties agree
that UCITA and CISG do not and shall not apply to such contract, to the extent
such exclusions are legally permissible under the applicable governing law of
such contract. If, despite such commercially reasonable efforts, CSC is unable
to obtain such provisions, CSC shall promptly notify Sears in writing of such
failure. Thereafter, Sears may reject or approve CSC’s use of such contract. If
Sears rejects such contract, CSC shall identify a replacement provider
reasonably acceptable to Sears that shall provide Sears with the applicable
contractual rights. Nothing contained in this Section 10.3(g) (UCITA and CISG)
shall relieve CSC of its obligation to (A) perform the Services or any of its
obligations under this Agreement, or (B) meet the Service Levels.
    (h)  
Other Matters.

  (i)  
With respect to all CSC Provided Systems, and related Third Party Contracts to
be used primarily to provide the Services, CSC shall use all commercially
reasonable efforts to (1) obtain for Sears the rights specified in Section 24
(Rights upon Expiration or Termination), (2) ensure that the granting of such
rights is not subject to subsequent third party approval or the payment by a
transferee of transfer fees, (3) ensure that the terms, conditions and prices
applicable to Sears following expiration or termination that are no less
favorable than those otherwise applicable to CSC, and at least sufficient for
the continuation of the activities comprising the Services, and (4) ensure that
neither the expiration or termination of this Agreement or any Transaction
Document, nor the assignment of the contract, shall trigger less favorable
terms, conditions or pricing or services.
    (ii)  
If in any instance CSC is unable to obtain any of the rights and assurances
described in this Section 10.3(h) (Other Matters), it shall notify Sears in
advance and shall not use such CSC Provided System or Third Party Contract
without Sears’ approval, and absent such approval, CSC’s use of

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any such CSC Provided System or Third Party Contract shall obligate CSC to
obtain or arrange, at no additional cost to Sears, equivalent rights to those
set forth in Section 24 (Rights upon Expiration or Termination) below. If Sears
so consents to CSC’s use of any specific CSC Provided Systems or Third Party
Contracts under the foregoing circumstances, such consent shall be deemed to be
conditioned on CSC’s commitment to use all commercially reasonable efforts to
cause such Third Party to agree at expiration or termination of this Agreement
or the applicable Transaction Document, or the completion of Termination
Assistance Services requested by Sears, to permit Sears to assume prospectively
the license, lease or other contract in question or to enter into a new license,
lease or other contract with Sears on substantially the same terms and
conditions, including price and restrictions on authorized users. Sears may, in
its sole discretion, withhold its consent to any such CSC Provided Systems or
Third Party Contract if, following expiration or termination of this Agreement
or any Transaction Document, as the case may be, (1) Sears would not be entitled
to the license, sublicense, assignment or other rights specified in Section 24.1
(Certain Rights), (2) the granting of such license, sublicense, assignment or
other rights would be subject to subsequent Third Party approval or the payment
by a transferee of transfer fees or (3) Sears would be obligated to reimburse
CSC for any termination or cancellation fees, noncancelable charges or other
termination charges set forth in the applicable Transaction Document.

  (i)  
Evaluation of Third Party Software, Equipment.

  (i)  
Replacement With Sears Provided System. If Sears wishes to replace or provision
any CSC Provided System or CSC Managed System with an identical or comparable
Sears Provided System, CSC shall provide Sears with a credit equal to the amount
of the cost avoidance, if any, enjoyed by CSC, its Affiliates or the CSC
Personnel by reason of such replacement. Such cost avoidance shall include all
reduced or eliminated license fees, lease payments, maintenance contracts and
all other costs and expenses avoided by CSC, its Affiliates or the CSC Personnel
as a result of Sears’ replacement or provisioning of such CSC Provided System or
CSC Managed System or other goods or services, as well as CSC’s, its Affiliates’
or the CSC Personnel’s anticipated profit associated with such avoided cost(s)
(net of any increased costs suffered by CSC as a result of such replacement);
provided that CSC shall not be required to accept such a replacement System if
such replacement would result in a net increase to CSC costs. If Sears’
provisioning of a comparable Sears Provided System will have an adverse affect
on the Services or the method in which CSC is providing any of the Services, CSC
shall notify Sears in writing of such adverse effect within ten (10) Business
Days of Sears’ notice of Sears’ intention to install such a comparable system;
in which case the parties shall work in good faith to mitigate any potential
harm from the use of

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Sears Provided System. ***.

    (ii)  
Evaluation of New Software or Equipment. If Sears wishes to modify or replace or
provision any CSC Provided System or CSC Managed System or Sears Provided System
with any Third Party Software or Equipment (other than a Sears Provided System,
in which case Section 10.3(i)(i) (Replacement With Sears Provided System) shall
apply) selected by an Eligible Recipient and that is not then in use in
connection with the Services, then CSC shall, without additional cost to Sears,
use all commercially reasonable efforts to evaluate and determine whether such
Software and Equipment shall adversely affect the Eligible Recipients’
environment, CSC Provided Systems, CSC Managed Systems, Sears Provided Systems
and/or CSC’s ability to provide the Services. CSC shall complete and report the
results of such evaluation to Sears within fifteen (15) days of its receipt of
Sears’ request; provided, however, that CSC shall use all commercially
reasonable efforts to respond more quickly in the case of a pressing business
need or an emergency situation.

10.4  
Notice of Decommissioning.
     
CSC shall notify Sears promptly if and to the extent any CSC Managed Systems or
Sears Provided Systems, including any Eligible Recipients’ owned Equipment or
Eligible Recipients’ leased Equipment, shall no longer be used to provide the
Services. The notification shall include the identification of the applicable
Equipment, Software or circuit, and the date it shall no longer be needed by
CSC, along with the reason for decommissioning or non-use. Upon receipt of any
such notice, Sears may (or may cause the applicable Eligible Recipient to), in
its sole discretion, terminate the Equipment lease for such leased Equipment or
the license for such Software, as the case may be, as of the date specified in
such notice and sell or otherwise dispose of or redeploy such Eligible Recipient
owned Equipment, Software or circuit that is the subject of such a notice as of
the date specified in such notice. Upon CSC ceasing to use any Equipment (or, in
the case of leased Equipment, upon the last day such Eligible Recipient is
obligated to make such leased Equipment available to CSC, if earlier) or
Software, CSC shall return the same to the Eligible Recipients and/or their
designee(s) in condition at least as good as the condition thereof on the
applicable Commencement Date, ordinary wear and tear excepted. CSC shall, at
CSC’s expense, deliver such Equipment or Software to the location designated by
the Eligible Recipients.
  10.5  
License to CSC Provided Systems.
     
As of the applicable Commencement Date, CSC, at no additional charge to the
Eligible Recipients, hereby grants an irrevocable, worldwide, non-exclusive, and
except for the Charges, paid-up, royalty-free right and license during the Term
of the applicable Transaction Document and any Termination Assistance Services
period to the Eligible

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.

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Recipients (but, as to Eligible Recipients ***, to access, interface with,
monitor, use, execute, reproduce, display, perform, prepare Derivative Works
based upon, and distribute, from and to any locations in the world, the CSC
Provided Systems to the extent necessary or appropriate to receive the full
benefit of the Services; *** may permit the Sears Personnel to exercise the
foregoing rights and licenses on behalf of the Eligible Recipients in connection
with receipt of the Services by the Eligible Recipients.
  10.6  
License to Sears Provided Systems and CSC Managed Systems.

  (a)  
License to Sears Owned Materials. As of the applicable Commencement Date, Sears
hereby grants to CSC, for the sole and express purpose of performing the
Services during the Term of the applicable Transaction Document and any
Termination Assistance Services period, a non-exclusive, non-transferable,
royalty-free right and license to access, interface with, monitor, use, operate,
copy and store Sears Provided Systems that consist of Sears Owned Materials;
provided that CSC may permit the CSC Personnel (that are retained in accordance
with this Agreement) to use such Materials solely to provide Services to
Eligible Recipients on CSC’s behalf. Neither CSC, nor CSC Personnel, shall have
any right to the source code to such Sears Owned Materials unless and to the
extent approved in advance by Sears, and shall cease all use of such Sears Owned
Materials upon the end of the Term of the applicable Transaction Document and
the completion of any applicable Termination Assistance Services requested by
Sears.
    (b)  
License to Third Party Materials. Subject to CSC having obtained any Required
Consents, Sears hereby grants to CSC, for the sole and express purpose of
performing the Services during the Term of the applicable Transaction Document
and any Termination Assistance Services period and solely to the extent of
Sears’ underlying rights, the same rights of access and use as Sears possesses
under the applicable contract with respect to the CSC Managed Systems and those
Sears Provided Systems that do not consist of Sears Owned Materials; provided
that CSC may permit the CSC Personnel (that are retained in accordance with this
Agreement) to use such Materials solely to provide Services to Eligible
Recipients on CSC’s behalf. CSC shall comply with the duties, including use
restrictions and those of nondisclosure, imposed on Sears by such Third Party
contracts, and shall cease all use of such CSC Managed Systems and Sears
Provided Systems upon the end of the Term of the applicable Transaction Document
and the completion of any applicable Termination Assistance Services requested
by Sears.

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.

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11.  
SERVICE LEVELS
  11.1  
Description of Service Levels.

  (a)  
Purpose of Service Levels. Without limiting CSC’s obligations provided elsewhere
in this Agreement, the Parties acknowledge and agree that the purpose of the
Service Levels specified in this Agreement is to serve as a reporting tool to
inform the Parties as to how the Services are being performed and to enable the
Parties to identify and measure those areas of the Services that require
improvement.
    (b)  
Service Level Performance Standards. CSC shall perform the Services so as to
meet or exceed the Service Levels set forth in the applicable Transaction
Document beginning on the applicable dates set forth therein. If such
Transaction Document does not specify dates for CSC to meet the Service Levels,
CSC shall perform the Services so as to meet or exceed the Service Levels
beginning on the Commencement Date thereof. If more than one Service Level
applies to any particular obligation of CSC, CSC shall perform in accordance
with the most stringent of such Service Levels. CSC shall be responsible for
meeting or exceeding the applicable Service Levels, even where doing so is
dependent on the provision of Services by CSC Personnel that are Third Parties.

11.2  
Service Level Credits.
     
CSC recognizes that Sears is paying CSC to deliver the Services at specified
Service Levels. If CSC fails to meet such Service Levels, then CSC shall pay or
credit to Sears the performance credits specified in the applicable Transaction
Document (“Service Level Credits”) in recognition of the diminished value of the
Services resulting from CSC’s failure to meet the agreed-upon level of
performance and not as a penalty. Sears shall have the right to re-allocate the
Service Level Credits among the Service Levels under a Transaction Document,
upon ninety (90) days’ advance written notice to CSC ***, provided that such
re-allocation shall not change the total amount of Service Level Credits at risk
under such Transaction Document. Under no circumstances shall the imposition of
Service Level Credits be construed as Sears’ sole or exclusive remedy for any
failure to meet the Service Levels. However, if Sears recovers monetary damages
from CSC as a result of CSC’s failure to meet a Service Level, CSC shall be
entitled to set off against such damages any Service Level Credits paid for the
failure giving rise to such recovery.
  11.3  
Problem Analysis.
     
If CSC fails to provide Services in accordance with the Service Levels or
otherwise in accordance with this Agreement, CSC shall (after restoring service
or otherwise resolving any immediate problems) (a) promptly investigate and
report on the causes of the problem, (b) provide a Root Cause Analysis of such
failure as soon as practicable after such failure or at Sears’ request, (c) use
all commercially reasonable efforts to implement remedial action and begin
meeting the Service Levels as soon as practicable, (d) advise

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.

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Sears of the status of remedial efforts being undertaken with respect to such
problem and (e) provide Sears reasonable evidence that the causes of such
problem have been or shall be corrected on a permanent basis. CSC shall use all
commercially reasonable efforts to complete the Root Cause Analysis within
fifteen (15) days; provided, however, that if it is not capable of being
completed within fifteen (15) days using reasonable diligence, CSC shall
complete such Root Cause Analysis as quickly as possible and shall notify Sears
prior to the end of the initial fifteen (15) day period as to the status of the
Root Cause Analysis and the estimated completion date.
  11.4  
Continuous Improvement Reviews.
     
Throughout each Exhibit Term, CSC shall identify and notify Sears of
commercially reasonable methods of improving the Services and reducing the cost
to the Eligible Recipients of such Services. In addition, Sears and CSC shall
periodically review the Service Levels and the performance data collected and
reported by CSC in accordance with the applicable Transaction Document. As part
of this review process, the Parties shall, at no additional cost to Sears,
increase the Service Levels to reflect the higher performance levels actually
attained or attainable by CSC in accordance with the applicable Transaction
Document. At minimum, if the actual performance of any Services exceeds the
applicable Service Level for twelve (12) consecutive months, then the applicable
Service Level shall be automatically increased (or decreased, if applicable) to
a value which is halfway between the existing Service Level and the average
actual performance for such twelve (12) month period. In addition, subject to
Section 4.5 (Additional Services) and the applicable Transaction Document, the
Parties shall, to the extent reasonable and appropriate, (a) increase the
Service Levels to reflect improved performance capabilities associated with
advances in the proven processes, technologies and methods available to perform
the Services, (b) add new Service Levels to permit further measurement or
monitoring of the accuracy, quality, completeness, timeliness, responsiveness,
cost-effectiveness or productivity of the Services, (c) modify or increase the
Service Levels to reflect changes in the processes, architecture, standards,
strategies, needs or objectives defined by Sears, (d) modify or increase the
Service Levels to reflect agreed-upon changes in the manner in which the
Services are performed by CSC or (e) replace Service Levels that are not
accurately measuring the impact of poor performance with Service Levels that
better measure the benefits the Eligible Recipients should receive from the
Services. Sears may, from time to time, require CSC to measure and report on
additional Service Levels.
  11.5  
Measurement and Monitoring.
     
CSC shall, on or before the applicable Commencement Date or as otherwise set
forth in the applicable Transformation Plan, implement measurement and
monitoring tools and metrics, as well as standard reporting procedures, all
acceptable to Sears, to measure and report CSC’s performance of the Services
against the applicable Service Levels. CSC shall provide Sears with on-line
access to up-to-date problem management data and other data regarding the status
of service problems, service requests and user inquiries. CSC also shall provide
Sears with access to the data used by CSC to calculate its performance against
the Service Levels and the measurement and monitoring tools and procedures

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utilized by CSC to generate such data for purposes of audit and verification.
Sears shall not be required to pay any amount in addition to the Charges for
such measurement and monitoring tools or the resource utilization associated
with their use.
  11.6  
Satisfaction Surveys.

  (a)  
General. Except as set forth in a Transaction Document, within three (3) months
after the initial Commencement Date under this Master Agreement, at least once
every twelve (12) months thereafter during the Term and as part of the Services,
CSC shall conduct (i) a satisfaction survey of end users regarding the Services
performed under each Transaction Document, and (ii) a survey of the senior
management of the Sears information technology department that shall focus on
satisfaction with the functional interface between Sears and CSC. The timing,
content, scope, protocols and procedures of each survey shall be as described in
the applicable Transaction Document or as otherwise mutually agreed upon in
writing by the Parties. To the extent CSC engages an independent Third Party to
perform all or any part of any satisfaction survey, CSC shall obtain Sears’
prior approval of such Third Party.
    (b)  
Sears Conducted Surveys. In addition to the satisfaction surveys to be conducted
by CSC pursuant to Section 11.6(a) (General), Sears may survey, or engage a
Third Party to survey, end user satisfaction with CSC’s performance. At Sears’
request, CSC shall cooperate and assist Sears with the formulation of the survey
questions, protocols and procedures and with the execution and review of such
surveys.
    (c)  
Survey Follow-up. If the results of any satisfaction survey conducted pursuant
to Section 11.6(a) (General) or 11.6(b) (Sears Conducted Surveys) indicate that
the level of satisfaction with CSC’s performance is less than the level
reasonably deemed appropriate by Sears, CSC shall promptly: (i) analyze and
report on the cause of the management or end user dissatisfaction; (ii) develop
an action plan to address and improve the level of satisfaction; (iii) present
such plan to Sears for its review, comment and approval; and (iv) take
reasonable action in accordance with the approved plan and as necessary to
improve the level of satisfaction. CSC’s action plan shall specify the specific
measures to be taken by CSC and the dates by which each such action shall be
completed. Following implementation of such action plan, CSC shall conduct
follow-up surveys with the affected Sears’ users and management to confirm that
the cause of any dissatisfaction has been addressed and that the level of
satisfaction has improved.

11.7  
Excessive Service Level Failure.
     
If the Parties define one or more Service Level failures in a Transaction
Document as giving Sears a right to terminate for cause (an “Excessive Service
Level Failure”), and such Excessive Service Level Failure occurs, Sears shall
have the right to terminate as provided in Section 23.1(a) (Termination By
Sears). The express acknowledgment that such number of Service Level failures
shall be considered an Excessive Service Level

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Failure, or that a certain amount of Service Level Credits shall give Sears the
right to terminate does not imply that a lesser number of Service Level failures
or lesser amount of Service Level Credits does not or cannot constitute a
material breach of this Agreement and therefore grounds for termination under
other subsections, and no Party shall contend otherwise in any dispute or
controversy between the Parties. In the event of any Excessive Service Level
Failure, either itself or in combination with other breaches of the applicable
Transaction Document, Sears shall be entitled to all remedies under this
Agreement and applicable Law, and shall not be limited to Service Level Credits
received for individual Service Level failures; provided, however, that any
Service Level Credits received by Sears shall be credited against any such
damages.
  12.  
PROJECT PERSONNEL
  12.1  
Key Personnel.
     
A Transaction Document may identify certain CSC Personnel and related positions
critical to the provision of the Services (“Key Personnel”). Key Personnel shall
be subject to the following terms and conditions.

  (a)  
Approval of Key Personnel. Before assigning an individual to act as one of the
Key Personnel, whether as an initial assignment or a subsequent assignment, CSC
shall notify Sears of the proposed assignment, shall introduce the individual to
appropriate Sears Personnel, shall provide a reasonable opportunity for Sears
Personnel to interview the individual and shall provide Sears with a resume and
such other information about the individual as may be reasonably requested by
Sears. If Sears in good faith objects to the proposed assignment, the Parties
shall attempt to resolve Sears’ concerns on a mutually agreeable basis. If the
Parties have not been able to resolve Sears’ concerns within five (5) Business
Days of Sears communicating its concerns, CSC shall not assign the individual to
that position and shall propose to Sears the assignment of another individual of
suitable ability and qualifications.
    (b)  
Continuity of Key Personnel. CSC shall cause each of the Key Personnel to devote
full time and effort to the provision of Services under this Agreement for the
period specified in the applicable Transaction Document from the date he or she
assumes the position in question. CSC shall not transfer, reassign or remove any
of the Key Personnel (except as a result of voluntary resignation, involuntary
termination for cause; documented, repeated negative performance; or illness,
disability or death (collectively, “Permitted Separation”)), without Sears’
prior approval, which approval may be withheld in Sears’ reasonable discretion
(based upon Sears’ business needs and the nature of the Services performed by
such individual). In the event of a Permitted Separation of one of its Key
Personnel, CSC shall (i) give Sears as much notice as reasonably possible of
such development, and (ii) expeditiously identify and obtain Sears’ approval of
a suitable replacement. Unless otherwise agreed, CSC shall not transfer,
reassign or remove more than *** of the Key Personnel under any Transaction
Document in any twelve (12) month period.

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  (c)  
Succession. CSC shall maintain active succession plans for each of the Key
Personnel positions, including plans to effectively transfer knowledge from Key
Personnel in the event that it becomes necessary to replace such Key Personnel.
Upon termination or resignation of any Key Personnel, CSC shall promptly provide
notice to Sears of such termination or resignation and identify potential
suitable replacements.
    (d)  
Location of Key Personnel. If any Key Personnel are not resident in the area
where they will be providing Services (e.g., the Chicago metropolitan area for
Key Personnel assigned to the Sears Hoffman Estates, Illinois facility), CSC
shall, at its expense, relocate such Key Personnel to the area where they will
be providing Services within *** days of such individuals being assigned as Key
Personnel under this Agreement; provided that for such interval period the Key
Personnel will be on-site Monday through Friday from 8 am to 5 pm, unless
otherwise agreed.
    (e)  
Restrictions on Performing Services to Sears’ Competitors. CSC shall not permit
any individual who (i) is retained (as CSC Personnel) by CSC or its
Subcontractors and (ii) provides Services to the Eligible Recipients to provide
services to any retailer that is a competitor of Sears or its Affiliates either
while engaged in the provision of such Services or during the twelve (12) months
immediately following the termination of his or her involvement in the provision
of such Services without Sears’ prior written consent.

12.2  
CSC Account Executive.
     
CSC shall designate a “CSC Account Executive” who, unless otherwise agreed by
Sears, shall maintain his or her office at Sears’ Hoffman Estates, Illinois
facility. The CSC Account Executive shall: (a) be the primary CSC representative
under this Agreement; (b) be one of the Key Personnel; (c) be a full-time
employee of CSC; (d) devote his or her full time and effort to managing the
Services; (e) remain in this position for a minimum period of three (3) years
from the initial assignment (except in the event of a Permitted Separation of
the CSC Account Executive); (f) serve as the single point of accountability for
the Services; (g) be the single point of contact to whom all Sears
communications concerning this Agreement may be addressed; (h) have authority to
act for and on behalf of CSC in all matters pertaining to this Agreement; and
(i) have overall responsibility for managing and coordinating the performance of
CSC’s obligations under this Agreement and day-to-day authority for ensuring
customer satisfaction and attainment of all Service Levels.
  12.3  
Compensation of CSC Account Executive and Key Personnel.

  (a)  
CSC Account Executive. At a minimum, *** of the CSC Account Executive’s ***
compensation shall be based upon (i) the level of customer satisfaction
reflected in the periodic customer satisfaction surveys, (ii) the extent to
which CSC has met or exceeded the Service Levels, Service Levels and CSC’s other
responsibilities and obligations under this

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Agreement, (iii) CSC’s achievement of the objectives relating to the Eligible
Recipients’ businesses set forth in Section 1.2 (Goals and Objectives), as
reasonably determined by Sears, and (iv) Sears’ determination as to whether CSC
has met the technical objectives set by the Sears Chief Information Officer.
    (b)  
Key Personnel. At a minimum, fifteen percent (15%) of the annual incentive
compensation of the Key Personnel listed in a Transaction Document shall be
based upon the factors set forth in Section 12.3(a) (CSC Account Executive).
    (c)  
Evaluation Input. Sears shall have a meaningful opportunity to provide
information to CSC with respect to Sears’ evaluation of the performance of the
CSC Account Executive and the other Key Personnel and such evaluation shall be
considered and accorded substantial weight by CSC in establishing the bonus and
other compensation of such individuals.

12.4  
Qualifications and Retention of CSC Personnel.

  (a)  
Sufficiency and Suitability of Personnel. CSC shall assign (or cause to be
assigned) sufficient CSC Personnel to provide the Services in accordance with
this Agreement and such CSC Personnel shall possess suitable competence, ability
and qualifications and shall be properly educated and trained for the Services
they are to perform.
    (b)  
Turnover Rate and Data. If Sears determines that the turnover rate of CSC
Personnel is unacceptable and so notifies CSC, CSC shall within ten
(10) Business Days (i) provide Sears with data concerning CSC’s turnover rate,
(ii) meet with Sears to discuss the reasons for the turnover rate, and
(iii) submit a proposal for reducing the turnover rate for Sears’ review and
approval. Notwithstanding any transfer or turnover of CSC Personnel, CSC shall
remain obligated to perform the Services without degradation and in accordance
with the Service Levels and other requirements of this Agreement.
    (c)  
Drug Testing. Attached here as Appendix C, is a copy of CSC’s drug testing
policy (the “CSC Drug Testing Policy”). CSC shall comply with its CSC Drug
Testing Policy (or a similarly restrictive policy) for any Personnel assigned to
the Sears account. CSC shall not subject the Transitioned Personnel to the CSC
Drug Testing Policy as a condition of employment. If CSC, in its sole
discretion, makes a material modification of the CSC Drug Testing Policy, it
shall provide Sears with a copy of such modifications at least 60 days in
advance of its implementation. For Personnel that have not been tested under a
similarly restrictive policy, CSC, its Affiliates or its Subcontractors, may
grandfather existing employees of any Third Party that such party acquires or
that such party receives transitioned Personnel from as part of a purchased
services arrangement.
    (d)  
Background Checks. Within sixty (60) days of the Effective Date, CSC shall
comply with the following provisions; provided that CSC shall not require the
Transitioned Personnel to submit to the following:

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  (i)  
CSC shall, at its sole cost and expense, conduct a criminal background check
report, and obtain any other job-relevant consumer reports, for each of the CSC
Personnel to be assigned to the Sears account or involved in the Services for
more than a total of three (3) days. Said reports must be based on a minimum of
seven (7) years’ residential history, unless otherwise restricted by Law;
provided, however, that the time span of the information obtained must extend to
that which is reasonably available from court records or any other applicable
sources, even if in excess of seven (7) years, except as otherwise restricted by
Law.
    (ii)  
CSC shall use the services of a consumer reporting agency, approved in advance
in writing by Sears, to conduct such criminal background checks and any other
job-relevant consumer reports. At a minimum, criminal background checks shall be
based on information obtained by the consumer reporting agency from every county
court associated with the applicable CSC Personnel’s residences. In addition,
CSC shall use a consumer reporting agency that conducts searches (typically via
pass-throughs of credit bureau data) to obtain aliases and other addresses found
that are then used for additional criminal background checks and CSC shall
conduct retail theft background checks when offered as an option by the consumer
reporting agency.
    (iii)  
Such background check shall be completed by CSC, and the results must be
satisfactory to Sears, before the applicable CSC Personnel report for the
cumulative sixth day of work on the Sears account or involvement in the
Services, except and to the extent the background check results are delayed
because of the administrative protocol of the information suppliers (e.g.,
county courts), or as otherwise agreed by Sears. CSC shall promptly notify Sears
of any adverse results obtained after the applicable CSC Personnel have begun
work on the Sears account and remove such Personnel from the Sears account. CSC
shall not be required to perform such background checks on CSC Personnel located
outside of the United States that will not have access to Sears Confidential
Personnel Information and that will not have contact with Sears Personnel.
    (iv)  
If an assignment involves operating equipment that requires special licensing or
certification such as trucks or forklifts, working around sensitive equipment or
data (as in the Sears Testing Laboratory), CSC shall ensure that all CSC
Personnel involved with such assignment have successfully acquired all required
licenses and certifications prior to reporting for the first day of work on such
assignment, regardless of any delay by any background check information
suppliers or administrative agencies.
    (v)  
If any CSC Personnel has satisfactorily completed a criminal background check,
and other job-relevant consumer reports, where applicable, specifically for a
Sears assignment in accordance with the requirements of

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this Section 12.4(d) (Background Checks), an additional check need not be
performed due to break in involvement in the Services by such CSC Personnel, as
long as the CSC Personnel’s primary residence has not changed and the initial
criminal background check was performed within sixty (60) days prior to the CSC
Personnel resuming involvement in the Services.
    (vi)  
CSC shall not assign individuals with job-relevant adverse information or
information that indicates an unreasonable risk to property, safety or the
welfare of individuals or the public or to any Eligible Recipient. At a minimum,
all such adverse information shall be evaluated by CSC in accordance with all
Laws. Sears reserves the right to approve and modify the criteria CSC utilizes
for this process.
    (vii)  
At Sears’ request, CSC shall submit evidence satisfactory to Sears of CSC’s
compliance with this Section 12.4(d) (Background Checks).

  (e)  
Fingerprinting. ***

12.5  
Identification of CSC Personnel.
     
While at Sears Facilities or Sears Sites, all CSC Personnel shall clearly
identify themselves as CSC Personnel and not as employees of the Eligible
Recipients. This shall include any and all e-mail communications.
  12.6  
Substance Abuse.
     
CSC represents, warrants and covenants that CSC and its Affiliates have and
shall maintain substance abuse policies, in each case in conformance with
applicable Laws, and CSC Personnel shall be subject to such policies.
  12.7  
Union Agreements.
     
CSC shall provide Sears not less than ninety (90) days’ prior written notice of
the potential expiration of any collective agreement with unionized CSC
Personnel (other than Exempt Subcontractors), if the expiration of such
agreement or any resulting labor dispute could potentially interfere with or
disrupt the business or operations of an Eligible Recipient or impact CSC’s
ability to timely perform its duties and obligations under this Agreement.
  12.8  
CSC Responsibility.
     
CSC shall be fully responsible for the performance of all CSC Personnel, as well
as any failure by any CSC Personnel, including CSC employees and Subcontractors
and Subcontractor’s Personnel, to perform in accordance with this Agreement or
to comply with any duties or obligations imposed on CSC under this Agreement.
Except as

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expressly provided otherwise in this Agreement, CSC shall be responsible for the
provision of the Services in accordance with this Agreement even if, by
agreement of the Parties, such Services are actually performed by Third Parties
(including Sears Personnel, subject to Section 7.1(c) (Sears Responsibilities)).
CSC shall be Sears’ sole point of contact regarding the Services, including with
respect to payment.

13.  
CHARGES
  13.1  
General.

  (a)  
Payment of Charges. In consideration of CSC’s performance of the Services, and
subject to Section 14.4 (Disputed Charges), Sears agrees to pay CSC the
applicable Charges set forth in a Transaction Document as full compensation for
such Services. Sears shall not pay any Charges or have any reimbursement
obligations other than those expressly set forth in a Transaction Document.
Except as provided for under Section 2.2(h) (Ordering Affiliates), CSC shall not
charge (nor seek any reimbursement from) any Eligible Recipient other than Sears
in connection with the Services. The Charges in each Transaction Document shall
be stated separately for each relevant consumption item or Service component at
a level of detail reasonably satisfactory to Sears. In no event shall any
Eligible Recipient be required to pay any Charges in connection with the
training of CSC Personnel.
    (b)  
No Charge for Reperformance. As part of the Services and at no additional
expense to Sears, CSC shall promptly correct and reperform (including any
backups or restoration of data) any Services or deliverables that result in
incorrect outputs or contain errors or inaccuracies due to an error or breach by
CSC or any CSC Personnel, and the resources required for such correction and
reperformance shall not be counted in calculating the Charges payable or
resources utilized by the Eligible Recipients under this Agreement.

13.2  
Pass-Through Expenses.

  (a)  
Procedures and Payment. Subject to Section 14.4 (Disputed Charges), Sears shall
pay all Pass-Through Expenses directly to the applicable suppliers following
review, validation and approval of such Pass-Through Expenses by CSC. Before
submitting an invoice to Sears for any Pass-Through Expense, CSC shall
(i) review and validate the invoiced charges, (ii) identify any errors or
omissions, and (iii) communicate with the applicable supplier to correct any
errors or omissions, resolve any questions or issues and obtain any applicable
credits for Sears. CSC shall deliver (or cause to be delivered) to Sears the
original supplier invoice, together with any documentation supporting such
invoice and a statement that CSC has reviewed and validated the invoiced
charges, within ten (10) Business Days after CSC’s receipt thereof or, if
earlier, at least fifteen (15) Business Days prior to the date on which payment
is due if such invoice was received by CSC; provided that if CSC receives an
invoice within fifteen (15) Business Days of its due date, CSC shall deliver
such invoice to Sears within two (2) Business Days of

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CSC’s receipt. In addition, if the supplier offers a discount for payment prior
to a specified date, CSC shall deliver such invoice and associated documentation
to Sears at least fifteen (15) Business Days prior to such date. To the extent
CSC fails to comply with its obligations under this Agreement, it shall be
financially responsible for any resulting discounts lost or any late fees or
interest charges incurred by the Eligible Recipients. In addition, to the extent
CSC fails to process any invoice in accordance with this provision within six
(6) months after CSC’s receipt thereof, CSC shall be financially responsible for
the payment of all such invoiced amounts.
    (b)  
No Markup; No Fees. CSC shall not (i) mark up any Pass-Through Expenses or
(ii) add any management, administrative or other fees to any Pass-Through
Expenses. In addition, CSC shall not separately charge Sears any handling or
administrative charge in connection with its processing or review of invoices
for Pass-Through Expenses in accordance with Section 13.2(a) (Procedures and
Payment).
    (c)  
Efforts to Minimize. CSC shall continually seek to identify methods of reducing
and minimizing both Sears’ retained and Pass-Through Expenses and shall notify
Sears of such methods and the estimated potential savings associated with each
such method.
    (d)  
Disbursements. Beginning on the applicable Commencement Date, CSC shall make
payments for all Third Party Contracts (other than Excluded Agreements and
Pass-Through Expenses) related to CSC Managed Systems and CSC Designated
Contracts (to the extent they have not then been assigned to CSC) as paying
agent of the Sears Related Businesses or shall reimburse Sears for amounts paid
by Sears and which were due such Third Parties.
    (e)  
Limited Agency. Sears hereby appoints CSC as its limited agent during the Term
of the applicable Transaction Document solely for the purposes of the
administration of Pass-Through Expenses and administration and payment of
amounts under CSC Designated Contracts (to the extent they have not then been
assigned to CSC). Sears shall provide, on a timely basis, such affirmation of
CSC’s authority to such Third Parties.
    (f)  
Reimbursement for Substitute Payment. If either Party (or their representatives,
or, in the case of Sears, the other Eligible Recipients) in error pays to a
Third Party an amount for which the other Party is responsible under this
Agreement, the Party that is responsible for such payment shall promptly
reimburse the other Party for such amount.

13.3  
Reimbursable Expenses and Sears Expense Policy.
     
To the extent a Transaction Document provides that an expense shall be
reimbursable by Sears, Sears’ obligation to pay such expenses shall be
conditioned upon CSC’s compliance with Sears Expense Policy (which was provided
to CSC prior to CSC

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incurring such expense). Sears’ current Expense Policy is set forth in
Appendix B (Sears Expense Policy), and may be amended by Sears from time to
time, upon notice to CSC.
  13.4  
Taxes.
     
The Parties’ respective responsibilities for taxes arising under or in
connection with this Agreement shall be as follows:

  (a)  
Income Taxes. Each Party shall be responsible for its own Income Taxes.
    (b)  
Sales, Use and Property Taxes. CSC shall be responsible for any sales, lease,
use, personal property, stamp duty or other such taxes on its real property and
personal property, including CSC Provided Systems. Sears (or the other Eligible
Recipients) shall be responsible for any sales, lease, use, personal property,
stamp duty or other such taxes on its real property and its personal property,
including Sears Provided Systems and CSC Managed Systems provided pursuant to
the Excluded Agreements or on a Pass-Through Expense basis.
    (c)  
Taxes on Goods or Services Used by CSC. CSC shall be responsible for all sales,
service, value-added, lease, use, personal property, excise, consumption and
other taxes and duties, including VAT, payable by CSC on any Equipment, Software
or other goods or services used or consumed by CSC in providing the Services
(including CSC Provided Systems, CSC Managed Systems, but not including CSC
Managed Systems provided pursuant to the Excluded Agreements or on a
Pass-Through Expense Basis, and CSC Designated Contracts and services obtained
from CSC Personnel) where the tax is imposed on CSC’s acquisition or use of such
goods or services and the amount of tax is measured by CSC’s costs in acquiring
or procuring such goods or services and not by Sears’ cost of acquiring such
goods or services from CSC.
    (d)  
Service Taxes.

  (i)  
Responsibility as of Effective Date. Sears shall be financially responsible for
all Service Taxes assessed by any United States jurisdiction against either
Party as of the Effective Date on the provision of the Services as a whole or on
any particular Service received by the Eligible Recipients from CSC. CSC shall
be responsible for assessing and collecting from Sears and remitting to the
appropriate Taxing Authority all such Service Taxes, and CSC shall indemnify
Sears from (pursuant to Section 20.1 (Indemnity by CSC)): (A) except as set
forth in clauses (ii) and (iii) below, the economic burden of any such Service
Taxes which exceed the amount of Service Taxes set forth in the applicable
Transaction Document, and (B) any fines, penalties and interest arising from
CSC’s failure to properly assess and remit Service Taxes.
    (ii)  
Modifications Increasing Taxes After the Effective Date. If after the Effective
Date new or higher Service Taxes become applicable to the

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Services as a result of either Party or its Affiliates (or their Personnel)
moving all or part of its operations to a different jurisdiction (e.g., Sears
opening a new office, CSC relocating performance of Services to a shared service
center or CSC assigning this Agreement to an Affiliate) or as a result of a
change in the manner in which CSC performs or invoices Sears for the Services,
the Party who initiated (or whose Personnel initiated) such move or change,
respectively, shall be financially responsible for such new or higher Service
Taxes.
    (iii)  
New or Increased Taxes. If new or higher Service Taxes become applicable to such
Services after the Effective Date for any other reason (e.g., tax law changes,
but not volume changes) the Parties shall share equally financial responsibility
for such new or additional Service Taxes; ***.
    (iv)  
Reimbursement. If required under applicable Laws, CSC shall invoice Sears for
the full amount of any Service Taxes, fines, penalties and interest and then
credit or reimburse Sears in an amount to make Sears whole for the economic
burden of such Service Taxes, fines, penalties and interest for which CSC is
financially responsible under this provision.
    (v)  
Invoicing. CSC’s invoices shall separately state the Charges that are subject to
taxation and the amount of any taxes included therein (by tax jurisdiction).

  (e)  
Notice of New Taxes and Charges. CSC shall promptly notify Sears when it becomes
aware of any new taxes or other Charges (including changes to existing taxes or
Charges) to be passed through to and/or collected from Sears under this Section,
as well as any changes in the manner in which CSC assesses taxes in connection
with this Agreement. Such notification (which shall be separate from the first
invoice reflecting such taxes or other Charges or changes, as the case may be,
and delivered to Sears at least thirty (30) days prior to the delivery to Sears
of such invoice) shall contain a detailed explanation of such taxes or Charges
or changes, as the case may be, including the effective date of each new tax or
charge or change.
    (f)  
Efforts to Minimize Taxes. CSC shall cooperate fully with Sears to enable Sears
to more accurately determine Sears’ tax liability and to minimize such liability
to the extent legally permissible (e.g., by the way CSC invoices). Each Party
shall provide and make available to the other any resale certificates,
information regarding out-of-state or out-of-country sales or use of Equipment,
materials or services, and other exemption certificates or information
reasonably requested by either Party. At Sears’ request, CSC shall provide Sears
with (i) written certification signed by an authorized representative of CSC
confirming that CSC has filed all required tax forms and returns required in
connection with any

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Service Taxes collected from Sears, and has collected and remitted all
applicable Service Taxes, and (ii) such other information pertaining to
applicable Taxes as Sears may reasonably request. For purposes of the State of
Illinois tax on telecommunications, CSC acknowledges that Sears’ Hoffman
Estates, Illinois facility is presently exempt from such tax and CSC agrees
that, for the duration of such exemption, CSC shall not include such tax on
invoices for exempt Services, provided Sears furnishes CSC with a current
exemption certificate. CSC shall provide to Sears such documentation as Sears
may reasonably request to establish that CSC is registered to collect any tax
described in Section 13.4(d) (Service Taxes) that CSC seeks to collect from
Sears.
    (g)  
Tax Audits or Proceedings. Each Party shall promptly notify the other of, and
coordinate with the other Party, the response to and settlement of any claim for
taxes asserted by applicable taxing authorities for which the other Party or its
Affiliates is responsible hereunder, but solely with respect to the taxes
claimed for Services under this Agreement that CSC seeks to recover from Sears.
Information regarding other taxes that do not relate to the Services or this
Agreement shall not be provided. With respect to any claim arising out of a form
or return signed by either Party or its Affiliates, such Entity shall have the
right to elect to control the response to and settlement of the claim, but the
other Party shall have all rights to consult with such Entity in the responses
and settlements that are appropriate to its potential responsibilities or
liabilities and in a reasonable time frame so as to allow the other Party
meaningful input into the responses and settlements. Each Party also shall have
the right to challenge the imposition of taxes for which it is financially
responsible under this Agreement or, if necessary, to direct the other Party to
challenge the imposition of such taxes. If either Party requests the other to
challenge the imposition of any tax, the requesting Party shall reimburse the
other for all fines, penalties, interest, additions to taxes or similar
liabilities imposed in connection therewith, plus the reasonable legal fees and
expenses it incurs. The Party who is ultimately responsible for payment of a tax
under this Agreement shall be entitled to receive, and to have the other Party
remit to it, any tax refunds or rebates granted with respect to such tax that
were paid by the obligated Party or its Affiliates.

13.5  
Tax Filings.
     
CSC represents, warrants and covenants that (a) it shall file appropriate tax
returns, and pay applicable taxes owed arising from or related to the provision
of the Services in applicable jurisdictions, and (b) it is registered to and
shall timely collect and remit Service Taxes in all applicable jurisdictions.
  13.6  
Extraordinary Events.

  (a)  
Definition. As used in this Agreement, an “Extraordinary Event” means a
circumstance in which an event or discrete set of events has occurred or is
planned with respect to the business of the Eligible Recipients that results or
could reasonably be expected to result in a change in the scope, nature or
volume

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of the Services that the Eligible Recipients shall require from CSC, and which
is expected to cause the estimated average monthly amount of Charges for any
Transaction Document specified in the applicable Transaction Document to
increase or decrease by *** or more. Examples of the kinds of events that might
cause such substantial increases or decreases include the following:

  (i)  
changes in locations where the Eligible Recipients operate;
    (ii)  
changes in products of, or in markets served by, the Eligible Recipients;
    (iii)  
mergers, acquisitions, divestitures or reorganizations of the Eligible
Recipients;
    (iv)  
changes in the method of service delivery;
    (v)  
changes in the applicable regulatory environment;
    (vi)  
changes or advances in technology allowing services to be delivered or supported
in a more efficient manner;
    (vii)  
changes in market priorities; or
    (viii)  
changes in the business units being serviced by CSC.

  (b)  
Consequence. If an Extraordinary Event occurs, Sears may, at its option, request
more favorable pricing with respect to applicable Charges in accordance with the
following:

  (i)  
CSC and Sears shall mutually determine on a reasonable basis the efficiencies,
economies, savings and resource utilization reductions resulting from such
Extraordinary Event and, upon Sears’ approval, CSC shall then proceed to
implement such efficiencies, economies, savings and resource utilization
reductions as quickly as practicable and in accordance with the agreed-upon
schedule. As the efficiencies, economies, savings or resource utilization
reductions are realized, the Charges specified in the applicable Transaction
Document shall be promptly and equitably adjusted to pass through to Sears the
full benefit of such efficiencies, economies, savings and resource utilization
reductions; provided, however, that Sears shall reimburse CSC for any
out-of-pocket expenses incurred to realize such efficiencies, economies, savings
or resource utilization reductions if and to the extent CSC (1) notifies Sears
of such additional costs and obtains Sears’ approval prior to incurring such
costs (at which point they shall become approved Out-Of-Pocket Expenses),
(2) uses commercially reasonable efforts to identify and consider practical
alternatives, and reasonably determines that there is no other more practical or
cost-effective way to obtain such savings without incurring such expenses, and

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(3) uses commercially reasonable efforts to minimize the Out-Of-Pocket Expenses
to be reimbursed by Sears.
    (ii)  
An Extraordinary Event shall not result in Charges to Sears being higher than
such Charges would have been if the rates and charges then specified in the
applicable Transaction Document had been applied, unless and to the extent such
Extraordinary Event results in New Services (e.g., Sears requires that CSC
create a new infrastructure to support an acquired Entity). Sears may, at its
sole option, elect, for each Extraordinary Event, at any time to forego its
rights under this Section 13.6 (Extraordinary Events), and instead apply the
rates and charges specified in the applicable Transaction Document to adjust the
Charges.

13.7  
Proration.
     
Periodic charges under a Transaction Document shall be computed on a
calendar-month basis, and shall be prorated for any partial month on a
calendar-day basis, unless expressly stated otherwise in a Transaction Document.
  13.8  
Refundable Items.

  (a)  
Prepaid Amounts. Where the Eligible Recipients have prepaid for a service or
function (e.g., prepaid software maintenance) for which CSC is assuming
financial responsibility under this Agreement, CSC shall refund to Sears, upon
either Party identifying the prepayment, that portion of such prepaid expense
which is attributable to periods on and after the applicable Commencement Date.
    (b)  
Refunds and Credits. If CSC receives a refund, credit, discount or other rebate
for Equipment, Software or other goods or services paid for by the Eligible
Recipients on a Pass-Through Expense basis, then CSC shall (i) notify Sears of
such refund, credit, discount or rebate and (ii) promptly pay the full amount of
such refund, credit, discount or rebate to Sears. ***.

13.9  
Repricing.
     
If and to the extent provided for in a Transaction Document, each pricing
element for Services specified in a Transaction Document shall be subject to
repricing (“Repricing”) as provided below. Upon the occurrence of a Repricing
event specified in the applicable Transaction Document, as and to the extent
requested by Sears, in Sears’ sole discretion,

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CSC shall promptly, but in no event more than thirty (30) days after the
occurrence of such Repricing event, provide to Sears a written document
detailing proposed new Charges for each pricing element subject to Repricing,
which proposed new Charges shall take into account (a) the facts and
circumstance giving rise to the Repricing event, (b) Sears’ expected future
consumption of the applicable Service, and (c) the terms and conditions
applicable to such Service. The Parties shall, within thirty (30) days after
Sears receives CSC’s proposed new Charges, negotiate in good faith the revised
pricing to be applied to each pricing element subject to Repricing. CSC
covenants that the Charges it proposes in connection with each Repricing shall
be competitive with those available to Sears from other providers for similar
Services, volumes and performance standards.
  13.10  
Benchmarking.

  (a)  
Required Benchmark Reviews. At the intervals set forth, if any, in the
applicable Transaction Document, the Parties shall participate in collaborative
benchmarking reviews with an independent Third Party selected by the Parties (a
“Benchmarker”) to compare the quality and cost of the Services against the
quality and cost of well-managed tier one information technology service
providers performing similar services to ensure that Sears is receiving from CSC
pricing and levels of service that are competitive with market rates, prices and
service levels, given the nature, volume and type of Services provided by CSC
hereunder (each a “Benchmarking”). The Parties shall each pay one-half of the
charges and reimbursable expenses to be paid to the Benchmarker for each
Benchmarking. In conducting the Benchmarking, the Benchmarker shall consider the
following factors, as well as any other appropriate factors, and shall adjust
the prices as and to the extent appropriate: (i) whether supplier transition
charges are paid by the customer as incurred or amortized over the term of the
applicable agreement; (ii) the extent to which supplier pricing includes the
purchase of the customer’s existing assets; (iii) the extent to which supplier
pricing includes the cost of acquiring future assets; (iv) the extent to which
this Agreement calls for supplier to provide and comply with unique Sears
requirements; and (v) whether Service Taxes are included in such pricing or
stated separately in supplier invoices. Prior to commencement of a Benchmarking
the Parties shall mutually agree with the Benchmarker on the methodology to be
used to perform such Benchmarking. If the Parties cannot, in good faith, agree
upon a Benchmarker or either Party disputes, in good faith, the methodology to
be used by the Benchmarker, then either Party may submit a notice to the other
Party, stating the nature of the disagreement and identifying with particularity
the basis of such Party’s dispute and the matter shall immediately thereafter be
resolved, in good faith, pursuant to Section 22 (Dispute Resolution).
    (b)  
Other Price Reviews. From time to time during the Term of the applicable
Transaction Document, Sears may, at its own cost, engage a Benchmarker to
conduct a Benchmarking or similar competitive review.

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  (c)  
General. Any Benchmarker engaged by the Parties or by Sears shall execute an
appropriate non-disclosure agreement. CSC shall cooperate fully, in a
collaborative manner, with Sears and the Benchmarker and shall provide
reasonable access to the Benchmarker during such effort, all at CSC’s cost and
expense. The Benchmarking shall be conducted so as not to unreasonably disrupt
CSC’s operations under this Agreement.
    (d)  
Results of Required Benchmarking. For any Benchmarking required under the
applicable Transaction Document, the Benchmarker shall submit a written report
to both Parties setting forth the Benchmarker’s findings and conclusions (the
“Benchmark Results”).
    (e)  
Non-Competitive Charges. If the Benchmark Results indicate (after resolution of
any dispute as provided in Section 13.10(d) (Results of Required Benchmarking)),
that the Charges being paid by Sears for the Benchmarked Services under the
applicable Transaction Document are greater than the lowest twenty-five percent
(25%) of the prices charged by other well-managed information technology service
providers for services of a similar nature, type and volume (the “Benchmark
Standard”), or the service levels associated with the contracts reviewed in
creating the Benchmark Standard are more stringent than those in effect under
such Transaction Document, CSC shall adjust the Charges downward to reflect the
Benchmark Results, including an appropriate adjustment for any less-stringent
service levels reflected by the Benchmark Results, effective as of earlier of:
(i) the date specified in the Transaction Document; or (ii) the date the
Benchmark Results are first delivered to both Parties. The Charges under this
Agreement shall not be increased as the result of any such Benchmarking.

13.11  
Most Favored Customer.
   
***.

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14.  
INVOICING AND PAYMENT
  14.1  
Invoicing.

  (a)  
Invoice. Within five (5) days after the beginning of each month, CSC shall
present Sears with a written invoice for any Charges due and owing for the
preceding month (the “Monthly Invoice”), and the applicable rates for such
Charges based on the rate card set forth in the applicable Transaction Document.
CSC shall not invoice Sears for any advance or concurrent charges or other
amounts. CSC shall submit all Monthly Invoices to the following address:

Sears, Roebuck and Co.
c/o Accounts Payable
P.O. Box 957437
Hoffman Estates, Illinois 60179-7437
IT Manager: Sears VP Operations/Engineering
IT Ledger Code: 704-OP

   
or to such other address as may be specified by Sears from time to time upon
notice to CSC. Each invoice must reference the Sears IT Manager, Sears IT Ledger
Code and applicable Transaction Document number.

    (b)  
Form and Data. At Sears’ request, CSC shall provide separate Monthly Invoices
for each Eligible Recipient then receiving Services, allocated among such
Eligible Recipients based on the charge-back data generated by CSC and the
allocation formula provided by Sears. Each invoice shall be in a form as may be
reasonably acceptable to Sears and shall (i) comply with all applicable legal,
regulatory and accounting requirements, (ii) contain transaction-level detail
and other data sufficient to permit Sears to validate and verify volumes and
fees, (iii) permit Sears to charge-back internally to the same organizational
level and at the same level of detail in use by Sears as of the applicable
Commencement Date, (iv) include accurate “bill to” designators, (v) segregate
the Charges for (1) taxable Services, (2) non-taxable Services, (3) items for
which CSC functions merely as a paying agent for Sears (including leasing and
licensing arrangements) that are non-taxable or have previously been subject to
tax, (4) the type and amount of tax due on taxable Services billed by CSC (by
taxing jurisdiction), and (5) other taxes (if any) collected by CSC under this
Agreement, and (vi) otherwise meet the Eligible Recipients’ billing
requirements. Each invoice shall include the pricing calculations and related
data utilized to establish the Charges. Each invoice, and the data underlying
each invoice, shall be delivered to Sears electronically in a form and format
compatible with and suitable for automated input into Sears’ Systems and its
processes (e.g., as a fixed or delimited flat file or other mutually agreed-upon
file format). If requested by Sears, the Parties shall work together to develop
additional procedures for invoicing formats and methods for invoice
reconciliation.

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  (c)  
Credits. To the extent a credit may be due to Sears pursuant to this Agreement
or any Transaction Document, CSC shall provide Sears with an appropriate credit
against amounts then due and owing. If such credit to Sears exceeds the Charges
payable by Sears to CSC over a two (2) month period, then any excess shall be
paid to Sears at the end of such two (2) month period.
    (d)  
Time Limitation. If CSC fails to invoice Sears for any amount within ninety
(90) days after the month in which the Services in question are rendered or the
expense incurred, CSC shall be deemed to have waived any right it may otherwise
have to invoice for and collect such amount (and Sears shall have no obligation
to pay such amounts).

14.2  
Payment.

  (a)  
Timing. Subject to the other provisions of this Section 14 (Invoicing and
Payment), Sears shall initiate payment (e.g., by check, wire transfer,
application of a credit due Sears) of all properly invoiced amounts within
thirty (30) calendar days after receipt of a proper and correct Monthly Invoice
as provided for under Section 14.1 (Invoicing) unless (a) such 30th day is a
Saturday, Sunday or bank holiday, in which case such amounts shall be due on the
next banking day or (b) the amount in question is disputed in accordance with
Section 14.4 (Disputed Charges), in which case Sears shall initiate payment of
the undisputed portion of such Monthly Invoice as provided in this Section 14.2
(Payment). Any undisputed amount due under this Agreement for which a time for
payment is not otherwise specified also shall be payable as provided in this
Section 14.2 (Payment).
    (b)  
Interest. If any properly invoiced amount remains unpaid by Sears after the
payment due date specified in Section 14.2(a) (Timing), CSC may impose an
interest charge until such amount is paid at the Contract Rate per month;
provided, that CSC shall not impose an interest charge on the portion of Charges
that Sears is disputing in accordance with Section 14.4 (Disputed Charges).
Additionally, if CSC fails to timely issue any credit to (or pay) Sears for any
amounts owing hereunder, such amounts shall accrue interest until paid by CSC at
the Contract Rate per month.

14.3  
Set Off.
     
Sears shall have the right to set off any amounts properly due Sears in
connection with this Agreement against any undisputed amounts owed to CSC under
this Agreement.
  14.4  
Disputed Charges.
     
Sears may withhold payment of particular Charges ***, that Sears disputes in
good faith, subject to the following:

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  (a)  
Description and Explanation. If Sears disputes any CSC Charges, Sears shall
promptly notify CSC and provide a description of the particular Charges in
dispute and an explanation of the reason why Sears disputes such Charges, ***.
    (b)  
No Waiver. Neither the failure to dispute any Charges or other amounts prior to
payment nor Sears’ failure to withhold any such Charges or amounts shall
constitute, operate or be construed as a waiver of any right Sears may otherwise
have to dispute any Charge or other amount or recover any such items previously
paid.
    (c)  
***.
    (d)  
***.

15.  
SEARS DATA AND OTHER CONFIDENTIAL INFORMATION
  15.1  
Sears Ownership of Sears Data.
     
Sears Data is and shall remain the property of the applicable Eligible
Recipients. CSC shall promptly deliver Sears Data (or the portion of such Sears
Data specified by Sears) to Sears in the format and on the media prescribed by
Sears (a) at any time at Sears’ request, (b) at the end of the Term of the
applicable Transaction Document and the completion of all requested Termination
Assistance Services, or (c) with respect to particular Sears Data, at such
earlier date that such data are no longer required by CSC to

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perform the Services. Neither CSC, its Affiliates nor the CSC Personnel shall
withhold any Sears Data as a means of resolving any dispute. Sears Data shall
not be utilized by CSC, its Affiliates or the CSC Personnel for any purpose
other than the performance of Services under this Agreement and shall not be
sold, assigned, leased or otherwise commercially exploited by or on behalf of
CSC or any CSC Personnel. Neither CSC, its Affiliates nor the CSC Personnel
shall possess or assert any lien or other right against or to Sears Data.

  15.2  
Safeguarding Sears Data.

  (a)  
Safeguarding Procedures.

  (i)  
CSC shall establish and maintain environmental, safety and facility procedures,
data security procedures and other safeguards against the destruction, loss,
unauthorized access or alteration of Sears Data in the possession of CSC or the
CSC Personnel that are no less rigorous than the most rigorous procedures and
safeguards maintained by Sears or CSC from time to time, and at least adequate
to meet the requirements of Sears’ records retention policy and applicable Laws.
CSC shall revise and maintain such procedures and safeguards upon Sears’
request. Sears shall have the right to establish backup security for Sears Data
and to keep backup copies of the Sears Data in Sears’ possession at Sears’
expense if Sears so chooses. If CSC, its Affiliates or their Subcontractors
revoke access to any of its Systems for any CSC Personnel for any reason (e.g.,
resignation, termination, security purposes, etc.), and such Personnel have or
in the past have been given access to Sears Provided Systems, CSC shall
immediately (1) notify Sears’ designated security contact of such revocation of
access rights, and (2) revoke such CSC Personnel’s access to all Sears Provided
Systems for which CSC has operational responsibilities.
    (ii)  
CSC shall remove all Sears Data from any media, CSC Provided Systems and CSC
Managed Systems taken out of service ***, and from any Sears Provided Systems
that are taken out of service by CSC Personnel and shall securely erase all
Sears Data from such media and Systems. No media on which Sears Data is stored
may be used or re-used to store data of any other customer of CSC or to deliver
data to a Third Party, including another CSC customer, unless Sears Data has
been securely erased from such media. Where this Agreement calls for off-site
storage of Sears Data, CSC shall use a commercially acceptable off-site storage
facility. All backup and off-site storage shall be in full compliance with all
confidentiality provisions of this Agreement.

  (b)  
Reconstruction Procedures. As part of the Services, CSC shall be responsible for
developing and maintaining commercially reasonable procedures for the
reconstruction of destroyed, lost or altered Sears Data, including any
procedures

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explicitly set forth in this Agreement. If and to the extent that such
destruction, loss or alteration was caused by CSC, its Affiliates, CSC
Personnel, any CSC Provided System or CSC Managed System, CSC shall be
responsible for the cost of restoring such data.

15.3  
Confidentiality.

  (a)  
Confidential Information. This Section 15.3 (Confidentiality) shall apply to any
information exchanged between the Parties regarding the Services or any proposed
services or other business, regardless of whether the Parties enter into a
Transaction Document regarding such proposed business. CSC’s obligations
pursuant to this Section 15.3 (Confidentiality) shall be in addition to, and not
in lieu of, CSC’s obligations provided for elsewhere in this Agreement.
    (b)  
Confidential Business Information.

  (i)  
Definition. The term “Confidential Business Information” means any information,
whether disclosed in oral, written, visual, electronic or other form, disclosed
by, or on behalf of, a Party or such Party’s Affiliates (and, as to Sears, the
other Eligible Recipients) and their Personnel (the “Disclosing Party”) to the
other Party or such Party’s Affiliates (the “Receiving Party”) or to Receiving
Party’s Personnel or which the Receiving Party or its Personnel observe in
connection with this Agreement, whether before or after the date of this
Agreement; that (1) if in tangible form or other media that can be converted to
readable form, is marked clearly as “confidential” (or with a similar term) when
disclosed, or (2) if oral or visual, is either (A) identified as “confidential”
(or with a similar term) at the time of disclosure and is promptly summarized in
a writing marked as such thereafter, or (B) treated as confidential by the
Disclosing Party and would reasonably be understood to be confidential, whether
or not so marked. Sears’ Confidential Business Information shall include,
without the need to mark it as such, Sears Data and Sears’, Sears Affiliates’
and the other Eligible Recipients’: business plans, strategies, forecasts,
projects and analyses; customer lists, customer contracts, customer information,
rates and pricing, information with respect to competitors, strategic plans,
Sears Provided Systems, CSC Managed Systems, CSC Designated Contracts, account
information and research information; financial information (including assets,
expenditures, mergers, acquisitions, divestitures, billings collections,
revenues and finances); employee and vendor information; system designs and
requirements, architectures, structure and protocols (including all hardware,
software and specifications and documentation related thereto); facilities,
business units and product lines, plans for business mergers, acquisitions or
divestitures; rate information; plans for the development and marketing of new
products, financial forecasts and budgets; information regarding businesses,
plans, operations, third-party contracts, licenses, internal or external audits,
law suits, regulatory compliance or

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other information or data obtained, received, transmitted, processed, stored,
archived or maintained by CSC under this Agreement; and other business processes
and proprietary information. The Disclosing Party’s Confidential Business
Information shall remain the property of such Entity.

  (ii)  
Failure to Denote as Confidential. Subject to Section 15.3(b)(i)(2)(B), if the
Disclosing Party fails to denote Confidential Business Information as
“confidential” (or with a similar term) prior to disclosure, and later does so,
and such Confidential Business Information would not otherwise be considered as
such pursuant to Section 15.3(b)(i) (Definition), the Receiving Party shall,
after receiving such notice, treat such information as Confidential Business
Information of the Disclosing Party to the extent such untimely notice does not
prejudice the Receiving Party.
    (iii)  
Treatment of Confidential Business Information. The Receiving Party shall use at
least the same degree of care and discretion to safeguard and prevent
disclosure, publication or dissemination of any Confidential Business
Information received from the Disclosing Party as the Receiving Party uses to
avoid unauthorized disclosure, publication or dissemination of its own
information (or information of its customers) of a similar nature, but not less
than reasonable care. Further, the Receiving Party shall: (1) use the Disclosing
Party’s Confidential Business Information only in connection with the Receiving
Party’s performance of its obligations or its full enjoyment of its rights under
this Agreement, and (2) not disclose the Disclosing Party’s Confidential
Business Information except to its Personnel who have a need to know such
Confidential Business Information in connection with the performance of the
Receiving Party’s obligations or the full enjoyment of its rights under this
Agreement. CSC shall restrict disclosure of Sears’ Confidential Business
Information to the CSC Personnel who have executed a written agreement by which
they agree to be bound by terms substantially similar to this Section 15.3
(Confidentiality). In any case, the Receiving Party is liable for any
unauthorized disclosure or use of Confidential Business Information by any of
its Personnel.
    (iv)  
Exceptions to Confidential Treatment. The obligations under this Section 15.3(b)
(Confidential Business Information) do not apply to any Confidential Business
Information that the Receiving Party can demonstrate:

  (1)  
the Receiving Party possessed prior to disclosure by the Disclosing Party, or
its Affiliates, without an obligation of confidentiality;
    (2)  
is or becomes publicly available without breach of this Agreement by the
Receiving Party;

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  (3)  
is independently developed by the Receiving Party without use of any
Confidential Business Information of the Disclosing Party; or
    (4)  
is received by the Receiving Party from a Third Party that does not have an
obligation of confidentiality to the Disclosing Party or its Affiliates.

  (v)  
Disclosure. If, in the reasonable opinion of its legal counsel, a Receiving
Party is: (1) required by Law to disclose any Confidential Business Information
of the Disclosing Party, including in connection with any legal proceeding, or
(2) such disclosure would be material in any legal proceeding concerning the
Confidential Business Information, the Services provided for hereunder or this
Agreement, then the Receiving Party may disclose such information to the
applicable arbitrator, court or other governmental authority, etc., as the case
may be, and shall not thereby be considered to have breached its obligations
under this Section 15.3(b) (Confidential Business Information) for such
disclosure; provided, however, that in each case, the Receiving Party shall, to
the extent it may legally do so, notify the Disclosing Party a reasonable time
prior to such disclosure of the Confidential Business Information to be
disclosed and the identity of the Third Party requiring such disclosure in order
that the Disclosing Party may interpose an objection to such disclosure, take
action to assure confidential handling of the Confidential Business Information
or take such other action as it deems appropriate to protect the Confidential
Business Information. The Receiving Party shall use commercially reasonable
efforts to cooperate with the Disclosing Party in its efforts to seek a
protective order or other appropriate remedy or, if such protective order or
other remedy is not obtained, to obtain assurance that confidential treatment
shall be accorded such Confidential Business Information.
    (vi)  
Duration. The Receiving Party’s obligations under this Section 15.3(b)
(Confidential Business Information) shall survive the termination or completion
of the applicable Transaction Document for a period of five (5) years from the
date that the applicable Confidential Business Information was initially
disclosed.

  (c)  
Confidential Personal Information.

  (i)  
General. CSC agrees that all information about the Eligible Recipients
(including their respective Affiliates’ individual customers and Personnel),
provided to CSC or the CSC Personnel by Eligible Recipients, including names,
addresses, telephone numbers, account numbers, customer lists and demographic,
financial and transaction information, as well as employee lists and company
telephone or e-mail directories and any other information that is subject to
applicable Privacy Laws (collectively, “Confidential Personal Information”)
shall be deemed confidential.

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This Section 15.3(c) (Confidential Personal Information) shall not apply to
information independently developed by CSC without the use of Confidential
Personal Information; provided that neither CSC nor the CSC Personnel are using
such information on Eligible Recipients’ behalf. If information may be deemed to
be both Sears Business Information and Sears Confidential Personal Information,
the provisions of this Section 15.3(c) (Confidential Personal Information) shall
control.

  (ii)  
Treatment of Confidential Personal Information. CSC shall use Confidential
Personal Information only as necessary to perform the Services and its other
obligations under this Agreement. CSC shall not duplicate or incorporate the
Confidential Personal Information into its own records or databases. CSC shall
restrict disclosure of Confidential Personal Information to those CSC Personnel
who have a need to know such information to perform the Services and who have
first agreed in writing to be bound by terms substantially similar to this
Section 15.3(c) (Confidential Personal Information). CSC shall be liable for any
unauthorized disclosure or use of Confidential Personal Information by any CSC
Personnel.
    (iii)  
Non-Disclosure of Confidential Personal Information. CSC shall not disclose the
Confidential Personal Information to any third party including Affiliates of
CSC, agents, independent contractors except Exempt Subcontractors and
Subcontractors approved by Sears, without prior written consent of Sears and the
written agreement of such third party to be bound by terms substantially similar
to this Section 15.3(c) (Confidential Personal Information). Unless otherwise
prohibited by applicable Law, CSC shall: (1) immediately notify Sears of any
legal process served on CSC for the purpose of obtaining Confidential Personal
Information; and (2) permit Sears or its Affiliates adequate time to exercise
its legal options to prohibit or limit such disclosure.
    (iv)  
CSC Policies for Confidential Personal Information. CSC shall establish and
maintain written policies and procedures designed to: (1) ensure the security
and the confidentiality of the Confidential Personal Information; (2) protect
against any anticipated threats or hazards to the security or integrity of such
information; and (3) protect against unauthorized access to or use of such
information that could result in substantial harm or inconvenience to any
customer or data subject. Copies of such policies and procedures shall be
provided to Sears by CSC upon Sears’ request.
    (v)  
CSC Notification for Confidential Personal Information. CSC shall notify Sears
promptly upon the discovery of the actual or potential loss, unauthorized
disclosure or unauthorized use of the Confidential Personal Information and
shall indemnify and hold harmless the Eligible Recipients for such loss,
unauthorized disclosure or unauthorized use, including Attorneys’ Fees pursuant
to Section 20.1 (Indemnity by CSC).

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  (vi)  
CSC Breach. A material breach by CSC or the CSC Personnel of this
Section 15.3(c) (Confidential Personnel Information) shall be a material breach
of this Agreement. In addition, Sears shall be entitled to the recovery of any
pecuniary gain realized by CSC or the CSC Personnel from the unauthorized use or
disclosure of Confidential Personal Information.

  (d)  
Return or Destruction of Confidential Information. Within ten (10) days
following the earlier of (i) termination or expiration of this Agreement or any
Transaction Document or (ii) completion of any Services for which such
Confidential Personal Information has been provided, CSC shall, at Sears’
discretion, either return Sears’ Confidential Information, and all copies and
derivatives thereof, to Sears, and certify in writing to Sears that such
Confidential Information and all copies and derivatives thereof have been
destroyed in such a manner that it cannot be retrieved.
    (e)  
Loss of Confidential Information. Each Party shall (i) immediately notify the
other Party of any actual or potential breach of security, unauthorized
possession, use, knowledge, disclosure or loss of such other Party’s
Confidential Information, including Sears Data, in contravention of this
Agreement, (ii) promptly furnish to the other Party all known details and assist
such other Party in investigating and/or preventing the recurrence of such
possession, use, knowledge, disclosure or loss, (iii) cooperate with the other
Party in any investigation or litigation deemed necessary by such other Party to
protect its rights, and (iv) promptly use all commercially reasonable efforts to
prevent further possession, use, knowledge, disclosure or loss of Confidential
Information in contravention of this Agreement. Each Party shall bear any costs
it incurs in complying with this Section 15.3(e) (Loss of Confidential
Information). Furthermore, CSC shall, at no additional charge, perform a Root
Cause Analysis of any security failure regarding a CSC Provided System, a CSC
Managed System or unauthorized access to Sears Provided Systems originating
directly or indirectly from any CSC Provided Systems, CSC Managed Systems or CSC
Personnel and provide Sears with such reasonable assurances as Sears shall
request that such breach or potential breach shall not recur; ***.
    (f)  
No Implied Rights. Nothing contained in this Section 15.3 (Confidential
Information) shall be construed as (i) obligating a Party to disclose its
Confidential Information to the other Party, (ii) granting to or conferring on a
Party any express or implied rights or license to any Confidential Information
of

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the other Party, or (iii) limiting or affecting any rights or licenses granted
to either Party elsewhere in this Agreement.

15.4  
File Access.

Sears Personnel authorized by the Sears Relationship Manager shall have
unrestricted access to, and the right to review and retain the entirety of, all
computer or other files containing Sears Data, as well as all Systems and
network logs, system parameters and documentation, and all such files and other
information provided to the Eligible Recipients shall be complete. CSC shall not
delay access by Sears to any of such files or other materials or information.
CSC shall provide to the Sears Relationship Manager all passwords, codes,
comments, keys, documentation and the locations of any such files and other
materials promptly upon the request of Sears, including Equipment and Software
keys and such information as to format, encryption (if any) and any other
specification or information necessary for the Eligible Recipients to retrieve,
read, revise and/or maintain such files and information.

16.  
OWNERSHIP

16.1  
CSC Provided Systems.

  (a)  
Ownership of CSC Provided Systems. Subject only to the licenses granted to the
Eligible Recipients by CSC under this Agreement, title to all CSC Provided
Systems shall not be affected by this Agreement and shall at all times remain
with CSC (or with CSC’s or its Subcontractors’ licensors).
    (b)  
*** — Patents.

  (i)  
Acknowledgement. CSC acknowledges and agrees that (i) it may be given access to
the Eligible Recipients’ respective business operations and Confidential
Information during the course of CSC’s performance of the Services, and (ii) by
virtue of such access, it may develop and patent related business methods and
innovations.
    (ii)  
CSC and its Affiliates. CSC covenants, on behalf of itself, its Affiliates and
their respective employees (while acting within the scope of their employment)
and their successors and assigns, that they shall not, and shall cause each of
its Affiliates and their respective employees to not, enforce or assert, during
the Term and thereafter, against ***, or any of their Personnel (in connection
with such Personnel’s relationship with Sears), any United States or foreign
patent at any time owned, acquired or controlled by CSC, any of its Affiliates
or their respective employees claiming any business method or innovation related
to the retail industry or any other aspect of the *** respective products,
services, methods of operation or relating to any Confidential Information of
any ***,

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or any of their Personnel (in connection with such Personnel relationship with
Sears); ***.
    (iii)  
Sears Cooperation. If during the Term, a ***, implements, after the Effective
Date of any applicable Transaction Document, any process, method of operation or
System *** is an infringement of such CSC Patent, then Sears will, upon CSC’s
written request, ***.
    (iv)  
Subcontractors. In addition, except as expressly provided otherwise in a
Transaction Document, CSC shall cause all Subcontractors (and their respective
Affiliates) to not enforce or assert, during the Term and thereafter, against
the Eligible Recipients any United States or foreign patent at any time owned,
acquired or controlled by any such Subcontractor (or any of its Affiliates)
claiming any business method or innovation related to the retail industry or any
other aspect of the Eligible Recipients’ respective products, services or
businesses or relating to any Confidential Information of any Eligible
Recipient, except for patents claiming inventions that were not invented,
developed, conceived, reduced to practice or otherwise discovered as a result
of, pursuant to or in connection with the Services or this Agreement.

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16.2  
Sears Provided Systems.

Subject only to the license granted by Sears to CSC in Section 10.6 (License to
Sears Provided Systems), title to all Sears Provided Systems shall not be
affected by this Agreement and shall at all times remain with Sears (or with the
Eligible Recipients’ licensor(s)), and CSC shall and hereby does, without
further consideration, assign to Sears any and all right, title or interest that
CSC, its Affiliates or the CSC Personnel may now or hereafter possess in or to
the Sears Provided Systems. To the fullest extent permissible by applicable Law,
all copyrightable aspects of any Sears Provided Systems developed by CSC or the
CSC Personnel shall be considered “works made for hire” (as that term is used in
Section 101 of the United States Copyright Act, as amended) and owned by Sears.
For purposes of clarity, if a Deliverable to be owned by Sears pursuant to this
Section 16.2 (Sears Provided Systems) contains a Derivative Work based upon any
pre-existing work in which a Third Party has rights and such pre-existing work
was provided to CSC by an Eligible Recipient for use with such Deliverable or
was incorporated into such Deliverable by CSC Personnel with Sears’ prior
written consent, then the assignment and transfer to Sears of rights, title and
interest in and to such Derivative Work pursuant to this Section 16.2 (Sears
Provided Systems) shall be subject to such Third Party’s rights, if any. CSC
acknowledges that, as between CSC, CSC Personnel and Sears, Sears (and its
successors and assigns) shall have the right to obtain and hold in their own
name any Intellectual Property Rights in and to the Sears Provided Systems. CSC
shall execute any documents and take any other actions reasonably requested by
Sears to effectuate the purposes of this Section 16.2 (Sears Provided Systems).
If and to the extent that CSC uses a Third Party to create Derivative Works,
modifications, enhancements or other Deliverables based upon (or for) a Sears
Provided System, and a related portion of such Sears Provided System was
licensed to Sears by such Third Party prior to the commencement of such work,
then, CSC may not be able to get from such Third Party the ownership rights
provided for in this Section 16.2 (Sears Provided Systems). If such Third Party
will not provide such ownership rights, then CSC will not commence the
applicable Services and instead CSC will inform Sears in writing of the
intellectual property rights such Third Party will provide, and will request
that Sears either or approve or reject such lessor rights (which approval Sears
may withhold in its sole discretion). After notice from CSC that it can not get
such rights, CSC shall be relieved from providing such Services until Sears has
expressly accepted or rejected such lesser rights. If Sears rejects such rights,
CSC shall be thereafter relieved from providing such Services and the Parties
shall equitably adjust the resulting Charges. If Sears does accept such lesser
rights, such change will be documented in a Service Addenda to the Agreement
prior to commencement of the applicable Services.

16.3  
Deliverables.

  (a)  
License to Sears. Unless otherwise expressly set forth in the applicable
Transaction Document, CSC shall and hereby does grant to Sears a perpetual,
assignable, unrestricted, worldwide, royalty-free, irrevocable, non-exclusive
right and license to copy, use, display, modify, create Derivative Works based
upon, distribute, sublicense and otherwise enjoy all Deliverables (including any
CSC Provided Software or CSC Provided Materials incorporated into such
Deliverables or necessary to operate such Deliverables) to the same extent as if
Sears were the sole owner thereof, without an obligation to account to CSC. For

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the avoidance of doubt, the parties agree that in the event both this
Section 16.1(a) and Section 16.3 (Sears Provided Systems) could apply in a
particular circumstance, that Section 16.3 (Sears Provided Systems) shall
control over this Section.

  (b)  
Restrictions. CSC shall not incorporate into any Deliverable any CSC Provided
Systems or other Third Party Materials for which CSC does not have the right to
grant the license provided for under Section 16.3(a) (License to Sears).
    (c)  
Source Code and Documentation. CSC shall, upon Sears’ request, provide Sears
with the source code and documentation for all Deliverables that are Software,
on media and in a format reasonably requested by Sears. Such source code shall
be sufficient to allow a reasonably knowledgeable and experienced programmer to
maintain and support such Deliverables; and the user documentation for such
Deliverables shall accurately describe, in terms understandable by a typical end
user, the functions and features of such Deliverables and the procedures for
exercising such functions and features.

16.4  
General Knowledge.

This Agreement shall not preclude either Party from using its general knowledge,
skills and experience; provided, however, that, in each case, such Party does
not use or disclose in connection therewith any of the Confidential Information
of the other Party or its Affiliates (or in case of Sears, any Eligible
Recipient) or infringe or misappropriate any Intellectual Property Rights of the
other Party or its Affiliates (or in case of Sears, any Eligible Recipient).

16.5  
Other Rights.

Except as expressly specified in this Agreement, nothing in this Agreement shall
be deemed to grant to one Party, by implication, estoppel or otherwise, license
rights, ownership rights or any other Intellectual Property Rights in any
Materials owned by the other Party or any Affiliate of the other Party (or, in
the case of Sears, owned by any Eligible Recipient).

16.6  
Copyright Legends.

Each Party agrees to reproduce copyright legends which appear on any portion of
the Materials which may be owned by the other Party or third parties.

17.  
REPRESENTATIONS, WARRANTIES AND COVENANTS

17.1  
By CSC.

CSC represents, warrants and covenants (as to future performance) to Sears (on
its behalf and on behalf of the Eligible Recipients) as follows:

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  (a)  
Work Standards. The Services shall be rendered with promptness and diligence and
shall be executed in a workmanlike manner, in accordance with the Service
Levels, the best practices and professional standards required under this
Agreement. CSC shall use adequate numbers of qualified individuals and all CSC
Personnel shall have suitable training, education, experience, competence and
skill to perform the Services. CSC shall provide such individuals with
sufficient training as to new products and services prior to the implementation
of such products and services in any Eligible Recipient’s environment.
    (b)  
Maintenance.

  (i)  
CSC Responsibility. Unless otherwise agreed, CSC shall maintain the CSC Provided
Systems and CSC Managed Systems and Deliverables so that they operate
substantially in accordance with their respective Specifications, including
(1) maintaining Equipment in good operating condition, subject to normal wear
and tear, (2) undertaking repairs and preventive maintenance on such Equipment
in accordance with the applicable manufacturer’s recommendations and
requirements, and (3) performing maintenance on such Software in accordance with
the applicable Software supplier’s documentation, recommendations and
requirements.
    (ii)  
Refresh. CSC shall, subject to Section 6.5 (Technology) or as otherwise agreed
by the Parties, Upgrade or replace such CSC Provided Systems and CSC Managed
Systems as necessary to satisfy its obligations under this Agreement, at no
additional cost to Sears.

  (c)  
Efficiency and Cost Effectiveness. CSC shall use commercially reasonable efforts
to provide the Services in the most cost-effective manner consistent with the
required level of quality and performance. Without limiting the generality of
the foregoing, such actions shall include:

  (i)  
Timing of Actions. Making adjustments in the timing of actions (consistent with
Sears’ priorities and schedules for the Services and CSC’s obligation to meet
the Service Levels).
    (ii)  
Timing of Functions. Delaying or accelerating, as appropriate, the performance
of non-critical functions within limits acceptable to Sears.
    (iii)  
Systems Optimization. Tuning or optimizing CSC Provided Systems and CSC Managed
Systems (including memory) to optimize performance and minimize costs.
    (iv)  
Usage Scheduling. Controlling its use of the CSC Provided Systems, CSC Managed
Systems and the Sears Provided Systems by scheduling usage, where possible, to
lower cost/utilization periods.

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  (v)  
Efficiency. Efficiently using resources for which Sears is charged under this
Agreement, consistent with industry norms, and compiling data concerning such
efficient use in segregated and auditable form whenever possible.

  (d)  
CSC Provided Systems/CSC Managed Systems/Deliverables. CSC is either the owner
of, or authorized to use, any and all CSC Provided Systems, CSC Managed Systems
(but not including any CSC Managed Systems provided under the Excluded
Agreements) and Deliverables, and the use thereof by CSC, the CSC Personnel and
the Eligible Recipients in accordance with this Agreement shall not infringe or
misappropriate any Intellectual Property Rights of any Third Party. As to any
such CSC Provided Systems, CSC Managed Systems and Deliverables that CSC does
not own but is authorized to use, CSC shall, prior to the use thereof in
connection with the Services, advise Sears as to the ownership and extent of
CSC’s rights with regard to such items to the extent any limitation in such
rights would impair CSC’s performance of its obligations under this Agreement
and obtain Sears’ written consent to such limitations.
    (e)  
Deliverables. All Deliverables (when delivered, but excluding interim
Deliverables for which the applicable project plan calls for a later final
Deliverable) shall be free from error, shall comply with the requirements, if
any, set forth in the applicable Transaction Document and, except as expressly
specified otherwise in a Transaction Document, shall be fully compatible with
any and all Software and Equipment that such Deliverable was intended to be
interfaced or otherwise operated with.
    (f)  
Non-Infringement. Except as otherwise provided in this Agreement, CSC and the
CSC Personnel shall perform CSC’s responsibilities under this Agreement in a
manner that does not infringe, or constitute an infringement or misappropriation
of, any Intellectual Property Rights of any third party; provided, however, that
CSC shall not have any obligation or liability to the extent any infringement or
misappropriation is caused by (i) modifications to CSC Provided Systems, CSC
Managed Systems or Deliverables made by Eligible Recipients, without the
knowledge or approval of CSC, (ii) Sears’ or the other Eligible Recipients’
combination of CSC Provided Systems, CSC Managed Systems or Deliverables with
items not furnished, specified or reasonably anticipated by CSC or contemplated
by this Agreement or known by CSC Personnel to be used with such items, (iii) a
breach of this Agreement by Sears, (iv) the failure of Sears to use corrections
or modifications provided by CSC, without additional charge and with notice of
actual infringement, offering equivalent or superior features and functionality,
or (v) CSC Managed Systems, except to the extent that such infringement or
misappropriation arises from the failure of CSC to obtain the necessary licenses
or Required Consents or to abide by the Third Party Contracts associated with
such CSC Managed Systems. CSC shall not use or create materials in connection
with the Services which are libelous, defamatory or obscene.

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  (g)  
Authorization.

  (i)  
Corporate Existence. CSC is a corporation duly incorporated, validly existing
and in good standing under all applicable Laws;
    (ii)  
Corporate Power and Authority. CSC has the requisite corporate power and
authority to execute, deliver and perform its obligations under this Agreement;
    (iii)  
Legal Authority. CSC has obtained all licenses, authorizations, approvals,
consents or permits required to perform its obligations under this Agreement
under all applicable federal, state or local laws and under all applicable rules
and regulations of all authorities having jurisdiction over the Services, except
to the extent the failure to obtain any such license, authorizations, approvals,
consents or permits is, in the aggregate, immaterial;
    (iv)  
Due Authorization. The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated by this Agreement have been
duly authorized by the requisite corporate action on the part of CSC; and
    (v)  
No Violation or Conflict. The execution, delivery and performance of this
Agreement shall not constitute a violation of any judgment, order or decree; a
material default under any material contract by which CSC or any of its material
assets are bound; or an event that would, with notice or lapse of time, or both,
constitute such a default.

  (h)  
Sears Code of Conduct and Privacy Policies. CSC acknowledges that it has been
furnished a copy of Sears Code of Business Conduct (the “Code of Conduct”) and
Sears Privacy Policies (collectively, the “Privacy Policy”) and that Sears’
associates are required to follow the Code of Conduct and Privacy Policy. CSC
shall at all times support and abide by the Code of Conduct and Privacy Policy,
as they may be modified from time to time by Sears, and shall not take any
action to induce Sears Personnel to violate the Code of Conduct or Privacy
Policy. In addition neither CSC, its Affiliates nor the CSC Personnel have given
nor shall give commissions, payments, kickbacks, lavish or extensive
entertainment, or other inducements of more than minimal value to any Sears
Personnel in connection with this Agreement. CSC acknowledges that the giving of
any such payments, gifts, entertainment or other thing of value is strictly in
violation of the Code of Conduct, and may result in the termination of this
Agreement for cause by Sears, in whole or in part, and any or all other existing
and future contracts between the Parties. CSC shall report to Sears immediately
any violation of or attempt to violate the Code of Conduct or Privacy Policy.
    (i)  
Unauthorized Code.

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  (i)  
General. CSC shall cooperate with Sears and shall take commercially reasonable
actions and precautions consistent with the applicable Transaction Document to
prevent the introduction and/or proliferation of Unauthorized Code into an
Eligible Recipient’s environment or any Sears Provided System, CSC Provided
System or CSC Managed System or Deliverables. Without limiting CSC’s other
obligations under this Agreement, if Unauthorized Code is found in any such
systems, CSC shall exercise all commercially reasonable efforts, at no
additional charge to Sears, to eliminate and reduce the effects of such
Unauthorized Code and, if the Unauthorized Code causes a loss of operational
efficiency or loss of data, to mitigate such losses and restore such data with
generally accepted data restoration techniques; ***.
    (ii)  
Items Containing Unauthorized Code. Without the prior written consent of Sears,
neither CSC nor the CSC Personnel shall use any Software or Equipment or Systems
that includes Unauthorized Code in connection with the Services and neither CSC,
its Affiliates nor their Personnel shall insert, or permit insertion of, any
Unauthorized Code into any Sears Provided System, CSC Provided System or CSC
Managed System or Deliverables. *** With respect to any Unauthorized Code that
is included in such Software or Equipment or Systems, neither CSC, its
Affiliates nor its Personnel shall invoke or cause to be invoked such
Unauthorized Code at any time, including upon expiration or termination of this
Agreement or any Transaction Document for any reason, without Sears’ prior
written consent, which may be withheld in Sears’ sole discretion. ***.

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.

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  (j)  
Compliance with Laws.

  (i)  
Compliance by CSC. With respect to the CSC Provided Systems, CSC Managed Systems
and Deliverables, the provision of the Services and the performance of CSC’s
obligations under this Agreement, CSC shall, and shall cause its Affiliates and
the CSC Personnel to, (1) comply with all Sears Rules and Laws from the
Effective Date and at all times thereafter during the Term of this Agreement
(including any Termination Assistance Services period(s)), including those Sears
Rules and Laws relating to security, safety, health and the environment, and
shall identify and procure all permits, certificates, approvals and inspections
required under such Laws and (2) comply with changes in Sears Rules and Laws and
at CSC’s expense, develop and implement any necessary modifications to the
Services, upon Sears’ approval of such proposed changes, prior to the deadline
for such requirement or change. If a charge of non-compliance by CSC with any
Law occurs, CSC shall promptly notify Sears of such charge. CSC shall take all
commercially reasonable precautions to avoid injury, property damage, spills or
emissions of hazardous substances, materials or waste, and other dangers to
persons, property or the environment, including by providing to CSC Personnel
appropriate training. CSC shall ensure that neither CSC nor any CSC Personnel
commits, and use all reasonable efforts to ensure that no business visitor or
invitee of CSC or CSC Personnel commits, any act in violation of any Laws in any
Sears Facility or any act in violation of any Eligible Recipient’s insurance
policies or in breach of an Eligible Recipient’s obligations under any
applicable real estate leases in such Sears Facilities (in each case, to the
extent CSC has received notice of such insurance policies or real estate leases
or should reasonably be expected to know of such obligations or limitations).
    (ii)  
Compliance with Privacy Laws. CSC shall (1) comply with the Sears data
protection and privacy policies disclosed by Sears to CSC from time to time and
(2) provide Sears with such assistance as Sears may reasonably require to
fulfill its responsibilities under the Privacy Laws. CSC shall, in good faith,
work with Sears to adopt and implement such contract clauses as Sears deems
reasonably necessary.
    (iii)  
Notice of Laws. CSC shall notify Sears of any Laws and changes in Laws
applicable to the Services and shall identify the impact of such Laws and
changes in Laws with respect to such Services. Subject to its non-disclosure
obligation under other customer contracts, CSC shall make commercially
reasonable efforts to obtain information regarding such requirements from other
customer engagements and to communicate such information to Sears in a timely
manner.

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  (k)  
Notice of Adverse Impact. As of each applicable Commencement Date, CSC is not
aware of any failure by CSC (including the CSC Personnel) to comply with its
obligations under this Agreement or any other situation that (i) has impacted or
reasonably could be expected to impact the maintenance of any Eligible
Recipient’s financial integrity or internal controls, the accuracy of any
Eligible Recipient’s financial, accounting, manufacturing quality or human
resources records and reports or compliance with the Code of Conduct, Privacy
Policies, Sears Rules, Sears Standards or any Laws, or (ii) has had or
reasonably could be expected to have any other material adverse impact on the
Services in question or the impacted business operations of the Eligible
Recipients. If CSC at any time becomes aware of any such situation, then CSC
shall (A) immediately notify Sears Relationship Manager of such situation and
the expected impact, and (B) with the assistance of Sears, formulate an
appropriate plan to mitigate the impact of, and to correct, the situation;
provided, however, that changes to CSC’s performance as a result of such plan
shall be subject to Sears’ prior consent.
    (l)  
Interoperability. Except as expressly specified otherwise in a Transaction
Document, the CSC Provided Systems and Deliverables shall be fully interoperable
with the Sears Provided Systems and the CSC Managed Systems that are used to run
or that interface with, or that otherwise interact with, the CSC Provided
Systems and Deliverables, including for receipt of the Services.
    (m)  
Pass-Through. CSC shall enforce any representations, warranties, covenants and
indemnities granted to CSC its Affiliates or the CSC Personnel by Third Parties
regarding any Software or other Materials, Equipment and/or Services, including
the CSC Provided Systems and Deliverables, on behalf of the Eligible Recipients
to the extent reasonably requested to do so by Sears and to the extent CSC is
permitted to do so under the terms of the applicable agreements with those Third
Parties, unless CSC determines that it is not commercially reasonable for it to
do so and CSC provides to Sears an alternative, equivalent remedy and CSC
reimburses Sears for any additional costs Sears incurs as a result of such
alternative remedy.

17.2  
By Sears.

Sears represents, warrants and covenants (as to future performance) to CSC as
follows:

  (a)  
Non-Infringement. Except as otherwise provided in this Agreement, Sears shall
perform its responsibilities under this Agreement in a manner that does not
infringe, or constitute an infringement or misappropriation of, any Intellectual
Property Rights of any third party; provided, however, that Sears shall not have
any obligation or liability to the extent any infringement or misappropriation
is caused by (i) modifications to Sears Provided Systems or CSC Managed Systems
not made by the Eligible Recipients, (ii) CSC or the CSC Personnel’s combination
of Sears Provided Systems or CSC Managed Systems with items not furnished by the
Eligible Recipients (provided, however, that Acquired Assets shall not be deemed
furnished by the Eligible Recipients), (iii) the failure of CSC

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or the CSC Personnel to use corrections or modifications provided by Sears (or
the other Eligible Recipients), without additional charge and with notice of
actual infringement, offering equivalent or superior features and functionality,
or (iv) Third Party Materials, except to the extent that Sears (or CSC on Sears’
behalf) is responsible under this Agreement for obtaining Required Consents for
such Third Party Materials and such infringement or misappropriation arises from
the failure to obtain such Required Consents or to abide by the limitations of
the applicable licenses for such Third Party Materials. The Eligible Recipients
shall not use or create Materials in connection with the Services which are
libelous, defamatory or obscene.

  (b)  
Authorization.

  (i)  
Corporate Existence. Sears is a corporation duly incorporated, validly existing
and in good standing under all applicable Laws;
    (ii)  
Corporate Power and Authority. Sears has the requisite corporate power and
authority to execute, deliver and perform its obligations under this Agreement;
    (iii)  
Legal Authority. Sears has obtained all licenses, authorizations, approvals,
consents or permits required to perform its obligations under this Agreement
under all applicable federal, state or local laws and under all applicable rules
and regulations of all authorities having jurisdiction over the Services, except
to the extent the failure to obtain any such license, authorizations, approvals,
consents or permits is, in the aggregate, immaterial;
    (iv)  
Due Authorization. The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated by this Agreement have been
duly authorized by the requisite corporate action on the part of Sears; and
    (v)  
No Violation or Conflict. The execution, delivery and performance of this
Agreement shall not constitute a violation of any judgment, order or decree; a
material default under any material contract by which Sears or any of Sears’
material assets are bound; or an event that would, with notice or lapse of time,
or both, constitute such a default.

17.3  
Disclaimer.

EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY MAKES
ANY EXPRESS OR IMPLIED REPRESENTATIONS, WARRANTIES OR COVENANTS TO THE OTHER
PARTY, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE AND NON-INFRINGEMENT. IN ADDITION, CSC ACKNOWLEDGES THAT THE
SEARS PROVIDED SYSTEMS AND THE CSC

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MANAGED SYSTEMS ARE PROVIDED BY THE ELIGIBLE RECIPIENTS TO CSC ON AN AS-IS,
WHERE-IS BASIS AND SEARS AND THE OTHER ELIGIBLE RECIPIENTS EXPRESSLY DISCLAIM
ANY EXPRESS OR IMPLIED REPRESENTATIONS, WARRANTIES OR COVENANTS AS TO SUCH SEARS
PROVIDED SYSTEMS AND CSC MANAGED SYSTEMS, OR THE CONDITION OR SUITABILITY OF
SUCH SEARS PROVIDED SYSTEMS AND CSC MANAGED SYSTEMS FOR USE BY CSC TO PROVIDE
THE SERVICES, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE AND NON-INFRINGEMENT.

17.4  
Effect.

All representations, warranties and/or covenants made in any provision of this
Master Agreement by either Party shall be true when made and remain true
throughout the Term and the Term of each Transaction Document.

18.  
AUDIT RIGHTS

18.1  
Contract Records.

CSC shall, and shall cause its Affiliates and all CSC Personnel and suppliers
to, maintain complete and accurate records of and supporting documentation for
all Charges, all Sears Data and all transactions, authorizations, System
Changes, implementations, soft document access, reports, analyses, data or
information created, generated, collected, processed or stored by CSC in the
performance of its obligations under this Agreement (“Contract Records”). CSC
shall maintain such Contract Records in accordance with generally accepted
accounting principles for the applicable jurisdiction applied on a consistent
basis. CSC shall retain Contract Records in accordance with Sears’ record
retention policy as modified from time to time and provided to CSC in writing.

18.2  
Sears Audit.

  (a)  
General. CSC shall, and shall cause its Affiliates and the CSC Personnel to,
allow Sears (and internal, governmental and other external auditors, inspectors,
regulators and other representatives that Sears may designate from time to time
or that may have jurisdiction over one or more Eligible Recipients)
(collectively, “Sears Audit Designees”) to conduct audits and examinations of
the operations of CSC, its Affiliates and the CSC Personnel as described in this
Section 18 (Audit Rights).
    (b)  
Operational and Financial Audits. CSC shall, and shall cause its Affiliates and
the CSC Personnel to, provide to Sears Audit Designees access to CSC Personnel,
to the facilities at or from which Services are then being provided and to
Contract Records and other pertinent information, all to the extent relevant to
the Services and CSC’s obligations under this Agreement. Such access shall be
provided for the purpose of performing audits and inspections of Sears and the
other Eligible Recipients’ businesses, to (i) verify the accuracy, completeness
and integrity of

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the Sears Data and Contract Records, (ii) verify the accuracy and completeness
of Charges, Pass-Through Expenses and Out-of-Pocket Expenses, (iii) examine the
financial controls, processes and procedures utilized by CSC and the performance
of CSC’s financial obligations, (iv) examine the Systems that process, store,
support and transmit that data, (v) examine the controls (e.g., organizational
controls, input/output controls, System modification controls, processing
controls, System design controls and access controls) and the privacy, security,
disaster recovery and back-up practices and procedures, (vi) examine CSC’s
performance of the Services and the measurement and reporting tools, performance
metrics and reporting procedures for the Services, (vii) verify CSC’s reported
performance against the applicable Service Levels, (viii) examine CSC’s
measurement, monitoring and management tools, and (ix) enable the Eligible
Recipients to meet applicable legal, regulatory and contractual requirements, in
each case to the extent applicable to the Services and/or Charges. CSC shall
provide any assistance reasonably requested by Sears or its designee in
conducting any such audit and shall make requested personnel, records and
information available during the Term and thereafter, during the period
specified in Sears’ records retention policy, as it may be modified from time to
time.

18.3  
SAS 70 Audit.

CSC shall, on an annual basis, retain an independent auditor to perform an audit
of the electronic data processing environment(s) and locations used by CSC to
provide the Services. Such audit shall conform to the Statement of Auditing
Standards No. 70 (“SAS 70”) or successor substitute statement adopted by the
American Institute of Certified Public Accountants or other relevant body, and
at least every other year such audit shall be a “Type II” audit under SAS 70
Guidelines. CSC shall provide Sears a reasonable opportunity to comment on each
planned audit, and provide suggested modifications (consistent with and in
accordance with SAS 70) to the planned audit prior to the commencement of the
audit. CSC shall provide Sears with a copy of the review resulting from each SAS
70 audit and shall, as soon as reasonably practicable, remedy any material
deficiencies revealed by such audit. In addition, to the extent a SAS 70 audit
(or equivalent audit) is conducted with respect to a CSC Facility at or from
which the Services are provided, CSC shall promptly provide a copy of the
resulting audit report to Sears. CSC shall respond to such report in accordance
with Section 18.7 (Remedial Obligations).

18.4  
Governmental or Other Non-Sears Audits.

Sears and the other Eligible Recipients may be subject to regulation and audit
by governmental bodies, standards organizations, other regulatory authorities,
customers or other parties to contracts with an Eligible Recipient under
applicable Laws, rules, regulations, standards and contract provisions. If an
Eligible Recipient is required by a governmental body, standards organization or
regulatory agency having jurisdiction over an Eligible Recipient to have an
audit or inspection of the Services then being provided to an Eligible Recipient
or information concerning an Eligible Recipient held by CSC under this
Agreement, CSC shall allow the governmental body, standards organization or

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regulatory agency exercising jurisdiction over the business of an Eligible
Recipient to conduct such an audit or inspection as it relates to CSC’s
provision of the Services, or such information concerning an Eligible Recipient
held by CSC, under this Agreement. In addition, if a customer or other party to
a contract with an Eligible Recipient exercises its right to audit or inspect an
Eligible Recipient’s books, records, documents or accounting practices, CSC
shall provide all cooperation requested by the Eligible Recipient in responding
to such audits or requests for information.

18.5  
Audit Process.

CSC shall provide Sears, and any Sears Audit Designees, access to the
facilities, Systems, books, records and information related to the provision of
the Services as reasonably necessary to perform audits described in this Section
18 (Audit Rights), including assisting Sears and Sears Audit Designees in
testing their data files, programs and procedures and operation of audit
software. To the extent permitted by applicable Laws, CSC shall provide Sears,
and its designees, with a copy of the findings of any such governmental audit.

18.6  
Security Testing.

Without limiting the generality of Section 18.2(b) (Operational and Financial
Audits), Sears Audit Designees may, from time to time, without prior notice,
perform security audits of CSC, its Affiliates and their Personnel, which may
include penetration testing and other exploits of CSC Provided Systems, CSC
Managed Systems and Sears Provided Systems and Deliverables (“Security
Testing”). CSC, on behalf of itself, its Affiliates and their Personnel, shall
and hereby does grant Sears permission to perform such Security Testing. ***
Notwithstanding anything to the contrary contained herein, Sears shall have no
obligation to provide CSC with, and CSC shall not be entitled to receive, copies
of the results of any Security Testing.

18.7  
Remedial Obligations.

CSC and Sears shall meet to review each audit report promptly after the issuance
thereof. CSC shall respond to each audit report in writing within thirty
(30) days from receipt of such report, unless a shorter response time is
specified in such report. If any audit or inspection reveals that CSC has failed
to comply with this Agreement, any generally accepted accounting principle or
other audit requirement or any Law or standard (including SAS 70) relating to
the performance of CSC’s obligations under this Agreement, CSC shall, at CSC’s
sole cost and expense, remedy such failures as soon as reasonably practical, but
in no event later than required by any auditing governmental body, standards
organization or regulatory authority, as the case may be. In addition, if any
audit or examination, including an internal CSC audit, reveals that CSC has
overbilled Sears or if an audit reveals any breach of this Agreement, CSC shall
promptly pay Sears: (a) the amount of such overbilling that Sears has paid (net
of underbilling discovered by such audit), plus (b) interest at the Contract
Rate per month accruing from

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.

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the original date the error was made until the date such credit is paid, plus
(c) the reasonable costs and expenses of the audit incurred by Sears; provided,
however, that CSC’s obligation under this clause (c) above shall not exceed
one-half of the amount due under clause (a) above.

18.8  
General Procedures.

  (a)  
Access. Notwithstanding the intended breadth of Sears’ audit rights, during any
audits pursuant to this Section 18 (Audit Rights) Sears shall not allow Sears or
Sears Personnel access to (i) the proprietary information of other CSC
customers, or (ii) CSC locations that are not related to the Eligible Recipients
or the Services, (iii) material protected by the attorney-client or other legal
privilege, or (iv) data to the extent not related to the CSC’s provision of
Services or CSC’s obligations under this Agreement.
    (b)  
Notice. In performing audits, Sears shall endeavor to provide CSC with
twenty-four (24) hour advance notice of such audits (other than Security Testing
audits). Access for such audits shall be provided by CSC at reasonable hours,
except as may be required on an emergency basis; provided, however, that any
such audit may not unreasonably interfere with CSC’s performance of its
obligation under this Agreement or compromise any reasonable security processes
or procedures. All audits shall be conducted in a reasonable manner. CSC, its
Affiliates and the CSC Personnel shall provide the Services described in this
Section 18 (Audit Rights) at no additional charge to Sears.
    (c)  
Exit Conference. Following any audit, Sears shall conduct (in the case of an
internal audit), or request its external auditors or examiners to conduct, an
exit conference with CSC to obtain factual concurrence with issues identified in
the review.
    (d)  
Audit Workspace. Sears and/or the Sears Audit Designee shall be given adequate
private workspace in which to perform an audit, plus access to photocopiers,
telephones, facsimile machines, computer hook-ups and any other facilities or
equipment needed for the performance of the audit.

18.9  
CSC Breach.

***

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19.  
INSURANCE AND RISK OF LOSS

19.1  
Insurance.

  (a)  
Requirements. CSC shall, and shall require its and its Affiliates’
Subcontractors to, obtain and maintain in full force and effect the following
insurance during the Term and the Term of each Transaction Document (including
any Termination Assistance Services period thereunder); ***

  (i)  
Workers’ Compensation and Employer’s Liability Insurance.

  (1)  
Statutory Workers’ Compensation insurance, including coverage for all costs,
benefits and liabilities under workers’ compensation and similar laws that may
accrue in favor of any person employed by CSC, in all states where CSC performs
Services in accordance with applicable Law.
    (2)  
Employer’s Liability Insurance with minimum limits of *** per employee by
accident/*** per employee by disease/*** policy limit by disease (or, if higher,
the policy limits required by applicable Law).

  (ii)  
Commercial General Liability Insurance. Commercial General Liability Insurance
(including coverage for Contractual Liability assumed by CSC under this
Agreement, Premises-Operations, Completed Operations-Products, Independent
Contractors, and explosion, collapse and underground property damage hazards)
providing coverage for bodily injury, personal and advertising injury and
property damage with combined single limits of not less than *** per occurrence
and *** the aggregate per CSC policy year.
    (iii)  
Commercial Business Automobile Liability Insurance. Commercial Business
Automobile Liability Insurance, including coverage for all owned, non-owned,
leased and hired vehicles providing coverage for bodily injury and property
damage liability with combined single limits of not less than *** per accident,
except as may otherwise be required by Law.
    (iv)  
Professional Liability Insurance. Professional Liability (also known as Errors
and Omissions Liability) Insurance covering acts, errors and omissions arising
out of CSC’s operations or Services in an amount not

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less than *** per claim and *** in the aggregate per CSC policy year.
    (v)  
Comprehensive Crime Insurance. Comprehensive Crime Insurance, including Employee
Dishonesty and Computer Fraud Insurance covering losses arising out of or in
connection with any fraudulent or dishonest acts committed by CSC employees,
acting alone or with others, in an amount not less than *** per loss and *** in
the aggregate per CSC policy year.
    (vi)  
All-Risk Property Insurance. All-risk property insurance covering loss or damage
to CSC owned or leased Equipment and other property in an amount not less than
the full replacement cost of such Equipment and property.
    (vii)  
Excess Coverage. Excess coverage with respect to Sections 19.1(a)(i)(2)
(Workers’ Compensation and Employer’s Liability Insurance), (ii) (Commercial
General Liability Insurance), and (iii) (Commercial Business Automobile
Liability Insurance) with a minimum combined single limit of ***.

CSC may satisfy the minimum limits requirements of this Section 19.1(a) (i),
(ii), (iii), and (iv) (Requirements) by any combination of primary liability and
umbrella and/or excess liability coverage that result in the same protection to
CSC and the Sears Indemnified Parties. To satisfy this insurance requirement for
non-owned and hired vehicles, CSC may extend its commercial general liability
insurance to provide insurance for such vehicles. Any annual aggregate limit
must be stated separately as to the Services or twice the required limit. The
policies required under this Section 19.1 (Insurance) must be on an occurrence
basis except for Professional Liability Insurance which is on a per claim basis.
For policies that are on a per claim basis, CSC will maintain equivalent
policies for at least 4 years after the expiration or termination of this
Agreement. CSC shall purchase the insurance required by Section 19.1 (Insurance)
from companies having a rating of A-/VII or better in the current Best’s
Insurance Reports published by A. M. Best Company, Inc.

  (b)  
Endorsements. CSC’s insurance policies as required in this Agreement under
Sections 19.1(a)(ii) (Commercial General Liability Insurance) and 19.1(a)(iii)
(Commercial Business Automobile Insurance) shall name Sears, its Affiliates and
their respective employees, as Additional Insureds for any and all liability
arising at any time in connection with CSC’s performance under this Agreement,
with the standard separation of insureds provision or an endorsement for
cross-liability coverage. The CSC insurance policies required under
Sections 19.1(a)(v) (Comprehensive Crime Insurance) and 19.1(a)(vi) (All Risk
Property Insurance) shall name Sears and its Affiliates as loss payees in
connection with any insurable interest of Sears for loss or damage of such
property under this Agreement. Should any policy expire or be canceled during
the Term or any Exhibit Term and

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CSC fails to procure replacement insurance as specified herein with 30 days of
notice from Sears, Sears reserves the right (but not the obligation) upon notice
to CSC to procure such insurance and to deduct the cost thereof from any sums
due CSC under this Agreement; provided that CSC’s liability for such replacement
insurance procured by Sears shall terminate 30 days after CSC provides written
evidence to Sears that CSC has procured (and paid the premium for a minimum of
three months after the date of such notice) such required insurance. All
insurance required under this Section 19.1 (Insurance) shall be primary
insurance and any other valid insurance existing for the other Eligible
Recipients’ benefit shall be excess of such primary insurance. CSC shall obtain
such endorsements to its policy or policies of insurance as are necessary to
cause the policy or policies to comply with the requirements stated in this
Agreement.

  (c)  
Certificates. CSC shall provide Sears with certificates of insurance evidencing
compliance with this Section 19 (Insurance and Risk of Loss) (including evidence
of renewal of insurance) signed by authorized representatives of the respective
carriers for each year that this Agreement is in effect. Each certificate of
insurance shall provide that the issuing company shall not cancel, reduce or
otherwise materially alter the insurance afforded under the above policies
unless notice of such cancellation, reduction or material alteration has been
provided at least thirty (30) days in advance to Sears at the addresses for
Sears specified in Section 26.3 (Notices).
    (d)  
No Implied Limitation. The obligation of CSC and its Subcontractors to provide
the insurance specified in this Agreement shall not limit in any way any
obligation or liability of CSC provided elsewhere in this Agreement. The rights
of the Eligible Recipients to insurance coverage under policies issued to or for
the benefit of one or more of them are independent of this Agreement and shall
not be limited by this Agreement.
    (e)  
Insurance Subrogation. With respect to insurance coverage to be provided by CSC
pursuant to this Section 19.1 (Insurance) except professional liability, the
insurance policies shall provide that the insurance companies waive all rights
of subrogation against CSC, the Eligible Recipients and their respective
Affiliates and Personnel. CSC waives its rights to recover against the Eligible
Recipients, including their respective Personnel in subrogation or as subrogee
for another party.
    (f)  
***

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19.2  
Risk of Loss.

  (a)  
General. Except as otherwise provided in Section 20.1(k) (CSC Acts or Omissions)
or Section 20.2(g) (Sears Acts or Omissions), (i) each Party shall be
responsible for risk of loss of, and damage to, any Equipment, Software, Systems
or other Materials in its or its Affiliates’ or their Personnel’s possession or
control, and (ii) such Party shall be responsible for the cost of any necessary
repair or replacement of such Equipment, Software, Systems or other Materials
due to an Event of Loss. CSC shall be deemed to possess and control all
Equipment, Software and other Materials located in its own Facilities or in
portions of Sears Facilities used by CSC to provide the Services. Each Party
shall promptly notify the other of any damage (except normal wear and tear),
destruction, loss, theft or governmental taking of any item of Equipment,
Software, Systems or other Materials (“Event of Loss”). For Events of Loss for
which Sears is responsible, such repair or replacement shall not be considered
part of CSC’s Service obligations, but CSC shall, if requested by Sears,
coordinate and oversee repair or replacement performed by a Third Party on a
Pass-Through Expenses basis, or by CSC at agreed-upon prices.
    (b)  
Waiver. Each Party waives all rights to recover against the other Party, its
Affiliates (and as to Sears, any Eligible Recipients) and their Personnel for
damage, destruction, loss, theft or governmental taking of their respective real
or tangible personal property (whether owned or leased) from any cause to the
extent (i) covered by insurance required to be maintained by such Party under
this Agreement, including their respective deductibles or self-insured
retentions, and (ii) insurance proceeds are actually received by such Party for
such loss. CSC and Sears shall cause their respective insurers to issue
appropriate waivers of subrogation rights endorsements to all property insurance
policies required to be maintained by each Party.

20.  
INDEMNITIES

20.1  
Indemnity by CSC.

CSC shall defend, indemnify and hold harmless the Eligible Recipients, including
their respective Personnel (collectively, the “Sears Indemnified Parties”) from
any and all Losses and threatened Losses arising out of any claims, demands,
suits or causes of action by Third Parties (collectively, “Claims”) (excluding
Claims brought by Sears and its Affiliates, and their Subcontractors, but
including Claims brought by other Sears Personnel) that result or are alleged to
result, in whole or in part, from or in connection with any of the following:

  (a)  
Breach of This Agreement. CSC’s or CSC’s Personnel’s breach of this Agreement,
including any representations, warranties or covenants set forth in this
Agreement. ***.

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  (b)  
CSC Designated Contracts. CSC’s decision to terminate or failure to observe or
perform any duties or obligations to be observed or performed on or after the
applicable Commencement Date by CSC with respect to any CSC Designated Contracts
or any Third Party Contracts related to Acquired Assets and/or CSC Managed
Systems.
    (c)  
Licenses, Leases or Contracts. CSC’s failure to observe or perform any duties or
obligations to be observed or performed on or after the applicable Commencement
Date by CSC with respect to Third Party Contracts associated with any CSC
Provided Systems or CSC Managed Systems; ***.
    (d)  
Sears Data or Confidential Information. CSC’s breach of its obligations with
respect to Sears Data or Sears Confidential Information.
    (e)  
Infringement. Infringement or misappropriation or alleged infringement or
alleged misappropriation of any Intellectual Property Rights in contravention of
Section 17.1(d) (CSC Provided Systems/CSC Managed Systems) or Section 17.1(f)
(Non-Infringement).
    (f)  
Government Claims. Claims by government regulators or agencies for fines,
penalties, sanctions or other remedies to the extent such fines, penalties,
sanctions, or other remedies caused by any breach of any obligation under this
Agreement, including any obligation related to Laws, by CSC or any CSC Personnel
or any other failure by CSC or CSC Personnel to perform CSC’s responsibilities
under this Agreement.
    (g)  
Taxes. Taxes, including interest and penalties, that are the responsibility of
CSC under Section 13.4 (Taxes).
    (h)  
Shared Facility Services. Services, products or Systems (not constituting
Services provided pursuant to this Agreement) provided by CSC to a Third Party
from any shared CSC Facility or using any shared CSC resources and not
constituting Services provided to an Eligible Recipient pursuant to this
Agreement.

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  (i)  
Affiliate, CSC Personnel or Assignee Claims. Any Claim, other than an
indemnification Claim under this Agreement, initiated by (i) a CSC Affiliate or
CSC Personnel asserting rights in connection with this Agreement or any Services
to be provided hereunder, or (ii) any entity to which CSC assigned, transferred,
pledged or otherwise encumbered its rights to receive payments from Sears under
this Agreement.
    (j)  
Background and Drug Checks. Any Claim by any third party, including CSC
Personnel or individuals seeking employment or a contract with CSC, that alleges
injury or harm arising from the administration of drug or background checks in
connection with this Agreement.
    (k)  
CSC Acts or Omissions. ***
    (l)  
Employment Claims. Any Claim (including claims by Transitioned Personnel)
relating to any (i) joint employment of CSC Personnel by Sears, any other
Eligible Recipients (including their respective Personnel), (ii) violation by
CSC, its Affiliates or other CSC Personnel of any Laws or any common law
protecting persons or members of protected classes or categories, including Laws
prohibiting discrimination or harassment on the basis of a protected
characteristic, (iii) liability arising or resulting from the employment or
engagement of CSC Personnel (including Transitioned Personnel) by CSC, its
Affiliates or other CSC Personnel (including liability for any social security
or other employment taxes, workers’ compensation claims and premium payments,
and contributions applicable to the wages and salaries of such CSC Personnel),
(iv) payment or failure to pay any salary, wages or other compensation due and
owing to any CSC Personnel (including Transitioned Personnel from and after
their Employment Effective Dates), (v) employee pension or other benefits of any
CSC Personnel (including Transitioned Personnel) accruing from and after their
Employment Effective Date, (vi) other aspects of the employment relationship of
CSC Personnel (including Transitioned Personnel) with CSC, its Affiliates or
other CSC Personnel or the termination of such relationship, including Claims
for wrongful discharge, Claims for breach of express or implied employment
contract and increases in unemployment insurance premiums, and/or
(vii) liability resulting from representations (whether oral or written) to the
Transitioned Personnel made, or alleged to have been made, by CSC, its
Affiliates or other CSC Personnel, or other acts or omissions with respect to
the Transitioned Personnel by such persons or entities, including any act,
omission or representation made in connection with the interview, selection,
hiring and/or transition process, the offers of employment made to such
employees, the failure to make offers to any such employees or the terms and
conditions of such offers (including compensation and employee benefits),
except, in each case, to the extent resulting from the wrongful actions of
Sears, the Eligible Recipients, errors or inaccuracies in the information
provided by Sears and faithfully communicated

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by CSC or the failure of the Eligible Recipients to comply with Sears’
responsibilities under this Agreement.
       
 

  (m)  
Environmental Claims. The generation, storage, use, handling, discharge, other
release or disposal of any materials that are regulated by the federal
government or any state or local government during use, transportation,
handling, storage, treatment and/or disposal/recycling by CSC Personnel or at
facilities owned or controlled by CSC Personnel.
    (n)  
Violation of Laws. The violation by CSC or its Personnel of any Law.

20.2  
Indemnity by Sears.

Sears agrees to defend, indemnify and hold harmless CSC, its Affiliates and the
CSC Personnel and their successors and assigns from any Losses and threatened
Losses arising out of any Claims (excluding the Claims of CSC, its Affiliates
and their Subcontractors but including Claims by other CSC Personnel) (each, a
“CSC Indemnified Party”) that result, or are alleged to result, in whole or in
part, from or in connection with any of the following:

  (a)  
Breach of This Agreement. Sears’ breach of this Agreement, including any
representations, warranties or covenants set forth in this Agreement.
    (b)  
Licenses, Leases or Contracts. Sears’ failure to observe or perform any duties
or obligations to be observed or performed by Sears or the other Eligible
Recipients under any of the applicable Third Party Contracts associated with
Sears Provided Systems ***.
    (c)  
Pre-Commencement Date Matters. Any Eligible Recipients’ failure to observe or
perform any duties or obligations to be observed or performed prior to the
applicable Commencement Date by the Eligible Recipients under any of the Third
Party Contracts related to Sears Provided Systems, CSC Managed Systems or the
Acquired Assets to the extent CSC notifies Sears of such Claims within twelve
(12) months after the assignment or transfer to CSC of the applicable Third
Party Contract.
    (d)  
CSC’s Confidential Business Information. Sears’ breach of its obligations with
respect to CSC’s Confidential Business Information.
    (e)  
Infringement. Infringement or misappropriation or alleged infringement or
alleged misappropriation of any Intellectual Property Rights in contravention of
Section 17.2(a) (Non-Infringement).

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  (f)  
Taxes. Taxes, including interest and penalties, that are the responsibility of
Sears under Section 13.4 (Taxes).
    (g)  
Eligible Recipients’ Acts or Omissions. Any Claim that an act or failure to act
of Sears or Sears Personnel (other than Sears Personnel for which CSC is
responsible) ***.
    (h)  
Eligible Recipient Claims. Any Claim, other than an indemnification Claim or a
Claim pursuant to Section 19 (Insurance and Risk of Loss) under this Agreement,
initiated by Sears’ Affiliates or by Sears’ and its Affiliates’ Subcontractors
asserting rights in connection with this Agreement or any Services to be
provided under this Agreement; provided, however, that this provision shall not
apply to Claims brought by Sears on behalf of the other Eligible Recipients.
    (i)  
Violation of Laws. The violation by Sears or its Personnel of any Law.

20.3  
Infringement.

  (a)  
CSC Provided Systems, CSC Managed Systems or Deliverables. If any portion of the
Services, including any CSC Provided Systems, CSC Managed Systems or
Deliverables that is subject to the indemnity under Section 20.1(e)
(Infringement) are found, or in CSC’s reasonable opinion are likely to be found,
to infringe upon or misappropriate any Intellectual Property Rights of any third
party in any country in which Services are to be performed or received under
this Agreement, or the continued use of the foregoing is enjoined, CSC shall, in
addition to defending, indemnifying and holding harmless the Sears Indemnified
Parties as provided in Section 20.1(e) (Infringement) and any other rights Sears
may have under this Agreement, promptly and at its own cost and expense and in
such a manner as to minimize the disturbance to the Eligible Recipients’
business activities, do one of the following:

  (i)  
Obtain Rights. Obtain for the Eligible Recipients the right to continue using
the Services, including such CSC Provided Systems, CSC Managed Systems and
Deliverables.
    (ii)  
Modification. Modify the Service in question, including the applicable CSC
Provided Systems, CSC Managed Systems and Deliverables, so that such Service is
no longer infringing (provided that *** such Services as contemplated by this
Agreement and/or as previously enjoyed by the Eligible Recipients under this
Agreement).
    (iii)  
Replacement. If either of the foregoing are not commercially feasible, either:
(i) provide functionally equivalent or superior replacement Services to the
Eligible Recipients and reimburse Sears for any additional

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cost to the Eligible Recipients, including costs of modifying Sears Provided
Systems to permit them to interface and interoperate properly with such revised
Services; or (ii) reimburse Sears for all costs and expenses (including any CSC
fees, consultant fees and other transition expenses) of obtaining such
replacement Services.

  (b)  
Sears Provided Systems. If any Sears Provided System supplied by Sears that is
subject to the indemnity under Section 20.2(e) (Infringement) is found, or in
Sears’ reasonable opinion is likely to be found, to infringe upon or
misappropriate any Intellectual Property Rights of any third party in any
country in which Services are to be performed or received under this Agreement,
or the continued use of the foregoing is enjoined, Sears may elect to, in its
sole discretion and at its own cost and expense (subject to Section 7.1(c)
(Sears Responsibilities) and Section 20.2(e) (Infringement)):

  (i)  
Obtain Rights. Obtain for CSC the right to continue using such Sears Provided
System;
    (ii)  
Modification. Modify the Sears Provided System in question so that it is no
longer infringing;
    (iii)  
Replacement. Replace the Sears Provided System with a non-infringing System; or
    (iv)  
Removal. Cease providing such Sears Provided System.

Within ten (10) Business Days of a request by Sears, CSC shall notify Sears in
writing of: (I) any adverse affect on the Services, and/or *** subsections (ii),
(iii) or (iv) above. The Parties shall work together in good faith, to mitigate
any such adverse effect and the cost of any such election to Sears. If Sears
does make an election under subsections (ii), (iii) or (iv) above: (x) the
Parties shall, if applicable, equitably adjust the terms of the applicable
Procurement Document, including any Service Levels applicable thereto, to take
Sears into account the elimination of such Sears Provided Systems and (y) ***
mitigated by the Parties. Sears may elect to stop receiving a portion of the
Services in order to mitigate such costs.

20.4  
Indemnification Procedures.

With respect to Third Party Claims that are subject to this Section 20
(Indemnities) (other than as provided in Section 20.5 (Indemnification
Procedures — Governmental Claims) with respect to Claims covered by
Section 20.1(f) (Government Claims)), the following procedures shall apply:

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  (a)  
Notice. Promptly after receipt by any Entity entitled to indemnification under
this Agreement of notice of the commencement or threatened commencement of any
Claim in respect of which the indemnitee shall seek indemnification hereunder,
the indemnitee shall notify the indemnitor of such Claim. No delay or failure to
so notify an indemnitor shall relieve it of its obligations under this Agreement
except to the extent that such indemnitor has suffered actual prejudice by such
delay or failure. Within fifteen (15) days following receipt of notice from the
indemnitee relating to any Claim, but no later than ten (10) Business Days
before the date on which any response to a complaint or summons is due, the
indemnitor shall notify the indemnitee that the indemnitor is assuming control
of the defense and settlement of that Claim (a “Notice of Assumption”).
    (b)  
Procedure Following Notice of Defense. If the indemnitor delivers a Notice of
Assumption within the required notice period, the indemnitor shall assume sole
control over the defense and settlement of the Claim; provided, however, that
(i) the indemnitor shall keep the indemnitee fully apprised at all times as to
the status of the defense, and (ii) the indemnitor shall obtain the prior
written approval of the indemnitee before: (x) entering into any settlement
asserting any liability against the indemnitee for such Claim, (y) imposing any
obligations or restrictions on the indemnitee or (z) ceasing to defend against
such Claim. The indemnitor shall not be liable for any legal fees or expenses
incurred by the indemnitee following the delivery of a Notice of Assumption;
provided, however, that (i) the indemnitee shall be entitled to employ counsel
at its own expense to participate in the handling of the Claim, and (ii) the
indemnitor shall pay the fees and expenses associated with such counsel if, in
the reasonable judgment of the indemnitee, based on an opinion of counsel, there
is a conflict of interest with respect to such Claim which is not otherwise
resolved or if the indemnitor has requested the assistance of the indemnitee in
the defense of the Claim or the indemnitor has failed to defend the Claim
diligently.
    (c)  
Procedure Where No Notice of Assumption Is Delivered. If the indemnitor does not
deliver a Notice of Assumption relating to any Claim within the required notice
period, the indemnitee shall have the right to defend the Claim in such manner
as it may deem appropriate. The indemnitor shall promptly reimburse the
indemnitee for all such reasonable costs and expenses incurred by the
indemnitee, including reasonable Attorneys’ Fees. The indemnitor shall not be
obligated to indemnify the indemnitee for any amount paid or payable by such
indemnitee in the settlement of any Claim if (i) the indemnitor has delivered a
timely Notice of Assumption and such amount was agreed to without the written
consent of the indemnitor, (ii) the indemnitee has not provided the indemnitor
with notice of such Claim and a reasonable opportunity to respond thereto, or
(iii) the time period within which to deliver a Notice of Assumption has not yet
expired.

20.5  
Indemnification Procedures — Governmental Claims.

Sears shall be entitled, at its option, to have any Claim involving
indemnification under Section 20.1(f) (Government Claims) handled pursuant to
Section 20.4 (Indemnification

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Procedures) or to retain sole control over the defense and settlement of such
Claim; provided, however, that, in the latter case, Sears shall (a) consult with
CSC on a regular basis regarding Claim processing (including actual and
anticipated costs and expenses) and litigation strategy, (b) reasonably consider
any CSC settlement proposals or suggestions, and (c) use commercially reasonable
efforts to minimize any amounts payable or reimbursable by CSC. Sears shall
notify CSC when Sears elects to exercise the rights provided in the preceding
sentence. Sears shall not enter into any settlement asserting any liability
against CSC for such Claims without CSC’s prior written consent.

20.6  
Mixed Claims.

Notwithstanding anything to the contrary contained in Section 20.4
(Indemnification Procedures) but subject to Section 20.5 (Indemnification
Procedures — Governmental Claims), in the event that both Parties are entitled
under this Section 20 to invoke the other Party’s defense obligations with
respect to the same Claim or a group of related Claims, then CSC shall assume
the defense of the Sears Indemnified Parties with respect to such Claim or
related Claims, as the case may be, and upon the rendering of a final,
non-appealable order by a court or arbitrator of competent jurisdiction with
respect to such Claim or Claims, Sears shall reimburse CSC for any reasonable
Attorneys’ Fees and other reasonable Out-of-Pocket Expenses incurred by CSC in
defending such Claim or Claims to the extent that the Sears Indemnified Parties
are found to be liable under such Claim or Claims. For example, if a Third Party
sues both Sears and CSC claiming that Sears’ employees and CSC’s employees were
negligent in causing injury to such Third Party, (a) CSC would assume the
defense of such a Claim, and (b) if, by a final, non-appealable order by a court
of competent jurisdiction, Sears were found to be 60% liable and CSC were found
to be 40% liable for such injuries, Sears would reimburse CSC for 60% of the
reasonable Attorneys’ Fees and other Out-of-Pocket Expenses incurred by CSC in
defending such Claim.

20.7  
Independent Obligations.

The obligations of CSC and Sears to defend, indemnify and hold harmless the
Sears Indemnified Parties and the CSC Indemnified Parties, respectively, under
this Section 20 (Indemnities) shall be independent of each other and any other
obligations of the Parties under this Agreement.

21.  
LIABILITY

21.1  
Force Majeure.

  (a)  
General. Subject to Section 21.1(d) (Disaster Recovery), no Party shall be
liable for any default or delay in the performance of its obligations under this
Agreement if and to the extent such default or delay is caused, directly or
indirectly, by fire, flood, earthquake, elements of nature or acts of God, wars,
riots, civil disorders, rebellions or revolutions, acts of terrorism, *** or any
other similar cause beyond the reasonable control of such Party (each, a “Force
Majeure Event”), except to the

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extent that the non-performing Party is at fault in failing to prevent or
causing such default or delay, and provided that such default or delay cannot
reasonably be circumvented by the non-performing Party through the use of
alternate sources, disaster recovery plans and workaround plans or other means
(including to the extent within the scope of the Services under this Agreement,
the performance of disaster recovery services). ***

  (b)  
Duration and Notification. In such Force Majeure Event, the non-performing Party
shall be excused from further performance or observance of the obligation(s) so
affected, subject to Section 21.1(a) (General), for as long as such
circumstances prevail and such Party continues to use all commercially
reasonable efforts to recommence performance or observance whenever and to
whatever extent possible without delay. Any Party so prevented, hindered or
delayed in its performance shall, as quickly as practicable under the
circumstances, notify the Party to whom performance is due by telephone (to be
confirmed in writing within one (1) day of the inception of such delay) and
describe at a reasonable level of detail the circumstances of the Force Majeure
Event, the steps being taken to address such Force Majeure Event and the
expected duration of such Force Majeure Event.
    (c)  
Substitute Services; Termination. If any event described in Section 21.1(a)
(General) has prevented, hindered or delayed or is reasonably expected to
prevent, hinder or delay the performance by CSC or the CSC Personnel of Services
for longer than the recovery period specified in the applicable disaster
recovery plan or for more than ten (10) Business Days, then Sears may require
CSC, to the extent practicable, to promptly procure such Services from an
alternate source.

  (i)  
To the extent that it was a CSC Facility impacted, CSC shall be solely liable
for payment for such services from the alternate source ***; provided, however,
that Sears continues to pay the portion of Charges under the applicable
Transaction Document that apply to those Services that it continues to receive
from CSC (directly or from such an alternate source). CSC shall diligently
pursue either a restoration and/or replacement of the affected CSC Facilities
and CSC will use its commercially reasonable efforts to relocate such Services
to a CSC Facility within ***. If ***, CSC has not been able to restore the
impacted CSC Facilities or move the Services to another CSC location, then Sears
shall have the option of *** (b) partially or fully terminating the Services (in
which case Sears would not have to pay any Termination Charges as to the
impacted Services, *** Termination Charges for the non-impacted Services
terminated by Sears).

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  (ii)  
If the Force Majeure event impacts a Sears Facility, at which CSC was to perform
its Services, then Sears may require CSC to provide such an alternate Services
provider within *** of Sears request, pursuant to Section 4.5 (Additional
Services). If Sears has not restored or replaced the impacted Sears Facility
within ***, then Sears shall have the option of partially or fully terminating
the Services (in which case Sears would not have to pay any Termination Charges
as to the impacted Services *** Termination Charges for the non-impacted
Services terminated by Sears).
    (iii)  
If CSC does not provide an alternative provider of such Services within *** of
the Force Majeure Event, then Sears may terminate this Agreement or any
Transaction Document, but only with respect to the portion of the Services so
affected, without payment of Termination Charges. In the event of such partial
termination, the Charges payable under this Agreement shall be equitably
adjusted to reflect those terminated Services.

  (d)  
Disaster Recovery. The occurrence of a Force Majeure Event shall not relieve CSC
of its obligation to (i) implement its disaster recovery plan for the facilities
used in providing the Services, and (ii) provide any disaster recovery services
described in an applicable Transaction Document.
    (e)  
Payment Obligation. If CSC fails to provide Services in accordance with this
Agreement due to the occurrence of a Force Majeure Event, all amounts payable to
CSC hereunder shall be equitably adjusted in a manner such that Sears is not
required to pay any amounts for Services that it is not receiving whether from
CSC or from an alternate source at CSC’s expense pursuant to Section 21.1(c)
(Substitute Services; Termination). CSC shall not have the right to additional
payments or an increase in per unit consumption charges as a result of any Force
Majeure Event (e.g., if a decrease in consumption of a Service under a
Transaction Document would have resulted in an increase in the “per unit”
charges under the rate card under such Transaction Document, but such decrease
in consumption was due to a Force Majeure Event, then such increase would not
apply).
    (f)  
Allocation of Resources. Without limiting CSC’s obligations under this
Agreement, whenever a Force Majeure Event causes CSC to allocate limited
resources between or among CSC’s customers and Affiliates, the Eligible
Recipients shall receive at least the same treatment as comparable CSC customers
with respect to such limited resources. In no event shall CSC re-deploy or
re-assign any Key Personnel to another customer or account in the event of the
occurrence of a Force Majeure Event.

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21.2  
Limitation of Liability.

  (a)  
Exclusions from Liability. EXCEPT AS PROVIDED IN THIS SECTION 21.2 (LIMITATION
OF LIABILITY), NEITHER PARTY NOR ITS AFFILIATES (NOR, IN THE CASE OF SEARS, ANY
ELIGIBLE RECIPIENT) SHALL BE LIABLE TO THE OTHER PARTY FOR INDIRECT,
CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES, INCLUDING LOST PROFITS, REGARDLESS
OF THE FORM OF THE ACTION OR THE THEORY OF RECOVERY, EVEN IF SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
    (b)  
Liability Cap. Additionally, except as provided below, the total aggregate
liability of either Party (including its Affiliates, and, in the case of Sears,
any Eligible Recipient), for all claims asserted by the other Party under or in
connection with this Agreement, regardless of the form of the action or the
theory of recovery, shall be limited to ***.
    (c)  
Other. The exclusions from liability set forth in Section 21.2(a) (Exclusions
from Liability) above and the liability cap set forth in Section 21.2(b)
(Liability Cap above shall ***.
    (d)  
Exceptions to Limitations of Liability. The limitations of liability set forth
in Sections 21.2(a) (Exclusions from Liability) and 21.2(b) (Liability Cap)
shall not apply with respect to:

  (i)  
Losses caused by the willful misconduct, fraud or gross negligence of a Party,
its Affiliates (or, in the case of Sears, any Eligible Recipient), or their
respective Personnel.

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  (ii)  
The Parties’ respective obligations under Section 20.1 (Indemnity by CSC) and
Section 20.2 (Indemnity by Sears).
    (iii)  
Losses related to personal injury, including death, and damage to tangible
property caused by the negligent or intentional acts of a Party, its Affiliates
(or, in the case of Sears, any Eligible Recipient), or their respective
Personnel.
    (iv)  
Either Party’s obligation to pay litigation costs and Attorneys’ Fees incurred
by the other Party in enforcing the terms of this Agreement as set forth in
Section 26.4 (Legal Expenses).
    (v)  
Losses caused by: (A) the willful abandonment of any significant portion (which
shall be determined by taking into account the actual or potential impact on the
businesses of each Sears Related Business) of the Services contracted for under
this Agreement, including any Termination Assistance Services; and/or
(b) wrongful termination of this Agreement or any Transaction Document by CSC.
For purposes of the foregoing, “willful abandonment” means, with respect to any
Services, that CSC or its Subcontractors have elected not to provide such
Services, although CSC or such Subcontractor is capable of providing them, or
CSC or its Subcontractors have intentionally acted, or failed to act, in a
manner to avoid its obligation to provide such Services (e.g., if CSC elects not
to renew a required governmental license and therefore is not able to provide
the Services).
    (vi)  
Losses caused by any breach of CSC’s obligations under Section 15.3(c)
(Confidential Personal Information) related to an intentional misuse of
Confidential Personal Information.

  (e)  
Items Not Considered Damages. The following shall not be considered damages
subject to, and shall not be counted toward the liability exclusion or cap
specified in, Section 21.2(a) (Exclusions from Liability) or 21.2(b) (Liability
Cap):

  (i)  
Service Level Credits assessed against CSC pursuant to a Transaction Document.
    (ii)  
Charges withheld by Sears in accordance with this Agreement due either to
incorrect Charges by CSC or ***.
    (iii)  
Amounts paid by Sears but subsequently recovered from CSC due either to
incorrect Charges by CSC ***.

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  (iv)  
Invoiced Charges, Pass-Through Expenses and other amounts that are due and owing
to either Party under this Agreement.

  (f)  
Waiver of Liability Cap. If, at any time, the total aggregate liability of CSC
under or in connection with this Agreement exceeds, or in connection with any
Third Party claim against any Eligible Recipient is claimed by Sears to exceed,
fifty percent (50%) of the liability cap specified in Section 21.2(b) (Liability
Cap) and, upon receipt of the request of Sears, CSC refuses to waive such cap
and/or increase the available cap to an amount at least equal to the original
liability cap with respect to liability accruing on or after the receipt of such
request from Sears, then Sears may terminate this Agreement or any Transaction
Document, in whole or in part, without payment of Termination Charges. Upon
CSC’s request, Sears will provide to CSC any information CSC reasonably requests
regarding such Claim, to the extent Sears (or such Eligible Recipients) has such
information. If the liability cap specified in Section 21.2(b) (Liability Cap)
is increased pursuant to this Section 21.2(f) (Waiver of Liability Cap) and
Sears fails in connection with the claim(s), giving rise to such increase to
recover or incur damages or a monetary settlement sufficient to make CSC’s total
aggregate liability under this Agreement exceed fifty percent (50%) of the
original liability cap, the liability cap specified in Section 21.2(b)
(Liability Cap) shall automatically revert to the amount thereof immediately
prior to such increase, without limiting the effectiveness of this
Section 21.2(f) (Waiver of Liability Cap) as to any subsequent liability or
potential liability of CSC under this Agreement.
    (g)  
Acknowledged Direct Damages. The following shall be considered direct damages
and CSC shall not assert that they are indirect, consequential, exemplary or
punitive damages to the extent they result from CSC’s breach of this Agreement:

  (i)  
Costs and expenses of recreating or reloading any lost, stolen or damaged Sears
Data that was in the CSC’s, its Affiliates’ or the CSC Personnel’s custody or
that was lost or damaged by CSC Provided Systems or CSC Personnel, subject to
Sears maintaining reasonable backup procedures with respect to such Sears Data;
provided, however, that CSC is not otherwise obligated to provide such backup as
part of the Services.
    (ii)  
Costs and expenses of implementing a work-around in respect of a failure to
provide the Services or any part thereof.
    (iii)  
Costs and expenses of replacing lost, stolen or damaged Sears Provided Systems
that are in the CSC’s, its Affiliates’ or the CSC Personnel’s custody.
    (iv)  
Cover damages, including the costs and expenses incurred to procure the Services
or corrected Services from an alternate source, to the extent in excess of CSC’s
Charges under this Agreement (which Sears shall not be

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obligated to pay while Sears is procuring Services from such alternate source).
    (v)  
Wages, salaries and other charges, including overtime, for existing or
additional Personnel, and related Personnel expenses (e.g., travel costs,
telecommunications charges and similar charges, etc.) incurred by the Eligible
Recipients, including overhead allocations of the Eligible Recipients, in
connection with clauses (i) through (iv) above or otherwise due to CSC’s or CSC
Personnel’s failure to perform in accordance with this Agreement.
    (vi)  
Costs and expenses incurred to bring the Services in-house or to contract to
obtain the Services from an alternate source, including the costs and expenses
associated with the retention of external consultants and legal counsel to
assist with any re-sourcing.
    (vii)  
Damages of an Eligible Recipient that would be direct damages if they had
instead been suffered by Sears.

21.3  
Public Telecommunications Transmissions.

In the case of transmission of data via public telecommunications facilities
permitted under this Agreement, CSC shall not be responsible for corruption,
damage, loss or mistransmission of, or loss of security with respect to, data
during such transmission unless and to the extent such corruption, damage, loss,
mistransmission or loss of security is attributable to CSC’s failure to comply
with its obligations (including data security requirements) under this
Agreement, including the obligation to (a) provide the Services (including data
security requirements) in accordance with the accepted practices of well-
managed tier one providers of information technology services, (b) provide and
maintain the technology required to detect and correct any corrupt, damaged,
lost or mistransmitted data and require retransmission of any such corrupt,
damaged, lost or mistransmitted data, (c) provide for encryption of Confidential
Personnel Information while in transmission, and (d) perform other Services
appropriate to assist in the resolution of such corruption, damage, loss or
mistransmission (e.g., backup and data recovery).

22.  
DISPUTE RESOLUTION

22.1  
Informal Dispute Resolution.

Prior to the initiation of formal dispute resolution procedures with respect to
any dispute, other than as provided in Section 22.1(d) (Prerequisite to Formal
Proceedings) or Section 26.15 (Equitable Remedies), the Parties shall first
attempt to resolve such dispute informally, as follows:

  (a)  
Initial Effort. The Parties agree that the Sears Relationship Manager and the
CSC Account Executive shall attempt in good faith to resolve all disputes (other

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than those described in Section 22.1(d) (Prerequisite to Formal Proceedings) or
Section 26.15 (Equitable Remedies)). If the Sears Relationship Manager and the
CSC Account Executive are unable to resolve a dispute in an amount of time that
either Party deems reasonable under the circumstances (e.g., 15-30 days), such
Party may refer the dispute for resolution to the senior corporate executives
specified in Section 22.1(b) (Escalation) upon notice to the other Party.

  (b)  
Escalation. Within five (5) Business Days of a notice under Section 22.1(a)
(Initial Effort) referring a dispute for resolution by senior corporate
executives, the Sears Relationship Manager and the CSC Account Executive shall
each prepare and provide to President of the CSC Technology Management Group and
the Sears Vice President of Operations and Engineering, respectively, summaries
of the non-privileged relevant information and background of the dispute, along
with any appropriate non-privileged supporting documentation, for their review.
The designated senior corporate executives shall confer as often as they deem
reasonably necessary in order to gather and furnish to the other all
non-privileged information with respect to the matter in issue that is
appropriate and germane in connection with its resolution. The designated senior
corporate executives shall discuss the problem and negotiate in good faith in an
effort to resolve the dispute without the necessity of any formal proceeding.
The specific format for the discussions shall be left to the discretion of the
designated senior corporate executives, but may include the preparation of
agreed-upon statements of fact or written statements of position.
    (c)  
Provision of Information. During the course of negotiations under
Section 22.1(a) (Initial Effort) or Section 22.1(b) (Escalation), all reasonable
requests made by one Party to another for non-privileged information, reasonably
related to the dispute, shall be honored in order that each of the parties may
be fully advised of the other’s position. In addition, as part of the
negotiations under Section 22.1(b), CSC shall provide, upon Sears’ request,
CSC’s internal costs to the extent that such information is relevant to
resolving the underlying dispute. All negotiation shall be strictly confidential
and used solely for the purposes of settlement. Any materials prepared by one
Party for these proceedings shall not be used as evidence by the other Party in
any subsequent arbitration or litigation; provided, however, the underlying
facts supporting such materials are discoverable to the extent provided in the
applicable proceeding; provided, further, that disclosure of such materials
pursuant to this process shall not prejudice a Party’s ability to seek such
discovery.
    (d)  
Prerequisite to Formal Proceedings. Formal proceedings for the resolution of a
dispute may not be commenced until the earlier of:

  (i)  
the designated senior corporate executives under Section 22.1(b) (Escalation)
concluding in good faith that amicable resolution through continued negotiation
of the matter does not appear likely; or

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  (ii)  
thirty (30) days after the notice under Section 22.1(a) (Initial Effort)
referring the dispute to senior corporate executives.

The provisions and time periods specified in this Section 22.1 (Informal Dispute
Resolution) shall not be construed to prevent a Party from instituting, and a
Party is authorized to institute, formal proceedings earlier to (1) avoid the
expiration of any applicable limitations period, (2) preserve a superior
position with respect to other creditors, or (3) address a claim arising out of
the breach of a Party’s obligations under Section 15 (Sears Data and Other
Confidential Information) or a dispute subject to Section 26.15 (Equitable
Remedies).

22.2  
Arbitration.

  (a)  
Arbitration. Except for claims arising out of the breach of a Party’s
obligations under Section 15 (Sears Data and Other Confidential Information) or
disputes subject to Section 26.15 (Equitable Remedies), any controversy or claim
arising out of or relating to this Agreement, or any breach thereof, that cannot
be resolved using the procedures set forth above in Section 22.1 (Informal
Dispute Resolution) shall be finally resolved under the Commercial Arbitration
Rules of the American Arbitration Association then in effect; provided, however,
that without limiting any rights at law or in equity a Party may have because of
an improper termination of this Agreement by the other Party, nothing contained
in this Agreement shall limit either Party’s right to terminate this Agreement
or a Transaction Document pursuant to Section 23 (Termination).
    (b)  
Location and Decision. The Arbitration shall take place in Chicago, Illinois,
and shall apply the governing law of this Agreement. The decision of the
arbitrators shall be final and binding and judgment on the award may be entered
in any court of competent jurisdiction. The arbitrators shall be required to
state the reasons for their decisions, including findings of fact and law. The
arbitrators shall be bound by the warranties, limitations of liability and other
provisions of this Agreement. The arbitrators shall not be permitted to decide
any claims subject to Section 26.15 (Equitable Remedies) or to award any
equitable remedies and to the extent that any claim/counterclaim or series of
related claims/counterclaims include demands for both equitable and monetary
remedies, then the entire claim/counterclaim, or series of related
claims/counterclaims, as applicable, shall be excluded from the arbitrators’
jurisdiction.
    (c)  
Selection and Qualification of Arbitrators. Within ten (10) days after delivery
of written notice (“Notice of Dispute”) by one Party to the other in accordance
with this Section, the Parties each shall use good faith efforts to mutually
agree upon one (1) arbitrator. If the Parties are not able to agree upon one (1)
arbitrator within such period of time, the Parties each shall within ten
(10) days: (i) appoint one (1) arbitrator who has at no time ever represented or
acted on behalf of either of the Parties, and is not otherwise affiliated with
or interested in either of the Parties; and (ii) deliver written notice of the
identity of such arbitrator and a copy of his or her written acceptance of such
appointment to the other Party. If either

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Party fails or refuses to appoint an arbitrator within such ten (10) day period,
the single arbitrator appointed by the other Party shall decide alone the issues
set out in the Notice of Dispute. Within ten (10) days after such appointment
and notice, such arbitrators shall appoint a third neutral and independent
arbitrator (the “Third Arbitrator”) who shall at no time have ever represented
or acted on behalf of either of the Parties, and shall not have otherwise been
affiliated with or interested in either of the Parties. In the event that the
two (2) arbitrators fail to appoint a Third Arbitrator within ten (10) days of
the appointment of the second arbitrator, either arbitrator or either Party may
apply for the appointment of a Third Arbitrator to the American Arbitration
Association.

  (d)  
General. All arbitrators selected pursuant to this Section shall be practicing
attorneys with at least five (5) years’ experience with the technology and/or
law applicable to the Services or similar services or transactions. Any such
appointment shall be binding upon the Parties; provided, however, that if the
parties have agreed upon a single arbitrator, then each Party shall have a
one-time right during such arbitration to remove such arbitrator for any reason
(in which case the parties shall then re-select their arbitrator(s) as provided
above). The Parties shall use best efforts to set the arbitration hearing within
sixty (60) days after selection of the arbitrator or arbitrators, as applicable,
but in no event shall the arbitration hearing be set more than ninety (90) days
after selection of the arbitrator or arbitrators, as applicable. Discovery as
permitted by the Federal Rules of Civil Procedure then in effect will be allowed
in connection with arbitration to the extent consistent with the purpose of the
arbitration and as allowed by the arbitrator or arbitrators, as applicable. In
connection with any dispute under Section 13.10 (Benchmarking), the arbitrator
or arbitrator(s) shall expressly have the authority to select a Benchmarker and
to choose the Benchmarking methodology. The decision or award of the arbitrator
or the majority of the three arbitrators, as applicable, shall be rendered
within fifteen (15) days after the conclusion of the hearing, shall be in
writing, shall set forth the legal and factual basis therefor, and shall be
final, binding and nonappealable upon the Parties and may be enforced and
executed upon in any court having jurisdiction over the Party against whom the
enforcement of such decision or award is sought. During the arbitration, each
Party shall bear its own arbitration costs and expenses and all other costs and
expenses of the arbitration shall be divided equally between the Parties;
provided, however, the arbitrator or arbitrators shall allocate such expenses
between the Parties in the final arbitration award in accordance with
Section 26.4 (Legal Expenses).

22.3  
Continued Performance.

  (a)  
General. During each Exhibit Term and during each Termination Assistance
Services period, each Party shall, unless otherwise directed by the other Party,
continue performing its obligations under this Agreement while any dispute is
being resolved; provided, however, that this provision shall not operate or be
construed as extending the Term or prohibiting or delaying a Party’s exercise of
any right it may have to terminate the Term as to all or any part of the
Services.

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  (b)  
Non-Interruption of Services. CSC acknowledges and agrees that (i) any
interruption to the Services would cause irreparable harm to Sears and the other
Eligible Recipients, in which case an adequate remedy at law would not be
available, and (ii) pending resolution of any dispute or controversy, it shall
not deny, withdraw or restrict CSC’s provision of the Services to any Eligible
Recipient under this Agreement, except as specifically and expressly agreed in
writing by Sears and CSC.

23.  
TERMINATION

23.1  
Termination for Cause.

  (a)  
Termination By Sears.

  (i)  
Agreement. If CSC:

  (1)  
commits any material breach of this Agreement (except as provided in clauses
(2), and (3) below), including Termination Assistance Services, which is curable
by CSC and CSC fails to cure such breach within *** CSC’s receipt of notice
thereof;
    (2)  
commits a material breach of this Agreement that is not capable of being cured;
    (3)  
commits a breach of this Agreement that is capable of being cured, but is not
capable of being cured within the period specified pursuant to clause (1)
above,; ***
    (4)  
commits numerous breaches of its duties or obligations under this Agreement,
whether or not cured within applicable cure periods, where such breaches
collectively constitute a material breach of this Agreement ***;

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then Sears may, by giving notice to CSC, terminate this Agreement, with respect
to all or any part of the Services, in whole or in part, as of a date specified
in the notice of termination. All notices of breach required to be given under
this Section 23.1(a) (Termination by Sears) shall be given by Sears and contain
a description of the breach in reasonable detail. CSC shall not be entitled to
any Termination Charges in connection with such a termination for cause. If
Sears chooses to terminate this Agreement in part, ***.

  (ii)  
Transaction Document. If CSC:

  (1)  
commits any material breach of a Transaction Document (except as provided in
clauses (2) and (3) below), including Termination Assistance Services, which is
curable by CSC and CSC fails to cure such breach within *** CSC’s receipt of
notice thereof;
    (2)  
commits a material breach of any Transaction Document that is not capable of
being cured;
    (3)  
commits a breach of a Transaction Document that is capable of being cured, but
is not capable of being cured within the period specified pursuant to clause (1)
above; ***
    (4)  
commits numerous breaches of its duties or obligations under a Transaction
Document, whether or not cured within applicable cure periods, where such
breaches collectively constitute a material breach of any Transaction Document
and CSC fails to (A) within ten (10) days after receiving notice of such
breaches, provide a reasonable plan to correct the deficiencies causing such
breaches on a permanent basis, or (B) implement such plan, cure such breaches
(to the extent they are curable), and permanently cure such deficiencies within
thirty (30) days after delivery of such plan; or

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  (5)  
commits any Excessive Service Level Failure, as defined in any Transaction
Document;

then Sears may, by giving notice to CSC, terminate all affected Transaction
Documents with respect to all or any part of the Services, in whole or in part,
as of a date specified in the notice of termination. All notices of breach
required to be given under this Section 23.1(a) (Termination by Sears) shall be
given by Sears and contain a description of the breach in reasonable detail. CSC
shall not be entitled to any Termination Charges in connection with such a
termination for cause. If Sears chooses to terminate a Transaction Document in
part, ***.

  (b)  
By CSC. CSC may upon notice to Sears terminate a Transaction Document if, and
only if, (i) Sears fails to pay Charges in accordance with this Agreement;
subject to Sears’ rights under Section 14.4 (Disputed Charges) (ii) CSC provides
Sears with a notice of such failure in accordance with Section 26.3 (Notices),
and (iii) such amount remains unpaid for at least thirty (30) days after such
notice is received by Sears.

23.2  
Termination for Convenience.

Unless a different period is set forth in a Transaction Document, Sears may
terminate this Agreement with respect to all or any portion of the Services for
convenience and without cause upon 180 days’ prior notice; provided, however,
that for Services under a Service Addenda, only ten (10) days’ notice shall be
required. Sears shall pay to CSC a Termination Charge (as such amount may be
reduced from time to time under this Agreement, the “Applicable Termination
Charge”), calculated in accordance with Section 23.3 (Termination Charges).
Commencing with the first invoice for Services due after the effective date of
such termination, CSC shall invoice Sears for (and Sears shall pay in accordance
with this Agreement), that portion of the Applicable Termination Charge equal to
the difference between the average monthly Charges by CSC over the immediately
preceding 12 months and the actual Charges by CSC for Services for such period
(the “TC Delta Payment”). The Applicable Termination Charge shall be reduced by
each TC Delta Payment made by Sears, and as otherwise provided for in this
Agreement. For each following month, a TC Delta Payment shall be calculated and
paid by Sears as provided for above, until the Applicable Termination Charge is
reduced to twenty percent (20%) of the original Applicable Termination Charge
(the “TC Holdback Amount”). The TC Holdback Amount (after adjustment as provided
for herein), shall be paid upon completion of any completion of the Services
(including any extension thereof, but not including the Termination Assistance
Services) under this Agreement. If a purported termination for cause by Sears
under Section 23.1 (Termination for Cause) is

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determined by a competent authority not to be properly a termination for cause,
then such termination by Sears shall be deemed to be a termination for
convenience under this Section 23.2 (Termination for Convenience) (whether or
not sufficient notice of such termination was given).

23.3  
Termination Charges.

No Termination Charges shall apply under this Agreement unless the applicable
Transaction Document states that such Charges will apply. The Parties
acknowledge and agree that: (a) any Termination Charges specified in a
Transaction Document shall be the maximum amount Sears will be required to pay
in the event of a termination for convenience of the Services under such
Transaction Document (regardless of whether such Services are terminated at one
time, or in a series of terminations (such as for partial terminations));
(b) Termination Charges shall decline over time and, (iii) Termination Charges
shall unless otherwise specified in a Transaction Document, no longer apply upon
the normal expiration of a Transaction Document or during any renewal period
thereof. *** Sears may, from time to time, request that CSC calculate the amount
of Termination Charges Sears would be required to pay in the event Sears were to
terminate, for convenience, in whole or in part, any Services. CSC shall provide
to Sears a detailed estimate of such Charges (broken out by the categories set
forth in the definition of Termination Charges), within 30 days after its
receipt of Sears’ request. If Sears elects to terminate, for convenience, any
Services for which such an estimate has been requested, then the Termination
Charges applicable to such termination shall not exceed the lower of: (x) the
Termination Charges set forth in the applicable Transaction Document, minus any
Termination Charges Sears is already obligated to pay due to previous
terminations under such Transaction Document, and (y) the amount set forth in
the CSC’s estimate pursuant to this Section 23.3 (Termination Charges).

23.4  
Termination Upon CSC Change of Control.

If a change in Control of CSC (or that portion of CSC providing Services under
this Agreement) or the Entity that Controls CSC (if any), where such control is
acquired, directly or indirectly, in a single transaction or series of related
transactions, or all or substantially all of the assets of CSC are acquired by
any entity, or CSC is merged with or into another entity to form a new entity,
then at any time within twelve (12) months after the last to occur of such
events, Sears may at its option terminate this Agreement or any Transaction
Document, in whole or in part, by giving CSC at least ninety (90) days’

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prior notice and designating a date upon which such termination shall be
effective; provided, however, if such change in Control of CSC involves a
competitor of Sears or its Affiliates, Sears may terminate this Agreement, or
any Transaction Document, in whole or in part, by giving CSC at least ten
(10) days’ prior notice, and such competitor of Sears or its Affiliates shall be
prohibited from any contact with Sears Data, Sears Confidential Information and
any and all other information about the Sears account, including discussions
with CSC Personnel regarding specifics relating to the Services. ***

23.5  
Termination Upon Sears’ Mergers and Acquisitions.

If, in a single transaction or series of transactions, Sears acquires Control of
or Control of Sears is acquired by any other Entity (by stock sale, asset sale
or otherwise) or merges with any other Entity, then, at any time within twelve
(12) months after the last to occur of such events, Sears may at its option
terminate, for convenience, the Services, in whole or in part, under this
Agreement, by giving CSC at least ninety (90) days’ prior notice and designating
a date upon which such termination shall be effective. If Sears acquires Control
of or Control of Sears is acquired by an Entity that has an existing agreement
with CSC (the “Entity Agreement”) for the provision of services similar to the
Services (“Other Services”), Sears shall not be required to pay any Termination
Charges in connection with the termination of the Services under this Agreement,
or the Entity Agreement to the extent that the combined Entity elects, in its
sole discretion, to have CSC provide the Services and Other Services to the
combined Entity pursuant to the terms of (a) this Agreement; ***.

23.6  
Termination for Insolvency.

If either Party (a) files for bankruptcy, (b) becomes or is declared insolvent,
or is the subject of any bona fide proceedings related to its liquidation,
administration, provisional liquidation, insolvency or the appointment of a
receiver or similar officer for it, (c) passes a resolution for its voluntary
liquidation, (d) has a receiver or manager appointed over all or substantially
all of its assets, (e) makes an assignment for the benefit of all or
substantially all of its creditors, (f) enters into an agreement or arrangement
for the composition, extension or readjustment of substantially all of its
obligations or any class of such obligations, (g) has any of its publicly traded
equities delisted from any stock exchange, or (h) experiences an event analogous
to any of the foregoing in any jurisdiction in which any material portion of its
assets are situated, then the other Party may terminate this Agreement as of a
date specified in a termination notice; provided, however, that CSC shall not
have the right to exercise such termination under this Section 23.6 (Termination
for Insolvency) so long as Sears (within 30 days of such

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notice) pays for the Services to be received hereunder in advance on a
month-to-month basis. If any Party elects to terminate this Agreement due to the
insolvency of the other Party, such termination shall be deemed to be a
termination for cause hereunder.

23.7  
Termination for Change in Laws.

If any change in Laws results in an increase of twenty percent (20%) or more in
the estimated average monthly Charges for any Service or under any Transaction
Document or otherwise has a material adverse impact on CSC’s ability to perform
the Services, then Sears may, at its option, terminate the applicable
Transaction Document by giving CSC at least ninety (90) days’ prior notice and
designating a date upon which such termination shall be effective. CSC shall be
entitled to eighty percent (80%) of the Termination Charges that would have been
paid in the event of a Termination for Convenience in connection with a
termination under this Section 23.7 (Termination for Change in Laws).

23.8  
Sears’ Rights Upon CSC’s Bankruptcy.

  (a)  
General Rights. In the event of CSC’s, any of CSC’s Affiliates’ or any
Subcontractors’ bankruptcy or other formal procedure referenced in Section 23.6
(Termination for Insolvency) or of the filing of any petition under bankruptcy
laws affecting the rights of CSC or any CSC Personnel which is not stayed or
dismissed within thirty (30) days of filing, in addition to the other rights and
remedies set forth in this Agreement, to the maximum extent permitted by Law,
Sears shall have the immediate right to retain and take possession for
safekeeping all Sears Data, Sears Confidential Information and Sears Provided
Systems, including Software, Equipment, Systems or Materials to which the
Eligible Recipients are or would be entitled during the Term or upon the
expiration or termination of this Agreement or any Transaction Document, in the
possession or control of CSC or CSC Personnel, as the case may be. CSC shall,
and shall cause the CSC Personnel (to the extent not prohibited by Law) to
cooperate fully with the Eligible Recipients and assist the Eligible Recipients
in identifying and taking possession of the items listed in the preceding
sentence. Sears shall have the right to hold such Sears Data, Confidential
Information, Software, Equipment, Systems and Materials until such time as the
trustee or receiver in bankruptcy or other appropriate insolvency office holder
can provide adequate assurances and evidence to Sears that they shall be
protected from sale, release, inspection, publication or inclusion in any
publicly accessible record, document, material or filing. CSC and Sears agree
that without this material provision, Sears would not have entered into this
Agreement or provided any right to the possession or use of Sears Data, Sears
Confidential Information or Sears Provided Systems covered by this Agreement.
    (b)  
Sears’ Rights in Event of Bankruptcy Rejection. Notwithstanding any other
provision of this Agreement to the contrary, if CSC becomes a debtor under the
United States Bankruptcy Code (11 U.S.C. §101 et seq. or any similar Law in any
other country (the “Bankruptcy Code”)) and rejects this Agreement pursuant to
Section 365 of the Bankruptcy Code (a “Bankruptcy Rejection”), (i) any and all

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of the licensee and sublicensee rights of Sears and the other Eligible
Recipients arising under or otherwise set forth in this Agreement, including the
rights of Sears and the other Eligible Recipients referred to in Section 16.6
(Sears’ Rights Upon Expiration or Termination), shall be deemed fully retained
by and vested in Sears and the other Eligible Recipients as protected
intellectual property rights under Section 365(n)(1)(B) of the Bankruptcy Code
and further shall be deemed to exist immediately before the commencement of the
bankruptcy case in which CSC is the debtor, (ii) Sears and the other Eligible
Recipients shall have all of the rights afforded to non-debtor licensees and
sublicensees under Section 365(n) of the Bankruptcy Code, and (iii) to the
extent any rights of Sears and the other Eligible Recipients under this
Agreement which arise after the termination or expiration of this Agreement are
determined by a bankruptcy court not to be “intellectual property rights” for
purposes of Section 365(n), all of such rights shall remain vested in and fully
retained by Sears and the other Eligible Recipients after any Bankruptcy
Rejection as though this Agreement were terminated or expired. Sears shall under
no circumstances be required to terminate this Agreement after a Bankruptcy
Rejection in order to enjoy or acquire any of its or the other Eligible
Recipients’ rights under this Agreement, including without limitation any of the
rights referenced in Section 16.6 (Sears’ Rights Upon Expiration or
Termination).

23.9  
Right to Assume Licenses in Bankruptcy.

In the event of commencement of bankruptcy proceedings by or against an Eligible
Recipient, such Entity or its trustee in bankruptcy shall be entitled to assume
the licenses granted to such Entity under or pursuant to this Agreement and
shall be entitled to retain all of such Entity’s rights thereunder.

24.  
RIGHTS UPON EXPIRATION OR TERMINATION

24.1  
Certain Rights.

Except as expressly provided otherwise in a Transaction Document, upon any
expiration or termination (regardless of whether for cause or convenience) of
this Agreement or any Transaction Document, the rights provided for in this
Section 24 (Rights Upon Expiration Or Termination) shall apply.

24.2  
Hiring.

The Eligible Recipients shall be permitted to undertake, without interference
from CSC or CSC Affiliates or CSC Subcontractors (including counteroffers), to
hire, effective after the expiration or termination of the Services (or the
applicable portion thereof) under this Agreement or the applicable Transaction
Document, as the case may be, or the completion of any Termination Assistance
Services (for which CSC reasonably requires such Personnel’s Services) requested
under Section 25 (Termination Assistance Services), any CSC Personnel assigned
primarily to the performance of Services within the 12-month period prior to the
expiration or termination date. CSC shall waive, and

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shall cause its Affiliates and Subcontractors to waive, their rights, if any,
under contracts with such Personnel restricting the ability of such Personnel to
be recruited or hired by the Eligible Recipients. The Eligible Recipients shall
have reasonable access to such CSC Personnel for interviews, evaluations and
recruitment. Sears shall endeavor to conduct the above-described hiring activity
in a manner that is not unnecessarily disruptive of the performance by CSC of
its obligations under this Agreement. ***

24.3  
Sears Provided Systems and Deliverables.

With respect to Sears Provided Systems and Deliverables, CSC shall, at no cost
to Sears:

  (a)  
Deliver. Deliver to Sears a copy of all Deliverables and all Sears Provided
Systems in the format and medium in use by CSC in connection with the Services
as of the date Sears requests such items, or the date of such expiration or
termination of this Agreement or the applicable Transaction Document, as the
case may be; and
    (b)  
Destroy. Following completion by CSC of any Termination Assistance Services for
which Sears Provided Systems are required, destroy or securely erase all
tangible embodiments of such Sears Provided Systems then in CSC’s or CSC
Personnel’s possession or under its control.

24.4  
Sears Facilities.

CSC and CSC Personnel shall vacate the Sears Facilities, in condition at least
as good as the condition when made available to CSC, ordinary wear and tear
excepted. Such Sears Facilities shall be vacated, at the expiration or
termination date of the applicable Transaction Document or the completion of any
Services requested by Sears under Section 25 (Termination Assistance Services)
requiring such Sears Facilities, whichever is later.

24.5  
CSC Provided Systems.

  (a)  
CSC Provided Circuits and Other Items. CSC shall, upon Sears’ request, and at no
additional charge, register, re-register, release, assign and transfer, as the
case may be, to Sears (or its designee) all Internet addresses, domain names and
toll and toll-free telephone numbers provided by CSC or CSC Personnel to Sears
that shall be used by Sears or CSC Personnel primarily in connection with the
provision of the Services.
    (b)  
CSC Provided Equipment.

  (i)  
Right to Purchase/Lease. Unless otherwise agreed to by Sears pursuant to
Section 10.3(h) (Other Matters), Sears may have the option (but not the

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obligation) to purchase, or assume the lease for any Equipment, including the
Acquired Assets (on the same terms and conditions as are applicable to CSC under
such lease and without transfer charges) or buy out the lease for such Equipment
(at a price appropriately discounted to reflect the present value of future
payments to be made under the lease), owned or leased by CSC or its Affiliates
that is used primarily by CSC, its CSC Affiliates or the CSC Personnel to
perform the Services. If the terms of such lease do not permit assignment or
buyout by Sears as provided above, CSC will, upon Sears’ request, inform Sears
of the actual buyout amount that CSC would incur to buy out out such lease (the
“CSC Buyout Price”), and then upon Sears’ request, CSC will buyout out such
lease and sell such Equipment to Sears at the CSC Buyout Price.

  (ii)  
Maintenance of Such Equipment. Such Equipment shall be transferred in good
working condition, reasonable wear and tear excepted, as of the expiration or
termination date of the applicable Transaction Document, or the completion of
any Services requiring such Equipment requested by Sears under Section 25
(Termination Assistance Services), whichever is later. CSC shall maintain such
Equipment through the date of transfer so as to be eligible for the applicable
manufacturer’s maintenance program at no additional charge to Sears.
    (iii)  
Conditions of Transfer. CSC shall assist Sears in identifying each such piece of
Equipment and the terms and conditions upon which such Equipment may be sold or
assigned to Sears, including any costs to be assumed by Sears. At Sears’
request, the Parties shall negotiate in good faith and agree upon the form and
structure of the purchase.

  (1)  
Owned Equipment. In the case of Equipment owned by CSC or its Affiliates
purchased by Sears, CSC shall grant to the Eligible Recipients a warranty of
title and a warranty that such Equipment is free and clear of all liens and
encumbrances. Such conveyance by CSC to the Sears shall be at the then-current
net book value as stated in CSC’s or its Affiliates accounting records;
provided, however, that for such purposes net book value shall be calculated in
accordance with generally accepted accounting principles, using the depreciation
methods used by CSC in preparing its federal income tax returns.
    (2)  
Leased Equipment. In the case of leased Equipment, CSC shall (A) represent and
warrant that the lease is not in default, (B) represent and warrant that all
payments thereunder have been made through the date of transfer, and (C) notify
Sears of any lessor defaults of which it is aware at the time.

  (c)  
CSC Provided Software. With respect to CSC Provided Software:

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  (i)  
CSC Software.

  (1)  
License. With respect to all CSC Provided Software that is CSC Software, CSC
shall grant to Sears an irrevocable, perpetual, nonexclusive, worldwide, paid-up
license to use, execute, reproduce, display, perform and prepare Derivative
Works based upon, and distribute to Eligible Recipients such CSC Software; ***
CSC shall deliver to Sears a copy of such CSC Software and all related
documentation sufficient to enable the Eligible Recipients to exercise the
foregoing license; provided that such Software shall be subject to the
confidentiality provisions set forth in Section 15.3 (Confidentiality) above.
The foregoing license shall be at no cost to the Eligible Recipients, unless and
to the extent such CSC Software is generally licensed to CSC’s other customers
on a rental fee basis, and such CSC Software was made available to Sears on a
rental fee basis under the applicable Transaction Document, in which case such
CSC Software shall be provided to Sears on terms no less favorable than the
terms under which Sears was receiving such CSC Software under this Agreement;
provided, however, that such CSC Software shall not be deemed to have been
provided on a rental fee basis if CSC included any one-time licensing fees
associated with such CSC Software in the monthly Charges paid by Sears under
this Agreement. ***
    (2)  
Maintenance. CSC shall offer to provide to Sears, and if and to the extent
requested by Sears, CSC shall provide to Sears, Upgrades, maintenance, support
and other services for such CSC Software on CSC’s or its Affiliates’, as
applicable, then-current standard terms and conditions for such services;
provided, however, that the charges for such Services shall not exceed those CSC
or its Affiliates, as applicable, customarily charges to its other preferred
commercial customers.

  (ii)  
Third Party Software.

  (1)  
License. With respect to CSC Provided Software that is Third Party Software,
unless otherwise agreed to by Sears pursuant to

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Section 10.3(h) (Other Matters), CSC shall, at Sears’ option, transfer to Sears
all licenses for Third Party Software used primarily to provide Services to
Sears (on the same terms and conditions as are applicable to CSC under such
license and without transfer charges); provided, however, that Sears shall be
entitled to permit the Eligible Recipients to use such Software subject to the
same terms as conditions as Sears is entitled to use such Software and subject
to any limits on usage that apply to Sears (e.g., if Sears were entitled to five
(5) CPU licenses, Sears and the Eligible Recipients can, on a combined basis,
only use such Software on five (5) CPUs); ***.

  (2)  
Transfer Fees. To the extent Sears has agreed in advance to pay any fees in
connection with its receipt of such licenses, sublicenses or other rights, CSC
shall, at Sears’ request, identify the licensing and sublicensing options
available to the Eligible Recipients and the license or transfer fees associated
with each. CSC shall use commercially reasonable efforts to obtain the most
favorable options and the lowest possible transfer, license, re-license,
assignment or termination fees for Third Party Materials. CSC shall not commit
the Eligible Recipients to paying any such fees or expenses without Sears’ prior
approval, which may be withheld in Sears’ sole discretion. If the applicable
licensor offers more than one form of license, Sears (not CSC) shall be entitled
to select the form of license to be received by the Eligible Recipients.

  (iii)  
Sufficient Licenses. If CSC did not purchase sufficient licenses to provide the
Services, and therefore additional licenses will have to be purchased to permit
CSC to meet its obligations under this Section 24.5(c), such costs shall be
borne by CSC.

24.6  
CSC Subcontracts and Third Party Contracts.

CSC shall inform Sears of all subcontracts or Third Party Contracts used
primarily by CSC, its CSC Affiliates and any CSC Personnel to perform the
Services. Subject to Section 10.3(h) (Other Matters), at Sears’ request, CSC
shall, and shall cause any such CSC Affiliates or any CSC Personnel to, permit
the Eligible Recipients to assume prospectively any or all such contracts or to
enter into new contracts with the Eligible Recipients on substantially the same
terms and conditions, including price. CSC shall so assign the designated
subcontracts and Third Party Contracts to the Eligible Recipients as of the
expiration or termination date of the applicable Transaction Document or the
completion of any Termination Assistance Services requested by Sears under
Section 25 (Termination Assistance Services) requiring such subcontracts or
Third Party Contracts,

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whichever is later. There shall be no charge or fee imposed on the Eligible
Recipients by CSC, its Affiliates or any of CSC Personnel for such assignment.
CSC shall (1) represent and warrant that it is not in default under such
subcontracts and Third Party Contracts, (2) represent and warrant that all
payments thereunder through the date of assignment are current, and (3) notify
Sears of any Subcontractor’s or Third Party contractor’s default with respect to
such subcontracts and Third Party Contracts of which it is aware at the time.
CSC shall retain the right to utilize any such Subcontractor or Third Party
services in connection with the performance of services for other CSC customers.

24.7  
Effect on Termination Charge.

If Sears exercises any of its rights under this Section 24 (Rights Upon
Termination), the Termination Charge under the applicable Transaction Document
shall be reduced by (a) any amounts paid or payable by Sears (or its designees)
to CSC, or its designees, pursuant to this Section 24 (Rights Upon Termination)
upon or after termination, or prior to the normal expiration, of the applicable
Transaction Document, as the case may be, and (b) all costs and expenses avoided
by CSC (including CSC’s applicable profit margins) by Sears (or its designees)
hiring CSC Personnel, taking assignment of Third Party Contracts, or exercising
any of Sears’ other rights under this Section 24 (Rights Upon Termination).

25.  
TERMINATION ASSISTANCE SERVICES.

25.1  
Duration.

As part of the Services, CSC shall provide to the Eligible Recipients the
Termination Assistance Services described in this Section 25 (Termination
Assistance Services) and in the applicable Transaction Document.

  (a)  
Period of Provision. As and to the extent requested by Sears from time to time,
CSC shall provide to the Eligible Recipients Termination Assistance Services
commencing upon request from Sears at any time or times during the Term of any
Transaction Document and continuing for up to twenty-four (24) months following
the expiration or termination of any Services.
    (b)  
Extension(s) of Services and Termination Assistance Services.

  (i)  
Extension(s) of Services (other than Termination Assistance Services). Sears may
elect, in its sole discretion, *** notice to CSC, from time to time, to extend
all or part of the Services (other than Termination Assistance Services (which
are dealt with in clause (ii) below) beyond the expiration or termination date
of such Services, in its sole discretion; ***. The terms and conditions of this
Master Agreement and the applicable Transaction

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Document(s) shall continue to apply to such Services during such extension,
notwithstanding such expiration or termination.

  (ii)  
Extension(s) of Termination Assistance Services. In addition to the foregoing
rights of Sears, Sears also may from time to time elect, in its sole discretion,
*** prior notice to CSC, to extend the period following the effective date of
any expiration or termination for the performance of Termination Assistance
Services with respect to a particular Transaction Document; ***.
    (iii)  
Other Extension(s). In any event, if Sears provides CSC with less than *** prior
notice of any extension of the Services or Termination Assistance Services, or
requests for Termination Assistance Services beyond the applicable period
referenced in clause (i) or (ii) above, CSC shall nonetheless *** comply with
Sears’ request and provide the requested Termination Assistance Services or
other Services, as the case may be.
    (iv)  
Option to Complete Transformation Services. In the event of a termination before
all Transformation Services are completed, Sears shall have the right to require
CSC to complete all or any portions of such Transformation Services in
accordance with the terms and conditions of this Agreement, despite termination
of any or all other Services, in which event the Charges set forth in the
applicable Transaction Document for such Transformation Services shall be
equitably adjusted in proportion to the Service that Sears elects to have CSC
complete.

  (c)  
Firm Commitment. CSC shall extend the Services and/or provide Termination
Assistance Services (as set forth in this Section 25.1(c) (Firm Commitment)),
upon Sears request regardless of the reason for the expiration or termination of
this Master Agreement or any Transaction Document; provided, however, that if
this Master Agreement or a Transaction Document is terminated by CSC in
accordance with Section 23.1(b) (Termination for Cause; By CSC), CSC may require
payment by Sears monthly in advance for Services and Termination Assistance
Services to be provided or performed under this Section 25 (Termination
Assistance Services). At Sears’ request, CSC shall provide Termination
Assistance Services directly to an Eligible Recipient or an Entity acquiring
Control of an Eligible Recipient; provided, however, that, unless otherwise
agreed by the Parties, all such Termination Assistance Services shall be
performed subject to and in accordance with the terms and conditions of this
Agreement.

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  (d)  
Performance. Except as expressly otherwise mutually agreed upon in writing by
the Parties, to the extent Sears requests Termination Assistance Services or
other Services, such Termination Assistance Services and other Services shall be
provided subject to and in accordance with the terms and conditions of this
Agreement, with at least the same degree of accuracy, quality, completeness,
timeliness, responsiveness and resource efficiency as was required to be
provided for the same or similar Services during the Term of the applicable
Transaction Document. CSC Personnel (including all Key Personnel) reasonably
considered by Sears to be critical to the performance of the Services, including
the Termination Assistance Services, shall be retained on the Sears account
through the completion of all relevant Termination Assistance Services or other
Services, as applicable.

25.2  
Scope of Termination Assistance Service.

As part of the Termination Assistance Services and to the extent requested by
Sears, CSC shall timely transfer the control and responsibility for all
information technology functions and Services previously performed under the
applicable Transaction Document by or for CSC to the Eligible Recipients.
Additionally, CSC shall provide any and all reasonable assistance requested by
Sears to allow:

  (a)  
***
    (b)  
***
    (c)  
***

25.3  
General Support.

To the extent requested by Sears, CSC shall (i) assist Sears in developing a
written transition plan for the transition of the Services to the Eligible
Recipients, which plan shall include (as requested by Sears) capacity planning,
facilities planning, human resources planning, telecommunications planning and
other planning necessary to effect the transition, (ii) perform programming and
consulting services as requested to assist in implementing the transition plan,
(iii) train Personnel designated by Sears in the use of any Equipment, Software,
Systems, Materials or tools used in connection with the provision of the
Services, (iv) catalog all Software, Sears Data, Equipment, Materials, Third
Party Contracts and tools used to provide the Services, (v) provide machine
readable and printed listings and associated documentation for source code for
Software owned by Sears and source code to which Sears is otherwise entitled
under this Agreement and assist in its re-configuration, (vi) analyze and report
on the space required for the Sears Data and the Software needed to provide the
Services, (vii) assist in the execution of a parallel operation, data migration
and testing process until the successful completion of the transition to the
Eligible Recipients has been successfully completed, (viii) create and provide
copies of the Sears Data in the format and on the media reasonably requested by
Sears, (ix) provide a complete and up-to-date, electronic copy of

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the Operational Procedures Manual in the format and on the media reasonably
requested by Sears, (x) provide other technical assistance as requested by
Sears, (xi) provide Sears with information related to the Services that Sears
reasonably requests during any Exhibit Term to enable Sears to draft requests
for proposal relating to the Services, and (xii) at Sears’ request, provide due
diligence information to recipients of such requests for proposal. CSC may or
may not be a recipient of any such requests for proposal.

25.4  
Rates and Charges.

For Services that Sears was receiving from CSC prior to any expiration or
termination of the applicable Transaction Document or the applicable Service,
the Charges applicable to such Services (during any extension of such Services
beyond such expiration or termination), shall be the Charges that Sears was (or
is) paying prior to such expiration or termination, ***. For all Termination
Assistance Services, Charges shall be subject to Section 4.5(b) (New Services);
provided, however, that (i) to the extent Sears requests a portion (but not all)
of the Services included in a particular Charge, the amount to be paid by Sears
shall be equitably adjusted in proportion to the portion of the Services
included in the applicable Charge that CSC shall not be providing or performing,
(ii) to the extent the Termination Assistance Services requested by Sears can be
provided by CSC using Personnel and resources then assigned to Sears, there
shall be no additional charge to Sears for such Termination Assistance Services,
(iii) if the Termination Assistance Services requested by Sears cannot be
provided by CSC using Personnel and resources then assigned to Sears, Sears, in
its sole discretion, may forego or delay any work activities or temporarily or
permanently adjust the work to be performed by CSC, the schedules associated
therewith or the Service Levels to permit the performance of such Termination
Assistance Services using such Personnel or resources at no additional charge to
Sears, and (iv) any Charges to Sears for Termination Assistance shall not exceed
the lesser of: (x) rates CSC charges customers (prior to such customer
terminating their agreement with CSC), of similar size and volume for such
services, and (y) CSC’s actual cost plus ***.

26.  
GENERAL

26.1  
Binding Nature and Assignment.

  (a)  
Binding Nature. This Agreement shall be binding on the Parties and their
respective successors and permitted assigns.
    (b)  
Assignment. Neither Party may, or shall have the power to, assign this Agreement
or any Transaction Document, without the prior written consent of the other,
except in the following circumstances:

  (i)  
Either Party may assign its rights and obligations under this Agreement, or any
Transaction Document, without the approval of the other Party, to an Affiliate
that expressly assumes such Party’s obligations and responsibilities hereunder;
provided, however, that the assigning Party

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shall remain fully liable for and shall not be relieved from the full
performance of all obligations under this Agreement. Any Party assigning its
rights or obligations to an Affiliate in accordance with this Agreement shall,
within one (1) Business Day after such assignment, provide notice thereof to the
other Party together with a copy of any relevant provisions of the assignment
document.

  (ii)  
Sears may assign its rights and obligations under this Agreement or any
Transaction Document without the approval of CSC to an Entity acquiring,
directly or indirectly, Control of Sears, an Entity into which Sears is merged
or an Entity acquiring all or substantially all of Sears’ assets; provided,
however, that if such acquisition or merger would result in CSC being required
to provide Services that meet the definition of New Services, then such Services
shall be treated as New Services under Section 4.5(b) (New Services). The
acquirer or surviving Entity shall agree in writing to be bound by the terms and
conditions of this Agreement.

  (c)  
Impermissible Assignment. Any attempted assignment that does not comply with the
terms of this Section shall be null and void.

26.2  
Entire Agreement; Amendment.

This Agreement, including any Appendices and Transaction Documents referred to
in this Agreement and attached hereto, each of which is incorporated in this
Agreement for all purposes, constitutes the entire agreement between the Parties
with respect to the subject matter hereof. There are no agreements,
representations, warranties, promises, covenants, commitments or undertakings
other than those expressly set forth in this Agreement. This Agreement
supersedes all prior agreements, representations, warranties, promises,
covenants, commitments or undertakings, whether written or oral, with respect to
the subject matter contained in this Agreement. Furthermore, this Agreement
shall supersede, and the Eligible Recipients shall not be bound by any “shrink
wrap license” which is now or hereafter bundled with the CSC Provided Systems,
or any “disclaimers” or “click to approve” terms or conditions now or hereafter
contained in the CSC Provided Systems, or any web site of CSC, its Affiliates or
CSC’s Personnel that the Eligible Recipients use in connection with the
Services. No Transaction Document, amendment, modification, change, waiver or
discharge hereof shall be valid or binding unless in a tangible writing (not in
electronic form) and manually signed by an authorized representative of the
Party against which such amendment, modification, change, waiver or discharge is
sought to be enforced.

26.3  
Notices.

All notices required or permitted to be given by one Party to the other Party
under this Agreement shall be in writing and shall be sufficient if sent by:
(a) hand delivery; (b) certified mail, return receipt requested; (c) nationally
recognized overnight courier

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service; or (d) facsimile with electronic confirmation to the sender, to the
applicable Party at its address(es) or facsimile number(s) set forth below:

     
If to Sears:
  Sears, Roebuck and Co.

  3333 Beverly Road, Mail Station: B6-157B

  Hoffman Estates, Illinois 60179

  Attn.: VP Operations/Engineering

  Facsimile: (847) 286-7574
 
   
With a copy to:
  Sears, Roebuck and Co.

  3333 Beverly Road, Mail Station: B5-212B

  Hoffman Estates, Illinois 60179

  Attn.: General Counsel

  Facsimile: (847) 286-2471
 
   
If to CSC
  Computer Sciences Corporation

  2100 East Grand

  El Segundo, California 90245

  Attn: VP, General Counsel and Secretary

  Facsimile: (310) 322-9767
 
   
With a copy to:
  Computer Sciences Corporation

  400 Commerce Drive

  Newark, DE 19713

  Attn: Director of Contracts

  Facsimile: (302) 391-6072
 
   
With a copy to:
  CSC’s Account Executive, which copy shall be provided at the address or
facsimile number assigned to CSC’s Account Executive by Sears at the applicable
Sears location.

All notices shall be effective: (i) when delivered personally; (ii) three
(3) Business Days after being sent by certified mail; (iii) the first Business
Day after being sent by a nationally recognized courier; or (iv) on the same
Business Day on which it is sent by facsimile; provided such transmittal is
complete before 5 p.m. (Central Time) and is followed by notice under clause
(i), (ii) or (iii) above. Either Party may change its notice information by
giving proper notice of such change to the other Party; provided, however, that
such notice shall only be effective upon receipt.

26.4  
Legal Expenses.

In the event of an arbitration or litigation arising out of an alleged breach of
this Agreement (each a “Dispute”), the prevailing Party shall be entitled to
reimbursement of all of its costs and expenses, including reasonable Attorneys’
Fees, incurred in connection with such Dispute, including any appeal therefrom.
For purposes of this Section 26.4 (Legal Expenses), the determination of which
Party is to be considered the prevailing

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Party shall be decided by the court of competent jurisdiction or independent
party (i.e., arbitrator) that resolves such Dispute. Notwithstanding such
determination by such court or independent party, a Party (the “Offeree”) shall
not be considered the prevailing party for purposes of this Section 26.4 (Legal
Expenses) if (a) the Offeree withholds its acceptance of any settlement of such
Dispute proposed by the other Party (the “Offeror”) and (b) the judgment or
award ultimately obtained by the Offeree, if any, is not more favorable to the
Offeree than such settlement offer. If multiple settlement offers are made but
not accepted, the preceding sentence shall apply to the Offeror’s final
settlement offer. This provision shall not apply to any proposed settlement that
would require an admission of fault by the Offeree or imposes any obligations on
the Offeree other than: (i) the payment of money or the issuance of a credit,
(ii) release of the claim, and (iii) agreement to keep the terms of the
settlement confidential.

26.5  
Counterparts.

This Agreement may be executed in several counterparts, all of which taken
together shall constitute one single agreement between the Parties hereto. Each
Party shall have the right to rely on a facsimile signature on this Agreement,
and each Party shall, if the other Party so requests, provide, after such
transmission, an originally signed copy of this Agreement to the other Party.

26.6  
Headings.

The section headings and the table of contents used in this Agreement are for
reference and convenience only and shall not be considered in the interpretation
of this Agreement.

26.7  
Severability.

If any provision of this Agreement conflicts with the law under which this
Agreement is to be construed or if any such provision is held invalid or
unenforceable by a court with jurisdiction over the Parties, such provision
shall be deemed to be restated to reflect as nearly as possible the original
intentions of the Parties in accordance with applicable law. The remaining
provisions of this Agreement and the application of the challenged provision to
persons or circumstances other than those as to which it is invalid or
unenforceable shall not be affected thereby, and each such provision shall be
valid and enforceable to the full extent permitted by law.

26.8  
Jurisdiction.

Each Party irrevocably agrees that any legal action, suit or proceeding brought
by it in any way arising out of this Agreement must be brought solely and
exclusively in Cook County, Illinois, and each Party irrevocably submits to the
sole and exclusive jurisdiction of the courts in Cook County, Illinois in
personam, generally and unconditionally with respect to any action, suit or
proceeding brought by it or against it by the other Party; provided that either
Party may bring an action in another United States jurisdiction to: (a) enforce
its rights under Section 20 (Indemnities) if the underlying Claim is pending in
such jurisdiction; and (b) interplead the other Party into a Claim pending in
such

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jurisdiction. Further, each Party consents to transfer of all actions filed in
foreign jurisdictions to a United States federal or state court. Notwithstanding
the foregoing: a Party shall have the right to bring litigation in an applicable
foreign jurisdictions (e.g., Canada, India, etc.), to the extent reasonably
deemed necessary by such Party, in its sole judgment, in order to either:
(i) receive interim injunctive or other equitable relief, including a temporary
restraining order; or (ii) to the extent required by such foreign law, litigate,
re-litigate or enforce any matter in order to enforce such Party’s rights under
this Agreement in such foreign jurisdiction, but only to the extent such
disputes or legal action: (A) as to Sears, relates to those Services actually
performed by CSC outside the United States; and (B) as to CSC, relates to those
Services specifically received by Sears outside the United States.

26.9  
Governing Law.

This Agreement, and all questions concerning the validity, interpretation and
performance of this Agreement, as well as the ownership of all materials created
in connection with this Agreement, and all claims arising out of this Agreement
or the Services provided hereunder, shall be governed by and construed in
accordance with the applicable laws of the State of Illinois and the United
States as such laws are applied to contracts between Illinois residents that are
entered into and performed entirely within the State of Illinois, and without
giving effect to the principles thereof relating to conflicts of laws. The
application of CISG is expressly excluded. If Illinois adopts any form of UCITA
during the Term of this Agreement, the Parties hereby agree that UCITA shall not
apply to this Agreement or any transactions contemplated hereunder, to the
extent that such exclusion is legally permissible under such adopted law.
Furthermore, to the extent permitted under Illinois law, each Party waives the
benefit all substantive, non-procedural, foreign and international Laws (e.g.,
the laws of Canada and India), to the extent such Laws would otherwise grant
such Party rights which are different than those contemplated under this
Agreement.

26.10  
Relationship of the Parties.

CSC, in furnishing services to the Eligible Recipients hereunder, is acting as
an independent contractor, and CSC has the sole obligation to supervise, manage,
contract, direct, procure, perform or cause to be performed all work to be
performed by CSC Personnel under this Agreement. Except as expressly provided in
this Agreement, CSC is not an agent of the Eligible Recipients and has no right,
power or authority, express or implied, to represent or bind the Eligible
Recipients as to any matters, except as expressly authorized in this Agreement.
Nothing set forth in this Agreement shall be deemed or construed to render the
Parties as joint venturers, partners, principals, joint employers, employer and
employee of or with the other. CSC’s Personnel are neither employees nor agents
of any Eligible Recipient and are not eligible to participate in any employment
benefit plans or other conditions of employment available to any Eligible
Recipient’s employees. No CSC Personnel retained by CSC to perform work on the
Eligible Recipients’ behalf in connection with this Agreement shall be deemed to
be an officer, director, employee, agent, Affiliate, contractor or subcontractor
of the Eligible Recipients for any purpose. CSC (or its Subcontractors) shall be
solely responsible for making or

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causing to be made all deductions and withholdings from the CSC Personnel’s
salaries and other compensation. CSC (or its Subcontractors) shall have
exclusive control over the CSC Personnel and over the labor and employee
relations, and the policies relating to wages, hours, working conditions or
other conditions of the Personnel. CSC, and not Sears, shall be responsible and
therefore solely liable for all acts and omissions of CSC Personnel. CSC (or its
Subcontractors) shall have the exclusive right to hire, transfer, suspend, lay
off, recall, promote, assign, discipline, discharge and adjust grievances with
the CSC Personnel. However, at any time Sears shall, without any additional
charge to any Eligible Recipient, have the right to require CSC to immediately
remove from involvement in any of the Services any Personnel objectionable to
Sears for any lawful reason.

26.11  
Consents and Approval.

  (a)  
General. Except where expressly provided as being in the sole discretion of a
Party, where agreement, approval, acceptance, consent, confirmation, notice or
similar action by either Party is required under this Agreement, such action
shall not be unreasonably delayed or withheld (taking into account Sears’
business needs and objectives for entering into this Agreement). An approval or
consent given by a Party under this Agreement shall not relieve the other Party
from responsibility for complying with the requirements of this Agreement, nor
shall it be construed as a waiver of any rights under this Agreement, except as
and to the extent otherwise expressly provided in such approval or consent. From
time to time, CSC may request, or be entitled to receive, Sears’ “approval” or
“sign-off” of project plans or other Deliverables prior to proceeding with the
next phase or step of a given project. CSC acknowledges and agrees that
(i) Sears is relying upon CSC’s technical expertise in providing such
Deliverables, and (ii) any such “approval” or “sign-off” by the Eligible
Recipients shall neither be construed as an endorsement by the Eligible
Recipients as to the technical means CSC has selected to achieve the required
results, nor as a waiver of any of the Eligible Recipients’ rights or CSC’s
obligations under this Agreement.
    (b)  
Written Approval. To the extent CSC is required under this Agreement to obtain
Sears’ approval, consent or agreement, such approval, consent or agreement must
be in writing and must be signed by or directly transmitted by electronic mail
from the Sears Relationship Manager or an authorized Sears representative.
Notwithstanding the preceding sentence, the Sears Relationship Manager may agree
in advance in writing that as to certain specific matters oral approval, consent
or agreement shall be sufficient.

26.12  
Waiver of Default; Cumulative Remedies.

  (a)  
Waiver of Default. A delay or omission by either Party hereto to exercise any
right or power under this Agreement shall not be construed to be a waiver
thereof. A waiver by either of the Parties hereto of any of the covenants to be
performed by the other or any breach thereof shall not be construed to be a
waiver of any succeeding breach thereof or of any other covenant contained in
this Agreement.

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  (b)  
Cumulative Remedies. All remedies provided for in this Agreement shall be
cumulative and in addition to and not in lieu of any other remedies available to
either Party at law, in equity or otherwise.

26.13  
Survival.

Any provision of this Agreement which contemplates performance or observance
subsequent to any termination or expiration of this Agreement shall survive any
termination or expiration of this Agreement and continue in full force and
effect, including Section 9 (Required Consents), Section 12.1(e) (Restrictions
on Performing Services to Sears’ Competitors), Section 13.4 (Taxes),
Section 13.8 (Refundable Items), Section 14.2 (Payment), Section 15 (Sears Data
and Other Confidential Information), Section 16 (Ownership), Section 17
(Representations, Warranties and Covenants), Section 18 (Audit Rights),
Section 19 (Insurance and Risk of Loss), Section 20 (Indemnities), Section 21
(Liability), Section 22 (Dispute Resolution), Section 23 (Termination),
Section 24 (Rights Upon Expiration or Termination), Section 25 (Termination
Assistance Services), and Section 26 (General). Additionally, all provisions of
this Agreement shall survive the expiration or termination of this Agreement to
the fullest extent necessary to give the Parties the full benefit of the bargain
expressed in this Agreement.

26.14  
Publicity.

CSC shall not, without Sears’ prior written consent, directly or indirectly, use
or refer to the names, service marks and/or trademarks of Sears or any of its
Affiliates, or publicize the existence of this Agreement in any manner,
including in any advertising, customer lists, publicity release or sales
presentation.

26.15  
Equitable Remedies.

CSC acknowledges that, solely for purposes of enabling Sears to obtain equitable
relief and for no other purpose, if CSC or any of the CSC Personnel breaches (or
attempts or threatens to breach) its obligation to provide Services or
Termination Assistance Services as provided in Section 25 (Termination
Assistance Services), or its obligation to provide access to computers or files,
containing Sears Confidential Personal Information and CSC obligations as such
Confidential Personal Information under Section 15 (Sears Data and Other
Confidential Information), the *** shall be irreparably harmed and money damages
shall not be an adequate remedy for such harm. In such a circumstance, Sears may
proceed directly to court. If a court of competent jurisdiction should find that
CSC or any CSC Personnel have breached (or attempted or threatened to breach)
any such obligations, CSC agrees that without any additional findings of
irreparable injury, CSC shall not oppose the entry of an appropriate order
compelling performance by CSC and CSC Personnel and restraining it from any
further breaches (or attempted or threatened); provided that CSC shall be
entitled to defend the claim fully on the merits and may seek to have the court
impose conditions such as the payment of amounts due under this Agreement

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.

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26.16  
Parties To This Agreement.

Except as set forth in Section 20.1 (Indemnity by CSC), and Section 20.2
(Indemnity by Sears), this Agreement is entered into solely between, and may be
enforced only by, Sears and CSC. Sears may enforce, on behalf of the Eligible
Recipients, the rights and protections granted to the Eligible Recipients under
this Agreement. This Section 26.16 (Parties to this Agreement) shall not
prejudice Sears’ rights under Section 21.2(g) (Acknowledge Direct Damages).

26.17  
Covenant Against Pledging and Liens.

CSC agrees that, without the prior written consent of Sears, it shall not
assign, transfer, pledge, hypothecate or otherwise encumber its rights to
receive payments from Sears under this Agreement for any reason whatsoever.

Furthermore, neither CSC nor any CSC Personnel shall file any liens, or by their
action or inaction permit, directly or indirectly, any liens to be filed, on or
against property (tangible or intangible) of Sears, or any other Eligible
Recipient. If any such liens arise as a result of CSC or CSC Personnel’s action
or inaction, CSC shall obtain a bond to fully satisfy such liens or otherwise
remove such liens at its sole cost and expense within ten (10) Business Days.

26.18  
Hiring of Employees.

  (a)  
Hiring Restriction. Except as otherwise provided in this Agreement, each Party
agrees that neither it nor its Affiliates shall employ any person currently
employed by the other Party or its Affiliates. Acknowledging that damage
resulting from breach of this paragraph would be difficult or impossible to
calculate, the breaching Party shall pay, for each such breach, a one-time fee
equal to twenty-five percent (25%) of such employee’s first year’s salary with
the hiring Party (such amount being deemed liquidated damages and not a
penalty). The foregoing sentence shall not limit either Party’s right to seek
equitable remedies for such a breach.
    (b)  
Permitted Hiring. Notwithstanding the foregoing, it shall not be a violation of
Section 26.18(a) (Hiring Restriction), if: (i) Sears or its Affiliates hires a
person who: (x) has been assigned continuously to work on Services under this
Agreement for a period of twelve (12) months or more; or (y) has not worked on
Services for the Eligible Recipients during the six (6) month period immediately
preceding Sears’ employment of such person; or (z) has left the employ of CSC
prior to being offered a position by Sears; or (ii) Sears or its Affiliates hire
a person to work in any department other than information technology and
e-commerce (collectively, a “Permitted Hiring”). Any and all agreements between
CSC or CSC Personnel and their former employees that would in any way conflict
with or prohibit Sears or its Affiliates from such Permitted Hiring shall be of
no force and effect with regard to such restriction.

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26.19  
Further Assurances.

Each Party covenants and agrees that, subsequent to the execution and delivery
of this Agreement and without any additional consideration, each Party shall
execute and deliver any further legal instruments and perform any acts that are
or may become necessary to effectuate the purposes of this Agreement.

26.20  
No Commitment and No Exclusivity.

Except as expressly stated in a Transaction Document, nothing in this Agreement
shall give CSC an exclusive right to provide, or require the Eligible Recipients
to purchase exclusively from CSC, any of the Services or other products or
services, and the Eligible Recipients make no commitments, promises or
representations whatsoever as to the amount of business CSC can expect at any
time under this Agreement. Any estimates or forecasts of any Eligible
Recipients’ future needs for Services are for such Eligible Recipients’ planning
purposes only and the Eligible Recipients shall not have any liability for CSC’s
reliance thereon. Sears may request information, proposals or competitive bids
from Third Parties on the same or different terms than as provided in this
Agreement, in which event CSC shall cooperate with such Third Parties as
provided in Section 6.1 (Cooperation with Sears Personnel). Factual descriptions
of the Services provided or to be provided to the Eligible Recipients shall not
be deemed CSC Confidential Business Information and Sears may, without CSC’s
consent, disclose such information to Third Parties, including other potential
providers of services to Sears. In addition, nothing in this Agreement shall be
construed or interpreted as limiting Sears’ right or ability during any
Exhibit Term to add or delete Eligible Recipients or to increase or decrease its
demand for Services.

26.21  
Sears Rules and Compliance.

CSC and Sears agree that that they, their Affiliates (and in case of Sears, the
Eligible Recipients) and their Personnel, while working at or visiting the
premises of the other Party, shall comply with all Laws and the internal rules
and regulations of the other Party communicated in writing to the visiting
Personnel, including security procedures. In addition, CSC shall, and shall
cause all CSC Personnel to, comply with the security rules and procedures for
use of the Eligible Recipients’ electronic resources and all other policies,
rules and regulations required by Sears and disclosed to CSC from time to time
(collectively, “Sears Rules”) and comply with reasonable requests of the
Eligible Recipients’ Personnel pertaining to personal and professional conduct
and otherwise conduct themselves in a businesslike manner.

26.22  
Interpretation.

The Section and Section headings of this Agreement and of any Appendixes and
Transaction Documents under this Agreement are for convenience only and shall
not be deemed part of this Agreement. As used in this Agreement (including any
Transaction Documents and Appendixes thereto): (i) any defined terms will
include the plural as well as the singular and the derivatives of such terms,
(ii) references to the word “include” and

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its derivatives (including “e.g.”) shall be deemed to mean “including but not
limited to,” (c) the words “day,” “month,” and “year” mean, respectively,
calendar day, calendar month and calendar year, (d) the words “Business Day”
means Monday through Friday, excluding any official Sears holidays, and
(e) references to Sears’ positions including the Sears Relationship Manager,
Sears Vice President of Operations/Engineering and the Sears Chief Information
Officer shall include that individual and his or her designee(s). For purposes
of clarity, usage of the word “include” or its derivatives is not mean to imply
an unlimited scope, and any additional items which are claimed to be inferred by
such statement must be reasonably related to the concepts stated before the
usage of the “include” or similar term. For example, if a provision stated that:
“CSC shall provide Help Desk Services, including answering End User Calls, Level
1 Support, Problem management .         . ..” It would be unreasonable to argue
that, by the use of the word “include,” Help Desk Services also consists of
hosting web servers. It would be not be unreasonable to argue that Help Desk
Services also includes opening Problem Tickets, which is a normal and customary
part of Help Desk Services. Unless otherwise expressly stated, (i) the words
“herein,” “hereof” and “hereunder” and other words of similar import refer to
this Agreement as a whole and not to any particular Transaction Document,
Appendix, Section, Subsection or other subdivision, and (ii) Section, Subsection
and Appendix in this Master Agreement refer to sections and subsections of, and
appendices to, this Master Agreement. The Parties agree that any principle of
construction or rule of law that provides that an agreement shall be construed
against the drafter of the agreement in the event of any inconsistency or
ambiguity in such agreement shall not apply to the terms and conditions of this
Agreement.

26.23  
Export Controls.

CSC will comply with all export control Laws of the United States, including
Export Administration Regulations, 15 C.F.R. Chapter VII, subchapter C (the
“EAR”), with respect to the Services, CSC Provided Systems and CSC’s Personnel’s
use of and any United States or foreign access to Sears Provided Systems and the
CSC Managed Systems, including to the extent applicable under such Laws access
of such Software from a location outside the United States. Upon Sears’ request,
CSC will identify which export Laws (and the applicable classifications related
thereto) that apply to Sears Provided Systems. CSC will cooperate with Sears in
obtaining any regulatory approvals, permits or licenses that are necessary to
enable Sears and the other Eligible Recipients to exercise their rights herein.

26.24  
Covenant of Good Faith.

Each Party agrees that, in its respective dealings with the other Party under or
in connection with this Agreement, it shall act in good faith.

Signature Page Follows

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IN WITNESS WHEREOF, the parties have caused this Master Agreement to be executed
by their respective duly authorized representatives as of the Effective Date.

     
Sears, Roebuck and Co.
  Computer Sciences Corporation
 
   
By: /s/ Gerald F. Kelly, Jr.                                               
  By:/s/ R. C. Ricks                                            
Title: Senior Vice President                                            
  Title: President, ABD
Date: May 31, 2004                                                          
  Date: May 31, 2004

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APPENDIX A

GLOSSARY

“Acquired Assets” means the Equipment, Software and other assets listed in the
applicable Transaction Document that CSC shall acquire as of the Commencement
Date.

“Acquired Assets Credit” means the amount set forth in the applicable
Transaction Document that CSC shall pay to Sears as consideration for the
Acquired Assets.

“Affiliate” means, at the applicable time, (a) with respect to either Party, any
Entity that directly or indirectly Controls, is Controlled with or by or is
under common Control with, such Party, and (b) with respect to Sears, any Entity
that is managed, operated or directed by Sears, is licensed to do business using
the Sears’ name, or does business within a Sears store (e.g., Sears’ dealer
stores). For purposes of the foregoing, “Control”, and its derivatives, means,
with respect to a corporation, the ownership, directly or indirectly, of 50% or
more of the voting power to elect directors thereof or, for purposes of foreign
corporations, if less than 50%, the amount allowed by applicable law; and with
respect to any other Entity, power to direct the management of such Entity.

“Agreement” means this Master Services Agreement, all Transaction Documents to
this Master Agreement and all Appendices and other documents incorporated by
reference into this Master Agreement and/or such Transaction Documents.

“Appendices” has the meaning given in Section 2.2(e) (Appendices).

“Attorneys’ Fees” means the reasonable costs and expenses incurred by a Party
for outside counsel, and related staff, and a reasonable apportionment of the
internal costs incurred by a Party for their in-house counsel, and related staff
working on the matter at issue.

“Benchmark Results” has the meaning given in Section 13.10(d) (Results of
Required Benchmarking).

“Benchmark Standard” has the meaning given in Section 13.10(d) (Non-Competitive
Charges).

“Benchmarker” has the meaning given in Section 13.10(b) (Benchmarking).

“Benchmarking” has the meaning given in Section 13.10(b) (Benchmarking).

"Business Day” has the meaning given in Section 26.22 (Interpretation).

“Charges” means the amounts set forth in a Transaction Document (or otherwise
set forth in this Agreement) that are payable by Sears for the Services. The
term “Charges” includes Pass-Through Expenses and Out-of-Pocket Expenses.

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“CISG” means the United Nations Convention on the International Sale of Goods.

“Code of Conduct” has the meaning given in Section 17.1(h) (Sears Code of
Conduct).

“Commencement Date” means, with respect to a Transaction Document, the date on
which CSC shall begin providing Services under such Transaction Document, as
defined in such Transaction Document.

“Confidential Business Information” has the meaning given in Section 15.3(b)(i)
(Confidential Business Information; Definition).

“Confidential Information” means, collectively, Confidential Business
Information and Confidential Personnel Information.

“Confidential Personal Information” has the meaning given in Section 15.3(c)(i)
(Confidential Personal Information; General).

“Contract Changes” has the meaning given in Section 4.5(d) (Charges for Contract
Changes).

“Contract Rate” means ***.

“Contract Year” means a period during the Term commencing on the first
Commencement Date under this Agreement or an anniversary thereof and ending on
the date one (1) year thereafter (or, if earlier, on the last day of the Term).
If any Contract Year is less than twelve (12) months, the rights and obligations
under this Agreement that are calculated on a Contract Year basis will be
proportionately adjusted for such shorter period.

“Credit Trigger Event” means a Downgrade Event, a MAC Event or a Default Event.

“CSC” has the meaning given in the preamble to this Master Agreement.

“CSC Account Executive” has the meaning given in Section 12.2 (CSC Account
Executive).

“CSC Designated Contract” has the meaning given in Section 10.1(a) (Assignment
and Assumption).

“CSC Facilities” means the facilities owned or leased by CSC, its Affiliates or
the CSC Personnel and from which any Services are provided.

“CSC Managed System” means (a) any Equipment or Software or System that the
applicable Transaction Document specifically states CSC will have operational,
but not financial, responsibility for, and (b) any Acquired Assets for which CSC
has been unable to obtain a Required Consent for the assignment, sale or
transfer to CSC of such Acquired Assets.

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.

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“CSC Personnel” means the Personnel of CSC, its Affiliates and their respective
Personnel including Subcontractors (e.g., an employee of CSC’s Subcontractor is
included within the definition of CSC Personnel).

“CSC Provided Circuits” means all communication circuits owned or leased by CSC
or any CSC Affiliate or otherwise provided by CSC Personnel and used in
connection with the Services or to which CSC, its Affiliates or the CSC
Personnel provides to any Eligible Recipient access in connection with the
Services.

“CSC Provided Equipment” means (a) all Acquired Assets, and (b) all Equipment
owned or leased by CSC, any CSC Affiliate or otherwise provided by CSC Personnel
and used in connection with the Services or to which CSC, its Affiliates, or CSC
Personnel provides any Eligible Recipient access in connection with the
Services.

“CSC Provided Materials” means all Materials (other than Sears Provided
Materials): (a) owned or licensed by CSC or its Affiliates; and (b) provided by
CSC Personnel; and, in each such case, used in connection with the Services.

“CSC Provided Software” means all Software owned by, or provided under license
to, CSC, any CSC Affiliate or otherwise provided by CSC Personnel and used in
connection with the Services or to which CSC provides any Eligible Recipient
with access in connection with the Services.

“CSC Provided System” means, collectively, the CSC Provided Circuits, the CSC
Provided Equipment, the CSC Provided Materials and the CSC Provided Software,
and any Systems consisting of a combination of the foregoing items.

“CSC Software” means all Software owned by CSC or its Affiliates and that has
been or shall be used to provide the Services.

“Default Event” means, for purposes of this Agreement and the provision of the
Services, (A) an event of default (as such term or any similar term is defined
in any material loan agreement of CSC or CSC’s parent Entity (to the extent CSC
has a parent Entity)), (B) any other event of default, the occurrence of which
would require CSC or CSC’s parent Entity (to the extent CSC has a parent Entity)
to notify its lenders or bondholders, or (C) any request for a waiver or
extension of, or a forbearance relating to, any event that with notice or the
passage of time (or both) would (unless such a waiver, extension or forbearance
is obtained) become an event of default by CSC or CSC’s parent Entity (to the
extent CSC has a parent Entity) under any material loan agreement of CSC or
CSC’s parent Entity (to the extent CSC has a parent Entity) or any indenture or
similar agreement governing a bond issue, requiring CSC or CSC’s parent Entity
(to the extent CSC has a parent Entity) to make a repayment of principal or
interest.

“Deliverables” means ***

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.

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provision of the Services, including all intermediate and partial versions
thereof, in whatever form or medium; provided, however, that except as stated in
Section 16.3 (Deliverables), the term “Deliverables” shall not include other CSC
Provided Software or CSC Provided Materials.

“Derivative Work” means a work based on one or more preexisting works, including
a condensation, transformation, translation, modification, expansion or
adaptation, that, if prepared without authorization of the owner of the
copyright of such preexisting work, would constitute a copyright infringement
under applicable Law, but excluding the preexisting work.

“Downgrade Event” means (A) any downgrade of the long term unsecured debt rating
of CSC’s or CSC’s parent Entity (to the extent CSC has a parent Entity) below
Moody’s rating BA1 or Standard & Poor’s rating BBB-, or (B) the failure of CSC
or CSC’s parent Entity (to the extent CSC has a parent Entity) to have a long
term unsecured debt rating from both Standard & Poor’s and Moody’s.

“Effective Date” has the meaning given in the preamble to this Master Agreement.

“Eligible Recipients” means, collectively, the following:

  (a)  
Sears;
    (b)  
any Entity that is an Affiliate of Sears as of the Effective Date;
    (c)  
for a period of twenty-four (24) months after such transaction, any Entity that
purchases any divested business operation of Sears, or any of its Affiliates,
including any division, marketing unit, business unit, research unit or
facility;
    (d)  
for a period of twenty-four (24) months after such transaction, any Entity that
is not an Affiliate of Sears and that is created using assets of Sears or any
Affiliate of Sears;
    (e)  
any Entity into which Sears or any Affiliate of Sears merges or consolidates;
    (f)  
any Entity which merges into or consolidates with Sears or any Affiliate of
Sears;
    (g)  
any Entity, including any corporation, joint venture or partnership in which, on
or after the Effective Date, Sears or any Affiliate of Sears has an ownership
interest and/or as to which Sears or such Affiliate has management or
operational responsibility by law or contract;
    (h)  
any Entity in which Sears or any of its Affiliates hold significant stock,
warrants or debt;
    (i)  
any customer of an Eligible Recipient identified in clauses (a) through (h)
above, but only in connection with the provision of products or services by such
Eligible Recipient to such customer;

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  (j)  
any person or Entity engaged in the provision of products or services to Sears
or an Eligible Recipient identified in clauses (a) through (h) of this
definition, but only in connection with the provision of such products or
services to Sears or such Eligible Recipient; and
    (k)  
other Entities to which the Parties agree.

Eligible Recipients shall include the Personnel of the Entities identified as
Eligible Recipients in clauses (a) through (k) above and the Eligible Recipients
and their Personnel’s respective successors and assigns. Sears shall have the
exclusive right, in Sears’ sole discretion, to exercise the rights granted to
the Eligible Recipients under this Agreement, to delegate the exercise of such
rights to other Eligible Recipients and/or to determine which Eligible
Recipients shall be entitled to receive the Services and other benefits of this
Agreement.

“Employment Effective Date” means, with respect to each Transitioned Personnel,
the date that such Transitioned Personnel begins employment with CSC (or its
delegates), in accordance with applicable Laws.

“Entity” means a firm, corporation, partnership (including general partnerships,
limited partnerships, and limited liability partnerships), joint venture, trust,
limited liability company, limited liability partnership, business trust,
association or other organization or entity.

“Equipment” means all computing, networking, communications and related
computing equipment (hardware and firmware) and other devices including (a)
mainframe, midrange, server and distributed computing equipment and associated
attachments, features, accessories, peripheral devices, and cabling, (b)
personal computers, laptop computers, workstations and personal data devices and
associated attachments, features, accessories, printers, multi-functional
printers, peripheral or network devices, and cabling, and (c) voice, data, video
and wireless telecommunications and network and monitoring equipment and
associated attachments, features, accessories, cell phones, peripheral devices
and cabling.

“Exception Project Work” means New Services authorized by Sears Vice President
of Operations/Engineering pursuant to Section 4.5(b)(iii) (Exception Project
Work).

“Exempt Subcontractors” has the meaning given in Section 6.2(a) (Exempt
Subcontractors).

***

“Exhibit” means an exhibit to this Master Agreement as more fully described in
Section 2.2(b) (Exhibits).

“Exhibit Term” has the meaning given in Section 3.1(b) (Exhibits).

“Extraordinary Event” has the meaning given in Section 13.6(a) (Definition).

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.

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“Future State Services” means, with respect to any Exhibit, the Services, as
modified by the changes/improvements thereto contemplated by the Transformation
Plan under such Exhibit.

“Income Tax” means any tax on or measured by the net income of a Party
(including taxes on capital or net worth that are imposed as an alternative to a
tax based on net or gross income), or taxes which are of the nature of excess
profits tax, minimum tax on tax preferences, alternative minimum tax,
accumulated earnings tax, personal holding company tax, capital gains tax or
franchise tax for the privilege of doing business.

“IBM” International Business Machines Corporation.

“IBM Lotus Notes Agreement” means that certain Exhibit 18: Messaging Services,
dated November 1, 2001, to that certain that certain Master Agreement for
Services, dated December 15, 2000, between IBM and Sears, including all SSAs and
other amendments thereto.

“Intellectual Property Rights” means any patents, patent applications, know-how,
processes, designs, industrial design rights, trademarks, domain names, IP
addresses, service marks, tradenames, trade dress, copyrights, moral rights,
mask works, trade secrets, inventions and technology (whether or not
patentable), confidential and proprietary information, software, databases and
other collections and compilations of data, rights of publicity/privacy, or
other intellectual property rights conferred by contract or by any Law.

“Interim Services” means, with respect to any Exhibit, the Services CSC is to
assume on the Commencement Date and provided prior to completion of any
Transformation Plan.

“Key Personnel” has the meaning given in Section 12.1 (Key Personnel).

“Laws” means: (i) *** (including, *** methods and manner in which CSC provides
Services): all federal, intergovernmental, state, provincial, regional,
territorial and local laws, statutes, ordinances, regulations, rules, executive
orders, supervisory requirements, directives, circulars, opinions, interpretive
letters and other official releases of or by any government (with jurisdiction
over such matter), or any authority, department or agency thereof; and (ii) any
rules and regulations of stock exchanges and other self-regulating organizations
applicable to CSC, CSC’s Affiliates, Sears or any Sears Affiliate.

“Losses” means all losses, liabilities, damages (including punitive and
exemplary damages), awards, fines, penalties and claims (including taxes), and
all related costs and expenses (including reasonable legal fees and
disbursements and costs of investigation, litigation, settlement, judgment,
interest and penalties).

“MAC Event” means any event that causes a material adverse change to the
business, properties, financial condition or results of operations of CSC or
CSC’s parent Entity (to the extent CSC has a parent Entity) or the ability of
CSC or CSC’s parent Entity (to the extent CSC has a parent Entity) to perform
its obligations under this Agreement.

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.

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“Major Release” means a new version of Software that includes changes to the
architecture and/or adds new features and functionality in addition to the
original functional characteristics of the preceding software release. These
releases are usually identified by full integer changes in the numbering, such
as from “7.0” to “8.0,” but may be identified by the industry as a major release
without the accompanying integer change.

“Managed Third Parties” means any Third Parties who provide Equipment, Software,
Systems or services in connection with CSC Managed Systems.

“Materials” means, collectively, Software (in both source and object code form),
literary works, documentation, reports, flowcharts, notes, outlines, drawings,
other works of authorship, plans, models, specifications, designs, analyses,
algorithms, processes, methodologies, ideas, concepts, inventions (whether
patentable or reduced to practice), know-how, programming tools, information,
data, databases and work product, together with all modifications, replacements,
Upgrades, enhancements, document, materials and media related thereto and any
Intellectual Property Rights subsisting in each of the foregoing.

“Migration Plan” has the meaning given in the TI Exhibit.

“Migration Services” has the meaning given in the TI Exhibit.

“Minor Release” means a scheduled release containing small functionality updates
and/or accumulated resolutions to defects or non-conformances made available
since the immediately preceding release (whether Major Release or Minor
Release). Minor Releases shall include “Maintenance Releases” which are
supplemental to and made available between Major Releases and other Minor
Releases, issued and provided under specific vendor service level or maintenance
obligations and contain only accumulated resolutions or mandated changes. These
releases are usually identified by a change in the decimal numbering of a
release, such as “7.12” to “7.13.”

“New Advances” has the meaning given in Section 6.5(g) (CSC Developed Advances).

“New Services” means new services or significant changes to existing Services
requested by Sears, (a) that are materially different from the Services, (b)
that require materially different levels of effort, resources or expense from
CSC, and (c) for which there is no current charging methodology. For example,
if: (w) a Transaction Document provides that CSC shall support certain devices;
(x) a new device is introduced into the Eligible Recipients’ environment;
(y) the new device does not require materially different ongoing effort to
support; and (z) there is an existing charging methodology for the existing
devices; then the support of the new device shall not be a New Service and the
charge for the existing device that most closely matches the new device would
apply to the new device. For the avoidance of doubt, New Services shall not
include increases in the volume of Services to be provided by CSC.

“No Impact Proposal” has the meaning given in Section 4.5(b) (New Services).

“ODBC” means open database compliant.

7

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“Operational Procedures Manual” or “OPM” has the meaning given in Section 5.1
(Operational Procedures Manual).

“Out-of-Pocket Expenses” means reasonable, demonstrable and actual out-of-pocket
expenses due and payable to a Third Party by CSC that are approved in advance by
Sears or for which CSC is entitled to be reimbursed by Sears under this
Agreement. Unless expressly agreed otherwise in writing by the Parties,
Out-of-Pocket Expenses shall not include CSC’s overhead costs (or allocations
thereof), general and/or administrative expenses or other mark-ups, but shall
include taxes on such amounts. Out-of-Pocket Expenses shall be calculated at
CSC’s actual incremental expense and shall be net of all rebates and allowances.

“Party” has the meaning given in the preamble to this Master Agreement.

“Pass-Through Expenses” means the costs and expenses identified as such in a
Transaction Document or otherwise agreed by the Parties in writing, as such list
may be amended from time to time in accordance with this Agreement. Unless
otherwise agreed, CSC shall not charge any handling or administrative charge in
connection with its processing or review of such invoices.

“Permitted Separation” has the meaning given in Section 12.1(b) (Continuity of
Key Personnel).

“Personnel” means the directors, officers, employees, partners, agents,
advisers, independent contractors and Subcontractors of a Party, its Affiliates
and, as to Sears, the other Eligible Recipients or another Entity, as
applicable.

“Privacy Laws” means all Laws relating to data privacy, trans-border data flow
or data protection including the Gramm-Leach-Bliley Act, Title V Privacy,
Subtitle A Disclosure of Nonpublic Information (15 U.S.C. 6801 et seq.) and
various agency implementing regulations and the California Information Practices
Act of 1977, as amended, California Civil Code 1798, etc.

“Privacy Policy” has the meaning given in Section 17.1(h) (Sears Code of
Conduct).

"Remediation Services” has the meaning given in the TI Exhibit.

“Reports” has the meaning set forth in Section 5.3(a) (Reports).

“Required Consents” means the consents (if any) required to be obtained: (a) to
assign or transfer to CSC any Acquired Assets and related CSC Designated
Contracts (including related warranties); (b) to grant CSC the right to use
and/or access any Sears Provided System or CSC Managed System from within or
outside the United States ***; (c) to grant Sears and the other Eligible
Recipients (including their customers and Personnel) the right to use and/or
access any CSC Provided Systems and Deliverables, as contemplated by this
Agreement, from within or outside the United States; (d) to assign or transfer
to Sears or its designee CSC Provided Systems and related Third Party Contracts
or other rights following the Term of the applicable Transaction Document to the
extent provided in

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.

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this Agreement; and (e) all other consents required from Third Parties in
connection with CSC’s provision of the Services.

“Root Cause Analysis” means the formal process, specified in the Operational
Procedures Manual, to be used by CSC to diagnose the underlying cause of
problems at the lowest reasonable level so that corrective action can be taken
that shall eliminate repeat failures. CSC shall implement a Root Cause Analysis
as further specified in Section 11.3 (Problem Analysis) or as requested by
Sears.

“Sears” has the meaning given in the preamble to this Master Agreement.

“Sears Data” means any data or information of any Eligible Recipient that is
provided to or obtained by CSC or CSC Personnel in connection with the
negotiation and execution of this Agreement or the performance of its
obligations under this Agreement, including data and information with respect to
the businesses, customer, operations, facilities, products, rates, regulatory
compliance, competitors, consumer markets, assets, expenditures, mergers,
acquisitions, divestitures, billings, collections, revenues and finances of any
Eligible Recipient. Sears Data also means any data or information created,
generated, collected or processed by CSC or CSC Personnel in the performance of
CSC’s obligations under this Agreement, including data processing input and
output, service level measurements, asset information, Reports, Third Party
service and product agreements, contract charges and retained and Pass-Through
expenses.

“Sears Facilities” means the facilities provided by any Eligible Recipient for
the use of CSC or its Personnel to the extent necessary to provide the Services.

“Sears IT Base Case” means, with respect to an Exhibit, the summary financial
base case that may be attached to such Exhibit, as well as the detailed
financial and budget information.

“Sears Owned Materials” means the Materials that are: (a) owned or acquired by
the Eligible Recipients (whether prior to or after the Effective Date); (b)
Deliverables that a Transaction Document provides, or the Parties otherwise
agree, shall be owned by Sears or the other Eligible Recipients; or (c)
Derivative Works, modifications and enhancements to any of the foregoing.

“Sears Personnel” means the Personnel of Sears, including the Personnel of the
other Eligible Recipients.

“Sears Provided Circuits” means all communication circuits: (a) owned by or
leased (other than by CSC, a CSC Affiliate or CSC Personnel under this
Agreement) to any Eligible Recipient(s); and (b) used in connection with the
Services.

“Sears Provided Equipment” means all Equipment: (a) owned by or leased (other
than by CSC, a CSC Affiliate or CSC Personnel under this Agreement) to any
Eligible Recipient(s); and (b) used in connection with the Services.

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“Sears Provided Materials” means all Materials: (a) owned by or licensed (other
than by CSC, a CSC Affiliate or CSC Personnel under this Agreement) to any
Eligible Recipient(s) (including the Sears Owned Materials); and (b) used in
connection with the Services.

“Sears Provided Software” means all Software: (a) owned by, or provided under
license (other than by CSC, a CSC Affiliate or CSC Personnel under this
Agreement) to any Eligible Recipient(s); and (b) used in connection with the
Services (including application Software).

“Sears Provided Systems” means, collectively, the Sears Provided Circuits, Sears
Provided Equipment, Sears Provided Materials and the Sears Provided Software and
any Systems consisting of a combination of the foregoing items.

“Sears Related Businesses” means ***.

“Sears Relationship Manager” has the meaning given in Section 7.1(a) (Sears
Exhibit Contacts).

“Sears Rules” has the meaning given in Section 26.21 (Sears Rules and
Compliance).

“Sears Sites” or “Sites” means the offices or other facilities listed in an
Exhibit owned or controlled by the Eligible Recipients at or to which CSC is to
provide the Services.

“Sears Standards” has the meaning given in Section 6.4(a) (CSC Support).

“SEC” means the United States Securities and Exchange Commission.

“Service Addenda” has the meaning given in Section 2.2(d) (Service Addenda).

“Service Level Credits” has the meaning given in Section 11.2 (Service Level
Credits) and a Transaction Document.

“Service Levels” means, individually and collectively, the performance standards
for the Services set forth in a Transaction Document.

“Service Taxes” means all sales, use, excise and other similar taxes or any
governmental duties that are assessed against either Party on the provision of
the Services as a whole, or on any particular Service received by Sears or
another Eligible Recipient from CSC, excluding Income Taxes.

“Services” means, collectively: (a) the services, functions and responsibilities
as are described in Section 4 (Services) and elsewhere in this Agreement as they
may be supplemented, enhanced, modified or replaced during the Term of the
applicable Transaction Document in accordance with this Agreement; and (b) any
New Services, upon Sears’ acceptance of CSC’s proposal for such New Services in
accordance with Section 4.5 (Additional Services) and the other provisions of
this Agreement.

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.

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“Software” means (a) any machine-readable instructions, any computer software
programs, interfaces, routines, any compilation of machine-readable data such as
a data base, and any related licensed materials, in any form, (b) any related
features, including distributed features, and any whole or partial copies,
(c) program listings, programming tools, and similar works in any form that are
applicable to any of the foregoing, (d) any modifications, replacements,
Upgrades, enhancements, documentation, patch-tapes, additions, addenda,
maintenance updates, defect fixes, materials and media related thereto, and
(e) any documentation or specifications for the foregoing.

“Specialized Services” has the meaning given in Section 4.4 (Access to
Specialized CSC Skills and Resources).

“Specifications” means, with respect to Software, Equipment, Systems or other
contract deliverables to be designed, developed, delivered, integrated,
installed and/or tested by CSC, the technical, design and/or functional
specifications set forth in a Transaction Document, in the original
manufacturer’s/licensor’s documentation, in a New Services description requested
and/or approved by Sears, or otherwise agreed upon in writing by the Parties.
Specifications contained in this Agreement, including any Transaction Document,
shall control, in the case of conflict, over those incorporated by reference.

“Statement of Work” or “SOW” has the meaning given in Section 2.2(c).

“Subcontractors” means contractors/subcontractors (of any tier) of a Party or
other Entity (including Affiliates of CSC providing Services under this
Agreement).

“System” means an interconnected grouping of Equipment, Software and/or
communication circuits and associated attachments, features, accessories,
peripherals and cabling, and all additions, modifications, substitutions and
Upgrades to such System. The term “System” shall include all Systems in use as
of the applicable Commencement Date, all additions, modifications,
substitutions, Upgrades to such Systems and all Systems installed or developed
by or for the Eligible Recipients or CSC, its Affiliates and the CSC Personnel
following the Commencement Date.

“System Change” means any change to the Software, Equipment, System or operating
environment, including without limitation, changes to programs, manual
procedures, job control language statements, distribution parameters or
schedules.

“Term” has the meaning given in Section 3.1(a) (Term of Master Agreement,
Exhibits, SOWs and Service Addenda) for this Master Agreement, and shall also
mean the term of the applicable Transaction Document, as applicable.

“Termination Assistance Services” means the termination/expiration assistance
requested by Sears to allow the Services to continue without interruption or
adverse effect and to facilitate the orderly transfer of the Services to Sears
or its designee, as such assistance is further described in Section 25
(Termination Assistance Services).

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“Termination Charge” means the costs incurred by CSC during the performance
under this Agreement and which are payable as the result of Sears terminating
for convenience any Transaction Document, subject to the limitations set forth
in Section 23.3 (Termination Charges) and elsewhere in this Agreement. Except as
expressly provided otherwise in a Transaction Document, Termination Charges
shall be limited to the aggregate of the following items:

  (a)  
Other Charges. The remaining portion *** for the Services, performed by CSC but
not previously paid for (through the Account Management Fees or other Charges)
to the extent related to the terminated Services;
    (b)  
CSC Designated Contracts/Acquired Assets. The remaining portion of Out-of-Pocket
costs incurred by CSC (and not previously paid for by Sears) in acquiring from
Sears *** terminated Services to the extent such contracts and assets are not
(or cannot reasonably be expected to be) utilized by CSC internally or for its
other customers; provided that: (i) such CSC Designated Contracts and/or
Acquired Assets are not assigned, transferred to, or assumed by Sears (or its
designees) pursuant to Section 24 (Rights upon Expiration or Termination); and
(ii) such costs shall be reduced by the net proceeds of any disposition of such
Acquired Assets;
    (c)  
CSC Provided Systems. The remaining portion of depreciation/amortization (not
previously paid for by Sears), on *** to provide the terminated Services but
only to the extent (i) such Systems are not (or cannot reasonably be expected to
be) utilized by CSC internally or for its other customers, and (ii) such CSC
Provided Systems are not assigned, transferred to, or assumed by Sears (or its
designees) pursuant to Section 24 (Rights upon Expiration or Termination);
provided that such costs shall be reduced by the net proceeds of any disposition
of such CSC Provided Systems.
    (d)  
Terminated CSC Employees. Demonstrable and actual amounts paid by CSC to *** the
terminated Services that are terminated as a direct result of Sears early
termination; provided, however, that (i) Sears shall only be liable to reimburse
termination benefits which CSC is obligated to provide by Law and/or by policies
generally applicable to employees of CSC, (ii) such costs shall be reduced on a
proportionate basis to the extent such terminated employee(s) were not engaged
on the Sears account, and (iii) this provision shall not apply to any employees
that are offered positions by Sears or its designee under Section 24 (Rights
upon Expiration or Termination); and
    (e)  
Third Party Contracts. With respect to *** that are terminated as a direct
result of Sears’ early termination of such Services, any Out-of-Pocket costs CSC
is required by contract to pay to terminate such contracts; provided that:
(i) this provision shall

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.

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not apply to any such contracts that are transferred to Sears or its designee
under Section 24 (Rights upon Expiration or Termination); and (ii) if such
contracts are used to support multiple CSC customers or CSC’s non-service
delivery functions, ***.

The “remaining portion” of depreciation and amortization shall be calculated in
accordance with generally accepted accounting principles, applied on a
consistent basis, using the methods used by CSC in preparing its federal income
tax returns.

The above costs shall only include amounts attributable to periods after the end
of the Term of the applicable Transaction Document, if Sears has expressly
approved the inclusion of such amounts in advance, and in writing.

The term “Termination Charge” does not include Charges that are payable by Sears
for work performed prior to the expiration or termination of the applicable
Transaction Document. Charges for partially completed work will be pro-rated
based upon the portion of the work that was completed. The term “Termination
Charges” does not include Charges and Out of Pocket Expenses payable for:
(x) Services, or (y) Termination Assistance Services under this Agreement.

“Third Party” means any person or Entity other than a Party, or such Party’s
Affiliates. When used without initial capital letters, “third party” means any
person or Entity that is not a party to this Agreement.

“Third Party Contracts” means all agreements between third parties and any
Eligible Recipient or CSC, its Affiliates or the other CSC Personnel that have
been or shall be used to provide the Services. Third Party Contracts shall
include all such agreements in effect as of the applicable Commencement Date,
including those contracts identified in the Transaction Document, those as to
which the costs are included in the Sears IT Base Case, and those as to which
CSC received reasonable notice and/or reasonable access prior to the
Commencement Date. Third Party Contracts also shall include those third party
agreements entered into by CSC, its Affiliates or the other CSC Personnel
following the Commencement Date.

“Third Party Materials” means all Materials that are owned by Third Parties and
that have been or shall be used to provide the Services.

“Third Party Software” means all Software provided under license or lease to
CSC, its Affiliates, the CSC Personnel or the Eligible Recipients that has been
or shall be used to provide the Services.

“TI Exhibit” means Exhibit 1 (Technical Infrastructure Outsourcing) to this
Master Agreement, of even date herewith.

“Transaction Document” has the meaning given in Section 2.2(f) (Transaction
Document).

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.

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“Transformation Plan” has the meaning given in the TI Exhibit.

“Transformation Services” has the meaning given in the TI Exhibit.

“Transitioned Personnel” means the Personnel of Sears and its Affiliates who are
eligible to be interviewed for employment by CSC (or its delegates) pursuant to
an Exhibit. Upon being employed by CSC, such Transitioned Personnel shall be
deemed to be CSC Personnel as defined in this Agreement.

“UCITA” means the Uniform Computer Information Transactions Act drafted by the
National Conference of Commissioners on Uniform State Laws or any enactment of
all or substantially all of such draft.

“Unanticipated IT Change” has the meaning set forth in Section 6.5(f)
(Unanticipated IT Change).

“Unauthorized Code” means any feature, routine or device that is intended or
designed, either automatically, upon the occurrence of a certain event, upon the
taking of or failure to take a certain action or under the control of a third
party that is not a Sears Personnel, (a) to disrupt the operation of any
Deliverable or any other Eligible Recipient Software, Equipment, data or
Systems, (b) to cause any Deliverable or any other Eligible Recipient Software,
Equipment, data or Systems to be unintentionally destroyed, erased, damaged or
otherwise made inoperable, or (c) to permit a third party that is not a Sears
Personnel to destroy, erase, damage or otherwise render inoperable any
Deliverable or any other Eligible Recipient Software, Equipment, data or
Systems, and shall include any computer virus, worm, trap door, back door, time
bomb, malicious program, or any mechanism such as software locks, password
checking, CPU serial number checking or time dependency, introduced by the
provider of the applicable Software, Equipment, Systems, data or Deliverable
that could hinder Sears’ Eligible Recipient’s freedom to fully exercise its
license rights to such Software, Equipment, Systems, data or Deliverable under
this Agreement.

“United States” means the United States of America, and its states,
commonwealths, possessions and territories, including Puerto Rico and the
District of Columbia.

“Upgrade” and its derivatives means the updates, renovations, enhancements,
additions and/or new versions or releases of Software or Equipment.

“Virus” means any Unauthorized Code that is included with or inserted into any
System without the consent of the owner or licensor of the underlying System.

End of Appendix

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