Form of Retail Establishment Agreement



 Exhibit 10.8 
 Form of 
 Shop Your Way Rewards Retail Establishment Agreement

 Between 
 Sears Holdings Management Corporation 
 And 

Sears Hometown and Outlet Stores, Inc.
             , 2012 







 TABLE OF CONTENTS 

 

					
	 I.
	  	 Definitions.
	  	1
			
	 II.
	  	 Term.
	  	1
			
	 III.
	  	 The Program.
	  	1
			
	 IV.
	  	 Program Authorizations; Program is Exclusive.
	  	2
			
	 V.
	  	 Transaction Information.
	  	2
			
	 VI.
	  	 Points.
	  	3
		  	 A.    Issuance of Points.
	  	3
		  	 B.    Bonus Point Offers.
	  	3
		  	 C.    Points Issuance Fee.
	  	3
		  	 D.    Redemption of Points.
	  	3
		  	 E.    Reimbursement Upon Redemption.
	  	4
		  	 F.    Expiration of Points.
	  	4
		  	 G.    Reconciliation and Payment.
	  	4
		  	 H.    Differentiation.
	  	4
		  	 I.    Permits and Taxes.
	  	4
			
	 VII.
	  	 Marketing.
	  	5
		  	 A.    Marketing by SHO.
	  	5
		  	 B.    Marketing by SHMC.
	  	5
		  	 C.    Monthly Member Analytics.
	  	5
		  	 D.    License to Use Marks.
	  	5
			
	 VIII.
	  	 Enrollment of New Members.
	  	6
			
	 IX.
	  	 Ownership of Data.
	  	6
			
	 X.
	  	 Confidentiality.
	  	7
		  	 A.    Confidential Business Information.
	  	7
		  	 B.    Exceptions.
	  	7
		  	 C.    Confidential Personal Information.
	  	7
		  	 D.    Injunctive Relief.
	  	8
		  	 E.    Data Security.
	  	8
		  	 F.    Unauthorized Use or Disclosure of Confidential Information.
	  	8
		  	 G.    Return of Confidential Information.
	  	8
		  	 H.    Publicity.
	  	9


  
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	 XI.
	  	 Termination.
	  	 	9	  
		  	 A.    For Breach.
	  	 	9	  
		  	 B.    Termination for Convenience.
	  	 	10	  
		  	 C.    Termination in Response to a Termination of Other Agreements
	  	 	10	  
		  	 D.    Obligations at Termination or Expiration.
	  	 	10	  
			
	 XII.
	  	 Books and Records; Audits.
	  	 	10	  
			
	 XIII.
	  	 Operating Committee; Dispute Resolution.
	  	 	11	  
		  	 A.    Operating Committee.
	  	 	11	  
		  	 B.    Dispute Resolution.
	  	 	11	  
			
	 XIV.
	  	 Representations and Warranties; Covenants of SHO.
	  	 	12	  
		  	 A.    Representations and Warranties of SHO.
	  	 	12	  
		  	 B.    Representations of SHMC.
	  	 	14	  
		  	 C.    Covenants of SHO.
	  	 	17	  
		  	 D.    Covenants of SHMC.
	  	 	17	  
			
	 XV.
	  	 Indemnification.
	  	 	18	  
		  	 A.    SHO Indemnification of SHMC.
	  	 	18	  
		  	 B.    SHMC Indemnification of SHO.
	  	 	19	  
		  	 C.    Procedures.
	  	 	19	  
		  	 D.    Notice and Additional Rights and Limitations.
	  	 	20	  
			
	 XVI.
	  	 Disclaimer.
	  	 	21	  
			
	 XVII.
	  	 Exclusion of Consequential Damages; Limitation of Liability.
	  	 	21	  
			
	 XVIII.
	  	 Force Majeure.
	  	 	21	  
			
	 XIX.
	  	 Notice.
	  	 	22	  
			
	 XX.
	  	 Relationship of Parties.
	  	 	22	  
			
	 XXI.
	  	 Expenses.
	  	 	22	  
			
	 XXII.
	  	 No Third Party Beneficiaries.
	  	 	22	  
			
	 XXIII.
	  	 Severability.
	  	 	23	  
			
	 XXIV.
	  	 No Waiver.
	  	 	23	  
			
	 XXV.
	  	 Cumulative Rights.
	  	 	23	  
			
	 XXVI.
	  	 Construction.
	  	 	23	  


  
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	 XXVII.
	  	 Further Assurances.
	  	 	23	  
			
	 XXVIII.
	  	 Survival.
	  	 	23	  
			
	 XXIX.
	  	 Entire Agreement; Modifications.
	  	 	23	  
			
	 XXX.
	  	 Glossary.
	  	 	24	  
			
	 XXXI.
	  	 Assignment.
	  	 	25	  
			
	 XXXII.
	  	 Governing Law.
	  	 	25	  
			
	 XXXIII.
	  	 Counterparts.
	  	 	25	  

 Appendices 
  

											
	 Appendix R.B
	  	 	–	  	  	 Program Terms and Conditions
	  	 	27	  
				
	 Appendix V.C
	  	 	–	  	  	 Transaction Information
	  	 	33	  
				
	 Appendix VI.C
	  	 	–	  	  	 Points Issuance Fee
	  	 	34	  
				
	 Appendix VI.D
	  	 	–	  	  	 Excluded Authorized Vendors and Authorized Providers
	  	 	39	  
				
	 Appendix VI.E
	  	 	–	  	  	 Reimbursement for Points Redemption
	  	 	40	  
				
	 Appendix VII.A
	  	 	–	  	  	 SHO’s Annual Marketing Program
	  	 	41	  
				
	 Appendix VII.C
	  	 	–	  	  	 Monthly Member Analytics
	  	 	42	  
				
	 Appendix XIII.A
	  	 	–	  	  	 Operating Committee
	  	 	46	  


  
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 Shop Your Way Rewards Retail Establishment Agreement 

            , 2012 

This Shop Your Way Rewards Retail Establishment Agreement (this “Agreement”) is between Sears Holdings Management
Corporation (“SHMC”) and Sears Hometown and Outlet Stores, Inc. (“SHO”). Each party to this Agreement is sometimes referred to herein as a “Party” and collectively as the
“Parties.” The date of this Agreement is the “Effective Date.” 
 Recitals 

A. SHMC maintains a rewards Program known as the Shop Your Way RewardsSM Program (the “Program”). The Program provides members with rewards points associated with purchases
of merchandise and services at participating retail establishments, which points may be redeemed for merchandise or services at selected establishments; and 
 B. SHO wishes to enroll in the Program so that SHO’s customers who are Program members may earn and redeem Points with respect to merchandise at SHO’s stores and websites all in accordance with
the current version of the “Terms and Conditions of the ShopYourWay Rewards Program” found on the SYWR website. The Terms and Conditions in effect as of the Effective Date are attached to this Agreement as Appendix R.B (as from time to
time amended and interpreted by SHMC the “Program Terms and Conditions”). 
 In consideration of the mutual covenants and
promises in this Agreement and other good and valuable consideration, the receipt and sufficiency of which each Party acknowledges, the Parties agree as follows: 
 I. Definitions. Section XXX of this Agreement, which begins on page 24, includes a glossary of defined terms. 
 II. Term. The duration of this Agreement will commence on the Effective Date and will continue for ten (10) years unless sooner terminated in accordance with the terms and conditions of this
Agreement (the “Term”). 
 III. The Program. SHMC will control and be responsible in all respects for the operation and
administration of the Program including (A) the Program Terms and Conditions and the other terms and conditions of the Program, (B) the terms and conditions of advertising and promoting the Program, (C) maintenance and retention of
Program records, (D) the terms and conditions of earning and redemption of Points by Members, (E) providing the Program to Members as advertised, and (F) any and all obligations and liabilities to Members regarding the offering and
fulfillment of the Program. Subject to applicable law and the next two sentences, 

  
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SHMC may amend or modify the Program at any time at its discretion, If an amendment or modification applies on a non-discriminatory basis to all Authorized Vendors and all Authorized Providers (a
“Complying Change”) and has a material adverse effect on SHO, SHO will provide prompt written notice to SHMC, and SHMC will use commercially reasonably efforts to provide an accommodation for SHO’s approval and consent, which
consent will not be unreasonably withheld. If SHMC is unable or unwilling to provide the accommodation, then the Complying Change will not be binding on SHO. SHMC’s interpretations of the Program Terms and Conditions will be final and binding
absent manifest error. SHMC will operate the Program in compliance with applicable law including with respect to the offering, marketing, advertising, and fulfillment of the Program, and applicable accounting principles. SHMC may provide monthly
Member analytics reports (with such content and in such format as SHMC determines in its sole discretion), marketing materials related to the Program, and other marketing initiatives as mutually agreed upon by the Parties and defined in Appendix
VII.A. Subject to the next sentence, SHMC reserves the right in its sole discretion to terminate any of the Additional Services (as defined in Appendix VII.A) upon prior notice to SHO. If SHMC determines that a termination is necessary to enable
SHMC to comply with applicable law or a change in applicable law, SHMC will use commercially reasonable efforts to provide SHO with prior notice to the extent practicable under the circumstances. SHMC’s changes to the SHMC Services will be
without additional obligations or consequences to either Party. 
 IV. Program Authorizations; Program is Exclusive. SHMC authorizes SHO,
on a non-exclusive basis and subject to and in accordance with the Program Terms and Conditions and this Agreement, (A) to represent to Members that Members may earn Points with respect to their Program-Eligible Purchases made from SHO,
(B) to accept the redemption of Points as payment for Program-Eligible Purchases made from SHO in accordance with the Program Terms and Conditions, and (C) to perform all other actions authorized or required by this Agreement. Except for
the Program, SHO will not participate in any rewards or points-issuance/redemption program that (A) awards, or authorizes the awarding of, points or other tangible economic benefits in connection with purchases of merchandise or services from
SHO or any of its Affiliates, or (B) authorizes SHO or any of its Affiliates to accept the redemption of points or other tangible economic benefits as payment with respect to purchases of merchandise or services from SHO or any of its
Affiliates. 
 V. Transaction Information. 
 A. SHO will deliver to SHMC, using delivery methods specified by SHMC from time to time, all information with respect to Program-Eligible Purchases made from SHO by Members including the following: Member
Number; merchandise or service purchased; purchase price paid; purchase location (such as particular store or online); date and time of day of purchase; associated returns, exchanges, adjustments, and related information; and tender type (not
including credit card numbers) (collectively, the “Transaction Information”). 

  
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 B. SHO will establish, and at all times during the Term maintain, the appropriate point-of
sale and related information systems to meet its enrollment obligations (the “POS System”) and use its commercially reasonable efforts to maximize enrollments. In accordance with prevailing retail-industry standards, the POS System
will accurately process, record, store, and permit retrieval of all Transaction Information. 
 C. The Transaction Information
will be delivered to SHMC in the format and with the frequency, and using the secure delivery methods, described in Appendix V.C. 
 VI.
Points. 
 A. Issuance of Points. In accordance with and subject to the Program Terms and Conditions, SHMC will
issue Base Points and Bonus Points to Members’ Accounts with respect to Program-Eligible Purchases and will take all related actions as SHMC determines are appropriate with respect to such purchases (including reflecting returns, exchanges, and
similar transactions) as those actions may affect the Members’ Accounts. 
 B. Bonus Point Offers. SHMC may make
Bonus Point Offers to Members (in accordance with and subject to the Program Terms and Conditions and this Agreement) to encourage Members to make Program-Eligible Purchases with SHO. Bonus Points offers may take various forms, such as, multiples of
Base Points awarded to Members for a Program-Eligible Purchase during the applicable offer period, a Bonus Point award for Program-Eligible purchases that exceed a certain amount, “Lifecycle Points” awarded at specific events or milestones
during Membership, or Points awarded for particular brands or purchases. SHMC will provide notice to SHO of any upcoming Bonus Point offers, and SHO may elect not to participate in the offer by providing SHMC with a timely notice of its intent
to opt-out. In the event SHO participates in any Bonus Offers, SHO shall pay a fee for any applicable Bonus Points earned at its establishments in accordance with the fee schedule in Appendix VI.C. The Parties may mutually agree in advance to
conduct Bonus Points Offers specific to SHO. 
 C. Points Issuance Fee. Appendix VI.C describes the Points Issuance Fees
that SHO will pay to SHMC with respect to the issuance of Base Points and Bonus Points in accordance with this Agreement, all of which fees are non-refundable regardless of the extent to which Points are redeemed. Points Issuance Fees related to
Bonus Points only will be subject to a quarterly true-up payment from SHO to SHMC triggered in the event the actual redemption rate of Bonus Points exceeds the assumed initial redemption rate, as further defined in Appendix VI.C. 

D. Redemption of Points. SHO will, on a non-exclusive basis, accept Points from all Members as partial or full payment for all
Program-Eligible Purchases in accordance with the Program Terms and Conditions and this Agreement and regardless of the means of payment tendered by Members for any portion of Program-Eligible Purchases that are not paid for with Points and
regardless of the merchandise and services purchased. Except as expressly provided in Appendix VI.D, SHMC may authorize, upon terms and conditions determined by SHMC in its sole discretion, additional third parties to redeem Points, including
Authorized Vendors and Authorized Providers. 

  
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 E. Reimbursement Upon Redemption. SHMC will reimburse SHO for Points that SHO, in
accordance with the Program Terms and Conditions and this Agreement, accepts from its customers that are Members as payment for Program-Eligible Purchases at the rate or rates specified in Appendix VI.E. 

F. Expiration of Points. SHMC will have no obligation to compensate a Member or SHO for expired Points earned by Members at SHO.

 G. Reconciliation and Payment. The amount or amounts that SHO owes to SHMC in accordance with this Agreement and the
amount or amounts that SHMC owes to SHO in accordance with this Agreement will be determined by SHMC on a monthly basis, which amounts will be netted against each other. The Party that owes an amount to the other Party after the netting will remit
the amount it owes to the other Party within five days of the reconciliation. 
 H. Differentiation. SHMC from time to
time in its sole discretion may establish multiple rates for earning Base Points and Bonus Points that differentiate among Members on the basis of, or that depend on, reflect, or are affected by, factors or considerations determined by SHMC in its
sole discretion, including the applicable Authorized Vendors or Authorized Providers from whom Program-Eligible Purchases are made, and Member achievement of specified levels of Program-Eligible Purchases, Qualifying Purchases, Qualifying
Prescriptions, or similar criteria. SHMC from time to time in its sole discretion may establish multiple rates for redemption of Base Points and Bonus Points that differentiate among Authorized Vendors, Authorized Providers, and other participants
in the Program on the basis of, or that depend on, reflect, or are affected by, factors or considerations determined by SHMC in its sole discretion, including the applicable Authorized Vendors or Authorized Providers from whom Program-Eligible
Purchases are made, and achievement of specified levels of Program-Eligible Purchases, Qualifying Purchases, Qualifying Prescriptions, or similar criteria. 
 I. Permits and Taxes. SHO will at its own expense: (i) obtain all permits and licenses required under any applicable law to operate its business; and (ii) pay and discharge all applicable
sales taxes and assessments which may be charged or levied, now or in the future, against SHO on any Program-Eligible Purchase made under this Agreement. Except as otherwise provided in the Tax Sharing Agreement dated
            , 2012 between SHO and Sears Holdings Corporation, each Party will be responsible for collecting and remitting their own taxes resulting from any income earned under this
Agreement. 

  
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 VII. Marketing. 
 A. Marketing by SHO. SHO may, on a non-exclusive basis, advertise and actively promote to its customers SHO’s membership in the Program, and may plan, create, and maintain an annual marketing
program as mutually agreed by the Parties, and defined in the marketing matrix set forth in Appendix VII.A, which marketing program, and all marketing materials used in the marketing program, must be approved by SHMC in advance. Before using any
advertising content in connection with the Program SHO will submit to SHMC: (i) all signs and advertising copy (including sales brochures, telemarketing scripts, newspaper advertisements, radio and television commercials and internet
advertising), and (ii) all plans and devices including coupons, contests, events, and giveaways intended to promote participation in the Program. SHO will not use any such advertising material or promotional plan or device without SHMC’s
prior written approval. SHMC may, in its sole discretion, disapprove or require modification of any advertising or other materials. SHMC may, upon reasonable notice, audit SHO’s advertising and promotional materials and practices to assess
SHO’s compliance with this Agreement and applicable law. All email and SMS communications sent by SHO pursuant to this section will be in compliance, to the extent applicable, with the CAN-SPAM Act and the Telephone Consumer Protection Act and
all other applicable laws and regulations promulgated from time to time by a governmental authority regarding communications to consumers. 
 B. Marketing by SHMC. SHMC may advertise the Program to the extent and via advertising channels that SHMC determines are appropriate with no limitations except for marketing related to SHO’s
participation in the Program, which will be conducted in accordance with the Marketing Matrix in Appendix VII.A. SHMC must submit all marketing materials containing SHO Marks or referencing SHO’s participation in the Program for SHO’s
prior approval, which may not be unreasonably withheld. 
 C. Monthly Member Analytics; . SHMC will provide SHO with the
Monthly Member Analytics reports detailed in Appendix VII.C. 
 D. License to Use Marks. 

1. SHMC Marks. SHMC hereby grants to SHO a non-exclusive, non-transferable, royalty-free license to use, solely in connection with
its participation and marketing of the Program in accordance with this Agreement, the trade names, trademarks, and service marks of SHMC (each a “SHMC Mark”), subject to SHMC’s prior review and approval of each use. SHO
acknowledges that the use of any SHMC Mark will not confer upon SHO any proprietary rights to the SHMC Mark, and SHO will not question, contest, or challenge SHMC’s ownership of a SHMC Mark. SHO will not register or attempt to register any SHMC
Mark, or any trade names, or trademarks similar to them. Nothing in this Agreement will be construed to bar SHMC from protecting its right to the 

  
 5 








 
exclusive ownership of a SHMC Mark against infringement or appropriation by any party or parties, including SHO. SHMC will have the right to control the quality and nature of the services
rendered in conjunction with all SHMC Marks, and SHO will conform to the standards set by SHMC in conjunction therewith. 
 2.
SHO Marks. SHO hereby grants to SHMC a non-exclusive, non-transferable, royalty-free license to use, solely in connection with its participation and marketing of the Program according to this Agreement, the trade names, trademarks, and
service marks of SHO (the “SHO Marks”), subject to SHO’s prior review and approval of each use. SHMC acknowledges that the use of any SHO Mark will not confer upon SHMC any proprietary rights to the SHO Marks, and SHMC will not
question, contest, or challenge SHO’s ownership of the SHO Marks. SHMC will not register or attempt to register any SHO Mark, or any trade names, or trademarks similar to them. Nothing in this Agreement will be construed to bar SHO from
protecting its right to the exclusive ownership of the SHO Marks against infringement or appropriation by any party or parties, including SHMC. SHO will have the right to control the quality and nature of the services rendered in conjunction with
any SHO Mark, and SHMC will conform to the standards set by SHO in conjunction therewith. 
 3. Injunctive Relief. Each
Party acknowledges that (a) the other Party’s trade names, trademarks, and service marks possess a special, unique and extraordinary character which makes it difficult to assess the monetary damage that the other Party or its affiliates
would sustain in the event of unauthorized use, (b) irreparable injury would be caused to the other Party by such unauthorized use for which there would be no adequate remedy at law, and (c) injunctive relief would be appropriate with
respect to any unauthorized use. 
 VIII. Enrollment of New Members. SHMC authorizes and directs SHO to enroll new Members at the point
of sale, online, via SMS, and call centers. SHO will use commercially reasonable efforts to maximize enrollments of its customers in the Program. SHO will make available to customers at the point of sale (or otherwise as agreed upon by the Parties)
all marketing materials provided by SHMC, including marketing materials detailing enrollment procedures. 
 IX. Ownership of Data. SHMC
is the sole and exclusive owner of the Member list, all Member enrollment information, Member passwords, Member Numbers, and Points accounts, and SHO has, and will have, no ownership interest of any kind whatsoever in the foregoing. SHO and SHMC are
joint owners of the Transaction Information except that SHMC is the sole owner of Member Numbers. SHMC may use the Transaction Information to operate the Program and for all other purposes in accordance with its privacy policy and applicable law
(including transfer to, and use by, third parties) without restriction. SHO may use the Transaction Information to communicate with its customers (including Members who are customers) and for the purpose of conducting its business, and for no other
purpose of any kind whatsoever. 

  
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 X. Confidentiality. 
 A. Confidential Business Information. All non-public information the other Party shares in connection with this Agreement, including all: business plans, strategies, forecasts, analyses, or
financial information; employee information, information technology information, other proprietary information, and the terms of this Agreement (collectively, “Confidential Business Information”), will be held in confidence by the
Party that receives the Confidential Business Information regardless of the manner or medium in which it is furnished or otherwise obtained. 
 B. Exceptions. Notwithstanding the provisions of Section X.A., Confidential Business Information will not include any information that (i) is obtained from a public source, other than due to
breach by such Party of this Section X, (ii) is obtained by one Party on a non-confidential basis from a source other than the disclosing Party (provided that such source, to such party’s knowledge, was not obligated to the disclosing
Party to keep such information confidential), (iii) was in one Party’s possession prior to disclosure by the other Party to it, (iv) is disclosed with the prior written consent of the disclosing Party whose information is proprietary
or non-public, or (v) is independently developed by or on behalf of a Party. Subject to the next sentence, nothing contained in this Agreement will limit the right of any of a party to disclose any information as required by applicable law or
by any governmental authority. If in the reasonable opinion of its legal counsel a Party is required by law to disclose any Confidential Business Information of the other Party in connection with any legal proceeding relating to this Agreement or
any other legal proceeding to an arbitrator, the court or other governmental authority, the receiving Party may disclose such information if it notifies the other Party within a reasonable time prior to disclosure and allows the other Party a
reasonable opportunity to seek appropriate protective measures. Each Party will notify the other Party promptly upon the discovery of the loss, unauthorized disclosure, or unauthorized use of Confidential Business Information and will indemnify and
hold harmless the other Party for such loss, unauthorized disclosure or unauthorized use, including attorneys’ fees. 
 C.
Confidential Personal Information. “Confidential Personal Information” means all information about Members, including Transaction Information and customer names, addresses, all contact information, customer lists, and
demographic or financial information. Confidential Personal Information may be used only as permitted in this Agreement. SHO will use the Confidential Personal Information only as necessary to perform its obligations under this Agreement and will
not disclose the Confidential Personal Information to any third party. SHO is liable for any unauthorized disclosure or use of Confidential Personal Information by its affiliates and its personnel. SHO will notify SHMC promptly upon the discovery of
the loss, unauthorized disclosure, or unauthorized use of the Confidential Personal Information and will indemnify SHMC and 

  
 7 








 
hold it harmless, for such loss, unauthorized disclosure or unauthorized use, including attorneys’ fees. All Confidential Personal Information constitutes Confidential Business Information,
however, the terms of this section govern the use of any Confidential Personal Information. 
 D. Injunctive Relief. Each
Party acknowledges that, in the event of a breach by it of its obligations in this Section X, the other Party would be irreparably and immediately harmed and could not be made whole by monetary damages alone. Accordingly, if a Party uses, discloses,
or is likely to breach its obligations in this Section X, in addition to any other remedy to which it may be entitled in law or equity, the non-breaching Party will be entitled to seek equitable relief, including temporary and permanent injunctive
relief and specific performance without the requirement of having to post a bond or other security and will be entitled to the recovery of its attorney’s costs, fees and expenses as part of such action. SHMC also will be entitled to recover all
pecuniary gain realized by SHO from its unauthorized use or disclosure of Confidential Business Information. 
 E. Data
Security. Each Party will establish, maintain and implement an information security program, including appropriate administrative, technical and physical safeguards, that is designed to (i) ensure the security and confidentiality of
Confidential Information, (ii) protect against any reasonably anticipated threats or hazards to the security or integrity of such Confidential Information, (iii) protect against unauthorized access to or use of such Confidential
Information that could result in substantial harm or inconvenience to any Member, and (iv) ensure the proper disposal of such Confidential Information. Each Party will use the same degree of care in protecting the Confidential Information of
the other Party against unauthorized disclosure as it accords to its own confidential customer information, but in no event less than a reasonable standard of care. 
 F. Unauthorized Use or Disclosure of Confidential Information. Each Party acknowledges that any unauthorized use or disclosure of Confidential Information of the disclosing Party or a Member might
cause immediate and irreparable harm to the disclosing Party for which money damages might not constitute an adequate remedy. Accordingly, each Party acknowledges that the other may seek injunctive relief to enforce the terms of this Section X in
addition to any other remedies the disclosing Party may have. Each Party will promptly (i) advise the other Party by telephone and in writing via facsimile of all security breaches that may have compromised any Confidential Information of such
Party or a Member or that may have constituted an unauthorized misappropriation, disclosure, or use by any Person of the Confidential Information of the other Party or a Member, in each case which may come to its attention, and (ii) take all
steps at its own expense reasonably requested by the other Party to limit, stop or otherwise remedy such misappropriation, disclosure, or use. 
 G. Return of Confidential Information. Upon the termination of this Agreement, each Party will return to the other Party all such Party’s Confidential Business Information, and will certify
such return or destruction upon request of the other Party. 

  
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 Each Party may retain Transaction Information, but SHO will return to SHMC all information
concerning the Program contained in the Transaction Information, including the Monthly Member Analytics defined in Appendix VII.C. 
 H. Publicity. Each Party will refrain from making any reference to this Agreement or to the other Party in the solicitation of business, unless the other Party gives its prior written
consent to such action and approves any press release or other publicity materials prior to their dissemination. 
 XI. Termination.

 A. For Breach. 
 1. Subject to the next sentence, SHO or SHMC may terminate this Agreement in the event of a material breach of this Agreement by the other Party if the breach is curable by the breaching Party and the
breaching Party fails to cure the breach within 30 days following its receipt of written notice of the breach from the non-breaching Party. If the breach is not curable by the breaching Party, the non-breaching Party may immediately terminate this
Agreement following the non-breaching Party’s delivery of notice to the breaching Party. 
 2. SHMC may terminate this
Agreement for cause if SHO fails to agree to a Complying Change made in accordance with Section III on or before the tenth day following SHO’s receipt of notice of the Complying Change. 

3. SHMC may terminate this Agreement if a Change in Control occurs. 

  
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 B. Termination for Convenience. Each Party, so long as no default by it described in
Section XI.A has occurred and is continuing, may terminate this Agreement for any reason or no reason following the fifth anniversary of the Effective Date by providing the other Party with one hundred eighty (180) days’ written notice of
its intent to terminate, which notice the terminating party may not deliver until after the fifth anniversary of the Effective Date. Termination in accordance with this section will be without penalty and further obligation of any kind except as
provided in subsection C of this section. 
 C. Termination in Response to a Termination of Other Agreements. Each Party
may terminate this Agreement (whichever Party is entitled to terminate, the “Terminating Party”) effective immediately upon 30-days’ advance written notice to the other Party if the Terminating Party or any of its Affiliates
terminates the Separation Agreement dated as of             , 2012 between SHO and Sears, Roebuck and Co., among others (the “Separation Agreement”), or the
Merchandising Agreement dated as of             , 2012 between SHO and Sears, Roebuck and Co., among others (the “Merchandising Agreement”) as a result of a material
breach of, or a material default by, the other Party or its Affiliates of their obligations in the Separation Agreement or the Merchandising Agreement, as the case may be. 
 D. Obligations at Termination or Expiration. Upon the termination of this Agreement in accordance with Sections XI.A, B or C, or upon the expiration of this Agreement: 

1. Each Party will perform, and reasonably assist the other Party in the performance of, all existing contractual obligations to Members;

 2. Each Party will promptly pay all undisputed amounts owed to the other; 

3. Each Party will cease use of the other party’s trade names, trademarks, and service marks, and will immediately cease use of, and
destroy (or if requested return), all of the other party’s Confidential Business Information; 
 4. All rights granted to
SHO in this Agreement will immediately terminate except to the extent necessary to enable SHO to fulfill its obligations to Members with respect to Program-Eligible Purchases, including continuing to accept all Points presented for redemption in
accordance with this Agreement prior to the date of termination. SHO will provide notice to its customers that they may no longer earn Points in connection with purchases of merchandise and services from SHO after the date of termination.

 XII. Books and Records; Audits. Each Party will keep and maintain books and records that accurately reflect its operations
according to industry standards, generally accepted accounting practices, and all applicable terms of this Agreement (the “Books and Records”). Each Party (the “Auditing Party”) will be permitted once each calendar
year to audit the other Party’s premises, Books and Records, and methods of operation in order to determine the audited Party’s compliance with the terms of this Agreement. Audits may occur at any time during normal 

  
 10 









 
business hours designated by the Auditing Party. At the Auditing Party’s sole option, audits may be conducted (i) by the Auditing Party, its third-party designee, or a combination of
the two, and (ii) at any location or locations reasonably specified by the Auditing Party. The audited Party will deliver copies of all Books and Records to a single audit location designated by the Auditing Party. The Auditing Party will bear
the reasonable costs and expenses of each audit. Each Party will retain its Books and Records for at least five years from the date of settlement of the last audit to which the Party was subject. 

XIII. Operating Committee; Dispute Resolution. 
 A. Operating Committee. The Parties will form a committee (the “Operating Committee”) that will address all day-to-day operational and other issues that may arise with
respect to this Agreement and all Disputes (as defined in section XIII.B.3). The Operating Committee will discuss all of these issues and will attempt to resolve informally all Disputes in accordance with section XIII.B.3. The Operating Committee
will consist of three employees of each Party that the Party designates. The initial representatives are listed on Appendix XIII.A. Each Party may replace one or more of its representatives at any time upon notice to the other Party. Each Party will
promptly fill all of its Operating Committee vacancies as they arise by notice to the other Party. Unless the members of the Operating Committee unanimously agree otherwise, the Operating Committee will meet at least once every calendar month during
the Term on the dates determined by the members of the Operating Committee. If the members of the Operating Agreement cannot agree on a date or a time for a particular monthly meeting the meeting will occur at 1:00 p.m. Central Time on the second
Thursday of the month at the offices of Sears Holdings Corporation, 3333 Beverly Road, Hoffman Estates, IL 60179 B6-D. At all times one of the members of the Operating Committee will serve as the Operating Committee’s Chairperson. The
Chairperson will rotate among the Operating Committee members on a monthly basis. The initial Chairperson is listed on Appendix XIII.A and the other Operating Committee members each will serve thereafter as Chairperson, on a monthly basis, in
alphabetical order based on last name. The Chairperson (i) will request that Operating Committee members provide meeting agenda items and (ii) will distribute to members, at least two business days in advance of each Operating Committee
meeting, an agenda for the meeting. 
 B. Dispute Resolution.  

1. Operating Committee’s Attempt to Resolve Dispute. If a Dispute arises, neither Party may cease to perform any of its
obligations in this Agreement in accordance with their terms or take any formal legal action (such as seeking to terminate this Agreement, seeking mediation in accordance with Section XIII.B.3., or instituting or seeking any judicial or
other legal action, relief, or remedy with respect to or arising out of this Agreement) unless the Party has first (1) delivered a notice of dispute (the “Dispute Notice”) to all of the members


  
 11 









 
of the Operating Committee and (2) complied with the terms and conditions of this Section XIII. At the first monthly meeting of the Operating Committee following the delivery of
the Dispute Notice (the “Dispute Resolution Meeting”) the Operating Committee will attempt to resolve all of the Disputes that are the subject of the Dispute Notice. Each Party will cause its designees on the Operating Committee to
negotiate in Good Faith to resolve all Disputes in a timely manner. If by the 30th calendar day following the Dispute Resolution Meeting the Operating Committee has not resolved all of the Disputes the Parties will proceed to mediate the unresolved Disputes (“Unresolved
Disputes”) in accordance with Section XIII.B.3. 
 2. Dispute Defined. Subject to the next sentence,
“Dispute” means each claim, controversy, dispute, and disagreement between (A) on the one hand, SHO or any of its Affiliates, or any of their respective shareholders, officers, directors, agents, employees, legal
representatives (including attorneys in their representative capacity), successors and assigns, and (B) on the other hand, SHMC or any of its Affiliates, employees, legal representatives (including attorneys in their representative capacity),
successors and assigns, in each case arising out of or relating to a Party’s performance, or failure to perform, one or more of its obligations in this Agreement. Disputes do not include claims, controversies, disputes, or disagreements with
respect to compliance with Section VII.D. or payment obligations with respect to amounts due in accordance with the terms and conditions of this Agreement that are not reasonably in dispute. 

3. Mediation of Unresolved Disputes. SHMC and SHO will attempt to resolve all Unresolved Disputes by
non-binding mediation. SHMC and SHO will negotiate in Good Faith to determine the mediator, the mediator’s compensation and related costs, and the applicable rules for the mediation. If by the 60th day following the Dispute Resolution Meeting SHMC and SHO have been
unable to settle an Unresolved Dispute the obligations of SHMC and SHO in this Section XIII will end with respect to the Unresolved Dispute. 

XIV. Representations and Warranties; Covenants of SHO. 
 A. Representations and Warranties of SHO. To induce SHMC to permit SHO to enroll in the Program, SHO, on behalf of itself and its Affiliates, makes the following representations and warranties to
SHMC, and each and all of which will be deemed to be restated and remade on each day from the Effective Date and at all times thereafter during the Term except that the representations and warranties in XIV.A(7) are made solely as of the Effective
Date. 
 1. Corporate Existence. SHO (i) is a corporation duly organized, validly existing, and in good standing
under the laws of the State of its incorporation; (ii) is duly licensed or qualified to do business as a corporation and is in good 

  
 12 









 
standing as a foreign corporation in all jurisdictions in which the nature of the activities conducted or proposed to be conducted by it or the character of the assets owned or leased by it makes
such licensing or qualification necessary to perform its obligations required in this Agreement except to the extent that its non-compliance would not have a material adverse effect on SHO’s ability to perform its obligations in this Agreement;
and (iii) has all necessary licenses, permits, consents, and approvals from or by, and has made all necessary notices to, all governmental authorities having jurisdiction, to the extent required for SHO to perform its obligations under this
Agreement, except to the extent that the failure to obtain such licenses, permits, consents or approvals or to provide such notices would not have a material adverse effect on SHO’s ability to perform its obligations required in this Agreement.

 2. Capacity; Authorization; Validity. SHO has all necessary corporate power and authority to (i) execute and enter
into this Agreement, and (ii) perform the obligations required of SHO under this Agreement and the other documents, instruments and agreements executed by SHO pursuant hereto. The execution and delivery by SHO of this Agreement and all
documents, instruments and agreements executed and delivered by SHO pursuant hereto, and the consummation by SHO of the transactions specified herein have been duly and validly authorized and approved by all necessary corporate action of SHO. This
Agreement (a) has been duly executed and delivered by SHO, (b) constitutes the valid and legally binding obligation of SHO, and (c) is enforceable in accordance with its terms. 

3. Conflicts; Defaults; Etc. The execution, delivery, and performance of this Agreement by SHO, its compliance with the terms
hereof, and its consummation of the transactions specified herein will not (i) conflict with, violate, result in the breach of, constitute an event which would, or with the lapse of time or action by a third party or both would, result in a
default under, or accelerate the performance required by, the terms of any material contract, instrument or agreement to which SHO is a party or by which it is bound, or by which SHO assets are bound, except for conflicts, breaches and defaults
which would not have a material and adverse effect upon SHO’s ability to perform its obligations under this Agreement, (ii) conflict with or violate the articles of incorporation or by-laws, or any other equivalent organizational document
of SHO, (iii) violate any applicable law, or conflict with or require any consent or approval under any judgment, order, writ, decree, permit or license, to which SHO is a party or by which it is bound or affected, except to the extent that
such violation or the failure to obtain such consent or approval would not have a material and adverse effect upon SHO’s ability to perform its obligations under this Agreement, (iv) require the consent or approval of any other party to
any contract, instrument or commitment to which SHO is a party or by which it is bound, which consent or 

  
 13 









 
approval has not been obtained, except to the extent that the failure to obtain such consent or approval would not have a material adverse effect upon SHO’s ability to perform its
obligations under this Agreement, or (v) require any filing with, notice to, consent or approval of, or any other action to be taken with respect to, any regulatory authority, except to the extent that the failure to obtain such consent or
approval would not have a material adverse effect upon SHO, the Program or SHO’s ability to perform its obligations under this Agreement. 
 4. Solvency. SHO is solvent. 
 5. No Default. Neither SHO nor any of
its Affiliates is in default with respect to any contract, agreement, lease, or other instrument to which it is a party or by which it is bound, except for defaults which would not have a material and adverse effect upon SHO’s ability to
perform its obligations under this Agreement, nor has SHO received any notice of default under any contract, agreement, lease or other instrument regarding a default which, if realized, would materially and adversely affect the performance by SHO of
its obligations under this Agreement. 
 6. No Litigation. No action, claim or any litigation, proceeding, arbitration,
investigation or controversy is pending or, to the best of SHO’s knowledge, threatened against SHO or any of its Affiliates, at law, in equity, or otherwise, which, if adversely determined, could have a material and adverse effect on SHO’s
ability to perform its obligations under this Agreement. 
 7. Intellectual Property. None of intellectual property of
SHO, including SHO Marks (together the “SHO IP”), infringes on the intellectual property rights of any third parties. SHO or its Affiliates is or are the owner(s) of the SHO IP and SHO has the right, power, and authority to license
to SHMC and authorized designees the use of the SHO IP, and such use by such licensees in a manner approved (or deemed approved) by SHO will not (i) violate any applicable law or (ii) infringe upon the right(s) of any third party, in
either case to an extent that would have a material and adverse effect upon the Program or SHO’s ability to perform its obligations under this Agreement. 
 8. Program Data. All data related to Program-Eligible Purchases, the Transaction Information, and product returns, exchanges, and similar information transmitted or sent to SHMC for purposes of
issuing to or redeeming Points of its Members is accurate, and the result of bona fide purchases or returns, free from fraud and misrepresentations. 
 B. Representations of SHMC. To induce SHO to enter into this Agreement and participate in the Program, SHMC, on behalf of itself and its Affiliates, makes the following representations and
warranties to SHO and each and all of which will be deemed to be restated and remade on each day from the Effective Date, and at all times thereafter during the Term except that the representations and warranties in XIV.B(7) are made solely as of
the Effective Date. 

  
 14 









 1. Corporate Existence. SHMC (i) is a corporation duly organized, validly
existing, and in good standing under the laws of the State of its incorporation; (ii) is duly licensed or qualified to do business and is in good standing as a foreign corporation in all jurisdictions in which the nature of the activities
conducted or proposed to be conducted by it or the character of the assets owned or leased by it makes such licensing or qualification necessary to perform its obligations in this Agreement except to the extent that its non-compliance would not have
a material and adverse effect on SHMC or the Program or SHMC’s ability to perform its obligations in this Agreement; and (iii) has all necessary licenses, permits, consents, or approvals from or by, and has made all necessary notices to,
all governmental authorities having jurisdiction, to the extent required for SHMC to perform its obligations under this Agreement, except to the extent that the failure to obtain such licenses, permits, consents, or approvals or to provide such
notices would not have a material and adverse effect on SHMC, the Program or SHMC’s ability to perform its obligations under this Agreement. 
 2. Capacity; Authorization; Validity. SHMC has all necessary power and authority to (i) execute and enter into this Agreement, and (ii) perform all of the obligations required of SHMC
under this Agreement and the other documents, instruments and agreements executed by SHMC pursuant hereto. The execution and delivery by SHMC of this Agreement and all documents, instruments and agreements executed and delivered by SHMC pursuant
hereto, and the consummation by SHMC of the transactions specified herein, have been duly and validly authorized and approved by all necessary corporate action of SHMC. This Agreement (a) has been duly executed and delivered by SHMC,
(b) constitutes the valid and legally binding obligation of SHMC, and (c) is enforceable in accordance with its terms. 

3. Conflicts; Defaults; Etc. The execution, delivery and performance of this Agreement by SHMC, its compliance with the terms
hereof, and the consummation of the transactions specified herein will not (i) conflict with, violate, result in the breach of, constitute an event which would, or with the lapse of time or action by a third party or both would, result in a
default under, or accelerate the performance required by, the terms of any material contract, instrument or agreement to which SHMC is a party or by which it is bound, except for conflicts, breaches and defaults which would not have a material and
adverse effect upon SHMC or the Program or SHMC’s ability to perform its obligations under this Agreement; (ii) conflict with or violate the articles of incorporation or by-laws, or any other equivalent organizational document(s) of SHMC;
(iii) violate any applicable law, or conflict with or require any consent or approval under any judgment, order, writ, decree, permit or license, to which 

  
 15 









 
SHMC is a party or by which it is bound or affected, except to the extent that such violation or the failure to obtain such consent or approval would not have a material and adverse effect upon
SHMC or the Program or SHMC’s ability to perform its obligations under this Agreement; (iv) require the consent or approval of any other party to any contract, instrument or commitment to which SHMC is a party or by which it is bound,
which consent or approval has not been obtained, except to the extent that the failure to obtain such consent or approval would not have a material and adverse effect upon SHMC’s ability to perform its obligations under this Agreement; or
(v) require any filing with, notice to, consent or approval of, or any other action to be taken with respect to, any regulatory authority. 
 4. Solvency. SHMC is solvent. 
 5. No Default. Neither SHMC nor any
of its Affiliates is in default with respect to any contract, agreement, lease, or other instrument to which it is a party or by which it is bound, except for defaults which would not have a material and adverse effect upon SHMC or the Program or
SHMC’s ability to perform its obligations under this Agreement, nor has SHMC received any notice of default under any such contract, agreement, lease or other instrument regarding a default which, if realized, would materially and adversely
affect the performance by SHMC of its obligations under this Agreement. 
 6. Books and Records. All of SHMC’s Books
and Records and the Books and Records of its Affiliates are in all material respects complete and correct and are maintained in accordance with applicable law, except to the extent that the failure to so maintain such books and records would not
have a material and adverse effect upon the Program or SHMC’s ability to perform its obligations under this Agreement. 
 7.
No Litigation. No action, claim, or any litigation, proceeding, arbitration, investigation or controversy is pending or, to the best of SHMC’s knowledge, threatened against SHMC or its Affiliates, at law, in equity or otherwise, which,
if adversely determined, could have a material and adverse effect on SHMC or the Program or SHMC’s ability to perform its obligations under this Agreement, nor, to the best of SHMC’s knowledge, do facts exist which might give rise to any
such proceedings. 
 8. Intellectual Property. None of intellectual property of SHMC, including the SHMC Marks (together
the “SHMC IP”), infringes on the intellectual property rights of any third parties. SHMC or its Affiliates is or are the owner(s) of the SHMC IP and SHMC has the right, power, and authority to license to SHO and authorized designees
the use of the SHMC IP, and such use by such licensees in a manner approved (or deemed approved) by SHMC will not (i) violate any applicable law or (ii) infringe upon the right(s) of any third party, in either case to an extent that would
have a material and adverse effect upon the Program or SHMC’s ability to perform its obligations under this Agreement. 

  
 16 









 C. Covenants of SHO. SHO makes the following covenants to SHMC, each and all of which
will survive the execution and delivery of this Agreement. 
 1. Maintenance of Existence and Conduct of Business. SHO
will preserve and keep in full force and effect its corporate existence. 
 2. Litigation. SHO promptly will notify SHMC
if it receives written notice of any litigation that, if adversely determined, would have a material and adverse effect on the Program or SHO’s ability to perform its obligations in this Agreement. 

3. Enforcement of Rights. Except as otherwise specified herein, SHO will enforce its rights against third parties to the extent
that a failure to enforce such rights could reasonably be expected to materially and adversely affect the Program or SHO’s ability to perform its obligations in this Agreement. SHO will not enter into any agreement which, at the time such
agreement is executed, could reasonably be expected to have a material and adverse effect on the Program. 
 4.
Compliance. SHO will at all times during the Term comply in all material respects with all law applicable to its activities. 
 5. Performance Standards. SHO will perform all of its obligations in this Agreement competently and in good faith, in a professional and commercially reasonable manner, in accordance with generally
accepted industry standards. 
 D. Covenants of SHMC. SHMC makes the following covenants to SHO, each and all of which
shall survive the execution and delivery of this Agreement. 
 1. Maintenance of Existence and Conduct of Business. SHMC
shall preserve and keep in full force and effect its corporate existence other than in the event of a change in control, merger or consolidation in which SHMC is not the surviving entity. 

2. Litigation. SHMC promptly shall notify SHO if it receives written notice of any litigation that, if adversely determined, would
have a material and adverse effect on the Program or SHMC’s ability to perform its obligations hereunder. 
 3.
Enforcement of Rights. Except as otherwise specified herein, SHMC shall enforce its rights against third parties to the extent that a failure to enforce such rights could reasonably be expected to materially and adversely affect the Program
or SHMC’s ability to perform its obligations hereunder. SHMC shall not enter into any agreement which, at the time such agreement is executed, could reasonably be expected to have a material and adverse effect on the Program or SHMC’s
ability to perform its obligations hereunder. 

  
 17 









 4. Compliance. SHMC shall at all times during the Term comply in all material
respects with Applicable Law applicable to its activities. 
 5. Books and Records. SHMC shall keep adequate records and
books of account with respect to its obligations under the Program. 
 6. Performance Standards. SHMC will perform all of
its obligations hereunder competently and in good faith, in a professional and commercially reasonable manner, in accordance with generally accepted industry standards. 
 7. Affiliate Compliance. SHMC shall, to the extent necessary, cause its Affiliates to comply with the terms of this Agreement. 
 XV. Indemnification. 
 A. SHO Indemnification of SHMC. From and after
the Effective Date SHO will indemnify and hold harmless SHMC, its Affiliates, their respective officers, directors, employees, agents and representatives and any Person claiming by or through any of them (collectively, the “SHMC Indemnified
Parties”) from and against and in respect of any and all losses, liabilities, damages, costs and expenses of whatever nature, including reasonable attorneys’ fees and expenses and all other costs and expenses of defense (collectively,
“Losses”) relating to third-party claims that are caused or incurred by, result from, arise out of, or relate to: 
 1. SHO’s negligence, recklessness or willful misconduct (including acts and omissions) relating to the Program; 
 2. Breaches and defaults by SHO or any of its Affiliates, or their respective officers, directors, employees or agents of any of the terms, conditions, covenants, representations, or warranties contained
in this Agreement; 
 3. Actions and omissions by SHMC taken or not taken at SHO’s request or direction pursuant to this
Agreement except where SHMC would have been otherwise required to take such action (or refrain from acting) absent the request or direction of SHO; 
 4. Fraudulent acts by SHO, its Affiliates, or their respective officers, directors employees or agents; 
 5. SHO’s failure to comply with applicable law unless such failure was the result of any action taken or not taken by SHO at the specific request or direction of SHMC; 

6. Allegations by a third party that the use of the SHO IP or any materials or documents provided by SHO constitutes (a) libel,
slander, or defamation, (b) unfair competition or misappropriation of another’s ideas or trade secret, (c) invasion of rights of privacy or rights of publicity, or (d) breach of contract or tortious interference; 

  
 18 









 7. Allegations by a third party that the use of the SHO IP or any materials or documents
provided by SHO other than at SHMC’s direction constitutes infringement of intellectual property, including trademark infringement or dilution, or copyright infringement. 
 B. SHMC’s Indemnification of SHO. From and after the Effective Date, SHMC will indemnify and hold harmless SHO, its Affiliates, their respective officers, directors, employees, agents and
representatives and any Person claiming by or through any of them (collectively, the “SHO Indemnified Parties”) from and against and in respect of any and all Losses relating to third-party claims, which are caused or incurred by,
result from, arise out of or relate to: 
 1. SHMC’s negligence, recklessness or willful misconduct (including acts and
omissions) relating to the Program; 
 2. Any breach by SHMC or any of its Affiliates, or their respective officers, directors,
employees or agents of any of the terms, conditions, covenants, representations, or warranties contained in this Agreement; 
 3.
SHMC’s failure to satisfy any of its obligations or liabilities to Members; 
 4. Actions and omissions by SHO taken or not
taken at SHMC’s request or direction pursuant to this Agreement except where SHO would have been otherwise required to take such action (or refrain from acting) absent the request or direction of SHMC; 

5. Fraudulent acts by SHMC, its Affiliates or their respective officers, directors employees or agents; 

6. Allegations by a third party that the use of the SHMC IP or any materials or documents provided by SHMC constitutes (a) libel,
slander, or defamation, (b) unfair competition or misappropriation of another’s ideas or trade secret, (c) invasion of rights of privacy or rights of publicity, or (d) breach of contract or tortious interference; 

7. Allegations by a third party that the use of the SHMC IP or any materials or documents provided by SHMC other than at SHO’s
direction constitutes infringement of intellectual property, including trademark infringement or dilution, or copyright infringement. 
 C. Procedures. In case any claim is made, or any suit or action is commenced, against an SHMC Indemnified Party or a SHO Indemnified Party, the Party in respect of which indemnification may be
sought under this Section XV (including for the benefit of its officers, directors, employees, agents or representatives or any Person claiming by or through any of them) (the “Indemnified Party”) will promptly give the other party
(the “Indemnifying Party”) notice thereof and the Indemnifying Party will be entitled to participate in the defense thereof and, with prior notice to the Indemnified Party given not 

  
 19 









 
later than twenty (20) days after the delivery of the applicable notice, to assume, at the Indemnifying Party’s expense, the defense thereof, with counsel reasonably satisfactory to
such Indemnified Party. After notice from the Indemnifying Party to such Indemnified Party of its election so to assume the defense thereof, the Indemnifying Party will not be liable to such Indemnified Party under this Section for any
attorneys’ fees or other expenses subsequently incurred by such Indemnified Party in connection with the defense thereof other than reasonable costs of investigation. 
 1. The Indemnified Party will have the right to employ its own counsel if the Indemnifying Party elects to assume such defense, but the fees and expenses of such counsel will be at the Indemnified
Party’s expense, unless (a) the employment of such counsel has been authorized in writing by the Indemnifying Party, (b) the Indemnifying Party has not employed counsel to take charge of the defense within twenty (20) days after
delivery of the applicable notice or, having elected to assume such defense, thereafter ceases its defense of such action, or (c) the Indemnified Party has reasonably concluded that there may be defenses available to it which are different from
or additional to those available to the Indemnifying Party (in which case the Indemnifying Party will not have the right to direct the defense of such action on behalf of the Indemnified Party), in any of which event attorneys’ fees and
expenses will be borne by the Indemnifying Party. 
 2. The Indemnifying Party will promptly notify the Indemnified Party if the
Indemnifying Party desires not to assume, or participate in the defense of, any such claim, suit or action, but such notice will not affect in any way the obligation of the Indemnifying Party in accordance with this Section XV to indemnify and hold
harmless the Indemnified Party against Losses consisting of reasonable attorneys’ fees and expenses and all other costs and expenses of defense. 
 3. The Indemnified Party or Indemnifying Party may at any time notify the other of its intention to settle or compromise any claim, suit or action against the Indemnified Party in respect of which
payments may be sought by the Indemnified Party in this Agreement, and the Indemnifying Party may settle or compromise any such claim, suit or action solely for the payment of money damages, but will not agree to any other settlement or compromise
without the prior consent of the Indemnified Party, which consent will not be unreasonably withheld or delayed. 
 D. Notice
and Additional Rights and Limitations. 
 1. If an Indemnified Party fails to give prompt notice of any claim being made or
any suit or action being commenced in respect of which indemnification under this Section XV may be sought, such failure will not limit the liability of the Indemnifying Party. The preceding sentence will not limit the Indemnifying Party’s
rights to recover for any loss, cost or expense which it can establish resulted from any failure to give prompt notice. 

  
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 2. This Section XV will govern the obligations of the Parties with respect to the subject
matter hereof but will not be deemed to limit the rights which any party might otherwise have at law or in equity. 
 XVI. Disclaimer.
EXCEPT AS OTHERWISE PROVIDED FOR IN THIS AGREEMENT, EACH PARTY DISCLAIMS ALL OTHER EXPRESS OR IMPLIED REPRESENTATIONS, WARRANTIES AND COVENANTS. FURTHER, SHMC AND SHO EACH ACKNOWLEDGE THAT RELIANCE ON ANY REPRESENTATION, WARRANTY OR COVENANT NOT
CONTAINED IN THIS AGREEMENT WILL BE DEEMED UNREASONABLE. 
 XVII. Exclusion of Consequential Damages; Limitation of Liability.
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES, WHETHER IN CONTRACT, TORT (INCLUDING
NEGLIGENCE AND STRICT LIABILITY) OR ANY OTHER LEGAL OR EQUITABLE PRINCIPLES, OR FOR ANY LOSS OF PROFITS OR REVENUE, ARISING IN CONNECTION WITH THIS AGREEMENT OR THE PERFORMANCE, OMISSION OF PERFORMANCE, OR TERMINATION OF THIS AGREEMENT WITHOUT
REGARD TO THE NATURE OF THE CLAIM (E.G., BREACH OF CONTRACT, NEGLIGENCE OR OTHERWISE), EVEN IF A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE FOREGOING LIMITATIONS WILL NOT APPLY TO CLAIMS FOR BREACH OF THE OBLIGATIONS OF
CONFIDENTIALITY (WHICH INCLUDES MISUSE OF TRANSACTION INFORMATION AND INFORMATION ABOUT THE PROGRAM), INDEMNIFICATION OR INTELLECTUAL PROPERTY INFRINGEMENT, OR PERSONAL INJURY, INCLUDING DEATH, AND DAMAGE TO TANGIBLE PROPERTY CAUSED BY THE NEGLIGENT
OR INTENTIONAL ACTS OF A PARTY, ITS AFFILIATES, OR THEIR RESPECTIVE PERSONNEL. 
 XVIII. Force Majeure. If either SHMC or SHO (the
“Excused Party”) is prevented from performing its obligations in this Agreement in accordance with their terms as the result of a condition or cause that did not arise or occur as the result of the Excused Party’s act or
failure to act and is beyond the Excused Party’s ability to avoid and is not directly or indirectly caused by, contributed to, or exacerbated by any of the Excused Party’s acts or failures to act or any of the acts or failures to act of
anyone acting on the Excused Party’s behalf, including work stoppages, strikes, lockouts or labor disputes, embargoes, casualties, acts of God, natural disasters, acts of terrorism, war or civil disturbances, and restraints of laws or
governments (each a “Condition or Cause”) but excluding all losses of market, and all other commercial contingencies and economic events (such as financial crises, recessions, depressions, and other economic downturns), the failure
to perform by the Excused Party will be excused only to that extent and 

  
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only so long as the Condition or Cause is existing. The Excused Party will promptly, but in all events within seven days, notify the other of the commencement and termination of the Condition or
Cause and include with the notice a statement estimating the effect of the Condition or Cause on the Excused Party’s ability to perform its obligations in this Agreement in accordance with their terms. If the Condition or Cause prevents the
Excused Party from performing its obligations in this Agreement in accordance with their terms for more than thirty consecutive calendar days either SHMC or SHO may terminate this Agreement upon delivery of written notice to the other, but the
terminating party may not seek to recover damages from the Excused Party resulting from the Condition or Cause. With respect to each Condition or Cause that results from a restraint of law or government, the Excused Party will make good-faith
efforts to cause the removal or repeal of the Condition or Cause. 
 XIX. Notice. 

Notices under this Agreement are sufficient if given by nationally recognized overnight courier service, certified mail (return receipt requested),
facsimile with electronic confirmation or personal delivery to the other party at the address below: 
  

							
	 If to SHMC:
	 	Sears Holdings Management Corporation	 	
		 	3333 Beverly Road	 	
		 	Hoffman Estates, IL 60179	 	
		 	Attn:	 	  
	 	
			
	 If to SHO:
	 	Sears Hometown and Outlet Stores, Inc.	 	
		 	  
	 	
		 	  
	 	
		 	Attn:	 	  
	 	

 XX. Relationship of Parties. For all purposes, including federal and state tax purposes, nothing contained in this
Agreement will be deemed or construed by the parties or any third party to create a partnership, joint venture or of any association between the Parties, and no act of either party will be deemed to create any such relationship. SHMC and SHO each
will take all additional actions as the other may request to evidence and affirm the non-existence of any such relationship, and that neither Party will become bound by any representation, act or omission of the other. SHO will not file suit using
the name of SHMC or any of its Affiliates. 
 XXI. Expenses. Except as expressly provided in this Agreement, each Party will be solely
responsible for the costs and expenses incurred by the Party in connection with the exercise of its rights and performance of its obligations under this Agreement. 
 XXII. No Third Party Beneficiaries. There are no third-party beneficiaries to this Agreement except that SHMC Indemnified Parties and SHO Indemnified Parties are intended third party beneficiaries
of Section XV. Except as provided in the preceding sentence, the Parties do not intend the benefits of this Agreement to inure to any third party or any rights, claims or causes of action against a Party to be created in favor of any person or
entity other than the other Party. 

  
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 XXIII. Severability. If any provision of this Agreement is determined to be unenforceable, the
Parties intend that this Agreement be enforced as if the unenforceable provisions were not present and that any partially valid and enforceable provisions be enforced to the extent that they are enforceable. 

XXIV. No Waiver. A Party does not waive any right under this Agreement by failing to insist on compliance with any of the terms of this Agreement
or by failing to exercise any right in this Agreement. Any waivers granted under this Agreement are effective only if recorded in a writing signed by the Party granting the waiver. 
 XXV. Cumulative Rights. The rights and remedies of the Parties under this Agreement are cumulative, and either Party may enforce any of its rights or remedies under this Agreement or other rights
and remedies available to it at law or in equity. 
 XXVI. Construction. Except as otherwise expressly provided in this Agreement, the
following rules will apply hereto: (a) the singular includes the plural and the plural includes the singular; (b) “or” is not exclusive and “include” and “including” are not limiting; (c) a reference to
any agreement or other contract includes any permitted modifications, supplements, amendments and replacements; (d) a reference in this Agreement to a Section or Appendix is to the Section of or Appendix to this Agreement unless otherwise
expressly provided; (e) a reference to a Section in this Agreement will, unless the context clearly indicates to the contrary, refer to all sub-parts or sub-components of any said article or section; (f) words such as “hereto,”
“hereof,” and “herein,” and other words of like import will, unless the context clearly indicates to the contrary, refer to the whole of this Agreement and not to any particular clause hereof; (g) a reference in this
Agreement contemplating certain action by a Party “after consultation with” or “in consultation with” another Party does not mean that the consent or approval of such other Party is required or contemplated in connection with
such action; (h) a reference to “mutually agree,” “mutually agreed” and “mutual agreement” with respect to a matter each individually means that a written agreement; and (I) “Will” expresses an
imperative, an obligation, and a requirement. 
 XXVII. Further Assurances. Each of SHMC and SHO will produce or execute such other
documents or agreements as may be necessary or desirable for the execution and implementation of this Agreement and the consummation of the transactions specified herein and to take all such further action as the other Party may reasonably request
in order to give evidence to the consummation of the transactions specified herein. 
 XXVIII. Survival. All provisions in this Agreement
that must survive its termination or expiration in order to give full effect to their language will so survive. 
 XXIX. Entire Agreement;
Modifications. This Agreement, including all Appendices attached which are incorporated by this reference, constitute the complete and final agreement of the parties pertaining to the Agreement. No modification of this Agreement is binding
unless it is in writing and signed by SHMC and SHO. 

  
 23 









 XXX. Glossary. The following terms are defined in the text of the Agreement, as indicated:

  

			
	 Term
	  	 Section

	 Actual Redemption Rate
	  	Appendix VI.C.
	 Additional Services
	  	Appendix VII.C
	 Affiliate
	  	This Section
	 Auditing Party
	  	VIII.
	 Authorized Provider
	  	Appendix R.B.
	 Authorized Vendor
	  	Appendix R.B.
	 Base Points
	  	Appendix R.B.
	 Bonus Points
	  	Appendix R.B.
	 Change in Control
	  	This Section
	 Competitor
	  	This Section
	 Confidential Business Information
	  	X.A.
	 Confidential Personal Information
	  	X.B.
	 Dispute
	  	XIII.C.3
	 Dispute Notice
	  	XIII.C.1
	 Executive Committee
	  	XIII.B
	 Indemnified Parties
	  	XV.
	 Initial Redemption Rate
	  	Appendix VI.C
	 Measurement Period
	  	Appendix VI.C
	 Member
	  	Appendix R.B.
	 Member Number
	  	Appendix R.B.
	 Operating Committee
	  	XIII.A
	 POS System
	  	V.B.
	 Program
	  	Recital A.
	 Program-Eligible Purchases
	  	Appendix R.B.
	 Program Terms and Conditions
	  	Recital B.
	 Purchase Points
	  	Appendix VI.C.
	 SHMC Mark
	  	VII.C.1.
	 SHO Mark
	  	VII.C.2.
	 Term
	  	II.
	 Transaction Information
	  	V.
	 True-Up Fee
	  	Appendix VI.C.
	 Unresolved Dispute
	  	XIII.C.2.


  
 24 









 “Affiliate” means (A) with respect to SHO, each of its subsidiaries, (B) with
respect to SHMC, Sears Holdings Corporation and each of its subsidiaries, and (C) with respect to a Competitor, each Person that directly or indirectly and by whatever means controls, is under common control with, or is controlled by, the
Competitor. 
 “Change in Control” means a Competitor becomes, directly or indirectly, at any time after the date of this
Agreement and by whatever means the beneficial owner of more than 50% of the total voting power of SHO’s outstanding securities entitled, to vote in, or carrying the right to direct voting with respect to, directly or indirectly and by whatever
means the election of SHO’s board of directors. 
 “Competitor” means each Person and each of its Affiliates that operates
a points-issuance/redemption business that competes in any material respect with the Program or with any other rewards or points-issuance/redemption business operated by SHMC or any of its Affiliates. 

“Person” means an individual, a sole proprietorship, a partnership, a joint venture, a limited liability company, a corporation, and all
other entities. 
 XXXI. Assignment. This Agreement may not be assigned by a Party without the prior written consent of the other.

 XXXII. Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of Illinois without
reference or regard to conflict of law provisions or other laws of any jurisdiction that would cause the application of the laws of any jurisdiction other than the State of Illinois. The Parties to this Agreement irrevocably submit to venue and
exclusive personal jurisdiction in the federal and state courts in Cook County, Illinois for any dispute arising out of this Agreement, and waive all objections to jurisdiction and venue of such courts. 

XXXIII. Counterparts. This Agreement may be executed in any number of counterparts, all of which together will constitute one and the same
instrument, but in making proof of this Agreement, it will not be necessary to produce or account for more than one such counterpart. Any facsimile or PDF e-mailed version of an executed counterpart will be deemed an original. 

  
 25 










							
	Sears Holdings Management Corporation	 	Sears Hometown and Outlet Stores, Inc.
				
	By:	 	  
	 	By:	 	  

	(signature)	 	(signature)
				
	Name:	 	  
	 	Name:	 	  

	(print)	 	(print)
				
	Title:	 	  
	 	Title:	 	  



  
 26 









 Appendix R.B 
 Program Terms and Conditions 
 Terms and Conditions of the
ShopYourWayRewardsSM Program 
 Effective Date April 12, 2012 

These Terms and Conditions (as they may be amended from time to time, these “Terms”) apply to all members of the ShopYourWay Rewards
Program (the “Program”) offered by Sears Holdings Management Corporation (together with its affiliated companies, “Company”). Upon your completion of the enrollment process you: (i) become a ShopYourWay Rewards
Member (“you” or “Member”), (ii) are issued a Member Number (“Member Number”), and (iii) agree that you have read and agree to these Terms. These Terms are subject to periodic changes that
Company may make in its sole discretion. Company is entitled to modify the participation requirements (the “Participation Requirements”) for Members at any time. Unless otherwise specified herein, all changes to these Terms and the
Participation Requirements apply to all Members, including Members enrolled before the date the changes take effect.  
 YOU
AGREE WITH COMPANY AS FOLLOWS: 
 1. Program-Eligible Purchases: “Program-Eligible Purchases” means
Qualifying Purchases and Qualifying Prescriptions. “Qualifying Purchases” means qualifying purchases of products and services (i) at Company’s Stores, (ii) from food concessions at Company Stores , (iii) from
Company-branded catalogs, (iv) at participating Company licensed businesses (products and services selected by these businesses from time to time), (v) from participating Company-branded and Company-sponsored websites, (vi) from
participating third-parties that are designated by Company from time to time in its sole discretion (“Authorized Vendors”), and (vii) from participating third-party vendors that are designated by Authorized Providers in
accordance with terms and conditions established by the Authorized Providers and approved by Company in its sole discretion. “Company Stores” means the following stores located in the United States: Sears; Sears Grand; Sears
Essentials; Sears Hometown Stores; Sears Home Appliance Showrooms; Sears Hardware; Sears Outlet; Sears Auto Centers; Sears Home Services; Kmart; Lands’ End; The Great Indoors; and mygofer. All references to the United States herein include
Puerto Rico. “Qualifying Prescriptions” means prescriptions filled at Kmart Pharmacies. “Authorized Providers” are third-party providers, such as networks, aggregators, sponsors, and consumer credit-card issuers,
that Company from time to time in its sole discretion authorizes to participate in the Program. 
 2. Excluded Purchases and
Layaway. The following are excluded from Qualifying Purchases (collectively “Non-Qualifying Purchases”): (i) sales and use taxes; (ii) service fees; (iii) donations to charitable organizations;
(iv) commercial account purchases; (v) purchases of lottery tickets, licenses, tobacco, alcohol, firearms, gift cards, postage, gasoline, and Western Union services; (vi) bill payments; (vii) credit card payments;
(viii) purchases that include a redemption of Points for some part or all of the purchase price; (ix) purchases of products and services via ServiceLive.com, including any fees paid to ServiceLive.com; (x) layaway payments made prior
to when you became a Member; (xi) shipping and delivery charges; (xii) purchases from third-party vendors (other than Authorized Vendors and other than participating third-party vendors that are designated by Authorized Providers) on
Company-branded and Company-sponsored websites if to complete a purchase the customer is redirected to the third-party vendor’s or other website (other than a Company-branded or Company-sponsored website); (xiii) Sears and Kmart auctions
on eBay; (xiv) the portion of any purchase price which is eliminated due to a coupon or other 

  
 27 









 
discount, (xv) purchases, transactions, and other items excluded by the terms and conditions established by Authorized Providers or by Authorized Vendors; (xvi) purchases outside the
United States and (xvii) other items determined by Company from time to time in its sole discretion. Layaway payments made after you become a Member will become Qualifying Purchases when you make your final layaway payment. The following are
not Qualifying Prescriptions (collectively “Non-Qualifying Prescriptions”): (A) prescriptions paid for in whole or in part by state or federal healthcare programs; (B) prescriptions filled by Kmart Pharmacies located in
AL, AR, NJ, MA, or NY; and (C) prescriptions for controlled substances filed by Kmart Pharmacies located in LA. 
 3. Earning
Points: When you present your Member Number at the point of sale in accordance with these Terms you earn base points on your Program-Eligible Purchase amount (“Base Points”) at the rate or rates established by Company from
time to time in its sole discretion. As of January 29, 2012 Members earn Base Points at the rate of one Base Point for every $0.10 of Qualifying Purchase amount, which rate may change without notice. If as of January 29, 2012 your
Qualifying Purchase amount is not a multiple of $0.10 you earn one additional Base Point if your Qualifying Purchase amount ends in $0.05 or more. For example, a Qualifying Purchase amount of $10.75 will earn 108 Base Points, while a Qualifying
Purchase amount of $10.74 will earn 107 Base Points. As of January 29, 2012 you earn 500 Base Points for each Qualifying Prescription filled regardless of the dollar amount of the Qualifying Prescription, which rate may change without notice.
Members residing in the United States may also earn additional Base Points on non-purchase activities pursuant to the terms and conditions governing those activities as adopted by Company from time to time (which terms and conditions are
incorporated into, and become a part of, these Terms). 
 Bonus Members may earn bonus points, in addition to Base Points, on specified
Qualifying Purchases pursuant to the terms and conditions of promotional offers (which terms and conditions are incorporated into, and become a part of, these Terms) published by Company from time to time (“Bonus Points”).
“Bonus Members” are Members who maintain a valid email address in their Program profile and who remain opted-in the Program to receiving promotional emails from the Program. Members who opt-out of receiving promotional emails from
the Program (“Base Members”) do not receive Bonus Points. Base Points and Bonus Points are together referred to in these Terms as “Points.” 
 If a Bonus-Point offer gives Bonus Members the opportunity to earn, in Points, a specified multiple or percentage of a Qualifying Purchase or dollar value (for example, “2x Points,” “2% of
value in Points,” or “$2 back in Points”) (a “Multiplier Offer”) the specified multiple, percentage, or dollar amount of Bonus Points earned will include the Base Points earned on the purchase. For example, a Bonus
Member will earn 1,000 Base Points on a $100 Qualifying Purchase. If a “2x” Multiplier Offer is applicable to the Qualifying Purchase, the total Points the Bonus Member will earn on the Qualifying Purchase will be 2,000. 

If Company, in its discretion, permits a Bonus Member to combine two or more Multiplier Offers on a Qualifying Purchase, the total number of Points the
Bonus Member will earn on the Qualifying Purchase will be equal to the sum of (i) the total Base Points earned for the Qualifying Purchase (the “Total Base Points”) and (ii) the Bonus Points for each Multiplier
Offer based on the specified multiple, percentage, or dollar amount for the Multiplier Offer less that portion of the Total Base Points that is attributable to the Multiplier Offer. For example, if a total Qualifying Purchase is $290 ($40 for shoes
and $250 for tools) and if Company permits a Bonus Member to combine two Multiplier Offers (one that is 2% in Points for shoes and the other that is 10x in Points for tools) the total Points that the Bonus Member will earn on the Qualifying Purchase
will be 25,800 calculated as follows: 2,900 Total Base Points (400 for shoes and 2,500 for tools) + 400 Bonus Points for shoes (800-400) + 22,500 Bonus Points for tools (25,000-2,500) = 25,800 total Points earned. 

POINTS ARE NOT EARNED ON (A) NON-QUALIFYING PURCHASES, (B) NON-QUALIFYING PRESCRIPTIONS, OR (C) PROGRAM-ELIGIBLE PURCHASES MADE PRIOR TO
YOUR ENROLLMENT DATE. BONUS POINTS ARE NOT EARNED ON PROGRAM-ELIGIBLE PURCHASES MADE PRIOR TO THE START DATE OF ANY BONUS POINT OFFER OR PROMOTION. Points are issued into your Points account within approximately 30 days from the date of the
Qualifying Purchases, except that Points for Qualifying Prescriptions may be issued on a quarterly basis and Points for Qualifying Purchases from Authorized Vendors and from participating third-party vendors that are designated by Authorized
Providers may be issued up to 90 days from the date of the Qualifying Purchases. You may review your Point balance in your Points account at 

  
 28 









 
shopyourway.com/rewards (the “Rewards Site”, or such other site as designated by Company from time to time). You do not acquire property rights in any Points in, or earned but
not yet issued into, your Points account. You may also earn Base Points and, if you are a Bonus Member, Bonus Points on purchases from, or using services provided by, eligible third parties (including without limitation Authorized Vendors and
Authorized Providers) pursuant to the terms and conditions governing those purchases as adopted, or approved, by Company from time to time (which terms and conditions are incorporated into, and become a part of, these Terms). 

Company from time to time in its sole discretion may establish multiple rates for earning Base Points and Bonus Points that differentiate among Members
on the basis of, or that depend on, reflect, or are affected by, Member achievement of specified levels of Program-Eligible Purchases, Qualifying Purchases, Qualifying Prescriptions, or similar criteria. 

Company from time to time in its sole discretion may sell or otherwise transfer Points for cash or other consideration to Members, Authorized Vendors,
and Authorized Providers. 
 4. Point Redemption and Expiration; Special Promotions. You may redeem Points in Your Points account
as determined by Company from time to time in its sole discretion. As of January 29, 2012 Members may redeem Points on all Program-Eligible Purchases except for purchases from Sears Home Services, purchases of Prescriptions, purchases from
Authorized Vendors, purchases from Authorized Providers, and purchases from participating third-party vendors that are designated by Authorized Providers. You may redeem your Points at the rate or rates determined by Company from time to time in its
discretion (the “Redemption Value”), which rate or rates are incorporated into, and become a part of, these Terms. You may redeem your Points only to pay all or a part of the purchase price for Program-Eligible Purchases. POINTS
HAVE NO CASH VALUE AND MAY NOT BE REDEEMED FOR CASH, CREDIT, OR OTHER VALUE. NO CREDIT, CASH, OR OTHER VALUE WILL BE GIVEN FOR UNUSED POINTS. ALL POINTS EXPIRE WITHOUT CREDIT, PAYMENT, OR OTHER VALUE TO YOU AT THE END OF THE CALENDAR QUARTER THAT
INCLUDES THE 12 MONTH ANNIVERSARY OF THE DATE THOSE POINTS WERE EARNED. Calendar-quarter end dates are March 31, June 30, September 30, and December 31. For example, Points earned on November 1, 2011 expire on
December 31, 2012. 
 From time to time Company may offer Members the chance to win various prizes, including Points. NO PURCHASE WILL BE
NECESSARY TO PLAY OR WIN these prizes. Rules and restrictions apply to these promotions and will be published with the applicable promotion. Further, Company may in its sole discretion, from time to time, also award Point(s) to Members, or to any
subset of Members. Notwithstanding anything to the contrary herein, Company may, in its sole discretion, attach additional or different terms to any Points awarded by Company, including, without limitation, establishing different (including shorter)
expiration dates for any Points provided by Company. 
 Company from time to time in its sole discretion may establish multiple Redemption
Values that differentiate among Members on the basis of, or that depend on, reflect, or are affected by, Member achievement of specified levels of Program-Eligible Purchases, Qualifying Purchases, or similar criteria. 

5. Returns: Any Points you earn on a Program Eligible Purchase are deducted from your Points account if you return the merchandise, or
cancel the service, comprising that Program Eligible Purchase, even if: (i) you have redeemed those Points prior to the return, and (ii) the deduction from your Points account results in a negative Points balance. 

6. Negative Points Balance. If you have a negative Points balance, you will still earn Points on Program-Eligible Purchases, which will be
applied to Your Points account until a positive Points balance is restored and thereafter. However, while your Points balance is negative, you will not be able to redeem Points until the positive Points balance is restored. If you return a Program
Eligible Purchase while your Points balance is negative, Company reserves the right to deduct an amount equal to the Redemption Value of that negative Points balance from the purchase price to be paid to you with respect to that return. For example,
if your Points balance is negative 1,000 Points and you return a $10.00 Program Eligible Purchase, then you will receive $9.00 in cash or store credit, and 1,000 Points (a Redemption Value of $1.00) will be applied to your Points account.


  
 29 









 7. Participation: There is no Program membership fee. As of April 12, 2012, the
Participation Requirements for each Member, are that such Member: (i) is 13 years of age or older (ii) is a resident of the United States (including Puerto Rico), or Mexico (iii) has provided to Company (as part of their Program
profile) such Member’s correct: (a) First Name, (b) Last Name, and (c) Zip Code, and (iv) has provided a valid unique email address that such Member has the right to use. Company may request proof of identification and
age to verify (A) your eligibility for Program membership, (B) membership participation, and (C) your compliance with these Terms. 
 If as a result in a change by Company in the Participation Requirements a Member no longer meets the requirements for participation, then, from the date of such change, such Member will no longer be
entitled to earn Points (and all purchases from the date of such change by such Member will be Non-Qualifying Purchases), unless and until such Member meets the revised Participation Requirements. Notwithstanding the foregoing, Members who have not
provided the information required in Section 7(iii) and Section 7(iv) above (but who were valid Members prior to imposition of such requirements), will be entitled to continue as full Members of the Program (with the same
rights and responsibilities as other Members); provided that Company reserves the right to remove this exception at any time. 
 If
you provide Company with your mobile telephone number (x) Company may send to your mobile telephone number SMS (text) and other messages, (y) with respect to those messages you may be charged data and message rates, and (z) if you
reply “stop” to a Company message to your mobile number Company may send to you an additional message confirming your “stop” reply.  
 8. Loss of Membership Number, Restrictions, and Taxes: You are entitled to only one Member Number and one Points account. Company will issue you a new Member Number and transfer your Point
balance, even if negative, to your new Member Number but only if you surrender your old Member Number. If you have more than one Points account we may, in our discretion, combine your Points accounts into one Points account. You will immediately
notify Company in the event of a lost or stolen Member Number. Unless you have timely notified Company of a lost or stolen Member Number, Company is not responsible for (i) lost or stolen Member Numbers or (ii) any misuse resulting from
lost or stolen Member Numbers. Your Member Number and, if you have a Membership card your Membership card, remain the property of Company and must be surrendered upon request. Member Numbers and Points are not transferable and may not be sold,
resold, exchanged, or bartered. Company may terminate Points, or any portion of your Points balance, at any time, without prior notice. Program benefits can be terminated by Company at any time regardless of how much you participate in the Program.
Company may adjust your Points account status or Points balance, at any time and without notice, due to any (A) computer error, (B) technical issues experienced by Company, (C) machine malfunction, (D) employee, customer, or
other error, or (E) fraud or other misuse of Points or the Program. All transactions involving Points are subject to review and verification by Company. All Points are for one-time use, and all transactions involving Points are final unless
otherwise determined by Company. Any violation of these Terms may result in the confiscation or cancellation of your Points and the suspension or termination of your Membership. Points you earn or are awarded may be subject to taxation, for which
you are solely responsible. 
 9. Overall Program Terms: The Program is void where prohibited by law. Participation in the Program
is subject to these Terms and all other terms and conditions, rules, policies, and procedures that Company may establish or change at any time and from time to time without notice. Company may change the Program at any time and without notice,
including but not limited to (i) changing the Program’s earning rates, (ii) changing the Program’s structure, (iii) removing or changing Points including the rate at which Points are earned, (iv) changing the Redemption
Value of Points, (v) raising or lowering Point levels, (vi) revising the procedures and rules for earning or redeeming Points, (vii) changing when Points expire, (viii) associating, combining, integrating, linking, or merging the
Program with 

  
 30 









 
other programs, and (ix) associating, combining, integrating, linking, or merging other programs with the Program. Company may make these changes even if these changes affect your ability to
use Points already accumulated. You are responsible for remaining knowledgeable about these Terms. The interpretation and application of these Terms is at the sole discretion and determination of Company, which in each case is final and conclusive.
Company assumes no responsibility for errors caused by equipment or system malfunctions, acts of God, or incorrect Member information. If you wish to discontinue your participation in the Program you may cancel at any time by contacting: ShopYourWay
Rewards Customer Relations at P.O. Box 365, Dodgeville, WI 53533 or by calling 800.991.8708 during business hours. Important Notice Concerning Credit Card / Financing Offers: THE INFORMATION YOU HAVE GIVEN COMPANY FOR THE PROGRAM MAY BE USED TO MAKE
PREAPPROVED CREDIT OFFERS TO YOU. The laws of the State of Illinois apply to the Program and these Terms without regard to any conflict of law rules that may require the application of the laws of another jurisdiction. 

If to access your Points account you use a user ID and password you are fully responsible for maintaining their confidentiality. You are fully
responsible for all activities that occur with respect to your user ID and password whether or not you authorize the activities. You must immediately notify Company of any unauthorized use of your user ID or password of which you become aware. You
acquire no property rights in your password, Member Number, or Points account. You may not give access to your Points account to any third-party on-line service, including but not limited to any points management service, points tracking service,
points aggregation service, or other service. 
 10. Confidential Arbitration: ALL DISPUTES COMPANY OR YOU HAS RELATING IN ANY WAY
TO THE PROGRAM (INCLUDING WITHOUT LIMITATION WITH RESPECT TO COMPANY’S DISCLOSURES, EMAIL AND MOBILE SMS (TEXT) MESSAGES COMPANY SENDS TO YOU, OR ANY CONTACT INFORMATION YOU SUPPLY TO COMPANY IN CONNECTION WITH THE PROGRAM), THESE TERMS, OR THE
REWARDS SITE WILL BE SUBMITTED TO CONFIDENTIAL ARBITRATION IN THE FEDERAL JUDICIAL DISTRICT IN WHICH YOU RESIDE, EXCEPT TO THE EXTENT THAT YOU HAVE, IN ANY WAY, VIOLATED OR THREATENED TO VIOLATE ANY COMPANY INTELLECTUAL PROPERTY RIGHT. All
arbitrations required by these Terms will be conducted under the rules then prevailing of the American Arbitration Association. The arbitrator’s award is binding and may be entered in any court of competent jurisdiction. To the fullest extent
permitted by applicable law no arbitration brought under, or with respect to, the Program, these Terms, any Company disclosure, any email or SMS (text) message that Company sends to you, any contact information you supply to Company in connection
with the Program, or the Rewards Site is to be joined to an arbitration involving any other party subject to these Terms whether through class arbitration proceedings or otherwise. 
 For arbitration claims you assert against Company in accordance with this section (but not for any arbitration claim against you) Company will pay all of your administrative, hearing, and
arbitrator’s fees and costs for the arbitration (but not the fees, expenses, and costs of your lawyers, experts, or witnesses) in excess of any filing fee you would have been required to pay to file the claim as a lawsuit in a state or federal
court (whichever is greater) in the judicial district in which you reside. Unless unlawful, Company will pay its, and you will pay your, lawyers’, experts’, and witness fees, expenses, and costs with respect to all claims. 

To the extent permitted by law, you will not agree to act as a representative or a private attorney general, or in any other representative capacity, or
participate as a member of a class of claimants in any lawsuit against Company in any court, or in arbitration, with respect to any claims arising under these Terms, the Program (including without limitation with respect to Company’s
disclosures, email and mobile SMS (text) messages Company sends to you, or any contact information you supply to Company in connection with the Program), or your status as a Member. This waiver will survive the termination of the relationship
between you and Company. 
 Company or you may seek injunctive relief in any state or federal court in Chicago, Illinois, USA, and Company and
you consent to the exclusive jurisdiction and venue in the state and federal courts in Chicago, Illinois, USA for injunctive relief purposes. 

  
 31 









 NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THESE TERMS, UNDER NO CIRCUMSTANCES IS COMPANY LIABLE FOR ANY
INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE, EXEMPLARY, OR CONSEQUENTIAL DAMAGES. 
 The employees of Company and its affiliates and individuals
eligible for an Associate discount are eligible to participate in the Program. See 88sears.com for Associate enrollment and participation guidelines. 
 © 2012 Sears Brands LLC. All rights reserved. 

These Terms and Conditions apply to the ShopYourWay Rewards Program offered by Company to ShopYourWay Rewards members. Please read these Terms and
Conditions carefully as they govern all aspects of the Shop Your Ways Rewards Program. Visit the Rewards Site for the most current Terms and Conditions. 

  
 32 









 Appendix V.C 

Transaction Information 

  
 33 









 Appendix VI.C 
 Points Issuance Fee 
 [***] 

  
 34 









 Appendix VI.D 
 Excluded Authorized Vendors and Authorized Providers 
 [If
applicable in accordance with Section VI.D] 
 None. 

  
 35 









 Appendix VI.E 
 Reimbursement for Points Redemption 
 [The following reflects a reimbursement rate of
100% of the Points face value in effect on 2-10-12] 
 SHMC will reimburse SHO at the rate of $0.001 for each Point accepted for redemption
by SHO in accordance with Section VI.E of the Shop Your Way Rewards Retail Establishment Agreement to which this Appendix is attached. 

  
 36 









 Appendix VII.A 
 SHO’s Annual Marketing Program 
  

  
 37 









 Appendix VII.C 
 Monthly Member Analytics 
 Monthly Member Analytics. SHMC will provide SHO with
monthly reports based on the Transaction Data SHMC receives from SHO (“Monthly Member Analytics”), in a form determined by SHMC which will consist of the following reports: 

 

			
	        SYWR Weekly Reporting Metrics
	
	        EARN BURN REPORT
		  	By Week, Month, Year
		  	     Business Units/Formats
		  	     Total Sales
		  	     SYWR Sales
		  	     % of SYWR to Total Sales
		  	     1% Base Rewards Expense
		  	     Fee
		  	     Total Base
		  	     BU Points Offer Expense
		  	     Total Offer Expense (Base + BU)
		  	     Rewards Redeemed
		  	     Total Sales in Redemption Transactions
		  	     Redemption Sales Multiplier
		  	     % of Expense Redeemed in BU**
		  	     SYWR Sales
		  	     Total Rewards Expense
		  	     Total Rewards Redeemed
	
	        WEEKLY BU EXPENSE REPORT
		  	By Week, Month, Year
		  	     By Actual and Plan for Current Year and Variances
		  	                             
   50142 SYWR BASE REWARDS
		  	                             
   50145 SYWR SERVICE FEE
		  	                             
   50156 BU OFFER REWARDS
		  	                             
   Total SYWR KPI


  
 38 










			
	        MONTLY BU EXPENSE REPORT
		  	By Month and Year
		  	     By Actual and Plan for Current Year and Variances
		  	                             
   BU Expense
		  	                             
   Base Offer Expense (1.25%)
		  	                             
   Total SYWR KPI
	
	        BU AND WH EXPENSE/SALES/TRANSACTION DETAIL
		  	By Week, Month, Year
		  	     By Whole House and BU Offer
		  	                             
   Format
		  	                             
   BU
		  	                             
   Offer ID
		  	                             
   Start Date
		  	                             
   End Date
		  	                             
   Offer Description
		  	                             
   SYWR Expense
		  	                             
   Qualifying Sales
		  	                             
   Transactions
		  	                             
   Members

  

			
	    SYWR Analytic Scorecard
	
	By Month and YTD
		  	Enrollment
		  	    Total Members Enrolled as of TY - PTD
		  	        Cumulative Enrollment by Month LY (PTD)
		  	        Shift MOM
		  	    New Enrollment by Month TY
		  	    New Enrollment by Month LY
		  	        Shift YOY
		
		  	Bonus Enrollment
		  	        Total Bonus Members Enrolled as of TY - PTD
		  	    Cumulative Bonus Enrollment by Month LY (PTD)
		  	            Shift MOM
		  	            Bonus Enrollment by Month TY


  
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		  	                Bonus Enrollment by Month LY
		  	            Shift YOY
		  	        Bonus Members Rate TY
		  	        Bonus Members Rate LY
		  	            Shift YOY
		
		  	Active Member Population
		  	    Total Members Shopped as of TY - PTD
		  	                Total Members 1x trip LY (PTD)
		  	            Shift MOM
		  	    Total Members Shopped in the last 12 Mnths TY
		  	    Total Members Shopped in the last 12 Mnths LY
		  	            Shift YOY
		  	            Total Members Shopped In Given Month TY
		  	            Total Members Shopped In Given Month LY
		  	            Shift YOY
		  	            First Visit TY
		  	            First Visit LY
		  	            Shift YOY
		  	            Active Member Shopping Rate TY
		  	            Active Member Shopping Rate LY
		  	            Shift YOY
		
		  	  Active Bonus Member Population
		  	    Bonus Members Shopped in last 12 Months - TY
		  	    Bonus Members Shopped in last 12 Months - LY
		  	            Shift YOY
		  	    Active Bonus Member Penetration TY
		  	    Active Bonus Member Penetration LY
		  	            Shift YOY
		
		  	  Shopping Behavior
		  	            Sales/ Transaction TY
		  	            Sales/ Transaction LY
		  	            Shift YOY
		  	    Sales/Member TY
		  	    Sales/Member LY
		  	            Shift YOY
		  	    Transactions Per Member TY


  
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		  	            Transactions Per Member LY
		  	                Shift YOY
		  	                Members who Shopped in 2 or more Bus TY
		  	                Members who Shopped in 2 or more Bus LY
		  	                Shift YOY
		  	            Cross Shopping Penetration Rate TY
		  	            Cross Shopping Penetration Rate LY
		  	                Shift YOY
		
		  	Redemption Behavior
		  	            PTD Redeemers Shopped in last 12 Months - TY
		  	            PTD Redeemers Shopped in last 12 Months - LY
		  	                Shift MOM
		  	        Unique Redeemers in Given Month TY
		  	        Unique Redeemers in Given Month LY
		  	                Shift YOY
		  	                    First Redemption TY
		  	    First Redemption LY
		  	                Shift YOY
		  	        Monthly Member Redemption Rate TY
		  	        Monthly Member Redemption Rate LY
		  	                Shift YOY
		  	            Redemption Multiplier TY
		  	            Redemption Multiplier LY
		  	                Shift YOY
		  	                    Active Redeeming Member Penetration TY
		  	                    Active Redeeming Member Penetration TY
		  	                Shift YOY
		  	            Redemption Sales % of Total Sales TY
		  	            Redemption Sales % of Total Sales LY
		  	                Shift YOY

 Additional reports containing specific data or trends may be provided for a fee or as otherwise mutually agreed upon by
the Parties in a separate addendum to this Agreement. 
 All Monthly Member Analytics shall be considered Confidential Business Information for
purposes of the Agreement, except that SHO may share Monthly Member Analytics with its third-party business consultants, attorneys, or accountants, provided such third-parties have executed written confidentiality agreements requiring they abide by
the confidentiality obligations of the Agreement. 

  
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 Appendix XIII.A 

Operating Committee 
 In
accordance with section XIII.A of the Shop Your Way Rewards Retail Establishment Agreement to which this Appendix is attached, SHO and SHMC hereby designate the following persons as members of the Operating Committee: 

 

			
	
	For SHO:
		
	1.	 	  

		
	2.	 	  

		
	3.	 	  

	
	For SHMC:
		
	1.	 	  

		
	2.	 	  

		
	3.	 	  

	
	Initial Chairperson:
	
	  



  
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