##### Table of Contents



Exhibit 10(c) MASTER SERVICES AGREEMENT between Sears, Roebuck and Co. and Computer Sciences Corporation DATED: June 1, 2004




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##### Table of Contents








Table of Contents(continued)

Page1.BACKGROUND AND OBJECTIVES1.1
    
    Information Technology Services
    
    
    11.2
    
    Goals and Objectives
    
    
    12.DEFINITIONS AND DOCUMENTS2.1
    
    Definitions
    
    
    32.2
    
    Master Agreement and Associated Contract Documents
    
    
    3(a)
    
    General
    
    
    3(b)
    
    Exhibits
    
    
    3(c)
    
    Statements of Work
    
    
    4(d)
    
    Service Addenda
    
    
    4(e)
    
    Appendices
    
    
    4(f)
    
    Transaction Document
    
    
    4(g)
    
    Interpretation and Precedence
    
    
    4(h)
    
    Ordering Affiliates
    
    
    52.3
    
    Appendices to this Master Agreement
    
    
    53.TERM3.1
    
    Term of Master Agreement, Exhibits, SOWs and Service Addenda
    
    
    5(a)
    
    Master Agreement
    
    
    5(b)
    
    Exhibits
    
    
    6(c)
    
    Service Addenda and SOWs
    
    
    63.2
    
    Extension
    
    
    64.SERVICES4.1
    
    Overview
    
    
    6(a)
    
    Services
    
    
    6(b)
    
    Included Services
    
    
    8(c)
    
    TI Exhibit
    
    
    8(d)
    
    Off-Shore Services
    
    
    8


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##### Table of Contents



Table of Contents(continued) Page4.2
    
    Eligible Recipient Services
    
    
    9(a)
    
    Eligible Recipients
    
    
    9(b)
    
    Eligible Recipient Requests
    
    
    94.3
    
    Acquisition and Divestiture Services
    
    
    9(a)
    
    Acquisition Support
    
    
    10(b)
    
    Migration of Systems
    
    
    10(c)
    
    On-Site Support
    
    
    10(d)
    
    Divestitures
    
    
    104.4
    
    Access to Specialized CSC Skills and Resources
    
    
    104.5
    
    Additional Services
    
    
    10(a)
    
    General
    
    
    10(b)
    
    New Services
    
    
    11(c)
    
    Efforts to Reduce Costs and Charges
    
    
    13(d)
    
    Charges for Contract Changes
    
    
    14(e)
    
    Additional Work or Reprioritization
    
    
    145.GOVERNANCE5.1
    
    Operational Procedures Manual
    
    
    14(a)
    
    Delivery and Contents
    
    
    14(b)
    
    Revision and Maintenance
    
    
    15(c)
    
    Compliance
    
    
    15(d)
    
    Modification and Updating
    
    
    165.2
    
    Change Control
    
    
    16(a)
    
    Compliance with Change Control Procedures
    
    
    16(b)
    
    System Change Costs
    
    
    16(c)
    
    Sears Approval - Cost, Adverse Impact
    
    
    17(d)
    
    Temporary Emergency Changes
    
    
    17(e)
    
    Implementation of System Changes
    
    
    17(f)
    
    Planning and Tracking
    
    
    17(g)
    
    Comparisons
    
    
    17
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##### Table of Contents



Table of Contents(continued) Page5.3
    
    Reports
    
    
    18(a)
    
    Reports
    
    
    18(b)
    
    Back-Up Documentation
    
    
    185.4
    
    Meetings
    
    
    18(a)
    
    Meetings
    
    
    18(b)
    
    Agenda and Minutes
    
    
    18(c)
    
    Eligible Recipient Meetings
    
    
    19(d)
    
    Telephone/Video Conferences
    
    
    196.CSC RESPONSIBILITIES6.1
    
    Cooperation with Sears Personnel
    
    
    196.2
    
    Subcontractors
    
    
    20(a)
    
    Use of Subcontractors
    
    
    20(b)
    
    Exempt Subcontractors
    
    
    20(c)
    
    Minority/Women-Owned Businesses
    
    
    206.3
    
    Quality Assurance
    
    
    216.4
    
    Architecture, Standards and Information Technology Planning
    
    
    21(a)
    
    CSC Support
    
    
    21(b)
    
    CSC Familiarity with Sears Standards
    
    
    22(c)
    
    Sears Authority and CSC Compliance
    
    
    22(d)
    
    Compliance with Sears Standards
    
    
    22(e)
    
    Financial, Forecasting and Budgeting Support
    
    
    236.5
    
    Technology
    
    
    23(a)
    
    CSC Briefings
    
    
    23(b)
    
    Currency
    
    
    23(c)
    
    Evaluation and Testing
    
    
    24(d)
    
    Approval by Sears
    
    
    24(e)
    
    Updates by Sears
    
    
    25(f)
    
    Unanticipated IT Change
    
    
    25(g)
    
    CSC Developed Advances
    
    
    25
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##### Table of Contents



Table of Contents(continued) Page(h)
    
    Services Evolution and Modification
    
    
    256.6
    
    Financial Filings and Notice of Change of Financial Condition
    
    
    25(a)
    
    Financial Filings
    
    
    25(b)
    
    Notice
    
    
    267.SEARS RESPONSIBILITIES7.1
    
    General Sears Responsibilities
    
    
    26(a)
    
    Sears Relationship Manager
    
    
    26(b)
    
    Cooperation
    
    
    26(c)
    
    Sears Personnel
    
    
    26(d)
    
    Contract Waivers
    
    
    267.2
    
    Sears Responsibilities
    
    
    26(a)
    
    Nature of Responsibilities
    
    
    26(b)
    
    Exception to CSC Performance
    
    
    27(c)
    
    Notice of Problems
    
    
    27(d)
    
    Sears Direction
    
    
    278.SEARS AND CSC FACILITIES8.1
    
    Service Facilities
    
    
    278.2
    
    Sears Facilities
    
    
    28(a)
    
    General
    
    
    28(b)
    
    Use of Sears Facilities
    
    
    298.3
    
    Access to Sears Networks
    
    
    298.4
    
    CSCs Responsibilities
    
    
    308.5
    
    Physical Security
    
    
    309.REQUIRED CONSENTS9.1
    
    Administrative Responsibility
    
    
    31(a)
    
    General
    
    
    31(b)
    
    Cooperation
    
    
    319.2
    
    Financial Responsibility
    
    
    31
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##### Table of Contents



Table of Contents(continued) Page9.3
    
    Contingent Arrangements
    
    
    32(a)
    
    General
    
    
    3210.SOFTWARE, EQUIPMENT, CONTRACTS AND ASSETS ASSOCIATED WITH THE PROVISION OF SERVICES10.1
    
    CSC Designated Contracts
    
    
    32(a)
    
    Assignment and Assumption
    
    
    32(b)
    
    CSC Designated Contracts Not Assignable by Commencement Date
    
    
    32(c)
    
    Non-Assignable CSC Designated Contracts
    
    
    33(d)
    
    Modification and Substitution
    
    
    33(e)
    
    Unidentified Third Party Contracts
    
    
    34(f)
    
    Managed Third Parties
    
    
    34(g)
    
    Notice of Defaults
    
    
    3410.2
    
    Acquired Assets
    
    
    3410.3
    
    Sears Provided Systems and CSC Provided Systems
    
    
    35(a)
    
    Inventory
    
    
    35(b)
    
    Non-Commercially Available Software
    
    
    35(c)
    
    CSC Managed Systems
    
    
    36(d)
    
    Financial Responsibility
    
    
    37(e)
    
    Operational Responsibility
    
    
    37(f)
    
    Benefits Pass-Through
    
    
    38(g)
    
    UCITA and CISG
    
    
    38(h)
    
    Other Matters
    
    
    38(i)
    
    Evaluation of Third Party Software, Equipment
    
    
    3910.4
    
    Notice of Decommissioning
    
    
    4010.5
    
    License to CSC Provided Systems
    
    
    4010.6
    
    License to Sears Provided Systems and CSC Managed Systems
    
    
    41(a)
    
    License to Sears Owned Materials
    
    
    41(b)
    
    License to Third Party Materials
    
    
    41
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##### Table of Contents



Table of Contents(continued) Page11.SERVICE LEVELS11.1
    
    Description of Service Levels
    
    
    42(a)
    
    Purpose of Service Levels
    
    
    42(b)
    
    Service Level Performance Standards
    
    
    4211.2
    
    Service Level Credits
    
    
    4211.3
    
    Problem Analysis
    
    
    4211.4
    
    Continuous Improvement Reviews
    
    
    4311.5
    
    Measurement and Monitoring
    
    
    4311.6
    
    Satisfaction Surveys
    
    
    44(a)
    
    General
    
    
    44(b)
    
    Sears Conducted Surveys
    
    
    44(c)
    
    Survey Follow-up
    
    
    4411.7
    
    Excessive Service Level Failure
    
    
    4412.PROJECT PERSONNEL12.1
    
    Key Personnel
    
    
    45(a)
    
    Approval of Key Personnel
    
    
    45(b)
    
    Continuity of Key Personnel
    
    
    45(c)
    
    Succession
    
    
    46(d)
    
    Location of Key Personnel
    
    
    46(e)
    
    Restrictions on Performing Services to Sears' Competitors
    
    
    4612.2
    
    CSC Account Executive
    
    
    4612.3
    
    Compensation of CSC Account Executive and Key Personnel
    
    
    46(a)
    
    CSC Account Executive
    
    
    46(b)
    
    Key Personnel
    
    
    47(c)
    
    Evaluation Input
    
    
    4712.4
    
    Qualifications and Retention of CSC Personnel
    
    
    47(a)
    
    Sufficiency and Suitability of Personnel
    
    
    47(b)
    
    Turnover Rate and Data
    
    
    47(c)
    
    Drug Testing
    
    
    47
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Table of Contents(continued) Page(d)
    
    Background Checks
    
    
    47(e)
    
    Fingerprinting
    
    
    4912.5
    
    Identification of CSC Personnel
    
    
    4912.6
    
    Substance Abuse
    
    
    4912.7
    
    Union Agreements
    
    
    4912.8
    
    CSC Responsibility
    
    
    4913.CHARGES13.1
    
    General
    
    
    50(a)
    
    Payment of Charges
    
    
    50(b)
    
    No Charge for Reperformance
    
    
    5013.2
    
    Pass-Through Expenses
    
    
    50(a)
    
    Procedures and Payment
    
    
    50(b)
    
    No Markup; No Fees
    
    
    51(c)
    
    Efforts to Minimize
    
    
    51(d)
    
    Disbursements
    
    
    51(e)
    
    Limited Agency
    
    
    51(f)
    
    Reimbursement for Substitute Payment
    
    
    5113.3
    
    Reimbursable Expenses and Sears Expense Policy
    
    
    5113.4
    
    Taxes
    
    
    52(a)
    
    Income Taxes
    
    
    52(b)
    
    Sales, Use and Property Taxes
    
    
    52(c)
    
    Taxes on Goods or Services Used by CSC
    
    
    52(d)
    
    Service Taxes
    
    
    52(e)
    
    Notice of New Taxes and Charges
    
    
    53(f)
    
    Efforts to Minimize Taxes
    
    
    53(g)
    
    Tax Audits or Proceedings
    
    
    5413.5
    
    Tax Filings
    
    
    5413.6
    
    Extraordinary Events
    
    
    54(a)
    
    Definition
    
    
    54
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Table of Contents(continued) Page(b)
    
    Consequence
    
    
    5513.7
    
    Proration
    
    
    5613.8
    
    Refundable Items
    
    
    56(a)
    
    Prepaid Amounts
    
    
    56(b)
    
    Refunds and Credits
    
    
    5613.9
    
    Repricing
    
    
    5613.10
    
    Benchmarking
    
    
    57(a)
    
    Required Benchmark Reviews
    
    
    57(b)
    
    Other Price Reviews
    
    
    57(c)
    
    General
    
    
    58(d)
    
    Results of Required Benchmarking
    
    
    58(e)
    
    Non-Competitive Charges
    
    
    5813.11
    
    Most Favored Customer
    
    
    5814.INVOICING AND PAYMENT14.1
    
    Invoicing
    
    
    59(a)
    
    Invoice
    
    
    59(b)
    
    Form and Data
    
    
    59(c)
    
    Credits
    
    
    60(d)
    
    Time Limitation
    
    
    6014.2
    
    Payment
    
    
    60(a)
    
    Timing
    
    
    60(b)
    
    Interest
    
    
    6014.3
    
    Set Off
    
    
    6014.4
    
    Disputed Charges
    
    
    60(a)
    
    Description and Explanation
    
    
    61(b)
    
    No Waiver
    
    
    61(c)
    
    Dispute
    
    
    61(d)
    
    Escrow
    
    
    61
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Table of Contents(continued) Page15.SEARS DATA AND OTHER CONFIDENTIAL INFORMATION15.1
    
    Sears Ownership of Sears Data
    
    
    6115.2
    
    Safeguarding Sears Data
    
    
    62(a)
    
    Safeguarding Procedures
    
    
    62(b)
    
    Reconstruction Procedures
    
    
    6215.3
    
    Confidentiality
    
    
    63(a)
    
    Confidential Information
    
    
    63(b)
    
    Confidential Business Information
    
    
    63(c)
    
    Confidential Personal Information
    
    
    65(d)
    
    Return or Destruction of Confidential Information
    
    
    67(e)
    
    Loss of Confidential Information
    
    
    67(f)
    
    No Implied Rights
    
    
    6715.4
    
    File Access
    
    
    6816.OWNERSHIP16.1
    
    CSC Provided Systems
    
    
    68(a)
    
    Ownership of CSC Provided Systems
    
    
    68(b)
    
    Limited Sears Related Businesses - Patents
    
    
    6816.2
    
    Sears Provided Systems
    
    
    7016.3
    
    Deliverables
    
    
    70(a)
    
    License to Sears
    
    
    70(b)
    
    Restrictions
    
    
    71(c)
    
    Source Code and Documentation
    
    
    7116.4
    
    General Knowledge
    
    
    7116.5
    
    Other Rights
    
    
    7116.6
    
    Copyright Legends
    
    
    7117.REPRESENTATIONS, WARRANTIES AND COVENANTS17.1
    
    By CSC
    
    
    71(a)
    
    Work Standards
    
    
    72
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Table of Contents(continued) Page(b)
    
    Maintenance
    
    
    72(c)
    
    Efficiency and Cost Effectiveness
    
    
    72(d)
    
    CSC Provided Systems/CSC Managed Systems/Deliverables
    
    
    73(e)
    
    Deliverables
    
    
    73(f)
    
    Non-Infringement
    
    
    73(g)
    
    Authorization
    
    
    74(h)
    
    Sears Code of Conduct and Privacy Policies
    
    
    74(i)
    
    Unauthorized Code
    
    
    74(j)
    
    Compliance with Laws
    
    
    76(k)
    
    Notice of Adverse Impact
    
    
    77(l)
    
    Interoperability
    
    
    77(m)
    
    Pass-Through
    
    
    7717.2
    
    By Sears
    
    
    77(a)
    
    Non-Infringement
    
    
    77(b)
    
    Authorization
    
    
    7817.3
    
    Disclaimer
    
    
    7817.4
    
    Effect
    
    
    7918.AUDIT RIGHTS18.1
    
    Contract Records
    
    
    7918.2
    
    Sears Audit
    
    
    79(a)
    
    General
    
    
    79(b)
    
    Operational and Financial Audits
    
    
    7918.3
    
    SAS 70 Audit
    
    
    8018.4
    
    Governmental or Other Non-Sears Audits
    
    
    8018.5
    
    Audit Process
    
    
    8118.6
    
    Security Testing
    
    
    8118.7
    
    Remedial Obligations
    
    
    8118.8
    
    General Procedures
    
    
    82(a)
    
    Access
    
    
    82
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Table of Contents(continued) Page(b)
    
    Notice
    
    
    82(c)
    
    Exit Conference
    
    
    82(d)
    
    Audit Workspace
    
    
    8218.9
    
    CSC Breach
    
    
    8219.INSURANCE AND RISK OF LOSS19.1
    
    Insurance
    
    
    83(a)
    
    Requirements
    
    
    83(b)
    
    Endorsements
    
    
    84(c)
    
    Certificates
    
    
    85(d)
    
    No Implied Limitation
    
    
    85(e)
    
    Insurance Subrogation
    
    
    85(f)
    
    Material Breach
    
    
    8519.2
    
    Risk of Loss
    
    
    86(a)
    
    General
    
    
    86(b)
    
    Waiver
    
    
    8620.INDEMNITIES20.1
    
    Indemnity by CSC
    
    
    86(a)
    
    Breach of This Agreement
    
    
    86(b)
    
    CSC Designated Contracts
    
    
    87(c)
    
    Licenses, Leases or Contracts
    
    
    87(d)
    
    Sears Data or Confidential Information
    
    
    87(e)
    
    Infringement
    
    
    87(f)
    
    Government Claims
    
    
    87(g)
    
    Taxes
    
    
    87(h)
    
    Shared Facility Services
    
    
    87(i)
    
    Affiliate, CSC Personnel or Assignee Claims
    
    
    88(j)
    
    Background and Drug Checks
    
    
    88(k)
    
    CSC Acts or Omissions
    
    
    88(l)
    
    Employment Claims
    
    
    88
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Table of Contents(continued) Page(m)
    
    Environmental Claims
    
    
    89(n)
    
    Violation of Laws
    
    
    8920.2
    
    Indemnity by Sears
    
    
    89(a)
    
    Breach of This Agreement
    
    
    89(b)
    
    Licenses, Leases or Contracts
    
    
    89(c)
    
    Pre-Commencement Date Matters
    
    
    89(d)
    
    CSC's Confidential Business Information
    
    
    89(e)
    
    Infringement
    
    
    89(f)
    
    Taxes
    
    
    90(g)
    
    Eligible Recipients' Acts or Omissions
    
    
    90(h)
    
    Eligible Recipient Claims
    
    
    90(i)
    
    Violation of Laws
    
    
    9020.3
    
    Infringement
    
    
    90(a)
    
    CSC Provided Systems, CSC Managed Systems or Deliverables
    
    
    90(b)
    
    Sears Provided Systems
    
    
    9120.4
    
    Indemnification Procedures
    
    
    91(a)
    
    Notice
    
    
    92(b)
    
    Procedure Following Notice of Defense
    
    
    92(c)
    
    Procedure Where No Notice of Assumption Is Delivered
    
    
    9220.5
    

Indemnification Procedures - Governmental Claims
    
    
    9220.6
    
    Mixed Claims
    
    
    9320.7
    
    Independent Obligations
    
    
    9321.LIABILITY21.1
    
    Force Majeure
    
    
    93(a)
    
    General
    
    
    93(b)
    
    Duration and Notification
    
    
    94(c)
    
    Substitute Services; Termination
    
    
    94(d)
    
    Disaster Recovery
    
    
    95(e)
    
    Payment Obligation
    
    
    95
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Table of Contents(continued) Page(f)
    
    Allocation of Resources
    
    
    9521.2
    
    Limitation of Liability
    
    
    96(a)
    
    Exclusions from Liability
    
    
    96(b)
    
    Liability Cap
    
    
    96(c)
    
    Other
    
    
    96(d)
    
    Exceptions to Limitations of Liability
    
    
    96(e)
    
    Items Not Considered Damages
    
    
    97(f)
    
    Waiver of Liability Cap
    
    
    98(g)
    
    Acknowledged Direct Damages
    
    
    9821.3
    
    Public Telecommunications Transmissions
    
    
    9922.DISPUTE RESOLUTION22.1
    
    Informal Dispute Resolution
    
    
    99(a)
    
    Initial Effort
    
    
    99(b)
    
    Escalation
    
    
    100(c)
    
    Provision of Information
    
    
    100(d)
    
    Prerequisite to Formal Proceedings
    
    
    10022.2
    
    Arbitration
    
    
    101(a)
    
    Arbitration
    
    
    101(b)
    
    Location and Decision
    
    
    101(c)
    
    Selection and Qualification of Arbitrators
    
    
    101(d)
    
    General
    
    
    10222.3
    
    Continued Performance
    
    
    102(a)
    
    General
    
    
    102(b)
    
    Non-Interruption of Services
    
    
    10323.TERMINATION23.1
    
    Termination for Cause
    
    
    103(a)
    
    Termination By Sears
    
    
    103(b)
    
    By CSC
    
    
    10523.2
    
    Termination for Convenience
    
    
    105
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Table of Contents(continued) Page23.3
    
    Termination Charges
    
    
    10523.4
    
    Termination Upon CSC Change of Control
    
    
    10623.5
    
    Termination Upon Sears Mergers and Acquisitions
    
    
    10723.6
    
    Termination for Insolvency
    
    
    10723.7
    
    Termination for Change in Laws
    
    
    10723.8
    
    Sears Rights Upon CSCs Bankruptcy
    
    
    108(a)
    
    General Rights
    
    
    108(b)
    
    Sears' Rights in Event of Bankruptcy Rejection
    
    
    10823.9
    
    Right to Assume Licenses in Bankruptcy
    
    
    10924.Rights Upon Expiration or Termination24.1
    
    Certain Rights
    
    
    10924.2
    
    Hiring
    
    
    10924.3
    
    Sears Provided Systems and Deliverables
    
    
    110(a)
    
    Deliver
    
    
    110(b)
    
    Destroy
    
    
    11024.4
    
    Sears Facilities
    
    
    11024.5
    
    CSC Provided Systems
    
    
    110(a)
    
    CSC Provided Circuits and Other Items
    
    
    110(b)
    
    CSC Provided Equipment
    
    
    110(c)
    
    CSC Provided Software
    
    
    11124.6
    
    CSC Subcontracts and Third Party Contracts
    
    
    11324.7
    
    Effect on Termination Charge
    
    
    11425.Termination Assistance Services25.1
    
    Duration
    
    
    114(a)
    
    Period of Provision
    
    
    114(b)
    
    Extension(s) of Services and Termination Assistance Services
    
    
    114(c)
    
    Firm Commitment
    
    
    115(d)
    
    Performance
    
    
    11525.2
    
    Scope of Termination Assistance Service
    
    
    116
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Table of Contents(continued) Page25.3
    
    General Support
    
    
    11625.4
    
    Rates and Charges
    
    
    11726.GENERAL26.1
    
    Binding Nature and Assignment
    
    
    117(a)
    
    Binding Nature
    
    
    117(b)
    
    Assignment
    
    
    117(c)
    
    Impermissible Assignment
    
    
    11826.2
    
    Entire Agreement; Amendment
    
    
    11826.3
    
    Notices
    
    
    11826.4
    
    Legal Expenses
    
    
    11926.5
    
    Counterparts
    
    
    12026.6
    
    Headings
    
    
    12026.7
    
    Severability
    
    
    12026.8
    
    Jurisdiction
    
    
    12026.9
    
    Governing Law
    
    
    12126.10
    
    Relationship of the Parties
    
    
    12126.11
    
    Consents and Approval
    
    
    122(a)
    
    General
    
    
    122(b)
    
    Written Approval
    
    
    12226.12
    
    Waiver of Default; Cumulative Remedies
    
    
    122(a)
    
    Waiver of Default
    
    
    122(b)
    
    Cumulative Remedies
    
    
    12226.13
    
    Survival
    
    
    12326.14
    
    Publicity
    
    
    12326.15
    
    Equitable Remedies
    
    
    12326.16
    
    Parties To This Agreement
    
    
    12326.17
    
    Covenant Against Pledging and Liens
    
    
    12426.18
    
    Hiring of Employees
    
    
    124(a)
    
    Hiring Restriction
    
    
    124
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Table of Contents(continued) Page(b)
    
    Permitted Hiring
    
    
    12426.19
    
    Further Assurances
    
    
    12426.20
    
    No Commitment and No Exclusivity
    
    
    12426.21
    
    Sears Rules and Compliance
    
    
    12526.22
    
    Interpretation
    
    
    12526.23
    
    Export Controls
    
    
    12626.24
    
    Covenant of Good Faith
    
    
    126
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MASTER SERVICES AGREEMENT THIS MASTER SERVICES AGREEMENT(this Master Agreement) is made as of June 1, 2004 (the
Effective Date) by and between Computer Sciences Corporation, a Nevada corporation (CSC), and
Sears, Roebuck and Co., a New York corporation (Sears). WHEREAS, Sears and CSC wish to set forth the terms and conditions under which CSC may provide
Sears and the other Eligible Recipients with certain services through one or more Transaction
Documents pursuant to this Master Agreement; NOW, THEREFORE, in consideration of the premises and the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Sears and CSC (collectively, the Parties and each, a Party) hereby agree
as follows: 
  1.
    BACKGROUND AND OBJECTIVES 
  1.1
    Information Technology Services.Sears desires that certain information technology services presently performed and managed
by or for Sears and the other Eligible Recipients by their respective Personnel, and certain
additional information technology services, as each is described in a Transaction Document,
be performed and managed by CSC. CSC has carefully reviewed Sears requirements, has
performed all due diligence it deems necessary, and desires to perform and manage such
information technology services for Sears and the other Eligible Recipients. 
  1.2
    Goals and Objectives.The Parties acknowledge and agree that the goals and objectives of the Parties in entering
into this Agreement are to create a special relationship between CSC and Sears, where CSCs
Personnel work cooperatively and proactively with Sears Personnel in a badge neutral
environment with the common goals of:  (a)
    Transforming the underlying architecture of Sears and the other Eligible
Recipients technical infrastructure to improve services;(b)
    Significantly reducing the current and ongoing cost to Sears and the other
Eligible Recipients for information technology services and delivery;(c)
    Providing a flexible, reliable, high-performance architecture for Sears and the
other Eligible Recipients technical infrastructure, that provides:  (i)
    Common processes across the Eligible Recipients;(ii)
    Elimination of duplication across the Eligible Recipients;




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(iii)
    Simplified end user interactions;(iv)
    Scalable and modular solutions;(v)
    Flexibility and speed in changing service delivery to meet the
Eligible Recipients evolving business requirements; and(vi)
    Technology currency;  (d)
    Performing all of the Services at or above existing service levels while
reducing costs, including providing:  (i)
    Improved quality and efficiency of information technology
delivery to the Eligible Recipients;(ii)
    Predictable and consistent service delivery;(iii)
    Industry best practices and delivery processes; and(iv)
    The right capability at the right time;  (e)
    Standardizing, simplifying and integrating the Eligible Recipients technical
infrastructure, including:  (i)
    Modernization and sustained infrastructure support of the
Eligible Recipients evolving business requirements;(ii)
    Access to current and evolving technologies;(iii)
    Rapid transformation to future state initiatives within
defined time frames; and(iv)
    Uniform technical infrastructure prioritized over best-of-class
for creation of future state;  (f)
    Continuously innovating and improving the performance and delivery of technical
services to the Eligible Recipients and the Eligible Recipients technical
infrastructure cost and Service Level metrics, including:  (i)
    Achieving and maintaining best-in-class pricing for the
technical capabilities and Service Levels for the Services received by the
Eligible Recipients under this Agreement;(ii)
    Utilizing enabling technologies to add value to the Eligible
Recipients business processes;(iii)
    Keeping Sears apprised of new and advanced technologies to
enhance the performance of the Eligible Recipients; and -2-




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(iv)
    Providing thought leadership in the selection and use of
enabling technologies;  (g)
    Allowing Sears to focus on its core competencies and allowing Sears technical
infrastructure management to focus on business relationships and requirements,
including:  (i)
    Delivering information technology services by proactively and
willingly participating on teams comprising CSC, Sears enterprise leadership
and staff, and Third Party vendors; and(ii)
    Providing flexibility to allow Sears and its Affiliates to meet
their changing business needs, align incentives, protect Sears Data and vital
business interests, allocate risks and to allow effective management of the
Services. 
  2.
    DEFINITIONS AND DOCUMENTS 
  2.1
    Definitions.Certain capitalized terms used in this Agreement are defined in Appendix A
(Glossary). Other capitalized terms used in this Master Agreement, the Appendices to this
Master Agreement or any Transaction Documents are defined in the context in which they are
used and have the respective meanings there indicated. 
  2.2
    Master Agreement and Associated Contract Documents. 
  (a)
    General. This Master Agreement is a master agreement that sets forth the
general terms and conditions upon which Sears and the other Eligible Recipients may
from time to time procure Services from CSC. Services shall be provided by CSC
pursuant to Transaction Documents entered into by CSC and Sears and/or Affiliate(s) of
Sears. The Parties intend that they shall enter into a Transaction Document before CSC
or its Affiliates provides any Services to Sears or the other Eligible Recipients. If
CSC or its Affiliates provides Services to Sears or the other Eligible Recipients in
the absence of such a Transaction Document or other written agreement signed by each
Party, this Agreement shall nevertheless apply to such Services. However, Sears shall
not be required to compensate CSC or its Affiliates for Services not described in a
Transaction Document or other written agreement executed by the duly authorized
representatives of both Parties, except as and to the extent expressly provided
otherwise in Section 4.5 (Additional Services). 
  (b)
    Exhibits. If Sears elects to procure Services from CSC that are unrelated to
the subject matter of any existing Exhibit (and CSC elects to provide such Services),
the Parties shall enter into an Exhibit for such Services. Separate Exhibits may be
entered into for discrete Services. Exhibits can be either: (i) commitments to procure
Services; or (ii) general descriptions of Services without a commitment to -3-




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procure Services, in which case Services shall not be deemed to have been ordered
under such Exhibit unless and until the Parties shall have entered into a subsequent
Statement of Work or Service Addendum that expressly references such Exhibit and
whereby Sears agrees to procure Services. Each Exhibit shall be subject to the
terms and conditions of this Master Agreement. All references in this Agreement to
Exhibits shall include Appendices, SOWs and Service Addenda thereunder. 
  (c)
    Statements of Work. Statements of Work or SOWs are transaction-level
documents that are entered into pursuant to an Exhibit. Each SOW shall be subject to
the terms and conditions of the applicable Exhibit and this Master Agreement. All
references in this Agreement to SOWs shall include all Appendices and Service Addenda
thereunder. 
  (d)
    Service Addenda. Service Addenda are transaction-level documents that are
entered into to add Services to an Exhibit or a SOW. Each Service Addendum shall be
subject to the terms and conditions of the applicable SOW, the applicable Exhibit and
this Master Agreement. All references in this Agreement to a Service Addendum shall
include all Appendices thereunder. 
  (e)
    Appendices. Appendices are ancillary documents attached to this Master
Agreement, an Exhibit, a SOW or a Service Addendum and the term Appendices shall
include Schedules and Attachments. Each Appendix shall be deemed incorporated by
reference into the Transaction Document that references it and shall be subordinate in
priority to such Transaction Document. 
  (f)
    Transaction Document. Transaction Document means the applicable Exhibit, SOW
and/or Service Addendum. 
  (g)
    Interpretation and Precedence. This Master Agreement and any Transaction
Documents are to be interpreted so that all of their respective provisions are given as
full effect as possible. In the event of a conflict between any of the documents
comprising this Agreement, the following order of precedence shall apply: (i) first, a
Service Addendum; (ii) second, a SOW; (iii) third, the applicable Exhibit; and (iv)
fourth, this Master Agreement; provided, however, that absent an
express statement therein to the contrary, no provision in a SOW, a Service Addendum or
an Appendix to any contract document shall be deemed to amend this Master Agreement or
any Exhibit (e.g., a different provision in an Exhibit would control over this Master
Agreement, but such a provision in a SOW shall not control over this Master Agreement
unless there is an express statement in such SOW that such provision was to control
over a particular Section of this Master Agreement). Notwithstanding the foregoing, if
a Transaction Document provides a more specific description of CSCs obligations or the
requirements relating to the Services to be performed by CSC or sets higher standards
than the terms of this Master Agreement or the applicable Exhibit, then such more
specific description, requirements or higher standard, as the case may be, shall not be
deemed to -4-




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conflict, or be inconsistent, with such terms of this Master Agreement or the
applicable Exhibit. 
  (h)
    Ordering Affiliates. Subject to Section 4.2(b) (Eligible Recipient
Requests), Affiliates of Sears may procure Services directly from CSC under this Master
Agreement by entering into a Transaction Document with CSC for such Services that
references this Master Agreement. Each Transaction Document, together with this Master
Agreement, shall be deemed to constitute a separate agreement between CSC and the
Affiliate of Sears that executed such Transaction Document. Any Affiliate of Sears
that executes a Transaction Document with CSC shall be deemed to be Sears hereunder
for purposes of such Transaction Document. Only the Affiliate of Sears that executes
such a Transaction Document shall be liable for Sears obligations under such
Transaction Document and CSC shall look solely to such Affiliate (and not to Sears) for
satisfaction of any liability arising thereunder or relating thereto. 
  2.3
    Appendices to this Master Agreement.This Master Agreement includes the following Appendices: Appendix A
    
    GlossaryAppendix B
    
    Sears Expense PolicyAppendix C
    
    CSC Drug Testing Policy
 
  3.
    TERM 
  3.1
    Term of Master Agreement, Exhibits, SOWs and Service Addenda. 
  (a)
    Master Agreement. The term of this Master Agreement (the Term) shall
commence as of 12:00:01 a.m., Eastern Time, on the Effective Date and continue until
11:59:59 p.m., Eastern Time, on May 31, 2009, unless this Master Agreement is extended
or terminated earlier in accordance with the terms and conditions of this Master
Agreement. Upon any expiration or termination of this Master Agreement, the terms and
conditions of this Master Agreement shall survive for purposes of any Transaction
Document still in effect as of such expiration or termination; provided,
however, that no new Exhibit shall be entered into after such expiration or
Termination. For purposes of clarity, the purpose of the preceding sentence is to cause
the parties to evaluate whether changes should be made to this Master Agreement prior
to entering into a new Exhibit after such five (5) year period. Absent the express
written agreement of the Parties, for Transaction Documents that have a Term that
extends past the expiration of this Master Agreement: (i) no renegotiation of this
Master Agreement upon its expiration shall affect such Transaction Document; and (ii)
the expiration or termination of this Master Agreement shall not affect the ability of
the Parties to enter into additional Exception Project Work, No Impact Proposals,
Service Addenda, SOWs or any other schedule or subsidiary document pursuant to such a
Transaction Document after such expiration or termination. -5-




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(b)
    Exhibits. The Term of each Exhibit (the Exhibit Term) shall be set
forth therein, unless such Exhibit is extended or terminated earlier in accordance with
the terms and conditions of such Exhibit or this Master Agreement. Upon any expiration
or termination of an Exhibit, the terms and conditions of such Exhibit shall survive
for purposes of any SOW and Service Addendum thereunder still in effect as of such
expiration or termination; provided, however, that no new SOW or
Service Addendum shall be entered into thereunder after such expiration or termination. 
  (c)
    Service Addenda and SOWs. Except as otherwise set forth in a Service Addendum
or SOW, the Term of each Service Addendum and SOW shall be coterminous with the Exhibit
pursuant to which it was entered into. 
  3.2
    Extension.CSC shall notify Sears in writing whether it desires to renew each Exhibit, and of the
proposed prices and other terms and conditions to govern such renewal, not less than
eighteen (18) months prior to the expiration of the applicable Exhibit Term. If CSC so
notifies Sears that it desires to renew such Exhibit, Sears shall inform CSC in writing
whether it also desires to renew such Exhibit not less than twelve (12) months prior to the
expiration of the applicable Exhibit Term, whereupon CSC shall promptly meet with Sears to
agree upon the prices and other terms and conditions for such renewal. Failure by either
CSC or Sears to provide notice at the time specified above shall be deemed to be notice of
intent not to extend such Exhibit, subject to the other rights of Sears under this
Agreement. If either Sears or CSC does not wish to renew such Exhibit, such Exhibit shall
expire at the end of the applicable Exhibit Term. IF BOTH CSC AND SEARS DESIRE TO RENEW
SUCH EXHIBIT BUT ARE UNABLE TO AGREE IN WRITING UPON RENEWAL PRICES AND OTHER TERMS AND
CONDITIONS AT LEAST SIX (6) MONTHS PRIOR TO THE EXPIRATION OF THE APPLICABLE EXHIBIT TERM,
SEARS MAY, UPON NOTICE TO CSC, ELECT TO EXTEND SUCH EXHIBIT TERM FOR ONE (1) YEAR AT THE
PRICES, TERMS AND CONDITIONS IN EFFECT DURING THE LAST YEAR OF THE THEN-CURRENT APPLICABLE
EXHIBIT TERM.If CSC and Sears are unable to reach agreement on renewal during such
extension period, if any, such Exhibit shall expire at the end of such extension period
unless earlier terminated in accordance with the terms and conditions of such Exhibit or
this Master Agreement, or further extended pursuant to Section 25.1(b) (Extension of
Services). 
  4.
    SERVICES 
  4.1
    Overview. 
  (a)
    Services. Commencing on the applicable Commencement Date, (i) CSC shall provide
the Services to Sears, and, upon Sears request, to other Eligible Recipients
designated by Sears, in each case, at levels of accuracy, quality, completeness,
timeliness, responsiveness and resource efficiency that are (1) at -6-




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least equal to those received by Sears or the other Eligible Recipients,
respectively, prior to the Commencement Date and (2) equal to or higher than the
applicable Service Levels and the accepted industry standards of first tier
providers of information technology services performing similar services, and (ii)
the Services that CSC shall provide under such Transaction Document shall consist of
the following, as they may evolve during the Term of such Transaction Documents or
be supplemented, enhanced, modified or replaced:  (i)
    General. The services, functions and responsibilities
described in such Transaction Document and the applicable portions of this
Master Agreement.(ii)
    Displaced Functions. The services, functions and
responsibilities performed during the twelve (12) months preceding such
Commencement Date by Sears Personnel who were displaced or whose functions were
displaced as a result of such Transaction Document, even if the service,
function or responsibility is not specifically described in this Master
Agreement or such Transaction Documents; provided, however,
that express statements in such Transaction Document that such services,
functions or responsibilities are out of scope shall control over this
Section 4.1(a)(ii) (Displaced Functions);(iii)
    Sears IT Base Case. The services, functions and
responsibilities reflected in those categories of the Sears IT Base Case that
CSC is assuming pursuant to such Transaction Document; provided,
however, that express statements in such Transaction Document that such
services, functions or responsibilities are out of scope shall control over
this Section 4.1(a)(iii) (Sears IT Base Case);(iv)
    Non-Retained Functions. The services, functions and
responsibilities that are not retained by Sears or the other Eligible
Recipients and that are reasonably related to the Services and of a nature and
type that would ordinarily be performed by the information technology
department of a generally comparable, major, multi-division retail
merchandising and services company, even if such services, functions and
responsibilities are not specifically described in this Agreement; and(v)
    Compliance Functions. All information technology and
telecommunication support services reasonably related to the Services that are
required for Sears and its Affiliates to meet (A) requirements imposed by
federal, state and local laws and regulations, and (B) their internal and
external audit and compliance requirements.(vi)
    Peak Business Season Readiness. All peak business
season readiness services (a/k/a holiday readiness) reasonably related to the
Services that Sears and its Affiliates deem prudent to prepare for their peak
business -7-




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periods. These include such things as forward deployment of important spare
parts, stress testing of various Systems, etc. 
  (b)
    Included Services. If any services, functions or responsibilities not
specifically described in this Agreement or any Transaction Document are an inherent,
necessary or customary part of the Services, including any Migration Services, Interim
Services, Termination Assistance Services and/or Transformation Services under any
Exhibit, and are (i) reasonably related to CSCs performance of the Services or (ii)
are required for proper performance or provision of the Services in accordance with
this Agreement, they shall be deemed to be included within the scope of the Services to
be delivered for the Charges, as if such services, functions or responsibilities were
specifically described in this Agreement or the applicable Transaction Document. 
  (c)
    TI Exhibit. For purposes of the TI Exhibit, the Services shall consist of four
(4) components: (i) the Migration Services; (ii) the Interim Services; (iii) the
Transformation Services; and (iv) the Future State Services, in each case as described
in greater detail therein. 
  (d)
    Off-Shore Services. Except as otherwise provided in a Transaction Document and
subject to the other terms and conditions of this Agreement, CSC may provide the
Services using services or facilities outside the United States (collectively, Foreign
Based Services), or install, transfer or otherwise use Sears Provided Systems, CSC
Managed Systems or Sears Data from outside the United States (collectively, Foreign
Use of Certain Systems), subject to the following.  (i)
    Foreign Based Services. CSC shall notify Sears at
least 180 days in advance of the commencement of such Foreign Based Service and
such notice shall specifically describe what Services will be performed in each
foreign jurisdiction. Sears shall have the right to reject the use of such
Foreign Based Service; provided, that if such Foreign Based Service was
a CSC initiated replacement for a Service Sears had already subscribed for
under this Agreement, then the parties shall equitably adjust the Charges under
the applicable Transaction Document to reflect the actual amount of lost cost
savings to CSC, if any, because of Sears refusal to permit the use of such
Foreign Based Service; provided further, that if: (a) such
proposal would violate any of CSCs other obligations under this Agreement
(e.g., compliance with Laws), or (b) Sears is otherwise entitled to reject such
proposal under any other provision of this Agreement; then, in each such case,
there will be no such adjustment to the Charges under this Agreement.
Discussions concerning the equitable adjustment shall commence as soon as Sears
indicates that Sears is considering rejecting the use of such Foreign Based
Service. CSC shall provide Sears any information Sears reasonably requests in
connection with evaluating the use of such Foreign Based Services and the
related cost savings. -8-




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(ii)
    Foreign Use of Certain Systems. CSC shall notify Sears
at least 180 days in advance of the commencement of any Foreign Use of Certain
Systems and such notice shall specifically describe which Systems will be used
in each foreign jurisdiction. Sears shall have the right to reject, in its
sole discretion, without any change in the applicable Charges, any proposal
that involves Foreign Use of Certain Systems. If Sears does approve such a
proposal, CSC shall be responsible for obtaining, prior to commencement of such
foreign use, at its expense, any Required Consents required from Third Parties
in connection with such Foreign Use of Certain Systems (e.g., approval from
Software licensors, etc.).(iii)
    Data Communications. Except as otherwise expressly
set forth in a Transaction Document, to the extent necessary to provide
Foreign Based Services, CSC shall, without separate Charge, provide data
network connectivity between: (i) CSCs data connection to the Eligible
Recipients United States facilities and (ii) the Foreign Based Services.(iv)
    Further Information. CSC shall promptly provide to Sears any
information Sears reasonably requests, in connection with any proposal for
Foreign Based Services or Foreign Use of Certain Systems. 
  4.2
    Eligible Recipient Services. 
  (a)
    Eligible Recipients. CSC shall provide the Services to Eligible Recipients
designated by Sears from time to time. Except as provided in Section 4.5
(Additional Services) or otherwise agreed by the Parties, such Services shall be
performed in accordance with the terms, conditions and prices (excluding any
non-recurring transition or start-up activities specific to such Eligible Recipients
which shall be subject to Section 4.5 (Additional Services)) then applicable to
the provisions of the same Services to existing Eligible Recipients. To the extent a
designated Eligible Recipient shall receive less than all of the Services, Sears shall
designate the categories of Services to be provided by CSC to such Eligible Recipient. 
  (b)
    Eligible Recipient Requests. CSC shall promptly inform the Sears Relationship
Manager of requests for New Services from Eligible Recipients and shall submit any
proposals for such New Services to the Sears Relationship Manager. Neither CSC nor its
Affiliates shall provide New Services to any Eligible Recipients without the prior
written approval of the Sears Relationship Manager. 
  4.3
    Acquisition and Divestiture Services.CSC shall provide the following Services, at no additional charge and as part of the base
Services, related to acquisitions or divestitures by Sears or any other Eligible Recipient.
Services that would require CSC to create a new infrastructure to support an acquired Entity
or to migrate Sears to an acquired Entitys Systems shall be subject to Section
4.5(b) (New Services). -9-




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(a)
    Acquisition Support. With respect to a potential acquisition by any Eligible
Recipient, upon Sears request, CSC shall provide acquisition support (including
assessments of the current technology environments to be acquired, potential
integration approaches and the potential net economic impact of the acquisition in
connection with the Services) as reasonably necessary to assist any Eligible
Recipients assessment of the portion of the acquisition to which the Services shall
relate. Such support shall be provided within the time frame reasonably requested by
Sears or as required by the timing of the transaction. 
  (b)
    Migration of Systems. As requested by Sears, CSC shall migrate all or some of
the Systems, applications and data of the acquired Entity to the Eligible Recipients
existing environment and/or migrate all or some of the Systems, applications and data
of Eligible Recipients to the environment of the acquired Entity. As requested by
Sears, CSC shall, following the integration, provide the Services as they apply to the
newly integrated acquired Entity or business. 
  (c)
    On-Site Support. As requested by Sears, CSC shall provide CSC Personnel to
staff vacancies and to provide management for the information technology functions
needed to support an acquisition, including on-site support at the location of the
acquired Entity or business. 
  (d)
    Divestitures. From time to time, any Eligible Recipient may divest business
units. In such cases, as and to the extent requested by Sears, CSC shall provide
transition support services to the Eligible Recipients, the divested business unit and
the acquirer, and shall continue to provide such Services for a period of up to
twenty-four (24) months after such divestitures as requested by Sears. Any revenues,
resources or other similar usage measures in connection with services that are the same
as, or similar to, the Services and that are obtained by any Eligible Recipients
divested business unit under a separate agreement between such business unit (or any
acquiring entity or successor thereof) and CSC, shall count toward the satisfaction of
any revenue, resource or other similar usage requirements under this Agreement. 
  4.4
    Access to Specialized CSC Skills and Resources.Upon Sears request, CSC shall provide the Eligible Recipients with prompt access to CSCs
specialized services, CSC Personnel and resources and associated Software, Equipment and
Systems. The foregoing shall be provided on an expedited basis, taking into account the
relevant circumstances, in the event of a service disruption (the Specialized Services). 
  4.5
    Additional Services. 
  (a)
    General. If Sears requests CSC to perform any services not already included in
the Services, then CSC shall perform such services at no additional Charge to any
Eligible Recipient, except to the extent such services constitute New Services. If -10-




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CSCs performance of such services results in a net reduction in CSCs costs of
providing the Services, CSC shall provide Sears a credit in the amount of such
savings. If Sears requests that CSC provide Services that CSC believes to be New
Services, CSC may make a proposal for New Services in accordance with Section
4.5(b) (New Services). 
  (b)
    New Services.  (i)
    No Impact Proposal. If Sears requests that CSC perform
New Services, CSC shall first perform an analysis to determine the means, if
any, by which CSC can complete such New Services without (1) additional charges
to Sears, (2) modifications to any Transaction Document, or (3) any adverse
impact to other Services under this Agreement, and, if CSC can do so, CSC shall
then: (A) document in writing such a proposal (each a No Impact Proposal),
(B) deliver a written copy of any such No Impact Proposal to Sears, and (C)
shall promptly proceed to provide such New Services in accordance with such
proposal.(ii)
    Service Addendum.  (1)
    Development of Service Addendum. If CSC
determines that CSC cannot formulate a No Impact Proposal, CSC shall
promptly complete a Service Addendum for such New Services. CSC shall
deliver to Sears with such Service Addendum a specific list of
alternatives that were explored as possible No Impact Proposals as well
as any adverse consequence CSC anticipates under such Service Addendum.
CSC shall prepare and deliver any Service Addendum required by this
Agreement, at no additional charge to Sears, within ten (10) days of
its receipt of Sears request; provided, however, that CSC shall use
all commercially reasonable efforts to respond more quickly in the case
of a pressing business need or an emergency situation. Sears shall
provide such information as CSC reasonably requests in order to prepare
such proposed Service Addendum. Such proposed Service Addendum shall
include, among other things, the following at a level of detail
sufficient to permit Sears to make an informed business decision for
those New Services not already covered by this Agreement: (A) a
project plan; (B) a fixed price or a time and materials price estimate
for new Charges required for the New Service, if any, and a breakdown
of such Charges by items of consumption (e.g., license and maintenance
fees for CSC Provided Software, number of hours of services, price,
service type, etc.); (C) a description of any additional Service Levels
to be associated with such New Service (or changes to existing Service
Levels); (D) a schedule, including major milestones, for commencing and
completing the New Service; (E) a description of the new CSC Provided
Systems to be provided by CSC in connection with the New Service; (F) a -11-




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description of any other software, hardware and other resources,
including resource unit utilization, necessary to provide the New
Service; (G) any additional or different Sears Provided Systems,
facilities or labor resources to be provided by the Eligible
Recipients in connection with the proposed New Service; and (H) in
the case of any Deliverables to be created through the provision of
the proposed New Services, any ownership rights therein that differ
from the provisions of Section 16.1(a) (Ownership of CSC
Provided Systems).(2)
    Acceptance of Service Addendum. Sears may
accept or reject any proposed Service Addendum in its sole discretion.
CSC shall not be obligated to perform any New Services for which a
Service Addenda is required unless the proposed Service Addendum is
signed by Sears, or Sears re-prioritizes or eliminates other Services
CSC is to provide such that CSC is not required to incur any
incremental resources. Upon the execution by the Parties of a proposed
Service Addendum for New Services, the scope of the Services in the
applicable Transaction Document shall be expanded to include such New
Services. Except as provided for in Section 4.5(b)(iii)
(Exception Project Work), CSC shall not receive any additional
compensation for New Services unless the Sears Relationship Manager and
CSC Account Executive, or their authorized designees, have executed a
Service Addendum for such New Services. Sears execution of a proposed
Service Addendum shall not waive Sears right to challenge the
appropriateness of any or all of CSCs Charges provided for in such
Service Addendum. If Sears authorizes CSC to proceed with any work,
such as by executing a Service Addendum, but the Parties disagree as to
whether the authorized work constitutes New Services or the amount of
the Charges for such work, CSC shall proceed with such work and the
disagreement shall be submitted to dispute resolution pursuant to
Section 14.4 (Disputed Charges), as to disputed Charges, and to
Section 22 (Dispute Resolution) for all other disputes.  (iii)
    Exception Project Work. The Sears Vice President of
Operations/Engineering may authorize CSC to perform New Services (for which an
additional charge will apply) on a project-by-project basis, without the need
to execute a Service Addendum; provided that:  (1)
    Such New Services are for a specific project of
a limited duration (rather than the addition of ongoing Services to be
performed for the Term of the applicable Transaction Document);(2)
    The Charges applicable to such New Services are
non-recurring and do not exceed (A) $100,000 per incident, (B)
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aggregate per Contract Year, or (C) the hourly rates set forth in the
applicable Transaction Document;(3)
    Neither CSC nor Sears are seeking any changes
to the ownership provisions set forth in this Agreement with respect to
any Deliverables relating to such New Services; and(4)
    CSC provides a written summary of such New
Services that contains the information in Section 4.5(b)(ii)
(Service Addendum) to the extent requested by Sears.  By the fifth (5th) day of each month during the Term, CSC shall
provide to the Sears Relationship Manager a report listing (A) each New
Service subject to this Section 4.5(b)(iii) (Exception Project
Work), (B) the amount of Charges then incurred to date for each New Service
and (C) the total amount approved by Sears for each New Service. For the
avoidance of doubt, each such New Service shall be subject to the terms of
this Master Agreement and the applicable Transaction Document.(iv)
    Charges. CSC shall act reasonably and in good faith in
formulating its pricing proposal for such New Services and shall use
commercially reasonable efforts to identify potential means of reducing or
eliminating the cost to Sears, including delaying expenditures in other areas
under this Agreement, utilizing Subcontractors, etc. CSCs pricing proposal
shall be competitive to the fair market value for such services and no less
favorable to Sears than the pricing and labor rates set forth in this Agreement
for comparable Services and shall take into account the existing and future
volume of overall business between Sears and its Affiliates and CSC and its
Affiliates. 
  (c)
    Efforts to Reduce Costs and Charges. The Parties shall work together
(throughout the Term) to identify ways of achieving reductions in the cost of service
delivery and corresponding reductions in the Charges to be paid by Sears by modifying
or reducing the nature or scope of the Services to be performed by CSC, the applicable
Service Levels or other contract requirements. If requested by Sears, CSC shall
promptly prepare a proposal at a level of detail sufficient to permit Sears to make an
informed business decision identifying all viable means of achieving the desired
reductions without adversely impacting business objectives or requirements identified
by Sears (or, if such adverse impacts cannot be avoided, identifying such adverse
impacts and any means of mitigating them). In preparing such a proposal, CSC shall
give due consideration to any means of achieving such reductions proposed by Sears. CSC
shall negotiate in good faith with Sears about each requested reduction in Charges and,
without disclosing the actual cost of providing the Services, CSC shall identify for
Sears if and to what extent the cost of service delivery may be reduced by implementing
various changes in the contract requirements, taking into account all avoided costs
plus CSCs average profit on such Services. If CSC rejects any such change in the -13-




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Service delivery, CSC shall demonstrate to Sears why technically such proposal
cannot work. Sears shall not be obligated to accept or implement any proposal, and
CSC shall not be obligated to implement any change that affects the Terms of this
Agreement, unless and until such change is reflected in a Service Addendum or a
written amendment to this Agreement. 
  (d)
    Charges for Contract Changes. Unless otherwise agreed, System Changes, changes
in the Services (including changes in the Sears Standards) and changes in the rights or
obligations of the Parties under this Agreement (collectively, Contract Changes)
shall result in changes in the applicable Charges only if and to the extent (i) this
Agreement expressly provides for a change in the CSC Charges in such circumstances,
(ii) the agreed-upon Charges or pricing methodology expressly provides for a price
change in such circumstances (for example, where the applicable Transaction Document
specifies a number of full time equivalents or hours of coverage to be provided for the
quoted price, or defines units of consumption for increased or decreased usage), or
(iii) the Contract Change constitutes New Services for purposes of Section
4.5(b) (New Services) and additional Charges are applicable in accordance
therewith. 
  (e)
    Additional Work or Reprioritization. The Sears Relationship Manager may, in
the sole discretion of Sears, identify new or additional work activities to be
performed by CSC Personnel, reprioritize or reset the schedule for existing Services or
New Services, and designate which problems shall be resolved immediately versus those
that may be deferred due to the priority of other Services to be performed by such CSC
Personnel. The foregoing shall not relieve CSC of its responsibility for identifying
and addressing problems and otherwise prioritizing its work flow absent specific
direction to the contrary by Sears. CSC shall use commercially reasonable efforts to
perform such work activities without impacting the established schedule for other tasks
or the performance of the Services in accordance with the Service Levels. If it is not
possible to avoid such impact, CSC shall notify Sears of the anticipated impact and
obtain Sears consent under Section 7.2(d) prior to proceeding with any work
activities that would cause such impact. Sears, in its sole discretion, may forego or
delay such work activities or temporarily adjust the work to be performed by CSC, the
schedules associated therewith or the Service Levels to permit such reprioritization. 
  5.
    GOVERNANCE 
  5.1
    Operational Procedures Manual. 
  (a)
    Delivery and Contents. CSC shall create, as part of the Services, and at no
additional cost to Sears, an operational procedures manual that documents the processes
and procedures that underlie each Service (the Operational Procedures Manual or
OPM). CSC shall deliver to Sears for its review, comment and approval both an
outline of the topics to be addressed in the Operational Procedures Manual and a final
draft of the OPM for each Exhibit, in each case within the time periods set forth in
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minimum, the Operational Procedures Manual for each Exhibit shall include the
following:  (i)
    a detailed description of the Services and the manner in which
each shall be performed by CSC under the Exhibit, including (1) all CSC
Provided Systems, CSC Managed Systems and Sears Provided Systems, as well as
the functional and operational characteristics of each of the foregoing, (2)
documentation (including operations manuals, user guides, specifications,
policies/procedures and disaster recovery plans) providing further details
regarding such Services, and (3) the specific activities to be undertaken by
CSC in connection with each Service, including, where appropriate, service
responsibilities matrices, the direction, supervision, monitoring, staffing,
reporting, planning and oversight activities to be performed by CSC and the
time period in which tasks are to be completed under the Exhibit;(ii)
    the procedures for Sears/CSC interaction and communication,
including (1) call lists, (2) procedures for and limits on direct communication
by CSC with Sears Personnel, (3) problem management and escalation procedures,
(4) priority and project procedures, (5) acceptance testing and procedures, (6)
quality assurance procedures and checkpoint reviews, and (7) annual and
quarterly financial objectives, budgets and performance goals; and(iii)
    practices and procedures addressing such other issues and
matters as Sears shall require.  CSC shall incorporate Sears then-current policies and procedures in the Operational
Procedures Manual to the extent Sears directs CSC to do so. 
  (b)
    Revision and Maintenance. CSC shall incorporate any comments or suggestions of
Sears into the OPM and shall deliver a final revised version to Sears within fifteen
(15) days of its receipt of such comments and suggestions for Sears approval. The OPM
shall be delivered and maintained by CSC in hard copy and electronic formats and shall
be accessible electronically to Sears Personnel in a manner consistent with Sears
security policies. 
  (c)
    Compliance. CSC shall perform the Services in accordance with Sears
then-current policies and procedures until the Operational Procedures Manual is
finalized and mutually agreed upon by the Parties. Thereafter, CSC shall perform the
Services in accordance with the Operational Procedures Manual. In the event of a
conflict between the provisions of this Agreement, including any Transaction Document,
and the Operational Procedures Manual, the provisions of this Agreement shall control.
The Operational Procedures Manual shall not be considered an amendment to this
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(d)
    Modification and Updating. CSC shall modify and update the Operational
Procedures Manual monthly to comply with Sears Standards as described in Section
6.4 (Architecture, Standards and Information Technology Planning) and to reflect
changes in the operations or procedures described therein and/or changes to the
features or functionality of the Services, including any CSC Provided Systems and/or
CSC Managed Systems. All updated versions of the OPM shall be accurate and at least as
detailed as the documentation originally delivered to Sears. In addition, CSC shall
meet with Sears on at least an annual basis to review and discuss the OPM and any
changes to the OPM proposed by CSC. In advance of each such meeting, and in advance of
making any change to the OPM, CSC shall provide Sears, for Sears review, comment and
approval, a revised copy of the OPM marked to show the proposed changes by CSC. To the
extent any such change could (i) increase Sears total costs of receiving the Services,
(ii) require changes to the facilities, Software or Equipment or Systems of the
Eligible Recipients (including the installation of any Upgrades), (iii) have an adverse
impact on the functionality, interoperability, performance, accuracy, speed,
responsiveness, quality, security or resource efficiency of the Services, or (iv)
violate or be inconsistent with the Sears Standards, neither CSC nor its Personnel
shall implement such change without first obtaining Sears approval (pursuant to a
written amendment to this Master Agreement or a Service Addendum), which approval Sears
may withhold in its sole discretion. 
  5.2
    Change Control. 
  (a)
    Compliance with Change Control Procedures. In requesting or making any System
Change, both Parties shall comply with the change control procedures specified in the
OPM (or, with respect to System Changes prior to the Parties mutually agreeing on the
OPM, Sears then-current change control procedures). Prior to making any System Change
or using any new (e.g., not tested in or for the Sears environment) Software or
Equipment to provide the Services, CSC shall verify by appropriate testing that the
change or item has been properly installed, is operating in accordance with its
specifications, is performing its intended functions in a reliable manner and is
compatible with and capable of operating as part of the Eligible Recipients
environment. This obligation shall be in addition to any unit testing to be performed
by CSC as part of the routine deployment or installation of Software or Equipment. 
  (b)
    System Change Costs. Unless otherwise set forth in the applicable Transaction
Document or approved by Sears in accordance with Section 5.2(c) (Sears Approval
 Cost, Adverse Impact) or otherwise, CSC shall bear all charges, fees and costs
associated with any System Change made by CSC or the CSC Personnel, including all
charges, fees and costs associated with (i) the design, installation, implementation,
testing and rollout of such System Change, (ii) any modification, enhancement to, or
substitution for, any CSC Provided Systems, CSC Managed Systems or Sears Provided
Systems, (iii) any increase in the cost to the Eligible Recipients of operating,
maintaining or supporting any CSC Provided Systems, CSC Managed Systems or Sears
Provided Systems, and (iv) subject to -16-




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Section 5.2(g) (Comparisons), any increase in resource usage to the extent
it results from a System Change. 
  (c)
    Sears Approval  Cost, Adverse Impact. Neither CSC nor the CSC Personnel shall
make any System Change that may (i) increase the Eligible Recipients total cost of
receiving the Services, (ii) require changes to an Eligible Recipients facilities,
Software, Equipment or other Systems (including the installation of any Upgrades),
(iii) have an adverse impact on the functionality, interoperability, performance,
accuracy, speed, responsiveness, quality, security or resource efficiency of the
Services or on any applications run by the Eligible Recipients, or (iv) violate or be
inconsistent with Sears Standards or plans as specified in Section 6.4
(Architecture, Standards and Information Technology Planning), without first obtaining
Sears approval, which approval: (x) Sears may withhold in its sole discretion and (y)
shall be effective only if in writing (in the form of an amendment to this Master
Agreement or a Service Addendum), if any such change would increase the Eligible
Recipients costs over the remaining Term of the applicable Transaction Document by
more than $10,000 or require a change to any provision of this Agreement (including
waivers of Service Level(s)). If CSC desires to make such a System Change, it shall
provide to Sears a written proposal describing in detail the extent to which the
desired System Change may affect the functionality, performance, security, price or
resource efficiency of the Services and any benefits, savings or risks to the Eligible
Recipients associated with such System Change. 
  (d)
    Temporary Emergency Changes. Notwithstanding the foregoing, CSC may make
temporary System Changes required by an emergency if it has been unable to contact the
Sears Relationship Manager to obtain approval after making reasonable efforts. CSC
shall document and report such emergency changes to Sears not later than the next
Business Day after the change is made. Such System Changes shall not be implemented on
a permanent basis unless and until approved by Sears. 
  (e)
    Implementation of System Changes. CSC shall schedule and implement all System
Changes so as not to (i) disrupt or adversely impact the business or operations of the
Eligible Recipients, (ii) degrade the Services then being received by them or (iii)
interfere with their ability to obtain the full benefit of the Services. 
  (f)
    Planning and Tracking. On a monthly basis, CSC shall prepare a rolling
quarterly look ahead schedule for ongoing and planned System Changes for the next
three (3) months in accordance with the OPM. The status of System Changes shall be
monitored and tracked by CSC against the applicable schedule. 
  (g)
    Comparisons. For any System Change, CSC shall, upon Sears request, perform a
comparison, at a reasonable and mutually agreed level of detail, between the amount of
resources required by the affected Software or Equipment to perform a representative
sample of the processing being performed for the Eligible Recipients immediately prior
to the System Change and immediately after the -17-




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System Change. Sears shall not be required to pay for increased resource usage due
to a System Change, except to the extent that such System Change is requested or
approved by Sears after notice from CSC of such increased resource usage. 
  5.3
    Reports. 
  (a)
    Reports. CSC shall provide Sears with reports pertaining to the performance of
the Services and CSCs other obligations under this Agreement sufficient to permit
Sears to monitor and manage CSCs performance (Reports). The Reports to be provided
by CSC shall include those described in each Transaction Document in the format and at
the frequencies provided therein. At no additional charge, CSC shall provide Sears
with data and reports in CSCs possession necessary for the Eligible Recipients to
comply with all Laws. In addition, from time to time, Sears may identify additional
Reports, to a commercially reasonable extent, to be generated by CSC and delivered to
Sears on an ad hocor periodic basis. All Reports shall be provided to Sears as part
of the Services and at no additional charge to Sears. The Reports described in each
Transaction Document and, to the extent reasonably possible, all other Reports, shall
be (i) capable of being accessed by Sears through a secure on-line connection, (ii)
exportable (together with the underlying data) by Sears in an electronic, ODBC format
capable of being accessed by Microsoft Office components and modified by Sears (e.g.,
not in read only form), with the information contained therein capable of being
displayed graphically and accessed from a web browser, and (iii) provided to Sears in
traditional printed form. 
  (b)
    Back-Up Documentation. As part of the Services, CSC shall provide Sears with
such documentation and other information as may be reasonably requested by Sears from
time to time in order to verify the accuracy of the Reports provided by CSC and the CSC
Personnel. In addition, CSC shall provide Sears with all documentation and other
information reasonably requested by Sears from time to time to verify that CSCs
performance of the Services is in compliance with the Service Levels and this
Agreement. 
  5.4
    Meetings. 
  (a)
    Meetings. During each Exhibit Term, representatives of the Parties shall meet
periodically or as requested by Sears or as set forth in the applicable Transaction
Document to discuss matters arising under this Agreement and each Transaction Document,
including any such meetings provided for under each Migration Plan and Transformation
Plan. Each Party shall bear its own costs in connection with the attendance and
participation of such Partys representatives in such meetings. Such meetings shall
include, at a minimum, the following: 
  (b)
    Agenda and Minutes. For each such meeting CSC shall prepare and distribute an
agenda, which shall incorporate the topics designated by Sears. CSC shall -18-




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distribute such agenda in advance of each meeting so that the meeting participants
may prepare for the meeting. In addition, CSC shall record and promptly distribute
minutes for every meeting for review and approval by Sears. 
  (c)
    Eligible Recipient Meetings. CSC shall notify the Sears Relationship Manager
(or her/his delegates) in advance of scheduled meetings with Eligible Recipients (other
than meetings pertaining to the provision of specific Services on a day-to-day basis)
and shall invite the Sears Relationship Manager and the applicable Exhibit Project
Executives to attend such meetings or to designate representatives to do so. 
  (d)
    Telephone/Video Conferences. Telephone/video conferences can be used in place
of meetings with the prior approval of the participants. Unless otherwise agreed to by
the participants, all meetings shall occur at Sears Facilities. 
  6.
    CSC RESPONSIBILITIESIn addition to CSCs responsibilities as expressly set forth elsewhere in this Agreement or
any Transaction Document, CSC shall be responsible for the following. 
  6.1
    Cooperation with Sears Personnel.CSC shall fully cooperate with and work in good faith with the Eligible Recipients and Sears
Personnel as described in this Agreement or as otherwise requested by Sears. Such
cooperation shall include timely providing: (a) all cooperation and assistance reasonably
required or requested by Sears, the other Eligible Recipients or the Sears Personnel in
connection with Sears evaluation or testing of the Services and Deliverables and/or
services Sears is to receive from such third parties (including the integration of such
Third Party services with the Services Sears is to receive under this Agreement); (b) access
to any facilities being used to provide the Services, as necessary for Sears Personnel to
perform the work assigned to them; (c) reasonable electronic and physical access to business
processes and associated CSC Provided Systems, CSC Managed Systems and Sears Provided
Systems to the extent necessary and appropriate for the Sears Personnel to perform the work
assigned to them (including oversight of CSC); (d) written requirements, standards, policies
or other documentation for the Services, and the business processes and associated CSC
Provided Systems, CSC Managed Systems and Sears Provided Systems; (e) access to CSC
Facilities to permit Sears, its Affiliates or Sears Personnel to install, maintain or manage
Third Party Software, Equipment and other Systems Sears desires to use in connection with
the Services; and (f) any other cooperation or assistance reasonably necessary for Sears
Personnel to perform the work in question. Sears Personnel shall comply with CSCs
reasonable security requirements, and shall, to the extent performing work on CSC Provided
Systems or CSC Managed Systems, comply with CSCs reasonable standards, methodologies and
procedures, in each case, to the extent such requirements are provided in advance and in
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6.2
    Subcontractors. 
  (a)
    Use of Subcontractors. Except as set forth in Section 6.2(a) (Exempt
Subcontractors) or elsewhere in this Agreement, CSC shall not subcontract any of its
responsibilities under this Agreement without Sears prior written approval;. Prior to
entering into a subcontract with a Third Party or a CSC Affiliate for the Services, for
whom approval is required under this subsection, CSC shall (i) give Sears reasonable
prior notice specifying the Transaction Documents and components of the Services
affected, the scope of the proposed subcontract, the identity and qualifications of the
proposed Subcontractor and the reasons for subcontracting the work in question and (ii)
obtain Sears prior written approval of such Subcontractor. 
  (b)
    Exempt Subcontractors. CSC may, without Sears approval, subcontract in the
ordinary course of business:  (i)
    for services that do not involve: (1) a material portion of
the Services; (2) regular direct contact with Sears Personnel, including any
Services that are to be performed at Sears Sites; or (3) off-site remote
services and help desk support; or(ii)
    for services to the extent they consist of the provision of
Equipment or Software maintenance and do not involve regular direct contact
with Sears Personnel; or(iii)
    with temporary personnel firms for the provision of temporary
contract labor (collectively, Exempt Subcontractors); or In addition, the parties agree that the prohibition in Section 6.2(a) do not apply to
third parties to the extent CSC is procuring Equipment or Software from such third parties. 
  (c)
    Minority/Women-Owned Businesses. CSC acknowledges that it is the commitment of
Sears to successfully bring minorities and women into the American economic system by
doing business with qualified minority and women sources. In furtherance of Sears
aforesaid commitment, if CSC utilizes the services of Subcontractors, CSC shall use
reasonable efforts to utilize Subcontractors that are qualified minority-owned and/or
women-owned sources. Upon Sears request, from time to time, CSC shall, and shall
require each of its Subcontractors to, provide Sears with a detailed listing of all
Subcontractors involved in the provision of the Services (including any CSC Provided
Systems), listing: (i) which, if any, are qualified minority-owned or women-owned
Entities, and (ii) the dollar amount of Charges under this Agreement attributable to
qualified minority-owned or women-owned Subcontractors and suppliers versus
Subcontractors and suppliers that are not qualified minority-owned or women-owned
Entities over the period of time specified by Sears; to assist Sears in reporting on
the level of minority-owned and/or women-owned entities involved in the provision of
the Services (including any CSC Provided Systems). CSC has -20-




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informed Sears that CSC has a goal for this Agreement of having 5% of its
Subcontractors be qualified minority-owned or women-owned Entities and CSC will
inform Sears of any changes in this goal. 
  6.3
    Quality Assurance. CSC shall develop, implement and fully document in the OPM quality assurance processes and
procedures to permit the Services to be performed in an accurate and timely manner, in
accordance with the requirements of this Agreement, including (a) the Service Levels, (b)
one of the best practices of the information technology industry applicable to the Services
at issue, (c) all Laws and (d) information technology industry standards (e.g., CMMI, Six
Sigma, ISO 9001) applicable to Services received by the Eligible Recipients and the
performance of the Services. Such procedures shall include verification, checkpoint reviews,
testing, acceptance and other procedures to assure the quality and timeliness of CSCs
performance. No failure or inability of the quality assurance procedures to disclose any
errors or problems with the Services shall excuse CSCs failure to comply with the terms of
this Agreement, including the Service Levels. In addition, CSC must integrate such quality
assurance procedures with Sears application development/enterprise service delivery teams.
Without limiting CSCs obligations under this Agreement, if and to the extent that Sears
requests CSC to perform the Services in accordance with a particular best practice of the
information technology industry that is not required by this Agreement and CSC is not then
performing the Services in accordance with such best practice, such request by Sears shall
be subject to Section 4.5 (Additional Services). 
  6.4
    Architecture, Standards and Information Technology Planning. 
  (a)
    CSC Support.As requested by Sears from time to time, CSC shall assist Sears
in defining information technology architectures and standards applicable to the
activities that are the subject of the Services on an ongoing basis (collectively, the
Sears Standards) and in annually preparing long-term strategic information technology
plans and short-term implementation plans based thereon. The assistance to be provided
by CSC shall include: (i) active participation with Sears representatives on permanent
and ad hoccommittees and working groups addressing such issues as further specified in
the Transaction Document, or otherwise agreed to by the Parties; (ii) assessments of
the then-current Sears Standards at a level of detail sufficient to permit Sears to
make informed business decisions; (iii) analyses of the appropriate direction for such
Sears Standards in light of business priorities, business strategies, competitive
market forces and changes in technology; (iv) the provision of information to Sears
regarding CSCs information technology strategies for its own business; (v) technology
briefings from an industry perspective, (vi) accompanying Sears, upon Sears request,
at meetings with other technology vendors (e.g., Microsoft), and (vii) recommendations
regarding information technology architectures and platforms, software and hardware
products, information technology strategies, standards and directions, and other
enabling technologies. With respect to each recommendation Sears elects to
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following at a level of detail sufficient to permit Sears to make an informed
business decision: (A) cost projections and cost/benefit analyses; (B) the changes,
if any, in the Software, Equipment, Materials, Personnel and other resources
required to operate and support the changed environment; (C) the resulting impact on
Sears information technology costs; and (D) the expected performance, quality,
responsiveness, efficiency, reliability, security risks and other Service Levels.
CSC shall, and shall cause the CSC Personnel to, perform their respective
obligations under this Agreement without any preference for or bias toward any
Software, Equipment or other products licensed or sold by CSC, its Affiliates or any
other CSC Personnel, including in connection with any recommendations that CSC or
the CSC Personnel may make regarding business processes, technologies or specific
solutions that Sears should adopt. 
  (b)
    CSC Familiarity with Sears Standards. CSC acknowledges and agrees that as of
the applicable Commencement Date, it is fully informed of and familiar with the Sears
Standards, Code of Conduct and Privacy Policies, both through due diligence and its
hiring of Transitioned Personnel pursuant to the applicable Transaction Document. CSC
shall be responsible for documenting the Sears Standards in the Operational Procedures
Manual in accordance with Section 5.1 (Operational Procedures Manual).
Additions, deletions or modifications to the Sears Standards shall be communicated in
writing by Sears to CSC. 
  (c)
    Sears Authority and CSC Compliance. Sears shall have final authority to
promulgate Sears Standards and to modify or grant waivers from such Sears Standards.
CSC shall (i) comply with and implement the Sears Standards in providing the Services,
(ii) work with Sears to enforce the Sears Standards, (iii) modify the Services as and
to the extent necessary to conform to such Sears Standards and (iv) obtain Sears prior
written approval for any deviations from such Sears Standards. CSCs compliance with
new Sears Standards and its modification of the Services in accordance therewith may or
may not constitute New Services. 
  (d)
    Compliance with Sears Standards. The Parties acknowledge and agree that (i)
Sears shall not incur additional Charges in connection with changes in the Sears
Standards applicable to Software if the new or changed Software can be distributed
remotely (in such event, the distribution of new or changed Software in this manner and
the setup of the distribution system to accommodate such new or changed Software shall
be deemed included in the Charges), (ii) Sears shall not incur additional Charges in
connection with changes in the Sears Standards applicable to Equipment and Software if
such changes are implemented through the refresh of such Equipment and Software in the
ordinary course in accordance with the refresh schedule set forth in the applicable
Transaction Document, and (iii) to the extent Sears requires that changes in the Sears
Standards applicable to Equipment and Software be implemented on an accelerated basis,
and not through the refresh of such Equipment and Software in the ordinary course, and
the implementation of such changes requires CSC to perform tasks that satisfy the -22-




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definition of New Services, the implementation of changes shall be subject to
Section 4.5(b) (New Services). 
  (e)
    Financial, Forecasting and Budgeting Support. On a monthly basis, CSC shall
provide to Sears, for Sears forecasting and budgeting purposes, a report that shall
include (i) a summary of the Charges for the Services current year to date, by pricing
element, under each Transaction Document, (ii) a forecast of the utilization of the
Services, by pricing element, under each Transaction Document, of the remainder of the
current calendar year, as well as the next calendar year, and (ii) changes to the
environment impacting Sears costs or utilization, including general plans and
projected time schedules for development and implementation. In addition, on each
anniversary of the Effective Date, CSC shall provide information to Sears regarding
opportunities to modify or improve the Services and reduce the Charges and/or total
cost to the Eligible Recipients of receiving the Services. 
  6.5
    Technology. 
  (a)
    CSC Briefings. CSC shall meet with Sears at least semi-annually to brief Sears
regarding technological developments and advances as well as new or enhanced services,
software, tools, products, methodologies, trends and directions which CSC is developing
or is otherwise aware of that could reasonably be expected to have an impact on
Eligible Recipients businesses, or are otherwise of possible interest or applicability
to Sears. Such briefing shall include CSCs assessment of the business impact,
performance improvements and cost savings to Sears associated with each. 
  (b)
    Currency. Subject to Section 6.4 (Architecture, Standards and
Information Technology Planning), throughout each Exhibit Term, CSC shall provide the
Services using current technologies that shall enable Sears and the other Eligible
Recipients to take advantage of technological advancements in Sears and its
Affiliates businesses and support Sears and its Affiliates efforts to maintain
competitiveness in the markets in which Sears and its Affiliates compete. Without
limiting the generality of the foregoing, and subject to and in accordance with
Sections 10.3 (Sears Provided Systems and CSC Provided Systems), Section
6.4 (Architecture, Standards and Information Technology Planning), Section
5.2 (Change Control), Section 6.5(d) (Approval by Sears) and the terms of
the applicable Transaction Document, CSC shall maintain reasonable currency for
Software for which it is financially responsible under this Agreement and provide
maintenance and support for new releases and versions of Software for which it is
operationally responsible. Notwithstanding the foregoing, as to the Software provided
for under the Excluded Agreements and the IBM Lotus Notes Agreement, CSC shall manage
the currency of such Software in accordance with the requirements of such Third Party
Contracts; provided that this sentence shall only apply until the earlier of
the expiration or termination of the foregoing Third Party Contracts related to such
Software. For purposes of this Section 6.5 (Technology), reasonable currency
means that, unless expressly provided -23-




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otherwise in the applicable Exhibit or otherwise directed by Sears, (i) CSC shall
maintain Software within one (1) Major Release of the then-current Major Release,
and (ii) CSC shall install Minor Releases promptly or, if earlier, as requested by
Sears. 
  (c)
    Evaluation and Testing. Prior to installing a new Major Release or Minor
Release, CSC shall evaluate and test such release to verify that it shall perform in
accordance with this Agreement and the Sears Standards and that it shall not violate
clauses (i)  (iv) of Section 5.2(c) (Sears Approval  Cost, Adverse
Impact). The evaluation and testing performed by CSC in accordance with the OPM shall
be at least consistent with the reasonable and accepted industry norms applicable to
the performance of such Services and shall be at least as rigorous and comprehensive as
the evaluation and testing usually performed by highly qualified service providers
under such circumstances. 
  (d)
    Approval by Sears. Notwithstanding Section 6.5(b) (Currency), CSC
shall confer with Sears prior to CSC or the CSC Personnel installing any Major Release
or Minor Release, shall provide Sears with the results of its testing and evaluation of
such release and a detailed implementation plan and shall not install such release if
directed not to do so by Sears. Neither CSC nor the CSC Personnel shall install new
Software releases or make other System Changes other than in accordance with
Section 5.2 (Change Control); provided, however, that if
requested by Sears, neither CSC nor the CSC Personnel shall install new Software
releases or make other Software changes until Sears has completed and provided formal
sign-off on successful user acceptance testing. CSC shall install, operate and support
multiple versions of the same Software as and to the extent directed to do so by Sears;
provided that following CSCs completion of applicable Remediation Services and
Transformation Services (and Sears acceptance thereof); if Sears request to install,
operate and/or support such versions is not attributable to any failure or breach of
CSC or CSC Personnel under this Agreement, use of such Software (other than Permitted
Software) shall: (i) require the prior approval of the Sears Vice President of
Operations/Engineering, and (ii) be subject to Section 4.5 (Additional
Services). For purposes of this Section 6.5(d) (Approval By Sears), Permitted
Versions means, with respect to any Software, all versions of such Software that (A)
are within 1 Major Release of the then-current Major Release of such Software;
provided no such Major Release shall be counted in determining the Permitted
Version if less than 12 months has elapsed between the date of such Major Releases and
the last Major Release, or such Major Release has not yet been made generally
commercially available by such licensor. For example, if Sears was using version 6.0
of XYZ Software for 2 years and the licensor of such Software issued version 7.0 on
March 1, 2005, version 8.0 on February 1, 2006, and version 9.0 on June 1, 2006, then
on June 1, 2006 the Permitted Versions would be Version 7.0, 8.0 and version 9.0 of XYZ
Software, whereas if version 8.0 had been released on April 1, 2006, then as on April
1, 2006, the Permitted Versions would be Version 7.0 and 8.0. If Sears is using a
version of Software that stops becoming a Permitted Version, then Sears -24-




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shall have a reasonable period of time, given the circumstances, to upgrade to a
Permitted Version. 
  (e)
    Updates by Sears. The Eligible Recipients shall have the right, but not the
obligation, to install new releases of, replace or make other changes to Software for
which Sears is financially responsible under this Agreement. 
  (f)
    Unanticipated IT Change. If an Unanticipated IT Change occurs, and if Sears
requests that such Unanticipated IT Change be substituted or added by CSC to the
Services, the Parties shall use the procedures in Section 13.6(b)
(Extraordinary Events; Consequence) to equitably adjust the Charges and other relevant
provisions of this Agreement to take such Unanticipated IT Change into account. An
Unanticipated IT Change means a material shift and improvement in technology capable
of providing all or part of the Services that is outside the normal evolution of
technology experienced by the information technology industry, was not generally
available as of the applicable Commencement Date, is reasonably reliable and relevant
and can be technically substituted or added by CSC to the Services. 
  (g)
    CSC Developed Advances. If CSC or its Affiliates develop technological
advances or changes to CSCs Systems to be offered to other CSC customers to provide
services that are the same or similar to the Services or CSC or its Affiliates develop
new or enhanced processes, services, software, tools, products or methodologies to be
offered to other CSC customers (collectively, New Advances), CSC shall, subject to
Section 4.5 (Additional Services), (i) offer Sears the opportunity to serve as
a pilot customer in connection with the implementation of such New Advances, and (ii)
if Sears declines such opportunity, offer Sears preferred access to such New Advances
and the opportunity to be among the first ten percent (10%) of the CSC customer base to
implement and receive the benefits of any New Advances. 
  (h)
    Services Evolution and Modification. The Parties anticipate that the Services
shall evolve and be supplemented, modified, enhanced or replaced over time to keep pace
with technological advancements and improvements in the methods of delivering services
and changes in the businesses of the Eligible Recipients. The Parties acknowledge and
agree that these changes shall modify the Services and shall not be deemed to result in
New Services as provided in Section 4.5(b) (New Services) unless the changed
services otherwise meet the definition of New Services. 
  6.6
    Financial Filings and Notice of Change of Financial Condition. 
  (a)
    Financial Filings. Promptly, but in no event later than fourteen (14) days
after CSC files any quarterly, annual or special report with the (i) SEC, including
10-Q, 10-K and 8-K reports, Proxy Statements pursuant to Section 14(a) of the
Securities Exchange Act of 1934, or Annual Reports to CSCs shareholders, or (ii)
applicable listing stock exchange for Suppliers publicly traded equities, CSC -25-




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shall provide copies of such reports, statements or filings to (1) Sears Chief
Information Officer, and (2) Sears Chief Financial Officer. 
  (b)
    Notice. CSC shall, within fourteen (14) days after obtaining actual knowledge
of the occurrence of a Credit Trigger Event, provide notice to Sears of the occurrence
of such Credit Trigger Event. Promptly following the date Sears receives such notice,
senior executives of the Parties shall meet to discuss CSCs and CSCs parent Entitys
(to the extent CSC has a parent Entity) financial condition and their ability to
continue to perform their obligations hereunder. 
  7.
    SEARS RESPONSIBILITIES 
  7.1
    General Sears Responsibilities. In addition to Sears responsibilities as expressly set forth elsewhere in this Agreement,
Sears shall be responsible for the following: 
  (a)
    Sears Relationship Manager. Sears shall designate one (1) individual to whom
all CSC communications concerning this Agreement may be addressed, as provided in
Section 26.3 (Notices) (the Sears Relationship Manager), who shall have the
authority to act on behalf of the Eligible Recipients in all day-to-day matters
pertaining to this Agreement. Sears may change the designated Sears Relationship
Manager from time to time by providing notice to CSC. 
  (b)
    Cooperation. Sears shall cooperate with CSC by, among other things, making
available, as reasonably requested by CSC, management decisions, information, approvals
and acceptances so that CSC may accomplish its obligations and responsibilities
hereunder. 
  (c)
    Sears Personnel. Subject to Section 7.2 (Sears Responsibilities),
Sears may elect to perform any of its obligations under this Agreement through any
Sears Personnel; provided that such election by Sears shall not limit or affect Sears
responsibilities under this Agreement for the performance of such obligations. 
  (d)
    Contract Waivers. At CSCs request, the Parties will meet, from time to time,
to discuss recommendations by CSC on the implementation of appropriate contract
waivers, through which the Parties can, limit both Sears and CSCs liability to Third
Parties for Claims subject to Section 20.1 (Indemnity by CSC); provided
that Sears responsibility under this Section 7.1(d) is limited to having such
consultations in good faith, and Sears shall not be required to implement such
recommendations. 
  7.2
    Sears Responsibilities. 
  (a)
    Nature of Responsibilities. Without limiting Sears obligations under this
Agreement, such as Sears payment obligation as provided in Section 14
(Invoicing and Payment) and Sears obligations regarding CSCs Confidential Business
Information under Section 15.3(b) (Confidential Business Information), -26-




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references in this Agreement to Sears responsibilities are intended solely for the
purpose of indicating items that are not CSCs responsibility, and shall not in any
circumstance give rise to, or constitute grounds for, a claim of breach by Sears. 
  (b)
    Exception to CSC Performance. CSCs failure to perform its responsibilities
under this Agreement or to meet the Service Levels shall be excused if and to the
extent such CSC non-performance is directly caused by Sears or Sears Personnels
(excluding for purposes of this Section 7.2(b) (Exception to CSC Performance)
Sears Personnel under the direction or management of CSC or CSC Personnel) breach of
Sears obligations under this Agreement or Sears failure (other than as a result of
CSCs failure to complete its obligations on a timely basis) to timely complete any
necessary predecessor Sears obligation under this Agreement, but only if (i) CSC
immediately notifies Sears in accordance with Section 7.2(c) (Notice of
Problems) of such a breach or Sears failure to perform such obligation and its
inability to perform under such circumstances, (ii) CSC provides Sears with every
reasonable opportunity to correct such breach or Sears failure to perform such
obligation and thereby avoid such CSC non-performance, and (iii) CSC uses commercially
reasonable efforts to perform notwithstanding Sears breach or Sears failure to
perform such obligation. 
  (c)
    Notice of Problems. CSC shall immediately notify Sears in writing when it
becomes aware that an act or omission of any Eligible Recipient shall cause, or has
caused, a problem or delay in providing the Services, and shall use commercially
reasonable efforts to work with the Eligible Recipients to prevent or circumvent such
problem or delay. CSC shall cooperate with the Eligible Recipients to resolve
differences and conflicts regarding the Services and other activities undertaken by the
Eligible Recipients. 
  (d)
    Sears Direction. If any Sears Personnel directs CSC to change the performance
of CSCs responsibilities under this Agreement (including by impeding, delaying or
stopping such performance), and such change would have a material impact on CSCs costs
of providing the Services; then: (i) CSC will notify the Sears Vice President of
Operations/Engineering specifying: (x) that such notice is being provided in accordance
with this provision; (y) the impacts that such direction CSC reasonably believes will
have on CSC cost of performance; and (z) the name of the Sears Personnel providing such
direction to CSC. CSC will provide a proposal for such change (as New Services) in
accordance with Section 4.5 (Additional Services), and Sears will then have the
option of either accepting such proposal or overriding the previous direction from
Sears. Changes in Sears Standards will be subject to this Section 7.2(d),
except to the extent the increased costs can be mitigated by implementing such changes
in accordance with Section 6.4(d). 
  8.
    SEARS AND CSC FACILITIES 
  8.1
    Service Facilities. -27-




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The Services shall be provided at or from (a) the Sears Facilities described in the
applicable Transaction Document, (b) the CSC Facilities described in the applicable
Transaction Document or (c) any other service location approved in writing by Sears. CSC
shall obtain Sears prior written approval for any proposed relocation by CSC or CSC
Personnel of the provision of a Service from or to a new or different Sears Facility. CSC
shall be financially responsible for all additional costs, taxes or expenses related to or
resulting from any CSC-initiated relocation to a new or different Sears Facility or CSC
Facility, including any costs or expenses incurred or experienced by any Eligible Recipient
as a result of such relocation (e.g., increases in taxes, telecommunications charges, etc.). 
  8.2
    Sears Facilities. 
  (a)
    General. To the extent expressly provided in a Transaction Document, Sears
shall provide CSC and the CSC Personnel with the use of and access to the Sears
Facilities (or equivalent space) and office furniture described in such Transaction
Document for the periods specified therein solely as necessary for CSC to perform its
obligations thereunder. Notwithstanding anything to the contrary in this Section
8.2 (Sears Facilities), Sears will provide office space only to CSC Personnel
directly involved in providing the Services and dedicated to Sears. In addition, all
improvements or modifications to Sears Facilities requested by CSC shall be (i) subject
to review and approval in advance by Sears, (ii) in strict compliance with applicable
Laws and Sears then-current policies, standards, rules and procedures, and (iii)
performed by and through Sears at CSCs expense. CSC acknowledges and agrees that the
facilities to be provided by Sears are sufficient for performing the Services and for
satisfying CSCs responsibilities under this Agreement. THE SEARS FACILITIES ARE
PROVIDED BY THE ELIGIBLE RECIPIENTS TO CSC AND THE CSC PERSONNEL ON AN AS-IS, WHERE-IS
BASIS. THE ELIGIBLE RECIPIENTS EXPRESSLY DISCLAIM ANY WARRANTIES, EXPRESS OR IMPLIED,
AS TO THE SEARS FACILITIES OR THEIR CONDITION OR SUITABILITY FOR USE BY CSC OR CSC
PERSONNEL. It is understood that CSC and the CSC Personnels use of the Sears
Facilities does not constitute or create a leasehold interest. When the Sears
Facilities, or any portion of the Sears Facilities, are no longer to be used by CSC or
the CSC Personnel as contemplated by this Section 8 (Sears and CSC Facilities)
or are otherwise no longer required for performance of the Services, CSC shall notify
Sears as soon as practicable and shall vacate and return such Sears Facilities
(including any improvements to such facilities made by or at the request of CSC) to
Sears in substantially the same condition as when such facilities were first provided
to CSC, subject to reasonable wear and tear. CSC Personnel using the office facilities
provided by Sears shall be accorded reasonable use of (A) certain employee facilities
(e.g., parking facilities (other than paid parking facilities), cafeteria and common
facilities) to the extent generally made available to similarly situated Sears
employees, and (B) certain shared office equipment and services (such as local
telephone service for Sears-related calls, mail service, office support service (e.g.,
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secretarial services), heat, light and air conditioning). The
foregoing employee
facilities, and the extent of CSC Personnels permitted use thereof, may be modified
in Sears sole discretion without advance notice, but in a manner generally
applicable to Sears Personnel. 
  (b)
    Use of Sears Facilities.  (i)
    No Use for Shared Services. Unless CSC obtains Sears
prior written agreement, which Sears may withhold in its sole discretion, CSC
shall use the Sears Facilities, and the Equipment and Software located therein,
and the Sears Provided Systems solely to provide the Services to the Eligible
Recipients and not to CSCs other customers.(ii)
    Relocation by Sears. Sears reserves the right to
relocate any Sears Facility from which the Services are then being provided by
CSC Personnel to another geographic location; provided,
however, that, in such event, Sears shall provide CSC with comparable
office space in the new location. In such event, Sears shall reimburse CSC
for: (1) any reasonable incremental Out-of-Pocket Expenses incurred by CSC, and
(2) CSCs internal labor costs (subject to Section 4.5 (Additional
Services)); in each such case, incurred in physically relocating to such new
geographic location; provided, however, that such relocation is
not expressly contemplated in this Agreement, and that CSC notifies Sears of
such incremental expenses, obtains Sears approval prior to incurring such
expenses and uses commercially reasonable efforts to minimize such expenses.(iii)
    Re-Use of Space. Sears also reserves the right to
direct CSC to cease using all or part of the space in any Sears Facility from
or in which the Services are then being provided by the CSC Personnel and to
thereafter use such space for Sears own purposes. In such event, Sears shall
reimburse CSC for: (1) any reasonable incremental Out-of-Pocket Expenses
incurred by CSC, and (2) CSCs internal labor costs (subject to Section
4.5 (Additional Services)); in each such case, incurred in leasing required
substitute new space; provided, however, that such relocation
direction is not expressly contemplated in this Agreement and that CSC notifies
Sears of such incremental expenses, obtains Sears approval prior to incurring
such expenses, and uses commercially reasonable efforts to minimize such
expenses. Except for office space provided by Sears in a Sears Facility for
CSCs Personnel pursuant to the TI Exhibit and any Systems that are required to
be located at a Sears Facility for the proper performance of the Services, CSC
shall relocate to a CSC Facility all other CSC Personnel, CSC Provided Systems
and CSC Managed Systems as part of the Transformation Services. Sears shall be
entitled to charge CSC rent for any such space that is not vacated by CSC
Personnel within the timelines set forth in the Transformation Plan. 
  8.3
    Access to Sears Networks. -29-




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If CSC or any CSC Personnel has access, whether on-site or through remote facilities, to any
Eligible Recipients Equipment, Software, electronic data storage Systems or other
electronic Systems (each, an Electronic System), in connection with this Agreement, CSC
shall limit such access and use by CSC Personnel solely to: (a) those Electronic Systems
and data contained therein that Sears has authorized CSCs Personnel to access; (b) those
CSC Personnel who need access to such Electronic Systems to accomplish CSCs obligations
under the applicable Transaction Document, and CSCs Personnel shall not attempt to access
any Electronic Systems and data contained therein other than those specifically required to
accomplish its obligations under the applicable Transaction Document; and (c) performing
CSCs obligations within the scope of the applicable Transaction Document. CSC shall, upon
Sears request, advise Sears in writing of the name of each such Personnel who have been
granted such access, and shall strictly follow all Sears Rules. CSC is responsible for any
unauthorized access or use by CSC Personnel. All user identification numbers and passwords
disclosed to CSC Personnel and any information obtained by CSC Personnel as a result of CSC
Personnels access to, and use of, Eligible Recipients Electronic Systems shall be Sears
Confidential Information, without the need to mark it as such. CSC shall cooperate with
Sears in the investigation of any apparent unauthorized access by CSC Personnel to any
Eligible Recipients Electronic Systems and/or the data contained therein. CSC shall not
install or permit the installation or connection of any Software or Equipment on any
Eligible Recipients network(s) without Sears prior review and approval. 
  8.4
    CSCs Responsibilities. Except for the Sears Provided Systems and as provided in Section 8.2 (Sears
Facilities), CSC shall be responsible for all office, data processing, and desktop and other
computing Software, Equipment and services, long-distance telephone service, space,
furniture, fixtures, facilities and other items, as well as all personnel, technical
knowledge, expertise and other resources, needed by CSC or CSC Personnel (including
Transitioned Personnel hired by CSC) to provide the Services, and for all Upgrades,
replacements and additions thereto. Without limiting the foregoing, CSC shall (i) provide
all maintenance, site management, site administration and similar services for the CSC
Facilities, and (ii) provide uninterrupted power supply services for the CSC Facilities and
for the Software, Equipment and Systems in Sears Facilities as designated in the applicable
Transaction Document. 
  8.5
    Physical Security. CSC shall be responsible for physical security, including safety and physical access and
control, for the CSC Facilities that CSC is using in performing the Services. CSC shall not
permit any person to have access to, or control of, any Sears Facilities unless such access
or control is permitted in accordance with control procedures approved by Sears. If CSC
provides the Services to the Eligible Recipients from a CSC Facility, CSC shall develop and
implement the processes and controls designed to prevent unauthorized access in any such CSC
Facility to Sears Confidential Information and prevent CSC Personnel servicing Third Parties
at or from such CSC Facility from having access to -30-




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Sears Confidential Information. CSC
shall maintain at the CSC Facilities safety and
physical security procedures that are no less rigorous than the most rigorous of the
following standards: (i) the procedures necessary to meet CSCs obligations under this
Agreement and the requirements of Laws; or (ii) the industry standard procedures for
locations similar to the CSC Facilities. 
  9.
    REQUIRED CONSENTS 
  9.1
    Administrative Responsibility. 
  (a)
    General. Unless otherwise elected by Sears, CSC shall, commencing on the
effective date of the applicable Transaction Document, undertake all administrative
activities necessary to obtain all Required Consents, including those necessary to
transfer Acquired Assets to CSC and to permit CSCs Personnel to access and use the
Acquired Assets in connection with providing the Services if consent to transfer them
to CSC is not received. Notwithstanding the foregoing, Sears shall undertake all
administrative activities necessary to obtain any Required Consents for CSCs use of
Sears Facilities as contemplated hereby. 
  (b)
    Cooperation. At CSCs request, Sears shall cooperate with CSC in obtaining the
Required Consents by executing appropriate Sears-approved written communications and
other documents prepared or provided by CSC. Upon CSCs request, Sears will provide to
CSC any information CSC reasonably requests that is in Sears possession and that Sears
is permitted to share with CSC under the terms of the applicable Third Party Contract
and Law. In connection with any Required Consents for Sears Facilities, at Sears
request, CSC shall cooperate with Sears in obtaining the Required Consents by executing
appropriate CSC approved written communications and other documents prepared or
provided by Sears. With Sears approval, CSC shall exercise for the benefit of the
Eligible Recipients any rights CSC, its Affiliates or the other CSC Personnel have to
utilize or transfer license rights or other applicable rights under any existing Third
Party licenses, leases or contracts, including licenses, leases and/or contracts
relating to functionally equivalent Systems, and the Parties shall cooperate in
minimizing or eliminating any costs associated therewith. 
  9.2
    Financial Responsibility. Except as set forth in a Transaction Document, (a) CSC shall pay all transfer, relicensing
or termination fees or expenses associated with obtaining any Required Consents (including
the rights provided for under Section 10.3(h) (Other Matters) for Sears Provided
Systems, CSC Provided Systems, including Acquired Assets, CSC Managed Systems, CSC
Designated Contracts and CSC Facilities or terminating any licenses, leases or agreements as
to which CSC is unable to obtain such Required Consents, and (b) Sears shall be responsible
for any fees or expenses for Required Consents for CSCs use of Sears Facilities. -31-




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9.3
    Contingent Arrangements. 
  (a)
    General. If, despite using all commercially reasonable efforts, CSC is unable
to obtain a Required Consent for any Acquired Asset, CSC Designated Contract, or Sears
Provided System, then, unless and until such Required Consent is obtained, CSC shall
use all commercially reasonable efforts to determine and adopt, subject to Sears prior
approval, such alternative approaches as are necessary and sufficient to provide the
Services without such Required Consent(s) and without violating the Third Party
Contracts applicable to the foregoing. If such alternative approaches are required for
a period longer than six (6) months following the applicable Commencement Date, the
Parties shall equitably adjust the terms and reduce the prices specified in this
Agreement to reflect any additional costs being incurred by Sears and any Services not
being received by the Eligible Recipients. The Parties shall work together to negotiate
in good faith any other appropriate adjustments to this Agreement during such interim
period. Except as otherwise expressly provided herein, the failure to obtain any
Required Consent shall not relieve CSC of its obligations under this Agreement and CSC
shall not be entitled to any additional compensation or reimbursement amounts in
connection with obtaining or failing to obtain any Required Consent or implementing any
alternative approach. 
  10.
    SOFTWARE, EQUIPMENT, CONTRACTS AND ASSETS ASSOCIATED WITH THE PROVISION OF SERVICES 
  10.1
    CSC Designated Contracts. 
  (a)
    Assignment and Assumption. On and as of the applicable Commencement Date,
Sears shall assign to CSC, and CSC shall assume and agree to perform all obligations
related to, the Software licenses, Equipment leases and Third Party Contracts
associated with Acquired Assets and/or identified as CSC Designated Contracts in the
applicable Transaction Document (collectively, CSC Designated Contracts). With
respect to each CSC Designated Contract requiring a Required Consent for assignment to
CSC, CSC shall use commercially reasonable efforts to cause the applicable Third Party
to enter into a mutually satisfactory novation agreement among such Third Party, Sears
and CSC evidencing the assignment and assumption by CSC of Sears obligations and the
release of Sears as provided for in this Agreement. With respect to CSC Designated
Contracts not requiring a Required Consent for assignment or for which CSC is unable to
obtain such novation agreement, then subject to CSC obtaining the applicable Required
Consents, Sears and CSC shall execute and deliver a mutually satisfactory assignment
and assumption agreement with respect to such CSC Designated Contracts, evidencing the
assignment and assumption provided for in this Agreement. 
  (b)
    CSC Designated Contracts Not Assignable by Commencement Date. With respect to
any CSC Designated Contracts that cannot, as of the applicable Commencement Date, be
assigned to CSC without breaching their terms or -32-




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otherwise adversely affecting the rights or obligations of Sears or CSC thereunder,
but for which any Required Consent necessary for CSC to access and use the
underlying Software, Equipment or services has been received, the performance
obligations thereunder shall be deemed to be subcontracted or delegated to CSC until
any requisite consent, notice or other prerequisite to assignment can be obtained,
given or satisfied by CSC. It is understood that, from and after the Commencement
Date, CSC, as a Subcontractor or delegate, shall be and remain financially and
operationally responsible for such CSC Designated Contract as Sears agent pursuant
to Section 13.2(e) (Limited Agency) and, if applicable, the underlying
Acquired Asset shall not be transferred to CSC, but instead shall be considered part
of the CSC Managed Systems. CSC shall use all commercially reasonable efforts to
satisfy the consent, notice or other prerequisites to assignment and, upon CSC doing
so, the CSC Designated Contract and, if applicable, the underlying Acquired Asset
shall immediately be assigned and transferred to and assumed by CSC (and shall
thereafter no longer be part of the CSC Managed Systems). 
  (c)
    Non-Assignable CSC Designated Contracts. If, after CSC using commercially
reasonable efforts for a reasonable period of time, a CSC Designated Contract cannot be
assigned to CSC without breaching its terms or otherwise adversely affecting the rights
or obligations of Sears or CSC thereunder, the Parties shall take such actions and
execute and deliver such documents as may be necessary to cause the Parties to realize
the practical effects of the allocation of responsibilities intended to be effected by
this Agreement. 
  (d)
    Modification and Substitution. Unless otherwise agreed to by the Parties in
writing, CSC may terminate, shorten, modify or extend the CSC Designated Contracts and
may substitute or change suppliers relating to Equipment, Software or other goods or
services covered thereby, so long as such change(s) do not, in connection with such CSC
Designated Contract or the Services hereunder: (i) constitute a breach of any
obligation of the Eligible Recipients under any CSC Designated Contract; (ii) result in
additional financial obligations, or Losses to Sears Related Businesses arising out of
such CSC Designated Contract; and (iii) provide, if assumable by Sears, for less
favorable terms, conditions or prices for the Eligible Recipients following the
expiration or termination of the applicable Transaction Document than would otherwise
be applicable to CSC (except for terms, conditions or prices available to CSC because
of its volume purchases). CSCs rights under the immediately preceding sentence are:
(i) conditioned upon CSC paying all applicable termination or cancellation charges,
Losses and other amounts due to the applicable supplier associated with such action,
and (ii) are subject to Section 10.1(d) (System Change Costs). Notwithstanding
anything to the contrary in this Agreement, CSC shall not terminate, shorten or modify
without Sears prior written consent any license for Third Party Software either
created exclusively for the Eligible Recipients or otherwise not commercially
available. CSC shall reimburse the Eligible Recipient(s) for any termination -33-




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charges, cancellation charges, or other amounts paid by them at CSCs direction in connection with obtaining any such modification. 
  (e)
    Unidentified Third Party Contracts. With respect to any Third Party Contract
that (i) is related to any of the Acquired Assets or functions, responsibilities or
services to be performed by CSC under this Agreement, (ii) is not identified in a
Transaction Document and (iii) was not discovered by CSC during their due diligence and
negotiations preceding the execution of such Transaction Document (an Unidentified
Third Party Contract), the following shall apply: (1) the Unidentified Third Party
Contract shall be added to the applicable Transaction Document as a CSC Designated
Contract as soon as it has been identified, subject to Sears prior approval; (2) CSC
shall obtain any Required Consents with respect to any Unidentified Third Party
Contract; and (3) the costs of all transfers, upgrade and other fees necessary to
obtain such Required Consent with respect to the Unidentified Third Party Contracts
shall be the responsibility of CSC. During the Term of the applicable Transaction
Document, Sears shall pay the costs of any ongoing license, maintenance or other
financial obligations with respect to such Unidentified Third Party Contracts; but only
to the extent that: (x) such costs, in the aggregate, exceed 1% of the Sears IT Base
Case (below such floor CSC will be solely responsible for such costs); and (y) if such
Equipment or Software is to be replaced as part of any Transformation Services, then
CSC shall have sole responsibility for such costs after the date such replacement was
to have occurred under the Transformation Plan. 
  (f)
    Managed Third Parties. If a Transaction Document provides for Managed Third
Parties, CSC shall be responsible for those Managed Third Parties perform in accordance
with this Agreement, including Service Levels, and comply with all applicable duties
and obligations imposed on CSC under this Agreement. Unless otherwise specified in the
applicable Transaction Document or agreed to in writing by the Parties, CSC shall be
responsible for all costs and charges associated with such Managed Third Parties and
for any failure by any Managed Third Party or its Personnel to perform in accordance
with this Agreement or to comply with any duties or obligations imposed on CSC under
this Agreement to the same extent as if such failure to perform or comply was committed
by CSC or CSC Personnel. CSC shall be the Eligible Recipients sole point of contact
regarding the services provided by such Managed Third Parties. 
  (g)
    Notice of Defaults. CSC shall promptly inform Sears in writing of any material
breach of, or misuse or fraud in connection with, any Third Party Contract, Equipment
lease or Third Party Software license used in connection with the Services of which CSC
becomes aware and shall cooperate with Sears to prevent or stay any such breach, misuse
or fraud. 
  10.2
    Acquired Assets. If a Transaction Document provides for Acquired Assets, Sears agrees to convey (or shall
cause the applicable Eligible Recipient to convey) to CSC (either directly or through an -34-




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entity purchase transaction mutually approved by the Parties), subject to CSC receiving any
Required Consents, and CSC agrees (or shall cause an Affiliate to agree) to accept, as of
the applicable Commencement Date, all of Sears (or the applicable Eligible
Recipients) right, title and interest in and to the Acquired Assets specified in the
applicable Transaction Document (or entity purchase transaction document). In consideration
for such conveyance, CSC shall pay Sears on the Commencement Date the Acquired Assets Credit
specified in the applicable Transaction Document (or entity purchase transaction document).
In addition, CSC shall be responsible for, and shall pay, or provide evidence of exemption
from, all sales, use, Equipment, Software or other goods and services and other similar
taxes arising out of the conveyance of such Acquired Assets. Subject to CSC receiving any
Required Consents, Sears represents and warrants to CSC that CSC (or its Affiliates) shall
take good title to such Acquired Assets as of the Commencement Date, free and clear of all
liens. Except as otherwise expressly provided in this Section 10.2 (Acquired
Assets), SEARS CONVEYS ACQUIRED ASSETS TO CSC ON AN AS IS, WHERE IS AND WITH ALL
FAULTS BASIS. SEARS HEREBY DISCLAIMS ALL IMPLIED WARRANTIES, WITH RESPECT TO ACQUIRED
ASSETS, OR THE CONDITION OR SUITABILITY OF SUCH ACQUIRED ASSETS FOR USE BY CSC TO PROVIDE
THE SERVICES, INCLUDING WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. 
  10.3
    Sears Provided Systems and CSC Provided Systems. 
  (a)
    Inventory. Except as may be set forth in a Transaction Document, with respect
to the Services to be provided under such Transaction Document, such Transaction
Document shall contain an inventory (the Inventory) of all: (i) Sears Provided
Systems that the Eligible Recipients are to provide for use by CSC Personnel under such
Transaction Document; (ii) CSC Provided Systems; (iii) CSC Managed Systems; and (iv)
CSC Designated Contracts. The Inventory shall be incorporated into the OPM and shall be
regularly updated by CSC as changes occur. CSC shall review all such changes with
Sears, upon Sears request, and at least once per year. All changes to the Inventory
shall be subject to Sears approval. 
  (b)
    Non-Commercially Available Software. CSC shall indicate on the Inventory which
of the CSC Software and Third Party Software used in providing the Services are not
commercially available. CSC shall avoid, after the Commencement Date, using
non-commercially available CSC Software and Third Party Software where practical and
shall not introduce any non-commercially available CSC Software or Third Party Software
where a reasonably functionally equivalent commercially available alternative exists,
unless otherwise agreed to in advance in writing by Sears. Prior to CSC or the CSC
Personnel introducing non-commercially available CSC Software or Third Party Software,
CSC shall notify Sears thereof and CSC shall work with Sears in good faith to ensure
that, to the extent requested by Sears, Sears Related Businesses are able to procure a
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for such Software. CSCs inability to obtain maintenance or support for any CSC Provided Systems shall not excuse CSCs performance under this Agreement. 
  (c)
    CSC Managed Systems.  (i)
    CSC Managed Systems Generally. For all CSC Managed
Systems that are not provided under Excluded Agreements; CSCs responsibility
for such Systems shall be the same under this Agreement as if the Third Party
provider of such System was a subcontractor to CSC, including end to end
management of such Systems and integration of such Systems into CSCs overall
Service delivery; provided that CSC shall not be responsible for the
failure of any such Third Party services provider to pay service credits, if
any, as required under the Third Party Contract between such service provider
and Sears for such CSC Managed System.(ii)
    IBM Lotus Notes Agreement. CSC shall have the same
responsibility for the IBM Lotus Notes Agreement, as CSC has for other CSC
Managed Systems under Section 10.3(c)(i); except that CSC shall not be
responsible for Service failures or other breaches of the IBM Lotus Notes
Agreement caused by IBM or IBMs Personnel; to the extent such failure would
not have been avoided or mitigated had CSC properly performed its management
responsibility under this Agreement.(iii)
    Excluded Agreements. CSCs responsibility for CSC
Managed Systems provided under Excluded Agreements shall be limited to managing
IBM, the same as if CSC were the customer of such services, rather than the
Sears; provided that CSC shall be responsible for end to end management
of such Systems and integration of such Systems into CSCs overall Service
delivery.(iv)
    Terms Applicable to All CSC Managed Systems. Upon CSCs
request, Sears shall assist CSC in any contractual matters under the Third
Party Contracts between Sears and such Third Party providers of such CSC
Managed Systems by, among other things, sending, in appropriate circumstances,
a notice of breach or termination (prepared by CSC in a format acceptable to
Sears); provided that Sears shall not terminate such agreements (except for
cause) with out CSCs concurrence. CSC shall be responsible for replacing
each CSC Managed System, including those provided for under the Excluded
Agreements and the IBM Lotus Notes Agreement, on or before the expiration or
termination (for any reason) of the Third Party Contract for such CSC Managed
System, either: (a) with a new CSC Provided System, or (b) by removal of the
need for such System from the Services (as may be further set forth in the
applicable Transaction Document), without any Charges to Sears not set forth in
the Transaction Document. -36-




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(d)
    Financial Responsibility. Except as set forth in a Transaction Document, CSC
shall be responsible for all costs and expenses incurred on or after the applicable
Commencement Date associated with the CSC Provided Systems, CSC Managed Systems and CSC
Designated Contracts (excluding the Excluded Agreements and Third Party Contracts
administered by CSC on a pass-through basis, which are addressed in Section
13.2 (Pass-Through Expenses)), used by CSC to provide the
Services. Subject to CSCs obligations with respect to Required Consents, Sears
shall be responsible for Third Party fees or expenses associated with Sears Provided
Systems. Unless otherwise expressly provided, each Party also shall be responsible
for any Third Party fees or expenses on or after the applicable Commencement Date
associated with new, substitute or replacement Software, Equipment, Equipment
leases, circuits, Systems, services or Third Party Contracts (including Upgrades,
enhancements, new versions or new releases of such Software, Equipment, circuits or
services) for which such Party or any of its Affiliates is financially responsible
under this Agreement or the applicable Transaction Document. 
  (e)
    Operational Responsibility. Except as set forth in a Transaction Document,
with respect to the CSC Provided Systems, CSC Managed Systems (except for Excluded
Agreements) and CSC Designated Contracts (excluding the charges under Third Party
Contracts administered by CSC on a pass-through basis, which are addressed in
Section 13.2 (Pass-Through Expenses)), used by CSC to provide the Services, CSC
shall be responsible for: (i) the evaluation, procurement, testing, installation,
rollout, use, repair, support, management, administration, operation and maintenance of
such Software, Equipment or Systems, including Equipment leases, circuits, services and
Third Party Contracts, (ii) the disposal of broken or replaced Equipment, Software or
Systems; (iii) the evaluation, procurement, testing, installation, rollout, use,
repair, support, management, administration, operation and maintenance of new,
substitute or replacement Software, Equipment, Equipment leases, circuits, services and
Third Party Contracts (including Upgrades); (iv) the performance, availability,
reliability, compatibility and interoperability of such Software, Equipment, circuits,
services and Third Party Contracts each in accordance with this Agreement, including
the Service Levels and change management procedures; (v) the compliance with and
performance of all operational, administrative and contractual obligations specified in
such licenses, leases and contracts; (vi) the administration and exercise as
appropriate of all rights available under such licenses, leases and contracts; and
(vii) the payment of any fees, penalties, charges, interest or other expenses due and
owing under or with respect to such Software licenses, Equipment, Equipment leases,
circuits, services and Third Party Contracts that are incurred, caused by or result
from CSCs failure to comply with or perform its obligations under this Section
10.3(e) (Operational Responsibility) (except to the extent such failure is relieved
due to Sears failure to perform its responsibilities as set forth in Section 7
(Sears Responsibilities)). CSC shall establish a schedule to evaluate all such Systems
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(f)
    Benefits Pass-Through. With respect to any products and services acquired by
CSC for an Eligible Recipient on a Pass-Through Expense basis during the course of
performing the Services, CSC shall use all commercially available efforts to
pass-through to Sears and the other Eligible Recipients all benefits offered by the
manufacturers and/or suppliers of such products and services (including all warranties,
refunds, credits, rebates, discounts, training, technical support and other
consideration offered by such manufacturers and suppliers) except to the extent
otherwise agreed by Sears. If CSC is unable to pass through such benefit to Sears or
the other Eligible Recipients, it shall notify Sears in advance and shall not purchase
such product or service without Sears prior written approval. 
  (g)
    UCITA and CISG. CSC shall use commercially reasonable efforts to ensure that
any Third Party Contracts (i) related to Software, Equipment or services procured by
CSC or any CSC Personnel in connection with this Agreement, and (ii) that may be
transferred to Sears upon the termination or expiration of this Agreement or any
Transaction Document, shall include provisions stating that the parties agree that
UCITA and CISG do not and shall not apply to such contract, to the extent such
exclusions are legally permissible under the applicable governing law of such contract.
If, despite such commercially reasonable efforts, CSC is unable to obtain such
provisions, CSC shall promptly notify Sears in writing of such failure. Thereafter,
Sears may reject or approve CSCs use of such contract. If Sears rejects such
contract, CSC shall identify a replacement provider reasonably acceptable to Sears that
shall provide Sears with the applicable contractual rights. Nothing contained in this
Section 10.3(g) (UCITA and CISG) shall relieve CSC of its obligation to (A)
perform the Services or any of its obligations under this Agreement, or (B) meet the
Service Levels. 
  (h)
    Other Matters.  (i)
    With respect to all CSC Provided Systems, and related Third
Party Contracts to be used primarily to provide the Services, CSC shall use all
commercially reasonable efforts to (1) obtain for Sears the rights specified in
Section 24 (Rights upon Expiration or Termination), (2) ensure that
the granting of such rights is not subject to subsequent third party approval
or the payment by a transferee of transfer fees, (3) ensure that the terms,
conditions and prices applicable to Sears following expiration or termination
that are no less favorable than those otherwise applicable to CSC, and at least
sufficient for the continuation of the activities comprising the Services, and
(4) ensure that neither the expiration or termination of this Agreement or any
Transaction Document, nor the assignment of the contract, shall trigger less
favorable terms, conditions or pricing or services.  (ii)
    If in any instance CSC is unable to obtain any of the rights
and assurances described in this Section 10.3(h) (Other Matters), it
shall notify Sears in advance and shall not use such CSC Provided System or
Third Party Contract without Sears approval, and absent such approval, CSCs
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any such CSC Provided System or Third Party Contract shall obligate CSC to
obtain or arrange, at no additional cost to Sears, equivalent rights to
those set forth in Section 24 (Rights upon Expiration or
Termination) below. If Sears so consents to CSCs use of any specific CSC
Provided Systems or Third Party Contracts under the foregoing circumstances,
such consent shall be deemed to be conditioned on CSCs commitment to use
all commercially reasonable efforts to cause such Third Party to agree at
expiration or termination of this Agreement or the applicable Transaction
Document, or the completion of Termination Assistance Services requested by
Sears, to permit Sears to assume prospectively the license, lease or other
contract in question or to enter into a new license, lease or other contract
with Sears on substantially the same terms and conditions, including price
and restrictions on authorized users. Sears may, in its sole discretion,
withhold its consent to any such CSC Provided Systems or Third Party
Contract if, following expiration or termination of this Agreement or any
Transaction Document, as the case may be, (1) Sears would not be entitled to
the license, sublicense, assignment or other rights specified in Section
24.1 (Certain Rights), (2) the granting of such license, sublicense,
assignment or other rights would be subject to subsequent Third Party
approval or the payment by a transferee of transfer fees or (3) Sears would
be obligated to reimburse CSC for any termination or cancellation fees,
noncancelable charges or other termination charges set forth in the
applicable Transaction Document. 
  (i)
    Evaluation of Third Party Software, Equipment.  (i)
    Replacement With Sears Provided System. If Sears
wishes to replace or provision any CSC Provided System or CSC Managed System
with an identical or comparable Sears Provided System, CSC shall provide Sears
with a credit equal to the amount of the cost avoidance, if any, enjoyed by
CSC, its Affiliates or the CSC Personnel by reason of such replacement. Such
cost avoidance shall include all reduced or eliminated license fees, lease
payments, maintenance contracts and all other costs and expenses avoided by
CSC, its Affiliates or the CSC Personnel as a result of Sears replacement or
provisioning of such CSC Provided System or CSC Managed System or other goods
or services, as well as CSCs, its Affiliates or the CSC Personnels
anticipated profit associated with such avoided cost(s) (net of any increased
costs suffered by CSC as a result of such replacement); provided that
CSC shall not be required to accept such a replacement System if such
replacement would result in a net increase to CSC costs. If Sears
provisioning of a comparable Sears Provided System will have an adverse affect
on the Services or the method in which CSC is providing any of the Services,
CSC shall notify Sears in writing of such adverse effect within ten (10)
Business Days of Sears notice of Sears intention to install such a comparable
system; in which case the parties shall work in good faith to mitigate any
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Sears Provided System. CSC shall be relieved from responsibility for any
adverse effect set forth in its notice to the extent that Sears proceeds
with such replacement and CSC was not able to in good faith to avoid such
adverse effect.  (ii)
    Evaluation of New Software or Equipment. If Sears
wishes to modify or replace or provision any CSC Provided System or CSC Managed
System or Sears Provided System with any Third Party Software or Equipment
(other than a Sears Provided System, in which case Section 10.3(i)(i)
(Replacement With Sears Provided System) shall apply) selected by an Eligible
Recipient and that is not then in use in connection with the Services, then CSC
shall, without additional cost to Sears, use all commercially reasonable
efforts to evaluate and determine whether such Software and Equipment shall
adversely affect the Eligible Recipients environment, CSC Provided Systems,
CSC Managed Systems, Sears Provided Systems and/or CSCs ability to provide the
Services. CSC shall complete and report the results of such evaluation to
Sears within fifteen (15) days of its receipt of Sears request;
provided, however, that CSC shall use all commercially
reasonable efforts to respond more quickly in the case of a pressing business
need or an emergency situation. 
  10.4
    Notice of Decommissioning.  CSC shall notify Sears promptly if and to the extent any CSC Managed Systems or Sears
Provided Systems, including any Eligible Recipients owned Equipment or Eligible Recipients
leased Equipment, shall no longer be used to provide the Services. The notification shall
include the identification of the applicable Equipment, Software or circuit, and the date it
shall no longer be needed by CSC, along with the reason for decommissioning or non-use.
Upon receipt of any such notice, Sears may (or may cause the applicable Eligible Recipient
to), in its sole discretion, terminate the Equipment lease for such leased Equipment or the
license for such Software, as the case may be, as of the date specified in such notice and
sell or otherwise dispose of or redeploy such Eligible Recipient owned Equipment, Software
or circuit that is the subject of such a notice as of the date specified in such notice.
Upon CSC ceasing to use any Equipment (or, in the case of leased Equipment, upon the last
day such Eligible Recipient is obligated to make such leased Equipment available to CSC, if
earlier) or Software, CSC shall return the same to the Eligible Recipients and/or their
designee(s) in condition at least as good as the condition thereof on the applicable
Commencement Date, ordinary wear and tear excepted. CSC shall, at CSCs expense, deliver
such Equipment or Software to the location designated by the Eligible Recipients. 
  10.5
    License to CSC Provided Systems.  As of the applicable Commencement Date, CSC, at no additional charge to the Eligible
Recipients, hereby grants an irrevocable, worldwide, non-exclusive, and except for the
Charges, paid-up, royalty-free right and license during the Term of the applicable
Transaction Document and any Termination Assistance Services period to the Eligible   -40-




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Recipients (but, as to Eligible Recipients that are not Sears Related Businesses, only in
connection with their relationship with the Sears Related Businesses), to access, interface
with, monitor, use, execute, reproduce, display, perform, prepare Derivative Works based
upon, and distribute, from and to any locations in the world, the CSC Provided Systems to
the extent necessary or appropriate to receive the full benefit of the Services;
provided that this Section 10.5 shall not require CSC to provide source code
to Sears for CSC Provided Systems, if CSC would not otherwise be required to provide source
code to Sears. Sears Related Businesses may permit the Sears Personnel to exercise the
foregoing rights and licenses on behalf of the Eligible Recipients in connection with
receipt of the Services by the Eligible Recipients. 
  10.6
    License to Sears Provided Systems and CSC Managed Systems. 
  (a)
    License to Sears Owned Materials. As of the applicable Commencement Date,
Sears hereby grants to CSC, for the sole and express purpose of performing the Services
during the Term of the applicable Transaction Document and any Termination Assistance
Services period, a non-exclusive, non-transferable, royalty-free right and license to
access, interface with, monitor, use, operate, copy and store Sears Provided Systems
that consist of Sears Owned Materials; provided that CSC may permit the CSC
Personnel (that are retained in accordance with this Agreement) to use such Materials
solely to provide Services to Eligible Recipients on CSCs behalf. Neither CSC, nor
CSC Personnel, shall have any right to the source code to such Sears Owned Materials
unless and to the extent approved in advance by Sears, and shall cease all use of such
Sears Owned Materials upon the end of the Term of the applicable Transaction Document
and the completion of any applicable Termination Assistance Services requested by
Sears. 
  (b)
    License to Third Party Materials. Subject to CSC having obtained any Required
Consents, Sears hereby grants to CSC, for the sole and express purpose of performing
the Services during the Term of the applicable Transaction Document and any Termination
Assistance Services period and solely to the extent of Sears underlying rights, the
same rights of access and use as Sears possesses under the applicable contract with
respect to the CSC Managed Systems and those Sears Provided Systems that do not consist
of Sears Owned Materials; provided that CSC may permit the CSC Personnel (that
are retained in accordance with this Agreement) to use such Materials solely to provide
Services to Eligible Recipients on CSCs behalf. CSC shall comply with the duties,
including use restrictions and those of nondisclosure, imposed on Sears by such Third
Party contracts, and shall cease all use of such CSC Managed Systems and Sears Provided
Systems upon the end of the Term of the applicable Transaction Document and the
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11.
    SERVICE LEVELS 
  11.1
    Description of Service Levels. 
  (a)
    Purpose of Service Levels. Without limiting CSCs obligations provided
elsewhere in this Agreement, the Parties acknowledge and agree that the purpose of the
Service Levels specified in this Agreement is to serve as a reporting tool to inform
the Parties as to how the Services are being performed and to enable the Parties to
identify and measure those areas of the Services that require improvement. 
  (b)
    Service Level Performance Standards. CSC shall perform the Services so as to
meet or exceed the Service Levels set forth in the applicable Transaction Document
beginning on the applicable dates set forth therein. If such Transaction Document does
not specify dates for CSC to meet the Service Levels, CSC shall perform the Services so
as to meet or exceed the Service Levels beginning on the Commencement Date thereof. If
more than one Service Level applies to any particular obligation of CSC, CSC shall
perform in accordance with the most stringent of such Service Levels. CSC shall be
responsible for meeting or exceeding the applicable Service Levels, even where doing so
is dependent on the provision of Services by CSC Personnel that are Third Parties. 
  11.2
    Service Level Credits.  CSC recognizes that Sears is paying CSC to deliver the Services at specified Service Levels.
If CSC fails to meet such Service Levels, then CSC shall pay or credit to Sears the
performance credits specified in the applicable Transaction Document (Service Level
Credits) in recognition of the diminished value of the Services resulting from CSCs
failure to meet the agreed-upon level of performance and not as a penalty. Sears shall have
the right to re-allocate the Service Level Credits among the Service Levels under a
Transaction Document, upon ninety (90) days advance written notice to CSC and no more than
twice in any Contract Year, provided that such re-allocation shall not change the
total amount of Service Level Credits at risk under such Transaction Document. Under no
circumstances shall the imposition of Service Level Credits be construed as Sears sole or
exclusive remedy for any failure to meet the Service Levels. However, if Sears recovers
monetary damages from CSC as a result of CSCs failure to meet a Service Level, CSC shall be
entitled to set off against such damages any Service Level Credits paid for the failure
giving rise to such recovery. 
  11.3
    Problem Analysis.  If CSC fails to provide Services in accordance with the Service Levels or otherwise in
accordance with this Agreement, CSC shall (after restoring service or otherwise resolving
any immediate problems) (a) promptly investigate and report on the causes of the problem,
(b) provide a Root Cause Analysis of such failure as soon as practicable after such failure
or at Sears request, (c) use all commercially reasonable efforts to implement remedial
action and begin meeting the Service Levels as soon as practicable, (d) advise -42-




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Sears of the status of remedial efforts being undertaken with respect to such problem and
(e) provide Sears reasonable evidence that the causes of such problem have been or shall be
corrected on a permanent basis. CSC shall use all commercially reasonable efforts to
complete the Root Cause Analysis within fifteen (15) days; provided,
however, that if it is not capable of being completed within fifteen (15) days using
reasonable diligence, CSC shall complete such Root Cause Analysis as quickly as possible and
shall notify Sears prior to the end of the initial fifteen (15) day period as to the status
of the Root Cause Analysis and the estimated completion date. 
  11.4
    Continuous Improvement Reviews.  Throughout each Exhibit Term, CSC shall identify and notify Sears of commercially reasonable
methods of improving the Services and reducing the cost to the Eligible Recipients of such
Services. In addition, Sears and CSC shall periodically review the Service Levels and the
performance data collected and reported by CSC in accordance with the applicable Transaction
Document. As part of this review process, the Parties shall, at no additional cost to
Sears, increase the Service Levels to reflect the higher performance levels actually
attained or attainable by CSC in accordance with the applicable Transaction Document. At
minimum, if the actual performance of any Services exceeds the applicable Service Level for
twelve (12) consecutive months, then the applicable Service Level shall be automatically
increased (or decreased, if applicable) to a value which is halfway between the existing
Service Level and the average actual performance for such twelve (12) month period. In
addition, subject to Section 4.5 (Additional Services) and the applicable
Transaction Document, the Parties shall, to the extent reasonable and appropriate, (a)
increase the Service Levels to reflect improved performance capabilities associated with
advances in the proven processes, technologies and methods available to perform the
Services, (b) add new Service Levels to permit further measurement or monitoring of the
accuracy, quality, completeness, timeliness, responsiveness, cost-effectiveness or
productivity of the Services, (c) modify or increase the Service Levels to reflect changes
in the processes, architecture, standards, strategies, needs or objectives defined by Sears,
(d) modify or increase the Service Levels to reflect agreed-upon changes in the manner in
which the Services are performed by CSC or (e) replace Service Levels that are not
accurately measuring the impact of poor performance with Service Levels that better measure
the benefits the Eligible Recipients should receive from the Services. Sears may, from time
to time, require CSC to measure and report on additional Service Levels. 
  11.5
    Measurement and Monitoring.  CSC shall, on or before the applicable Commencement Date or as otherwise set forth in the
applicable Transformation Plan, implement measurement and monitoring tools and metrics, as
well as standard reporting procedures, all acceptable to Sears, to measure and report CSCs
performance of the Services against the applicable Service Levels. CSC shall provide Sears
with on-line access to up-to-date problem management data and other data regarding the
status of service problems, service requests and user inquiries. CSC also shall provide
Sears with access to the data used by CSC to calculate its performance against the Service
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utilized by CSC to generate such data for purposes of audit and verification. Sears shall
not be required to pay any amount in addition to the Charges for such measurement and
monitoring tools or the resource utilization associated with their use. 
  11.6
    Satisfaction Surveys. 
  (a)
    General. Except as set forth in a Transaction Document, within three (3)
months after the initial Commencement Date under this Master Agreement, at least once
every twelve (12) months thereafter during the Term and as part of the Services, CSC
shall conduct (i) a satisfaction survey of end users regarding the Services performed
under each Transaction Document, and (ii) a survey of the senior management of the
Sears information technology department that shall focus on satisfaction with the
functional interface between Sears and CSC. The timing, content, scope, protocols and
procedures of each survey shall be as described in the applicable Transaction Document
or as otherwise mutually agreed upon in writing by the Parties. To the extent CSC
engages an independent Third Party to perform all or any part of any satisfaction
survey, CSC shall obtain Sears prior approval of such Third Party. 
  (b)
    Sears Conducted Surveys. In addition to the satisfaction surveys to be
conducted by CSC pursuant to Section 11.6(a) (General), Sears may survey, or
engage a Third Party to survey, end user satisfaction with CSCs performance. At
Sears request, CSC shall cooperate and assist Sears with the formulation of the survey
questions, protocols and procedures and with the execution and review of such surveys. 
  (c)
    Survey Follow-up. If the results of any satisfaction survey conducted pursuant
to Section 11.6(a) (General) or 11.6(b) (Sears Conducted Surveys)
indicate that the level of satisfaction with CSCs performance is less than the level
reasonably deemed appropriate by Sears, CSC shall promptly: (i) analyze and report on
the cause of the management or end user dissatisfaction; (ii) develop an action plan to
address and improve the level of satisfaction; (iii) present such plan to Sears for its
review, comment and approval; and (iv) take reasonable action in accordance with the
approved plan and as necessary to improve the level of satisfaction. CSCs action plan
shall specify the specific measures to be taken by CSC and the dates by which each such
action shall be completed. Following implementation of such action plan, CSC shall
conduct follow-up surveys with the affected Sears users and management to confirm that
the cause of any dissatisfaction has been addressed and that the level of satisfaction
has improved. 
  11.7
    Excessive Service Level Failure.  If the Parties define one or more Service Level failures in a Transaction Document as giving
Sears a right to terminate for cause (an Excessive Service Level Failure), and such
Excessive Service Level Failure occurs, Sears shall have the right to terminate as provided
in Section 23.1(a) (Termination By Sears). The express acknowledgment that such
number of Service Level failures shall be considered an Excessive Service Level -44-




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Failure, or that a certain amount of Service Level Credits shall give Sears the right to
terminate does not imply that a lesser number of Service Level failures or lesser amount of
Service Level Credits does not or cannot constitute a material breach of this Agreement and
therefore grounds for termination under other subsections, and no Party shall contend
otherwise in any dispute or controversy between the Parties. In the event of any Excessive
Service Level Failure, either itself or in combination with other breaches of the applicable
Transaction Document, Sears shall be entitled to all remedies under this Agreement and
applicable Law, and shall not be limited to Service Level Credits received for individual
Service Level failures; provided, however, that any Service Level Credits
received by Sears shall be credited against any such damages. 
  12.
    PROJECT PERSONNEL 
  12.1
    Key Personnel.  A Transaction Document may identify certain CSC Personnel and related positions critical to
the provision of the Services (Key Personnel). Key Personnel shall be subject to the
following terms and conditions. 
  (a)
    Approval of Key Personnel. Before assigning an individual to act as one of the
Key Personnel, whether as an initial assignment or a subsequent assignment, CSC shall
notify Sears of the proposed assignment, shall introduce the individual to appropriate
Sears Personnel, shall provide a reasonable opportunity for Sears Personnel to
interview the individual and shall provide Sears with a resume and such other
information about the individual as may be reasonably requested by Sears. If Sears in
good faith objects to the proposed assignment, the Parties shall attempt to resolve
Sears concerns on a mutually agreeable basis. If the Parties have not been able to
resolve Sears concerns within five (5) Business Days of Sears communicating its
concerns, CSC shall not assign the individual to that position and shall propose to
Sears the assignment of another individual of suitable ability and qualifications. 
  (b)
    Continuity of Key Personnel. CSC shall cause each of the Key Personnel to
devote full time and effort to the provision of Services under this Agreement for the
period specified in the applicable Transaction Document from the date he or she assumes
the position in question. CSC shall not transfer, reassign or remove any of the Key
Personnel (except as a result of voluntary resignation, involuntary termination for
cause; documented, repeated negative performance; or illness, disability or death
(collectively, Permitted Separation)), without Sears prior approval, which approval
may be withheld in Sears reasonable discretion (based upon Sears business needs and
the nature of the Services performed by such individual). In the event of a Permitted
Separation of one of its Key Personnel, CSC shall (i) give Sears as much notice as
reasonably possible of such development, and (ii) expeditiously identify and obtain
Sears approval of a suitable replacement. Unless otherwise agreed, CSC shall not
transfer, reassign or remove more than ten percent (10%) of the Key Personnel under any
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(c)
    Succession. CSC shall maintain active succession plans for each of the Key
Personnel positions, including plans to effectively transfer knowledge from Key
Personnel in the event that it becomes necessary to replace such Key Personnel. Upon
termination or resignation of any Key Personnel, CSC shall promptly provide notice to
Sears of such termination or resignation and identify potential suitable replacements. 
  (d)
    Location of Key Personnel. If any Key Personnel are not resident in the area
where they will be providing Services (e.g., the Chicago metropolitan area for Key
Personnel assigned to the Sears Hoffman Estates, Illinois facility), CSC shall, at its
expense, relocate such Key Personnel to the area where they will be providing Services
within 90days of such individuals being assigned as Key Personnel under this
Agreement; provided that for such interval period the Key Personnel will be on-site
Monday through Friday from 8 am to 5 pm, unless otherwise agreed. 
  (e)
    Restrictions on Performing Services to Sears Competitors. CSC shall not permit
any individual who (i) is retained (as CSC Personnel) by CSC or its Subcontractors and
(ii) provides Services to the Eligible Recipients to provide services to any retailer
that is a competitor of Sears or its Affiliates either while engaged in the provision
of such Services or during the twelve (12) months immediately following the termination
of his or her involvement in the provision of such Services without Sears prior
written consent. 
  12.2
    CSC Account Executive.  CSC shall designate a CSC Account Executive who, unless otherwise agreed by Sears, shall
maintain his or her office at Sears Hoffman Estates, Illinois facility. The CSC Account
Executive shall: (a) be the primary CSC representative under this Agreement; (b) be one of
the Key Personnel; (c) be a full-time employee of CSC; (d) devote his or her full time and
effort to managing the Services; (e) remain in this position for a minimum period of three
(3) years from the initial assignment (except in the event of a Permitted Separation of the
CSC Account Executive); (f) serve as the single point of accountability for the Services;
(g) be the single point of contact to whom all Sears communications concerning this
Agreement may be addressed; (h) have authority to act for and on behalf of CSC in all
matters pertaining to this Agreement; and (i) have overall responsibility for managing and
coordinating the performance of CSCs obligations under this Agreement and day-to-day
authority for ensuring customer satisfaction and attainment of all Service Levels. 
  12.3
    Compensation of CSC Account Executive and Key Personnel. 
  (a)
    CSC Account Executive. At a minimum, thirty percent (30%) of the CSC Account
Executives annual incentive compensation shall be based upon (i) the level of customer
satisfaction reflected in the periodic customer satisfaction surveys, (ii) the extent
to which CSC has met or exceeded the Service Levels, Service Levels and CSCs other
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Agreement, (iii) CSCs achievement of the objectives relating to the Eligible
Recipients businesses set forth in Section 1.2 (Goals and Objectives), as
reasonably determined by Sears, and (iv) Sears determination as to whether CSC has
met the technical objectives set by the Sears Chief Information Officer. 
  (b)
    Key Personnel. At a minimum, fifteen percent (15%)of the annual incentive
compensation of the Key Personnel listed in a Transaction Document shall be based upon
the factors set forth in Section 12.3(a) (CSC Account Executive). 
  (c)
    Evaluation Input. Sears shall have a meaningful opportunity to provide
information to CSC with respect to Sears evaluation of the performance of the CSC
Account Executive and the other Key Personnel and such evaluation shall be considered
and accorded substantial weight by CSC in establishing the bonus and other compensation
of such individuals. 
  12.4
    Qualifications and Retention of CSC Personnel. 
  (a)
    Sufficiency and Suitability of Personnel. CSC shall assign (or cause to be
assigned) sufficient CSC Personnel to provide the Services in accordance with this
Agreement and such CSC Personnel shall possess suitable competence, ability and
qualifications and shall be properly educated and trained for the Services they are to
perform. 
  (b)
    Turnover Rate and Data. If Sears determines that the turnover rate of CSC
Personnel is unacceptable and so notifies CSC, CSC shall within ten (10) Business Days
(i) provide Sears with data concerning CSCs turnover rate, (ii) meet with Sears to
discuss the reasons for the turnover rate, and (iii) submit a proposal for reducing the
turnover rate for Sears review and approval. Notwithstanding any transfer or turnover
of CSC Personnel, CSC shall remain obligated to perform the Services without
degradation and in accordance with the Service Levels and other requirements of this
Agreement. 
  (c)
    Drug Testing. Attached here as Appendix C, is a copy of CSCs drug
testing policy (the CSC Drug Testing Policy). CSC shall comply with its CSC Drug
Testing Policy (or a similarly restrictive policy) for any Personnel assigned to the
Sears account. CSC shall not subject the Transitioned Personnel to the CSC Drug
Testing Policy as a condition of employment. If CSC, in its sole discretion, makes a
material modification of the CSC Drug Testing Policy, it shall provide Sears with a
copy of such modifications at least 60 days in advance of its implementation. For
Personnel that have not been tested under a similarly restrictive policy, CSC, its
Affiliates or its Subcontractors, may grandfather existing employees of any Third Party
that such party acquires or that such party receives transitioned Personnel from as
part of a purchased services arrangement. 
  (d)
    Background Checks. Within sixty (60) days of the Effective Date, CSC shall
comply with the following provisions; provided that CSC shall not require the
Transitioned Personnel to submit to the following: -47-




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(i)
    CSC shall, at its sole cost and expense, conduct a criminal
background check report, and obtain any other job-relevant consumer reports,
for each of the CSC Personnel to be assigned to the Sears account or involved
in the Services for more than a total of three (3) days. Said reports must be
based on a minimum of seven (7) years residential history, unless otherwise
restricted by Law; provided, however, that the time span of the information
obtained must extend to that which is reasonably available from court records
or any other applicable sources, even if in excess of seven (7) years, except
as otherwise restricted by Law.  (ii)
    CSC shall use the services of a consumer reporting agency,
approved in advance in writing by Sears, to conduct such criminal background
checks and any other job-relevant consumer reports. At a minimum, criminal
background checks shall be based on information obtained by the consumer
reporting agency from every county court associated with the applicable CSC
Personnels residences. In addition, CSC shall use a consumer reporting agency
that conducts searches (typically via pass-throughs of credit bureau data) to
obtain aliases and other addresses found that are then used for additional
criminal background checks and CSC shall conduct retail theft background checks
when offered as an option by the consumer reporting agency.  (iii)
    Such background check shall be completed by CSC, and the
results must be satisfactory to Sears, before the applicable CSC Personnel
report for the cumulative sixth day of work on the Sears account or involvement
in the Services, except and to the extent the background check results are
delayed because of the administrative protocol of the information suppliers
(e.g., county courts), or as otherwise agreed by Sears. CSC shall promptly
notify Sears of any adverse results obtained after the applicable CSC Personnel
have begun work on the Sears account and remove such Personnel from the Sears
account. CSC shall not be required to perform such background checks on CSC
Personnel located outside of the United States that will not have access to
Sears Confidential Personnel Information and that will not have contact with
Sears Personnel.  (iv)
    If an assignment involves operating equipment that requires
special licensing or certification such as trucks or forklifts, working around
sensitive equipment or data (as in the Sears Testing Laboratory), CSC shall
ensure that all CSC Personnel involved with such assignment have successfully
acquired all required licenses and certifications prior to reporting for the
first day of work on such assignment, regardless of any delay by any background
check information suppliers or administrative agencies.  (v)
    If any CSC Personnel has satisfactorily completed a criminal
background check, and other job-relevant consumer reports, where applicable,
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this Section 12.4(d) (Background Checks), an additional check need
not be performed due to break in involvement in the Services by such CSC
Personnel, as long as the CSC Personnels primary residence has not changed
and the initial criminal background check was performed within sixty (60)
days prior to the CSC Personnel resuming involvement in the Services.  (vi)
    CSC shall not assign individuals with job-relevant adverse
information or information that indicates an unreasonable risk to property,
safety or the welfare of individuals or the public or to any Eligible
Recipient. At a minimum, all such adverse information shall be evaluated by
CSC in accordance with all Laws. Sears reserves the right to approve and
modify the criteria CSC utilizes for this process.  (vii)
    At Sears request, CSC shall submit evidence satisfactory to
Sears of CSCs compliance with this Section 12.4(d) (Background
Checks). 
  (e)
    Fingerprinting. Upon Sears request, CSC will implement, after negotiation and
execution of a Service Addenda acceptable to both Parties, fingerprint background
checks, in accordance with requirements provided by Sears. 
  12.5
    Identification of CSC Personnel.  While at Sears Facilities or Sears Sites, all CSC Personnel shall clearly identify
themselves as CSC Personnel and not as employees of the Eligible Recipients. This shall
include any and all e-mail communications. 
  12.6
    Substance Abuse.  CSC represents, warrants and covenants that CSC and its Affiliates have and shall maintain
substance abuse policies, in each case in conformance with applicable Laws, and CSC
Personnel shall be subject to such policies. 
  12.7
    Union Agreements.  CSC shall provide Sears not less than ninety (90) days prior written notice of the
potential expiration of any collective agreement with unionized CSC Personnel (other than
Exempt Subcontractors), if the expiration of such agreement or any resulting labor dispute
could potentially interfere with or disrupt the business or operations of an Eligible
Recipient or impact CSCs ability to timely perform its duties and obligations under this
Agreement. 
  12.8
    CSC Responsibility.  CSC shall be fully responsible for the performance of all CSC Personnel, as well as any
failure by any CSC Personnel, including CSC employees and Subcontractors and Subcontractors
Personnel, to perform in accordance with this Agreement or to comply with any duties or
obligations imposed on CSC under this Agreement. Except as -49-




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expressly provided otherwise in this Agreement, CSC shall be responsible for the provision
of the Services in accordance with this Agreement even if, by agreement of the Parties, such
Services are actually performed by Third Parties (including Sears Personnel, subject to
Section 7.1(c) (Sears Responsibilities)). CSC shall be Sears sole point of contact
regarding the Services, including with respect to payment. 
  13.
    CHARGES 
  13.1
    General. 
  (a)
    Payment of Charges. In consideration of CSCs performance of the Services, and
subject to Section 14.4 (Disputed Charges), Sears agrees to pay CSC the
applicable Charges set forth in a Transaction Document as full compensation for such
Services. Sears shall not pay any Charges or have any reimbursement obligations other
than those expressly set forth in a Transaction Document. Except as provided for under
Section 2.2(h) (Ordering Affiliates), CSC shall not charge (nor seek any
reimbursement from) any Eligible Recipient other than Sears in connection with the
Services. The Charges in each Transaction Document shall be stated separately for each
relevant consumption item or Service component at a level of detail reasonably
satisfactory to Sears. In no event shall any Eligible Recipient be required to pay any
Charges in connection with the training of CSC Personnel. 
  (b)
    No Charge for Reperformance. As part of the Services and at no additional
expense to Sears, CSC shall promptly correct and reperform (including any backups or
restoration of data) any Services or deliverables that result in incorrect outputs or
contain errors or inaccuracies due to an error or breach by CSC or any CSC Personnel,
and the resources required for such correction and reperformance shall not be counted
in calculating the Charges payable or resources utilized by the Eligible Recipients
under this Agreement. 
  13.2
    Pass-Through Expenses. 
  (a)
    Procedures and Payment. Subject to Section 14.4 (Disputed Charges),
Sears shall pay all Pass-Through Expenses directly to the applicable suppliers
following review, validation and approval of such Pass-Through Expenses by CSC. Before
submitting an invoice to Sears for any Pass-Through Expense, CSC shall (i) review and
validate the invoiced charges, (ii) identify any errors or omissions, and (iii)
communicate with the applicable supplier to correct any errors or omissions, resolve
any questions or issues and obtain any applicable credits for Sears. CSC shall deliver
(or cause to be delivered) to Sears the original supplier invoice, together with any
documentation supporting such invoice and a statement that CSC has reviewed and
validated the invoiced charges, within ten (10) Business Days after CSCs receipt
thereof or, if earlier, at least fifteen (15) Business Days prior to the date on which
payment is due if such invoice was received by CSC; provided that if CSC
receives an invoice within fifteen (15) Business Days of its due date, CSC shall
deliver such invoice to Sears within two (2) Business Days of -50-




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CSCs receipt. In addition, if the supplier offers a discount for payment prior to
a specified date, CSC shall deliver such invoice and associated documentation to
Sears at least fifteen (15) Business Days prior to such date. To the extent CSC
fails to comply with its obligations under this Agreement, it shall be financially
responsible for any resulting discounts lost or any late fees or interest charges
incurred by the Eligible Recipients. In addition, to the extent CSC fails to
process any invoice in accordance with this provision within six (6) months after
CSCs receipt thereof, CSC shall be financially responsible for the payment of all
such invoiced amounts. 
  (b)
    No Markup; No Fees. CSC shall not (i) mark up any Pass-Through Expenses or
(ii) add any management, administrative or other fees to any Pass-Through Expenses. In
addition, CSC shall not separately charge Sears any handling or administrative charge
in connection with its processing or review of invoices for Pass-Through Expenses in
accordance with Section 13.2(a) (Procedures and Payment). 
  (c)
    Efforts to Minimize. CSC shall continually seek to identify methods of
reducing and minimizing both Sears retained and Pass-Through Expenses and shall notify
Sears of such methods and the estimated potential savings associated with each such
method. 
  (d)
    Disbursements. Beginning on the applicable Commencement Date, CSC shall make
payments for all Third Party Contracts (other than Excluded Agreements and Pass-Through
Expenses) related to CSC Managed Systems and CSC Designated Contracts (to the extent
they have not then been assigned to CSC) as paying agent of the Sears Related
Businesses or shall reimburse Sears for amounts paid by Sears and which were due such
Third Parties. 
  (e)
    Limited Agency. Sears hereby appoints CSC as its limited agent during the Term
of the applicable Transaction Document solely for the purposes of the administration of
Pass-Through Expenses and administration and payment of amounts under CSC Designated
Contracts (to the extent they have not then been assigned to CSC). Sears shall
provide, on a timely basis, such affirmation of CSCs authority to such Third Parties. 
  (f)
    Reimbursement for Substitute Payment. If either Party (or their
representatives, or, in the case of Sears, the other Eligible Recipients) in error pays
to a Third Party an amount for which the other Party is responsible under this
Agreement, the Party that is responsible for such payment shall promptly reimburse the
other Party for such amount. 
  13.3
    Reimbursable Expenses and Sears Expense Policy.  To the extent a Transaction Document provides that an expense shall be reimbursable by
Sears, Sears obligation to pay such expenses shall be conditioned upon CSCs compliance
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incurring such expense). Sears current Expense Policy is set forth in Appendix B
(Sears Expense Policy), and may be amended by Sears from time to time, upon notice to CSC. 
  13.4
    Taxes.  The Parties respective responsibilities for taxes arising under or in connection with this
Agreement shall be as follows: 
  (a)
    Income Taxes. Each Party shall be responsible for its own Income Taxes. 
  (b)
    Sales, Use and Property Taxes. CSC shall be responsible for any sales, lease,
use, personal property, stamp duty or other such taxes on its real property and
personal property, including CSC Provided Systems. Sears (or the other Eligible
Recipients) shall be responsible for any sales, lease, use, personal property, stamp
duty or other such taxes on its real property and its personal property, including
Sears Provided Systems and CSC Managed Systems provided pursuant to the Excluded
Agreements or on a Pass-Through Expense basis. 
  (c)
    Taxes on Goods or Services Used by CSC. CSC shall be responsible for all
sales, service, value-added, lease, use, personal property, excise, consumption and
other taxes and duties, including VAT, payable by CSC on any Equipment, Software or
other goods or services used or consumed by CSC in providing the Services (including
CSC Provided Systems, CSC Managed Systems, but not including CSC Managed Systems
provided pursuant to the Excluded Agreements or on a Pass-Through Expense Basis, and
CSC Designated Contracts and services obtained from CSC Personnel) where the tax is
imposed on CSCs acquisition or use of such goods or services and the amount of tax is
measured by CSCs costs in acquiring or procuring such goods or services and not by
Sears cost of acquiring such goods or services from CSC. 
  (d)
    Service Taxes.  (i)
    Responsibility as of Effective Date. Sears shall be
financially responsible for all Service Taxes assessed by any United States
jurisdiction against either Party as of the Effective Date on the provision of
the Services as a whole or on any particular Service received by the Eligible
Recipients from CSC. CSC shall be responsible for assessing and collecting
from Sears and remitting to the appropriate Taxing Authority all such Service
Taxes, and CSC shall indemnify Sears from (pursuant to Section 20.1
(Indemnity by CSC)): (A) except as set forth in clauses (ii) and
(iii) below, the economic burden of any such Service Taxes which exceed
the amount of Service Taxes set forth in the applicable Transaction Document,
and (B) any fines, penalties and interest arising from CSCs failure to
properly assess and remit Service Taxes.  (ii)
    Modifications Increasing Taxes After the Effective
Date. If after the Effective Date new or higher Service Taxes become
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Services as a result of either Party or its Affiliates (or their Personnel)
moving all or part of its operations to a different jurisdiction (e.g.,
Sears opening a new office, CSC relocating performance of Services to a
shared service center or CSC assigning this Agreement to an Affiliate) or as
a result of a change in the manner in which CSC performs or invoices Sears
for the Services, the Party who initiated (or whose Personnel initiated)
such move or change, respectively, shall be financially responsible for such
new or higher Service Taxes.  (iii)
    New or Increased Taxes. If new or higher Service
Taxes become applicable to such Services after the Effective Date for any other
reason (e.g., tax law changes, but not volume changes) the Parties shall share
equally financial responsibility for such new or additional Service Taxes;
provided that CSC shall not be required to share such costs to the
extent CSC can demonstrate that such costs will require CSC to incur a loss
over the Term of this Agreement.  (iv)
    Reimbursement. If required under applicable Laws, CSC
shall invoice Sears for the full amount of any Service Taxes, fines, penalties
and interest and then credit or reimburse Sears in an amount to make Sears
whole for the economic burden of such Service Taxes, fines, penalties and
interest for which CSC is financially responsible under this provision.  (v)
    Invoicing. CSCs invoices shall separately state the
Charges that are subject to taxation and the amount of any taxes included
therein (by tax jurisdiction). 
  (e)
    Notice of New Taxes and Charges. CSC shall promptly notify Sears when it
becomes aware of any new taxes or other Charges (including changes to existing taxes or
Charges) to be passed through to and/or collected from Sears under this Section, as
well as any changes in the manner in which CSC assesses taxes in connection with this
Agreement. Such notification (which shall be separate from the first invoice
reflecting such taxes or other Charges or changes, as the case may be, and delivered to
Sears at least thirty (30) days prior to the delivery to Sears of such invoice) shall
contain a detailed explanation of such taxes or Charges or changes, as the case may be,
including the effective date of each new tax or charge or change. 
  (f)
    Efforts to Minimize Taxes. CSC shall cooperate fully with Sears to enable
Sears to more accurately determine Sears tax liability and to minimize such liability
to the extent legally permissible (e.g., by the way CSC invoices). Each Party shall
provide and make available to the other any resale certificates, information regarding
out-of-state or out-of-country sales or use of Equipment, materials or services, and
other exemption certificates or information reasonably requested by either Party. At
Sears request, CSC shall provide Sears with (i) written certification signed by an
authorized representative of CSC confirming that CSC has filed all required tax forms
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Service Taxes collected from Sears, and has collected and remitted all applicable
Service Taxes, and (ii) such other information pertaining to applicable Taxes as
Sears may reasonably request. For purposes of the State of Illinois tax on
telecommunications, CSC acknowledges that Sears Hoffman Estates, Illinois facility
is presently exempt from such tax and CSC agrees that, for the duration of such
exemption, CSC shall not include such tax on invoices for exempt Services, provided
Sears furnishes CSC with a current exemption certificate. CSC shall provide to
Sears such documentation as Sears may reasonably request to establish that CSC is
registered to collect any tax described in Section 13.4(d) (Service Taxes)
that CSC seeks to collect from Sears. 
  (g)
    Tax Audits or Proceedings. Each Party shall promptly notify the other of, and
coordinate with the other Party, the response to and settlement of any claim for taxes
asserted by applicable taxing authorities for which the other Party or its Affiliates
is responsible hereunder, but solely with respect to the taxes claimed for Services
under this Agreement that CSC seeks to recover from Sears. Information regarding other
taxes that do not relate to the Services or this Agreement shall not be provided. With
respect to any claim arising out of a form or return signed by either Party or its
Affiliates, such Entity shall have the right to elect to control the response to and
settlement of the claim, but the other Party shall have all rights to consult with such
Entity in the responses and settlements that are appropriate to its potential
responsibilities or liabilities and in a reasonable time frame so as to allow the other
Party meaningful input into the responses and settlements. Each Party also shall have
the right to challenge the imposition of taxes for which it is financially responsible
under this Agreement or, if necessary, to direct the other Party to challenge the
imposition of such taxes. If either Party requests the other to challenge the
imposition of any tax, the requesting Party shall reimburse the other for all fines,
penalties, interest, additions to taxes or similar liabilities imposed in connection
therewith, plus the reasonable legal fees and expenses it incurs. The Party who is
ultimately responsible for payment of a tax under this Agreement shall be entitled to
receive, and to have the other Party remit to it, any tax refunds or rebates granted
with respect to such tax that were paid by the obligated Party or its Affiliates. 
  13.5
    Tax Filings.  CSC represents, warrants and covenants that (a) it shall file appropriate tax returns, and
pay applicable taxes owed arising from or related to the provision of the Services in
applicable jurisdictions, and (b) it is registered to and shall timely collect and remit
Service Taxes in all applicable jurisdictions. 
  13.6
    Extraordinary Events. 
  (a)
    Definition. As used in this Agreement, an Extraordinary Event means a
circumstance in which an event or discrete set of events has occurred or is planned
with respect to the business of the Eligible Recipients that results or could
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of the Services that the Eligible Recipients shall require from CSC, and which is
expected to cause the estimated average monthly amount of Charges for any
Transaction Document specified in the applicable Transaction Document to increase or
decrease by twenty-five percent (25%) or more. Examples of the kinds of events that
might cause such substantial increases or decreases include the following:  (i)
    changes in locations where the Eligible Recipients operate;  (ii)
    changes in products of, or in markets served by, the Eligible
Recipients;  (iii)
    mergers, acquisitions, divestitures or reorganizations of the
Eligible Recipients;  (iv)
    changes in the method of service delivery;  (v)
    changes in the applicable regulatory environment;  (vi)
    changes or advances in technology allowing services to be
delivered or supported in a more efficient manner;  (vii)
    changes in market priorities; or  (viii)
    changes in the business units being serviced by CSC. 
  (b)
    Consequence. If an Extraordinary Event occurs, Sears may, at its option,
request more favorable pricing with respect to applicable Charges in accordance with
the following:  (i)
    CSC and Sears shall mutually determine on a reasonable basis
the efficiencies, economies, savings and resource utilization reductions
resulting from such Extraordinary Event and, upon Sears approval, CSC shall
then proceed to implement such efficiencies, economies, savings and resource
utilization reductions as quickly as practicable and in accordance with the
agreed-upon schedule. As the efficiencies, economies, savings or resource
utilization reductions are realized, the Charges specified in the applicable
Transaction Document shall be promptly and equitably adjusted to pass through
to Sears the full benefit of such efficiencies, economies, savings and resource
utilization reductions; provided, however, that Sears shall
reimburse CSC for any out-of-pocket expenses incurred to realize such
efficiencies, economies, savings or resource utilization reductions if and to
the extent CSC (1) notifies Sears of such additional costs and obtains Sears
approval prior to incurring such costs (at which point they shall become
approved Out-Of-Pocket Expenses), (2) uses commercially reasonable efforts to
identify and consider practical alternatives, and reasonably determines that
there is no other more practical or cost-effective way to obtain such savings
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(3)  uses commercially reasonable efforts to minimize the Out-Of-Pocket
Expenses to be reimbursed by Sears.  (ii)
    An Extraordinary Event shall not result in Charges to Sears
being higher than such Charges would have been if the rates and charges then
specified in the applicable Transaction Document had been applied, unless and
to the extent such Extraordinary Event results in New Services (e.g., Sears
requires that CSC create a new infrastructure to support an acquired Entity).
Sears may, at its sole option, elect, for each Extraordinary Event, at any time
to forego its rights under this Section 13.6 (Extraordinary Events),
and instead apply the rates and charges specified in the applicable Transaction
Document to adjust the Charges. 
  13.7
    Proration.  Periodic charges under a Transaction Document shall be computed on a calendar-month basis,
and shall be prorated for any partial month on a calendar-day basis, unless expressly stated
otherwise in a Transaction Document. 
  13.8
    Refundable Items. 
  (a)
    Prepaid Amounts. Where the Eligible Recipients have prepaid for a service or
function (e.g., prepaid software maintenance) for which CSC is assuming financial
responsibility under this Agreement, CSC shall refund to Sears, upon either Party
identifying the prepayment, that portion of such prepaid expense which is attributable
to periods on and after the applicable Commencement Date. 
  (b)
    Refunds and Credits. If CSC receives a refund, credit, discount or other
rebate for Equipment, Software or other goods or services paid for by the Eligible
Recipients on a Pass-Through Expense basis, then CSC shall (i) notify Sears of such
refund, credit, discount or rebate and (ii) promptly pay the full amount of such
refund, credit, discount or rebate to Sears. If Sears or its Affiliates erroneously
receives a refund, credit, discount or rebate which should have been paid to CSC and
not to Sears and/or its Affiliates, and CSC notifies Sears of such erroneous payment
within twelve (12) months, Sears shall (or shall cause its Affiliates to), promptly pay
the full amount of such refund, credit, discount or rebate to CSC; provided
that if Sears receives such a payment and the applicable Sears Personnel know that such
payment should have been directed to CSC, Sears will (without requiring notice from
CSC) promptly reimburse such amount to CSC. 
  13.9
    Repricing.  If and to the extent provided for in a Transaction Document, each pricing element for
Services specified in a Transaction Document shall be subject to repricing (Repricing) as
provided below. Upon the occurrence of a Repricing event specified in the applicable
Transaction Document, as and to the extent requested by Sears, in Sears sole discretion, -56-




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CSC shall promptly, but in no event more than thirty (30) days after the occurrence of such
Repricing event, provide to Sears a written document detailing proposed new Charges for each
pricing element subject to Repricing, which proposed new Charges shall take into account (a)
the facts and circumstance giving rise to the Repricing event, (b) Sears expected future
consumption of the applicable Service, and (c) the terms and conditions applicable to such
Service. The Parties shall, within thirty (30) days after Sears receives CSCs proposed new
Charges, negotiate in good faith the revised pricing to be applied to each pricing element
subject to Repricing. CSC covenants that the Charges it proposes in connection with each
Repricing shall be competitive with those available to Sears from other providers for
similar Services, volumes and performance standards. 
  13.10
    Benchmarking. 
  (a)
    Required Benchmark Reviews. At the intervals set forth, if any, in the
applicable Transaction Document, the Parties shall participate in collaborative
benchmarking reviews with an independent Third Party selected by the Parties (a
Benchmarker) to compare the quality and cost of the Services against the quality and
cost of well-managed tier one information technology service providers performing
similar services to ensure that Sears is receiving from CSC pricing and levels of
service that are competitive with market rates, prices and service levels, given the
nature, volume and type of Services provided by CSC hereunder (each a Benchmarking).
The Parties shall each pay one-half of the charges and reimbursable expenses to be paid
to the Benchmarker for each Benchmarking. In conducting the Benchmarking, the
Benchmarker shall consider the following factors, as well as any other appropriate
factors, and shall adjust the prices as and to the extent appropriate: (i) whether
supplier transition charges are paid by the customer as incurred or amortized over the
term of the applicable agreement; (ii) the extent to which supplier pricing includes
the purchase of the customers existing assets; (iii) the extent to which supplier
pricing includes the cost of acquiring future assets; (iv) the extent to which this
Agreement calls for supplier to provide and comply with unique Sears requirements; and
(v) whether Service Taxes are included in such pricing or stated separately in supplier
invoices. Prior to commencement of a Benchmarking the Parties shall mutually agree
with the Benchmarker on the methodology to be used to perform such Benchmarking. If
the Parties cannot, in good faith, agree upon a Benchmarker or either Party disputes,
in good faith, the methodology to be used by the Benchmarker, then either Party may
submit a notice to the other Party, stating the nature of the disagreement and
identifying with particularity the basis of such Partys dispute and the matter shall
immediately thereafter be resolved, in good faith, pursuant to Section 22
(Dispute Resolution). 
  (b)
    Other Price Reviews. From time to time during the Term of the applicable
Transaction Document, Sears may, at its own cost, engage a Benchmarker to conduct a
Benchmarking or similar competitive review. -57-




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(c)
    General. Any Benchmarker engaged by the Parties or by Sears shall execute an
appropriate non-disclosure agreement. CSC shall cooperate fully, in a collaborative
manner, with Sears and the Benchmarker and shall provide reasonable access to the
Benchmarker during such effort, all at CSCs cost and expense. The Benchmarking shall
be conducted so as not to unreasonably disrupt CSCs operations under this Agreement. 
  (d)
    Results of Required Benchmarking. For any Benchmarking required under the
applicable Transaction Document, the Benchmarker shall submit a written report to both
Parties setting forth the Benchmarkers findings and conclusions (the Benchmark
Results). 
  (e)
    Non-Competitive Charges. If the Benchmark Results indicate (after resolution
of any dispute as provided in Section 13.10(d) (Results of Required
Benchmarking)), that the Charges being paid by Sears for the Benchmarked Services under
the applicable Transaction Document are greater than the lowest twenty-five percent
(25%) of the prices charged by other well-managed information technology service
providers for services of a similar nature, type and volume (the Benchmark Standard),
or the service levels associated with the contracts reviewed in creating the Benchmark
Standard are more stringent than those in effect under such Transaction Document, CSC
shall adjust the Charges downward to reflect the Benchmark Results, including an
appropriate adjustment for any less-stringent service levels reflected by the Benchmark
Results, effective as of earlier of: (i) the date specified in the Transaction
Document; or (ii) the date the Benchmark Results are first delivered to both Parties.
The Charges under this Agreement shall not be increased as the result of any such
Benchmarking. 
  13.11
    Most Favored Customer.CSCs Charges to Sears for Services to be provided under any Exhibit shall be at least as
low as CSCs lowest charges to any Third Party for services that are (a) similar in scope
and volume to such Services and (b) subject to similar material contract and financial terms
as those contained in this Agreement. If CSC provides services to a Third Party that are
similar in scope and volume to such Services under similar material contract and financial
terms as those contained in such Transaction Document, and at charges that are lower or
otherwise more favorable than those set forth in this Agreement, CSC shall promptly notify
Sears and reduce CSCs Charges for the Services to equal the more favorable pricing. This
price reduction will be retroactive to the date on which the more favorable pricing was
first provided to the Third Party. At the end of each Contract Year, CSC will provide to
Sears a written certification of its compliance with this Section 13.11 (Most
Favored Customer), executed by a financial officer of CSC. -58-




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14.
    INVOICING AND PAYMENT 
  14.1
    Invoicing. 
  (a)
    Invoice. Within five (5) days after the beginning of each month, CSC shall
present Sears with a written invoice for any Charges due and owing for the preceding
month (the Monthly Invoice), and the applicable rates for such Charges based on the
rate card set forth in the applicable Transaction Document. CSC shall not invoice
Sears for any advance or concurrent charges or other amounts. CSC shall submit all
Monthly Invoices to the following address: Sears, Roebuck and Co.
c/o Accounts Payable
P.O. Box 957437
Hoffman Estates, Illinois 60179-7437
IT Manager: Sears VP Operations/Engineering
IT Ledger Code: 704-OP or to such other address as may be specified by Sears from time to time upon notice
to CSC. Each invoice must reference the Sears IT Manager, Sears IT Ledger Code and
applicable Transaction Document number. 
  (b)
    Form and Data. At Sears request, CSC shall provide separate Monthly Invoices
for each Eligible Recipient then receiving Services, allocated among such Eligible
Recipients based on the charge-back data generated by CSC and the allocation formula
provided by Sears. Each invoice shall be in a form as may be reasonably acceptable to
Sears and shall (i) comply with all applicable legal, regulatory and accounting
requirements, (ii) contain transaction-level detail and other data sufficient to permit
Sears to validate and verify volumes and fees, (iii) permit Sears to charge-back
internally to the same organizational level and at the same level of detail in use by
Sears as of the applicable Commencement Date, (iv) include accurate bill to
designators, (v) segregate the Charges for (1) taxable Services, (2) non-taxable
Services, (3) items for which CSC functions merely as a paying agent for Sears
(including leasing and licensing arrangements) that are non-taxable or have previously
been subject to tax, (4) the type and amount of tax due on taxable Services billed by
CSC (by taxing jurisdiction), and (5) other taxes (if any) collected by CSC under this
Agreement, and (vi) otherwise meet the Eligible Recipients billing requirements. Each
invoice shall include the pricing calculations and related data utilized to establish
the Charges. Each invoice, and the data underlying each invoice, shall be delivered to
Sears electronically in a form and format compatible with and suitable for automated
input into Sears Systems and its processes (e.g., as a fixed or delimited flat file or
other mutually agreed-upon file format). If requested by Sears, the Parties shall work
together to develop additional procedures for invoicing formats and methods for invoice
reconciliation. -59-




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(c)
    Credits. To the extent a credit may be due to Sears pursuant to this Agreement
or any Transaction Document, CSC shall provide Sears with an appropriate credit against
amounts then due and owing. If such credit to Sears exceeds the Charges payable by
Sears to CSC over a two (2) month period, then any excess shall be paid to Sears at the
end of such two (2) month period. 
  (d)
    Time Limitation. If CSC fails to invoice Sears for any amount within ninety
(90) days after the month in which the Services in question are rendered or the expense
incurred, CSC shall be deemed to have waived any right it may otherwise have to invoice
for and collect such amount (and Sears shall have no obligation to pay such amounts). 
  14.2
    Payment. 
  (a)
    Timing. Subject to the other provisions of this Section 14
(Invoicing and Payment), Sears shall initiate payment (e.g., by check, wire transfer,
application of a credit due Sears) of all properly invoiced amounts within thirty (30)
calendar days after receipt of a proper and correct Monthly Invoice as provided for
under Section 14.1 (Invoicing) unless (a) such 30th day is a Saturday, Sunday
or bank holiday, in which case such amounts shall be due on the next banking day or (b)
the amount in question is disputed in accordance with Section 14.4 (Disputed
Charges), in which case Sears shall initiate payment of the undisputed portion of such
Monthly Invoice as provided in this Section 14.2 (Payment). Any undisputed
amount due under this Agreement for which a time for payment is not otherwise specified
also shall be payable as provided in this Section 14.2 (Payment). 
  (b)
    Interest. If any properly invoiced amount remains unpaid by Sears after the
payment due date specified in Section 14.2(a) (Timing), CSC may impose an
interest charge until such amount is paid at the Contract Rate per month; provided, that CSC shall not impose an interest charge on the portion of Charges that Sears
is disputing in accordance with Section 14.4 (Disputed Charges).
Additionally, if CSC fails to timely issue any credit to (or pay) Sears for any amounts
owing hereunder, such amounts shall accrue interest until paid by CSC at the Contract
Rate per month. 
  14.3
    Set Off.Sears shall have the right to set off any amounts properly due Sears in connection with this
Agreement against any undisputed amounts owed to CSC under this Agreement. 
  14.4
    Disputed Charges.Sears may withhold payment of particular Charges (in an amount not to exceed $5,000,000 from
any invoice), that Sears disputes in good faith, subject to the following: -60-




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(a)
    Description and Explanation. If Sears disputes any CSC Charges, Sears shall
promptly notify CSC and provide a description of the particular Charges in dispute and
an explanation of the reason why Sears disputes such Charges, and such disputed Charges
will be immediately referred to Dispute Resolution in accordance with Section
14.4(c) (Dispute) below. 
  (b)
    No Waiver. Neither the failure to dispute any Charges or other amounts prior
to payment nor Sears failure to withhold any such Charges or amounts shall constitute,
operate or be construed as a waiver of any right Sears may otherwise have to dispute
any Charge or other amount or recover any such items previously paid. 
  (c)
    Dispute. Either Party may refer any dispute underlying Sears withholding of
any charges pursuant to this Section 14.4 (Disputed Charges) directly to the
executives of each party designated in Section 22.1(a) (Informal Dispute
Resolution). Notwithstanding any other provision in Section 22 (Dispute
Resolution), the executives will endeavor to resolve such dispute within ten (10)
Business Days after any withheld amount would otherwise have become due and payable.
If the dispute is not resolved by the expiration of such thirty (30) day period, either
Party may initiate a proceeding in accordance with Section 22.2 (Arbitration)
and both Parties will request an expedited arbitration process. 
  (d)
    Escrow. To the extent the disputed amounts withheld by either Party, in the
aggregate, are in excess of the lesser of: (i) $25,000,000, or (ii) the total Service
Charges for the three (3) months immediately preceding the first amount withheld, then
the disputing Party shall pay the other party seventy-five percent (75%) of the
disputed amount and deposit the remaining twenty-five percent (25%) of such disputed
amounts within thirty (30) days of the payment due date into an interest-bearing escrow
account in a United States national bank for the benefit of both Parties. Upon
resolution of the dispute, the Parties shall allocate the money in the escrow account
minus any fees relating to opening and maintaining the escrow account, plus any
interest earned on such money in such account, according to the resolution of the
dispute. If CSC invoices Sears for Services that have not been rendered or for charges
or expenses that are not set forth in this Agreement, Sears shall have no obligation to
place into escrow monies for such amounts. 
  15.
    SEARS DATA AND OTHER CONFIDENTIAL INFORMATION 
  15.1
    Sears Ownership of Sears Data.Sears Data is and shall remain the property of the applicable Eligible Recipients. CSC
shall promptly deliver Sears Data (or the portion of such Sears Data specified by Sears) to
Sears in the format and on the media prescribed by Sears (a) at any time at Sears request,
(b) at the end of the Term of the applicable Transaction Document and the completion of all
requested Termination Assistance Services, or (c) with respect to particular Sears Data, at
such earlier date that such data are no longer required by CSC to -61-




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perform the Services. Neither CSC, its Affiliates nor the CSC Personnel shall withhold any
Sears Data as a means of resolving any dispute. Sears Data shall not be utilized by CSC,
its Affiliates or the CSC Personnel for any purpose other than the performance of Services
under this Agreement and shall not be sold, assigned, leased or otherwise commercially
exploited by or on behalf of CSC or any CSC Personnel. Neither CSC, its Affiliates nor the
CSC Personnel shall possess or assert any lien or other right against or to Sears Data. 
  15.2
    Safeguarding Sears Data. 
  (a)
    Safeguarding Procedures.  (i)
    CSC shall establish and maintain environmental, safety and
facility procedures, data security procedures and other safeguards against the
destruction, loss, unauthorized access or alteration of Sears Data in the
possession of CSC or the CSC Personnel that are no less rigorous than the most
rigorous procedures and safeguards maintained by Sears or CSC from time to
time, and at least adequate to meet the requirements of Sears records
retention policy and applicable Laws. CSC shall revise and maintain such
procedures and safeguards upon Sears request. Sears shall have the right to
establish backup security for Sears Data and to keep backup copies of the Sears
Data in Sears possession at Sears expense if Sears so chooses. If CSC, its
Affiliates or their Subcontractors revoke access to any of its Systems for any
CSC Personnel for any reason (e.g., resignation, termination, security
purposes, etc.), and such Personnel have or in the past have been given access
to Sears Provided Systems, CSC shall immediately (1) notify Sears designated
security contact of such revocation of access rights, and (2) revoke such CSC
Personnels access to all Sears Provided Systems for which CSC has operational
responsibilities.(ii)
    CSC shall remove all Sears Data from any media, CSC Provided
Systems and CSC Managed Systems taken out of service by CSC Personnel (which
for purposes of the Excluded Agreement and the IBM Lotus Notes Agreement, do
not include IBM Personnel for purposes of this subsection), and from any Sears
Provided Systems that are taken out of service by CSC Personnel and shall
securely erase all Sears Data from such media and Systems. No media on which
Sears Data is stored may be used or re-used to store data of any other customer
of CSC or to deliver data to a Third Party, including another CSC customer,
unless Sears Data has been securely erased from such media. Where this
Agreement calls for off-site storage of Sears Data, CSC shall use a
commercially acceptable off-site storage facility. All backup and off-site
storage shall be in full compliance with all confidentiality provisions of this
Agreement. 
  (b)
    Reconstruction Procedures. As part of the Services, CSC shall be responsible
for developing and maintaining commercially reasonable procedures for the
reconstruction of destroyed, lost or altered Sears Data, including any procedures -62-




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explicitly set forth in this Agreement. If and to the extent that such destruction,
loss or alteration was caused by CSC, its Affiliates, CSC Personnel, any CSC
Provided System or CSC Managed System, CSC shall be responsible for the cost of
restoring such data. 
  15.3
    Confidentiality. 
  (a)
    Confidential Information. This Section 15.3 (Confidentiality) shall
apply to any information exchanged between the Parties regarding the Services or any
proposed services or other business, regardless of whether the Parties enter into a
Transaction Document regarding such proposed business. CSCs obligations pursuant to
this Section 15.3 (Confidentiality) shall be in addition to, and not in lieu
of, CSCs obligations provided for elsewhere in this Agreement. 
  (b)
    Confidential Business Information.  (i)
    Definition. The term Confidential Business
Information means any information, whether disclosed in oral, written, visual,
electronic or other form, disclosed by, or on behalf of, a Party or such
Partys Affiliates (and, as to Sears, the other Eligible Recipients) and their
Personnel (the Disclosing Party) to the other Party or such Partys
Affiliates (the Receiving Party) or to Receiving Partys Personnel or which
the Receiving Party or its Personnel observe in connection with this Agreement,
whether before or after the date of this Agreement; that (1) if in tangible
form or other media that can be converted to readable form, is marked clearly
as confidential (or with a similar term) when disclosed, or (2) if oral or
visual, is either (A) identified as confidential (or with a similar term) at
the time of disclosure and is promptly summarized in a writing marked as such
thereafter, or (B) treated as confidential by the Disclosing Party and would
reasonably be understood to be confidential, whether or not so marked. Sears
Confidential Business Information shall include, without the need to mark it as
such, Sears Data and Sears, Sears Affiliates and the other Eligible
Recipients: business plans, strategies, forecasts, projects and analyses;
customer lists, customer contracts, customer information, rates and pricing,
information with respect to competitors, strategic plans, Sears Provided
Systems, CSC Managed Systems, CSC Designated Contracts, account information and
research information; financial information (including assets, expenditures,
mergers, acquisitions, divestitures, billings collections, revenues and
finances); employee and vendor information; system designs and requirements,
architectures, structure and protocols (including all hardware, software and
specifications and documentation related thereto); facilities, business units
and product lines, plans for business mergers, acquisitions or divestitures;
rate information; plans for the development and marketing of new products,
financial forecasts and budgets; information regarding businesses, plans,
operations, third-party contracts, licenses, internal or external audits, law
suits, regulatory compliance or -63-




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other information or data obtained, received, transmitted, processed,
stored, archived or maintained by CSC under this Agreement; and other
business processes and proprietary information. The Disclosing Partys
Confidential Business Information shall remain the property of such Entity.  (ii)
    Failure to Denote as Confidential. Subject to Section 15.3(b)(i)(2)(B), if the Disclosing Party fails to denote
Confidential Business Information as confidential (or with a similar term)
prior to disclosure, and later does so, and such Confidential Business
Information would not otherwise be considered as such pursuant to Section
15.3(b)(i) (Definition), the Receiving Party shall, after receiving such
notice, treat such information as Confidential Business Information of the
Disclosing Party to the extent such untimely notice does not prejudice the
Receiving Party.(iii)
    Treatment of Confidential Business Information. The
Receiving Party shall use at least the same degree of care and discretion to
safeguard and prevent disclosure, publication or dissemination of any
Confidential Business Information received from the Disclosing Party as the
Receiving Party uses to avoid unauthorized disclosure, publication or
dissemination of its own information (or information of its customers) of a
similar nature, but not less than reasonable care. Further, the Receiving
Party shall: (1) use the Disclosing Partys Confidential Business Information
only in connection with the Receiving Partys performance of its obligations or
its full enjoyment of its rights under this Agreement, and (2) not disclose the
Disclosing Partys Confidential Business Information except to its Personnel
who have a need to know such Confidential Business Information in connection
with the performance of the Receiving Partys obligations or the full enjoyment
of its rights under this Agreement. CSC shall restrict disclosure of Sears
Confidential Business Information to the CSC Personnel who have executed a
written agreement by which they agree to be bound by terms substantially
similar to this Section 15.3 (Confidentiality). In any case, the
Receiving Party is liable for any unauthorized disclosure or use of
Confidential Business Information by any of its Personnel.(iv)
    Exceptions to Confidential Treatment. The obligations
under this Section 15.3(b) (Confidential Business Information) do not
apply to any Confidential Business Information that the Receiving Party can
demonstrate:  (1)
    the Receiving Party possessed prior to
disclosure by the Disclosing Party, or its Affiliates, without an
obligation of confidentiality;(2)
    is or becomes publicly available without breach
of this Agreement by the Receiving Party; -64-




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(3)
    is independently developed by the Receiving
Party without use of any Confidential Business Information of the
Disclosing Party; or(4)
    is received by the Receiving Party from a Third
Party that does not have an obligation of confidentiality to the
Disclosing Party or its Affiliates.  (v)
    Disclosure. If, in the reasonable opinion of its
legal counsel, a Receiving Party is: (1) required by Law to disclose any
Confidential Business Information of the Disclosing Party, including in
connection with any legal proceeding, or (2) such disclosure would be material
in any legal proceeding concerning the Confidential Business Information, the
Services provided for hereunder or this Agreement, then the Receiving Party may
disclose such information to the applicable arbitrator, court or other
governmental authority, etc., as the case may be, and shall not thereby be
considered to have breached its obligations under this Section 15.3(b)
(Confidential Business Information) for such disclosure; provided,
however, that in each case, the Receiving Party shall, to the extent it
may legally do so, notify the Disclosing Party a reasonable time prior to such
disclosure of the Confidential Business Information to be disclosed and the
identity of the Third Party requiring such disclosure in order that the
Disclosing Party may interpose an objection to such disclosure, take action to
assure confidential handling of the Confidential Business Information or take
such other action as it deems appropriate to protect the Confidential Business
Information. The Receiving Party shall use commercially reasonable efforts to
cooperate with the Disclosing Party in its efforts to seek a protective order
or other appropriate remedy or, if such protective order or other remedy is not
obtained, to obtain assurance that confidential treatment shall be accorded
such Confidential Business Information.(vi)
    Duration. The Receiving Partys obligations under
this Section 15.3(b) (Confidential Business Information) shall survive
the termination or completion of the applicable Transaction Document for a
period of five (5) years from the date that the applicable Confidential
Business Information was initially disclosed. 
  (c)
    Confidential Personal Information.  (i)
    General. CSC agrees that all information about the
Eligible Recipients (including their respective Affiliates individual
customers and Personnel), provided to CSC or the CSC Personnel by Eligible
Recipients, including names, addresses, telephone numbers, account numbers,
customer lists and demographic, financial and transaction information, as well
as employee lists and company telephone or e-mail directories and any other
information that is subject to applicable Privacy Laws (collectively,
Confidential Personal Information) shall be deemed confidential. -65-




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This Section 15.3(c) (Confidential Personal Information) shall not
apply to information independently developed by CSC without the use of
Confidential Personal Information; provided that neither CSC nor
the CSC Personnel are using such information on Eligible Recipients behalf.
If information may be deemed to be both Sears Business Information and
Sears Confidential Personal Information, the provisions of this Section
15.3(c) (Confidential Personal Information) shall control.  (ii)
    Treatment of Confidential Personal Information. CSC
shall use Confidential Personal Information only as necessary to perform the
Services and its other obligations under this Agreement. CSC shall not
duplicate or incorporate the Confidential Personal Information into its own
records or databases. CSC shall restrict disclosure of Confidential Personal
Information to those CSC Personnel who have a need to know such information to
perform the Services and who have first agreed in writing to be bound by terms
substantially similar to this Section 15.3(c) (Confidential Personal
Information). CSC shall be liable for any unauthorized disclosure or use of
Confidential Personal Information by any CSC Personnel.(iii)
    Non-Disclosure of Confidential Personal Information.
CSC shall not disclose the Confidential Personal Information to any third party
including Affiliates of CSC, agents, independent contractors except Exempt
Subcontractors and Subcontractors approved by Sears, without prior written
consent of Sears and the written agreement of such third party to be bound by
terms substantially similar to this Section 15.3(c) (Confidential
Personal Information). Unless otherwise prohibited by applicable Law, CSC
shall: (1) immediately notify Sears of any legal process served on CSC for the
purpose of obtaining Confidential Personal Information; and (2) permit Sears or
its Affiliates adequate time to exercise its legal options to prohibit or limit
such disclosure.(iv)
    CSC Policies for Confidential Personal Information.
CSC shall establish and maintain written policies and procedures designed to:
(1) ensure the security and the confidentiality of the Confidential Personal
Information; (2) protect against any anticipated threats or hazards to the
security or integrity of such information; and (3) protect against unauthorized
access to or use of such information that could result in substantial harm or
inconvenience to any customer or data subject. Copies of such policies and
procedures shall be provided to Sears by CSC upon Sears request.(v)
    CSC Notification for Confidential Personal Information. CSC shall notify Sears promptly upon the discovery of the actual or
potential loss, unauthorized disclosure or unauthorized use of the Confidential
Personal Information and shall indemnify and hold harmless the Eligible
Recipients for such loss, unauthorized disclosure or unauthorized use,
including Attorneys Fees pursuant to Section 20.1 (Indemnity by CSC). -66-




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(vi)
    CSC Breach. A material breach by CSC or the CSC
Personnel of this Section 15.3(c) (Confidential Personnel Information)
shall be a material breach of this Agreement. In addition, Sears shall be
entitled to the recovery of any pecuniary gain realized by CSC or the CSC
Personnel from the unauthorized use or disclosure of Confidential Personal
Information. 
  (d)
    Return or Destruction of Confidential Information. Within ten (10) days
following the earlier of (i) termination or expiration of this Agreement or any
Transaction Document or (ii) completion of any Services for which such Confidential
Personal Information has been provided, CSC shall, at Sears discretion, either return
Sears Confidential Information, and all copies and derivatives thereof, to Sears, and
certify in writing to Sears that such Confidential Information and all copies and
derivatives thereof have been destroyed in such a manner that it cannot be retrieved. 
  (e)
    Loss of Confidential Information. Each Party shall (i) immediately notify the
other Party of any actual or potential breach of security, unauthorized possession,
use, knowledge, disclosure or loss of such other Partys Confidential Information,
including Sears Data, in contravention of this Agreement, (ii) promptly furnish to the
other Party all known details and assist such other Party in investigating and/or
preventing the recurrence of such possession, use, knowledge, disclosure or loss, (iii)
cooperate with the other Party in any investigation or litigation deemed necessary by
such other Party to protect its rights, and (iv) promptly use all commercially
reasonable efforts to prevent further possession, use, knowledge, disclosure or loss of
Confidential Information in contravention of this Agreement. Each Party shall bear any
costs it incurs in complying with this Section 15.3(e) (Loss of Confidential
Information). Furthermore, CSC shall, at no additional charge, perform a Root Cause
Analysis of any security failure regarding a CSC Provided System, a CSC Managed System
or unauthorized access to Sears Provided Systems originating directly or indirectly
from any CSC Provided Systems, CSC Managed Systems or CSC Personnel and provide Sears
with such reasonable assurances as Sears shall request that such breach or potential
breach shall not recur; provided that, without limiting CSCs other
obligations under this Agreement, with respect to those CSC Managed Systems provided
pursuant to the Excluded Agreements, such reasonable assurance shall be limited to
CSCs: (i) first, using diligent management of the applicable supplier(s) under such
Excluded Agreements and, if such efforts do not provide reasonable assurance to Sears,
then (ii) subject to Section 4.5 (Additional Services), the implementation of
reasonably necessary modifications and/or enhancements of Sears Provided Systems, CSC
Provided Systems, and other CSC Managed Systems. 
  (f)
    No Implied Rights. Nothing contained in this Section 15.3
(Confidential Information) shall be construed as (i) obligating a Party to disclose its
Confidential Information to the other Party, (ii) granting to or conferring on a Party
any express or implied rights or license to any Confidential Information of -67-




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the other Party, or (iii) limiting or affecting any rights or licenses granted to
either Party elsewhere in this Agreement. 
  15.4
    File Access.Sears Personnel authorized by the Sears Relationship Manager shall have unrestricted access
to, and the right to review and retain the entirety of, all computer or other files
containing Sears Data, as well as all Systems and network logs, system parameters and
documentation, and all such files and other information provided to the Eligible Recipients
shall be complete. CSC shall not delay access by Sears to any of such files or other
materials or information. CSC shall provide to the Sears Relationship Manager all
passwords, codes, comments, keys, documentation and the locations of any such files and
other materials promptly upon the request of Sears, including Equipment and Software keys
and such information as to format, encryption (if any) and any other specification or
information necessary for the Eligible Recipients to retrieve, read, revise and/or maintain
such files and information. 
  16.
    OWNERSHIP 
  16.1
    CSC Provided Systems. 
  (a)
    Ownership of CSC Provided Systems. Subject only to the licenses granted to the
Eligible Recipients by CSC under this Agreement, title to all CSC Provided Systems
shall not be affected by this Agreement and shall at all times remain with CSC (or with
CSCs or its Subcontractors licensors). 
  (b)
    Limited Sears Related Businesses  Patents.  (i)
    Acknowledgement. CSC acknowledges and agrees that (i)
it may be given access to the Eligible Recipients respective business
operations and Confidential Information during the course of CSCs performance
of the Services, and (ii) by virtue of such access, it may develop and patent
related business methods and innovations.(ii)
    CSC and its Affiliates. CSC covenants, on behalf of
itself, its Affiliates and their respective employees (while acting within the
scope of their employment) and their successors and assigns, that they shall
not, and shall cause each of its Affiliates and their respective employees to
not, enforce or assert, during the Term and thereafter, against the Limited
Sears Related Businesses, or any of their Personnel (in connection with such
Personnels relationship with Sears), any United States or foreign patent at
any time owned, acquired or controlled by CSC, any of its Affiliates or their
respective employees claiming any business method or innovation related to the
retail industry or any other aspect of the Limited Sears Related Business
respective products, services, methods of operation or relating to any
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Related Businesses, or any of their Personnel (in connection with such
Personnel relationship with Sears); provided that after the expiration or
termination of this Agreement (including any Termination Assistance
Services), this prohibition shall not apply to any patents that were not
invented, developed, conceived, reduced to practice or otherwise discovered
as a result of, pursuant to or in connection with the Services or this
Agreement (a Sears Related Patent); unless such patents relate to
Equipment, Software or Systems that Sears acquires under Section 24
(Rights Upon Termination).  (iii)
    Sears Cooperation. If during the Term, a Limited
Sears Related Business, with actual knowledge of an Out-of-Scope CSC Patent,
implements, after the Effective Date of any applicable Transaction Document,
any process, method of operation or System with actual knowledge that such
process, method of operation or System is an infringement of such CSC Patent,
then Sears will, upon CSCs written request, use all commercially reasonable
efforts to cause such Limited Sears Related Business to cease such knowing
infringement. For purposes of this Section 16.1(b) (Limited Sears
Related Businesses  Patents): (A) Out-of-Scope Patents means any Patent
that: (x) was held by CSC or its Affiliates prior to the Effective Date, and or
(y) is not a Sears Related Patent, and (B) Limited Sears Related Business
means Sears Related Businesses: (I) including any Entity, including any
corporation, joint venture or partnership in which, on or after the Effective
Date, Sears or any Affiliate of Sears has management or operational
responsibility by law or contract, but (II) otherwise excluding subsections
(g) and (h) of the Eligible Recipients definition, and (III) excluding any
direct competitor of CSC; provided that for this subsection (III) any
entity shall not cease being a Limited Sears Related Business until CSC has
provided written notice to Sears that such entity is a direct competitor of
CSC. CSC shall provide Sears a list of such competitors prior to the Effective
Date and may update such list from time to time.(iv)
    Subcontractors. In addition, except as expressly
provided otherwise in a Transaction Document, CSC shall cause all
Subcontractors (and their respective Affiliates) to not enforce or assert,
during the Term and thereafter, against the Eligible Recipients any United
States or foreign patent at any time owned, acquired or controlled by any such
Subcontractor (or any of its Affiliates) claiming any business method or
innovation related to the retail industry or any other aspect of the Eligible
Recipients respective products, services or businesses or relating to any
Confidential Information of any Eligible Recipient, except for patents claiming
inventions that were not invented, developed, conceived, reduced to practice or
otherwise discovered as a result of, pursuant to or in connection with the
Services or this Agreement. -69-




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16.2
    Sears Provided Systems. Subject only to the license granted by Sears to CSC in Section 10.6 (License to Sears
Provided Systems), title to all Sears Provided Systems shall not be affected by this Agreement and
shall at all times remain with Sears (or with the Eligible Recipients licensor(s)), and CSC shall
and hereby does, without further consideration, assign to Sears any and all right, title or
interest that CSC, its Affiliates or the CSC Personnel may now or hereafter possess in or to the
Sears Provided Systems. To the fullest extent permissible by applicable Law, all copyrightable
aspects of any Sears Provided Systems developed by CSC or the CSC Personnel shall be considered
works made for hire (as that term is used in Section 101 of the United States Copyright Act, as
amended) and owned by Sears. For purposes of clarity, if a Deliverable to be owned by Sears
pursuant to this Section 16.2 (Sears Provided Systems) contains a Derivative Work based
upon any pre-existing work in which a Third Party has rights and such pre-existing work was
provided to CSC by an Eligible Recipient for use with such Deliverable or was incorporated into
such Deliverable by CSC Personnel with Sears prior written consent, then the assignment and
transfer to Sears of rights, title and interest in and to such Derivative Work pursuant to this
Section 16.2 (Sears Provided Systems) shall be subject to such Third Partys rights, if any.
CSC acknowledges that, as between CSC, CSC Personnel and Sears, Sears (and its successors and
assigns) shall have the right to obtain and hold in their own name any Intellectual Property Rights
in and to the Sears Provided Systems. CSC shall execute any documents and take any other actions
reasonably requested by Sears to effectuate the purposes of this Section 16.2 (Sears
Provided Systems). If and to the extent that CSC uses a Third Party to create Derivative Works,
modifications, enhancements or other Deliverables based upon (or for) a Sears Provided System, and
a related portion of such Sears Provided System was licensed to Sears by such Third Party prior to
the commencement of such work, then, CSC may not be able to get from such Third Party the ownership
rights provided for in this Section 16.2 (Sears Provided Systems). If such Third Party
will not provide such ownership rights, then CSC will not commence the applicable Services and
instead CSC will inform Sears in writing of the intellectual property rights such Third Party will
provide, and will request that Sears either or approve or reject such lessor rights (which approval
Sears may withhold in its sole discretion). After notice from CSC that it can not get such rights,
CSC shall be relieved from providing such Services until Sears has expressly accepted or rejected
such lesser rights. If Sears rejects such rights, CSC shall be thereafter relieved from providing
such Services and the Parties shall equitably adjust the resulting Charges. If Sears does accept
such lesser rights, such change will be documented in a Service Addenda to the Agreement prior to
commencement of the applicable Services. 
  16.3
    Deliverables. 
  (a)
    License to Sears. Unless otherwise expressly set forth in the applicable
Transaction Document, CSC shall and hereby does grant to Sears a perpetual, assignable,
unrestricted, worldwide, royalty-free, irrevocable, non-exclusive right and license to
copy, use, display, modify, create Derivative Works based upon, distribute, sublicense
and otherwise enjoy all Deliverables (including any CSC Provided Software or CSC
Provided Materials incorporated into such Deliverables or necessary to operate such
Deliverables) to the same extent as if Sears were the sole owner thereof, without an
obligation to account to CSC. For -70-




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the avoidance of doubt, the parties agree that in the event both this Section
16.1(a) and Section 16.3 (Sears Provided Systems) could apply in a
particular circumstance, that Section 16.3 (Sears Provided Systems) shall
control over this Section. 
  (b)
    Restrictions. CSC shall not incorporate into any Deliverable any CSC Provided
Systems or other Third Party Materials for which CSC does not have the right to grant
the license provided for under Section 16.3(a) (License to Sears). 
  (c)
    Source Code and Documentation. CSC shall, upon Sears request, provide Sears
with the source code and documentation for all Deliverables that are Software, on media
and in a format reasonably requested by Sears. Such source code shall be sufficient to
allow a reasonably knowledgeable and experienced programmer to maintain and support
such Deliverables; and the user documentation for such Deliverables shall accurately
describe, in terms understandable by a typical end user, the functions and features of
such Deliverables and the procedures for exercising such functions and features. 
  16.4
    General Knowledge.This Agreement shall not preclude either Party from using its general knowledge, skills and
experience; provided, however, that, in each case, such Party does not use
or disclose in connection therewith any of the Confidential Information of the other Party
or its Affiliates (or in case of Sears, any Eligible Recipient) or infringe or
misappropriate any Intellectual Property Rights of the other Party or its Affiliates (or in
case of Sears, any Eligible Recipient). 
  16.5
    Other Rights.Except as expressly specified in this Agreement, nothing in this Agreement shall be deemed
to grant to one Party, by implication, estoppel or otherwise, license rights, ownership
rights or any other Intellectual Property Rights in any Materials owned by the other Party
or any Affiliate of the other Party (or, in the case of Sears, owned by any Eligible
Recipient). 
  16.6
    Copyright Legends.Each Party agrees to reproduce copyright legends which appear on any portion of the
Materials which may be owned by the other Party or third parties. 
  17.
    REPRESENTATIONS, WARRANTIES AND COVENANTS 
  17.1
    By CSC.CSC represents, warrants and covenants (as to future performance) to Sears (on its behalf
and on behalf of the Eligible Recipients) as follows: -71-




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(a)
    Work Standards. The Services shall be rendered with promptness and diligence
and shall be executed in a workmanlike manner, in accordance with the Service Levels,
the best practices and professional standards required under this Agreement. CSC shall
use adequate numbers of qualified individuals and all CSC Personnel shall have suitable
training, education, experience, competence and skill to perform the Services. CSC
shall provide such individuals with sufficient training as to new products and services
prior to the implementation of such products and services in any Eligible Recipients
environment. 
  (b)
    Maintenance.  (i)
    CSC Responsibility. Unless otherwise agreed, CSC
shall maintain the CSC Provided Systems and CSC Managed Systems and
Deliverables so that they operate substantially in accordance with their
respective Specifications, including (1) maintaining Equipment in good
operating condition, subject to normal wear and tear, (2) undertaking repairs
and preventive maintenance on such Equipment in accordance with the applicable
manufacturers recommendations and requirements, and (3) performing maintenance
on such Software in accordance with the applicable Software suppliers
documentation, recommendations and requirements.(ii)
    Refresh. CSC shall, subject to Section 6.5
(Technology) or as otherwise agreed by the Parties, Upgrade or replace such CSC
Provided Systems and CSC Managed Systems as necessary to satisfy its
obligations under this Agreement, at no additional cost to Sears. 
  (c)
    Efficiency and Cost Effectiveness. CSC shall use commercially reasonable
efforts to provide the Services in the most cost-effective manner consistent with the
required level of quality and performance. Without limiting the generality of the
foregoing, such actions shall include:  (i)
    Timing of Actions. Making adjustments in the timing
of actions (consistent with Sears priorities and schedules for the Services
and CSCs obligation to meet the Service Levels).(ii)
    Timing of Functions. Delaying or accelerating, as
appropriate, the performance of non-critical functions within limits acceptable
to Sears.(iii)
    Systems Optimization. Tuning or optimizing CSC
Provided Systems and CSC Managed Systems (including memory) to optimize
performance and minimize costs.(iv)
    Usage Scheduling. Controlling its use of the CSC
Provided Systems, CSC Managed Systems and the Sears Provided Systems by
scheduling usage, where possible, to lower cost/utilization periods. -72-




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(v)
    Efficiency. Efficiently using resources for which
Sears is charged under this Agreement, consistent with industry norms, and
compiling data concerning such efficient use in segregated and auditable form
whenever possible. 
  (d)
    CSC Provided Systems/CSC Managed Systems/Deliverables. CSC is either the owner
of, or authorized to use, any and all CSC Provided Systems, CSC Managed Systems (but
not including any CSC Managed Systems provided under the Excluded Agreements) and
Deliverables, and the use thereof by CSC, the CSC Personnel and the Eligible Recipients
in accordance with this Agreement shall not infringe or misappropriate any Intellectual
Property Rights of any Third Party. As to any such CSC Provided Systems, CSC Managed
Systems and Deliverables that CSC does not own but is authorized to use, CSC shall,
prior to the use thereof in connection with the Services, advise Sears as to the
ownership and extent of CSCs rights with regard to such items to the extent any
limitation in such rights would impair CSCs performance of its obligations under this
Agreement and obtain Sears written consent to such limitations. 
  (e)
    Deliverables. All Deliverables (when delivered, but excluding interim
Deliverables for which the applicable project plan calls for a later final Deliverable)
shall be free from error, shall comply with the requirements, if any, set forth in the
applicable Transaction Document and, except as expressly specified otherwise in a
Transaction Document, shall be fully compatible with any and all Software and Equipment
that such Deliverable was intended to be interfaced or otherwise operated with. 
  (f)
    Non-Infringement. Except as otherwise provided in this Agreement, CSC and the
CSC Personnel shall perform CSCs responsibilities under this Agreement in a manner
that does not infringe, or constitute an infringement or misappropriation of, any
Intellectual Property Rights of any third party; provided, however,
that CSC shall not have any obligation or liability to the extent any infringement or
misappropriation is caused by (i) modifications to CSC Provided Systems, CSC Managed
Systems or Deliverables made by Eligible Recipients, without the knowledge or approval
of CSC, (ii) Sears or the other Eligible Recipients combination of CSC Provided
Systems, CSC Managed Systems or Deliverables with items not furnished, specified or
reasonably anticipated by CSC or contemplated by this Agreement or known by CSC
Personnel to be used with such items, (iii) a breach of this Agreement by Sears, (iv)
the failure of Sears to use corrections or modifications provided by CSC, without
additional charge and with notice of actual infringement, offering equivalent or
superior features and functionality, or (v) CSC Managed Systems, except to the extent
that such infringement or misappropriation arises from the failure of CSC to obtain the
necessary licenses or Required Consents or to abide by the Third Party Contracts
associated with such CSC Managed Systems. CSC shall not use or create materials in
connection with the Services which are libelous, defamatory or obscene. -73-




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(g)
    Authorization.  (i)
    Corporate Existence. CSC is a corporation duly
incorporated, validly existing and in good standing under all applicable Laws;(ii)
    Corporate Power and Authority. CSC has the requisite
corporate power and authority to execute, deliver and perform its obligations
under this Agreement;(iii)
    Legal Authority. CSC has obtained all licenses,
authorizations, approvals, consents or permits required to perform its
obligations under this Agreement under all applicable federal, state or local
laws and under all applicable rules and regulations of all authorities having
jurisdiction over the Services, except to the extent the failure to obtain any
such license, authorizations, approvals, consents or permits is, in the
aggregate, immaterial;(iv)
    Due Authorization. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated by this Agreement have been duly authorized by the requisite
corporate action on the part of CSC; and(v)
    No Violation or Conflict. The execution, delivery and
performance of this Agreement shall not constitute a violation of any judgment,
order or decree; a material default under any material contract by which CSC or
any of its material assets are bound; or an event that would, with notice or
lapse of time, or both, constitute such a default. 
  (h)
    Sears Code of Conduct and Privacy Policies. CSC acknowledges that it has been
furnished a copy of Sears Code of Business Conduct (the Code of Conduct) and Sears
Privacy Policies (collectively, the Privacy Policy) and that Sears associates are
required to follow the Code of Conduct and Privacy Policy. CSC shall at all times
support and abide by the Code of Conduct and Privacy Policy, as they may be modified
from time to time by Sears, and shall not take any action to induce Sears Personnel to
violate the Code of Conduct or Privacy Policy. In addition neither CSC, its Affiliates
nor the CSC Personnel have given nor shall give commissions, payments, kickbacks,
lavish or extensive entertainment, or other inducements of more than minimal value to
any Sears Personnel in connection with this Agreement. CSC acknowledges that the
giving of any such payments, gifts, entertainment or other thing of value is strictly
in violation of the Code of Conduct, and may result in the termination of this
Agreement for cause by Sears, in whole or in part, and any or all other existing and
future contracts between the Parties. CSC shall report to Sears immediately any
violation of or attempt to violate the Code of Conduct or Privacy Policy. 
  (i)
    Unauthorized Code. -74-




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(i)
    General. CSC shall cooperate with Sears and shall
take commercially reasonable actions and precautions consistent with the
applicable Transaction Document to prevent the introduction and/or
proliferation of Unauthorized Code into an Eligible Recipients environment or
any Sears Provided System, CSC Provided System or CSC Managed System or
Deliverables. Without limiting CSCs other obligations under this Agreement,
if Unauthorized Code is found in any such systems, CSC shall exercise all
commercially reasonable efforts, at no additional charge to Sears, to eliminate
and reduce the effects of such Unauthorized Code and, if the Unauthorized Code
causes a loss of operational efficiency or loss of data, to mitigate such
losses and restore such data with generally accepted data restoration
techniques; provided that CSC may, with the consent of the Sears
Relationship Manager, reprioritize CSC resources (with respect to the Services)
as necessary to mitigate the impact of such Unauthorized Code; provided further that for CSC Managed Systems provided for under the Excluded
Agreements, CSC responsibilities shall be limited to (i) first, using diligent
management of the applicable supplier(s) under such Excluded Agreements and, if
such efforts do not resolve the issue, then (ii) subject to Section 4.5 (Additional Services), implement reasonably necessary modifications and/or
enhancements of Sears Provided Systems, CSC Provided Systems, and other CSC
Managed Systems.(ii)
    Items Containing Unauthorized Code. Without the prior
written consent of Sears, neither CSC nor the CSC Personnel shall use any
Software or Equipment or Systems that includes Unauthorized Code in connection
with the Services and neither CSC, its Affiliates nor their Personnel shall
insert, or permit insertion of, any Unauthorized Code into any Sears Provided
System, CSC Provided System or CSC Managed System or Deliverables.
Furthermore, Sears shall be deemed to have approved any Unauthorized Code that
exists in the Acquired Assets and the Sears Provided Systems as of the
Commencement Date and any Unauthorized Code (other than a Virus) that is
inserted into any Systems or provided by Sears or its Eligible Recipients after
the Commencement Date. If Sears requests CSC to remove such Unauthorized Code,
CSC will do so subject to Section 4.5 (Additional Services). With
respect to any Unauthorized Code that is included in such Software or Equipment
or Systems, neither CSC, its Affiliates nor its Personnel shall invoke or cause
to be invoked such Unauthorized Code at any time, including upon expiration or
termination of this Agreement or any Transaction Document for any reason,
without Sears prior written consent, which may be withheld in Sears sole
discretion. For purposes of this Section 17.1(i)(ii) (Items
Containing Unauthorized Code) only, provided that CSC complies with its
obligations set forth in Section 17.1(i)(i) (General) and its other
relevant obligations set forth in this Agreement, CSC Personnel shall not be
deemed to have used, inserted or invoked a Virus in any Software, Equipment or
System (unless they knew or reasonably should have known -75-




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of the existence of such Virus), and upon discovery failed to promptly take
the steps set forth in Section 17.1(i)(i) (General). 
  (j)
    Compliance with Laws.  (i)
    Compliance by CSC. With respect to the CSC Provided
Systems, CSC Managed Systems and Deliverables, the provision of the Services
and the performance of CSCs obligations under this Agreement, CSC shall, and
shall cause its Affiliates and the CSC Personnel to, (1) comply with all Sears
Rules and Laws from the Effective Date and at all times thereafter during the
Term of this Agreement (including any Termination Assistance Services
period(s)), including those Sears Rules and Laws relating to security, safety,
health and the environment, and shall identify and procure all permits,
certificates, approvals and inspections required under such Laws and (2) comply
with changes in Sears Rules and Laws and at CSCs expense, develop and
implement any necessary modifications to the Services, upon Sears approval of
such proposed changes, prior to the deadline for such requirement or change.
If a charge of non-compliance by CSC with any Law occurs, CSC shall promptly
notify Sears of such charge. CSC shall take all commercially reasonable
precautions to avoid injury, property damage, spills or emissions of hazardous
substances, materials or waste, and other dangers to persons, property or the
environment, including by providing to CSC Personnel appropriate training. CSC
shall ensure that neither CSC nor any CSC Personnel commits, and use all
reasonable efforts to ensure that no business visitor or invitee of CSC or CSC
Personnel commits, any act in violation of any Laws in any Sears Facility or
any act in violation of any Eligible Recipients insurance policies or in
breach of an Eligible Recipients obligations under any applicable real estate
leases in such Sears Facilities (in each case, to the extent CSC has received
notice of such insurance policies or real estate leases or should reasonably be
expected to know of such obligations or limitations).(ii)
    Compliance with Privacy Laws. CSC shall (1) comply
with the Sears data protection and privacy policies disclosed by Sears to CSC
from time to time and (2) provide Sears with such assistance as Sears may
reasonably require to fulfill its responsibilities under the Privacy Laws. CSC
shall, in good faith, work with Sears to adopt and implement such contract
clauses as Sears deems reasonably necessary.(iii)
    Notice of Laws. CSC shall notify Sears of any Laws
and changes in Laws applicable to the Services and shall identify the impact of
such Laws and changes in Laws with respect to such Services. Subject to its
non-disclosure obligation under other customer contracts, CSC shall make
commercially reasonable efforts to obtain information regarding such
requirements from other customer engagements and to communicate such
information to Sears in a timely manner. -76-




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(k)
    Notice of Adverse Impact. As of each applicable Commencement Date, CSC is not
aware of any failure by CSC (including the CSC Personnel) to comply with its
obligations under this Agreement or any other situation that (i) has impacted or
reasonably could be expected to impact the maintenance of any Eligible Recipients
financial integrity or internal controls, the accuracy of any Eligible Recipients
financial, accounting, manufacturing quality or human resources records and reports or
compliance with the Code of Conduct, Privacy Policies, Sears Rules, Sears Standards or
any Laws, or (ii) has had or reasonably could be expected to have any other material
adverse impact on the Services in question or the impacted business operations of the
Eligible Recipients. If CSC at any time becomes aware of any such situation, then CSC
shall (A) immediately notify Sears Relationship Manager of such situation and the
expected impact, and (B) with the assistance of Sears, formulate an appropriate plan to
mitigate the impact of, and to correct, the situation; provided,
however, that changes to CSCs performance as a result of such plan shall be
subject to Sears prior consent. 
  (l)
    Interoperability. Except as expressly specified otherwise in a Transaction
Document, the CSC Provided Systems and Deliverables shall be fully interoperable with
the Sears Provided Systems and the CSC Managed Systems that are used to run or that
interface with, or that otherwise interact with, the CSC Provided Systems and
Deliverables, including for receipt of the Services. 
  (m)
    Pass-Through. CSC shall enforce any representations, warranties, covenants and
indemnities granted to CSC its Affiliates or the CSC Personnel by Third Parties
regarding any Software or other Materials, Equipment and/or Services, including the CSC
Provided Systems and Deliverables, on behalf of the Eligible Recipients to the extent
reasonably requested to do so by Sears and to the extent CSC is permitted to do so
under the terms of the applicable agreements with those Third Parties, unless CSC
determines that it is not commercially reasonable for it to do so and CSC provides to
Sears an alternative, equivalent remedy and CSC reimburses Sears for any additional
costs Sears incurs as a result of such alternative remedy. 
  17.2
    By Sears.Sears represents, warrants and covenants (as to future performance) to CSC as follows: 
  (a)
    Non-Infringement. Except as otherwise provided in this Agreement, Sears shall
perform its responsibilities under this Agreement in a manner that does not infringe,
or constitute an infringement or misappropriation of, any Intellectual Property Rights
of any third party; provided, however, that Sears shall not have any
obligation or liability to the extent any infringement or misappropriation is caused by
(i) modifications to Sears Provided Systems or CSC Managed Systems not made by the
Eligible Recipients, (ii) CSC or the CSC Personnels combination of Sears Provided
Systems or CSC Managed Systems with items not furnished by the Eligible Recipients
(provided, however, that Acquired Assets shall not be deemed furnished
by the Eligible Recipients), (iii) the failure of CSC -77-




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or the CSC Personnel to use corrections or modifications provided by Sears (or the
other Eligible Recipients), without additional charge and with notice of actual
infringement, offering equivalent or superior features and functionality, or (iv)
Third Party Materials, except to the extent that Sears (or CSC on Sears behalf) is
responsible under this Agreement for obtaining Required Consents for such Third
Party Materials and such infringement or misappropriation arises from the failure to
obtain such Required Consents or to abide by the limitations of the applicable
licenses for such Third Party Materials. The Eligible Recipients shall not use or
create Materials in connection with the Services which are libelous, defamatory or
obscene. 
  (b)
    Authorization.  (i)
    Corporate Existence. Sears is a corporation duly
incorporated, validly existing and in good standing under all applicable Laws;  (ii)
    Corporate Power and Authority. Sears has the requisite
corporate power and authority to execute, deliver and perform its obligations
under this Agreement;  (iii)
    Legal Authority. Sears has obtained all licenses,
authorizations, approvals, consents or permits required to perform its
obligations under this Agreement under all applicable federal, state or local
laws and under all applicable rules and regulations of all authorities having
jurisdiction over the Services, except to the extent the failure to obtain any
such license, authorizations, approvals, consents or permits is, in the
aggregate, immaterial;  (iv)
    Due Authorization. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated by this Agreement have been duly authorized by the requisite
corporate action on the part of Sears; and  (v)
    No Violation or Conflict. The execution, delivery and
performance of this Agreement shall not constitute a violation of any judgment,
order or decree; a material default under any material contract by which Sears
or any of Sears material assets are bound; or an event that would, with notice
or lapse of time, or both, constitute such a default. 
  17.3
    Disclaimer.EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY EXPRESS OR
IMPLIED REPRESENTATIONS, WARRANTIES OR COVENANTS TO THE OTHER PARTY, INCLUDING THE IMPLIED
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT. IN
ADDITION, CSC ACKNOWLEDGES THAT THE SEARS PROVIDED SYSTEMS AND THE CSC -78-




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MANAGED SYSTEMS ARE PROVIDED BY THE ELIGIBLE RECIPIENTS TO CSC ON AN AS-IS, WHERE-IS BASIS
AND SEARS AND THE OTHER ELIGIBLE RECIPIENTS EXPRESSLY DISCLAIM ANY EXPRESS OR IMPLIED
REPRESENTATIONS, WARRANTIES OR COVENANTS AS TO SUCH SEARS PROVIDED SYSTEMS AND CSC MANAGED
SYSTEMS, OR THE CONDITION OR SUITABILITY OF SUCH SEARS PROVIDED SYSTEMS AND CSC MANAGED
SYSTEMS FOR USE BY CSC TO PROVIDE THE SERVICES, INCLUDING WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT. 
  17.4
    Effect.  All representations, warranties and/or covenants made in any provision of this Master
Agreement by either Party shall be true when made and remain true throughout the Term and
the Term of each Transaction Document. 
  18.
    AUDIT RIGHTS 
  18.1
    Contract Records.  CSC shall, and shall cause its Affiliates and all CSC Personnel and suppliers to, maintain
complete and accurate records of and supporting documentation for all Charges, all Sears
Data and all transactions, authorizations, System Changes, implementations, soft document
access, reports, analyses, data or information created, generated, collected, processed or
stored by CSC in the performance of its obligations under this Agreement (Contract
Records). CSC shall maintain such Contract Records in accordance with generally accepted
accounting principles for the applicable jurisdiction applied on a consistent basis. CSC
shall retain Contract Records in accordance with Sears record retention policy as modified
from time to time and provided to CSC in writing. 
  18.2
    Sears Audit. 
  (a)
    General. CSC shall, and shall cause its Affiliates and the CSC Personnel to,
allow Sears (and internal, governmental and other external auditors, inspectors,
regulators and other representatives that Sears may designate from time to time or that
may have jurisdiction over one or more Eligible Recipients) (collectively, Sears Audit
Designees) to conduct audits and examinations of the operations of CSC, its Affiliates
and the CSC Personnel as described in this Section 18 (Audit Rights). 
  (b)
    Operational and Financial Audits. CSC shall, and shall cause its Affiliates
and the CSC Personnel to, provide to Sears Audit Designees access to CSC Personnel, to
the facilities at or from which Services are then being provided and to Contract
Records and other pertinent information, all to the extent relevant to the Services and
CSCs obligations under this Agreement. Such access shall be provided for the purpose
of performing audits and inspections of Sears and the other Eligible Recipients
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the Sears Data and Contract Records, (ii) verify the accuracy and completeness of
Charges, Pass-Through Expenses and Out-of-Pocket Expenses, (iii) examine the
financial controls, processes and procedures utilized by CSC and the performance of
CSCs financial obligations, (iv) examine the Systems that process, store, support
and transmit that data, (v) examine the controls (e.g., organizational controls,
input/output controls, System modification controls, processing controls, System
design controls and access controls) and the privacy, security, disaster recovery
and back-up practices and procedures, (vi) examine CSCs performance of the Services
and the measurement and reporting tools, performance metrics and reporting
procedures for the Services, (vii) verify CSCs reported performance against the
applicable Service Levels, (viii) examine CSCs measurement, monitoring and
management tools, and (ix) enable the Eligible Recipients to meet applicable legal,
regulatory and contractual requirements, in each case to the extent applicable to
the Services and/or Charges. CSC shall provide any assistance reasonably requested
by Sears or its designee in conducting any such audit and shall make requested
personnel, records and information available during the Term and thereafter, during
the period specified in Sears records retention policy, as it may be modified from
time to time. 
  18.3
    SAS 70 Audit.  CSC shall, on an annual basis, retain an independent auditor to perform an audit of the
electronic data processing environment(s) and locations used by CSC to provide the Services.
Such audit shall conform to the Statement of Auditing Standards No. 70 (SAS 70) or
successor substitute statement adopted by the American Institute of Certified Public
Accountants or other relevant body, and at least every other year such audit shall be a
Type II audit under SAS 70 Guidelines. CSC shall provide Sears a reasonable opportunity
to comment on each planned audit, and provide suggested modifications (consistent with and
in accordance with SAS 70) to the planned audit prior to the commencement of the audit. CSC
shall provide Sears with a copy of the review resulting from each SAS 70 audit and shall, as
soon as reasonably practicable, remedy any material deficiencies revealed by such audit. In
addition, to the extent a SAS 70 audit (or equivalent audit) is conducted with respect to a
CSC Facility at or from which the Services are provided, CSC shall promptly provide a copy
of the resulting audit report to Sears. CSC shall respond to such report in accordance with
Section 18.7 (Remedial Obligations). 
  18.4
    Governmental or Other Non-Sears Audits.  Sears and the other Eligible Recipients may be subject to regulation and audit by
governmental bodies, standards organizations, other regulatory authorities, customers or
other parties to contracts with an Eligible Recipient under applicable Laws, rules,
regulations, standards and contract provisions. If an Eligible Recipient is required by a
governmental body, standards organization or regulatory agency having jurisdiction over an
Eligible Recipient to have an audit or inspection of the Services then being provided to an
Eligible Recipient or information concerning an Eligible Recipient held by CSC under this
Agreement, CSC shall allow the governmental body, standards organization or -80-




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regulatory agency exercising jurisdiction over the business of an Eligible Recipient to
conduct such an audit or inspection as it relates to CSCs provision of the Services, or
such information concerning an Eligible Recipient held by CSC, under this Agreement. In
addition, if a customer or other party to a contract with an Eligible Recipient exercises
its right to audit or inspect an Eligible Recipients books, records, documents or
accounting practices, CSC shall provide all cooperation requested by the Eligible Recipient
in responding to such audits or requests for information. 
  18.5
    Audit Process.  CSC shall provide Sears, and any Sears Audit Designees, access to the facilities, Systems,
books, records and information related to the provision of the Services as reasonably
necessary to perform audits described in this Section 18 (Audit Rights), including
assisting Sears and Sears Audit Designees in testing their data files, programs and
procedures and operation of audit software. To the extent permitted by applicable Laws, CSC
shall provide Sears, and its designees, with a copy of the findings of any such governmental
audit. 
  18.6
    Security Testing.  Without limiting the generality of Section 18.2(b) (Operational and Financial
Audits), Sears Audit Designees may, from time to time, without prior notice, perform
security audits of CSC, its Affiliates and their Personnel, which may include penetration
testing and other exploits of CSC Provided Systems, CSC Managed Systems and Sears Provided
Systems and Deliverables (Security Testing). CSC, on behalf of itself, its Affiliates and
their Personnel, shall and hereby does grant Sears permission to perform such Security
Testing. The foregoing shall not be construed as CSC providing authorization on behalf of
IBM for the performance of such Security Testing. Notwithstanding anything to the contrary
contained herein, Sears shall have no obligation to provide CSC with, and CSC shall not be
entitled to receive, copies of the results of any Security Testing. 
  18.7
    Remedial Obligations.  CSC and Sears shall meet to review each audit report promptly after the issuance thereof.
CSC shall respond to each audit report in writing within thirty (30) days from receipt of
such report, unless a shorter response time is specified in such report. If any audit or
inspection reveals that CSC has failed to comply with this Agreement, any generally accepted
accounting principle or other audit requirement or any Law or standard (including SAS 70)
relating to the performance of CSCs obligations under this Agreement, CSC shall, at CSCs
sole cost and expense, remedy such failures as soon as reasonably practical, but in no event
later than required by any auditing governmental body, standards organization or regulatory
authority, as the case may be. In addition, if any audit or examination, including an
internal CSC audit, reveals that CSC has overbilled Sears or if an audit reveals any breach
of this Agreement, CSC shall promptly pay Sears: (a) the amount of such overbilling that
Sears has paid (net of underbilling discovered by such audit), plus (b) interest at the
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the original date the error was made until the date such credit is paid, plus (c) the
reasonable costs and expenses of the audit incurred by Sears; provided,
however, that CSCs obligation under this clause (c) above shall not exceed
one-half of the amount due under clause (a) above. 
  18.8
    General Procedures. 
  (a)
    Access. Notwithstanding the intended breadth of Sears audit rights, during
any audits pursuant to this Section 18 (Audit Rights) Sears shall not allow
Sears or Sears Personnel access to (i) the proprietary information of other CSC
customers, or (ii) CSC locations that are not related to the Eligible Recipients or the
Services, (iii) material protected by the attorney-client or other legal privilege, or
(iv) data to the extent not related to the CSCs provision of Services or CSCs
obligations under this Agreement. 
  (b)
    Notice. In performing audits, Sears shall endeavor to provide CSC with
twenty-four (24) hour advance notice of such audits (other than Security Testing
audits). Access for such audits shall be provided by CSC at reasonable hours, except
as may be required on an emergency basis; provided, however, that any
such audit may not unreasonably interfere with CSCs performance of its obligation
under this Agreement or compromise any reasonable security processes or procedures.
All audits shall be conducted in a reasonable manner. CSC, its Affiliates and the CSC
Personnel shall provide the Services described in this Section 18 (Audit
Rights) at no additional charge to Sears. 
  (c)
    Exit Conference. Following any audit, Sears shall conduct (in the case of an
internal audit), or request its external auditors or examiners to conduct, an exit
conference with CSC to obtain factual concurrence with issues identified in the review. 
  (d)
    Audit Workspace. Sears and/or the Sears Audit Designee shall be given adequate
private workspace in which to perform an audit, plus access to photocopiers,
telephones, facsimile machines, computer hook-ups and any other facilities or equipment
needed for the performance of the audit. 
  18.9
    CSC Breach.  The refusal by CSC to permit Sears to perform an audit permitted under this Section
18 (Audit), that is not cured within 2 Business Days after written notice by Sears that
has been delivered by a nationally recognized courier to the notification address in
Section 26.3 (Notice), shall be a material breach of this Agreement and/or any
Transaction Document under Section 23.1(a)(i)(2) (Termination For Cause  Agreement)
and Section 23.1(a)(ii)(2) (Termination For Cause  Transaction Document). The
preceding sentence shall not be construed to limit what other circumstances would constitute
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19.
    INSURANCE AND RISK OF LOSS 
  19.1
    Insurance. 
  (a)
    Requirements. CSC shall, and shall require its and its Affiliates
Subcontractors to, obtain and maintain in full force and effect the following insurance
during the Term and the Term of each Transaction Document (including any Termination
Assistance Services period thereunder); provided, however, that for CSC
and its Affiliates Subcontractors the amounts of such coverage may be commensurate
with the scope of the services to be performed by such Subcontractor related to this
Agreement, as reasonably determined by CSC; provided, further, that the foregoing shall
not limit CSCs liability with respect to such Subcontractor, including any failure of
such Subcontractor to perform in accordance with this Agreement:  (i)
    Workers Compensation and Employers Liability
Insurance.  (1)
    Statutory Workers Compensation insurance,
including coverage for all costs, benefits and liabilities under
workers compensation and similar laws that may accrue in favor of any
person employed by CSC, in all states where CSC performs Services in
accordance with applicable Law.  (2)
    Employers Liability Insurance with minimum
limits of $1,000,000 per employee by accident/$1,000,000 per employee
by disease/$1,000,000 policy limit by disease (or, if higher, the
policy limits required by applicable Law).  (ii)
    Commercial General Liability Insurance. Commercial
General Liability Insurance (including coverage for Contractual Liability
assumed by CSC under this Agreement, Premises-Operations, Completed
Operations-Products, Independent Contractors, and explosion, collapse and
underground property damage hazards) providing coverage for bodily injury,
personal and advertising injury and property damage with combined single limits
of not less than $1,000,000 per occurrence and $2,000,000 in the aggregate per
CSC policy year.  (iii)
    Commercial Business Automobile Liability Insurance.
Commercial Business Automobile Liability Insurance, including coverage for all
owned, non-owned, leased and hired vehicles providing coverage for bodily
injury and property damage liability with combined single limits of not less
than $2,000,000 per accident, except as may otherwise be required by Law.  (iv)
    Professional Liability Insurance. Professional
Liability (also known as Errors and Omissions Liability) Insurance covering
acts, errors and omissions arising out of CSCs operations or Services in an
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less than $10,000,000 per claim and $10,000,000 in the aggregate per CSC
policy year.  (v)
    Comprehensive Crime Insurance. Comprehensive Crime
Insurance, including Employee Dishonesty and Computer Fraud Insurance covering
losses arising out of or in connection with any fraudulent or dishonest acts
committed by CSC employees, acting alone or with others, in an amount not less
than $5,000,000 per loss and $5,000,000 in the aggregate per CSC policy year.  (vi)
    All-Risk Property Insurance. All-risk property
insurance covering loss or damage to CSC owned or leased Equipment and other
property in an amount not less than the full replacement cost of such Equipment
and property.  (vii)
    Excess Coverage. Excess coverage with respect to
Sections 19.1(a)(i)(2) (Workers Compensation and Employers Liability
Insurance), (ii) (Commercial General Liability Insurance), and
(iii) (Commercial Business Automobile Liability Insurance) with a
minimum combined single limit of $25,000,000.  CSC may satisfy the minimum limits requirements of this Section 19.1(a) (i),
(ii), (iii), and (iv) (Requirements) by any combination of primary liability and
umbrella and/or excess liability coverage that result in the same protection to CSC
and the Sears Indemnified Parties. To satisfy this insurance requirement for
non-owned and hired vehicles, CSC may extend its commercial general liability
insurance to provide insurance for such vehicles. Any annual aggregate limit must
be stated separately as to the Services or twice the required limit. The policies
required under this Section 19.1 (Insurance) must be on an occurrence basis
except for Professional Liability Insurance which is on a per claim basis. For
policies that are on a per claim basis, CSC will maintain equivalent policies for at
least 4 years after the expiration or termination of this Agreement. CSC shall
purchase the insurance required by Section 19.1 (Insurance) from companies
having a rating of A-/VII or better in the current Bests Insurance Reports
published by A. M. Best Company, Inc. 
  (b)
    Endorsements. CSCs insurance policies as required in this Agreement under
Sections 19.1(a)(ii) (Commercial General Liability Insurance) and
19.1(a)(iii) (Commercial Business Automobile Insurance) shall name Sears, its
Affiliates and their respective employees, as Additional Insureds for any and all
liability arising at any time in connection with CSCs performance under this
Agreement, with the standard separation of insureds provision or an endorsement for
cross-liability coverage. The CSC insurance policies required under Sections
19.1(a)(v) (Comprehensive Crime Insurance) and 19.1(a)(vi) (All Risk
Property Insurance) shall name Sears and its Affiliates as loss payees in connection
with any insurable interest of Sears for loss or damage of such property under this
Agreement. Should any policy expire or be canceled during the Term or any Exhibit Term
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CSC fails to procure replacement insurance as specified herein with 30 days of
notice from Sears, Sears reserves the right (but not the obligation) upon notice to
CSC to procure such insurance and to deduct the cost thereof from any sums due CSC
under this Agreement; provided that CSCs liability for such replacement
insurance procured by Sears shall terminate 30 days after CSC provides written
evidence to Sears that CSC has procured (and paid the premium for a minimum of three
months after the date of such notice) such required insurance. All insurance
required under this Section 19.1 (Insurance) shall be primary insurance and
any other valid insurance existing for the other Eligible Recipients benefit shall
be excess of such primary insurance. CSC shall obtain such endorsements to its
policy or policies of insurance as are necessary to cause the policy or policies to
comply with the requirements stated in this Agreement. 
  (c)
    Certificates. CSC shall provide Sears with certificates of insurance
evidencing compliance with this Section 19 (Insurance and Risk of Loss)
(including evidence of renewal of insurance) signed by authorized representatives of
the respective carriers for each year that this Agreement is in effect. Each
certificate of insurance shall provide that the issuing company shall not cancel,
reduce or otherwise materially alter the insurance afforded under the above policies
unless notice of such cancellation, reduction or material alteration has been provided
at least thirty (30) days in advance to Sears at the addresses for Sears specified in
Section 26.3 (Notices). 
  (d)
    No Implied Limitation. The obligation of CSC and its Subcontractors to provide
the insurance specified in this Agreement shall not limit in any way any obligation or
liability of CSC provided elsewhere in this Agreement. The rights of the Eligible
Recipients to insurance coverage under policies issued to or for the benefit of one or
more of them are independent of this Agreement and shall not be limited by this
Agreement. 
  (e)
    Insurance Subrogation. With respect to insurance coverage to be provided by
CSC pursuant to this Section 19.1 (Insurance) except professional
liability, the insurance policies shall provide that the insurance companies waive all
rights of subrogation against CSC, the Eligible Recipients and their respective
Affiliates and Personnel. CSC waives its rights to recover against the Eligible
Recipients, including their respective Personnel in subrogation or as subrogee for
another party. 
  (f)
    Material Breach. A failure of CSC to have any of the insurance policies
required by this Section 19 (Insurance) shall be deemed a material breach;
provided that it shall not be a breach of this provision for CSC to self-insure such
risks; provided further that CSC maintains appropriate excess liability coverage in
such circumstances. . Open:. -85-




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19.2
    Risk of Loss. 
  (a)
    General. Except as otherwise provided in Section 20.1(k) (CSC Acts or
Omissions) or Section 20.2(g) (Sears Acts or Omissions), (i) each Party shall
be responsible for risk of loss of, and damage to, any Equipment, Software, Systems or
other Materials in its or its Affiliates or their Personnels possession or control,
and (ii) such Party shall be responsible for the cost of any necessary repair or
replacement of such Equipment, Software, Systems or other Materials due to an Event of
Loss. CSC shall be deemed to possess and control all Equipment, Software and other
Materials located in its own Facilities or in portions of Sears Facilities used by CSC
to provide the Services. Each Party shall promptly notify the other of any damage
(except normal wear and tear), destruction, loss, theft or governmental taking of any
item of Equipment, Software, Systems or other Materials (Event of Loss). For Events
of Loss for which Sears is responsible, such repair or replacement shall not be
considered part of CSCs Service obligations, but CSC shall, if requested by Sears,
coordinate and oversee repair or replacement performed by a Third Party on a
Pass-Through Expenses basis, or by CSC at agreed-upon prices. 
  (b)
    Waiver. Each Party waives all rights to recover against the other Party, its
Affiliates (and as to Sears, any Eligible Recipients) and their Personnel for damage,
destruction, loss, theft or governmental taking of their respective real or tangible
personal property (whether owned or leased) from any cause to the extent (i) covered by
insurance required to be maintained by such Party under this Agreement, including their
respective deductibles or self-insured retentions, and (ii) insurance proceeds are
actually received by such Party for such loss. CSC and Sears shall cause their
respective insurers to issue appropriate waivers of subrogation rights endorsements to
all property insurance policies required to be maintained by each Party. 
  20.
    INDEMNITIES 
  20.1
    Indemnity by CSC.  CSC shall defend, indemnify and hold harmless the Eligible Recipients, including their
respective Personnel (collectively, the Sears Indemnified Parties) from any and all Losses
and threatened Losses arising out of any claims, demands, suits or causes of action by Third
Parties (collectively, Claims) (excluding Claims brought by Sears and its Affiliates, and
their Subcontractors, but including Claims brought by other Sears Personnel) that result or
are alleged to result, in whole or in part, from or in connection with any of the following: 
  (a)
    Breach of This Agreement. CSCs or CSCs Personnels breach of this Agreement,
including any representations, warranties or covenants set forth in this Agreement.
Notwithstanding the foregoing, if: (i) the Claim is based upon a breach of CSCs
responsibilities under any provision of this Agreement other than Sections
17.1(f),17.1(g),17.1(h),17.1(i) and 17.1(j),
and (ii) CSC could not have -86-




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direct liability to the Third Party (other than a governmental body or any
regulatory agency thereunder), bringing such a Claim under the Law that would apply
to such Claim for the act or omission that gave rise to such Losses, for any reason
other than the lack of jurisdiction over CSC or CSCs Personnel (e.g., because of no
privity of contract), then this Section 20.1(a) shall not apply to such
Claim. 
  (b)
    CSC Designated Contracts. CSCs decision to terminate or failure to observe or
perform any duties or obligations to be observed or performed on or after the
applicable Commencement Date by CSC with respect to any CSC Designated Contracts or any
Third Party Contracts related to Acquired Assets and/or CSC Managed Systems. 
  (c)
    Licenses, Leases or Contracts. CSCs failure to observe or perform any duties
or obligations to be observed or performed on or after the applicable Commencement Date
by CSC with respect to Third Party Contracts associated with any CSC Provided Systems
or CSC Managed Systems; provided that with respect to those CSC Managed Systems
provided under the Excluded Agreement, this Section 20.1(c) (Licenses, Leases
or Contracts) shall only apply to the extent that CSC knew of such duties or
obligations or such failure is otherwise subject to subsection (a) above. 
  (d)
    Sears Data or Confidential Information. CSCs breach of its obligations with
respect to Sears Data or Sears Confidential Information. 
  (e)
    Infringement. Infringement or misappropriation or alleged infringement or
alleged misappropriation of any Intellectual Property Rights in contravention of
Section 17.1(d) (CSC Provided Systems/CSC Managed Systems) or Section
17.1(f) (Non-Infringement). 
  (f)
    Government Claims. Claims by government regulators or agencies for fines,
penalties, sanctions or other remedies to the extent such fines, penalties, sanctions,
or other remedies caused by any breach of any obligation under this Agreement,
including any obligation related to Laws, by CSC or any CSC Personnel or any other
failure by CSC or CSC Personnel to perform CSCs responsibilities under this Agreement. 
  (g)
    Taxes. Taxes, including interest and penalties, that are the responsibility of
CSC under Section 13.4 (Taxes). 
  (h)
    Shared Facility Services. Services, products or Systems (not constituting
Services provided pursuant to this Agreement) provided by CSC to a Third Party from any
shared CSC Facility or using any shared CSC resources and not constituting Services
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(i)
    Affiliate, CSC Personnel or Assignee Claims. Any Claim, other than an
indemnification Claim under this Agreement, initiated by (i) a CSC Affiliate or CSC
Personnel asserting rights in connection with this Agreement or any Services to be
provided hereunder, or (ii) any entity to which CSC assigned, transferred, pledged or
otherwise encumbered its rights to receive payments from Sears under this Agreement. 
  (j)
    Background and Drug Checks. Any Claim by any third party, including CSC
Personnel or individuals seeking employment or a contract with CSC, that alleges injury
or harm arising from the administration of drug or background checks in connection with
this Agreement. 
  (k)
    CSC Acts or Omissions. Any Claim that an act or failure to act of CSC or CSCs
Personnel that constitutes negligence, an intentional tort, other tortious conduct or
conduct for which strict liability would apply. 
  (l)
    Employment Claims. Any Claim (including claims by Transitioned Personnel)
relating to any (i) joint employment of CSC Personnel by Sears, any other Eligible
Recipients (including their respective Personnel), (ii) violation by CSC, its
Affiliates or other CSC Personnel of any Laws or any common law protecting persons or
members of protected classes or categories, including Laws prohibiting discrimination
or harassment on the basis of a protected characteristic, (iii) liability arising or
resulting from the employment or engagement of CSC Personnel (including Transitioned
Personnel) by CSC, its Affiliates or other CSC Personnel (including liability for any
social security or other employment taxes, workers compensation claims and premium
payments, and contributions applicable to the wages and salaries of such CSC
Personnel), (iv) payment or failure to pay any salary, wages or other compensation due
and owing to any CSC Personnel (including Transitioned Personnel from and after their
Employment Effective Dates), (v) employee pension or other benefits of any CSC
Personnel (including Transitioned Personnel) accruing from and after their Employment
Effective Date, (vi) other aspects of the employment relationship of CSC Personnel
(including Transitioned Personnel) with CSC, its Affiliates or other CSC Personnel or
the termination of such relationship, including Claims for wrongful discharge, Claims
for breach of express or implied employment contract and increases in unemployment
insurance premiums, and/or (vii) liability resulting from representations (whether oral
or written) to the Transitioned Personnel made, or alleged to have been made, by CSC,
its Affiliates or other CSC Personnel, or other acts or omissions with respect to the
Transitioned Personnel by such persons or entities, including any act, omission or
representation made in connection with the interview, selection, hiring and/or
transition process, the offers of employment made to such employees, the failure to
make offers to any such employees or the terms and conditions of such offers (including
compensation and employee benefits), except, in each case, to the extent resulting from
the wrongful actions of Sears, the Eligible Recipients, errors or inaccuracies in the
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by CSC or the failure of the Eligible Recipients to comply with Sears
responsibilities under this Agreement. 
  (m)
    Environmental Claims. The generation, storage, use, handling, discharge, other
release or disposal of any materials that are regulated by the federal government or
any state or local government during use, transportation, handling, storage, treatment
and/or disposal/recycling by CSC Personnel or at facilities owned or controlled by CSC
Personnel. 
  (n)
    Violation of Laws. The violation by CSC or its Personnel of any Law. 
  20.2
    Indemnity by Sears.  Sears agrees to defend, indemnify and hold harmless CSC, its Affiliates and the CSC
Personnel and their successors and assigns from any Losses and threatened Losses arising out
of any Claims (excluding the Claims of CSC, its Affiliates and their Subcontractors but
including Claims by other CSC Personnel) (each, a CSC Indemnified Party) that result, or
are alleged to result, in whole or in part, from or in connection with any of the following: 
  (a)
    Breach of This Agreement. Sears breach of this Agreement, including any
representations, warranties or covenants set forth in this Agreement. 
  (b)
    Licenses, Leases or Contracts. Sears failure to observe or perform any duties
or obligations to be observed or performed by Sears or the other Eligible Recipients
under any of the applicable Third Party Contracts associated with Sears Provided
Systems and CSC Managed Systems provided under the
Excluded Agreements; provided, in each such case, that (i) such failure is
not attributable to the acts or failures to act of CSC or any CSC Personnel, and
(ii) such failure is not covered by CSCs indemnity obligations under Section
20.1 (Indemnity by CSC). 
  (c)
    Pre-Commencement Date Matters. Any Eligible Recipients failure to observe or
perform any duties or obligations to be observed or performed prior to the applicable
Commencement Date by the Eligible Recipients under any of the Third Party Contracts
related to Sears Provided Systems, CSC Managed Systems or the Acquired Assets to the
extent CSC notifies Sears of such Claims within twelve (12) months after the assignment
or transfer to CSC of the applicable Third Party Contract. 
  (d)
    CSCs Confidential Business Information. Sears breach of its obligations with
respect to CSCs Confidential Business Information. 
  (e)
    Infringement. Infringement or misappropriation or alleged infringement or
alleged misappropriation of any Intellectual Property Rights in contravention of
Section 17.2(a) (Non-Infringement). -89-




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(f)
    Taxes. Taxes, including interest and penalties, that are the responsibility of
Sears under Section 13.4 (Taxes). 
  (g)
    Eligible Recipients Acts or Omissions. Any Claim that an act or failure to act
of Sears or Sears Personnel (other than Sears Personnel for which CSC is responsible)
that constitutes negligence, an intentional tort, other tortious conduct or conduct for
which strict liability would apply. 
  (h)
    Eligible Recipient Claims. Any Claim, other than an indemnification Claim or a
Claim pursuant to Section 19 (Insurance and Risk of Loss) under this Agreement,
initiated by Sears Affiliates or by Sears and its Affiliates Subcontractors
asserting rights in connection with this Agreement or any Services to be provided under
this Agreement; provided, however, that this provision shall not apply
to Claims brought by Sears on behalf of the other Eligible Recipients. 
  (i)
    Violation of Laws. The violation by Sears or its Personnel of any Law. 
  20.3
    Infringement. 
  (a)
    CSC Provided Systems, CSC Managed Systems or Deliverables. If any portion of
the Services, including any CSC Provided Systems, CSC Managed Systems or Deliverables
that is subject to the indemnity under Section 20.1(e) (Infringement) are
found, or in CSCs reasonable opinion are likely to be found, to infringe upon or
misappropriate any Intellectual Property Rights of any third party in any country in
which Services are to be performed or received under this Agreement, or the continued
use of the foregoing is enjoined, CSC shall, in addition to defending, indemnifying and
holding harmless the Sears Indemnified Parties as provided in Section 20.1(e)
(Infringement) and any other rights Sears may have under this Agreement, promptly and
at its own cost and expense and in such a manner as to minimize the disturbance to the
Eligible Recipients business activities, do one of the following:  (i)
    Obtain Rights. Obtain for the Eligible Recipients the right to
continue using the Services, including such CSC Provided Systems, CSC Managed
Systems and Deliverables.  (ii)
    Modification. Modify the Service in question, including the
applicable CSC Provided Systems, CSC Managed Systems and Deliverables, so that
such Service is no longer infringing (provided that such modification
does not degrade the performance or quality of the Services or adversely affect
the Sears Provided Systems or the Eligible Recipients intended use of such
Services as contemplated by this Agreement and/or as previously enjoyed by the
Eligible Recipients under this Agreement).  (iii)
    Replacement. If either of the foregoing are not commercially
feasible, either: (i) provide functionally equivalent or superior replacement
Services to the Eligible Recipients and reimburse Sears for any additional -90-




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cost to the Eligible Recipients, including costs of modifying Sears Provided
Systems to permit them to interface and interoperate properly with such
revised Services; or (ii) reimburse Sears for all costs and expenses
(including any CSC fees, consultant fees and other transition expenses) of
obtaining such replacement Services. 
  (b)
    Sears Provided Systems. If any Sears Provided System supplied by Sears that is
subject to the indemnity under Section 20.2(e) (Infringement) is found, or in
Sears reasonable opinion is likely to be found, to infringe upon or misappropriate any
Intellectual Property Rights of any third party in any country in which Services are to
be performed or received under this Agreement, or the continued use of the foregoing is
enjoined, Sears may elect to, in its sole discretion and at its own cost and expense
(subject to Section 7.1(c) (Sears Responsibilities) and Section 20.2(e)
(Infringement)):  (i)
    Obtain Rights. Obtain for CSC the right to continue using such
Sears Provided System;  (ii)
    Modification. Modify the Sears Provided System in question so
that it is no longer infringing;  (iii)
    Replacement. Replace the Sears Provided System with a
non-infringing System; or  (iv)
    Removal. Cease providing such Sears Provided System.  Within ten (10) Business Days of a request by Sears, CSC shall notify Sears in
writing of: (I) any adverse affect on the Services, and/or (II) the Out-of-Pocket
Expenses, if any CSC would incur if Sears were to elect any of its options under
subsections (ii), (iii) or (iv) above. The Parties shall work together in good
faith, to mitigate any such adverse effect and the cost of any such election to
Sears. If Sears does make an election under subsections (ii), (iii) or (iv) above:
(x) the Parties shall, if applicable, equitably adjust the terms of the applicable
Procurement Document, including any Service Levels applicable thereto, to take Sears
into account the elimination of such Sears Provided Systems and (y) Sears shall
reimburse CSC for any Out-of-Pocket Expenses to the extent such Expenses were
identified by CSC in its notice as required above and such costs can not be
mitigated by the Parties. Sears may elect to stop receiving a portion of the
Services in order to mitigate such costs. 
  20.4
    Indemnification Procedures.  With respect to Third Party Claims that are subject to this Section 20 (Indemnities)
(other than as provided in Section 20.5 (Indemnification Procedures  Governmental
Claims) with respect to Claims covered by Section 20.1(f) (Government Claims)), the
following procedures shall apply: -91-




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(a)
    Notice. Promptly after receipt by any Entity entitled to indemnification under
this Agreement of notice of the commencement or threatened commencement of any Claim in
respect of which the indemnitee shall seek indemnification hereunder, the indemnitee
shall notify the indemnitor of such Claim. No delay or failure to so notify an
indemnitor shall relieve it of its obligations under this Agreement except to the
extent that such indemnitor has suffered actual prejudice by such delay or failure.
Within fifteen (15) days following receipt of notice from the indemnitee relating to
any Claim, but no later than ten (10) Business Days before the date on which any
response to a complaint or summons is due, the indemnitor shall notify the indemnitee
that the indemnitor is assuming control of the defense and settlement of that Claim (a
Notice of Assumption). 
  (b)
    Procedure Following Notice of Defense. If the indemnitor delivers a Notice of
Assumption within the required notice period, the indemnitor shall assume sole control
over the defense and settlement of the Claim; provided, however, that
(i) the indemnitor shall keep the indemnitee fully apprised at all times as to the
status of the defense, and (ii) the indemnitor shall obtain the prior written approval
of the indemnitee before: (x) entering into any settlement asserting any liability
against the indemnitee for such Claim, (y) imposing any obligations or restrictions on
the indemnitee or (z) ceasing to defend against such Claim. The indemnitor shall not
be liable for any legal fees or expenses incurred by the indemnitee following the
delivery of a Notice of Assumption; provided, however, that (i) the
indemnitee shall be entitled to employ counsel at its own expense to participate in the
handling of the Claim, and (ii) the indemnitor shall pay the fees and expenses
associated with such counsel if, in the reasonable judgment of the indemnitee, based on
an opinion of counsel, there is a conflict of interest with respect to such Claim which
is not otherwise resolved or if the indemnitor has requested the assistance of the
indemnitee in the defense of the Claim or the indemnitor has failed to defend the Claim
diligently. 
  (c)
    Procedure Where No Notice of Assumption Is Delivered. If the indemnitor does
not deliver a Notice of Assumption relating to any Claim within the required notice
period, the indemnitee shall have the right to defend the Claim in such manner as it
may deem appropriate. The indemnitor shall promptly reimburse the indemnitee for all
such reasonable costs and expenses incurred by the indemnitee, including reasonable
Attorneys Fees. The indemnitor shall not be obligated to indemnify the indemnitee for
any amount paid or payable by such indemnitee in the settlement of any Claim if (i) the
indemnitor has delivered a timely Notice of Assumption and such amount was agreed to
without the written consent of the indemnitor, (ii) the indemnitee has not provided the
indemnitor with notice of such Claim and a reasonable opportunity to respond thereto,
or (iii) the time period within which to deliver a Notice of Assumption has not yet
expired. 
  20.5
    Indemnification Procedures  Governmental Claims.  Sears shall be entitled, at its option, to have any Claim involving indemnification under
Section 20.1(f) (Government Claims) handled pursuant to Section 20.4
(Indemnification -92-




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Procedures) or to retain sole control over the defense and settlement of such Claim;
provided, however, that, in the latter case, Sears shall (a) consult with
CSC on a regular basis regarding Claim processing (including actual and anticipated costs
and expenses) and litigation strategy, (b) reasonably consider any CSC settlement proposals
or suggestions, and (c) use commercially reasonable efforts to minimize any amounts payable
or reimbursable by CSC. Sears shall notify CSC when Sears elects to exercise the rights
provided in the preceding sentence. Sears shall not enter into any settlement asserting any
liability against CSC for such Claims without CSCs prior written consent. 
  20.6
    Mixed Claims.  Notwithstanding anything to the contrary contained in Section 20.4 (Indemnification
Procedures) but subject to Section 20.5 (Indemnification Procedures  Governmental
Claims), in the event that both Parties are entitled under this Section 20 to invoke
the other Partys defense obligations with respect to the same Claim or a group of related
Claims, then CSC shall assume the defense of the Sears Indemnified Parties with respect to
such Claim or related Claims, as the case may be, and upon the rendering of a final,
non-appealable order by a court or arbitrator of competent jurisdiction with respect to such
Claim or Claims, Sears shall reimburse CSC for any reasonable Attorneys Fees and other
reasonable Out-of-Pocket Expenses incurred by CSC in defending such Claim or Claims to the
extent that the Sears Indemnified Parties are found to be liable under such Claim or Claims.
For example, if a Third Party sues both Sears and CSC claiming that Sears employees and
CSCs employees were negligent in causing injury to such Third Party, (a) CSC would assume
the defense of such a Claim, and (b) if, by a final, non-appealable order by a court of
competent jurisdiction, Sears were found to be 60% liable and CSC were found to be 40%
liable for such injuries, Sears would reimburse CSC for 60% of the reasonable Attorneys
Fees and other Out-of-Pocket Expenses incurred by CSC in defending such Claim. 
  20.7
    Independent Obligations.  The obligations of CSC and Sears to defend, indemnify and hold harmless the Sears
Indemnified Parties and the CSC Indemnified Parties, respectively, under this Section
20 (Indemnities) shall be independent of each other and any other obligations of the
Parties under this Agreement. 
  21.
    LIABILITY 
  21.1
    Force Majeure. 
  (a)
    General. Subject to Section 21.1(d) (Disaster Recovery), no Party
shall be liable for any default or delay in the performance of its obligations under
this Agreement if and to the extent such default or delay is caused, directly or
indirectly, by fire, flood, earthquake, elements of nature or acts of God, wars, riots,
civil disorders, rebellions or revolutions, acts of terrorism, outbreaks of disease,
strike, lockout or labor dispute or any other similar cause beyond the reasonable
control of such Party (each, a Force Majeure Event), except to the -93-




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extent that the non-performing Party is at fault in failing to prevent or causing
such default or delay, and provided that such default or delay cannot
reasonably be circumvented by the non-performing Party through the use of alternate
sources, disaster recovery plans and workaround plans or other means (including to
the extent within the scope of the Services under this Agreement, the performance of
disaster recovery services). Notwithstanding the foregoing, a strike, lockout or
labor dispute involving CSC or CSCs Affiliates employees or its telecommunications
Subcontractors (other than Level 3 and MCI and their subcontractors) shall not
excuse CSC from its obligations hereunder. 
  (b)
    Duration and Notification. In such Force Majeure Event, the non-performing
Party shall be excused from further performance or observance of the obligation(s) so
affected, subject to Section 21.1(a) (General), for as long as such
circumstances prevail and such Party continues to use all commercially reasonable
efforts to recommence performance or observance whenever and to whatever extent
possible without delay. Any Party so prevented, hindered or delayed in its performance
shall, as quickly as practicable under the circumstances, notify the Party to whom
performance is due by telephone (to be confirmed in writing within one (1) day of the
inception of such delay) and describe at a reasonable level of detail the circumstances
of the Force Majeure Event, the steps being taken to address such Force Majeure Event
and the expected duration of such Force Majeure Event. 
  (c)
    Substitute Services; Termination. If any event described in Section
21.1(a) (General) has prevented, hindered or delayed or is reasonably expected to
prevent, hinder or delay the performance by CSC or the CSC Personnel of Services for
longer than the recovery period specified in the applicable disaster recovery plan or
for more than ten (10) Business Days, then Sears may require CSC, to the extent
practicable, to promptly procure such Services from an alternate source.  (i)
    To the extent that it was a CSC Facility impacted, CSC shall be
solely liable for payment for such services from the alternate source for a
period not to exceed six (6) months; provided, however, that
Sears continues to pay the portion of Charges under the applicable Transaction
Document that apply to those Services that it continues to receive from CSC
(directly or from such an alternate source). CSC shall diligently pursue
either a restoration and/or replacement of the affected CSC Facilities and CSC
will use its commercially reasonable efforts to relocate such Services to a CSC
Facility within such six (6) month period. If after such six (6) month period,
CSC has not been able to restore the impacted CSC Facilities or move the
Services to another CSC location, then Sears shall have the option of: (a)
agreeing to pay sum of the: (x) Charges, and (y) the incremental cost between
CSCs Out-of-Pocket cost for such alternate Service provider and the Charges
for such Services, or (b) partially or fully terminating the Services (in which
case Sears would not have to pay any Termination Charges as to the impacted
Services, and only 80% of the Termination Charges for the non-impacted Services
terminated by Sears). -94-




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(ii)
    If the Force Majeure event impacts a Sears Facility, at which
CSC was to perform its Services, then Sears may require CSC to provide such an
alternate Services provider within ten (10) Business Days of Sears request,
pursuant to Section 4.5 (Additional Services). If Sears has not
restored or replaced the impacted Sears Facility within six (6) months, then
Sears shall have the option of partially or fully terminating the Services (in
which case Sears would not have to pay any Termination Charges as to the
impacted Services, and only 80% of the Termination Charges for the non-impacted
Services terminated by Sears).  (iii)
    If CSC does not provide an alternative provider of such
Services within ten (10) Business Days of the Force Majeure Event, then Sears
may terminate this Agreement or any Transaction Document, but only with respect
to the portion of the Services so affected, without payment of Termination
Charges. In the event of such partial termination, the Charges payable under
this Agreement shall be equitably adjusted to reflect those terminated
Services. 
  (d)
    Disaster Recovery. The occurrence of a Force Majeure Event shall not relieve
CSC of its obligation to (i) implement its disaster recovery plan for the facilities
used in providing the Services, and (ii) provide any disaster recovery services
described in an applicable Transaction Document. 
  (e)
    Payment Obligation. If CSC fails to provide Services in accordance with this
Agreement due to the occurrence of a Force Majeure Event, all amounts payable to CSC
hereunder shall be equitably adjusted in a manner such that Sears is not required to
pay any amounts for Services that it is not receiving whether from CSC or from an
alternate source at CSCs expense pursuant to Section 21.1(c) (Substitute
Services; Termination). CSC shall not have the right to additional payments or an
increase in per unit consumption charges as a result of any Force Majeure Event (e.g.,
if a decrease in consumption of a Service under a Transaction Document would have
resulted in an increase in the per unit charges under the rate card under such
Transaction Document, but such decrease in consumption was due to a Force Majeure
Event, then such increase would not apply). 
  (f)
    Allocation of Resources. Without limiting CSCs obligations under this
Agreement, whenever a Force Majeure Event causes CSC to allocate limited resources
between or among CSCs customers and Affiliates, the Eligible Recipients shall receive
at least the same treatment as comparable CSC customers with respect to such limited
resources. In no event shall CSC re-deploy or re-assign any Key Personnel to another
customer or account in the event of the occurrence of a Force Majeure Event. -95-




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21.2
    Limitation of Liability. 
  (a)
    Exclusions from Liability. EXCEPT AS PROVIDED IN THIS
SECTION 21.2
(LIMITATION OF LIABILITY), NEITHER PARTY NOR ITS AFFILIATES (NOR, IN THE CASE OF SEARS,
ANY ELIGIBLE RECIPIENT) SHALL BE LIABLE TO THE OTHER PARTY FOR INDIRECT, CONSEQUENTIAL,
EXEMPLARY OR PUNITIVE DAMAGES, INCLUDING LOST PROFITS, REGARDLESS OF THE FORM OF THE
ACTION OR THE THEORY OF RECOVERY, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. 
  (b)
    Liability Cap. Additionally, except as provided below, the total aggregate
liability of either Party (including its Affiliates, and, in the case of Sears, any
Eligible Recipient), for all claims asserted by the other Party under or in connection
with this Agreement, regardless of the form of the action or the theory of recovery,
shall be limited to the Aggregate Liability Cap. The Aggregate Liability Cap, at any
time, shall equal the greater of: (a) the total Charges paid (or payable) to CSC, or
its designee(s), under this Agreement during the twelve (12) month period preceding the
act or omission giving rise to such liability (the Rolling Cap); or (b) $130,000,000;
provided that after the first 12 months after the Effective Date, if the
Charges paid (or payable) under this Agreement to CSC for any three (3) consecutive
months is less than $35 million, then only the Rolling Cap would apply. The Liability
Cap will be reduced for each claim paid by CSC under this provision, and the size of
the Liability Cap will vary from time to based upon the Charges and will be determined
as of the point in time when the act or omission giving rise to such liability
occurred. For example, if: (i) CSC has paid Sears $40 million in claims under this
provision, (ii) Sears incurs another loss of $20 million that is reimbursable under
this provision based upon an act that occurred on April 1, 2006, (iii) the Charges paid
for the first quarter of 2006 were $30 million, and for the 12 months preceding such
act were $120 million, then the Liability Cap prior to the payment of the new $20
million claim shall be $80 million ($120 million net of the previous $40 million in
claims). 
  (c)
    Other. The exclusions from liability set forth in Section 21.2(a)
(Exclusions from Liability) above and the liability cap set forth in Section
21.2(b) (Liability Cap above shall continue in full force and effect, without
regard to the effectiveness of any other remedy. 
  (d)
    Exceptions to Limitations of Liability. The limitations of liability set forth
in Sections 21.2(a) (Exclusions from Liability) and 21.2(b) (Liability
Cap) shall not apply with respect to:  (i)
    Losses caused by the willful misconduct, fraud or gross
negligence of a Party, its Affiliates (or, in the case of Sears, any Eligible
Recipient), or their respective Personnel. -96-




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(ii)
    The Parties respective obligations under Section 20.1
(Indemnity by CSC) and Section 20.2 (Indemnity by Sears).  (iii)
    Losses related to personal injury, including death, and damage
to tangible property caused by the negligent or intentional acts of a Party,
its Affiliates (or, in the case of Sears, any Eligible Recipient), or their
respective Personnel.  (iv)
    Either Partys obligation to pay litigation costs and
Attorneys Fees incurred by the other Party in enforcing the terms of this
Agreement as set forth in Section 26.4 (Legal Expenses).  (v)
    Losses caused by: (A) the willful abandonment of any
significant portion (which shall be determined by taking into account the
actual or potential impact on the businesses of each Sears Related Business) of
the Services contracted for under this Agreement, including any Termination
Assistance Services; and/or (b) wrongful termination of this Agreement or any
Transaction Document by CSC. For purposes of the foregoing, willful
abandonment means, with respect to any Services, that CSC or its
Subcontractors have elected not to provide such Services, although CSC or such
Subcontractor is capable of providing them, or CSC or its Subcontractors have
intentionally acted, or failed to act, in a manner to avoid its obligation to
provide such Services (e.g., if CSC elects not to renew a required governmental
license and therefore is not able to provide the Services).  (vi)
    Losses caused by any breach of CSCs obligations under
Section 15.3(c) (Confidential Personal Information) related to an
intentional misuse of Confidential Personal Information. 
  (e)
    Items Not Considered Damages. The following shall not be considered damages
subject to, and shall not be counted toward the liability exclusion or cap specified
in, Section 21.2(a) (Exclusions from Liability) or 21.2(b) (Liability
Cap):  (i)
    Service Level Credits assessed against CSC pursuant to a
Transaction Document.  (ii)
    Charges withheld by Sears in accordance with this Agreement due
either to incorrect Charges by CSC or Services not rendered. For purposes of
clarity, disputes over the quality of a Service are not covered by the
preceding sentence.  (iii)
    Amounts paid by Sears but subsequently recovered from CSC due
either to incorrect Charges by CSC or Services not rendered. For purposes of
clarity, disputes over the quality of a Service are not covered by the
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(iv)
    Invoiced Charges, Pass-Through Expenses and other amounts that
are due and owing to either Party under this Agreement. 
  (f)
    Waiver of Liability Cap. If, at any time, the total aggregate liability of CSC
under or in connection with this Agreement exceeds, or in connection with any Third
Party claim against any Eligible Recipient is claimed by Sears to exceed, fifty percent
(50%) of the liability cap specified in Section 21.2(b) (Liability Cap) and,
upon receipt of the request of Sears, CSC refuses to waive such cap and/or increase the
available cap to an amount at least equal to the original liability cap with respect to
liability accruing on or after the receipt of such request from Sears, then Sears may
terminate this Agreement or any Transaction Document, in whole or in part, without
payment of Termination Charges. Upon CSCs request, Sears will provide to CSC any
information CSC reasonably requests regarding such Claim, to the extent Sears (or such
Eligible Recipients) has such information. If the liability cap specified in
Section 21.2(b) (Liability Cap) is increased pursuant to this Section
21.2(f) (Waiver of Liability Cap) and Sears fails in connection with the claim(s),
giving rise to such increase to recover or incur damages or a monetary settlement
sufficient to make CSCs total aggregate liability under this Agreement exceed fifty
percent (50%) of the original liability cap, the liability cap specified in Section
21.2(b) (Liability Cap) shall automatically revert to the amount thereof
immediately prior to such increase, without limiting the effectiveness of this
Section 21.2(f) (Waiver of Liability Cap) as to any subsequent liability or
potential liability of CSC under this Agreement. 
  (g)
    Acknowledged Direct Damages. The following shall be considered direct damages
and CSC shall not assert that they are indirect, consequential, exemplary or punitive
damages to the extent they result from CSCs breach of this Agreement:  (i)
    Costs and expenses of recreating or reloading any lost, stolen
or damaged Sears Data that was in the CSCs, its Affiliates or the CSC
Personnels custody or that was lost or damaged by CSC Provided Systems or CSC
Personnel, subject to Sears maintaining reasonable backup procedures with
respect to such Sears Data; provided, however, that CSC is not
otherwise obligated to provide such backup as part of the Services.  (ii)
    Costs and expenses of implementing a work-around in respect of
a failure to provide the Services or any part thereof.  (iii)
    Costs and expenses of replacing lost, stolen or damaged Sears
Provided Systems that are in the CSCs, its Affiliates or the CSC Personnels
custody.  (iv)
    Cover damages, including the costs and expenses incurred to
procure the Services or corrected Services from an alternate source, to the
extent in excess of CSCs Charges under this Agreement (which Sears shall not
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obligated to pay while Sears is procuring Services from such alternate
source).  (v)
    Wages, salaries and other charges, including overtime, for
existing or additional Personnel, and related Personnel expenses (e.g., travel
costs, telecommunications charges and similar charges, etc.) incurred by the
Eligible Recipients, including overhead allocations of the Eligible Recipients,
in connection with clauses (i) through (iv) above or otherwise
due to CSCs or CSC Personnels failure to perform in accordance with this
Agreement.  (vi)
    Costs and expenses incurred to bring the Services in-house or
to contract to obtain the Services from an alternate source, including the
costs and expenses associated with the retention of external consultants and
legal counsel to assist with any re-sourcing.  (vii)
    Damages of an Eligible Recipient that would be direct damages
if they had instead been suffered by Sears. 
  21.3
    Public Telecommunications Transmissions.  In the case of transmission of data via public telecommunications facilities permitted under
this Agreement, CSC shall not be responsible for corruption, damage, loss or mistransmission
of, or loss of security with respect to, data during such transmission unless and to the
extent such corruption, damage, loss, mistransmission or loss of security is attributable to
CSCs failure to comply with its obligations (including data security requirements) under
this Agreement, including the obligation to (a) provide the Services (including data
security requirements) in accordance with the accepted practices of well-managed tier one
providers of information technology services, (b) provide and maintain the technology
required to detect and correct any corrupt, damaged, lost or mistransmitted data and require
retransmission of any such corrupt, damaged, lost or mistransmitted data, (c) provide for
encryption of Confidential Personnel Information while in transmission, and (d) perform
other Services appropriate to assist in the resolution of such corruption, damage, loss or
mistransmission (e.g., backup and data recovery). 
  22.
    DISPUTE RESOLUTION 
  22.1
    Informal Dispute Resolution.  Prior to the initiation of formal dispute resolution procedures with respect to any dispute,
other than as provided in Section 22.1(d) (Prerequisite to Formal Proceedings) or
Section 26.15 (Equitable Remedies), the Parties shall first attempt to resolve such
dispute informally, as follows: 
  (a)
    Initial Effort. The Parties agree that the Sears Relationship Manager and the
CSC Account Executive shall attempt in good faith to resolve all disputes (other -99-




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than those described in Section 22.1(d) (Prerequisite to Formal Proceedings)
or Section 26.15 (Equitable Remedies)). If the Sears Relationship Manager
and the CSC Account Executive are unable to resolve a dispute in an amount of time
that either Party deems reasonable under the circumstances (e.g., 15-30 days), such
Party may refer the dispute for resolution to the senior corporate executives
specified in Section 22.1(b) (Escalation) upon notice to the other Party. 
  (b)
    Escalation. Within five (5) Business Days of a notice under Section
22.1(a) (Initial Effort) referring a dispute for resolution by senior corporate
executives, the Sears Relationship Manager and the CSC Account Executive shall each
prepare and provide to President of the CSC Technology Management Group and the Sears
Vice President of Operations and Engineering, respectively, summaries of the
non-privileged relevant information and background of the dispute, along with any
appropriate non-privileged supporting documentation, for their review. The designated
senior corporate executives shall confer as often as they deem reasonably necessary in
order to gather and furnish to the other all non-privileged information with respect to
the matter in issue that is appropriate and germane in connection with its resolution.
The designated senior corporate executives shall discuss the problem and negotiate in
good faith in an effort to resolve the dispute without the necessity of any formal
proceeding. The specific format for the discussions shall be left to the discretion of
the designated senior corporate executives, but may include the preparation of
agreed-upon statements of fact or written statements of position. 
  (c)
    Provision of Information. During the course of negotiations under Section
22.1(a) (Initial Effort) or Section 22.1(b) (Escalation), all reasonable
requests made by one Party to another for non-privileged information, reasonably
related to the dispute, shall be honored in order that each of the parties may be fully
advised of the others position. In addition, as part of the negotiations under
Section 22.1(b), CSC shall provide, upon Sears request, CSCs internal costs
to the extent that such information is relevant to resolving the underlying dispute.
All negotiation shall be strictly confidential and used solely for the purposes of
settlement. Any materials prepared by one Party for these proceedings shall not be
used as evidence by the other Party in any subsequent arbitration or litigation;
provided, however, the underlying facts supporting such materials are
discoverable to the extent provided in the applicable proceeding; provided,
further, that disclosure of such materials pursuant to this process shall not
prejudice a Partys ability to seek such discovery. 
  (d)
    Prerequisite to Formal Proceedings. Formal proceedings for the resolution of a
dispute may not be commenced until the earlier of:  (i)
    the designated senior corporate executives under Section
22.1(b) (Escalation) concluding in good faith that amicable resolution
through continued negotiation of the matter does not appear likely; or -100-




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(ii)
    thirty (30) days after the notice under Section 22.1(a)
(Initial Effort) referring the dispute to senior corporate executives.  The provisions and time periods specified in this Section 22.1 (Informal
Dispute Resolution) shall not be construed to prevent a Party from instituting, and
a Party is authorized to institute, formal proceedings earlier to (1) avoid the
expiration of any applicable limitations period, (2) preserve a superior position
with respect to other creditors, or (3) address a claim arising out of the breach of
a Partys obligations under Section 15 (Sears Data and Other Confidential
Information) or a dispute subject to Section 26.15 (Equitable Remedies). 
  22.2
    Arbitration. 
  (a)
    Arbitration. Except for claims arising out of the breach of a Partys
obligations under Section 15 (Sears Data and Other Confidential Information) or
disputes subject to Section 26.15 (Equitable Remedies), any controversy or
claim arising out of or relating to this Agreement, or any breach thereof, that cannot
be resolved using the procedures set forth above in Section 22.1 (Informal
Dispute Resolution) shall be finally resolved under the Commercial Arbitration Rules of
the American Arbitration Association then in effect; provided, however,
that without limiting any rights at law or in equity a Party may have because of an
improper termination of this Agreement by the other Party, nothing contained in this
Agreement shall limit either Partys right to terminate this Agreement or a Transaction
Document pursuant to Section 23 (Termination). 
  (b)
    Location and Decision. The Arbitration shall take place in Chicago, Illinois,
and shall apply the governing law of this Agreement. The decision of the arbitrators
shall be final and binding and judgment on the award may be entered in any court of
competent jurisdiction. The arbitrators shall be required to state the reasons for
their decisions, including findings of fact and law. The arbitrators shall be bound by
the warranties, limitations of liability and other provisions of this Agreement. The
arbitrators shall not be permitted to decide any claims subject to Section
26.15 (Equitable Remedies) or to award any equitable remedies and to the extent
that any claim/counterclaim or series of related claims/counterclaims include demands
for both equitable and monetary remedies, then the entire claim/counterclaim, or series
of related claims/counterclaims, as applicable, shall be excluded from the arbitrators
jurisdiction. 
  (c)
    Selection and Qualification of Arbitrators. Within ten (10) days after
delivery of written notice (Notice of Dispute) by one Party to the other in
accordance with this Section, the Parties each shall use good faith efforts to mutually
agree upon one (1) arbitrator. If the Parties are not able to agree upon one (1)
arbitrator within such period of time, the Parties each shall within ten (10) days: (i)
appoint one (1) arbitrator who has at no time ever represented or acted on behalf of
either of the Parties, and is not otherwise affiliated with or interested in either of
the Parties; and (ii) deliver written notice of the identity of such arbitrator and a
copy of his or her written acceptance of such appointment to the other Party. If
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Party fails or refuses to appoint an arbitrator within such ten (10) day period, the
single arbitrator appointed by the other Party shall decide alone the issues set out
in the Notice of Dispute. Within ten (10) days after such appointment and notice,
such arbitrators shall appoint a third neutral and independent arbitrator (the
Third Arbitrator) who shall at no time have ever represented or acted on behalf of
either of the Parties, and shall not have otherwise been affiliated with or
interested in either of the Parties. In the event that the two (2) arbitrators fail
to appoint a Third Arbitrator within ten (10) days of the appointment of the second
arbitrator, either arbitrator or either Party may apply for the appointment of a
Third Arbitrator to the American Arbitration Association. 
  (d)
    General. All arbitrators selected pursuant to this Section shall be practicing
attorneys with at least five (5) years experience with the technology and/or law
applicable to the Services or similar services or transactions. Any such appointment
shall be binding upon the Parties; provided, however, that if the
parties have agreed upon a single arbitrator, then each Party shall have a one-time
right during such arbitration to remove such arbitrator for any reason (in which case
the parties shall then re-select their arbitrator(s) as provided above). The Parties
shall use best efforts to set the arbitration hearing within sixty (60) days after
selection of the arbitrator or arbitrators, as applicable, but in no event shall the
arbitration hearing be set more than ninety (90) days after selection of the arbitrator
or arbitrators, as applicable. Discovery as permitted by the Federal Rules of Civil
Procedure then in effect will be allowed in connection with arbitration to the extent
consistent with the purpose of the arbitration and as allowed by the arbitrator or
arbitrators, as applicable. In connection with any dispute under Section 13.10
(Benchmarking), the arbitrator or arbitrator(s) shall expressly have the authority to
select a Benchmarker and to choose the Benchmarking methodology. The decision or award
of the arbitrator or the majority of the three arbitrators, as applicable, shall be
rendered within fifteen (15) days after the conclusion of the hearing, shall be in
writing, shall set forth the legal and factual basis therefor, and shall be final,
binding and nonappealable upon the Parties and may be enforced and executed upon in any
court having jurisdiction over the Party against whom the enforcement of such decision
or award is sought. During the arbitration, each Party shall bear its own arbitration
costs and expenses and all other costs and expenses of the arbitration shall be divided
equally between the Parties; provided, however, the arbitrator or
arbitrators shall allocate such expenses between the Parties in the final arbitration
award in accordance with Section 26.4 (Legal Expenses). 
  22.3
    Continued Performance. 
  (a)
    General. During each Exhibit Term and during each Termination Assistance
Services period, each Party shall, unless otherwise directed by the other Party,
continue performing its obligations under this Agreement while any dispute is being
resolved; provided, however, that this provision shall not operate or
be construed as extending the Term or prohibiting or delaying a Partys exercise of any
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(b)
    Non-Interruption of Services. CSC acknowledges and agrees that (i) any
interruption to the Services would cause irreparable harm to Sears and the other
Eligible Recipients, in which case an adequate remedy at law would not be available,
and (ii) pending resolution of any dispute or controversy, it shall not deny, withdraw
or restrict CSCs provision of the Services to any Eligible Recipient under this
Agreement, except as specifically and expressly agreed in writing by Sears and CSC. 
  23.
    TERMINATION 
  23.1
    Termination for Cause. 
  (a)
    Termination By Sears.  (i)
    Agreement. If CSC:  (1)
    commits any material breach of this Agreement
(except as provided in clauses (2), and(3) below),
including Termination Assistance Services, which is curable by CSC and
CSC fails to cure such breach within thirty (30) days after CSCs
receipt of notice thereof;(2)
    commits a material breach of this Agreement
that is not capable of being cured;(3)
    commits a breach of this Agreement that is
capable of being cured, but is not capable of being cured within the
period specified pursuant to clause (1)above,;
provided, that CSC will be entitled to an additional thirty
(30) days to cure such breach if CSC demonstrates that: (A) CSC is
capable of curing such breach within such additional period, (B) CSC
works diligently and in good faith to cure such breach in accordance
with a cure plan submitted by CSC to Sears, and (C) the breach does not
impair the ability of Sears or any of its Affiliates to conduct any
material portion of their business; or(4)
    commits numerous breaches of its duties or
obligations under this Agreement, whether or not cured within
applicable cure periods, where such breaches collectively constitute a
material breach of this Agreement and CSC fails to (A) within ten (10)
days after receiving notice of such breaches, provide a reasonable plan
to correct the deficiencies causing such breaches on a permanent basis,
or (B) implement such plan, cure such breaches (to the extent they are
curable), and permanently cure such deficiencies within thirty (30)
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then Sears may, by giving notice to CSC, terminate this Agreement, with
respect to all or any part of the Services, in whole or in part, as of a
date specified in the notice of termination. All notices of breach required
to be given under this Section 23.1(a) (Termination by Sears) shall
be given by Sears and contain a description of the breach in reasonable
detail. CSC shall not be entitled to any Termination Charges in connection
with such a termination for cause. If Sears chooses to terminate this
Agreement in part, the Charges payable under the remaining Transaction
Documents shall be equitably adjusted to reflect the fair market value of
the remaining Services; provided that the revised Charges for the remaining
Services shall take into account the un-amortized costs that were originally
part of the Charges under this Agreement; but only to the extent such costs
directly related to the remaining Services.  (ii)
    Transaction Document. If CSC:  (1)
    commits any material breach of a Transaction
Document (except as provided in clauses (2) and (3)
below), including Termination Assistance Services, which is curable by
CSC and CSC fails to cure such breach within thirty (30) days after
CSCs receipt of notice thereof;(2)
    commits a material breach of any Transaction
Document that is not capable of being cured;(3)
    commits a breach of a Transaction Document that
is capable of being cured, but is not capable of being cured within the
period specified pursuant to clause (1) above;
provided, that CSC will be entitled to an additional thirty
(30) days to cure such breach if CSC demonstrates that: (A) CSC is
capable of curing such breach within such additional period, (B) CSC
works diligently and in good faith to cure such breach in accordance
with a cure plan submitted by CSC to Sears, and (C) the breach does not
impair the ability of any Sears or its Affiliates to conduct any
material portion of their business;(4)
    commits numerous breaches of its duties or
obligations under a Transaction Document, whether or not cured within
applicable cure periods, where such breaches collectively constitute a
material breach of any Transaction Document and CSC fails to (A) within
ten (10) days after receiving notice of such breaches, provide a
reasonable plan to correct the deficiencies causing such breaches on a
permanent basis, or (B) implement such plan, cure such breaches (to the
extent they are curable), and permanently cure such deficiencies within
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(5)
    commits any Excessive Service Level Failure, as
defined in any Transaction Document; then Sears may, by giving notice to CSC, terminate all affected Transaction
Documents with respect to all or any part of the Services, in whole or in
part, as of a date specified in the notice of termination. All notices of
breach required to be given under this Section 23.1(a) (Termination
by Sears) shall be given by Sears and contain a description of the breach in
reasonable detail. CSC shall not be entitled to any Termination Charges in
connection with such a termination for cause. If Sears chooses to terminate
a Transaction Document in part, the Charges payable under the portion of the
Transaction Document that is not terminated shall be equitably adjusted to
reflect the fair market value of the remaining Services; provided that the
revised Charges for the remaining Services shall take into account the
un-amortized costs that were originally part of the Charges under this
Agreement; but only to the extent such costs directly related to the
remaining Services. 
  (b)
    By CSC. CSC may upon notice to Sears terminate a Transaction Document if, and
only if, (i) Sears fails to pay Charges in accordance with this Agreement; subject to
Sears rights under Section 14.4 (Disputed Charges) (ii) CSC provides Sears
with a notice of such failure in accordance with Section 26.3 (Notices), and
(iii) such amount remains unpaid for at least thirty (30) days after such notice is
received by Sears. 
  23.2
    Termination for Convenience.Unless a different period is set forth in a Transaction Document, Sears may terminate this
Agreement with respect to all or any portion of the Services for convenience and without
cause upon 180 days prior notice; provided, however, that for Services
under a Service Addenda, only ten (10) days notice shall be required. Sears shall pay to
CSC a Termination Charge (as such amount may be reduced from time to time under this
Agreement, the Applicable Termination Charge), calculated in accordance with Section
23.3 (Termination Charges). Commencing with the first invoice for Services due after
the effective date of such termination, CSC shall invoice Sears for (and Sears shall pay in
accordance with this Agreement), that portion of the Applicable Termination Charge equal to
the difference between the average monthly Charges by CSC over the immediately preceding 12
months and the actual Charges by CSC for Services for such period (the TC Delta Payment).
The Applicable Termination Charge shall be reduced by each TC Delta Payment made by Sears,
and as otherwise provided for in this Agreement. For each following month, a TC Delta
Payment shall be calculated and paid by Sears as provided for above, until the Applicable
Termination Charge is reduced to twenty percent (20%) of the original Applicable Termination
Charge (the TC Holdback Amount). The TC Holdback Amount (after adjustment as provided for
herein), shall be paid upon completion of any completion of the Services (including any
extension thereof, but not including the Termination Assistance Services) under this
Agreement. If a purported termination for cause by Sears under Section 23.1
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determined by a competent authority not to be properly a termination for cause, then such
termination by Sears shall be deemed to be a termination for convenience under this
Section 23.2 (Termination for Convenience) (whether or not sufficient notice of such
termination was given). 
  23.3
    Termination Charges.No Termination Charges shall apply under this Agreement unless the applicable Transaction
Document states that such Charges will apply. The Parties acknowledge and agree that: (a)
any Termination Charges specified in a Transaction Document shall be the maximum amount
Sears will be required to pay in the event of a termination for convenience of the Services
under such Transaction Document (regardless of whether such Services are terminated at one
time, or in a series of terminations (such as for partial terminations)); (b) Termination
Charges shall decline over time and, (iii) Termination Charges shall unless otherwise
specified in a Transaction Document, no longer apply upon the normal expiration of a
Transaction Document or during any renewal period thereof. Furthermore, the inclusion of
such Termination Charges in a Transaction Document shall not limit CSCs obligation to
mitigate any Termination Charges associated with the termination of such Transaction
Document, nor obligate Sears to pay any Termination Charges in excess of the actual
Termination Charges. If Sears terminates for convenience all or a material portion of the
Services under any Transaction Document that is subject to Termination Charges, CSC shall
calculate and invoice Sears (pursuant to Section 14.1 (Invoicing)), for the
Termination Charges as specified in the Transaction Document. A change in the amount of
Services that the Eligible Recipients receive under this Agreement shall not be deemed a
partial termination (for which Termination Charges would be payable) except as expressly
provided otherwise in the applicable Transaction Document. Sears may, from time to time,
request that CSC calculate the amount of Termination Charges Sears would be required to pay
in the event Sears were to terminate, for convenience, in whole or in part, any Services.
CSC shall provide to Sears a detailed estimate of such Charges (broken out by the categories
set forth in the definition of Termination Charges), within 30 days after its receipt of
Sears request. If Sears elects to terminate, for convenience, any Services for which such
an estimate has been requested, then the Termination Charges applicable to such termination
shall not exceed the lower of: (x) the Termination Charges set forth in the applicable
Transaction Document, minus any Termination Charges Sears is already obligated to pay due to
previous terminations under such Transaction Document, and (y) the amount set forth in the
CSCs estimate pursuant to this Section 23.3 (Termination Charges). 
  23.4
    Termination Upon CSC Change of Control.If a change in Control of CSC (or that portion of CSC providing Services under this
Agreement) or the Entity that Controls CSC (if any), where such control is acquired,
directly or indirectly, in a single transaction or series of related transactions, or all or
substantially all of the assets of CSC are acquired by any entity, or CSC is merged with or
into another entity to form a new entity, then at any time within twelve (12) months after
the last to occur of such events, Sears may at its option terminate this Agreement or any
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prior notice and designating a date upon which such termination shall be effective;
provided, however, if such change in Control of CSC involves a competitor of
Sears or its Affiliates, Sears may terminate this Agreement, or any Transaction Document, in
whole or in part, by giving CSC at least ten (10) days prior notice, and such competitor of
Sears or its Affiliates shall be prohibited from any contact with Sears Data, Sears
Confidential Information and any and all other information about the Sears account,
including discussions with CSC Personnel regarding specifics relating to the Services. CSC
shall be entitled to eighty percent (80%) of the Termination Charges that would have been
paid in the event of a Termination for Convenience in connection with a termination under
this Section 23.4 (Termination Upon CSC Change of Control). 
  23.5
    Termination Upon Sears Mergers and Acquisitions.If, in a single transaction or series of transactions, Sears acquires Control of or Control
of Sears is acquired by any other Entity (by stock sale, asset sale or otherwise) or merges
with any other Entity, then, at any time within twelve (12) months after the last to occur
of such events, Sears may at its option terminate, for convenience, the Services, in whole
or in part, under this Agreement, by giving CSC at least ninety (90) days prior notice and
designating a date upon which such termination shall be effective. If Sears acquires Control
of or Control of Sears is acquired by an Entity that has an existing agreement with CSC (the
Entity Agreement) for the provision of services similar to the Services (Other
Services), Sears shall not be required to pay any Termination Charges in connection with
the termination of the Services under this Agreement, or the Entity Agreement to the extent
that the combined Entity elects, in its sole discretion, to have CSC provide the Services
and Other Services to the combined Entity pursuant to the terms of (a) this Agreement;
provided that the Charges under this Agreement shall be equitably adjusted to the extent
required to take into account any un-amortized costs that were part of the Entity Agreement,
(b) the Entity Agreement (provided that this option (b) will require CSCs consent), or (c)
a mutually acceptable new agreement between CSC and the combined Entity. The Parties will
negotiate in good faith regarding the New Services, if any, required to provide the Other
Services under this Agreement. 
  23.6
    Termination for Insolvency.If either Party (a) files for bankruptcy, (b) becomes or is declared insolvent, or is the
subject of any bona fide proceedings related to its liquidation, administration, provisional
liquidation, insolvency or the appointment of a receiver or similar officer for it, (c)
passes a resolution for its voluntary liquidation, (d) has a receiver or manager appointed
over all or substantially all of its assets, (e) makes an assignment for the benefit of all
or substantially all of its creditors, (f) enters into an agreement or arrangement for the
composition, extension or readjustment of substantially all of its obligations or any class
of such obligations, (g) has any of its publicly traded equities delisted from any stock
exchange, or (h) experiences an event analogous to any of the foregoing in any jurisdiction
in which any material portion of its assets are situated, then the other Party may terminate
this Agreement as of a date specified in a termination notice; provided,
however, that CSC shall not have the right to exercise such termination under this
Section 23.6 (Termination for Insolvency) so long as Sears (within 30 days of such -107-




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notice) pays for the Services to be received hereunder in advance on a month-to-month basis.
If any Party elects to terminate this Agreement due to the insolvency of the other Party,
such termination shall be deemed to be a termination for cause hereunder. 
  23.7
    Termination for Change in Laws.If any change in Laws results in an increase of twenty percent (20%) or more in the
estimated average monthly Charges for any Service or under any Transaction Document or
otherwise has a material adverse impact on CSCs ability to perform the Services, then Sears
may, at its option, terminate the applicable Transaction Document by giving CSC at least
ninety (90) days prior notice and designating a date upon which such termination shall be
effective. CSC shall be entitled to eighty percent (80%) of the Termination Charges that
would have been paid in the event of a Termination for Convenience in connection with a
termination under this Section 23.7 (Termination for Change in Laws). 
  23.8
    Sears Rights Upon CSCs Bankruptcy. 
  (a)
    General Rights. In the event of CSCs, any of CSCs Affiliates or any
Subcontractors bankruptcy or other formal procedure referenced in Section 23.6(Termination for Insolvency) or of the filing of any petition under bankruptcy laws
affecting the rights of CSC or any CSC Personnel which is not stayed or dismissed
within thirty (30) days of filing, in addition to the other rights and remedies set
forth in this Agreement, to the maximum extent permitted by Law, Sears shall have the
immediate right to retain and take possession for safekeeping all Sears Data, Sears
Confidential Information and Sears Provided Systems, including Software, Equipment,
Systems or Materials to which the Eligible Recipients are or would be entitled during
the Term or upon the expiration or termination of this Agreement or any Transaction
Document, in the possession or control of CSC or CSC Personnel, as the case may be.
CSC shall, and shall cause the CSC Personnel (to the extent not prohibited by Law) to
cooperate fully with the Eligible Recipients and assist the Eligible Recipients in
identifying and taking possession of the items listed in the preceding sentence. Sears
shall have the right to hold such Sears Data, Confidential Information, Software,
Equipment, Systems and Materials until such time as the trustee or receiver in
bankruptcy or other appropriate insolvency office holder can provide adequate
assurances and evidence to Sears that they shall be protected from sale, release,
inspection, publication or inclusion in any publicly accessible record, document,
material or filing. CSC and Sears agree that without this material provision, Sears
would not have entered into this Agreement or provided any right to the possession or
use of Sears Data, Sears Confidential Information or Sears Provided Systems covered by
this Agreement. 
  (b)
    Sears Rights in Event of Bankruptcy Rejection. Notwithstanding any other
provision of this Agreement to the contrary, if CSC becomes a debtor under the United
States Bankruptcy Code (11 U.S.C. §101 et seq. or any similar Law in any other country
(the Bankruptcy Code)) and rejects this Agreement pursuant to Section 365 of the
Bankruptcy Code (a Bankruptcy Rejection), (i) any and all -108-




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of the licensee and sublicensee rights of Sears and the other Eligible Recipients
arising under or otherwise set forth in this Agreement, including the rights of
Sears and the other Eligible Recipients referred to in Section 16.6 (Sears
Rights Upon Expiration or Termination), shall be deemed fully retained by and vested
in Sears and the other Eligible Recipients as protected intellectual property rights
under Section 365(n)(1)(B) of the Bankruptcy Code and further shall be deemed to
exist immediately before the commencement of the bankruptcy case in which CSC is the
debtor, (ii) Sears and the other Eligible Recipients shall have all of the rights
afforded to non-debtor licensees and sublicensees under Section 365(n) of the
Bankruptcy Code, and (iii) to the extent any rights of Sears and the other Eligible
Recipients under this Agreement which arise after the termination or expiration of
this Agreement are determined by a bankruptcy court not to be intellectual property
rights for purposes of Section 365(n), all of such rights shall remain vested in
and fully retained by Sears and the other Eligible Recipients after any Bankruptcy
Rejection as though this Agreement were terminated or expired. Sears shall under no
circumstances be required to terminate this Agreement after a Bankruptcy Rejection
in order to enjoy or acquire any of its or the other Eligible Recipients rights
under this Agreement, including without limitation any of the rights referenced in
Section 16.6 (Sears Rights Upon Expiration or Termination). 
  23.9
    Right to Assume Licenses in Bankruptcy.In the event of commencement of bankruptcy proceedings by or against an Eligible Recipient,
such Entity or its trustee in bankruptcy shall be entitled to assume the licenses granted to
such Entity under or pursuant to this Agreement and shall be entitled to retain all of such
Entitys rights thereunder. 
  24.
    RIGHTS UPON EXPIRATION OR TERMINATION 
  24.1
    Certain Rights.Except as expressly provided otherwise in a Transaction Document, upon any expiration or
termination (regardless of whether for cause or convenience) of this Agreement or any
Transaction Document, the rights provided for in this Section 24 (Rights Upon
Expiration Or Termination) shall apply. 
  24.2
    Hiring.The Eligible Recipients shall be permitted to undertake, without interference from CSC or
CSC Affiliates or CSC Subcontractors (including counteroffers), to hire, effective after the
expiration or termination of the Services (or the applicable portion thereof) under this
Agreement or the applicable Transaction Document, as the case may be, or the completion of
any Termination Assistance Services (for which CSC reasonably requires such Personnels
Services) requested under Section 25 (Termination Assistance Services), any CSC
Personnel assigned primarily to the performance of Services within the 12-month period prior
to the expiration or termination date. CSC shall waive, and -109-




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shall cause its Affiliates and Subcontractors to waive, their rights, if any, under
contracts with such Personnel restricting the ability of such Personnel to be recruited or
hired by the Eligible Recipients. The Eligible Recipients shall have reasonable access to
such CSC Personnel for interviews, evaluations and recruitment. Sears shall endeavor to
conduct the above-described hiring activity in a manner that is not unnecessarily disruptive
of the performance by CSC of its obligations under this Agreement. Notwithstanding the
foregoing, as to CSCs Subcontractors, CSCs obligation under this Section 24.2
(Hiring) is only to use commercially reasonable effort to endeavor to cause its
Subcontractors to agree to the foregoing terms upon Sears request. 
  24.3
    Sears Provided Systems and Deliverables.With respect to Sears Provided Systems and Deliverables, CSC shall, at no cost to Sears: 
  (a)
    Deliver. Deliver to Sears a copy of all Deliverables and all Sears Provided
Systems in the format and medium in use by CSC in connection with the Services as of
the date Sears requests such items, or the date of such expiration or termination of
this Agreement or the applicable Transaction Document, as the case may be; and 
  (b)
    Destroy. Following completion by CSC of any Termination Assistance Services
for which Sears Provided Systems are required, destroy or securely erase all tangible
embodiments of such Sears Provided Systems then in CSCs or CSC Personnels possession
or under its control. 
  24.4
    Sears Facilities.CSC and CSC Personnel shall vacate the Sears Facilities, in condition at least as good as
the condition when made available to CSC, ordinary wear and tear excepted. Such Sears
Facilities shall be vacated, at the expiration or termination date of the applicable
Transaction Document or the completion of any Services requested by Sears under Section
25 (Termination Assistance Services) requiring such Sears Facilities, whichever is
later. 
  24.5
    CSC Provided Systems. 
  (a)
    CSC Provided Circuits and Other Items. CSC shall, upon Sears request, and at
no additional charge, register, re-register, release, assign and transfer, as the case
may be, to Sears (or its designee) all Internet addresses, domain names and toll and
toll-free telephone numbers provided by CSC or CSC Personnel to Sears that shall be
used by Sears or CSC Personnel primarily in connection with the provision of the
Services. 
  (b)
    CSC Provided Equipment.  (i)
    Right to Purchase/Lease. Unless otherwise agreed to by
Sears pursuant to Section 10.3(h) (Other Matters), Sears may have the
option (but not the -110-




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obligation) to purchase, or assume the lease for any Equipment, including
the Acquired Assets (on the same terms and conditions as are applicable to
CSC under such lease and without transfer charges) or buy out the lease for
such Equipment (at a price appropriately discounted to reflect the present
value of future payments to be made under the lease), owned or leased by CSC
or its Affiliates that is used primarily by CSC, its CSC Affiliates or the
CSC Personnel to perform the Services. If the terms of such lease do not
permit assignment or buyout by Sears as provided above, CSC will, upon
Sears request, inform Sears of the actual buyout amount that CSC would
incur to buy out out such lease (the CSC Buyout Price), and then upon
Sears request, CSC will buyout out such lease and sell such Equipment to
Sears at the CSC Buyout Price.  (ii)
    Maintenance of Such Equipment. Such Equipment shall be
transferred in good working condition, reasonable wear and tear excepted, as of
the expiration or termination date of the applicable Transaction Document, or
the completion of any Services requiring such Equipment requested by Sears
under Section 25 (Termination Assistance Services), whichever is later.
CSC shall maintain such Equipment through the date of transfer so as to be
eligible for the applicable manufacturers maintenance program at no additional
charge to Sears.(iii)
    Conditions of Transfer. CSC shall assist Sears in
identifying each such piece of Equipment and the terms and conditions upon
which such Equipment may be sold or assigned to Sears, including any costs to
be assumed by Sears. At Sears request, the Parties shall negotiate in good
faith and agree upon the form and structure of the purchase.  (1)
    Owned Equipment. In the case of Equipment
owned by CSC or its Affiliates purchased by Sears, CSC shall grant to
the Eligible Recipients a warranty of title and a warranty that such
Equipment is free and clear of all liens and encumbrances. Such
conveyance by CSC to the Sears shall be at the then-current net book
value as stated in CSCs or its Affiliates accounting records;
provided, however, that for such purpose net book value
shall be calculated in accordance with generally accepted accounting
principles, using the depreciation methods used by CSC in preparing its
federal income tax returns.(2)
    Leased Equipment. In the case of leased
Equipment, CSC shall (A) represent and warrant that the lease is not in
default, (B) represent and warrant that all payments thereunder have
been made through the date of transfer, and (C) notify Sears of any
lessor defaults of which it is aware at the time. 
  (c)
    CSC Provided Software. With respect to CSC Provided Software: -111-




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(i)
    CSC Software.  (1)
    License. With respect to all CSC Provided
Software that is CSC Software, CSC shall grant to Sears an irrevocable,
perpetual, nonexclusive, worldwide, paid-up license to use, execute,
reproduce, display, perform and prepare Derivative Works based upon,
and distribute to Eligible Recipients such CSC Software;
provided that Eligible Recipients that are not Sears Related
Businesses may exercise the foregoing license only in connection with
their relationship with the Sears Related Businesses. Source code for
such Software will only be disclosed to the Sears Related Businesses
and their Personnel and not to other Eligible Recipients. CSC shall
deliver to Sears a copy of such CSC Software and all related
documentation sufficient to enable the Eligible Recipients to exercise
the foregoing license; provided that such Software shall be subject to
the confidentiality provisions set forth in Section 15.3
(Confidentiality) above. The foregoing license shall be at no cost to
the Eligible Recipients, unless and to the extent such CSC Software is
generally licensed to CSCs other customers on a rental fee basis, and
such CSC Software was made available to Sears on a rental fee basis
under the applicable Transaction Document, in which case such CSC
Software shall be provided to Sears on terms no less favorable than the
terms under which Sears was receiving such CSC Software under this
Agreement; provided, however, that such CSC Software
shall not be deemed to have been provided on a rental fee basis if CSC
included any one-time licensing fees associated with such CSC Software
in the monthly Charges paid by Sears under this Agreement. If Sears
does not procure maintenance for such CSC Software, the foregoing
license shall only apply to the version(s) of CSC Software in use for
providing the Services at any time during the twelve (12) months
immediately preceding the expiration or termination of the applicable
Services or Transaction Document.(2)
    Maintenance. CSC shall offer to provide to
Sears, and if and to the extent requested by Sears, CSC shall provide
to Sears, Upgrades, maintenance, support and other services for such
CSC Software on CSCs or its Affiliates, as applicable, then-current
standard terms and conditions for such services; provided,
however, that the charges for such Services shall not exceed
those CSC or its Affiliates, as applicable, customarily charges to its
other preferred commercial customers.  (ii)
    Third Party Software.  (1)
    License. With respect to CSC Provided Software
that is Third Party Software, unless otherwise agreed to by Sears
pursuant to -112-




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Section 10.3(h) (Other Matters), CSC shall, at Sears option,
transfer to Sears all licenses for Third Party Software used
primarily to provide Services to Sears (on the same terms and
conditions as are applicable to CSC under such license and without
transfer charges); provided, however, that Sears
shall be entitled to permit the Eligible Recipients to use such
Software subject to the same terms as conditions as Sears is entitled
to use such Software and subject to any limits on usage that apply to
Sears (e.g., if Sears were entitled to five (5) CPU licenses, Sears
and the Eligible Recipients can, on a combined basis, only use such
Software on five (5) CPUs); provided further that
Eligible Recipients that are not Sears Related Businesses may
exercise the foregoing license only in connection with their
relationship with the Sears Related Businesses. CSC shall deliver to
Sears a copy of such Third Party Software and all related
documentation.  (2)
    Transfer Fees. To the extent Sears has agreed
in advance to pay any fees in connection with its receipt of such
licenses, sublicenses or other rights, CSC shall, at Sears request,
identify the licensing and sublicensing options available to the
Eligible Recipients and the license or transfer fees associated with
each. CSC shall use commercially reasonable efforts to obtain the most
favorable options and the lowest possible transfer, license,
re-license, assignment or termination fees for Third Party Materials.
CSC shall not commit the Eligible Recipients to paying any such fees or
expenses without Sears prior approval, which may be withheld in Sears
sole discretion. If the applicable licensor offers more than one form
of license, Sears (not CSC) shall be entitled to select the form of
license to be received by the Eligible Recipients.  (iii)
    Sufficient Licenses. If CSC did not purchase
sufficient licenses to provide the Services, and therefore additional licenses
will have to be purchased to permit CSC to meet its obligations under this
Section 24.5(c), such costs shall be borne by CSC. 
  24.6
    CSC Subcontracts and Third Party Contracts.CSC shall inform Sears of all subcontracts or Third Party Contracts used primarily by CSC,
its CSC Affiliates and any CSC Personnel to perform the Services. Subject to Section
10.3(h) (Other Matters), at Sears request, CSC shall, and shall cause any such CSC
Affiliates or any CSC Personnel to, permit the Eligible Recipients to assume prospectively
any or all such contracts or to enter into new contracts with the Eligible Recipients on
substantially the same terms and conditions, including price. CSC shall so assign the
designated subcontracts and Third Party Contracts to the Eligible Recipients as of the
expiration or termination date of the applicable Transaction Document or the completion of
any Termination Assistance Services requested by Sears under Section 25 (Termination
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whichever is later. There shall be no charge or fee imposed on the Eligible Recipients by
CSC, its Affiliates or any of CSC Personnel for such assignment. CSC shall (1) represent
and warrant that it is not in default under such subcontracts and Third Party Contracts, (2)
represent and warrant that all payments thereunder through the date of assignment are
current, and (3) notify Sears of any Subcontractors or Third Party contractors default
with respect to such subcontracts and Third Party Contracts of which it is aware at the
time. CSC shall retain the right to utilize any such Subcontractor or Third Party services
in connection with the performance of services for other CSC customers. 
  24.7
    Effect on Termination Charge.If Sears exercises any of its rights under this Section 24 (Rights Upon
Termination), the Termination Charge under the applicable Transaction Document shall be
reduced by (a) any amounts paid or payable by Sears (or its designees) to CSC, or its
designees, pursuant to this Section 24 (Rights Upon Termination) upon or after
termination, or prior to the normal expiration, of the applicable Transaction Document, as
the case may be, and (b) all costs and expenses avoided by CSC (including CSCs applicable
profit margins) by Sears (or its designees) hiring CSC Personnel, taking assignment of Third
Party Contracts, or exercising any of Sears other rights under this Section 24
(Rights Upon Termination). 
  25.
    TERMINATION ASSISTANCE SERVICES. 
  25.1
    Duration.As part of the Services, CSC shall provide to the Eligible Recipients the Termination
Assistance Services described in this Section 25 (Termination Assistance Services)
and in the applicable Transaction Document. 
  (a)
    Period of Provision. As and to the extent requested by Sears from time to
time, CSC shall provide to the Eligible Recipients Termination Assistance Services
commencing upon request from Sears at any time or times during the Term of any
Transaction Document and continuing for up to twenty-four (24) months following the
expiration or termination of any Services. 
  (b)
    Extension(s) of Services and Termination Assistance Services.  (i)
    Extension(s) of Services (other than Termination Assistance
Services). Sears may elect, in its sole discretion, upon thirty (30) days
prior notice to CSC, from time to time, to extend all or part of the Services
(other than Termination Assistance Services (which are dealt with in clause
(ii) below) beyond the expiration or termination date of such Services, in
its sole discretion; provided, however, that the total of all
such extensions with respect to a particular Service shall not exceed twelve
(12) months following the originally specified effective date of applicable
expiration or termination without CSCs prior written consent. The terms and
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Document(s) shall continue to apply to such Services during such extension,
notwithstanding such expiration or termination.  (ii)
    Extension(s) of Termination Assistance Services. In
addition to the foregoing rights of Sears, Sears also may from time to time
elect, in its sole discretion, upon thirty (30) days prior notice to CSC, to
extend the period following the effective date of any expiration or termination
for the performance of Termination Assistance Services with respect to a
particular Transaction Document; provided, however, that the
period between the originally specified effective date of such expiration or
termination of such Termination Assistance Services and the completion of all
Termination Assistance Services with respect to such Services is not greater
than twenty-four (24) months.(iii)
    Other Extension(s). In any event, if Sears provides
CSC with less than thirty (30) days prior notice of any extension of the
Services or Termination Assistance Services, or requests for Termination
Assistance Services beyond the applicable period referenced in clause
(i) or (ii)above, CSC shall nonetheless use commercially
reasonable efforts to comply with Sears request and provide the requested
Termination Assistance Services or other Services, as the case may be.(iv)
    Option to Complete Transformation Services. In the
event of a termination before all Transformation Services are completed, Sears
shall have the right to require CSC to complete all or any portions of such
Transformation Services in accordance with the terms and conditions of this
Agreement, despite termination of any or all other Services, in which event the
Charges set forth in the applicable Transaction Document for such
Transformation Services shall be equitably adjusted in proportion to the
Service that Sears elects to have CSC complete. 
  (c)
    Firm Commitment. CSC shall extend the Services and/or provide Termination
Assistance Services (as set forth in this Section 25.1(c) (Firm Commitment)),
upon Sears request regardless of the reason for the expiration or termination of this
Master Agreement or any Transaction Document; provided, however, that
if this Master Agreement or a Transaction Document is terminated by CSC in accordance
with Section 23.1(b) (Termination for Cause; By CSC), CSC may require payment
by Sears monthly in advance for Services and Termination Assistance Services to be
provided or performed under this Section 25 (Termination Assistance Services).
At Sears request, CSC shall provide Termination Assistance Services directly to an
Eligible Recipient or an Entity acquiring Control of an Eligible Recipient;
provided, however, that, unless otherwise agreed by the Parties, all
such Termination Assistance Services shall be performed subject to and in accordance
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(d)
    Performance. Except as expressly otherwise mutually agreed upon in writing by
the Parties, to the extent Sears requests Termination Assistance Services or other
Services, such Termination Assistance Services and other Services shall be provided
subject to and in accordance with the terms and conditions of this Agreement, with at
least the same degree of accuracy, quality, completeness, timeliness, responsiveness
and resource efficiency as was required to be provided for the same or similar Services
during the Term of the applicable Transaction Document. CSC Personnel (including all
Key Personnel) reasonably considered by Sears to be critical to the performance of the
Services, including the Termination Assistance Services, shall be retained on the Sears
account through the completion of all relevant Termination Assistance Services or other
Services, as applicable. 
  25.2
    Scope of Termination Assistance Service.As part of the Termination Assistance Services and to the extent requested by Sears, CSC
shall timely transfer the control and responsibility for all information technology
functions and Services previously performed under the applicable Transaction Document by or
for CSC to the Eligible Recipients. Additionally, CSC shall provide any and all reasonable
assistance requested by Sears to allow:  (a)
    the Systems associated with the Services to operate efficiently;(b)
    the Services to continue without interruption or adverse effect during the
transfer of such Services to the Eligible Recipients or Sears designees; and(c)
    the orderly transfer of the Services to the Eligible Recipients. 
  25.3
    General Support.To the extent requested by Sears, CSC shall (i) assist Sears in developing a written
transition plan for the transition of the Services to the Eligible Recipients, which plan
shall include (as requested by Sears) capacity planning, facilities planning, human
resources planning, telecommunications planning and other planning necessary to effect the
transition, (ii) perform programming and consulting services as requested to assist in
implementing the transition plan, (iii) train Personnel designated by Sears in the use of
any Equipment, Software, Systems, Materials or tools used in connection with the provision
of the Services, (iv) catalog all Software, Sears Data, Equipment, Materials, Third Party
Contracts and tools used to provide the Services, (v) provide machine readable and printed
listings and associated documentation for source code for Software owned by Sears and source
code to which Sears is otherwise entitled under this Agreement and assist in its
re-configuration, (vi) analyze and report on the space required for the Sears Data and the
Software needed to provide the Services, (vii) assist in the execution of a parallel
operation, data migration and testing process until the successful completion of the
transition to the Eligible Recipients has been successfully completed, (viii) create and
provide copies of the Sears Data in the format and on the media reasonably requested by
Sears, (ix) provide a complete and up-to-date, electronic copy of -116-




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the Operational Procedures Manual in the format and on the media reasonably requested by
Sears, (x) provide other technical assistance as requested by Sears, (xi) provide Sears with
information related to the Services that Sears reasonably requests during any Exhibit Term
to enable Sears to draft requests for proposal relating to the Services, and (xii) at Sears
request, provide due diligence information to recipients of such requests for proposal. CSC
may or may not be a recipient of any such requests for proposal. 
  25.4
    Rates and Charges.For Services that Sears was receiving from CSC prior to any expiration or termination of the
applicable Transaction Document or the applicable Service, the Charges applicable to such
Services (during any extension of such Services beyond such expiration or termination),
shall be the Charges that Sears was (or is) paying prior to such expiration or termination,
subject to any cost of living adjustment set forth in such Transaction Document. For all
Termination Assistance Services, Charges shall be subject to Section 4.5(b) (New
Services); provided, however, that (i) to the extent Sears requests a
portion (but not all) of the Services included in a particular Charge, the amount to be paid
by Sears shall be equitably adjusted in proportion to the portion of the Services included
in the applicable Charge that CSC shall not be providing or performing, (ii) to the extent
the Termination Assistance Services requested by Sears can be provided by CSC using
Personnel and resources then assigned to Sears, there shall be no additional charge to Sears
for such Termination Assistance Services, (iii) if the Termination Assistance Services
requested by Sears cannot be provided by CSC using Personnel and resources then assigned to
Sears, Sears, in its sole discretion, may forego or delay any work activities or temporarily
or permanently adjust the work to be performed by CSC, the schedules associated therewith or
the Service Levels to permit the performance of such Termination Assistance Services using
such Personnel or resources at no additional charge to Sears, and (iv) any Charges to Sears
for Termination Assistance shall not exceed the lesser of: (x) rates CSC charges customers
(prior to such customer terminating their agreement with CSC), of similar size and volume
for such services, and (y) CSCs actual cost plus ten and one-half percent (101/2%). 
  26.
    GENERAL 
  26.1
    Binding Nature and Assignment. 
  (a)
    Binding Nature. This Agreement shall be binding on the Parties and their
respective successors and permitted assigns. 
  (b)
    Assignment. Neither Party may, or shall have the power to, assign this
Agreement or any Transaction Document, without the prior written consent of the other,
except in the following circumstances:  (i)
    Either Party may assign its rights and obligations under this
Agreement, or any Transaction Document, without the approval of the other
Party, to an Affiliate that expressly assumes such Partys obligations and
responsibilities hereunder; provided, however, that the
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shall remain fully liable for and shall not be relieved from the full
performance of all obligations under this Agreement. Any Party assigning its
rights or obligations to an Affiliate in accordance with this Agreement
shall, within one (1) Business Day after such assignment, provide notice
thereof to the other Party together with a copy of any relevant provisions
of the assignment document.  (ii)
    Sears may assign its rights and obligations under this
Agreement or any Transaction Document without the approval of CSC to an Entity
acquiring, directly or indirectly, Control of Sears, an Entity into which Sears
is merged or an Entity acquiring all or substantially all of Sears assets;
provided, however, that if such acquisition or merger would
result in CSC being required to provide Services that meet the definition of
New Services, then such Services shall be treated as New Services under
Section 4.5(b) (New Services). The acquirer or surviving Entity shall
agree in writing to be bound by the terms and conditions of this Agreement. 
  (c)
    Impermissible Assignment. Any attempted assignment that does not comply with
the terms of this Section shall be null and void. 
  26.2
    Entire Agreement; Amendment.This Agreement, including any Appendices and Transaction Documents referred to in this
Agreement and attached hereto, each of which is incorporated in this Agreement for all
purposes, constitutes the entire agreement between the Parties with respect to the subject
matter hereof. There are no agreements, representations, warranties, promises, covenants,
commitments or undertakings other than those expressly set forth in this Agreement. This
Agreement supersedes all prior agreements, representations, warranties, promises, covenants,
commitments or undertakings, whether written or oral, with respect to the subject matter
contained in this Agreement. Furthermore, this Agreement shall supersede, and the Eligible
Recipients shall not be bound by any shrink wrap license which is now or hereafter bundled
with the CSC Provided Systems, or any disclaimers or click to approve terms or
conditions now or hereafter contained in the CSC Provided Systems, or any web site of CSC,
its Affiliates or CSCs Personnel that the Eligible Recipients use in connection with the
Services. No Transaction Document, amendment, modification, change, waiver or discharge
hereof shall be valid or binding unless in a tangible writing (not in electronic form) and
manually signed by an authorized representative of the Party against which such amendment,
modification, change, waiver or discharge is sought to be enforced. 
  26.3
    Notices.All notices required or permitted to be given by one Party to the other Party under this
Agreement shall be in writing and shall be sufficient if sent by: (a) hand delivery; (b)
certified mail, return receipt requested; (c) nationally recognized overnight courier -118-




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service; or (d) facsimile with electronic confirmation to the sender, to the applicable
Party at its address(es) or facsimile number(s) set forth below: If to Sears:
    
    Sears, Roebuck and Co.3333 Beverly Road, Mail Station: B6-157BHoffman Estates, Illinois 60179Attn.: VP Operations/EngineeringFacsimile: (847) 286-7574With a copy to:
    
    Sears, Roebuck and Co.3333 Beverly Road, Mail Station: B5-212BHoffman Estates, Illinois 60179Attn.: General CounselFacsimile: (847) 286-2471If to CSC
    
    Computer Sciences Corporation2100 East GrandEl Segundo, California 90245Attn: VP, General Counsel and SecretaryFacsimile: (310) 322-9767With a copy to:
    
    Computer Sciences Corporation400 Commerce DriveNewark, DE 19713Attn: Director of ContractsFacsimile: (302) 391-6072With a copy to:
    
    CSCs Account Executive, which copy shall be provided at
the address or facsimile number assigned to CSCs Account
Executive by Sears at the applicable Sears location.
 All notices shall be effective: (i) when delivered personally; (ii) three (3) Business Days
after being sent by certified mail; (iii) the first Business Day after being sent by a
nationally recognized courier; or (iv) on the same Business Day on which it is sent by
facsimile; provided such transmittal is complete before 5 p.m. (Central Time) and is
followed by notice under clause (i), (ii) or (iii) above. Either
Party may change its notice information by giving proper notice of such change to the other
Party; provided, however, that such notice shall only be effective upon
receipt. 
  26.4
    Legal Expenses.In the event of an arbitration or litigation arising out of an alleged breach of this
Agreement (each a Dispute), the prevailing Party shall be entitled to reimbursement of all
of its costs and expenses, including reasonable Attorneys Fees, incurred in connection with
such Dispute, including any appeal therefrom. For purposes of this Section 26.4
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Party shall be decided by the court of competent jurisdiction or independent party (i.e.,
arbitrator) that resolves such Dispute. Notwithstanding such determination by such court or
independent party, a Party (the Offeree) shall not be considered the prevailing party for
purposes of this Section 26.4 (Legal Expenses) if (a) the Offeree withholds its
acceptance of any settlement of such Dispute proposed by the other Party (the Offeror) and
(b) the judgment or award ultimately obtained by the Offeree, if any, is not more favorable
to the Offeree than such settlement offer. If multiple settlement offers are made but not
accepted, the preceding sentence shall apply to the Offerors final settlement offer. This
provision shall not apply to any proposed settlement that would require an admission of
fault by the Offeree or imposes any obligations on the Offeree other than: (i) the payment
of money or the issuance of a credit, (ii) release of the claim, and (iii) agreement to keep
the terms of the settlement confidential. 
  26.5
    Counterparts.This Agreement may be executed in several counterparts, all of which taken together shall
constitute one single agreement between the Parties hereto. Each Party shall have the right
to rely on a facsimile signature on this Agreement, and each Party shall, if the other Party
so requests, provide, after such transmission, an originally signed copy of this Agreement
to the other Party. 
  26.6
    Headings.The section headings and the table of contents used in this Agreement are for reference and
convenience only and shall not be considered in the interpretation of this Agreement. 
  26.7
    Severability.If any provision of this Agreement conflicts with the law under which this Agreement is to
be construed or if any such provision is held invalid or unenforceable by a court with
jurisdiction over the Parties, such provision shall be deemed to be restated to reflect as
nearly as possible the original intentions of the Parties in accordance with applicable law.
The remaining provisions of this Agreement and the application of the challenged provision
to persons or circumstances other than those as to which it is invalid or unenforceable
shall not be affected thereby, and each such provision shall be valid and enforceable to the
full extent permitted by law. 
  26.8
    Jurisdiction.Each Party irrevocably agrees that any legal action, suit or proceeding brought by it in any
way arising out of this Agreement must be brought solely and exclusively in Cook County,
Illinois, and each Party irrevocably submits to the sole and exclusive jurisdiction of the
courts in Cook County, Illinois in personam, generally and unconditionally with respect to
any action, suit or proceeding brought by it or against it by the other Party;
provided that either Party may bring an action in another United States jurisdiction
to: (a) enforce its rights under Section 20 (Indemnities) if the underlying Claim
is pending in such jurisdiction; and (b) interplead the other Party into a Claim pending in
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jurisdiction. Further, each Party consents to transfer of all actions filed in foreign
jurisdictions to a United States federal or state court. Notwithstanding the foregoing: a
Party shall have the right to bring litigation in an applicable foreign jurisdictions (e.g.,
Canada, India, etc.), to the extent reasonably deemed necessary by such Party, in its sole
judgment, in order to either: (i) receive interim injunctive or other equitable relief,
including a temporary restraining order; or (ii) to the extent required by such foreign law,
litigate, re-litigate or enforce any matter in order to enforce such Partys rights under
this Agreement in such foreign jurisdiction, but only to the extent such disputes or legal
action: (A) as to Sears, relates to those Services actually performed by CSC outside the
United States; and (B) as to CSC, relates to those Services specifically received by Sears
outside the United States. 
  26.9
    Governing Law.This Agreement, and all questions concerning the validity, interpretation and performance of
this Agreement, as well as the ownership of all materials created in connection with this
Agreement, and all claims arising out of this Agreement or the Services provided hereunder,
shall be governed by and construed in accordance with the applicable laws of the State of
Illinois and the United States as such laws are applied to contracts between Illinois
residents that are entered into and performed entirely within the State of Illinois, and
without giving effect to the principles thereof relating to conflicts of laws. The
application of CISG is expressly excluded. If Illinois adopts any form of UCITA during the
Term of this Agreement, the Parties hereby agree that UCITA shall not apply to this
Agreement or any transactions contemplated hereunder, to the extent that such exclusion is
legally permissible under such adopted law. Furthermore, to the extent permitted under
Illinois law, each Party waives the benefit all substantive, non-procedural, foreign and
international Laws (e.g., the laws of Canada and India), to the extent such Laws would
otherwise grant such Party rights which are different than those contemplated under this
Agreement. 
  26.10
    Relationship of the Parties.CSC, in furnishing services to the Eligible Recipients hereunder, is acting as an
independent contractor, and CSC has the sole obligation to supervise, manage, contract,
direct, procure, perform or cause to be performed all work to be performed by CSC Personnel
under this Agreement. Except as expressly provided in this Agreement, CSC is not an agent
of the Eligible Recipients and has no right, power or authority, express or implied, to
represent or bind the Eligible Recipients as to any matters, except as expressly authorized
in this Agreement. Nothing set forth in this Agreement shall be deemed or construed to
render the Parties as joint venturers, partners, principals, joint employers, employer and
employee of or with the other. CSCs Personnel are neither employees nor agents of any
Eligible Recipient and are not eligible to participate in any employment benefit plans or
other conditions of employment available to any Eligible Recipients employees. No CSC
Personnel retained by CSC to perform work on the Eligible Recipients behalf in connection
with this Agreement shall be deemed to be an officer, director, employee, agent, Affiliate,
contractor or subcontractor of the Eligible Recipients for any purpose. CSC (or its
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causing to be made all deductions and withholdings from the CSC Personnels salaries and
other compensation. CSC (or its Subcontractors) shall have exclusive control over the CSC
Personnel and over the labor and employee relations, and the policies relating to wages,
hours, working conditions or other conditions of the Personnel. CSC, and not Sears, shall
be responsible and therefore solely liable for all acts and omissions of CSC Personnel. CSC
(or its Subcontractors) shall have the exclusive right to hire, transfer, suspend, lay off,
recall, promote, assign, discipline, discharge and adjust grievances with the CSC Personnel.
However, at any time Sears shall, without any additional charge to any Eligible Recipient,
have the right to require CSC to immediately remove from involvement in any of the Services
any Personnel objectionable to Sears for any lawful reason. 
  26.11
    Consents and Approval. 
  (a)
    General. Except where expressly provided as being in the sole discretion of a
Party, where agreement, approval, acceptance, consent, confirmation, notice or similar
action by either Party is required under this Agreement, such action shall not be
unreasonably delayed or withheld (taking into account Sears business needs and
objectives for entering into this Agreement). An approval or consent given by a Party
under this Agreement shall not relieve the other Party from responsibility for
complying with the requirements of this Agreement, nor shall it be construed as a
waiver of any rights under this Agreement, except as and to the extent otherwise
expressly provided in such approval or consent. From time to time, CSC may request, or
be entitled to receive, Sears approval or sign-off of project plans or other
Deliverables prior to proceeding with the next phase or step of a given project. CSC
acknowledges and agrees that (i) Sears is relying upon CSCs technical expertise in
providing such Deliverables, and (ii) any such approval or sign-off by the Eligible
Recipients shall neither be construed as an endorsement by the Eligible Recipients as
to the technical means CSC has selected to achieve the required results, nor as a
waiver of any of the Eligible Recipients rights or CSCs obligations under this
Agreement. 
  (b)
    Written Approval. To the extent CSC is required under this Agreement to obtain
Sears approval, consent or agreement, such approval, consent or agreement must be in
writing and must be signed by or directly transmitted by electronic mail from the Sears
Relationship Manager or an authorized Sears representative. Notwithstanding the
preceding sentence, the Sears Relationship Manager may agree in advance in writing that
as to certain specific matters oral approval, consent or agreement shall be sufficient. 
  26.12
    Waiver of Default; Cumulative Remedies. 
  (a)
    Waiver of Default. A delay or omission by either Party hereto to exercise any
right or power under this Agreement shall not be construed to be a waiver thereof. A
waiver by either of the Parties hereto of any of the covenants to be performed by the
other or any breach thereof shall not be construed to be a waiver of any succeeding
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(b)
    Cumulative Remedies. All remedies provided for in this Agreement shall be
cumulative and in addition to and not in lieu of any other remedies available to either
Party at law, in equity or otherwise. 
  26.13
    Survival.Any provision of this Agreement which contemplates performance or observance subsequent to
any termination or expiration of this Agreement shall survive any termination or expiration
of this Agreement and continue in full force and effect, including Section 9
(Required Consents), Section 12.1(e) (Restrictions on Performing Services to Sears
Competitors), Section 13.4 (Taxes), Section 13.8 (Refundable Items),
Section 14.2 (Payment), Section 15 (Sears Data and Other Confidential
Information), Section 16 (Ownership), Section 17 (Representations,
Warranties and Covenants), Section 18 (Audit Rights), Section 19 (Insurance
and Risk of Loss), Section 20 (Indemnities), Section 21 (Liability),
Section 22 (Dispute Resolution), Section 23 (Termination), Section
24 (Rights Upon Expiration or Termination), Section 25 (Termination Assistance
Services), and Section 26 (General). Additionally, all provisions of this Agreement
shall survive the expiration or termination of this Agreement to the fullest extent
necessary to give the Parties the full benefit of the bargain expressed in this Agreement. 
  26.14
    Publicity.CSC shall not, without Sears prior written consent, directly or indirectly, use or refer to
the names, service marks and/or trademarks of Sears or any of its Affiliates, or publicize
the existence of this Agreement in any manner, including in any advertising, customer lists,
publicity release or sales presentation. 
  26.15
    Equitable Remedies.CSC acknowledges that, solely for purposes of enabling Sears to obtain equitable relief and
for no other purpose, if CSC or any of the CSC Personnel breaches (or attempts or threatens
to breach) its obligation to provide Services or Termination Assistance Services as provided
in Section 25 (Termination Assistance Services), or its obligation to provide access
to computers or files, containing Sears Confidential Personal Information and CSC
obligations as such Confidential Personal Information under Section 15 (Sears Data
and Other Confidential Information), the Sears Related Businesses shall be irreparably
harmed and money damages shall not be an adequate remedy for such harm. In such a
circumstance, Sears may proceed directly to court. If a court of competent jurisdiction
should find that CSC or any CSC Personnel have breached (or attempted or threatened to
breach) any such obligations, CSC agrees that without any additional findings of irreparable
injury, CSC shall not oppose the entry of an appropriate order compelling performance by CSC
and CSC Personnel and restraining it from any further breaches (or attempted or threatened);
provided that CSC shall be entitled to defend the claim fully on the merits and may seek to
have the court impose conditions such as the payment of amounts due under this Agreement -123-




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26.16
    Parties To This Agreement.Except as set forth in Section 20.1 (Indemnity by CSC), and Section 20.2
(Indemnity by Sears), this Agreement is entered into solely between, and may be enforced
only by, Sears and CSC. Sears may enforce, on behalf of the Eligible Recipients, the rights
and protections granted to the Eligible Recipients under this Agreement. This Section
26.16 (Parties to this Agreement) shall not prejudice Sears rights under Section
21.2(g) (Acknowledge Direct Damages). 
  26.17
    Covenant Against Pledging and Liens.CSC agrees that, without the prior written consent of Sears, it shall not assign, transfer,
pledge, hypothecate or otherwise encumber its rights to receive payments from Sears under
this Agreement for any reason whatsoever.Furthermore, neither CSC nor any CSC Personnel shall file any liens, or by their action or
inaction permit, directly or indirectly, any liens to be filed, on or against property
(tangible or intangible) of Sears, or any other Eligible Recipient. If any such liens arise
as a result of CSC or CSC Personnels action or inaction, CSC shall obtain a bond to fully
satisfy such liens or otherwise remove such liens at its sole cost and expense within ten
(10) Business Days. 
  26.18
    Hiring of Employees. 
  (a)
    Hiring Restriction. Except as otherwise provided in this Agreement, each Party
agrees that neither it nor its Affiliates shall employ any person currently employed by
the other Party or its Affiliates. Acknowledging that damage resulting from breach of
this paragraph would be difficult or impossible to calculate, the breaching Party shall
pay, for each such breach, a one-time fee equal to twenty-five percent (25%) of such
employees first years salary with the hiring Party (such amount being deemed
liquidated damages and not a penalty). The foregoing sentence shall not limit either
Partys right to seek equitable remedies for such a breach. 
  (b)
    Permitted Hiring. Notwithstanding the foregoing, it shall not be a violation
of Section 26.18(a) (Hiring Restriction), if: (i) Sears or its Affiliates
hires a person who: (x) has been assigned continuously to work on Services under this
Agreement for a period of twelve (12) months or more; or (y) has not worked on Services
for the Eligible Recipients during the six (6) month period immediately preceding
Sears employment of such person; or (z) has left the employ of CSC prior to being
offered a position by Sears; or (ii) Sears or its Affiliates hire a person to work in
any department other than information technology and e-commerce (collectively, a
Permitted Hiring). Any and all agreements between CSC or CSC Personnel and their
former employees that would in any way conflict with or prohibit Sears or its
Affiliates from such Permitted Hiring shall be of no force and effect with regard to
such restriction. -124-




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26.19
    Further Assurances.Each Party covenants and agrees that, subsequent to the execution and delivery of this
Agreement and without any additional consideration, each Party shall execute and deliver any
further legal instruments and perform any acts that are or may become necessary to
effectuate the purposes of this Agreement. 
  26.20
    No Commitment and No Exclusivity.Except as expressly stated in a Transaction Document, nothing in this Agreement shall give
CSC an exclusive right to provide, or require the Eligible Recipients to purchase
exclusively from CSC, any of the Services or other products or services, and the Eligible
Recipients make no commitments, promises or representations whatsoever as to the amount of
business CSC can expect at any time under this Agreement. Any estimates or forecasts of any
Eligible Recipients future needs for Services are for such Eligible Recipients planning
purposes only and the Eligible Recipients shall not have any liability for CSCs reliance
thereon. Sears may request information, proposals or competitive bids from Third Parties on
the same or different terms than as provided in this Agreement, in which event CSC shall
cooperate with such Third Parties as provided in Section 6.1 (Cooperation with Sears
Personnel). Factual descriptions of the Services provided or to be provided to the Eligible
Recipients shall not be deemed CSC Confidential Business Information and Sears may, without
CSCs consent, disclose such information to Third Parties, including other potential
providers of services to Sears. In addition, nothing in this Agreement shall be construed or
interpreted as limiting Sears right or ability during any Exhibit Term to add or delete
Eligible Recipients or to increase or decrease its demand for Services. 
  26.21
    Sears Rules and Compliance.CSC and Sears agree that that they, their Affiliates (and in case of Sears, the Eligible
Recipients) and their Personnel, while working at or visiting the premises of the other
Party, shall comply with all Laws and the internal rules and regulations of the other Party
communicated in writing to the visiting Personnel, including security procedures. In
addition, CSC shall, and shall cause all CSC Personnel to, comply with the security rules
and procedures for use of the Eligible Recipients electronic resources and all other
policies, rules and regulations required by Sears and disclosed to CSC from time to time
(collectively, Sears Rules) and comply with reasonable requests of the Eligible
Recipients Personnel pertaining to personal and professional conduct and otherwise conduct
themselves in a businesslike manner. 
  26.22
    Interpretation.The Section and Section headings of this Agreement and of any Appendixes and Transaction
Documents under this Agreement are for convenience only and shall not be deemed part of this
Agreement. As used in this Agreement (including any Transaction Documents and Appendixes
thereto): (i) any defined terms will include the plural as well as the singular and the
derivatives of such terms, (ii) references to the word include and -125-




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its derivatives (including e.g.) shall be deemed to mean including but not limited to,
(c) the words day, month, and year mean, respectively, calendar day, calendar month
and calendar year, (d) the words Business Day means Monday through Friday, excluding any
official Sears holidays, and (e) references to Sears positions including the Sears
Relationship Manager, Sears Vice President of Operations/Engineering and the Sears Chief
Information Officer shall include that individual and his or her designee(s). For purposes
of clarity, usage of the word include or its derivatives is not mean to imply an unlimited
scope, and any additional items which are claimed to be inferred by such statement must be
reasonably related to the concepts stated before the usage of the include or similar term.
For example, if a provision stated that: CSC shall provide Help Desk Services, including
answering End User Calls, Level 1 Support, Problem management . . .. It would be
unreasonable to argue that, by the use of the word include, Help Desk Services also
consists of hosting web servers. It would be not be unreasonable to argue that Help Desk
Services also includes opening Problem Tickets, which is a normal and customary part of Help
Desk Services. Unless otherwise expressly stated, (i) the words herein, hereof and
hereunder and other words of similar import refer to this Agreement as a whole and not to
any particular Transaction Document, Appendix, Section, Subsection or other subdivision, and
(ii) Section, Subsection and Appendix in this Master Agreement refer to sections and
subsections of, and appendices to, this Master Agreement. The Parties agree that any
principle of construction or rule of law that provides that an agreement shall be construed
against the drafter of the agreement in the event of any inconsistency or ambiguity in such
agreement shall not apply to the terms and conditions of this Agreement. 
  26.23
    Export Controls.CSC will comply with all export control Laws of the United States, including Export
Administration Regulations, 15 C.F.R. Chapter VII, subchapter C (the EAR), with respect to
the Services, CSC Provided Systems and CSCs Personnels use of and any United States or
foreign access to Sears Provided Systems and the CSC Managed Systems, including to the
extent applicable under such Laws access of such Software from a location outside the United
States. Upon Sears request, CSC will identify which export Laws (and the applicable
classifications related thereto) that apply to Sears Provided Systems. CSC will cooperate
with Sears in obtaining any regulatory approvals, permits or licenses that are necessary to
enable Sears and the other Eligible Recipients to exercise their rights herein. 
  26.24
    Covenant of Good Faith.Each Party agrees that, in its respective dealings with the other Party under or in
connection with this Agreement, it shall act in good faith. Signature Page Follows -126-




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IN WITNESS WHEREOF, the parties have caused this Master Agreement to be executed by their
respective duly authorized representatives as of the Effective Date. Sears, Roebuck and Co.
    
    Computer Sciences CorporationBy:
/s/ Gerald F. Kelly, Jr.,
Title: Senior Vice President
Date: May 31, 2004
    
    By: /s/ R.C. Ricks
Title: President, ABD
Date: May 31, 2004




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HRMP 222     1 OF 3 APPENDIX A GLOSSARY Acquired Assetsmeans the Equipment, Software and other assets listed in the applicable
Transaction Document that CSC shall acquire as of the Commencement Date. Acquired Assets Credit means the amount set forth in the applicable Transaction Document that CSC
shall pay to Sears as consideration for the Acquired Assets. Affiliate means, at the applicable time, (a) with respect to either Party, any Entity that
directly or indirectly Controls, is Controlled with or by or is under common Control with, such
Party, and (b) with respect to Sears, any Entity that is managed, operated or directed by Sears, is
licensed to do business using the Sears name, or does business within a Sears store (e.g., Sears
dealer stores). For purposes of the foregoing, Control, and its derivatives, means, with respect
to a corporation, the ownership, directly or indirectly, of 50% or more of the voting power to
elect directors thereof or, for purposes of foreign corporations, if less than 50%, the amount
allowed by applicable law; and with respect to any other Entity, power to direct the management of
such Entity. Agreement means this Master Services Agreement, all Transaction Documents to this Master
Agreement and all Appendices and other documents incorporated by reference into this Master
Agreement and/or such Transaction Documents. Appendices has the meaning given in Section 2.2(e) (Appendices). Attorneys Fees means the reasonable costs and expenses incurred by a Party for outside counsel,
and related staff, and a reasonable apportionment of the internal costs incurred by a Party for
their in-house counsel, and related staff working on the matter at issue. Benchmark Results has the meaning given in Section 13.10(d) (Results of Required
Benchmarking). Benchmark Standard has the meaning given in Section 13.10(d) (Non-Competitive Charges). Benchmarker has the meaning given in Section 13.10(b) (Benchmarking). Benchmarking has the meaning given in Section 13.10(b) (Benchmarking). Business Day has the meaning given in Section 26.22 (Interpretation). Charges means the amounts set forth in a Transaction Document (or otherwise set forth in this
Agreement) that are payable by Sears for the Services. The term Charges includes Pass-Through
Expenses and Out-of-Pocket Expenses. -1-




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HRMP 222      2 OF 3 "CISG means the United Nations Convention on the International Sale of Goods. Code of Conduct has the meaning given in Section 17.1(h) (Sears Code of Conduct). Commencement Date means, with respect to a Transaction Document, the date on which CSC shall
begin providing Services under such Transaction Document, as defined in such Transaction Document. Confidential Business Information has the meaning given in Section 15.3(b)(i)
(Confidential Business Information; Definition). Confidential Information means, collectively, Confidential Business Information and Confidential
Personnel Information. Confidential Personal Information has the meaning given in Section 15.3(c)(i)
(Confidential Personal Information; General). Contract Changes has the meaning given in Section 4.5(d) (Charges for Contract Changes). Contract Rate means one-twelfth (1/12) of the sum of: (a) the then-current annualized Prime Rate
set forth in the Money Rates table in The Wall Street Journal, plus (b) one and one-half percent
(11/2%). Contract Year means a period during the Term commencing on the first Commencement Date under this
Agreement or an anniversary thereof and ending on the date one (1) year thereafter (or, if earlier,
on the last day of the Term). If any Contract Year is less than twelve (12) months, the rights and
obligations under this Agreement that are calculated on a Contract Year basis will be
proportionately adjusted for such shorter period. Credit Trigger Event means a Downgrade Event, a MAC Event or a Default Event. CSC has the meaning given in the preamble to this Master Agreement. CSC Account Executive has the meaning given in Section 12.2 (CSC Account Executive). CSC Designated Contract has the meaning given in Section 10.1(a) (Assignment and
Assumption). CSC Facilities means the facilities owned or leased by CSC, its Affiliates or the CSC Personnel
and from which any Services are provided. CSC Managed System means (a) any Equipment or Software or System that the applicable Transaction
Document specifically states CSC will have operational, but not financial, responsibility for, and
(b) any Acquired Assets for which CSC has been unable to obtain a Required Consent for the
assignment, sale or transfer to CSC of such Acquired Assets. -2-




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HRMP 222      3 OF 3 CSC Personnel means the Personnel of CSC, its Affiliates and their respective Personnel including
Subcontractors (e.g., an employee of CSCs Subcontractor is included within the definition of CSC
Personnel). CSC Provided Circuits means all communication circuits owned or leased by CSC or any CSC
Affiliate or otherwise provided by CSC Personnel and used in connection with the Services or to
which CSC, its Affiliates or the CSC Personnel provides to any Eligible Recipient access in
connection with the Services. CSC Provided Equipment means (a) all Acquired Assets, and (b) all Equipment owned or leased by
CSC, any CSC Affiliate or otherwise provided by CSC Personnel and used in connection with the
Services or to which CSC, its Affiliates, or CSC Personnel provides any Eligible Recipient access
in connection with the Services. CSC Provided Materials means all Materials (other than Sears Provided Materials): (a) owned or
licensed by CSC or its Affiliates; and (b) provided by CSC Personnel; and, in each such case, used
in connection with the Services. CSC Provided Software means all Software owned by, or provided under license to, CSC, any CSC
Affiliate or otherwise provided by CSC Personnel and used in connection with the Services or to
which CSC provides any Eligible Recipient with access in connection with the Services. CSC Provided System means, collectively, the CSC Provided Circuits, the CSC Provided Equipment,
the CSC Provided Materials and the CSC Provided Software, and any Systems consisting of a
combination of the foregoing items. CSC Software means all Software owned by CSC or its Affiliates and that has been or shall be used
to provide the Services. Default Event means, for purposes of this Agreement and the provision of the Services, (A) an
event of default (as such term or any similar term is defined in any material loan agreement of CSC
or CSCs parent Entity (to the extent CSC has a parent Entity)), (B) any other event of default,
the occurrence of which would require CSC or CSCs parent Entity (to the extent CSC has a parent
Entity) to notify its lenders or bondholders, or (C) any request for a waiver or extension of, or a
forbearance relating to, any event that with notice or the passage of time (or both) would (unless
such a waiver, extension or forbearance is obtained) become an event of default by CSC or CSCs
parent Entity (to the extent CSC has a parent Entity) under any material loan agreement of CSC or
CSCs parent Entity (to the extent CSC has a parent Entity) or any indenture or similar agreement
governing a bond issue, requiring CSC or CSCs parent Entity (to the extent CSC has a parent
Entity) to make a repayment of principal or interest. Deliverables means all Materials that: (i) CSC, its Affiliates or their Personnel deliver or are
required to deliver to the Sears Related Businesses (or their Personnel) under this Agreement, and
(ii) that are documented, conceived, developed, originated, prepared or generated by or on behalf
of CSC or CSCs Personnel in connection with this Agreement or pursuant to the -3-




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HRMP 222      4 OF 3 provision of the Services, including all intermediate and partial versions thereof, in whatever
form or medium; provided, however, that except as stated in Section 16.3
(Deliverables), the term Deliverables shall not include other CSC Provided Software or CSC
Provided Materials. Derivative Work means a work based on one or more preexisting works, including a condensation,
transformation, translation, modification, expansion or adaptation, that, if prepared without
authorization of the owner of the copyright of such preexisting work, would constitute a copyright
infringement under applicable Law, but excluding the preexisting work. Downgrade Event means (A) any downgrade of the long term unsecured debt rating of CSCs or CSCs
parent Entity (to the extent CSC has a parent Entity) below Moodys rating BA1 or Standard & Poors
rating BBB-, or (B) the failure of CSC or CSCs parent Entity (to the extent CSC has a parent
Entity) to have a long term unsecured debt rating from both Standard & Poors and Moodys. Effective Date has the meaning given in the preamble to this Master Agreement. Eligible Recipients means, collectively, the following:  (a)
    Sears;(b)
    any Entity that is an Affiliate of Sears as of the Effective Date;(c)
    for a period of twenty-four (24) months after such transaction, any Entity that
purchases any divested business operation of Sears, or any of its Affiliates, including
any division, marketing unit, business unit, research unit or facility;(d)
    for a period of twenty-four (24) months after such transaction, any Entity that
is not an Affiliate of Sears and that is created using assets of Sears or any Affiliate
of Sears;(e)
    any Entity into which Sears or any Affiliate of Sears merges or consolidates;(f)
    any Entity which merges into or consolidates with Sears or any Affiliate of
Sears;(g)
    any Entity, including any corporation, joint venture or partnership in which,
on or after the Effective Date, Sears or any Affiliate of Sears has an ownership
interest and/or as to which Sears or such Affiliate has management or operational
responsibility by law or contract;(h)
    any Entity in which Sears or any of its Affiliates hold significant stock,
warrants or debt;(i)
    any customer of an Eligible Recipient identified in clauses (a) through
(h) above, but only in connection with the provision of products or services by
such Eligible Recipient to such customer; -4-




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HRMP 222      5 OF 3  (j)
    any person or Entity engaged in the provision of products or services to Sears
or an Eligible Recipient identified in clauses (a) through (h) of this
definition, but only in connection with the provision of such products or services to
Sears or such Eligible Recipient; and(k)
    other Entities to which the Parties agree. Eligible Recipients shall include the Personnel of the Entities identified as Eligible Recipients
in clauses (a) through (k) above and the Eligible Recipients and their Personnels
respective successors and assigns. Sears shall have the exclusive right, in Sears sole
discretion, to exercise the rights granted to the Eligible Recipients under this Agreement, to
delegate the exercise of such rights to other Eligible Recipients and/or to determine which
Eligible Recipients shall be entitled to receive the Services and other benefits of this Agreement. Employment Effective Date means, with respect to each Transitioned Personnel, the date that such
Transitioned Personnel begins employment with CSC (or its delegates), in accordance with applicable
Laws. Entity means a firm, corporation, partnership (including general partnerships, limited
partnerships, and limited liability partnerships), joint venture, trust, limited liability company,
limited liability partnership, business trust, association or other organization or entity. Equipment means all computing, networking, communications and related computing equipment
(hardware and firmware) and other devices including (a) mainframe, midrange, server and distributed
computing equipment and associated attachments, features, accessories, peripheral devices, and
cabling, (b) personal computers, laptop computers, workstations and personal data devices and
associated attachments, features, accessories, printers, multi-functional printers, peripheral or
network devices, and cabling, and (c) voice, data, video and wireless telecommunications and
network and monitoring equipment and associated attachments, features, accessories, cell phones,
peripheral devices and cabling. Exception Project Work means New Services authorized by Sears Vice President of
Operations/Engineering pursuant to Section 4.5(b)(iii) (Exception Project Work). Exempt Subcontractors has the meaning given in Section 6.2(a) (Exempt Subcontractors). Excluded Agreements means those Third Party Contracts that are designated as Excluded
Agreements in a Transaction Document, including any special services addendum or amendments
thereto. Exhibit means an exhibit to this Master Agreement as more fully described in Section
2.2(b) (Exhibits). Exhibit Term has the meaning given in Section 3.1(b) (Exhibits). Extraordinary Event has the meaning given in Section 13.6(a) (Definition). -5-




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HRMP 222      6 OF 3 Future State Services means, with respect to any Exhibit, the Services, as modified by the
changes/improvements thereto contemplated by the Transformation Plan under such Exhibit. Income Tax means any tax on or measured by the net income of a Party (including taxes on capital
or net worth that are imposed as an alternative to a tax based on net or gross income), or taxes
which are of the nature of excess profits tax, minimum tax on tax preferences, alternative minimum
tax, accumulated earnings tax, personal holding company tax, capital gains tax or franchise tax for
the privilege of doing business. IBM International Business Machines Corporation. IBM Lotus Notes Agreement means that certain Exhibit 18: Messaging Services, dated November 1,
2001, to that certain that certain Master Agreement for Services, dated December 15, 2000, between
IBM and Sears, including all SSAs and other amendments thereto. Intellectual Property Rights means any patents, patent applications, know-how, processes,
designs, industrial design rights, trademarks, domain names, IP addresses, service marks,
tradenames, trade dress, copyrights, moral rights, mask works, trade secrets, inventions and
technology (whether or not patentable), confidential and proprietary information, software,
databases and other collections and compilations of data, rights of publicity/privacy, or other
intellectual property rights conferred by contract or by any Law. Interim Services means, with respect to any Exhibit, the Services CSC is to assume on the
Commencement Date and provided prior to completion of any Transformation Plan. Key Personnel has the meaning given in Section 12.1 (Key Personnel). Laws means: (i) to the extent applicable to a Party, or its obligations under this Agreement
(including, as to CSC, the methods and manner in which CSC provides Services): all federal,
intergovernmental, state, provincial, regional, territorial and local laws, statutes, ordinances,
regulations, rules, executive orders, supervisory requirements, directives, circulars, opinions,
interpretive letters and other official releases of or by any government (with jurisdiction over
such matter), or any authority, department or agency thereof; and (ii) any rules and regulations of
stock exchanges and other self-regulating organizations applicable to CSC, CSCs Affiliates, Sears
or any Sears Affiliate. Losses means all losses, liabilities, damages (including punitive and exemplary damages), awards,
fines, penalties and claims (including taxes), and all related costs and expenses (including
reasonable legal fees and disbursements and costs of investigation, litigation, settlement,
judgment, interest and penalties). MAC Event means any event that causes a material adverse change to the business, properties,
financial condition or results of operations of CSC or CSCs parent Entity (to the extent CSC has a
parent Entity) or the ability of CSC or CSCs parent Entity (to the extent CSC has a parent Entity)
to perform its obligations under this Agreement. -6-




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HRMP 222      7 OF 3 Major Release means a new version of Software that includes changes to the architecture and/or
adds new features and functionality in addition to the original functional characteristics of the
preceding software release. These releases are usually identified by full integer changes in the
numbering, such as from 7.0 to 8.0, but may be identified by the industry as a major release
without the accompanying integer change. Managed Third Parties means any Third Parties who provide Equipment, Software, Systems or
services in connection with CSC Managed Systems. Materials means, collectively, Software (in both source and object code form), literary works,
documentation, reports, flowcharts, notes, outlines, drawings, other works of authorship, plans,
models, specifications, designs, analyses, algorithms, processes, methodologies, ideas, concepts,
inventions (whether patentable or reduced to practice), know-how, programming tools, information,
data, databases and work product, together with all modifications, replacements, Upgrades,
enhancements, document, materials and media related thereto and any Intellectual Property Rights
subsisting in each of the foregoing. Migration Plan has the meaning given in the TI Exhibit. Migration Services has the meaning given in the TI Exhibit. Minor Release means a scheduled release containing small functionality updates and/or accumulated
resolutions to defects or non-conformances made available since the immediately preceding release
(whether Major Release or Minor Release). Minor Releases shall include Maintenance Releases
which are supplemental to and made available between Major Releases and other Minor Releases,
issued and provided under specific vendor service level or maintenance obligations and contain only
accumulated resolutions or mandated changes. These releases are usually identified by a change in
the decimal numbering of a release, such as 7.12 to 7.13. New Advances has the meaning given in Section 6.5(g) (CSC Developed Advances). New Services means new services or significant changes to existing Services requested by Sears,
(a) that are materially different from the Services, (b) that require materially different levels
of effort, resources or expense from CSC, and (c) for which there is no current charging
methodology. For example, if: (w) a Transaction Document provides that CSC shall support certain
devices; (x) a new device is introduced into the Eligible Recipients environment; (y) the new
device does not require materially different ongoing effort to support; and (z) there is an
existing charging methodology for the existing devices; then the support of the new device shall
not be a New Service and the charge for the existing device that most closely matches the new
device would apply to the new device. For the avoidance of doubt, New Services shall not include
increases in the volume of Services to be provided by CSC. No Impact Proposal has the meaning given in Section 4.5(b) (New Services). ODBC means open database compliant. -7-




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HRMP 222      8 OF 3 Operational Procedures Manual or OPM has the meaning given in Section 5.1 (Operational
Procedures Manual). Out-of-Pocket Expenses means reasonable, demonstrable and actual out-of-pocket expenses due and
payable to a Third Party by CSC that are approved in advance by Sears or for which CSC is entitled
to be reimbursed by Sears under this Agreement. Unless expressly agreed otherwise in writing by
the Parties, Out-of-Pocket Expenses shall not include CSCs overhead costs (or allocations
thereof), general and/or administrative expenses or other mark-ups, but shall include taxes on such
amounts. Out-of-Pocket Expenses shall be calculated at CSCs actual incremental expense and shall
be net of all rebates and allowances. Party has the meaning given in the preamble to this Master Agreement. Pass-Through Expenses means the costs and expenses identified as such in a Transaction Document
or otherwise agreed by the Parties in writing, as such list may be amended from time to time in
accordance with this Agreement. Unless otherwise agreed, CSC shall not charge any handling or
administrative charge in connection with its processing or review of such invoices. Permitted Separation has the meaning given in Section 12.1(b) (Continuity of Key
Personnel). Personnel means the directors, officers, employees, partners, agents, advisers, independent
contractors and Subcontractors of a Party, its Affiliates and, as to Sears, the other Eligible
Recipients or another Entity, as applicable. Privacy Laws means all Laws relating to data privacy, trans-border data flow or data protection
including the Gramm-Leach-Bliley Act, Title V Privacy, Subtitle A Disclosure of Nonpublic
Information (15 U.S.C. 6801 et seq.) and various agency implementing regulations and the
California Information Practices Act of 1977, as amended, California Civil Code 1798, etc. Privacy Policy has the meaning given in Section 17.1(h) (Sears Code of Conduct). Remediation Services has the meaning given in the TI Exhibit. Reports has the meaning set forth in Section 5.3(a) (Reports). Required Consents means the consents (if any) required to be obtained: (a) to assign or transfer
to CSC any Acquired Assets and related CSC Designated Contracts (including related warranties); (b)
to grant CSC the right to use and/or access any Sears Provided System or CSC Managed System from
within or outside the United States to the extent necessary to provide the Services; (c) to grant
Sears and the other Eligible Recipients (including their customers and Personnel) the right to use
and/or access any CSC Provided Systems and Deliverables, as contemplated by this Agreement, from
within or outside the United States; (d) to assign or transfer to Sears or its designee CSC
Provided Systems and related Third Party Contracts or other rights following the Term of the
applicable Transaction Document to the extent provided in -8-




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HRMP 222      9 OF 3 this Agreement; and (e) all other consents required from Third Parties in connection with CSCs
provision of the Services. Root Cause Analysis means the formal process, specified in the Operational Procedures Manual, to
be used by CSC to diagnose the underlying cause of problems at the lowest reasonable level so that
corrective action can be taken that shall eliminate repeat failures. CSC shall implement a Root
Cause Analysis as further specified in Section 11.3 (Problem Analysis) or as requested by
Sears. Sears has the meaning given in the preamble to this Master Agreement. Sears Data means any data or information of any Eligible Recipient that is provided to or
obtained by CSC or CSC Personnel in connection with the negotiation and execution of this Agreement
or the performance of its obligations under this Agreement, including data and information with
respect to the businesses, customer, operations, facilities, products, rates, regulatory
compliance, competitors, consumer markets, assets, expenditures, mergers, acquisitions,
divestitures, billings, collections, revenues and finances of any Eligible Recipient. Sears Data
also means any data or information created, generated, collected or processed by CSC or CSC
Personnel in the performance of CSCs obligations under this Agreement, including data processing
input and output, service level measurements, asset information, Reports, Third Party service and
product agreements, contract charges and retained and Pass-Through expenses. Sears Facilities means the facilities provided by any Eligible Recipient for the use of CSC or
its Personnel to the extent necessary to provide the Services. Sears IT Base Case means, with respect to an Exhibit, the summary financial base case that may be
attached to such Exhibit, as well as the detailed financial and budget information. Sears Owned Materials means the Materials that are: (a) owned or acquired by the Eligible
Recipients (whether prior to or after the Effective Date); (b) Deliverables that a Transaction
Document provides, or the Parties otherwise agree, shall be owned by Sears or the other Eligible
Recipients; or (c) Derivative Works, modifications and enhancements to any of the foregoing. Sears Personnel means the Personnel of Sears, including the Personnel of the other Eligible
Recipients. Sears Provided Circuits means all communication circuits: (a) owned by or leased (other than by
CSC, a CSC Affiliate or CSC Personnel under this Agreement) to any Eligible Recipient(s); and (b)
used in connection with the Services. Sears Provided Equipment means all Equipment: (a) owned by or leased (other than by CSC, a CSC
Affiliate or CSC Personnel under this Agreement) to any Eligible Recipient(s); and (b) used in
connection with the Services. -9-




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HRMP 222      10 OF 3 Sears Provided Materials means all Materials: (a) owned by or licensed (other than by CSC, a CSC
Affiliate or CSC Personnel under this Agreement) to any Eligible Recipient(s) (including the Sears
Owned Materials); and (b) used in connection with the Services. Sears Provided Software means all Software: (a) owned by, or provided under license (other than
by CSC, a CSC Affiliate or CSC Personnel under this Agreement) to any Eligible Recipient(s); and
(b) used in connection with the Services (including application Software). Sears Provided Systems means, collectively, the Sears Provided Circuits, Sears Provided
Equipment, Sears Provided Materials and the Sears Provided Software and any Systems consisting of a
combination of the foregoing items. Sears Related Businesses means any Entity described in clauses (a) through (h) of
the definition of Eligible Recipient set forth above. Sears Relationship Manager has the meaning given in Section 7.1(a) (Sears Exhibit
Contacts). Sears Rules has the meaning given in Section 26.21 (Sears Rules and Compliance). Sears Sites or Sites means the offices or other facilities listed in an Exhibit owned or
controlled by the Eligible Recipients at or to which CSC is to provide the Services. Sears Standards has the meaning given in Section 6.4(a) (CSC Support). SEC means the United States Securities and Exchange Commission. Service Addenda has the meaning given in Section 2.2(d) (Service Addenda). Service Level Credits has the meaning given in Section 11.2 (Service Level Credits) and a
Transaction Document. Service Levels means, individually and collectively, the performance standards for the Services
set forth in a Transaction Document. Service Taxes means all sales, use, excise and other similar taxes or any governmental duties
that are assessed against either Party on the provision of the Services as a whole, or on any
particular Service received by Sears or another Eligible Recipient from CSC, excluding Income
Taxes. Services means, collectively: (a) the services, functions and responsibilities as are described
in Section 4 (Services) and elsewhere in this Agreement as they may be supplemented,
enhanced, modified or replaced during the Term of the applicable Transaction Document in accordance
with this Agreement; and (b) any New Services, upon Sears acceptance of CSCs proposal for such
New Services in accordance with Section 4.5 (Additional Services) and the other provisions
of this Agreement. -10-




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HRMP 222      11 OF 3 Software means (a) any machine-readable instructions, any computer software programs, interfaces,
routines, any compilation of machine-readable data such as a data base, and any related licensed
materials, in any form, (b) any related features, including distributed features, and any whole or
partial copies, (c) program listings, programming tools, and similar works in any form that are
applicable to any of the foregoing, (d) any modifications, replacements, Upgrades, enhancements,
documentation, patch-tapes, additions, addenda, maintenance updates, defect fixes, materials and
media related thereto, and (e) any documentation or specifications for the foregoing. Specialized Services has the meaning given in Section 4.4 (Access to Specialized CSC
Skills and Resources). Specifications means, with respect to Software, Equipment, Systems or other contract deliverables
to be designed, developed, delivered, integrated, installed and/or tested by CSC, the technical,
design and/or functional specifications set forth in a Transaction Document, in the original
manufacturers/licensors documentation, in a New Services description requested and/or approved by
Sears, or otherwise agreed upon in writing by the Parties. Specifications contained in this
Agreement, including any Transaction Document, shall control, in the case of conflict, over those
incorporated by reference. Statement of Work or SOW has the meaning given in Section 2.2(c). Subcontractors means contractors/subcontractors (of any tier) of a Party or other Entity
(including Affiliates of CSC providing Services under this Agreement). System means an interconnected grouping of Equipment, Software and/or communication circuits and
associated attachments, features, accessories, peripherals and cabling, and all additions,
modifications, substitutions and Upgrades to such System. The term System shall include all
Systems in use as of the applicable Commencement Date, all additions, modifications, substitutions,
Upgrades to such Systems and all Systems installed or developed by or for the Eligible Recipients
or CSC, its Affiliates and the CSC Personnel following the Commencement Date. System Change means any change to the Software, Equipment, System or operating environment,
including without limitation, changes to programs, manual procedures, job control language
statements, distribution parameters or schedules. Term has the meaning given in Section 3.1(a) (Term of Master Agreement, Exhibits, SOWs
and Service Addenda) for this Master Agreement, and shall also mean the term of the applicable
Transaction Document, as applicable. Termination Assistance Services means the termination/expiration assistance requested by Sears to
allow the Services to continue without interruption or adverse effect and to facilitate the orderly
transfer of the Services to Sears or its designee, as such assistance is further described in
Section 25 (Termination Assistance Services). -11-




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HRMP 222      12 OF 3 Termination Charge means the costs incurred by CSC during the performance under this Agreement
and which are payable as the result of Sears terminating for convenience any Transaction Document,
subject to the limitations set forth in Section 23.3 (Termination Charges) and elsewhere in
this Agreement. Except as expressly provided otherwise in a Transaction Document, Termination
Charges shall be limited to the aggregate of the following items:  (a)
    Other Charges. The remaining portion of costs incurred by CSC (and not
previously paid for by Sears) for the Services, performed by CSC but not previously
paid for (through the Account Management Fees or other Charges) to the extent related
to the terminated Services;(b)
    CSC Designated Contracts/Acquired Assets. The remaining portion of
Out-of-Pocket costs incurred by CSC (and not previously paid for by Sears) in acquiring
from Sears the CSC Designated Contracts and the Acquired Assets related to the
terminated Services to the extent such contracts and assets are not (or cannot
reasonably be expected to be) utilized by CSC internally or for its other customers;
provided that: (i) such CSC Designated Contracts and/or Acquired Assets are
not assigned, transferred to, or assumed by Sears (or its designees) pursuant to
Section 24 (Rights upon Expiration or Termination); and (ii) such costs shall
be reduced by the net proceeds of any disposition of such Acquired Assets;(c)
    CSC Provided Systems. The remaining portion of
depreciation/amortization (not previously paid for by Sears), on CSC Provided Systems
used primarily to provide the terminated Services but only to the extent (i) such
Systems are not (or cannot reasonably be expected to be) utilized by CSC internally or
for its other customers, and (ii) such CSC Provided Systems are not assigned,
transferred to, or assumed by Sears (or its designees) pursuant to Section 24
(Rights upon Expiration or Termination); provided that such costs shall be
reduced by the net proceeds of any disposition of such CSC Provided Systems.(d)
    Terminated CSC Employees. Demonstrable and actual amounts paid by CSC
to CSC employees dedicated to providing the terminated Services that are terminated as
a direct result of Sears early termination; provided, however, that (i) Sears
shall only be liable to reimburse termination benefits which CSC is obligated to
provide by Law and/or by policies generally applicable to employees of CSC, (ii) such
costs shall be reduced on a proportionate basis to the extent such terminated
employee(s) were not engaged on the Sears account, and (iii) this provision shall not
apply to any employees that are offered positions by Sears or its designee under
Section 24 (Rights upon Expiration or Termination); and(e)
    Third Party Contracts. With respect to Third Party Contracts for
services entered into by CSC solely for the Services that are terminated as a direct
result of Sears early termination of such Services, any Out-of-Pocket costs CSC is
required by contract to pay to terminate such contracts; provided that: (i) this
provision shall -12-




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HRMP 222      13 OF 3  not apply to any such contracts that are transferred to Sears or its designee under
Section 24 (Rights upon Expiration or Termination); and (ii) if such
contracts are used to support multiple CSC customers or CSCs non-service delivery
functions, such costs shall be reduced proportionately to reflect the percentage of
use applicable to Sears. The remaining portion of depreciation and amortization shall be calculated in accordance
with generally accepted accounting principles, applied on a consistent basis, using the
methods used by CSC in preparing its federal income tax returns. The above costs shall only include amounts attributable to periods after the end of the Term
of the applicable Transaction Document, if Sears has expressly approved the inclusion of
such amounts in advance, and in writing. The term Termination Charge does not include Charges that are payable by Sears for work
performed prior to the expiration or termination of the applicable Transaction Document.
Charges for partially completed work will be pro-rated based upon the portion of the work
that was completed. The term Termination Charges does not include Charges and Out of
Pocket Expenses payable for: (x) Services, or (y) Termination Assistance Services under this
Agreement. Third Party means any person or Entity other than a Party, or such Partys Affiliates. When used
without initial capital letters, third party means any person or Entity that is not a party to
this Agreement. Third Party Contracts means all agreements between third parties and any Eligible Recipient or
CSC, its Affiliates or the other CSC Personnel that have been or shall be used to provide the
Services. Third Party Contracts shall include all such agreements in effect as of the applicable
Commencement Date, including those contracts identified in the Transaction Document, those as to
which the costs are included in the Sears IT Base Case, and those as to which CSC received
reasonable notice and/or reasonable access prior to the Commencement Date. Third Party Contracts
also shall include those third party agreements entered into by CSC, its Affiliates or the other
CSC Personnel following the Commencement Date. Third Party Materials means all Materials that are owned by Third Parties and that have been or
shall be used to provide the Services. Third Party Software means all Software provided under license or lease to CSC, its Affiliates,
the CSC Personnel or the Eligible Recipients that has been or shall be used to provide the
Services. TI Exhibit means Exhibit 1 (Technical Infrastructure Outsourcing) to this Master Agreement, of
even date herewith. Transaction Document has the meaning given in Section 2.2(f) (Transaction Document). -13-




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HRMP 222      14 OF 3 Transformation Plan has the meaning given in the TI Exhibit. Transformation Services has the meaning given in the TI Exhibit. Transitioned Personnel means the Personnel of Sears and its Affiliates who are eligible to be
interviewed for employment by CSC (or its delegates) pursuant to an Exhibit. Upon being employed by
CSC, such Transitioned Personnel shall be deemed to be CSC Personnel as defined in this Agreement. UCITA means the Uniform Computer Information Transactions Act drafted by the National Conference
of Commissioners on Uniform State Laws or any enactment of all or substantially all of such draft. Unanticipated IT Change has the meaning set forth in Section 6.5(f) (Unanticipated IT
Change). Unauthorized Codemeans any feature, routine or device that is intended or designed, either
automatically, upon the occurrence of a certain event, upon the taking of or failure to take a
certain action or under the control of a third party that is not a Sears Personnel, (a) to disrupt
the operation of any Deliverable or any other Eligible Recipient Software, Equipment, data or
Systems, (b) to cause any Deliverable or any other Eligible Recipient Software, Equipment, data or
Systems to be unintentionally destroyed, erased, damaged or otherwise made inoperable, or (c) to
permit a third party that is not a Sears Personnel to destroy, erase, damage or otherwise render
inoperable any Deliverable or any other Eligible Recipient Software, Equipment, data or Systems,
and shall include any computer virus, worm, trap door, back door, time bomb, malicious program, or
any mechanism such as software locks, password checking, CPU serial number checking or time
dependency, introduced by the provider of the applicable Software, Equipment, Systems, data or
Deliverable that could hinder Sears Eligible Recipients freedom to fully exercise its license
rights to such Software, Equipment, Systems, data or Deliverable under this Agreement. United States means the United States of America, and its states, commonwealths, possessions and
territories, including Puerto Rico and the District of Columbia. Upgrade and its derivatives means the updates, renovations, enhancements, additions and/or new
versions or releases of Software or Equipment. Virus means any Unauthorized Code that is included with or inserted into any System without the
consent of the owner or licensor of the underlying System. End of Appendix -14-