EXHIBIT 10.41
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SERVICE AGREEMENT
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THIS SERVICE AGREEMENT ("Agreement") is made as of this __ day of May, 2001
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("Effective Date") between Sears, ▇▇▇▇▇▇▇ and Co. ("Sears"), a New York
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corporation, having its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and ▇▇▇▇▇▇▇▇▇.▇▇▇, Inc., (the "Company"), a
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Nevada corporation, having its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇.
Recitals
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WHEREAS, Sears markets and sells computers and related equipment
(collectively, the "Products"), including Sears provided software ("Software")
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and also provides service for the Products and for the Software.
WHEREAS, the Company provides outsourced technical support services on
various items including, but not limited to, the Products and Software.
WHEREAS, Sears seeks to engage the Company as a provider of services to
purchasers of the Products and Software ("Customers") and the Company is willing
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to provide such services under the terms of this Agreement.
NOW, THEREFORE in consideration of the premises and the mutual covenants
and promises hereinafter set forth, the parties agree as follows:
Agreements
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1. APPOINTMENT
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Sears hereby designates the Company as a non-exclusive, independent service
contractor to perform outsourced technical support services on the Products and
Software (the "Services") in the United States of America, including Puerto Rico
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(the "Territory") and the Company hereby accepts such designation.
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2. NON-EXCLUSIVITY
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Sears shall have the right, in its sole discretion, to select the Company
or any other service provider to perform any Service Attempt (as defined below)
requested or to perform such Services or Service Attempts itself.
3. SEARS RESPONSIBILITIES
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(a) Sears shall refer, in its sole determination, any Customer who has
Product or Software related problems to the web application (the "Application")
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established by the Company. The Application feature list is attached hereto as
Exhibit A.
(b) Sears shall pay for each Service Attempt made by the Company hereunder
unless such Service Attempt could not be completed as a result of cause within
the control of the Company. For purposes of this Agreement, a "Service Attempt"
shall be defined as any attempt by the Company to a repair or diagnose a Product
or Software problem as a result of a Sears referral pursuant to Section 3(a)
above.
(c) Sears hereby grants the Company a non-exclusive, royalty-free limited
license for use in the Territory during the term of this Agreement only to use
the following trade names, services marks and or trademarks of Sears: "Sears",
"Sears, ▇▇▇▇▇▇▇ and Co." and "Sears PC Client Care (collectively, the "Sears
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Marks"). The Company may only use the Sears Marks for the following purposes:
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(i) for use in the world wide web domain address for the Application, (ii) for
use on the Application, (iii) for use during the actual Service Attempt, (iv) to
refer the Customer to Sears in the event that the Service Attempt cannot be
completed, and (v) as otherwise reasonably necessary to carry out its
obligations hereunder. Sears shall have the right to approve each specific use
of the Sears Marks prior to its first use or prior to the implementation of a
Company template that includes a ▇▇▇▇▇ ▇▇▇▇. Except for the limited license
granted in this Section, Sears shall retain any and all rights Sears may have in
the Sears Marks.
(d) Sears shall provide the Company with the following data so that the
Company may verify a Customer's eligibility for Service: Customer's name,
Customer's date of purchase, Product purchased, model number, and
warranty/service contract expiration date and agreement number.
4. THE COMPANY'S RESPONSIBILITIES
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(a) The Company shall perform the Services described in Exhibit A attached
hereto for Customers who contact the Company through the Application and in
accordance with the applicable service contract. All Service Attempts shall be
performed on-line. Prior to any Service Attempt, the Company shall verify that
the Customer is eligible for Service. Sears shall not be responsible for any
Service Attempt performed on an ineligible Customer.
(b) The Company shall have sole responsibility for the content of the
Application. The Company shall maintain and operate the Application in
accordance with industry standards for similar sites and in accordance with the
service levels set forth in Exhibit D attached hereto. Sears shall have the
right to approve the Application prior to its first use or prior to any material
modification, addition or enhancement to the Application. If at any time Sears
determines in its sole and absolute discretion that any modification, addition
or enhancement to the Application implemented by the Company without Sears
express written approval shall have an adverse effect on Sears image,
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reputation or competitive position, it may immediately revoke the limited
license granted in Section 3(c) and it may immediately terminate this Agreement.
Except as set forth in Section 4(c), the Company shall use all commercially
reasonable efforts to make any other modification, addition or enhancement to
the Application requested by Sears from time to time. Sears acknowledges that
the Application that has been previously reviewed by Sears is acceptable for use
during the Pilot Period (as such term is defined below).
(c) The Company shall use its best efforts to make any modification,
addition or enhancement to the Application requested by Sears from time to time
in order to meet the service levels described in Exhibit D. The previous
sentence notwithstanding, in the event that the Company materially fails to meet
any service level described on Exhibit D for seven (7) consecutive days after
formal written notice by Sears, Sears may immediately terminate this Agreement,
provided that Sears provides reasonably accurate forecasts of the actual numbers
of users of the Services and the usage incident rate. Where there is a material
difference between the forecasted number of users or the usage incident rate and
the actual number of users or the usage incident rate, the Company will have
thirty (30) days after formal notification by Sears of such change in which to
meet the service levels described in Exhibit D.
(d) At its own expense, the Company shall make available training materials
and facilitate training for Sears employees as reasonably required to enable the
Sears associates to refer Product and Software related problems to the Company.
(e) For each completed Service Attempt, the Company shall provide the
information contained in the reports described on Exhibit B attached hereto and
any other information reasonably requested by Sears from time to time. For any
failed Service Attempt, the Company shall advise the Customer to contact Sears
directly and the Company shall provide Sears with the relevant information
immediately via electronic mail or any other mutually acceptable method.
(f) The Company shall not be responsible for collecting or retaining any
charges on behalf of Sears for any Service preformed hereunder.
(g) The Company shall in good faith assist Sears in developing a matrix for
measuring Customer satisfaction.
(h) The Company represents and warrants to Sears that its website
(including the Application) does not and will not contain any content that
infringes on or violates any applicable law, rule or regulation, or any
proprietary right or intellectual property right of any third party or which is
obscene, defamatory or offensive and that it shall comply with all applicable
laws, rules and regulations with respect to its website and the Application.
(i) The Company hereby grants to Sears a non-exclusive, royalty-free
limited license for use in the Territory only to use the following tradenames,
services marks and or trademarks of the Company: ▇▇▇▇▇▇▇▇▇.▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, ▇▇▇▇▇▇▇▇▇.▇▇▇,
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▇▇▇▇▇▇▇▇▇▇.▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, ▇▇▇▇▇▇▇▇▇.▇▇▇,
FirstHelp, ▇▇▇▇▇▇▇▇▇.▇▇▇, ▇▇▇▇▇▇▇▇▇.▇▇▇, ▇▇▇▇▇▇▇▇▇.▇▇▇, 1/st/help,
1/st/▇▇▇▇.▇▇▇, 1/st/▇▇▇▇.▇▇▇, 1/st/▇▇▇▇.▇▇▇, MyHelpDesk, ▇▇▇▇▇▇▇▇▇▇.▇▇▇,
▇▇▇▇▇▇▇▇▇▇.▇▇▇, MyHelpDesk3.0 and ▇▇▇▇▇▇▇▇▇▇.▇▇▇, (collectively, the "Company
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Marks"). Sears may only use the Company Marks to refer Customers to the
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Application and in connection with the Services provided by the Company pursuant
to this Agreement. Except for the limited license granted in this Section, the
Company shall retain any and all rights the Company may have in the Company
Marks.
(j) The Company represents and warrants to Sears that upon the Effective
Date, during the duration of this Agreement, and for the period during which
Company performs the Services for Sears Customers, the Application and any and
all other Company-developed or third party software used by Company to provide
the Services to Sears Customers ("Services Software") hereunder shall (1) at all
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times remain free of Unauthorized Code, and (2) shall not introduce Unauthorized
Code into the computer systems of Sears Customers who have contracted with Sears
to receive the benefits of the Services. For purposes of this Agreement,
"Unauthorized Code" means any computer virus, worm, trap door, back door, timer,
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counter, software locks or other such limited routine, instruction or design,
harmful programs or data incorporated into the Application or Services Software
used by Company to provide the Services to Sears Customers which (1)
irretrievably destroys, damages, makes temporarily or permanently inoperable,
and/or erases the computer hardware (and/or any computer peripherals), software,
data media, or stored data of Sears Customers (collectively, "Customer
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Systems"); (2) allows for unauthorized access by third parties to such Customer
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Systems; or (3) at any time other than in the performance of its Services,
otherwise disrupts or prevents (i) the normal operation of the Customer Systems,
and/or (ii) the access to and the use of the Customer Systems by such Sears
Customers.
5. SEARS CHARGES
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(a) The Company shall charge Sears the applicable rates set forth on
Exhibit C attached hereto. Sears shall prepay in accordance with the schedule
set forth on Exhibit C.
(b) The Company shall invoice Sears in accordance with Exhibit C. All
disputed claims shall be resolved within ninety (90) days from receipt of
invoice in accordance with Section 14.
(c) Sears shall be responsible for the collection and payment of all
applicable United States sales taxes in the Territory. The Company warrants that
there are no sales or value-added taxes applicable in Canada on the Services
delivered into the United States.
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(d) The Company shall keep and maintain accurate books of account and
records covering all transactions relating to this Agreement. Sears or its
designee shall be entitled to (i) audit and inspect such books and records at
Sears expense at any time during or up to five (5) years after the termination
of the Agreement during reasonable business hours and upon three (3) days prior
written notice to Company, and (ii) make copies and summaries of such books and
records. The Company shall retain all such books of account and records for a
minimum of five (5) years after termination of this Agreement. If a Sears duly
authorized representative discovers a deficiency in the monies charged by the
Company for any period under audit (an "Audit Deficiency"), the Company shall
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promptly pay such Audit Deficiency to Sears unless such amounts are reasonably
disputed by the Company. In the event, the Company, or its authorized
representative, conducts its own audit, Sears at its sole election, may have
access to and make copies of all reports and documentation generated from such
audit in lieu of conducting its own audit. Sears shall be charged for such
reasonable costs incurred while reproducing any reports or documentation.
6. WARRANTIES
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(a) If the Company is notified during the thirty (30) day period beginning
on the date that any particular Service Attempt was completed (the "Warranty
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Period") that the Product or Software still requires Service, the Company will
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arrange for the necessary Service to be made without additional charges to
either the Customer or Sears. A new Warranty Period shall commence upon the
completion of this follow-up Service Attempt.
(b) The Company shall ensure that each Sears Customer to whom Company
provides Services shall (i) be the holder of a valid Sears Service Contract or
warranty, (ii) first execute or otherwise effectively accept and be bound by a
legally enforceable contract for the Services and the use of the Application in
the form and substance reasonably satisfactory to both parties ("Customer
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Contract Form"). Neither Sears, Company nor their respective employees, agents,
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contractors or subcontractors shall offer to Sears Customers warranties or
representations with respect to the Company's Services which would obligate or
otherwise bind such parties beyond any warranty or representation expressly set
forth in such mutually-approved Customer Contract Form.
7. TERM, TERMINATION AND RENEWAL
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(a) This Agreement shall become effective on the Effective Date and shall
continue in force and effect thereafter for three (3) years. Sears reserves the
right to extend this Agreement for two (2) additional one (1) year periods at
Sears sole and exclusive option. In addition, unless explicitly stated otherwise
herein, either party may terminate this Agreement due to a material breach of
any provision hereof; provided that the breaching party shall have thirty (30)
days to cure upon notice of such breach. The termination of this Agreement shall
not affect or impair the obligations of Sears to pay the Company for Services
performed prior to termination and the rights and obligations of the
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parties under Sections 6, 9, 10, 12 and 15 of this Agreement shall survive any
such termination.
(b) In the event that this Agreement is terminated for any reason before
the Company has completed all the Services Attempts for which Sears has prepaid
in accordance with Exhibit C or Sears no longer offers the Services to
Customers, the Company shall immediately refund any unused portion of such
prepaid amount.
8. PILOT PERIOD
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(a) The Company will implement the Services within 14 days of the Effective
Date (the "Implementation Date"). The period commencing on the Implementation
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Date and ending on the earlier of the date 45 days thereafter or the date on
which the four hundredth to one thousandth Customer at Sears option is referred
to the Application pursuant to Section 8(b) below shall be known as the "Pilot
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Period".
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(b) During the Pilot Period, certain Sears associates shall refer Customers
who require Service to the Application. The Company shall provide the
Application with a separate domain name (which domain name shall be different
then the domain name described in Section 8(c)) in order to provide Service for
these Customers.
(c) During the Pilot Period, the Sears voice response unit ("VRU") after
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normal working hours local time shall refer Customers who require Service to the
Application. The Company shall provide the Application with a separate domain
name in order to provide Service for these Customers.
(d) Within ten (10) days of the Effective Date, Sears shall pay the Company
[+] as payment in full for all Services performed by the Company as a result
of any referral pursuant to Sections 8(b) or 8(c).
(e) Both parties shall use their best efforts during the Pilot Period to
capture all relevant data that will allow Sears to make a determination whether
or not to terminate the Agreement.
(f) Sears may terminate this Agreement with or without cause for any reason
whatsoever within thirty (30) days of the end of the Pilot Period by the sending
the Company a formal written notice.
9. INDEMNITY BY SEARS
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+ Certain portions of this exhibit have been omitted pursuant to a request
for confidential treatment filed with the Securities and Exchange Commission.
Omitted portions have been filed separately with the Securities and Exchange
Commission.
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Sears shall release, indemnify, and defend the Company and its affiliates,
subsidiaries, officers, directors, employees and agents and hold them harmless,
from and against all claims, complaints, fines, penalties, causes of action,
liabilities, judgments, losses, costs, damages of every kind and character, and
expenses including reasonable attorneys' fees, (collectively, "Sears Claims") to
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the extent they are proximately caused by, or proximately result from: (A) a
breach of or default under any covenant or provision of this Agreement by Sears,
(B) any actual or alleged improper service on any Product or Software covered by
this Agreement by Sears or its officers, employees, or technicians, or (C) the
negligent acts or omissions or willful misconduct by Sears or its officers,
employees, or technicians. Sears shall, at its own option and expense, take
control of any Sears Claim and engage counsel of its own choice to defend any
Sears Claim.
10. INDEMNITY BY THE COMPANY
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The Company shall release, indemnify and defend Sears and its affiliates,
subsidiaries, officers, directors, employees and agents and hold them harmless,
from and against any and all claims, complaints, fines, penalties, causes of
action, liabilities, judgments, losses, costs, damages of every kind and
character, and expenses, including reasonable attorneys' fees, (collectively,
"Company Claims") to the extent same are proximately caused by, or proximately
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arise out of: (A) a breach of or default under any covenant or provision of this
Agreement by Company, (B) any actual or alleged defect in the Application or any
Services Software, (C) the improper or defective delivery of the Services (or
the failure to deliver same) to Sears Customers with whom Company has contracted
to deliver the Services, (D) the negligent acts or omissions or willful
misconduct of Company or its officers, employees, or technicians. The Company
shall, at its own option and expense, take control of any Company Claim and
engage counsel of its own choice to defend any Company Claim.
11. INSURANCE
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(a) The Company represents and warrants to Sears that during the entire
term of this Agreement, it shall maintain and keep in full force and effect,
policies of insurance meeting or exceeding the following specifications:
(1) Crime insurance, including Employee Dishonesty and Computer Fraud
coverage for theft of money or securities that Company holds, or for
which Company is legally liable, arising out of the dishonest acts
committed by the personnel of Company, acting alone or in collusion
with others, or through the use of the Services or Company's computer
systems to fraudulently cause a transfer, with aggregate coverage
limits of not less than five million dollars ($5,000,000).
(2) Commercial General Liability insurance, written on an occurrence
basis, with coverage including premises/operations, contractual,
personal and advertising injury, specifically including coverage for
invasion of privacy
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rights, and products/completed operations, with aggregate coverage
limits of not less than three million dollars ($3,000,000).
(3) Professional Liability or Errors & Omissions Liability insurance with
aggregate coverage limits of not less than five million dollars
($5,000,000).
(4) The Company warrants that all of its employees are covered by
statutory compensation programs in the jurisdiction in which they are
employed.
(b) Sears shall be listed as an additional insured on each insurance
policy or bond required under Sections 11(a)(1), 11(a)(2) and 11(a)(3) effective
as of the first date of use of the Services by Sears Customers, to the extent
applicable. Such insurance shall be purchased from companies reasonably
acceptable to Sears. Policies of insurance shall provide that they will not be
canceled or materially changed without at least thirty (30) days prior written
notice to Sears. Certificates of insurance evidencing coverage shall be
submitted in advance of or concurrent with the execution of this Agreement, and
on each insurance policy renewal thereafter. Company shall, at Sears request,
provide specimen copies of requested insurance policies. If Company does not
provide Sears with such certificates of insurance, or, in Sears opinion,
reasonably reached in good faith, such policies do not afford adequate
protection for Sears, then Sears will so advise Company. In the event that
Company does not procure policies and deliver certificates which are reasonably
acceptable to Sears within a reasonable time after Company receives advice of
Sears opinion, then Sears may terminate this Agreement, without penalty, upon
thirty (30) days prior written notice, during which notice period Company shall
be permitted to attempt to cure such default. Any approval by Sears of any of
Company's insurance policies shall not relieve Company of any obligation
contained in this Agreement.
12. CONFIDENTIALTY
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(a) The terms and conditions of that certain letter agreement, dated
January 10, 2001 shall remain in full force and effect during the term of this
Agreement. To the extent that any provision of such agreement conflicts with
this Section 12, this Section 12 shall control.
(b) The Company agrees that all information about individual Customers
provided by the Customer/Sears to the Company, including but not limited to
names, addresses, telephone numbers, account numbers, Customer lists, and
demographic, financial and transaction information ("Confidential Personal
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Information"), shall be deemed confidential.
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(c) The Company shall use Confidential Personal Information only as
necessary to perform the Services and its other obligations under this
Agreement. The Company shall not duplicate or incorporate the Confidential
Personal Information into its own records or database, except as necessary to
permit the Company to provide the
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Services and fulfil its obligations to Sears under this Agreement. The Company
shall restrict disclosure of Confidential Personal Information to its employees
who have a need to know such information to perform the Services and who have
first agreed to be bound by the terms of this Section 12. The Company shall
require its authorized agents and subcontractors who are performing its
obligations hereunder to execute a document stating such agreement. The Company
is liable for any unauthorized disclosure or use of Confidential Personal
Information by any of its employees.
(d) The Company shall not disclose the Confidential Personal Information to
any third party, including an affiliate of the Company or a permitted
subcontractor, without prior written consent of Sears and the written agreement
of such third party to be bound by the terms of this Section 12. Unless
otherwise prohibited by law, the Company shall (i) immediately notify Sears of
any legal process served on the Company for the purpose of obtaining
Confidential Personal Information and (ii) permit Sears adequate time to
exercise its legal options to prohibit or limit such disclosure.
(e) The Company shall establish and maintain written policies and
procedures designed to ensure the confidentiality of the Confidential Personal
Information. Copies of such policies and procedures shall be provided to Sears
upon our request.
(f) Within ten days following termination of this Agreement, the Company
shall, at Sears discretion, (i) return the Confidential Personal Information to
Sears or (ii) certify in writing to Sears that such Confidential Personal
Information has been destroyed in such a manner that it cannot be retrieved.
(g) The Company shall notify Sears promptly upon the discovery of the loss,
unauthorized disclosure or unauthorized use of the Confidential Personal
Information and shall indemnify Sears and hold Sears harmless for such loss,
unauthorized disclosure or unauthorized use, including attorney's fees.
(h) The Company shall permit Sears to audit the Company's compliance with
the provisions of this Section 12 at any time during the Company's regular
business hours.
(i) A breach of this Section 12 shall be grounds for immediate termination
of this Agreement.
(j) In addition to any other rights Sears may have under this Agreement or
in law, since unauthorized use or disclosure of the Confidential Personal
Information may result in immediate and irreparable injury to Sears for which
monetary damages may not be adequate, in the event the Company or any officer,
director, employee, agent or subcontractor of the Company uses or discloses or
in Sears sole reasonable opinion, any such party is likely to use or disclose
the Confidential Personal Information in breach of the Company's obligations
under this Agreement, Sears shall be entitled to equitable relief, including
temporary and permanent injunctive relief and specific performance.
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Sears shall also be entitled to the recovery of any pecuniary gain realized by
the Company from the unauthorized use or disclosure of the Confidential Personal
Information.
(k) The provisions of this Section 12 shall survive the termination of this
Agreement.
13. UNAVOIDABLE DELAYS
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Neither party shall be liable to the other party for any failure to perform
or for delay in performance of its obligations hereunder caused by circumstances
beyond its reasonable control, including, but not limited to, fire, flood,
earthquake, war, insurrection, riot, sabotage, epidemic, labor disputes, labor
shortages, shortage of materials, acts of God, acts of any government or agency
thereof or judicial action.
14. NOTICES
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All notices given with respect to this Agreement shall be in writing and
given by personal delivery, courier service, or by certified or registered mail
with postage prepaid and return receipt requested or by telecopy, electronic or
digital transmission. Such notices, if sent by mail, shall be deemed to have
been given two (2) business days after they are placed in the mail postage
prepaid, any notice sent via courier service shall be deemed given one (1)
business day after being deposited with a reputable overnight courier service
for guaranteed next business day delivery, and any notice transmitted by
telecopy, electronic or digital transmission shall be deemed given when
transmitted. Notices given by the Company shall be addressed to Sears at:
SEARS, ▇▇▇▇▇▇▇ AND CO.
Product Repair Services
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President - Product Repair Services
With a copy to: SEARS, ▇▇▇▇▇▇▇ AND CO.
Law Department
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Deputy General Counsel - Services
or to such other address as Sears by written notice to the Company shall
specify. Notices given by Sears shall be addressed to the Company at:
▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
Contracts Administration,
Suite 300 - ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇, ▇▇▇ ▇▇▇
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Attention: Contracts Administrator
or to such other address as the Company by written notice to Sears shall
specify.
15. ALTERNATIVE DISPUTE RESOLUTION
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(a) The parties shall attempt in good faith to resolve any dispute arising
out of or relating to breach, termination or validity of this Agreement, as
follows. In the event of a dispute (the "Dispute") that cannot be resolved in
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the normal course of business, project managers of both parties, at levels at
least one step above the project personnel who have previously been involved in
the Dispute, shall meet at a mutually acceptable time and place within fourteen
(14) days after delivery of a written notice by either party requesting such a
meeting, and thereafter as often as they reasonably deem necessary, to exchange
relevant information and to attempt to resolve the Dispute. If the project
managers are not able to resolve the Dispute within thirty (30) days of their
initial meeting, or if the parties fail to meet within the fourteen-day period
referred to above, the Dispute shall be referred to senior executives of both
parties who have authority to settle the Dispute. The senior executives will
meet for negotiations within fourteen (14) days of the end of the thirty-day
period referred to above (or if applicable, the fourteen-day period referred to
above), at a mutually agreed time and place.
(b) If the matter has not been resolved within sixty (60) days from the
referral of the Dispute to senior executives, the Dispute shall be finally
settled by arbitration conducted expeditiously in accordance with the American
Arbitration Association Rules for Commercial Arbitration by one (1) arbitrator
to be mutually agreed upon. The arbitration shall be governed by the United
States Arbitration Act, 9 U.S.C. ss. 1-16, and judgment upon the award rendered
by the arbitrators may be entered by any court having jurisdiction of the
dispute. The place of arbitration shall be Seattle, Washington. The costs of
arbitration shall be shared equally by the parties.
(c) All negotiations pursuant to this Section are confidential and shall
be treated as compromise and settlement negotiations for purposes of the Federal
Rules of Evidence and the applicable state rules of evidence.
(d) The procedures specified in this Section shall be the sole and
exclusive procedures for the resolution of disputes between the parties arising
out of or relating to this Agreement; provided, however, that a party may seek a
preliminary injunction or other preliminary judicial relief if in its judgment
such action is necessary to avoid immediate and irreparable damage. Despite such
action, the parties will continue to participate in good faith in the procedures
specified in this Section. All applicable statutes of limitation shall be tolled
while the procedures specified in this Section are pending. The parties will
take such action, if any, required to effectuate such tolling.
15. MISCELLANEOUS
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(a) PROJECT PERSONNEL. Each party shall appoint a project manager. As of
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the date hereof, the Company project manager shall be ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and the
Sears project manager shall be ▇▇▇ ▇▇▇▇▇▇▇▇. Either party may change its project
manager by providing thirty (30) days written notice.
(b) PUBLICITY. Except as noted herein, neither party shall use the other
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party's name or reveal the existence of this Agreement in any product manuals,
product warranties, advertising, promotional activities, publicity releases or
any other literature of similar nature, or in any other manner, and will refrain
from making any reference to this Agreement or to the other party's name in the
solicitation of business, unless the other party gives its written approval and
consent to such action.
(c) RELATIONSHIP. The only relationship of the parties created by this
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Agreement is that of independent contractors. Nothing contained in or performed
pursuant to this Agreement shall be construed as creating a partnership, agency
or joint venture. Except as otherwise expressly provided in this Agreement,
neither party shall become bound by a representation, act or omission of the
other party.
(d) GOVERNING LAW. This Agreement shall be interpreted and governed by the
-------------
law of the State of New York, without regard to conflict of law principles.
(e) WAIVER. No waiver of any provision or breach shall be implied by
------
failure to enforce any rights or remedy herein provided, and no expressed waiver
shall affect any provision or breach other than that to which the waiver is
applicable and only for that occurrence.
(f) CUMULATIVE REMEDIES. All rights and remedies provided herein are
-------------------
cumulative, and the exercise of any such right or remedy shall be without
prejudice to the right to exercise any other right or remedy provided herein, at
law, or in equity.
(g) SEVERABILITY. The invalidity or unenforceability of any provision of
------------
this Agreement shall not affect or impair the enforcement of any other
provision, and this Agreement shall be construed as if such invalid or
unenforceable provision had never been contained herein.
(h) ASSIGNMENT. Neither party to this Agreement may assign this Agreement
----------
or its rights or obligations hereunder without the prior written consent of the
other party; provided, however that nothing in this provision or this Agreement
shall prohibit either party from assigning its rights or obligations hereunder
to an affiliate or subsidiary, nor in the event of an acquisition or merger in
which all or substantially all of the assets are transferred to another party.
(i) BINDING EFFECT. This Agreement shall be binding upon and insure to the
--------------
benefit of the parties hereto and their respective successors and assigns,
subject to the restrictions of Section 15(h).
12
(j) HEADINGS. The headings in this Agreement have been placed thereon for
--------
convenience of the parties and shall not be used to interpret this Agreement.
(k) ENTIRE AGREEMENT. This Agreement sets forth the entire agreement and
----------------
understanding between the parties with respect to the subject matter hereof.
Except as otherwise expressly provided herein, this Agreement may not be
supplemented, modified or amended except by written instrument signed by a duly
authorized officer of the Company and by a duly authorized officer of Sears.
IN WITNESS WHEREOF, the parties have executed this Agreement on or as of
the date first above written.
SEARS, ▇▇▇▇▇▇▇ AND CO.
By:/s/ ▇▇▇▇ Good
---------------------------------------
Name: ▇▇▇▇ Good
Title: President, Product Repair
Services
▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
By:/s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President and Chief Executive
Officer
13
EXHIBIT A
MYHELPDESK APPLICATION DETAILED FEATURE LIST
-------------------------------------------------------------
Service Feature Included
Category
-------------------------------------------------------------
Automated
Help
-------------------------------------------------------------
Disk Maintenance Utilities Future
-------------------------------------------------------------
Self Help
-------------------------------------------------------------
FirstHelp Yes
-------------------------------------------------------------
Content Database Yes
-------------------------------------------------------------
Content Filtering Future
-------------------------------------------------------------
Personalized Help Desk Future
-------------------------------------------------------------
Promotion Engine Future
-------------------------------------------------------------
Relevancy Feedback Future
-------------------------------------------------------------
Session History Yes
-------------------------------------------------------------
Assisted Help
-------------------------------------------------------------
Email with an Expert Yes
-------------------------------------------------------------
Chat with an Expert Yes
-------------------------------------------------------------
Desktop Sharing Yes
-------------------------------------------------------------
Telephone Support No
-------------------------------------------------------------
User
Management
-------------------------------------------------------------
Data Harvest Future
-------------------------------------------------------------
ECommerce Engine No
-------------------------------------------------------------
License Key Engine Yes
-------------------------------------------------------------
Branding Engine Yes
-------------------------------------------------------------
Incident
Management
-------------------------------------------------------------
Integrated Live Support Yes
-------------------------------------------------------------
Incident Tracking Yes
-------------------------------------------------------------
Internal Knowledge Base Future
-------------------------------------------------------------
Reporting Yes
-------------------------------------------------------------
14
I. Feature Descriptions
Disk Maintenance Standard tools to increase the performance of a
user's hard drive.
FirstHelp First Help is a resource directory that indexes over
16,000 Internet resources sorted by product. There
are over 2,200 software and hardware products
supported. These self-help resources are verified
and expanded daily.
Content Database A significant collection of how-to's, tips, bugs,
and tutorials are available to address some of the
most common PC support issues. This content is
also sorted by product and continues to grow in
breadth and depth daily.
Content Filtering A filtering mechanism allows the selection of
products covered by the resources and content to
be tailored for each implementation. Each customer
may choose a specific subset of products to
support for their particular implementation. This
reduces the amount of potentially distracting
material that end-users might come across when
searching for help.
Personalized Help Desk A personalized help desk engine allows users to
select specific products that they use regularly
to be part of their personalized help desk. This
provides easy "one-click" access to resources for
their most often used applications or hardware
components. Users can select from any of the
products supported by the particular
implementation they are accessing but not those
excluded from the service (see Content Filtering -
above).
Promotion Engine A customizable context sensitive promotion engine
allows promotions, offers, reminders, or other
notices to be displayed to end-users when viewing
an associated product directory. For example, a
user browsing the help directory for Microsoft
Excel, might see a notice of an upcoming company
sponsored Excel productivity training course.
Relevancy Feedback When viewing a help resource, users can provide
feedback on the usefulness of the resource in
solving their problem.
Session History A log of questions/problems including the resource
that solved the problem is maintained and
available to users so they can quickly access
resources that solved previous problems.
Email with an Expert Answers to technical support inquiries by email
within a 4 hour turnaround time by ▇▇▇▇▇▇▇▇▇.▇▇▇'s
Support analysts.
Chat with an Expert Immediate answers to technical support inquiries
in a text-based, real-time interactive chat
session with one of ▇▇▇▇▇▇▇▇▇.▇▇▇'s Support
analysts.
15
Desktop Sharing Desktop Sharing of a user's desktop over the
Internet by one of ▇▇▇▇▇▇▇▇▇.▇▇▇'s Support
analysts.
Telephone Support Immediate answers to technical support inquiries
delivered over the telephone by ▇▇▇▇▇▇▇▇▇.▇▇▇'s
Support analysts.
Enhanced Registration Enhanced registration provides for customizing the
data collected from users when they register. The
type of data collected can be configured for each
company and does not require coding changes to the
system. Data collected can include: personal
information, demographic data, system information,
or any other type of data.
Data Harvesting In addition to the Enhanced Registration
capabilities, system profiles can be gathered from
the users computer during registration using a
fully automated data-harvesting component. This
component is configurable to gather information
from the users machine including: OS, peripherals,
applications, network settings, configuration,
memory, hard drives, etc.
eCommerce Engine The eCommerce engine supports multiple
subscription based packages at different prices in
different currencies. It integrates with the user
management system, providing entitlement data for
users based on their purchases. It uses
▇▇▇▇▇▇▇▇▇.▇▇▇'s eCommerce payment gateway to
process credit card transactions in real time
securely over the Internet using industry standard
encryption technology of the highest levels.
License Key Engine A license key system allows user entitlement to be
handled via license keys or promotional codes
rather than using the eCommerce engine. Users
simply enter a valid key on the PC Support
Application to obtain access to the agreed upon
services. License keys or promotional codes are
easily created by ▇▇▇▇▇▇▇▇▇.▇▇▇ to distribute to
companies as necessary.
Branding Engine The branding engine allows for customer logos to
be added to the PC Support Application easily.
Integrated Live Support Integrated email, chat and telephone solutions
allow a group of agents to deal with both types of
requests using a single integrated incident
management solution. The live support tools
provide the ability to quickly reference a users
incident history as well as push helpful content
to users (i.e. URL's or KB articles).
Incident Tracking A holistic incident tracking system allows
incidents to persist in the system until they are
resolved, which may include a variety of customer
interactions or agent activities. Incidents can be
assigned to and later transferred among agents.
Users can view their own incident history and
refer to past case numbers when re-engaging a live
support agent. Time spent on each incident
activity is recorded and summed when the incident
is closed.
Knowledgebase A knowledgebase that is integrated with the live
support tools allows agents to easily and quickly
publish knowledgebase articles from scratch or
using a live support incident as a catalyst.
16
Reporting A variety of reports are available quickly and
readily to administrators including: incident
data, agent activity data, knowledge base data,
and user data.
17
EXHIBIT B - REPORTS
The following reports and data are made available.
II. Problem Summary Report
-----------------------------------------------------------------
# Data Reported
-----------------------------------------------------------------
1 New Problems Generated
-----------------------------------------------------------------
2 Model and Serial Number
-----------------------------------------------------------------
3 New Problems Marked as Resolved
-----------------------------------------------------------------
4 Prior Problems Marked as Resolved
-----------------------------------------------------------------
5 Total Problems In-Progress as of date
-----------------------------------------------------------------
6 Problems Resolved Using Self Help
-----------------------------------------------------------------
7 Problem Resolved Using Email
-----------------------------------------------------------------
8 Problems Resolved Using Chat
-----------------------------------------------------------------
9 Problems Resolved Using Phone
-----------------------------------------------------------------
10 Total Support Actions
-----------------------------------------------------------------
11 Average Actions Per New Problem
-----------------------------------------------------------------
12 Self Help Actions
-----------------------------------------------------------------
13 Emails
-----------------------------------------------------------------
14 Chats
-----------------------------------------------------------------
15 Phone Calls
-----------------------------------------------------------------
16 Average Chat Duration
-----------------------------------------------------------------
17 Average Phone Call Duration
-----------------------------------------------------------------
III. SLA Report
-----------------------------------------------------------------
# Data Reported
-----------------------------------------------------------------
1 First Contact Resolution Rate
-----------------------------------------------------------------
2 Average Email Response Time
-----------------------------------------------------------------
3 [ +] Email Response Time
-----------------------------------------------------------------
4 Average Chat Response Time (Hold Time)
-----------------------------------------------------------------
5 Maximum Chat Response Time
-----------------------------------------------------------------
6 [+] Chat Response Time
-----------------------------------------------------------------
7 Chat Abandonment Rate
-----------------------------------------------------------------
IV. Problem Category Report
The following report data is reported for a selected date range (referred to
hereafter as the "period") and summarized across all departments as well as
articulated for each individual department for those organizations using the
department feature.
__________________________
+ Certain portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission.
Omitted portions have been filed separately with the Securities and Exchange
Commission.
18
-----------------------------------------------------------------
# Data Reported
-----------------------------------------------------------------
1 User Assigned Category
-----------------------------------------------------------------
2 Agent Assigned Category
-----------------------------------------------------------------
EXHIBIT C - CHARGE FOR SERVICES
PRICING SCHEDULE
The pricing schedule consists of the following distinct components.
1. Pilot Period Pricing
2. Monthly Base Charges with overage rate per incidence
3. Subscriber per seat Pricing Option
1. The Pilot Period
--------------------
Both parties agree that time is of the essence and will work
to capture the relevant data that will allow Sears to make a decision
to execute or terminate the agreement. The criterion that Sears will
use to assess the effectiveness of the trial is as follows:
1. Call back comparisons from the two samples
2. The truck roll comparisons from the two samples
3. A comparison of the labor cost associated to
support the business model require by the two
samples
4. A comparison of the parts ordered and parts used
from the two samples
5. A comparison of the equipment that was replaced
due to customer satisfaction issues from the two
samples
6. A customer satisfaction survey
7. The call duration of the control group for the
test vs. the incumbent group.
Pilot Period cost [ + ]
2. Monthly Base Charges
-------------------------
Monthly Base Charge [ + ]
Includes the following services at the stated quantities:
Service Quantity Included Overage Charge
Email [ + ] [ + ]
Chat with a Technician [ + ] [ + ]
Desktop share [ + ] [ + ]
Self Help [ + ] [ + ]
___________________
+ Certain portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission.
Omitted portions have been filed separately with the Securities and Exchange
Commission.
19
Notes:
1. Overages shall be billed in arrears once the Quantity Included is
exceeded.
2. Monthly base charge is paid in advance, All other payments are due
within thirty (30) days after invoice date.
3. Any unused prepaid Service (as described above) may be applied in
subsequent quarters.
4. Sears reserves the right to vary, up or down, the quantity of
services included in the monthly base charge to reflect business
cycles upon 30 days notice.
5. At the request of Sears, a monthly account review will occur to
set the size of the base quantities for upcoming months.
6. Sears and PC Support hereby agree that beginning on the tenth
month following the Effective Date, all payment terms will be as
follows: payment in arrears, net 30 from invoice date.
3. Subscriber per Seat Option Charges
---------------------------------------
Number of Users: [ + ]
----------------
Incident CapIncident Price
over Cap
--------------------------
Email with an Expert
Chat with an Expert
Desktop Sharing [ + ]
Self-Help
Price per User per Month
Notes:
1. Per incident fees will be applied per incident when incident
volume exceeds stated incident caps.
[ + ]
EXHIBIT D - SERVICE LEVEL AGREEMENT
_________________________
+ Certain portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission.
Omitted portions have been filed separately with the Securities and Exchange
Commission.
20
1. Network Connectivity
▇▇▇▇▇▇▇▇▇.▇▇▇ assumes responsibility for obtaining and managing Internet
connectivity for our services and will provide sufficient bandwidth server
uptime to meet all performance requirements.
Bandwidth
Our website is co-located at [ + ]. Our website is fed by redundant circuits and
we are capable of increasing our current bandwidth by 5x within moments, and
without interruption of service. If the need arises we can dramatically increase
our bandwidth, up to and including multiple OC48's.
Webservers
Our network load balancing is designed in such a manner that we can easily grow
the number of webservers in our network without interrupting service. Currently,
our server growth occurs when the monitored load on our webservers maintains
[ + ].
Our estimated uptime is [ + ]. The reason why we this is an estimate has nothing
to do with our own ability to control up time, and has everything to do with the
Internet itself and our third party ASP's. Every session between a customer and
our software goes through several linkages (anywhere between 2 to 30 "hops").
Each of those linkages (or "hops") in between the customer and our ISP or ASP is
beyond our control. Examples of these linkages (or hops) are things like
customer ISP's, our ISP's servers, phone company's telephone switches, our third
party ASP servers and their ISP connections, etc. Despite all the inherent
redundancies in the Internet and with ASP's, the fact remains that every time
any of those linkages fails, our ability to make our system available to
Customers is compromised. We cannot guarantee up time because we cannot
guarantee these linkages beyond our control.
2. Support Services Guidelines
We will assist the end users by providing information based on our experience
and backed up by support information published by the software vendor while
applying industry standard troubleshooting methods and procedures.
First Line support and problem resolution shall encompass, at a minimum, the
following items:
1. Identify source of the problem -- Applications vs. Environment
2. Provide assistance on the products we are contracted to support by our
Customers
3. Obtain appropriate resources if outside our remote scope
4. Provide installation assistance
___________________
+ Certain portions of this exhibit have been omitted pursuant to a request
for confidential treatment filed with the Securities and Exchange Commission.
Omitted portions have been filed separately with the Securities and Exchange
Commission.
21
5. Answer configuration questions
6. Answer "How do I" questions
7. Diagnose and provide solutions for known bugs with fixes
8. Properly document problem/symptoms for escalation if necessary
1. Maintain a record of all customer contacts
2. Incident recording and tracking
3. Availability, updates, maintenance, and additions to customer
specific knowledge directories.
3. Incident definition
A ▇▇▇▇▇▇▇▇▇.▇▇▇ incident is defined as a unique customer question asked
through any medium: chat, email, phone, or self search of knowledge
directories; closure of the incident may require multiple customer contacts.
4. Incident Routing
We currently offer two stages of customer support. At the first stage
technicians field all questions; any incident that is beyond their capability
is immediately escalated to a second stage with one of our subject matter
experts (SME).
5. Incident Resolution
Given the resources at ▇▇▇▇▇▇▇▇▇.▇▇▇'s disposal (analyst expertise, Internet,
Knowledge directories) we are able to maintain first contact resolution of
[ + ] of the incidents related to the applications/environments as per the
contract. One factor that contributes to lower first incident resolution is
proper training and documentation for customer specific technology.
6. Capacity
We maintain approximately [ + ] excess capacity to cover shifts and manpower
utilization. We use scaling models for future growth based on customer
forecasts. We have the ability to ramp up by approximately [ + ] eSupport
Analysts per month per support location. We currently maintain three support
contact centers located in Vancouver, British Columbia, Bangalore, India and
Charlottetown, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island.
7. Chat Based Services
▇▇▇▇▇▇▇▇▇.▇▇▇ will maintain a chat acceptance time (time between chat request
and acceptance by a technician) of [ + ] seconds but not exceeding [ + ]
seconds. There
_______________________
+ Certain portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission.
Omitted portions have been filed separately with the Securities and Exchange
Commission.
22
are times when this time may be exceeded due to end user connection speed and
Internet traffic. Chat based services are available 24x365. Uptime is estimated
to be [ + ] (see Availability of Services).
8. Email Based Services
▇▇▇▇▇▇▇▇▇.▇▇▇'s email based services offer response levels that range from [ + ]
hours of receipt of the email, based on customer selected service levels. Email
based services are available 24x365 with an estimated uptime of [+ ] uptime (see
Availability of Services).
9. Availability of Services
▇▇▇▇▇▇▇▇▇.▇▇▇ services will be available to any end user, on a best efforts
basis by ▇▇▇▇▇▇▇▇▇.▇▇▇, at an estimated [ + ] hours per week or more. Periodic
scheduled maintenance may be performed. When the maintenance window is not
required, services will be available for all member activities. Uptime for all
services is estimated at [ + ].
10. Availability Exceptions:
1. Service inaccessibility caused by the failure of facilities or
communication network or which ▇▇▇▇▇▇▇▇▇.▇▇▇ has contracted a third
party supplier to provide.
2. Physical damage to the facility and/or equipment due to Act of God
circumstance.
______________________
+ Certain portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission.
Omitted portions have been filed separately with the Securities and Exchange
Commission.
23
11. SLA Grid
----------------------------------------------------------
Measure Standard
---------------------------------------------------------------------
Days of Operation Sunday through Saturday 365 days/year
---------------------------------------------------------------------
Hours of Operation 24 hours a day
---------------------------------------------------------------------
Availability of Services
-------------------------------
Incident Closure
-------------------------------
Staff Utilization
-------------------------------
Average Call Duration (Chat)
-------------------------------
Average Call Duration (Phone) [ + ]
-------------------------------
First Contact Resolution
-------------------------------
Abandon Rate
-------------------------------
Service Level (Chat)
-------------------------------
Service Level (Phone)
-------------------------------
Service Level (Email)
-------------------------------
Customer Satisfaction
---------------------------------------------------------------------
_________________
+ Certain portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission.
Omitted portions have been filed separately with the Securities and Exchange
Commission.
24
