Exhibit 10.1

 

TRANSITION SERVICES AGREEMENT

 

BY AND BETWEEN

 

SERVICEMASTER GLOBAL HOLDINGS, INC.

 

AND

 

FRONTDOOR, INC.

 

DATED AS OF SEPTEMBER 28, 2018

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE I DEFINITIONS

2

 

 

 

Section 1.01.

Definitions

2

 

 

ARTICLE II SERVICES

6

 

 

Section 2.01.

Services

6

Section 2.02.

Performance of Services

7

Section 2.03.

Charges for Services

8

Section 2.04.

Reimbursement for Out-of-Pocket Costs and Expenses

9

Section 2.05.

Changes in the Performance of Services

9

Section 2.06.

Transitional Nature of Services

10

Section 2.07.

Subcontracting

10

Section 2.08.

Contract Manager

10

 

 

 

ARTICLE III BILLING; TAXES

10

 

 

 

Section 3.01.

Procedure

10

Section 3.02.

Late Payments

11

Section 3.03.

Taxes

11

Section 3.04.

No Set-Off

11

 

 

 

ARTICLE IV TERM AND TERMINATION

11

 

 

Section 4.01.

Term

11

Section 4.02.

Early Termination

12

Section 4.03.

Interdependencies

12

Section 4.04.

Effect of Termination

13

Section 4.05.

Information Transmission

13

 

 

 

ARTICLE V CONFIDENTIALITY; PROTECTIVE ARRANGEMENTS

13

 

 

Section 5.01.

Parent and SpinCo Obligations

13

Section 5.02.

No Release; Return or Destruction

14

Section 5.03.

Privacy and Data Protection Laws

14

Section 5.04.

Protective Arrangements

14

 

 

 

ARTICLE VI LIMITED LIABILITY AND INDEMNIFICATION

15

 

 

Section 6.01.

Limitations on Liability

15

Section 6.02.

Obligation to Re-Perform; Liabilities

15

Section 6.03.

Third-Party Claims

16

Section 6.04.

Provider Indemnity

16

Section 6.05.

Indemnification Procedures

16

 

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ARTICLE VII MISCELLANEOUS

16

 

 

Section 7.01.

Mutual Cooperation

16

Section 7.02.

Further Assurances

17

Section 7.03.

Audit Assistance

17

Section 7.04.

Title to Intellectual Property

17

Section 7.05.

Independent Contractors

17

Section 7.06.

Counterparts; Entire Agreement; Corporate Power

17

Section 7.07.

Governing Law

18

Section 7.08.

Assignability

18

Section 7.09.

Third-Party Beneficiaries

19

Section 7.10.

Notices

19

Section 7.11.

Severability

20

Section 7.12.

Force Majeure

20

Section 7.13.

Headings

20

Section 7.14.

Survival of Covenants

20

Section 7.15.

Waivers of Default

20

Section 7.16.

Dispute Resolution

21

Section 7.17.

Specific Performance

21

Section 7.18.

Amendments

22

Section 7.19.

Precedence of Schedules

22

Section 7.20.

Interpretation

22

Section 7.21.

Mutual Drafting

22

 

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TRANSITION SERVICES AGREEMENT

 

This TRANSITION SERVICES AGREEMENT (this “Agreement”) is entered into as of
September 28, 2018, by and between ServiceMaster Global Holdings, Inc., a
Delaware corporation (“Parent”), and frondoor, inc., a Delaware corporation
(“SpinCo”).

 

R E C I T A L S:

 

WHEREAS, the board of directors of Parent (the “Parent Board”) has determined
that it is in the best interests of Parent and its stockholders to create a new
publicly traded company that shall operate the SpinCo Business;

 

WHEREAS, in furtherance of the foregoing, the Parent Board has determined that
it is appropriate and desirable to separate the SpinCo Business from the Parent
Business (the “Separation”) and, following the Separation, make a distribution,
on a pro rata basis, to holders of Parent Shares on the Record Date of at least
80.1 percent (80.1%) of the outstanding SpinCo Shares owned by Parent (the
“Distribution”);

 

WHEREAS, SpinCo has been incorporated solely for these purposes and has not
engaged in activities, except in connection with the Separation and the
Distribution;

 

WHEREAS, for U.S. federal income tax purposes, the Separation and the
Distribution, taken together, are intended to qualify as a transaction that is
generally tax-free for U.S. federal income tax purposes under Sections 355 and
368(a)(1)(D) of the Code, and this Agreement is intended to be, and is hereby
adopted as, a “plan of reorganization” within the meaning of Treasury
Regulations Section 1.368-2(g);

 

WHEREAS, SpinCo and Parent have prepared, and SpinCo has filed with the SEC, the
Form 10, which includes the Information Statement, and which sets forth
disclosures concerning SpinCo, the Separation and the Distribution;

 

WHEREAS, in order to effectuate the Separation and the Distribution, Parent and
SpinCo have entered into a Separation and Distribution Agreement, dated as of
September 28, 2018 (the “Separation and Distribution Agreement”);

 

WHEREAS, in order to facilitate and provide for an orderly transition in
connection with the Separation and the Distribution, the Parties desire to enter
into this Agreement to set forth the terms and conditions pursuant to which each
of the Parties shall provide Services to the other Party for a transitional
period; and

 

WHEREAS, the Parties acknowledge that this Agreement, the Separation and
Distribution Agreement, and the other Ancillary Agreements represent the
integrated agreement of Parent and SpinCo relating to the Separation and the
Distribution, are being entered together, and would not have been entered
independently.

 

NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, and for other good and valuable
consideration, the

 

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receipt and sufficiency of which are hereby acknowledged, the Parties, intending
to be legally bound, hereby agree as follows:

 

ARTICLE I
DEFINITIONS

 

Section 1.01.                                      Definitions.  For purposes of
this Agreement (including the Recitals hereof), the following terms have the
following meanings, and capitalized terms used but not otherwise defined herein
shall have the meaning ascribed to them in the Separation and Distribution
Agreement:

 

“Action” means any demand, action, claim, dispute, suit, countersuit,
arbitration, inquiry, subpoena, proceeding or investigation of any nature
(whether criminal, civil, legislative, administrative, regulatory, prosecutorial
or otherwise) by or before any federal, state, local, foreign or international
Governmental Authority or any arbitration or mediation tribunal.

 

“Additional Services” has the meaning set forth in Section 2.01(b).

 

“Affiliate” has the meaning set forth in the Separation and Distribution
Agreement.

 

“Agreement” has the meaning set forth in the Preamble.

 

“Ancillary Agreements” has the meaning set forth in the Separation and
Distribution Agreement.

 

“Charge” and “Charges” have the meaning set forth in Section 2.03.

 

“Confidential Information” means all Information that is either confidential or
proprietary.

 

“Contract Manager” has the meaning set forth in Section 2.08.

 

“Dispute” has the meaning set forth in Section 7.16(a).

 

“Distribution” has the meaning set forth in the Recitals.

 

“Distribution Date” means the date of the consummation of the Distribution,
which shall be determined by the Parent Board in its sole and absolute
discretion.

 

“e-mail” has the meaning set forth in Section 7.10.

 

“Effective Time” means 12:01 a.m., New York City time, on the Distribution Date.

 

“Force Majeure” means, with respect to a Party, an event beyond the reasonable
control of such Party (or any Person acting on its behalf), which event (a) does
not arise or result from the fault or negligence of such Party (or any Person
acting on its behalf) and (b) by its nature would not reasonably have been
foreseen by such Party (or such Person), or, if it would

 

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reasonably have been foreseen, was unavoidable, and includes acts of God, acts
of civil or military authority, embargoes, epidemics, war, riots, insurrections,
fires, explosions, earthquakes, floods, unusually severe weather conditions,
labor problems or unavailability of parts, or, in the case of computer systems,
any significant and prolonged failure in electrical or air conditioning
equipment.  Notwithstanding the foregoing, (i) the receipt by a Party of an
unsolicited takeover offer or other acquisition proposal, even if unforeseen or
unavoidable, and such Party’s response thereto and (ii) the inability to obtain
sufficient funds needed for the performance of a Party’s obligation hereunder,
shall not be deemed an event of Force Majeure.

 

“Governmental Authority” means any nation or government, any state, municipality
or other political subdivision thereof, and any entity, body, agency,
commission, department, board, bureau, court, tribunal or other instrumentality,
whether federal, state, local, domestic, foreign or multinational, exercising
executive, legislative, judicial, regulatory, administrative or other similar
functions of, or pertaining to, government and any executive official thereof.

 

“Information” means information, whether or not patentable or copyrightable, in
written, oral, electronic or other tangible or intangible forms, stored in any
medium, including studies, reports, records, books, contracts, instruments,
surveys, discoveries, ideas, concepts, know-how, techniques, designs,
specifications, drawings, blueprints, diagrams, models, prototypes, samples,
flow charts, data, computer data, disks, diskettes, tapes, computer programs or
other software, marketing plans, customer names, communications by or to
attorneys (including attorney-client privileged communications), memos and other
materials prepared by attorneys or under their direction (including attorney
work product), and other technical, financial, employee or business information
or data.

 

“Interest Payment” has the meaning set forth in Section 3.02.

 

“Law” means any national, supranational, federal, state, provincial, local or
similar law (including common law), statute, code, order, ordinance, rule,
regulation, treaty (including any income tax treaty), license, permit,
authorization, approval, consent, decree, injunction, binding judicial or
administrative interpretation or other requirement, in each case, enacted,
promulgated, issued or entered by a Governmental Authority.

 

“Level of Service” has the meaning set forth in Section 2.02(c).

 

“Liabilities” means all debts, guarantees, assurances, commitments, liabilities,
responsibilities, Losses, remediation, deficiencies, damages, fines, penalties,
settlements, sanctions, costs, expenses, interest and obligations of any nature
or kind, whether accrued or fixed, absolute or contingent, matured or unmatured,
accrued or not accrued, asserted or unasserted, liquidated or unliquidated,
foreseen or unforeseen, known or unknown, reserved or unreserved, or determined
or determinable, including those arising under any Law, claim (including any
Third-Party Claim), demand, Action, or order, writ, judgment, injunction,
decree, stipulation, determination or award entered by or with any Governmental
Authority or arbitration tribunal, and those arising under any contract,
agreement, obligation, indenture, instrument, lease, promise, arrangement,
release, warranty, commitment or undertaking, or any fines,

 

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damages or equitable relief that is imposed, in each case, including all costs
and expenses relating thereto.

 

“Losses” means actual losses (including any diminution in value), costs,
damages, penalties and expenses (including legal and accounting fees and
expenses and costs of investigation and litigation), whether or not involving a
Third-Party Claim.

 

“Parent” has the meaning set forth in the Preamble.

 

“Parent Board” has the meaning set forth in the Recitals.

 

“Parent Business” has the meaning set forth in the Separation and Distribution
Agreement.

 

“Parent Shares” means the shares of common stock, par value $0.01 per share, of
Parent.

 

“Party” or “Parties” means the parties to this Agreement.

 

“Person” means an individual, a general or limited partnership, a corporation, a
trust, a joint venture, an unincorporated organization, a limited liability
entity, any other entity and any Governmental Authority.

 

“Provider” means, with respect to any Service, the Party providing such Service.

 

“Provider Indemnitees” has the meaning set forth in Section 6.03.

 

“Recipient” means, with respect to any Service, the Party receiving such
Service.

 

“Recipient Indemnitees” has the meaning set forth in Section 6.04.

 

“Record Date” means the close of business on the date to be determined by the
Parent Board as the record date for determining holders of Parent Shares
entitled to receive SpinCo Shares pursuant to the Distribution.

 

“Representatives” means, with respect to any Person, any of such Person’s
directors, officers, employees, agents, consultants, advisors, accountants,
attorneys or other representatives.

 

“Separation” has the meaning set forth in the Recitals.

 

“Separation and Distribution Agreement” has the meaning set forth in the
Recitals.

 

“Service Baseline Period” has the meaning set forth in Section 2.02(c).

 

“Service Period” means, with respect to any Service, the period commencing on
the Distribution Date and ending on the earliest to occur of (a) the date that a
Party terminates the provision of such Service pursuant to Section 4.02 and
(b) the date, if any, specified for

 

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termination of such Service on the Schedules hereto or, if no such date is
specified, December 31, 2019.

 

“Services” has the meaning set forth in Section 2.01(a).

 

“SpinCo” has the meaning set forth in the Preamble.

 

“SpinCo Business” has the meaning set forth in the Separation and Distribution
Agreement.

 

“SpinCo Change of Control” means the first of the following events, if any, to
occur following the Distribution Date:

 

(i)                                     the acquisition by any person, entity or
“group” (as defined in Section 13(d) of the Exchange Act) of beneficial
ownership of fifty percent (50%) or more of the combined voting power of
SpinCo’s then-outstanding voting securities, other than any such acquisition by
SpinCo, any of its Subsidiaries, any employee benefit plan of SpinCo or any of
its Subsidiaries, or any Affiliates of any of the foregoing;

 

(ii)                                  the merger, consolidation or other similar
transaction involving SpinCo, as a result of which persons who were stockholders
of SpinCo immediately prior to such merger, consolidation, or other similar
transaction do not, immediately thereafter, own, directly or indirectly, more
than fifty percent (50%) of the combined voting power entitled to vote generally
in the election of directors of the merged or consolidated company;

 

(iii)                               within any twenty-four (24)-month period,
the persons who were directors of SpinCo at the beginning of such period shall
cease to constitute at least a majority of the directors of SpinCo; or

 

(iv)                              the sale, transfer or other disposition of all
or substantially all of the assets of SpinCo and its Subsidiaries.

 

“SpinCo Shares” means the shares of common stock, par value $0.01 per share, of
SpinCo.

 

“Subsidiary” means, with respect to any Person, any corporation, limited
liability company, joint venture or partnership of which such Person
(a) beneficially owns, either directly or indirectly, fifty percent (50%) or
more of (i) the total combined voting power of all classes of voting securities,
(ii) the total combined equity interests or (iii) the capital or profit
interests, in the case of a partnership, or (b) otherwise has the power to vote,
either directly or indirectly, sufficient securities to elect a majority of the
board of directors or similar governing body.

 

“Tax” means any and all forms of taxation, whenever created or imposed by a
Taxing Authority, and, without limiting the generality of the foregoing, shall
include net income, alternative or add-on minimum, estimated, gross income,
sales, use, ad valorem, gross receipts, value-added, franchise, profits,
license, transfer, recording, withholding, payroll, employment,

 

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excise, severance, stamp, occupation, premium, property, windfall profit, custom
duty or other tax, governmental fee or other like assessment or charge of any
kind whatsoever, together with any related interest, penalties or other
additions to tax, or additional amounts imposed by any such Taxing Authority.

 

“Taxing Authority” means a national, foreign, municipal, state, federal or other
Governmental Authority responsible for the administration of any Tax.

 

“Termination Charges” shall mean, with respect to the termination of any Service
pursuant to Section 4.02(a)(i), the sum of (a) any and all costs, fees and
expenses (other than any severance or retention costs) payable by the Provider
of such Service to a Third Party principally because of the early termination of
such Service; provided, however, that the Provider shall use commercially
reasonable efforts to minimize any costs, fees or expenses payable to any Third
Party in connection with such early termination of such Service and credit any
such reductions against the Termination Charges payable by Recipient; and
(b) any additional severance and retention costs, if any, because of the early
termination of such Service that the Provider of such terminated Service incurs
to employees who had been retained primarily to provide such terminated Service
(it being agreed that the costs set forth in this clause (b) shall only be the
amount, if any, in excess of the severance and retention costs that such
Provider would have paid to such employees if the Service had been provided for
the full period during which such Service would have been provided hereunder but
for such early termination).

 

“Third Party” means any Person other than the Parties or any of their respective
Affiliates.

 

“Third-Party Claim” means any Action commenced by any Third Party against any
Party or any of its Affiliates.

 

ARTICLE II
SERVICES

 

Section 2.01.                                      Services.

 

(a)                                 Commencing as of the Effective Time,
Provider agrees to provide, or to cause one (1) or more of its Subsidiaries to
provide, to Recipient, or any Subsidiary of Recipient, the applicable services
(the “Services”) set forth on the Schedules hereto.

 

(b)                                 After the date of this Agreement, if
(i) SpinCo identifies a service that Parent provided to SpinCo prior to the
Distribution Date that SpinCo reasonably needs in order for the SpinCo Business
to continue to operate in substantially the same manner in which the SpinCo
Business operated prior to the Distribution Date, and such service was not
included on the Schedules hereto (other than because the Parties agreed such
service shall not be provided), or (ii) Parent identifies a service that SpinCo
provided to Parent prior to the Distribution Date that Parent reasonably needs
in order for the Parent Business to continue to operate in substantially the
same manner in which the Parent Business operated prior to the Distribution
Date, and such service was not included on the Schedules hereto (other than
because the Parties agreed such service shall not be provided) then, in each
case, if such Party provides written notice to the other Party within sixty (60)
days after the Distribution Date requesting such

 

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additional services, then the Party receiving such notice shall use its
commercially reasonable efforts to provide such requested additional services
(such requested additional services, the “Additional Services”); provided,
however, that neither Party shall be obligated to provide any Additional Service
if it does not, in its commercially reasonable judgment, have adequate resources
to provide such Additional Service or if the provision of such Additional
Service would significantly disrupt the operation of such Party’s or its
Subsidiaries’ businesses; and provided, further, that a Party shall not be
required to provide any Additional Services if the Parties, acting reasonably
and in good faith, are unable to reach agreement on the terms thereof (including
with respect to Service Charges therefor).  In connection with any request for
Additional Services in accordance with this Section 2.01(b), the Parties shall
negotiate in good faith the terms of a supplement to the applicable Schedule,
which terms shall be consistent with the terms of, and the pricing methodology
used for, similar Services provided under this Agreement.  Upon the mutual
written agreement of the Parties, the supplement to the applicable Schedule
shall describe in reasonable detail the nature, scope, Service Period(s),
termination provisions and other terms applicable to such Additional Services in
a manner similar to that in which the Services are described in the existing
Schedules.  Each supplement to the applicable Schedule, as agreed to in writing
by the Parties, shall be deemed part of this Agreement as of the date of such
agreement and the Additional Services set forth therein shall be deemed
“Services” provided under this Agreement, in each case subject to the terms and
conditions of this Agreement.

 

Section 2.02.                                      Performance of Services.

 

(a)                                 Subject to Section 2.05, Provider shall
perform, or shall cause one or more of its Subsidiaries to perform (directly,
through one (1) or more of its Subsidiaries, or through a Third Party service
provider in accordance herewith), all Services to be provided in a manner that
is substantially similar in all material respects to the analogous services
provided by or on behalf of Provider or any of its Subsidiaries to its
applicable functional group or Subsidiary prior to the Effective Time and that
in any event, conforms in all material respects with the terms of the Schedules
hereto.

 

(b)                                 Nothing in this Agreement shall require
Provider to perform or cause to be performed any Service to the extent that the
manner of such performance would constitute a violation of any applicable Law or
any existing contract or agreement with a Third Party.  If Provider is or
becomes aware of any such violation is reasonably likely, Provider shall use
commercially reasonable efforts to promptly advise Recipient of such potential
violation, and Provider and Recipient will mutually seek an alternative that
addresses such potential violation.  The Parties agree to cooperate in good
faith and use commercially reasonable efforts to obtain any necessary Third
Party consents required under any existing contract or agreement with a Third
Party to allow Provider to perform, or cause to be performed, all Services to be
provided hereunder in accordance with the standards set forth in this
Section 2.02.  Recipient shall reimburse Provider for all reasonable
out-of-pocket costs and expenses (if any) incurred by Provider or any of its
Subsidiaries in connection with obtaining any such Third Party consent that is
required to allow Provider to perform or cause to be performed such Services. 
If, with respect to a Service, the Parties, despite the use of such commercially
reasonable efforts, are unable to obtain a required Third Party consent, or the
performance of such Service by Provider

 

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would constitute a violation of any applicable Law, Provider shall have no
obligation whatsoever to perform or cause to be performed such Service.

 

(c)                                  Unless otherwise provided with respect to a
specific Service on the Schedules hereto, Provider shall not be obligated to
perform or cause to be performed any Service in a manner that is more burdensome
(with respect to service quality or quantity) than analogous services provided
by Provider or its applicable functional group or Subsidiary (collectively
referred to as the “Level of Service”) during the one (1)-year period ending on
the last day of Provider’s last fiscal quarter completed on or prior to the date
of the Distribution (the “Service Baseline Period”).  If Recipient requests that
Provider perform or cause to be performed any Service that exceeds the Level of
Service during the Service Baseline Period, then the Parties shall cooperate and
negotiate in good faith to determine whether Provider will be required to
provide such requested increased Level of Service.  If the Parties determine
that Provider shall provide the requested increased Level of Service, then such
increased Level of Service shall be documented in a written agreement signed by
the Parties.  Each amended section of the Schedules hereto, as agreed in writing
by the Parties, shall be deemed part of this Agreement as of the date of such
written agreement, and the Level of Service increases set forth in such written
agreement shall be deemed a part of the “Services” provided under this
Agreement, in each case subject to the terms and conditions of this Agreement.

 

(d)                                 (i) Neither Provider nor any of its
Subsidiaries shall be required to perform or cause to be performed any of the
Services for the benefit of any Third Party or any other Person other than
Recipient and its Subsidiaries, and (ii) EXCEPT AS EXPRESSLY PROVIDED IN THIS
SECTION 2.02 OR SECTION 6.04, RECIPIENT ACKNOWLEDGES AND AGREES THAT ALL
SERVICES ARE PROVIDED ON AN “AS-IS” BASIS, THAT RECIPIENT ASSUMES ALL RISK AND
LIABILITY ARISING FROM OR RELATING TO ITS USE OF AND RELIANCE UPON THE SERVICES,
AND THAT PROVIDER MAKES NO OTHER REPRESENTATIONS OR GRANTS ANY WARRANTIES,
EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR
OTHERWISE, WITH RESPECT TO THE SERVICES.  PROVIDER SPECIFICALLY DISCLAIMS ANY
OTHER WARRANTIES, WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, INCLUDING ANY
WARRANTY OF QUALITY, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR USE OR PURPOSE
OR THE NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

 

(e)                                  Each Party shall be responsible for its own
compliance with any and all Laws applicable to its performance under this
Agreement.  No Party shall knowingly take any action in violation of any such
applicable Law that results in Liability being imposed on the other Party.

 

Section 2.03.                                          Charges for Services. 
Unless otherwise provided with respect to a specific Service on the Schedules
hereto, Recipient shall pay Provider a fee (either one (1)-time or recurring)
for such Services (or category of Services, as applicable) (each fee, a “Charge”
and, collectively, “Charges”), which Charges shall be set forth on the
applicable Schedules hereto, or if not so set forth, then, unless otherwise
provided with respect to a specific Service on the Schedule hereto, based upon
the cost of providing such Services as shall be

 

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agreed by the Parties from time to time.  During the term of this Agreement, the
amount of a Charge for any Service may be modified to the extent of (a) any
adjustments mutually agreed by the Parties, (b) any adjustments due to a change
in Level of Service requested by Recipient and agreed by Provider, and (c) any
adjustment in the rates or charges imposed by any Third-Party provider that is
providing Services; provided that Provider will notify Recipient in writing of
any such change in rates at least thirty (30) days prior to the effective date
of such rate change.  Together with any invoice for Charges, Provider shall
provide Recipient with reasonable documentation, including any additional
documentation reasonably requested by Recipient to the extent that such
documentation is in Provider’s or its Subsidiaries’ possession or control, to
support the calculation of such Charges.

 

Section 2.04.                                      Reimbursement for
Out-of-Pocket Costs and Expenses.  In addition to any increase to a Charge
contemplated by Section 2.02(c) and Section 2.03, Recipient shall reimburse
Provider for reasonable out-of-pocket costs and expenses incurred by Provider or
any of its Subsidiaries in connection with providing the Services (including
reasonable travel-related expenses) to the extent that such costs and expenses
are not reflected in the Charges for such Services; provided, however, that any
such cost or expense in excess of one thousand dollars ($1,000) individually, or
ten thousand dollars ($10,000) in the aggregate, that is not consistent with
historical practice between the Parties for any individual Service (including
business travel and related expenses) shall require advance written approval of
Recipient; provided, further, that if Recipient does not provide such advance
written approval and the incurrence of such cost or expense is reasonably
necessary for Provider to provide such Service in accordance with the standards
set forth in this Agreement, Provider shall not be required to perform such
Service.  Any authorized travel-related expenses incurred in performing the
Services shall be charged to Recipient in accordance with Provider’s
then-applicable business travel policies.

 

Section 2.05.                                      Changes in the Performance of
Services.

 

(a)                                 Subject to the performance standards for
Services set forth in Section 2.02(a), 2.02(b) and 2.02(c), Provider may make
changes from time to time in the manner of performing the Services if Provider
is making similar changes in performing analogous services for itself and if
Provider furnishes to Recipient reasonable prior written notice (in content and
timing) of such changes; provided, that if such change shall materially
adversely affect the timeliness or quality of, or the Charges for, the
applicable Service, the Parties shall cooperate in good faith to agree on
modifications to such Services as are commercially reasonable in consideration
of the circumstances.

 

(b)                                 Subject to the limitations on Additional
Services set forth in Section 2.02(b), Recipient may request a change to a
Service by submitting a request in writing to Provider describing the proposed
change in reasonable detail.  Provider shall respond to the request as soon as
reasonably practicable, and the Parties shall use commercially reasonable
efforts to agree to such request, unless the change requested would adversely
impact the cost, liability, or risk associated with providing or receiving the
applicable Service, or cause any other disruption or adverse impact on the
business or operations of Recipient or its Affiliates.  Each agreed upon change
shall be documented by an amendment in writing to the applicable Schedule.

 

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Section 2.06.                                      Transitional Nature of
Services.  The Parties acknowledge the transitional nature of the Services and
agree to cooperate in good faith and to use commercially reasonable efforts to
avoid a disruption in the transition of the Services from Provider to Recipient
(or its designee).  Recipient agrees to use commercially reasonable efforts to
reduce or eliminate its and its Affiliates’ dependency on each Service to the
extent and as soon as is reasonably practicable.

 

Section 2.07.                                      Subcontracting.  Provider may
hire or engage one (1) or more Third Parties to perform any or all of its
obligations under this Agreement; provided, however, that (a) Provider shall use
the same degree of care (but at least reasonable care) in selecting each such
Third Party as it would if such Third Party was being retained to provide
similar services to Provider and (b) Provider shall in all cases remain
responsible (as primary obligor) for all of its obligations under this Agreement
with respect to the scope of the Services, the performance standard for Services
set forth in Section 2.02(a), 2.02(b) and 2.02(c) and the content of the
Services provided to Recipient.  Provider shall be liable for any breach of its
obligations under this Agreement by any Third-Party service provider engaged by
Provider.  Subject to the confidentiality provisions set forth in Article V,
Provider shall, and shall cause its Affiliates to, provide, upon fifteen (15)
business days’ prior written notice, any Information within Provider’s or its
Affiliates’ control that Recipient reasonably requests in connection with any
Services being provided to Recipient by a Third Party, including any applicable
invoices, agreements documenting the arrangements between such Third Party and
Provider and other supporting documentation; provided, further, that Recipient
may make no more than one (1) such request per Third Party during any calendar
quarter.

 

Section 2.08.                                      Contract Manager.  Each Party
shall appoint an individual to act as its primary point of operational contact
for the administration and operation of this Agreement (each, a “Contract
Manager”) who shall have overall responsibility for coordinating all activities
undertaken by such Party hereunder, for acting as a day-to-day contact with the
other Party, and for making available to the other Party the data, facilities,
resources and other support services required for the performance of the
services in accordance with the terms of this Agreement; provided that for each
Service, the Contract Manager shall be permitted to delegate the foregoing
responsibilities for such Service to an individual identified on the Schedules,
and such representative shall be deemed to be the Contract Manager with respect
to such Service.  The initial Contract Managers for the Parties are set forth on
the applicable Transition Services Schedules.  The Parties may change their
respective Contract Managers from time to time upon notice to the other Party in
accordance herewith.

 

ARTICLE III
BILLING; TAXES

 

Section 3.01.                                      Procedure.  Recipient shall
pay, or cause to be paid to, Provider the fees for the Services as set forth on
the Schedules, and, without duplication, all other costs incurred by Provider as
set forth in this Agreement.  Amounts payable pursuant to this Agreement shall
be paid by wire transfer or Automated Clearing House payment (or such other
method of payment as may be agreed between the Parties from time to time) to
Provider (as directed by Provider), which amounts shall be due (a) in the case
of recurring fees, on a monthly basis on or prior to the first (1st) day of the
calendar month for which the applicable

 

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Service is to be provided, and (b) in the case of all other amounts, within
thirty (30) days of Recipient’s receipt of each invoice for Charges, including
reasonable documentation pursuant to Section 2.03.  All amounts due and payable
hereunder shall be paid in U.S. dollars.  In the event of any billing dispute,
Recipient shall promptly pay any undisputed amount.  For ease of administration,
Parent may pay certain of SpinCo’s costs hereunder from time to time and shall
invoice SpinCo for such costs.  SpinCo shall pay, or cause to be paid, Parent in
accordance with this Section 3.01.

 

Section 3.02.                                      Late Payments.  Charges not
paid when due (including any undisputed amounts) pursuant to this Agreement (and
any amounts billed or otherwise invoiced or demanded and properly payable that
are not paid within fifteen (15) days of the receipt of such bill, invoice or
other demand) shall accrue interest at a rate per annum equal to the Prime Rate
plus two percent (2%) (the “Interest Payment”).

 

Section 3.03.                                      Taxes.  Without limiting any
provisions of this Agreement, Recipient shall bear any and all Taxes and other
similar charges (and any related interest and penalties) imposed on, or payable
with respect to, any fees or charges, including any Charges, payable by it
pursuant to this Agreement, including all sales, use, value-added, and similar
Taxes, but excluding any Taxes on Provider’s income.  Notwithstanding anything
to the contrary in the previous sentence or elsewhere in this Agreement,
Recipient shall be entitled to withhold from any payments to Provider any such
Taxes that Recipient is required by applicable Law to withhold and shall pay
such Taxes to the applicable Taxing Authority.

 

Section 3.04.                                      No Set-Off.  Except as
mutually agreed in writing by the Parties, no Party nor any of its Affiliates
shall have any right of set-off or other similar rights with respect to (a) any
amounts received pursuant to this Agreement or (b) any other amounts claimed to
be owed to the other Party or any of its Subsidiaries arising out of this
Agreement.

 

ARTICLE IV
TERM AND TERMINATION

 

Section 4.01.                                      Term.  This Agreement shall
commence at the Effective Time and shall terminate upon the earliest to occur of
(a) the close of business on the last day of the last Service Period with
respect to any Service either Party is obligated to provide to the other Party
in accordance with the terms of this Agreement and the Schedules hereto and
(b) the mutual written agreement of the Parties to terminate this Agreement in
its entirety.  Unless otherwise terminated pursuant to Section 4.02, this
Agreement shall terminate with respect to each Service as of the close of
business on the last day of the Service Period for such Service.  The Parties
may, by written consent executed at least ten (10) days prior to the last day of
the Service Period for any individual Service, extend the Service Period for
such Service on a month-to-month basis for a period not to exceed the two
(2)-year anniversary of the Distribution Date.  To the extent that Provider’s
ability to provide a Service is dependent on the continuation of a specified
Service, Provider’s obligation to provide such dependent Service shall terminate
automatically with the termination of such supporting Service.

 

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Section 4.02.                                      Early Termination.

 

(a)                                 Without prejudice to Recipient’s rights with
respect to Force Majeure, Recipient may from time to time terminate this
Agreement with respect to the entirety of any Service (but not any portion
thereof) (i) for any reason or no reason, upon the giving of at least sixty (60)
days’ prior written notice to Provider; provided, however, that such termination
(x) may only be effective as of the last day of a calendar month and (y) shall
be subject to the obligation to pay any applicable Termination Charges pursuant
to Section 4.04, or (ii) if Provider has failed to perform any of its material
obligations under this Agreement with respect to such Service, and such failure
shall continue to be uncured by Provider for a period of at least thirty (30)
days after receipt by Provider of written notice of such failure from Recipient;
provided, however, that (i) such termination may only be effective as of the
last day of a month and (ii) Recipient shall not be entitled to terminate this
Agreement with respect to the applicable Service if, as of the end of such
period, there remains a good-faith Dispute between the Parties (undertaken in
accordance with the terms of Section 7.16) as to whether Provider has cured the
applicable breach.

 

(b)                                 Provider may terminate this Agreement with
respect to the entirety of any Service (but not any portion thereof) at any time
upon prior written notice to Recipient, if Recipient has failed to perform any
of its material obligations under this Agreement with respect to such Service,
including making payment of Charges for such Service when due, and such failure
shall continue to be uncured by Recipient for a period of at least thirty (30)
days after receipt by Recipient of a written notice of such failure from
Provider; provided, however, that (x) such termination may only be effective as
of the last day of a calendar month and (y) Provider shall not be entitled to
terminate this Agreement with respect to the applicable Service if, as of the
end of such period, there remains a good-faith Dispute between the Parties
(undertaken in accordance with the terms of Section 7.16) as to whether
Recipient has cured the applicable breach.

 

(c)                                  Parent may terminate this Agreement with
respect to all Services if there is a SpinCo Change of Control.

 

(d)                                 The Schedules hereto shall be updated to
reflect any terminated Service.

 

Section 4.03.                                      Interdependencies.  The
Parties acknowledge and agree that (a) there may be interdependencies among the
Services being provided under this Agreement; (b) upon the request of either
Party, the Parties shall cooperate and act in good faith to determine whether
(i) any such interdependencies exist with respect to the particular Service that
Recipient is seeking to terminate pursuant to Section 4.02, and (ii) in the case
of such termination, Provider’s ability to provide a particular Service in
accordance with this Agreement would be materially and adversely affected by
such termination of another Service; and (c) in the event that the Parties have
determined that such interdependencies exist and such termination would
materially and adversely affect Provider’s ability to provide a particular
Service in accordance with this Agreement, the Parties shall (i) negotiate in
good faith to amend the Schedules hereto with respect to such impacted Service
prior to such termination, which amendment shall be consistent with the terms of
comparable Services, and (ii) if after such negotiation, the Parties are unable
to agree on such amendment, Provider’s obligation to provide such Service shall
terminate automatically with such termination.

 

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Section 4.04.                                      Effect of Termination.  Upon
the termination of any Service pursuant to this Agreement, Provider shall have
no further obligation to provide the terminated Service, and Recipient shall
have no obligation to pay any future Charges relating to such Service; provided,
however, that Recipient shall remain obligated to Provider for (a) the Charges
owed and payable in respect of Services provided prior to the effective date of
termination for such Service and (b) any applicable Termination Charges (which,
in the case of each of clauses (a) and (b), shall be payable only in the event
that Recipient terminates any Service pursuant to Section 4.02(a)(i)).  In
connection with the termination of any Service, the provisions of this Agreement
not relating solely to such terminated Service shall survive any such
termination, and in connection with a termination of this Agreement, Article I,
this Article IV, Article VI and Article VII, all confidentiality obligations
under this Agreement and Liability for all due and unpaid Charges and
Termination Charges shall continue to survive indefinitely.

 

Section 4.05.                                      Information Transmission. 
Provider, on behalf of itself and its Subsidiaries, shall use commercially
reasonable efforts to provide or make available, or cause to be provided or made
available, to Recipient, in accordance with Section 6.1 of the Separation and
Distribution Agreement, any Information received or computed by Provider for the
benefit of Recipient concerning the relevant Service during the Service Period;
provided, however, that, except as otherwise agreed in writing by the Parties,
(a) Provider shall not have any obligation to provide, or cause to be
provided, Information in any nonstandard format, (b) Provider and its
Subsidiaries shall be reimbursed for their reasonable costs in accordance with
Section 6.3 of the Separation and Distribution Agreement for creating,
gathering, copying, transporting and otherwise providing such Information and
(c) Provider shall use commercially reasonable efforts to maintain any such
Information in accordance with Section 6.4 of the Separation and Distribution
Agreement.

 

ARTICLE V
CONFIDENTIALITY; PROTECTIVE ARRANGEMENTS

 

Section 5.01.                                      Parent and SpinCo
Obligations.  Subject to Section 5.04, until the three (3)-year anniversary of
the date of the termination of this Agreement in its entirety, each of Parent
and SpinCo, on behalf of itself and each of its Subsidiaries, agrees to hold,
and to cause its respective Representatives to hold, in strict confidence, with
at least the same degree of care that applies to Parent’s Confidential
Information pursuant to policies in effect as of the Effective Time, all
Confidential Information concerning the other Party or its Subsidiaries or their
respective businesses that is either in its possession (including Confidential
Information in its possession prior to the date hereof) or furnished by such
other Party or such other Party’s Subsidiaries or their respective
Representatives at any time pursuant to this Agreement, and shall not use any
such Confidential Information other than for such purposes as may be expressly
permitted hereunder, except, in each case, to the extent that such Confidential
Information (a) is in the public domain or is generally available to the public,
other than as a result of a disclosure by such Party or any of its Subsidiaries
or any of their respective Representatives in violation of this Agreement;
(b) is lawfully acquired from other sources by such Party or any of its
Subsidiaries, which sources are not themselves known by such Party or any of its
Subsidiaries to be bound by a confidentiality obligation or other contractual,
legal or fiduciary obligation of confidentiality with respect to such
Confidential Information; or (c) is independently developed or generated without
reference to or use of the Confidential

 

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Information of the other Party or any of its Subsidiaries.  If any Confidential
Information of a Party or any of its Subsidiaries is disclosed to the other
Party or any of its Subsidiaries in connection with providing the Services, then
such disclosed Confidential Information shall be used only as required to
perform such Services.

 

Section 5.02.                                      No Release; Return or
Destruction.  Each Party agrees (a) not to release or disclose, or permit to be
released or disclosed, any Confidential Information of the other Party pursuant
to Section 5.01 to any other Person, except its Representatives who need to know
such Confidential Information in their capacities as such (who shall be advised
of their obligations hereunder with respect to such Confidential Information)
and except in compliance with Section 5.04, and (b) to use commercially
reasonable efforts to maintain such Confidential Information in accordance with
Section 6.4 of the Separation and Distribution Agreement.  Without limiting the
foregoing, when any such Confidential Information is no longer needed for the
purposes contemplated by the Separation and Distribution Agreement, this
Agreement or any other Ancillary Agreements, each Party will promptly after
request of the other Party either return to the other Party all such
Confidential Information in a tangible form (including all copies thereof and
all notes, extracts or summaries based thereon) or notify the other Party in
writing that it has destroyed such information (and such copies thereof and such
notes, extracts or summaries based thereon); provided that the Parties may
retain electronic back-up versions of such Confidential Information maintained
on routine computer system back-up tapes, disks or other back-up storage
devices; and provided, further, that any such retained back-up information shall
remain subject to the confidentiality provisions of this Agreement.

 

Section 5.03.                                      Privacy and Data Protection
Laws.  Each Party shall comply with all applicable state, federal and foreign
privacy and data protection Laws that are or that may in the future be
applicable to the provision of the Services under this Agreement.

 

Section 5.04.                                      Protective Arrangements.  In
the event that a Party or any of its Subsidiaries either determines on the
advice of its counsel that it is required to disclose any information pursuant
to applicable Law or receives any request or demand under lawful process or from
any Governmental Authority to disclose or provide information of the other Party
(or any of its Subsidiaries) that is subject to the confidentiality provisions
hereof, such Party shall notify the other Party (to the extent legally
permitted) as promptly as practicable under the circumstances prior to
disclosing or providing such information and shall cooperate, at the expense of
the other Party, in seeking any appropriate protective order requested by the
other Party.  In the event that such other Party fails to receive such
appropriate protective order in a timely manner and the Party receiving the
request or demand reasonably determines that its failure to disclose or provide
such information shall actually prejudice the Party receiving the request or
demand, then the Party that received such request or demand may thereafter
disclose or provide information to the extent required by such Law (as so
advised by its counsel) or by lawful process or such Governmental Authority, and
the disclosing Party shall promptly provide the other Party with a copy of the
information so disclosed, in the same form and format so disclosed, together
with a list of all Persons to whom such information was disclosed, in each case
to the extent legally permitted.

 

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ARTICLE VI
LIMITED LIABILITY AND INDEMNIFICATION

 

Section 6.01.                                      Limitations on Liability.

 

(a)                                 SUBJECT TO SECTION 6.02, THE LIABILITIES OF
PROVIDER AND ITS SUBSIDIARIES AND THEIR RESPECTIVE REPRESENTATIVES,
COLLECTIVELY, UNDER THIS AGREEMENT FOR ANY ACT OR FAILURE TO ACT IN CONNECTION
HEREWITH (INCLUDING THE PERFORMANCE OR BREACH OF THIS AGREEMENT), OR FROM THE
SALE, DELIVERY, PROVISION OR USE OF ANY SERVICES PROVIDED UNDER OR CONTEMPLATED
BY THIS AGREEMENT, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT
LIABILITY) OR OTHERWISE, SHALL NOT EXCEED 25% OF THE AGGREGATE CHARGES PAID AND
PAYABLE UNDER THIS AGREEMENT TO SUCH PROVIDER IN RESPECT OF SUCH SERVICE;
PROVIDED THAT, NOTWITHSTANDING THE FOREGOING, THE TOTAL LIABILITIES OF PROVIDER
AND ITS SUBSIDIARIES AND THEIR RESPECTIVE REPRESENTATIVES, COLLECTIVELY, UNDER
THIS AGREEMENT FOR ANY ACT OR FAILURE TO ACT IN CONNECTION HEREWITH (INCLUDING
THE PERFORMANCE OR BREACH OF THIS AGREEMENT), OR FROM THE SALE, DELIVERY,
PROVISION OR USE OF ANY SERVICES PROVIDED UNDER OR CONTEMPLATED BY THIS
AGREEMENT, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY)
OR OTHERWISE, SHALL NOT EXCEED THE AGGREGATE AMOUNT OF FEES (EXCLUDING ANY FEES
CHARGED BY PROVIDER FOR REIMBURSEMENT OF THIRD PARTY FEES) PAID OR PAYABLE BY
THE RECIPIENT OVER THE PREVIOUS TWELVE MONTHS OR SINCE THE DATE OF THIS
AGREEMENT (IF PRIOR TO THE FIRST ANNIVERSARY OF THIS AGREEMENT) WITH RESPECT TO
THE SERVICES GIVING RISE TO SUCH LIABILITY.

 

(b)                                 IN NO EVENT SHALL EITHER PARTY, ITS
SUBSIDIARIES OR THEIR RESPECTIVE REPRESENTATIVES BE LIABLE TO THE OTHER PARTY
FOR ANY INDIRECT, INCIDENTAL, PUNITIVE, EXEMPLARY, REMOTE, SPECULATIVE OR
SIMILAR DAMAGES IN EXCESS OF COMPENSATORY DAMAGES OF THE OTHER PARTY IN
CONNECTION WITH THE PERFORMANCE OF THIS AGREEMENT (OTHER THAN ANY SUCH LIABILITY
WITH RESPECT TO A THIRD-PARTY CLAIM), AND EACH PARTY HEREBY WAIVES ON BEHALF OF
ITSELF, ITS SUBSIDIARIES AND ITS REPRESENTATIVES ANY CLAIM FOR SUCH DAMAGES,
WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE.

 

(c)                                  The limitations in Section 6.01(a) and
Section 6.01(b) shall not apply in respect of any Liability arising out of or in
connection with (i) either Party’s Liability for breaches of confidentiality
under Article V, (ii) the Parties’ respective obligations under Section 6.03 or
6.04 or (iii) the willful misconduct or fraud of or by the Party to be charged.

 

Section 6.02.                                      Obligation to Re-Perform;
Liabilities.  In the event of any breach of this Agreement by Provider with
respect to the provision of any Services (with respect to which Provider can
reasonably be expected to re-perform in a commercially reasonable manner),
Provider shall, at the request of Recipient, promptly correct in all material
respects such

 

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error, defect or breach or re-perform in all material respects such Services at
the sole cost and expense of Provider.  The remedy set forth in this
Section 6.02 shall be the sole and exclusive remedy of Recipient for any such
breach of this Agreement; provided, however, that the foregoing shall not
prohibit Recipient from exercising its right to terminate this Agreement in
accordance with the provisions of Section 4.02(a) or to seek specific
performance in accordance with Section 7.17.  Any request for re-performance in
accordance with this Section 6.02 by Recipient must be in writing and specify in
reasonable detail the particular error, defect or breach, and such request must
be made no more than one month from the later of (a) the date on which such
breach occurred and (b) the date on which such breach was reasonably discovered
by Recipient.

 

Section 6.03.                                      Third-Party Claims.  In
addition to (but not in duplication of) its other indemnification obligations
(if any) under the Separation and Distribution Agreement, this Agreement or any
other Ancillary Agreement, Recipient shall indemnify, defend and hold harmless
Provider, its Subsidiaries and each of their respective Representatives, and
each of the successors and assigns of any of the foregoing (collectively, the
“Provider Indemnitees”), from and against any and all claims of Third Parties
relating to, arising out of or resulting from Recipient’s use or receipt of the
Services provided by Provider hereunder, other than Third-Party Claims arising
out of the gross negligence, willful misconduct or fraud of any Provider
Indemnitee.

 

Section 6.04.                                      Provider Indemnity.  In
addition to (but not in duplication of) its other indemnification obligations
(if any) under the Separation and Distribution Agreement, this Agreement or any
other Ancillary Agreement, Provider shall indemnify, defend and hold harmless
Recipient, its Subsidiaries and each of their respective Representatives, and
each of the successors and assigns of any of the foregoing (collectively, the
“Recipient Indemnitees”), from and against any and all Liabilities relating to,
arising out of or resulting from the sale, delivery or provision of any Services
provided by Provider hereunder, but only to the extent that such Liability
relates to, arises out of or results from Provider’s gross negligence, willful
misconduct or fraud.

 

Section 6.05.                                      Indemnification Procedures. 
The procedures for indemnification set forth in Sections 4.5, 4.6 and 4.7 of the
Separation and Distribution Agreement shall govern claims for indemnification
under this Agreement.

 

ARTICLE VII
MISCELLANEOUS

 

Section 7.01.                                      Mutual Cooperation.  Each
Party shall, and shall cause its Subsidiaries to, cooperate with the other Party
and its Subsidiaries in connection with the performance of the Services
hereunder; provided, however, that such cooperation shall not unreasonably
disrupt the normal operations of such Party or its Subsidiaries; and, provided,
further, that this Section 7.01 shall not require such Party to incur any
out-of-pocket costs or expenses, unless and except as expressly provided in this
Agreement or otherwise agreed in writing by the Parties.

 

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Section 7.02.                                      Further Assurances.  Subject
to the terms of this Agreement, each Party shall take, or cause to be taken, any
and all reasonable actions, including the execution, acknowledgment, filing and
delivery of any and all documents and instruments that any other Party may
reasonably request in order to effect the intent and purpose of this Agreement
and the transactions contemplated hereby.

 

Section 7.03.                                      Audit Assistance.  Each of
the Parties and their respective Subsidiaries are or may be subject to
regulation and audit by a Governmental Authority (including a Taxing Authority),
standards organizations, customers or other parties to contracts with such
Parties or their respective Subsidiaries under applicable Law, standards or
contract provisions.  If a Governmental Authority, standards organization,
customer or other party to a contract with a Party or its Subsidiary exercises
its right to examine or audit such Party’s or its Subsidiary’s books, records,
documents or accounting practices and procedures pursuant to such applicable
Law, standards or contract provisions, and such examination or audit relates to
the Services, then the other Party shall provide, at the sole cost and expense
of the requesting Party, all assistance reasonably requested by the Party that
is subject to the examination or audit in responding to such examination or
audits or requests for Information, to the extent that such assistance or
Information is within the reasonable control of the cooperating Party and is
related to the Services.

 

Section 7.04.                                      Title to Intellectual
Property.  Except as expressly provided for under the terms of this Agreement or
the Separation and Distribution Agreement, Recipient acknowledges that it shall
acquire no right, title or interest (including any license rights or rights of
use) in any intellectual property that is owned or licensed by Provider, by
reason of the provision of the Services hereunder.  Recipient shall not remove
or alter any copyright, trademark, confidentiality or other proprietary notices
that appear on any intellectual property owned or licensed by Provider, and
Recipient shall reproduce any such notices on any and all copies thereof. 
Recipient shall not attempt to decompile, translate, reverse engineer or make
excessive copies of any intellectual property owned or licensed by Provider, and
Recipient shall promptly notify Provider of any such attempt, regardless of
whether by Recipient or any Third Party, of which Recipient becomes aware.

 

Section 7.05.                                      Independent Contractors.  The
Parties each acknowledge and agree that they are separate entities, each of
which has entered into this Agreement for independent business reasons.  The
relationships of the Parties hereunder are those of independent contractors and
nothing contained herein shall be deemed to create a joint venture, partnership
or any other relationship between the Parties.  Employees performing Services
hereunder do so on behalf of, under the direction of, and as employees of,
Provider, and Recipient shall have no right, power or authority to direct such
employees, unless otherwise specified with respect to a particular Service on
the Schedules hereto.

 

Section 7.06.                                      Counterparts; Entire
Agreement; Corporate Power.

 

(a)                                 This Agreement may be executed in one (1) or
more counterparts, all of which shall be considered one (1) and the same
agreement, and shall become effective when one (1) or more counterparts have
been signed by each of the Parties and delivered to the other Party.

 

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(b)                                 This Agreement, the Separation and
Distribution Agreement and the other Ancillary Agreements and the Exhibits,
Schedules and appendices hereto and thereto contain the entire agreement between
the Parties with respect to the subject matter hereof, supersede all previous
agreements, negotiations, discussions, writings, understandings, commitments and
conversations with respect to such subject matter, and there are no agreements
or understandings between the Parties other than those set forth or referred to
herein or therein.  This Agreement, the Separation and Distribution Agreement,
and the other Ancillary Agreements govern the arrangements in connection with
the Separation and the Distribution and would not have been entered
independently.

 

(c)                                  Parent represents on behalf of itself and,
to the extent applicable, each of its Subsidiaries, and SpinCo represents on
behalf of itself and, to the extent applicable, each of its Subsidiaries, as
follows:

 

(i)                                     each such Person has the requisite
corporate or other power and authority and has taken all corporate or other
action necessary in order to execute, deliver and perform this Agreement and to
consummate the transactions contemplated hereby; and

 

(ii)                                  this Agreement has been duly executed and
delivered by it and constitutes a valid and binding agreement of it and is
enforceable in accordance with the terms hereof.

 

(d)                                 Each Party acknowledges and agrees that
delivery of an executed counterpart of a signature page to this Agreement
(whether executed by manual, stamp or mechanical signature) by facsimile or by
e-mail in portable document format (PDF) shall be effective as delivery of such
executed counterpart of this Agreement.  Each Party expressly adopts and
confirms each such facsimile, stamp or mechanical signature (regardless of
whether delivered in person, by mail, by courier, by facsimile or by e-mail in
portable document format (PDF)) made in its respective name as if it were a
manual signature delivered in person, agrees that it will not assert that any
such signature or delivery is not adequate to bind such Party to the same extent
as if it were signed manually and delivered in person and agrees that, at the
reasonable request of the other Party at any time, it will as promptly as
reasonably practicable cause this Agreement to be manually executed (any such
execution to be as of the date of the initial date thereof) and delivered in
person, by mail or by courier.

 

Section 7.07.                                      Governing Law.  This
Agreement (and any claims or disputes arising out of or related hereto or to the
transactions contemplated hereby or to the inducement of any Party to enter
herein, whether for breach of contract, tortious conduct or otherwise and
whether predicated on common law, statute or otherwise) shall be governed by and
construed and interpreted in accordance with the Laws of the State of Delaware,
irrespective of the choice of Laws principles of the State of Delaware,
including all matters of validity, construction, effect, enforceability,
performance and remedies.

 

Section 7.08.                                      Assignability.  This
Agreement shall be binding upon and inure to the benefit of the Parties and
their respective successors and permitted assigns; provided, however, that
neither Party may assign its rights or delegate its obligations under this
Agreement

 

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without the express prior written consent of the other Party.  Notwithstanding
the foregoing, no such consent shall be required for the assignment of a Party’s
rights and obligations under the Separation and Distribution Agreement, this
Agreement and the other Ancillary Agreements in whole (i.e., the assignment of a
Party’s rights and obligations under the Separation and Distribution Agreement,
this Agreement and all of the other Ancillary Agreements all at the same time)
in connection with a merger, consolidation or other business combination of a
Party with or into any other Person or a sale of all or substantially all of the
assets of a Party to another Person, in each case so long as the resulting,
surviving or acquiring Person assumes all of the obligations of the relevant
Party by operation of Law or pursuant to an agreement in form and substance
reasonably satisfactory to the other Party.

 

Section 7.09.                                      Third-Party Beneficiaries. 
Except as provided in Article VI with respect to the Provider Indemnitees and
the Recipient Indemnitees in their respective capacities as such, (a) the
provisions of this Agreement are solely for the benefit of the Parties and are
not intended to confer upon any other Person except the Parties any rights or
remedies hereunder; and (b) there are no other third-party beneficiaries of this
Agreement and this Agreement shall not provide any other Third Party with any
remedy, claim, Liability, reimbursement, claim of action or other right in
excess of those existing without reference to this Agreement.

 

Section 7.10.                                      Notices.  All notices,
requests, claims, demands or other communications under this Agreement shall be
in writing and shall be given or made (and except as provided herein shall be
deemed to have been duly given or made upon receipt) by delivery in person, by
overnight courier service, by certified mail, return receipt requested, by
facsimile, or by electronic mail (“e-mail”), so long as confirmation of receipt
of such e-mail is requested and received, to the respective Parties at the
following addresses (or at such other address for a Party as shall be specified
in a notice given in accordance with this Section 7.10):

 

If to Parent, to:

 

ServiceMaster Global Holdings, Inc.

150 Peabody Place
Memphis, Tennessee  38103
Attention:                    Dion Persson

E-mail:                                   dion.persson@servicemaster.com

 

If to SpinCo, to:

 

frontdoor, inc.
150 Peabody Place
Memphis, Tennessee  38103
Attention:                    General Counsel

E-mail:                                   Jeffrey.Fiarman@frontdoorhome.com

 

Any Party may, by notice to the other Party, change the address to which such
notices are to be given.

 

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Section 7.11.                                      Severability.  If any
provision of this Agreement or the application thereof to any Person or
circumstance is determined by a court of competent jurisdiction to be invalid,
void or unenforceable, the remaining provisions hereof, or the application of
such provision to Persons or circumstances or in jurisdictions other than those
as to which it has been held invalid or unenforceable, shall remain in full
force and effect and shall in no way be affected, impaired or invalidated
thereby.  Upon such determination, the Parties shall negotiate in good faith in
an effort to agree upon such a suitable and equitable provision to effect the
original intent of the Parties.

 

Section 7.12.                                      Force Majeure.  No Party
shall be deemed in default of this Agreement for any delay or failure to fulfill
any obligation hereunder so long as and to the extent to which any delay or
failure in the fulfillment of such obligations is prevented, frustrated,
hindered or delayed as a consequence of circumstances of Force Majeure.  Without
limiting the termination rights contained in this Agreement, in the event of any
such excused delay, the time for performance shall be extended for a period
equal to the time lost by reason of the delay.  A Party claiming the benefit of
this provision shall, as soon as reasonably practicable after the occurrence of
any such Force Majeure, (a) provide written notice to the other Party of the
nature and extent of such Force Majeure; and (b) use commercially reasonable
efforts to remove any such causes and resume performance under this Agreement as
soon as reasonably practicable (and in no event later than the date that the
affected Party resumes analogous performance under any other agreement for
itself, its Affiliates or any Third Party), unless this Agreement has previously
been terminated under Article IV or this Section 7.12.  Recipient shall be
(i) relieved of the obligation to pay Charges for the affected
Service(s) throughout the duration of such Force Majeure and (ii) entitled to
permanently terminate such Service(s) if the delay or failure in providing such
Services because of a Force Majeure shall continue to exist for more than thirty
(30) consecutive days (it being understood that Recipient shall not be required
to provide any advance notice of such termination to Provider).

 

Section 7.13.                                      Headings.  The Article,
Section and Paragraph headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.

 

Section 7.14.                                      Survival of Covenants. 
Except as expressly set forth in this Agreement, the covenants, representations
and warranties and other agreements contained in this Agreement, and Liability
for the breach of any obligations contained herein, shall survive the Effective
Time and shall remain in full force and effect thereafter.

 

Section 7.15.                                      Waivers of Default.  Waiver
by any Party of any default by the other Party of any provision of this
Agreement shall not be deemed a waiver by the waiving Party of any subsequent or
other default, nor shall it prejudice the rights of the waiving Party.  No
failure or delay by any Party in exercising any right, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall a single or partial
exercise thereof prejudice any other right or further exercise thereof or the
exercise of any other right, power or privilege.

 

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Section 7.16.                                      Dispute Resolution.

 

(a)                                 In the event of any controversy, dispute or
claim (a “Dispute”) arising out of or relating to any Party’s rights or
obligations under this Agreement (whether arising in contract, tort or
otherwise), calculation or allocation of the costs of any Service or otherwise
arising out of or relating in any way to this Agreement (including the
interpretation or validity of this Agreement), such Dispute shall be resolved by
submitting such Dispute first to the relevant Contract Manager of each Party,
and the Contract Managers shall seek to resolve such Dispute through informal
good faith negotiation.  In the event that the Contract Managers fail to meet
or, if they meet and fail to resolve a Dispute within twenty (20) Business Days,
then either Party may pursue the remedy set forth in Section 7.16(b).

 

(b)                                 If the procedures set forth in
Section 7.16(a) have been followed with respect to a Dispute and such Dispute
remains unresolved, such Dispute shall be resolved in accordance with the
dispute resolution process referred to in Article VII of the Separation and
Distribution Agreement.

 

(c)                                  In any Dispute regarding the amount of a
Charge or a Termination Charge, if such Dispute is finally resolved pursuant to
the dispute resolution process set forth or referred to in Section 7.16(a) and
(b) and it is determined that the Charge or the Termination Charge, as
applicable, that Provider has invoiced Recipient, and that Recipient has paid to
Provider, is greater or less than the amount that the Charge or the Termination
Charge, as applicable, should have been, then (i) if it is determined that
Recipient has overpaid the Charge or the Termination Charge, as applicable,
Provider shall within ten (10) calendar days after such determination reimburse
Recipient an amount of cash equal to such overpayment, plus the Interest
Payment, accruing from the date of payment by Recipient to the time of
reimbursement by Provider; and (ii) if it is determined that Recipient has
underpaid the Charge or the Termination Charge, as applicable, Recipient shall
within ten (10) calendar days after such determination reimburse Provider an
amount of cash equal to such underpayment, plus the Interest Payment, accruing
from the date such payment originally should have been made by Recipient to the
time of payment by Recipient.

 

Section 7.17.                                      Specific Performance. 
Subject to Section 7.16, in the event of any actual or threatened default in, or
breach of, any of the terms, conditions and provisions of this Agreement, the
Party or Parties who are, or are to be, thereby aggrieved shall have the right
to specific performance and injunctive or other equitable relief (on an interim
or permanent basis) in respect of its rights or their rights under this
Agreement, in addition to any and all other rights and remedies at law or in
equity, and all such rights and remedies shall be cumulative.  The Parties agree
that the remedies at law for any breach or threatened breach are inadequate
compensation for any loss and that any defense in any Action for specific
performance that a remedy at law would be adequate is waived.  Any requirements
for the securing or posting of any bond with such remedy are hereby waived by
each of the Parties.  Unless otherwise agreed in writing, Provider shall
continue to provide Services and the Parties shall honor all other commitments
under this Agreement during the course of dispute resolution pursuant to the
provisions of Section 7.16 and this Section 7.17 with respect to all matters not
subject to such Dispute; provided, however, that this obligation shall only
exist during the term of this Agreement.

 

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Section 7.18.                                      Amendments.  No provisions of
this Agreement shall be deemed waived, amended, supplemented or modified by a
Party, unless such waiver, amendment, supplement or modification is in writing
and signed by the authorized representative of the Party against whom
enforcement of such waiver, amendment, supplement or modification is sought.

 

Section 7.19.                                      Precedence of Schedules. 
Each Schedule attached to or referenced in this Agreement is hereby incorporated
into and shall form a part of this Agreement; provided, however, that the terms
contained in such Schedule shall only apply with respect to the Services
provided under that Schedule.  In the event of a conflict between the terms
contained in an individual Schedule and the terms in the body of this Agreement,
the terms in the Schedule shall take precedence with respect to the Services
under such Schedule only.  No terms contained in individual Schedules shall
otherwise modify the terms of this Agreement.

 

Section 7.20.                                      Interpretation.  In this
Agreement, (a) words in the singular shall be deemed to include the plural and
vice versa and words of one gender shall be deemed to include the other genders
as the context requires; (b) the terms “hereof,” “herein” and “herewith” and
words of similar import shall, unless otherwise stated, be construed to refer to
this Agreement as a whole (including all of the Schedules, Annexes and Exhibits
hereto) and not to any particular provision of this Agreement; (c) Article,
Section, Exhibit, Annex and Schedule references are to the Articles, Sections,
Exhibits, Annexes and Schedules to this Agreement, unless otherwise specified;
(d) unless otherwise stated, all references to any agreement shall be deemed to
include the exhibits, schedules and annexes to such agreement; (e) the word
“including” and words of similar import when used in this Agreement shall mean
“including, without limitation,” unless otherwise specified; (f) the word “or”
need not be exclusive; (g) unless otherwise specified in a particular case, the
word “days” refers to calendar days; (h) references to “business day” shall mean
any day other than a Saturday, a Sunday or a day on which banking institutions
are generally authorized or required by Law to close in Memphis, Tennessee;
(i) references herein to this Agreement or any other agreement contemplated
herein shall be deemed to refer to this Agreement or such other agreement as of
the date on which it is executed and as it may be amended, modified or
supplemented thereafter, unless otherwise specified; and (j) unless expressly
stated to the contrary in this Agreement, all references to “the date hereof,”
“the date of this Agreement” and “hereby” and words of similar import shall all
be references to September 28, 2018.

 

Section 7.21.                                      Mutual Drafting.  This
Agreement shall be deemed to be the joint work product of the Parties and any
rule of construction that a document shall be interpreted or construed against a
drafter of such document shall not be applicable to this Agreement.

 

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their duly authorized representatives as of the date first written above.

 

 

 

SERVICEMASTER GLOBAL HOLDINGS, INC.

 

 

 

 

 

By:

 

 

 

Name: Anthony D. Dilucente

 

 

Title:   Senior Vice President and Chief Financial Officer

 

 

 

 

 

FRONTDOOR, INC.

 

 

 

 

 

By:

 

 

 

Name: Rexford J. Tibbens

 

 

Title:   President and Chief Executive Officer

 

[Signature Page to Transition Services Agreement]

 

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