Document:

EX-10.5

 Exhibit 10.5 

Execution Version 
 ASSET
REPRESENTATIONS REVIEW AGREEMENT 
 among 

GM FINANCIAL AUTOMOBILE LEASING TRUST 2018-3, 

as Issuer 
 GM FINANCIAL, 

as Servicer 
 and 

CLAYTON FIXED INCOME SERVICES LLC, 

as Asset Representations Reviewer 

Dated as of July 31, 2018 

 TABLE OF CONTENTS 
  

							
	 ARTICLE I DEFINITIONS
	  	 	1	 
	 Section 1.1.
	 	Definitions	  	 	1	 
	 Section 1.2.
	 	Additional Definitions	  	 	1	 
		
	 ARTICLE II ENGAGEMENT OF ASSET REPRESENTATIONS REVIEWER
	  	 	2	 
			
	 Section 2.1.
	 	Engagement; Acceptance	  	 	2	 
	 Section 2.2.
	 	Confirmation of Status	  	 	2	 
		
	 ARTICLE III ASSET REPRESENTATIONS REVIEW PROCESS
	  	 	3	 
			
	 Section 3.1.
	 	Asset Review Notices	  	 	3	 
	 Section 3.2.
	 	Identification of Asset Review Receivables	  	 	3	 
	 Section 3.3.
	 	Asset Review Materials	  	 	3	 
	 Section 3.4.
	 	Performance of Asset Reviews	  	 	3	 
	 Section 3.5.
	 	Asset Review Reports	  	 	4	 
	 Section 3.6.
	 	Asset Review Representatives	  	 	5	 
	 Section 3.7.
	 	Dispute Resolution	  	 	5	 
	 Section 3.8.
	 	Limitations on Asset Review Obligations	  	 	5	 
		
	 ARTICLE IV ASSET REPRESENTATIONS REVIEWER
	  	 	6	 
			
	 Section 4.1.
	 	Representations and Warranties	  	 	6	 
	 Section 4.2.
	 	Covenants	  	 	7	 
	 Section 4.3.
	 	Fees and Expenses	  	 	8	 
	 Section 4.4.
	 	Limitation on Liability	  	 	9	 
	 Section 4.5.
	 	Indemnification	  	 	9	 
	 Section 4.6.
	 	Right to Audit	  	 	10	 
	 Section 4.7.
	 	Delegation of Obligations	  	 	10	 
	 Section 4.8.
	 	Confidential Information	  	 	10	 
	 Section 4.9.
	 	Security and Safeguarding Information	  	 	13	 
		
	 ARTICLE V . RESIGNATION AND REMOVAL
	  	 	14	 
			
	 Section 5.1.
	 	Resignation and Removal of Asset Representations Reviewer	  	 	14	 
	 Section 5.2.
	 	Engagement of Successor	  	 	15	 
	 Section 5.3.
	 	Merger, Consolidation or Succession	  	 	15	 
		
	 ARTICLE VI OTHER AGREEMENTS
	  	 	16	 
			
	 Section 6.1.
	 	Independence of Asset Representations Reviewer	  	 	16	 
	 Section 6.2.
	 	No Petition	  	 	16	 
	 Section 6.3.
	 	Limitation of Liability of Owner Trustee	  	 	16	 
	 Section 6.4.
	 	Termination of Agreement	  	 	16	 
		
	 ARTICLE VII MISCELLANEOUS PROVISIONS 
	  	 	17	 
			
	 Section 7.1.
	 	Amendments	  	 	17	 
	 Section 7.2.
	 	Assignment; Benefit of Agreement; Third Party Beneficiaries	  	 	17	 
	 Section 7.3.
	 	Notices	  	 	17	 
	 Section 7.4.
	 	GOVERNING LAW	  	 	18	 
	 Section 7.5.
	 	Submission to Jurisdiction	  	 	18	 
	 Section 7.6.
	 	No Waiver; Remedies	  	 	18	 
	 Section 7.7.
	 	Severability	  	 	18	 
	 Section 7.8.
	 	Headings	  	 	19	 
	 Section 7.9.
	 	Counterparts	  	 	19	 
		
	 SCHEDULES
	 		
	 Schedule A
	 	Representations and Warranties and Procedures to be Performed	  

  
 i 

 ASSET REPRESENTATIONS REVIEW AGREEMENT dated as of July 31, 2018 (this
“Agreement”), among GM FINANCIAL AUTOMOBILE LEASING TRUST 2018-3, a Delaware statutory trust (the “Issuer”), AMERICREDIT FINANCIAL SERVICES, INC., a Delaware corporation
(“GM Financial”), in its capacity as Servicer (in such capacity, the “Servicer”) and CLAYTON FIXED INCOME SERVICES LLC, a Delaware limited liability company, as Asset Representations Reviewer (the “Asset
Representations Reviewer”). 
 WHEREAS, in the regular course of its business, GM Financial causes its affiliated titling trust to
purchase leased vehicles and to originate lease agreements related to such leased vehicles. 
 WHEREAS, in connection with a securitization
transaction sponsored by GM Financial, GM Financial sold an exchange note backed by the 2018-3 Exchange Note Assets (a designated pool of leased vehicles and associated lease agreements) to GMF Leasing LLC
(the “Depositor”) which, in turn, sold that exchange note to the Issuer. 
 WHEREAS, the Issuer has granted a security
interest in the exchange note to the Indenture Trustee, for the benefit of the Issuer Secured Parties, pursuant to the Indenture. 

WHEREAS, the Issuer has determined to engage the Asset Representations Reviewer to perform reviews of certain
2018-3 Exchange Note Assets for compliance with the representations and warranties made by GM Financial about such 2018-3 Exchange Note Assets in the 2018-3 Servicing Supplement. 
 NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties agree as follows. 
 ARTICLE I 

DEFINITIONS 
 Section 1.1.
Definitions. Capitalized terms that are used but are not otherwise defined in this Agreement have the meanings assigned to them in the 2018-3 Exchange Note Supplement, dated as of July 31, 2018, to
the Second Amended and Restated Credit and Security Agreement, dated as of January 24, 2018, both by and between ACAR Leasing Ltd., as borrower, GM Financial, as lender and servicer, and Wells Fargo Bank, National Association, as administrative
agent and as collateral agent. 
 Section 1.2. Additional Definitions. The following terms have the meanings given below: 

“Asset Review” means the performance by the Asset Representations Reviewer of the testing procedures for each Test and each
Asset Review Receivable in accordance with Section 3.4. 
 “Asset Review Demand Date” means, for an Asset Review, the
date when the Indenture Trustee determines that each of (a) the Delinquency Trigger has occurred and (b) the required percentage of Noteholders has voted to direct an Asset Review under Section 7.2(f) of the Indenture. 

 “Asset Review Fee” has the meaning assigned to such term in
Section 4.3(b). 
 “Asset Review Materials” means, with respect to an Asset Review and an Asset Review Receivable, the
documents and other materials for each Test listed under “Documents” in Schedule A. 
 “Asset Review Notice”
means the notice from the Indenture Trustee to the Asset Representations Reviewer and the Servicer directing the Asset Representations Reviewer to perform an Asset Review. 

“Asset Review Receivables” means, with respect to any Asset Review, each Receivable that is not a Defaulted Lease or a
Liquidated Lease and which the related lessee fails to make at least the lesser of (i) 90% of a Monthly Payment or (ii) all but $25 of the Monthly Payment in either case by the related Payment Due Date and, as of the last day of the Collection
Period prior to the date the related Asset Review Notice was delivered, remained unpaid for 60 days or more from the Payment Due Date. 

“Asset Review Report” means, with respect to any Asset Review, the report of the Asset Representations Reviewer prepared in
accordance with Section 3.5. 
 “Clayton” means Clayton Fixed Income Services LLC. 

“Confidential Information” has the meaning assigned to such term in Section 4.8(a). 

“Eligible Asset Representations Reviewer” means a Person that (a) is not an Affiliate of GM Financial, the Seller, the
Servicer, the Indenture Trustee, the Owner Trustee or any of their Affiliates and (b) was not, and is not an Affiliate of a Person that was, engaged by GM Financial or any Underwriter to perform any due diligence on the Lease Assets prior to
the Closing Date. 
 “Test” has the meaning assigned to such term in Section 3.4(a). 

“Test Complete” has the meaning assigned to such term in Section 3.4(c). 

“Test Fail” has the meaning assigned to such term in Section 3.4(a). 

“Test Pass” has the meaning assigned to such term in Section 3.4(a). 

ARTICLE II 
 ENGAGEMENT OF ASSET
REPRESENTATIONS REVIEWER 
 Section 2.1. Engagement; Acceptance. The Issuer hereby engages Clayton to act as the Asset
Representations Reviewer for the Issuer. Clayton accepts the engagement and agrees to perform the obligations of the Asset Representations Reviewer on the terms stated in this Agreement. 

Section 2.2. Confirmation of Status. The parties confirm that the Asset Representations Reviewer is not responsible for
(a) reviewing the Asset Review Receivables for compliance with the representations and warranties under the Program Documents, except as described in this Agreement, or (b) determining whether noncompliance with the representations or
warranties constitutes a breach of the Program Documents. 

  
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 ARTICLE III 

ASSET REPRESENTATIONS REVIEW PROCESS 

Section 3.1. Asset Review Notices. Upon receipt of an Asset Review Notice from the Indenture Trustee in the manner set forth in
Section 7.2(f) of the Indenture, the Asset Representations Reviewer will start an Asset Review. The Asset Representation Reviewer will have no obligation to start an Asset Review unless and until an Asset Review Notice is received. 

Section 3.2. Identification of Asset Review Receivables. Within ten (10) Business Days of receipt of an Asset Review Notice,
the Servicer will deliver to the Asset Representations Reviewer and the Indenture Trustee a list of the related Asset Review Receivables. 

Section 3.3. Asset Review Materials. 

(a) Access to Asset Review Materials. The Servicer will give the Asset Representations Reviewer access to the Asset Review Materials for
all of the Asset Review Receivables within sixty (60) days of receipt of the Asset Review Notice in one or more of the following ways: (i) by providing access to the Servicer’s lease asset systems, either remotely or at one of the
properties of the Servicer; (ii) by electronic posting to a password-protected website to which the Asset Representations Reviewer has access; (iii) by providing originals or photocopies at one of the properties of the Servicer where the
Asset Receivable Files are located; or (iv) in another manner agreed by the Servicer and the Asset Representations Reviewer. The Servicer may redact or remove Non-Public Personal Information (as defined
in Section 4.8) from the Asset Review Materials so long as such redaction or removal does not change the meaning or usefulness of the Asset Review Materials for purposes of the Asset Review. 

(b) Missing or Insufficient Asset Review Materials. If any of the Asset Review Materials are missing or insufficient for the Asset
Representations Reviewer to perform any Test, the Asset Representations Reviewer will notify the Servicer promptly, and in any event no less than twenty (20) days before completing the Asset Review, and the Servicer will have fifteen
(15) days to give the Asset Representations Reviewer access to such missing Asset Review Materials or other documents or information to correct the insufficiency. If the missing or insufficient Asset Review Materials have not been provided by
the Servicer within fifteen (15) days, the parties agree that the Asset Review Receivable will have a Test Fail for the related Test(s) and the Test(s) will be considered completed and the Asset Review Report will indicate the reason for the
Test Fail. 
 Section 3.4. Performance of Asset Reviews. 

(a) Test Procedures. For an Asset Review, the Asset Representations Reviewer will perform for each Asset Review Receivable the
procedures listed under “Procedures to be Performed” in Schedule A for each representation and warranty (each, a “Test”), using the Asset Review Materials listed for each such Test in Schedule A. For each Test and Asset
Review Receivable, the Asset Representations Reviewer will determine if the Test has been satisfied (a “Test Pass”) or if the Test has not been satisfied (a “Test Fail”). 

  
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 (b) Asset Review Period. The Asset Representations Reviewer will complete the Asset
Review of all of the Asset Review Receivables within sixty (60) days of receiving access to the Asset Review Materials under Section 3.3(a). However, if additional Asset Review Materials are provided to the Asset Representations Reviewer
in accordance with Section 3.3(b), the Asset Review period will be extended for an additional thirty (30) days. 
 (c)
Completion of Asset Review for Certain Asset Review Receivables. Following the delivery of the list of the Asset Review Receivables and before the delivery of the Asset Review Report by the Asset Representations Reviewer, the Servicer may
notify the Asset Representations Reviewer if an Asset Review Receivable is paid in full by the related Obligor or purchased from the Issuer by GM Financial, the Seller or the Servicer according to the Program Documents. On receipt of any such
notice, the Asset Representations Reviewer will immediately terminate all Tests of the related Asset Review Receivables and the Asset Review of such Receivables will be considered complete (a “Test Complete”). In this case, the
Asset Review Report will indicate a Test Complete for the related Asset Review Receivables and the related reason. 
 (d) Previously
Reviewed Receivable. If any Asset Review Receivable was included in a prior Asset Review, then the Asset Representations Reviewer will not perform any Tests on it, but will include the results of the previous Tests in the Asset Review Report for
the current Asset Review, unless (i) any representation or warranty about such Asset Review Receivable that would be subject to a Test as part of the Asset Review relates to a date that is after the date on which the prior Asset Review was
performed with respect to such Asset Review Receivable or (ii) the Asset Representations Reviewer has provided the Servicer with evidence that reasonably demonstrates that the Asset Representations Reviewer was unable during such prior Asset
Review to conduct a review of such Asset Review Receivable in a manner that would have ascertained compliance or non-compliance with a specific representation or warranty. 

(e) Termination of Asset Review. If an Asset Review is in process and the Notes will be paid in full on the next Distribution Date, the
Servicer will notify the Asset Representations Reviewer and the Indenture Trustee no less than ten (10) days before that Distribution Date. On receipt of the notice, the Asset Representations Reviewer will terminate the Asset Review immediately
and will have no obligation to deliver an Asset Review Report. 
 Section 3.5. Asset Review Reports. Within five (5) days
of the end of the Asset Review period under Section 3.4(b), the Asset Representations Reviewer will deliver to the Issuer, the Servicer and the Indenture Trustee an Asset Review Report indicating for each Asset Review Receivable whether there
was a Test Pass or a Test Fail for each Test, or whether the Asset Review Receivable was a Test Complete and the related reason. The Asset Review Report will contain a summary of the Asset Review results to be included in the Issuer’s Form 10-D report for the Collection Period in which the Asset Review Report is received. The Asset Representations Reviewer will ensure that the Asset Review Report does not contain any
Non-Public Personal Information. 

  
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 Section 3.6. Asset Review Representatives. 

(a) Servicer Representative. The Servicer will designate one or more representatives who will be available to assist the Asset
Representations Reviewer in performing the Asset Review, including responding to requests and answering questions from the Asset Representations Reviewer about access to Asset Review Materials on the Servicer’s receivables systems, obtaining
missing or insufficient Asset Review Materials and/or providing clarification of any Asset Review Materials or Tests. 
 (b) Asset
Representations Reviewer Representative. The Asset Representations Reviewer will designate one or more representatives who will be available to the Issuer and the Servicer during the performance of an Asset Review. 

(c) Questions About Asset Review. The Asset Representations Reviewer will make appropriate personnel available to respond in writing to
written questions or requests for clarification of any Asset Review Report from the Indenture Trustee or the Servicer until the earlier of (i) the payment in full of the Notes and (ii) one year after the delivery of the Asset Review
Report. The Asset Representations Reviewer will have no obligation to respond to questions or requests for clarification from Noteholders or any other Person and will direct such Persons to submit written questions or requests to the Indenture
Trustee. 
 Section 3.7. Dispute Resolution. If an Asset Review Receivable that was reviewed by the Asset Representations
Reviewer is the subject of a dispute resolution proceeding under Section 2.20 of the 2018-3 Servicing Supplement, the Asset Representations Reviewer will participate in the dispute resolution proceeding
on request of a party to the proceeding. The reasonable out-of-pocket expenses of the Asset Representations Reviewer for its participation in any dispute resolution
proceeding will be considered expenses of the requesting party for the dispute resolution and will be paid by a party to the dispute resolution as determined by the parties to the dispute resolution in the course of the mediation (in the case of a
mediation) or by the arbitrator for the dispute resolution (in the case of an arbitration), in either case according to Section 2.20 of the 2018-3 Servicing Supplement. If not paid by a party to the
dispute resolution, the expenses will be reimbursed by the Issuer according to Section 4.3(d). 
 Section 3.8. Limitations on
Asset Review Obligations. 
 (a) Asset Review Process Limitations. The Asset Representations Reviewer will have no obligation:

 (i) to determine whether a Delinquency Trigger has occurred or whether the required percentage of Noteholders has voted to
direct an Asset Review under the Indenture, and is entitled to rely on the information in any Asset Review Notice delivered by the Indenture Trustee; 

(ii) to determine which Receivables are subject to an Asset Review, and is entitled to rely on the lists of Asset Review
Receivables provided by the Servicer; 

  
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 (iii) to obtain or confirm the validity of the Asset Review Materials and no
liability for any errors contained in the Asset Review Materials and will be entitled to rely on the accuracy and completeness of the Asset Review Materials; 

(iv) to obtain missing or insufficient Asset Review Materials from any party or any other source; 

(v) to take any action or cause any other party to take any action under any of the Program Documents or otherwise to enforce
any remedies against any Person for breaches of representations or warranties about the Asset Review Receivables. 
 (vi) to
determine the reason for the delinquency of any Asset Review Receivable, the creditworthiness of any Obligor, the overall quality of any Asset Review Receivable or the compliance by the Servicer with its covenants with respect to the servicing of
such Asset Review Receivable; or 
 (vii) to establish cause, materiality or recourse for any failed Test as described in
Section 3.4. 
 (b) Testing Procedure Limitations. The Asset Representations Reviewer will only be required to perform the
testing procedures listed under “Procedures to be Performed” in Schedule A, and will have no obligation to perform additional procedures on any Asset Review Receivable or to provide any information other than an Asset Review Report
indicating for each Asset Review Receivable whether there was a Test Pass or a Test Fail for each Test, or whether the Asset Review Receivable was a Test Complete and the related reason. However, the Asset Representations Reviewer may provide
additional information about any Asset Review Receivable that it determines in good faith to be material to the Asset Review. 
 ARTICLE IV

 ASSET REPRESENTATIONS REVIEWER 

Section 4.1. Representations and Warranties . 

(a) Representations and Warranties. The Asset Representations Reviewer represents and warrants to the Issuer as of the date of this
Agreement: 
 (i) Organization and Qualification. The Asset Representations Reviewer is duly organized and validly
existing as a limited liability company in good standing under the laws of Delaware. The Asset Representations Reviewer is qualified as a limited liability company in good standing and has obtained all necessary licenses and approvals in all
jurisdictions in which the ownership or lease of its properties or the conduct of its activities requires the qualification, license or approval, unless the failure to obtain the qualifications, licenses or approvals would not reasonably be expected
to have a material adverse effect on the Asset Representations Reviewer’s ability to perform its obligations under this Agreement. 

  
 6 

 (ii) Power, Authority and Enforceability. The Asset Representations
Reviewer has the power and authority to execute, deliver and perform its obligations under this Agreement. The Asset Representations Reviewer has authorized the execution, delivery and performance of this Agreement. This Agreement is the legal,
valid and binding obligation of the Asset Representations Reviewer enforceable against the Asset Representations Reviewer, except as may be limited by insolvency, bankruptcy, reorganization or other laws relating to the enforcement of
creditors’ rights or by general equitable principles. 
 (iii) No Conflicts and No Violation. The completion of
the transactions contemplated by this Agreement and the performance of the Asset Representations Reviewer’s obligations under this Agreement will not (A) conflict with, or be a breach or default under, any indenture, agreement, guarantee
or similar agreement or instrument under which the Asset Representations Reviewer is a party, (B) result in the creation or imposition of any Lien on any of the assets of the Asset Representations Reviewer under the terms of any indenture,
agreement, guarantee or similar agreement or instrument, (C) violate the organizational documents of the Asset Representations Reviewer or (D) violate any law or, to the Asset Representations Reviewer’s knowledge, any order, rule or
regulation that applies to the Asset Representations Reviewer of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Asset Representations Reviewer, in each
case, which conflict, breach, default, Lien or violation would reasonably be expected to have a material adverse effect on the Asset Representations Reviewer’s ability to perform its obligations under this Agreement. 

(iv) No Proceedings. To the Asset Representations Reviewer’s knowledge, there are no proceedings or investigations
pending or threatened in writing before any court, regulatory body, administrative agency, or other governmental instrumentality having jurisdiction over the Asset Representations Reviewer or its properties: (A) asserting the invalidity of this
Agreement, (B) seeking to prevent the completion of any of the transactions contemplated by this Agreement or (C) seeking any determination or ruling that would reasonably be expected to have a material adverse effect on the Asset
Representations Reviewer’s ability to perform its obligations under, or the validity or enforceability of, this Agreement. 

(v) Eligibility. The Asset Representations Reviewer is an Eligible Asset Representations Reviewer. 

(b) Notice of Breach. Upon (i) the discovery by the Asset Representations Reviewer, the Issuer or the Servicer or (ii) the
receipt of written notice by or actual knowledge of a Responsible Officer of the Owner Trustee or the Indenture Trustee, of a material breach of any of the representations and warranties in Section 4.1(a), the party discovering such breach will
give prompt notice to the other parties. 
 Section 4.2. Covenants. The Asset Representations Reviewer covenants and agrees
that: 
 (a) Eligibility. It will notify the Issuer and the Servicer promptly if it is not, or on the occurrence of any action that
would result in it not being, an Eligible Asset Representations Reviewer. 

  
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 (b) Review Systems. It will maintain business process management and/or other systems
necessary to ensure that it can perform each Test and, on execution of this Agreement, will load each Test into these systems. The Asset Representations Reviewer will ensure that these systems allow for each Asset Review Receivable and the related
Asset Review Materials to be individually tracked and stored as contemplated by this Agreement. 
 (c) Personnel. It will maintain
adequate staff that is properly trained to conduct Asset Reviews as required by this Agreement. The Asset Representations Reviewer, at its discretion, may utilize the services of third parties, affiliates, and agents (“Agents”) to provide
any Asset Review under this Agreement; provided, however, that the Asset Representations Reviewer has entered into confidentiality agreements with such Agents (or such Agents are otherwise bound by confidentiality obligations) the provisions of
which are no less protective than those set forth in this Agreement. Any such Agent must be approved by Servicer prior to engaging in any Asset Review under this Agreement. The Asset Representations Reviewer shall be responsible to Servicer for the
Asset Reviews provided by its Agents to the same extent as if provided by the Asset Representations Reviewer under this Agreement. Servicer agrees to look solely to the Asset Representations Reviewer and not to any Agent for satisfaction of any
claims the Servicer may have arising out of this Agreement or due to the performance or non-performance of Services. 

(d) Changes to Personnel. It will promptly notify Servicer in the event that it undergoes significant management or staffing changes
which would negatively impact its ability to fulfill its obligations under this Agreement. 
 (e) Maintenance of Asset Review
Materials. It will maintain copies of any Asset Review Materials, Asset Review Reports and other documents relating to an Asset Review, including internal correspondence and work papers, for a period of two years after the termination of this
Agreement. 
 Section 4.3. Fees and Expenses. 

(a) Annual Fee. The Issuer will, or will cause the Servicer to, pay the Asset Representations Reviewer, as compensation for agreeing to
act as the Asset Representations Reviewer under this Agreement, an annual fee in the amount of $5,000. The annual fee will be paid on the Closing Date and on each anniversary of the Closing Date until this Agreement is terminated, payable pursuant
to the priority of payments in Section 8.3 of the Indenture. 
 (b) Asset Review Fee. Following the completion of an Asset Review
and the delivery to the Indenture Trustee of the Asset Review Report, or the termination of an Asset Review according to Section 3.4(e), and the delivery to the Servicer of a detailed invoice, the Asset Representations Reviewer will be entitled
to a fee of up to $250 for each Asset Review Receivable for which the Asset Review was started (the “Asset Review Fee”). However, no Asset Review Fee will be charged for any Asset Review Receivable which was included in a prior
Asset Review or for which no Tests were completed prior to the Asset Representations Reviewer being notified of a termination of the Asset Review according to Section 3.4(e). If the detailed invoice is submitted on or before the first day of a
month, the Asset Review Fee will be paid by the Issuer pursuant to the priority of payments in Section 8.3 of the Indenture starting on or before the 

  
 8 

 
Distribution Date in that month. However, if an Asset Review is terminated according to Section 3.4(e), the Asset Representations Reviewer must submit its invoice for the Asset Review Fee
for the terminated Asset Review no later than five (5) Business Days before the final Distribution Date in order to be reimbursed no later than the final Distribution Date. To the extent that such amounts were not previously paid by the
Servicer or any other party, upon receipt of a detailed invoice, the Asset Representations Reviewer shall be entitled to payment by the Servicer of incurred but otherwise unpaid Asset Review Fees. 

(c) Reimbursement of Travel Expenses. If the Servicer provides access to the Asset Review Materials at one of its properties, the Issuer
will, or will cause the Servicer to, reimburse the Asset Representations Reviewer for its reasonable travel expenses incurred in connection with the Asset Review upon receipt of a detailed invoice, payable pursuant to the priority of payments in
Section 8.3 of the Indenture. To the extent that such amounts were not previously paid by the Servicer or any other party, upon receipt of a detailed invoice, the Asset Representations Reviewer shall be entitled to payment by the Servicer of
incurred but otherwise unpaid travel expenses. 
 (d) Dispute Resolution Expenses. If the Asset Representations Reviewer participates
in a dispute resolution proceeding under Section 3.7 and its reasonable out-of-pocket expenses it incurs in participating in the proceeding are not paid by a party
to the dispute resolution within ninety (90) days of the end of the proceeding, the Issuer will reimburse the Asset Representations Reviewer for such expenses upon receipt of a detailed invoice, payable pursuant to the priority of payments in
Section 8.3 of the Indenture. To the extent that such amounts were not previously paid by the Servicer or any other party, upon receipt of a detailed invoice, the Asset Representations Reviewer shall be entitled to payment by the Servicer of
incurred but otherwise unpaid expenses. 
 Section 4.4. Limitation on Liability. The Asset Representations Reviewer will not be
liable to any person for any action taken, or not taken, in good faith under this Agreement or for errors in judgment. However, the Asset Representations Reviewer will be liable for its willful misconduct, bad faith or negligence in performing its
obligations under this Agreement. In no event shall either party be liable to the other party for any incidental, special, indirect, punitive, exemplary or consequential damages. 

Section 4.5. Indemnification  

(a) Indemnification by Asset Representations Reviewer. The Asset Representations Reviewer will indemnify each of the Issuer, the Seller,
the Servicer, the Owner Trustee, the Collateral Agent and the Indenture Trustee (both in its individual capacity and in its capacity as Indenture Trustee on behalf of the Noteholders) and their respective directors, officers, employees and agents
for all costs, expenses, losses, damages and liabilities resulting from (i) the willful misconduct, fraud, bad faith or negligence of the Asset Representations Reviewer in performing its obligations under this Agreement (ii) the Asset
Representations Reviewer’s breach of any of its representations or warranties or other obligations under this Agreement (iii) its breach of confidentiality obligations or (iv) any third party intellectual property claim. The Asset
Representations Reviewer’s obligations under this Section 4.5 will survive the termination of this Agreement, the termination of the Issuer and the resignation or removal of the Asset Representations Reviewer. 

  
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 (b) Indemnification of Asset Representations Reviewer. The Issuer will, or will cause
the Servicer to, indemnify the Asset Representations Reviewer and its officers, directors, employees and agents, for all costs, expenses, losses, damages and liabilities resulting from the performance of its obligations under this Agreement
(including the costs and expenses of defending itself against any loss, damage or liability), but excluding any cost, expense, loss, damage or liability resulting from (i) the Asset Representations Reviewer’s willful misconduct, bad faith
or negligence or (ii) the Asset Representations Reviewer’s breach of any of its representations or warranties in this Agreement. The Issuer acknowledges and agrees that its obligation to indemnify the Asset Representations Reviewer in
accordance with this Agreement shall survive termination of this Agreement. To the extent that such indemnities owed to the Asset Representations Reviewer were not previously paid by the Servicer or any other party, upon receipt of a detailed
invoice, the Asset Representations Reviewer shall be entitled to payment by the Servicer of such incurred but otherwise unpaid indemnities. 

Section 4.6. Right to Audit. During the term of this Agreement and not more than once per year (unless circumstances warrant
additional audits as described below), Servicer may audit the Asset Representations Reviewer’s policies, procedures and records that relate to the performance of the Asset Representation Reviewer under this Agreement to ensure compliance with
this Agreement upon at least 10 business days’ notice. Notwithstanding the foregoing, the parties agree that Servicer may conduct an audit at any time, in the event of (i) audits required by Servicer’s governmental or regulatory
authorities, (ii) investigations of claims of misappropriation, fraud, or business irregularities of a potentially criminal nature, or (iii) Servicer reasonably believes that an audit is necessary to address a material operational problem
or issue that poses a threat to Servicer’s business. 
 Section 4.7. Delegation of Obligations. Subject to the terms of
Section 4.2(c) of this Agreement, the Asset Representations Reviewer may not delegate or subcontract its obligations under this Agreement to any Person without the consent of the Issuer and the Servicer. 

Section 4.8. Confidential Information. 

(a) Definitions. 

(i) In performing its obligations pursuant to this Agreement, the parties may have access to and receive disclosure of certain
Confidential Information about or belonging to the other, including but not limited to marketing philosophy, strategies (including tax mitigation strategies), techniques, and objectives; advertising and promotional copy; competitive advantages and
disadvantages; financial results; technological developments; loan evaluation programs; customer lists; account information, profiles, demographics and Non-Public Personal Information (defined below); credit
scoring criteria, formulas and programs; research and development efforts; any investor, financial, commercial, technical or scientific information (including, but not limited to, patents, copyrights, trademarks, service marks, trade names and
dress, and applications relating to same, trade secrets, software, code, inventions, know-how and similar information) and any and all other business information (hereinafter “Confidential
Information”). 

  
 10 

 (ii) “Non-Public Personal
Information” shall include all Personally Identifiable Financial Information in any list, description or other grouping of consumers/customers, and publicly available information pertaining to them, that is derived using any Personally
Identifiable Financial Information that is not publicly available, and shall further include all Non-Public Personal Information as defined by Federal regulations implementing the Gramm-Leach-Bliley Act, as
amended from time to time, and any state statues or regulations governing this agreement. 
 (iii) “Personally
Identifiable Financial Information” means any information a consumer provides to a party in order to obtain a financial product or service, any information a party otherwise obtains about a consumer in connection with providing a financial
product or service to that consumer, and any information about a consumer resulting from any transaction involving a financial product or service between a party and a consumer. Personally Identifiable Financial Information may include, without
limitation, a consumer’s first and last name, physical address, zip code, e-mail address, phone number, Social Security number, birth date, account number and any information that identifies, or when tied
to the above information may identify, a consumer.
 (b) Use of Confidential Information. The parties agree that during the term of
this Agreement and thereafter, Confidential Information is to be used solely in connection with satisfying their obligations pursuant to this Agreement, and that a party shall neither disclose Confidential Information to any third party, nor use
Confidential Information for its own benefit, except as may be necessary to perform its obligations pursuant to this Agreement or as expressly authorized in writing by the other party, as the case may be. 

Neither party shall disclose any Confidential Information to any other persons or entities, except on a “need to know” basis and then
only: (i) to their own employees and Agents (as defined below); (ii) to their own accountants and legal representatives, provided that any such representatives shall be subject to subsection(iv) below; (iii) to their own affiliates,
provided that such affiliates shall be restricted in use and redisclosure of the Confidential Information to the same extent as the parties hereto. “Agents”, for purposes of this Section, mean each of the parties’ advisors,
directors, officers, employees, contractors, consultants affiliated entities (i.e., an entity controlling, controlled by, or under common control with a party), or other agents. If and to the extent any Agent of the recipient receive Confidential
Information, such recipient party shall be responsible for such Agent’s full compliance with the terms and conditions of this Agreement and shall be liable for any such Agent’s non-compliance. 

(c) Compelled Disclosure. If a subpoena or other legal process seeking Confidential Information is served upon either party, such party
will, to the extent not prohibited by law, rule or order, notify the other immediately and, to the maximum extent practicable prior to disclosure of any Confidential Information, will, at the other’s request and reasonable expense, cooperate in
any lawful effort to contest the legal validity of such subpoena or other legal process. The restrictions set forth herein shall apply during the term and after the termination of this Agreement. All Confidential Information furnished to
the Asset Representations Reviewer or Servicer, as the case may be, or to which the Asset Representations Reviewer or Servicer gains access in connection with this Agreement, is the respective exclusive property of the disclosing party.

  
 11 

 (d) Use by Agents, Employees, Subcontractors. The parties shall take reasonable
measures to prevent its Agents, employees and subcontractors from using or disclosing any Confidential Information, except as may be necessary for each party to perform its obligations pursuant to this Agreement. Such measures shall include,
but not be limited to, (i) education of such Agents, employees and subcontractors as to the confidential nature of the Confidential Information; and (ii) securing a written acknowledgment and agreement from such Agents, employees and
subcontractors that the Confidential Information shall be handled only in accordance with provisions no less restrictive than those contained in this Agreement. This provision shall survive termination of this Agreement.

(e) Remedies. The parties agree and acknowledge that in order to prevent the unauthorized use or disclosure of Confidential Information,
it may be necessary for a party to seek injunctive or other equitable relief, and that money damages may not constitute adequate relief, standing alone, in the event of actual or threatened disclosure of Confidential Information. In addition,
the harmed party shall be entitled to all other remedies available at law or equity including injunctive relief. 
 (f) Exceptions.
Confidential Information shall not include, and this Agreement imposes no obligations with respect to, information that: 

(i) is or becomes part of the public domain other than by disclosure by a Party or its Agents in violation of this Agreement;

 (ii) was disclosed to a Party prior to the Effective Date without a duty of confidentiality; 

(iii) is independently developed by a Party outside of this Agreement and without reference to or reliance on any Confidential
Information of the other Party; or 
 (iv) was obtained from a third party not known after reasonable inquiry to be under a
duty of confidentiality. 
 The foregoing exceptions shall not apply to any Non-Public Personal
Information or Personally Identifiable Financial Information, which shall remain confidential in all circumstances, except as required or permitted to be disclosed by applicable law, statute, or regulation. 

(g) Return of Confidential Information. Subject to Section 4.2(e) of this Agreement, upon the request of a party, the other party
shall return all Confidential Information to the other; provided, however, (i) each party shall be permitted to retain copies of the other party’s Confidential Information solely for archival, audit, disaster recovery, legal and/or
regulatory purposes, and (ii) neither party will be required to search archived electronic back-up files of its computer systems for the other party’s Confidential Information in order to purge the
other party’s Confidential Information from its archived files; provided further, that any Confidential Information so retained will (x) remain subject to the obligations and restrictions contained in this Agreement, (y) will be
maintained in accordance with the retaining party’s document retention policies and procedures, and (z) the retaining party will not use the retained Confidential Information for any other purpose. 

  
 12 

 Section 4.9. Security and Safeguarding Information  

(a) Confidential Information that contains Non-Public Personal Information about customers is subject
to the protections created by the Gramm-Leach-Bliley Act of 1999 (the “Act”) and under the standards for safeguarding Confidential Information, 16 CFR Part 314 (2002) adopted by Federal Trade Commission (“FTC”) (the
“Safeguards Rule”). Additionally, state specific laws may regulate how certain confidential or personal information is safeguarded. The parties agree with respect to the Non-Public Personal
Information to take all appropriate measures in accordance with the Act, and any state specific laws, as are necessary to protect the security of the Non-Public Personal Information and to specifically assure
there is no disclosure of the Non-Public Personal Information other than as authorized under the Act, and any state specific laws, and this Agreement. 

With respect to Confidential Information, including Non-Public Personal Information and Personally
Identifiable Financial Information as applicable, each of the parties agrees that: 
 (i) It will use commercially reasonable
efforts to safeguard and protect the confidentiality of any Confidential Information and agrees, warrants, and represents that it has or will implement and maintain appropriate safeguards designed to safeguard and protect the confidentiality of any
Confidential Information. 
 (ii) It will not disclose or use Confidential Information provided except for the purposes as
set in the Agreement, including as permitted under the Act and its implementing regulations, or other applicable law. 

(iii) It acknowledges that the providing party is required by the Safeguards Rule to take reasonable steps to assure itself
that its service providers maintain sufficient procedures to detect and respond to security breaches, and maintain reasonable procedures to discover and respond to widely-known security failures by its service providers. It agrees to furnish to
the providing party that appropriate documentation to provide such assurance. 
 (iv) It understands that the FTC may, from
time to time, issue amendments to and interpretations of its regulations implementing the provisions of the Act, and that pursuant to its regulations, either or both of the parties hereto may be required to modify their policies and procedures
regarding the collection, use, protection, and/or dissemination of Non-Public Personal Information. Additionally, states may issue amendments to and interpretations of existing regulations, or may issue
new regulations, which both of the parties hereto may be required to modify their policies and procedures. To the extent such regulations are so amended or interpreted, each party hereto agrees to use reasonable efforts to adjust the Agreement in
order to comply with any such new requirements. 
 (v) By the signing of this Agreement, each party certifies that it has a
written, comprehensive information security program that is in compliance with federal and state laws that are applicable to its respective organization and the types of Confidential Information it receives. 

  
 13 

 (b) The Asset Representations Reviewer represents and warrants that it has, and will
continue to have, adequate administrative, technical, and physical safeguards designed to (i) protect the security, confidentiality and integrity of Non-Public Personal Information, (ii) ensure
against anticipated threats or hazards to the security or integrity of Non-Public Personal Information, (iii) protect against unauthorized access to or use of
Non-Public Personal Information and (iv) otherwise comply with its obligations under this Agreement. These safeguards include a written data security plan, employee training, information access controls,
restricted disclosures, systems protections (e.g., intrusion protection, data storage protection and data transmission protection) and physical security measures. 

(c) Asset Representations Reviewer will promptly notify Servicer in the event it becomes aware of any unauthorized or suspected acquisition of
data or Confidential Information that compromises the security, confidentiality or integrity of Servicer’s Confidential Information, whether internal or external. The disclosure will include the date and time of the breach along with
specific information compromised along with the monitoring logs, to the extent then known. The Asset Representations Reviewer will use commercially reasonable efforts to take remedial action to resolve such breach. 

(d) The Asset Representations Reviewer will cooperate with and provide information to the Issuer and the Servicer regarding the Asset
Representations Reviewer’s compliance with this Section 4.9. 
 ARTICLE V. 

RESIGNATION AND REMOVAL 

Section 5.1. Resignation and Removal of Asset Representations Reviewer. 

(a) Resignation of Asset Representations Reviewer. The Asset Representations Reviewer may not resign as Asset Representations Reviewer,
except: 
 (i) upon determination that (A) the performance of its obligations under this Agreement is no longer
permitted under applicable law and (B) there is no reasonable action that it could take to make the performance of its obligations under this Agreement permitted under applicable law; or 

(ii) with the consent of the Issuer. 

The Asset Representations Reviewer will give the Issuer and the Servicer sixty (60) days’ prior notice of its resignation. Any
determination permitting the resignation of the Asset Representations Reviewer under subsection (i) above must be evidenced by an Opinion of Counsel delivered to the Issuer, the Servicer, the Owner Trustee, the Collateral Agent and the
Indenture Trustee. No resignation of the Asset Representations Reviewer will become effective until a successor Asset Representations Reviewer is in place. 

  
 14 

 (b) Removal of Asset Representations Reviewer. The Issuer may remove the Asset
Representations Reviewer and terminate all of its rights and obligations (other than as provided in Section 4.6) under this Agreement (i) if the Asset Representations Reviewer ceases to be an Eligible Asset Representations Reviewer,
(ii) on a breach of any of the representations, warranties, covenants or obligations of the Asset Representations Reviewer contained in this Agreement and (iii) on the occurrence of an Insolvency Event with respect to the Asset
Representations Reviewer, by notifying the Asset Representations Reviewer, the Indenture Trustee and the Servicer of the removal. 
 (c)
Effectiveness of Resignation or Removal. No resignation or removal of the Asset Representations Reviewer will become effective until a successor Asset Representations Reviewer is in place. The predecessor Asset Representations Reviewer will
continue to perform its obligations under this agreement until a successor asset Representations Reviewer is in place. 
 Section 5.2.
Engagement of Successor. 
 (a) Successor Asset Representations Reviewer. Following the resignation or removal of the Asset
Representations Reviewer under Section 5.1, the Issuer will engage as the successor Asset Representations Reviewer a Person that is an Eligible Asset Representations Reviewer. The successor Asset Representations Reviewer will accept its
engagement or appointment by executing and delivering to the Issuer and the Servicer an agreement to assume the Asset Representations Reviewer’s obligations under this Agreement or entering into a new Asset Representations Review Agreement with
the Issuer that is on substantially the same terms as this Agreement. 
 (b) Transition and Expenses. The predecessor Asset
Representations Reviewer will cooperate with the successor Asset Representations Reviewer engaged by the Issuer in effecting the transition of the Asset Representations Reviewer’s obligations and rights under this Agreement. The predecessor
Asset Representations Reviewer will pay the reasonable expenses of the successor Asset Representations Reviewer in transitioning the Asset Representations Reviewer’s obligations under this Agreement and preparing the successor Asset
Representations Reviewer to take on the obligations on receipt of an invoice with reasonable detail of the expenses from the successor Asset Representations Reviewer. 

Section 5.3. Merger, Consolidation or Succession. Any Person (a) into which the Asset Representations Reviewer is merged or
consolidated, (b) resulting from any merger or consolidation to which the Asset Representations Reviewer is a party, (c) which acquires substantially all of the assets of the Asset Representations Reviewer, or (d) succeeding to the
business of the Asset Representations Reviewer, which Person is an Eligible Asset Representations Reviewer, will be the successor to the Asset Representations Reviewer under this Agreement. Such Person will execute and deliver to the Issuer and the
Servicer an agreement to assume the Asset Representations Reviewer’s obligations under this Agreement (unless the assumption happens by operation of law). No such transaction will be deemed to release the Asset Representations Reviewer from its
obligations under this Agreement. 

  
 15 

 ARTICLE VI 

OTHER AGREEMENTS 

Section 6.1. Independence of Asset Representations Reviewer. The Asset Representations Reviewer will be an independent contractor
and will not be subject to the supervision of the Issuer, the Indenture Trustee or the Owner Trustee for the manner in which it accomplishes the performance of its obligations under this Agreement. Unless expressly authorized by the Issuer and, with
respect to the Owner Trustee, the Owner Trustee, the Asset Representations Reviewer will have no authority to act for or represent the Issuer, the Indenture Trustee or the Owner Trustee and will not be considered an agent of the Issuer, the
Indenture Trustee or the Owner Trustee. Nothing in this Agreement will make the Asset Representations Reviewer and any of the Issuer, the Indenture Trustee or the Owner Trustee members of any partnership, joint venture or other separate entity or
impose any liability as such on any of them. 
 Section 6.2. No Petition. Each of the Servicer and the Asset Representations
Reviewer, by entering into this Agreement, and the Owner Trustee and the Indenture Trustee, by accepting the benefits of this Agreement, agrees that, before the date that is one year and one day (or, if longer, any applicable preference period)
after payment in full of (a) all securities issued by the Seller or by a trust for which the Seller was a Seller or (b) the Notes, it will not start or pursue against, or join any other Person in starting or pursuing against, the Seller or
the Issuer any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other proceedings under any bankruptcy or similar law. This Section 6.2 will survive the termination of this Agreement. 

Section 6.3. Limitation of Liability of Owner Trustee . It is expressly understood and agreed by the parties hereto that
(i) this Agreement is executed and delivered by Wilmington Trust Company, not individually or personally but solely as trustee of the Issuer, in the exercise of the powers and authority conferred and vested in it, (ii) each of the
representations, undertakings and agreements herein made on the part of the Issuer is made and intended not as personal representations, undertakings and agreements by Wilmington Trust Company but is made and intended for the purpose of binding only
the issuer, (iii) nothing herein contained shall be construed as creating any liability on Wilmington Trust Company, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any,
being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto, (iv) Wilmington Trust Company has made no investigation as to the accuracy or completeness of any representations or warranties
made by the Issuer in this Agreement and (v) under no circumstances shall Wilmington Trust Company be personally liable for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or failure of any obligations,
representation, warranty or covenant made or undertaken by the Issuer under this Agreement or any other related documents. 

Section 6.4. Termination of Agreement. This Agreement will terminate, except for the obligations under Section 4.6, on the
earlier of (a) the payment in full of all outstanding Notes and the satisfaction and discharge of the Indenture and (b) the termination of the Issuer. 

  
 16 

 ARTICLE VII 

MISCELLANEOUS PROVISIONS 

Section 7.1. Amendments. 

(a) The parties may amend this Agreement: 

(i) without the consent of the Noteholders, to clarify an ambiguity or to correct or supplement any term of this Agreement that
may be defective or inconsistent with the other terms of this Agreement or to provide for, or facilitate the acceptance of this Agreement by, a successor Asset Representations Reviewer; 

(ii) without the consent of the Noteholders, if the Servicer delivers an Officer’s Certificate to the Issuer, the Owner
Trustee, the Collateral Agent and the Indenture Trustee stating that the amendment will not have a material adverse effect on the Notes; or 

(iii) with the consent of the Noteholders of a majority of the Note Balance of each Class of Notes materially and
adversely affected by the amendment (with each affected Class voting separately, except that all Noteholders of Class A Notes will vote together as a single class). 

(b) Notice of Amendments. The Servicer will give prior notice of any amendment to the Rating Agencies. Promptly after the execution of
an amendment, the Servicer will deliver a copy of the amendment to the Rating Agencies. 
 Section 7.2. Assignment; Benefit of
Agreement; Third Party Beneficiaries. 
 (a) Assignment. Except as stated in Section 5.3, this Agreement may not be assigned
by the Asset Representations Reviewer without the consent of the Issuer and the Servicer. 
 (b) Benefit of the Agreement; Third-Party
Beneficiaries. This Agreement is for the benefit of and will be binding on the parties to this Agreement and their permitted successors and assigns. The Owner Trustee and the Indenture Trustee (both in its individual capacity and in its capacity
as Indenture Trustee), for the benefit of the Noteholders, will be third-party beneficiaries of this Agreement entitled to enforce this Agreement against the Asset Representations Reviewer and the Servicer. No other Person will have any right or
obligation under this Agreement. 
 Section 7.3. Notices. 

(a) Delivery of Notices. All notices, requests, demands, consents, waivers or other communications to or from the parties to this
Agreement must be in writing and will be considered given: 
 (i) on delivery or, for a letter mailed by registered first
class mail, postage prepaid, three (3) days after deposit in the mail; 
 (ii) for a fax, when receipt is confirmed by
telephone, reply email or reply fax from the recipient; 

  
 17 

 (iii) for an email, when receipt is confirmed by telephone or reply email
from the recipient; and 
 (iv) for an electronic posting to a password-protected website to which the recipient has access,
on delivery (without the requirement of confirmation of receipt) of an email to that recipient stating that the electronic posting has occurred. 

(b) Notice Addresses. Any notice, request, demand, consent, waiver or other communication will be delivered or addressed as follows: via
electronic mail to ARRNotices@clayton.com, and to Clayton Fixed Income Services LLC, 2638 South Falkenburg Road, Riverview, Florida 33578, Attn: SVP, with a copy to Clayton Fixed Income Services LLC, c/o Clayton Holdings LLC, 1500 Market Street,
West Tower Suite 2050, Philadelphia, Pennsylvania 19102, Attn: General Counsel, or at any another address as the related party may designate by notice to the other parties hereto. 

Section 7.4. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND THIS AGREEMENT AND ALL MATTERS
ARISING OUT OF OR RELATING IN ANY WAY TO THIS AGREEMENT SHALL BE, GOVERNED BY, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW). 
 Section 7.5. Submission to
Jurisdiction. Each of the parties hereto hereby irrevocably and unconditionally: 
 (a) submits for itself and, as applicable, its
property, in any legal action relating to this Agreement, the Program Documents or any other documents executed and delivered in connection herewith, or for recognition and enforcement of any judgment in respect thereof, to the nonexclusive general
jurisdiction of the courts of the State of New York, the courts of the United States of America for the Southern District of New York and appellate courts from any thereof; 

(b) consents that any such action may be brought in such courts and waives any objection that it may now or hereafter have to the venue of such
action in any such court or that such action was brought in an inconvenient court and agrees not to plead or claim the same; and 
 (c)
waives, to the fullest extent permitted by law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement, the Program Documents or the transactions contemplated hereby. 

Section 7.6. No Waiver; Remedies. No party’s failure or delay in exercising any power, right or remedy under this Agreement
will operate as a waiver. No single or partial exercise of any power, right or remedy will preclude any other or further exercise of the power, right or remedy or the exercise of any other power, right or remedy. The powers, rights and remedies
under this Agreement are in addition to any powers, rights and remedies under law. 
 Section 7.7. Severability. Any provision
of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 

  
 18 

 Section 7.8. Headings. The headings of the various Articles and Sections herein
are for convenience of reference only and shall not define or limit any of the terms or provisions hereof. 
 Section 7.9.
Counterparts. This Agreement may be executed in multiple counterparts. Each counterpart will be an original, and all counterparts will together be one document. 

[Remainder of Page Intentionally Left Blank] 

  
 19 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered by their respective duly authorized officers as of the day and the year first above written. 
  

			
	 GM FINANCIAL AUTOMOBILE LEASING TRUST
2018-3

	
	By: WILMINGTON TRUST COMPANY, not in its individual capacity but solely as Owner Trustee on behalf of the Trust.
		
	By:	 	 /s/ Clarice Wright

	 Name: Clarice Wright

Title:   Assistant Vice President

	
	AMERICREDIT FINANCIAL SERVICES, INC. d/b/a GM FINANCIAL, as Servicer
		
	By:	 	 /s/ Sheli Fitzgerald

	 Name: Sheli Fitzgerald

Title:   Senior Vice President, Corporate Treasury

	
	CLAYTON FIXED INCOME SERVICES LLC, as Asset Representations Reviewer
		
	By:	 	 /s/ Robert Harris

	Name: Robert Harris
	Title:   Secretary

 [Signature Page to Asset Representations Review Agreement] 

 Schedule A 

Representation 
 1.
Origination. The 2018-3 Lease Agreement (a) was originated in the United States by the Titling Trust or a Dealer in the ordinary course of business and in accordance with GM Financial’s
underwriting guidelines for lease agreements, and, in the case of a 2018-3 Lease Agreement originated by a Dealer, pursuant to a Dealer Agreement which allows for recourse to the Dealer in the event of certain
defects in the 2018-3 Lease Agreement (but not for a default by the related Lessee), and (b) was not originated under a master lease contract. 

Documents 
 Lease Documents 

Procedures to be Performed 
  

	i.	 Confirm the Lease Agreement lists the Titling Trust or an approved Dealer as the Lessor 

 

	ii.	 If the Lessor is listed as a Dealer, confirm the Dealer name on the Lease Agreement matches the Dealer name on
the Dealer Agreement 

  

	iii.	 If the Lessor is listed as a Dealer, confirm the Dealer Agreement allows for recourse to the Dealer in the
event of certain defects in the Lease Agreement 

  

	iv.	 Confirm the Lease Agreement was not originated under a master lease contract 

 

	v.	 If Steps (i) through (iv) are confirmed, then Test Pass 

  
 Schedule A-1 

 Representation 

2. Good Title. The Titling Trust has good title, or the Servicer has commenced procedures that will result in good title, to each 2018-3 Lease Agreement and each 2018-3 Leased Vehicle, free and clear of any Liens (other than the Liens in favor of the Collateral Agent granted in accordance with the Credit
and Security Agreement); and the Collateral Agent has a security interest in each 2018-3 Lease Agreement and the related 2018-3 Leased Vehicle which was validly created
and is a perfected, first priority security interest, and is noted as lienholder on the related Certificate of Title. 
 Documents 

Lease Documents 
 Procedures to be Performed 

 

	i.	 Confirm the Certificate of Title or Application for Certificate of Title lists the Titling Trust as the
titleholder of the Leased Vehicle 

  

	ii.	 Confirm the Vehicle Identification Number (VIN) listed on the title documents matches the VIN number on the
Lease Agreement 

  

	iii.	 Confirm there is no evidence of any lien that would take priority over the Collateral Agent’s security
interest 

  

	iv.	 Confirm the Collateral Agent is listed on the Title Documents as the first priority lienholder

  

	v.	 If Steps (i) through (v) are confirmed, then Test Pass 

  
 Schedule A-2 

 Representation 

3. Compliance with Law. Each 2018-3 Lease Agreement complied in all material respects at the
time it was originated, and as of the date of the 2018-3 Servicing Supplement will comply in all material respects, with all requirements of federal, State and local laws. 

Documents 
 Lease Documents 

Procedures to be Performed 
  

	i.	 Confirm the following sections are present on the contract and filled out: 

 

	 	a.	 Name and address of Lessor 

 

	 	b.	 Name and address of Lessee 

 

	 	c.	 Vehicle Description 

  

	 	d.	 Amount Due at Lease Signing 

 

	 	e.	 Amount of Monthly Payment 

 

	 	f.	 Number of Monthly Payments 

 

	 	g.	 Other Charges 

  

	 	h.	 Total of Payments 

  

	ii.	 Confirm there is an itemization of the Amount Due at Lease Signing. 

 

	iii.	 Confirm there is an itemization of the Monthly Payment 

 

	iv.	 Confirm the following disclosures are included in the contract: 

 

	 	a.	 Early Termination 

  

	 	b.	 Excessive Wear 

  

	 	c.	 Purchase Option 

  

	 	d.	 Insurance Requirements 

 

	 	e.	 Late Charges 

  

	v.	 If Step (i) through (iv) are confirmed, then Test Pass 

  
 Schedule A-3 

 Representation 

4. Necessary Licenses and Approvals. All material consents, licenses, approvals or authorizations of, or registrations or declarations
with, any Governmental Authority required to be obtained, effected or given by the originator of such 2018-3 Lease Agreement in connection with (a) the origination or acquisition of such 2018-3 Lease Agreement, (b) the execution, delivery and performance of such 2018-3 Lease Agreement by the Titling Trust, and (c) the acquisition of such 2018-3 Lease Agreement and the related 2018-3 Leased Vehicle by the Titling Trust, were duly obtained, effected or given and were in full force and effect as of such date of
origination or acquisition. 
 Documents 
 Lease
Documents 
 Dealer Agreement 
 Procedures to be
Performed 
  

	i.	 If the Lease Agreement was originated by GM Financial, review the Lease Documents and confirm GM Financial had
all necessary licenses and permits as required by the state in which it was originated 

  

	ii.	 If the Lease Agreement was originated by a Dealer, confirm the Dealer Agreement contains language confirming
the dealer was required to have all necessary licenses and permits and there was no evidence to the contrary. 

  

	iii.	 If (i) and (ii) are confirmed, then Test Pass 

  
 Schedule A-4 

 Representation 

5. Binding Obligation. The 2018-3 Lease Agreement and all related Lease Documents were fully and
properly executed by the parties thereto and such 2018-3 Lease Agreement represents the legal, valid and binding full-recourse payment obligation of the related Lessee, enforceable against such Lessee in
accordance with its terms, except as enforceability is subject to or limited by bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium and other similar laws affecting the enforcement of creditors’ rights in general or
principles of equity (whether considered in a suit at law or in equity). 
 Documents 

Lease Documents 
 Procedures to be Performed 

 

	i.	 Confirm the Lessee, Co-lessee and Lessor have signed the Lease
Agreement 

  

	ii.	 If Steps (i) and (ii) are confirmed, then Test Pass 

  
 Schedule A-5 

 Representation 

6. No Defenses. The 2018-3 Lease Agreement is not subject, to the best of the Seller’s and
Servicer’s knowledge, any right of rescission, cancellation, setoff, claim, counterclaim or any other defense (including defenses arising out of violations of usury laws) of the related Lessee to payment of the amounts due thereunder, and no
such right of rescission, cancellation, set-off, claim, counterclaim or any other defense (including defenses arising out of violations of usury laws) has been asserted or threatened. 

Documents 
 Lease Documents 

Procedures to be Performed 
  

	i.	 Confirm there is no indication the Lease Agreement is subject to any right or threat of rescission,
cancellation, setoff, claim, counterclaim or other defense 

  

	ii.	 If confirmed, then Test Pass 

  
 Schedule A-6 

 Representation 

7. Satisfaction of Obligations. Each of GM Financial, the Titling Trust and, to the best of the Seller’s and Servicer’s
knowledge, the Dealer which originated the 2018-3 Lease Agreement, if any, has satisfied all respective obligations required to be fulfilled on its part with respect to such
2018-3 Lease Agreement and the related 2018-3 Leased Vehicle. 

Documents 
 Lease Documents 

Procedures to be Performed 
  

	i.	 Confirm the Lease Agreement contains a Truth in Lending statement 

 

	ii.	 If confirmed, then Test Pass 

  
 Schedule A-7 

 Representation 
  

	 	8.	 U.S. Dollars. The 2018-3 Lease Agreement is payable solely in
Dollars in the United States. 

 Documents 

Lease Documents 
 Procedures to be Performed 

 

	i.	 Confirm all dollar amounts within the Lease Agreement are denominated in US Dollars 

 

	ii.	 If confirmed, then Test Pass 

  
 Schedule A-8 

 Representation 

9. No Government Obligors. The related Lessee is a Person other than GM Financial, any Affiliate or employee thereof or a Governmental
Authority and at the time of origination of the 2018-3 Lease Agreement, based on information provided by the Lessee, the Lessee is located in and has a billing address within the United States. 

Documents 
 Lease Documents 

Procedures to be Performed 
  

	i.	 Confirm the Lessee is not GM Financial 

 

	ii.	 Confirm the Lessee is not a Governmental Authority as of the origination of the Lease Agreement

  

	iii.	 Confirm the Lease Agreement reports the Lessee’s billing address within the United States

  

	iv.	 If tests (i) through (iii) are confirmed, then Test Pass 

  
 Schedule A-9 

 Representation 

10. No Bankrupt Lessees. As of the Cutoff Date, the related Lessee has not been identified on the records of GM Financial as being the
subject of a current bankruptcy proceeding. 
 Documents 

data tape 
 Procedures to be Performed 

 

	i.	 Review the data tape and confirm the Lessee is not involved in active bankruptcy proceeding as of the Cutoff
Date 

  

	ii.	 If confirmed, then Test Pass 

  
 Schedule A-10 

 Representation 

11. Insurance. The 2018-3 Lease Agreement requires the Lessee thereunder to maintain
(a) physical damage and liability insurance covering the related 2018-3 Leased Vehicle, and (b) insurance against loss and damage due to fire, theft, transportation, collision and other risks
generally covered by comprehensive and collision coverage. 
 Documents 

Lease Documents 
 Procedures to be Performed 

 

	i.	 Confirm the Lease Agreement contains language requiring the Lessee to maintain physical damage and liability
insurance on the vehicle 

  

	ii.	 Confirm the Lease Agreement contains language requiring the Lessee to obtain insurance against loss and damage
due to fire, theft, transportation, collision and other risks generally covered by comprehensive and collision coverage 

  

	iii.	 If (i) and (ii) are confirmed, then Test Pass 

  
 Schedule A-11 

 Representation 

12. Security Interest in Leased Vehicle. The related 2018-3 Leased Vehicle is titled in the name
of a Titling Trust Permissible Name and the Collateral Agent is listed as the recorded lienholder or recorded holder of a security interest in such 2018-3 Leased Vehicle, or the Servicer has commenced
procedures that will result in such 2018-3 Leased Vehicle being titled in the name of a Titling Trust Permissible Name and the Collateral Agent being listed as recorded lienholder or recorded holder of a
security interest in such 2018-3 Leased Vehicle. 
 Documents 

Lease Documents 
 Procedures to be Performed 

 

	i.	 Confirm the Certificate of Title or Application for Certificate of Title lists the Titling Trust as the
titleholder of the Leased Vehicle 

  

	ii.	 Confirm the Vehicle Identification Number (VIN) listed on the title documents matches the VIN number on the
Lease Agreement 

  

	iii.	 Confirm the Collateral Agent is listed on the Title Documents as the first priority lienholder

  

	iv.	 If Steps (i) through (iii) are confirmed, then Test Pass 

  
 Schedule A-12 

 Representation 

13. Simple Interest. The 2018-3 Lease Agreement is a
closed-end lease that provides for equal monthly payments by the Lessee, which scheduled payments, if made when due, fully amortize the net capitalized cost of such
2018-3 Lease Agreement to the Booked Residual Value by the end of the Lease Term, based on the related APR. 

Documents 
 Lease Documents 

Procedures to be Performed 
  

	i.	 Confirm the monthly payment reported on the Lease Agreement are level 

 

	ii.	 Confirm the product of the number of payments and the amount of the payments fully amortizes the net
capitalized cost 

  

	iii.	 If Steps (i) and (ii) are confirmed, then Test Pass 

  
 Schedule A-13 

 Representation 

14. Lawful Assignment. The 2018-3 Lease Agreement is fully assignable by the Lessor and does not
require the consent of the related Lessee or any other Person as a condition to any transfer, sale, assignment or granting of a security interest of the rights thereunder to or by the Titling Trust. 

Documents 
 Lease Documents 

Procedures to be Performed 
  

	i.	 Confirm the Lease Agreement contains disclosures that grant the lessor the ability to fully assign its
interests without the consent of the related Lessee or any other Person 

  

	ii.	 If confirmed, then Test Pass 

  
 Schedule A-14 

 Representation 

15. No Material Amendments or Modifications. The 2018-3 Lease Agreement has not been modified in
any way except in accordance with the Customary Servicing Practices. 
 Documents 

Lease Documents 
 Procedures to be Performed 

 

	i.	 Confirm the Lease Agreement has not been modified in any way except in accordance with the Customary Servicing
Practices 

  

	ii.	 If confirmed, then Test Pass 

  
 Schedule A-15 

 Representation 

16. No Default. As of the Cutoff Date, the 2018-3 Lease Agreement is not a Liquidated Lease, a
Defaulted Lease or a Delinquent Lease and, except as permitted in this paragraph, to the best of the Seller’s and Servicer’s knowledge, no default, breach, violation or event permitting acceleration under its terms has occurred; and to the
best of the Seller’s and Servicer’s knowledge, no continuing condition that with notice or the lapse of time would constitute a default, breach, violation or event permitting acceleration under its terms has arisen; and GM Financial has
not waived, and shall not waive, any of the foregoing. 
 Documents 

data tape 
 Procedures to be Performed 

 

	i.	 Confirm the Lease is active as of the Cutoff Date 

 

	ii.	 Confirm the Lease is not delinquent as of the Cutoff Date 

 

	iii.	 Confirm there is no evidence of a breach, violation or event permitting acceleration of the terms of the Lease
Agreement 

  

	iv.	 Confirm there is no continuing conditions that has arisen that would lead to a default, breach, violation or
even permitting acceleration under the Lease terms 

  

	v.	 If (i) through (iv) are confirmed, then Test Pass 

  
 Schedule A-16 

 Representation 

17. Vehicle. The related 2018-3 Leased Vehicle is a car, light truck or utility vehicle
manufactured by General Motors Company or an Affiliate thereof. 
 Documents 

Lease Documents 
 Procedures to be Performed 

 

	i.	 Confirm the Vehicle is a car, light truck or utility vehicle 

 

	ii.	 Confirm the Vehicle was manufactured by General Motors Company or an Affiliate 

 

	iii.	 If (i) and (ii) are confirmed, then Test Pass 

  
 Schedule A-17 

 Representation 

18. Chattel Paper. The 2018-3 Lease Agreement constitutes “tangible chattel paper” or
“electronic chattel paper” within the meaning of the UCC. 
 Documents 

Lease Documents 
 Procedures to be Performed 

 

	i.	 Confirm there is a signature under the appropriate lessee, co-lessee
and lessor signature lines within the Lease Agreement 

  

	ii.	 Confirm the Lease Agreement reports an monetary obligation greater than zero 

 

	iii.	 Confirm the Title Documents report the Collateral Agent has a security interest in the Lease Agreement

  

	iv.	 If Steps (i) through (iii) are confirmed, then Test Pass 

  
 Schedule A-18 

 Representation 

19. Leases in Force. The 2018-3 Lease Agreement is in full force and effect and, to the best of
the Seller’s and Servicer’s knowledge, has not been satisfied, subordinated, rescinded, cancelled or terminated. 
 Documents 

Lease Documents 
 Procedures to be Performed 

 

	i.	 Confirm there is no evidence within the Lease Documents that the Lease has been subordinated, rescinded,
cancelled or terminated 

  

	ii.	 Confirm there is no evidence within the Lease Documents that the Lease has been satisfied prior to the Cutoff
Date 

  

	iii.	 If Steps (i) through (ii) are confirmed, then Test Pass 

  
 Schedule A-19 

 Representation 

20. Schedule of Leases. The 2018-3 Lease Agreement has been identified in the Schedule of 2018-3 Lease Agreements and 2018-3 Leased Vehicles and such Schedule of 2018-3 Lease Agreements and
2018-3 Leased Vehicles is accurate in all material respects and the 2018-3 Lease Agreement has not been allocated to any other Designated Pool. 

Documents 
 data tape 

Procedures to be Performed 
  

	i.	 Confirm the Lease number reported in the data tape matches the Lease number reported in the Schedule of 2018-3 Lease Agreements and 2018-3 Leased Vehicles 

  

	ii.	 If confirmed, Test Pass 

  
 Schedule A-20 

 Representation 

21. Maturity Date. At origination the Maturity Date with respect to the 2018-3 Lease Agreement
was not less than twelve (12) months or more than sixty (60) months after the date of origination. 
 Documents 

Lease Documents 
 Procedures to be Performed 

 

	i.	 Confirm the Lease Agreement reports the lease term within the allowable range 

 

	ii.	 If confirmed, then Test Pass 

  
 Schedule A-21 

 Representation 

22. Securitization Value. As of the 2018-3 Cutoff Date, each
2018-3 Lease Agreement had a Securitization Value not less than $5,000.000 and no more than $150,000.00. 

Documents 
 Lease Documents 

Procedures to be Performed 
  

	i.	 Confirm the Lease Agreement reports the Securitization value within the allowable range. 

 

	ii.	 If confirmed, then Test Pass 

  
 Schedule A-22 

 Representation 

23. One Original. With respect to any 2018-3 Lease Agreement that constitutes “electronic
chattel paper” under the UCC, (a) a single electronically authenticated authoritative copy (within the meaning of the UCC) of the 2018-3 Lease Agreement is continuously maintained by the Servicer,
and (b) the Servicer is able (1) to transfer the electronically authenticated authoritative copy of the related 2018-3 Lease Agreement to a separate electronic vault at the related econtracting
facilitator that is controlled by the applicable Successor Servicer or to an electronic vault at the applicable successor Servicer, or (2) to export the electronically authenticated authoritative copy from the electronic vault and deliver a
physical copy of the exported 2018-3 Lease Agreement to the successor Servicer. 
 Documents 

Lease Documents 
 E-Vault

 Procedures to be Performed 
  

	i.	 If the Lease Agreement constitutes “electronic chattel paper”, confirm it is an electronically
authenticated authoritative copy and 

  

	ii.	 Confirm the authoritative copy of the Lease Agreement was signed by all parties 

 

	iii.	 If (i) and (ii) are confirmed, then Test Pass 

  
 Schedule A-23Exhibit 10.1

 

TRANSITION SERVICES AGREEMENT

 

BY AND BETWEEN

 

SERVICEMASTER GLOBAL HOLDINGS, INC.

 

AND

 

FRONTDOOR, INC.

 

DATED AS OF SEPTEMBER 28, 2018

 

 

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
    

 

i

 

	
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
    

 

ii

 

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

 

 

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

 

2

 

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,

 

3

 

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

 

4

 

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,

 

5

 

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

 

6

 

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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