Exhibit 10.4
TRANSITION SERVICES
AGREEMENT
This TRANSITION SERVICES AGREEMENT
(this “ Agreement ”) is entered into as of
November 20, 2008 and effective as of the Closing Date subject
to the consummation of the Closing (the “ Effective
Date ”), between RESIDENTIAL CAPITAL, LLC, a Delaware
limited liability company (“ ResCap ”), GMAC
RESIDENTIAL FUNDING OF CANADA, LIMITED, a corporation organized
under the laws of Canada (“ RFOC ”) (ResCap and
RFOC are collectively referred to as the “ ResCap
Entities ”) and RESMOR TRUST COMPANY, a Canadian
federally incorporated trust company (“ ResMor
”). All capitalized terms used in this Agreement but not
defined herein shall have the meanings assigned to them in the
Purchase Agreement (as defined below).
WHEREAS, concurrently herewith,
pursuant to and on the terms and conditions contained in that
certain Share Purchase Agreement (the “ Purchase
Agreement ”), dated as of November 20, 2008, between
RFOC and GMAC LLC, a Delaware limited liability company (“
GMAC ”), RFOC is selling to GMAC, and GMAC is
purchasing from RFOC, (i) all of the issued and outstanding
shares of 1020491 Alberta Ltd., a corporation existing under the
laws of Alberta, and (ii) the shares of ResMor Capital
Corporation, a corporation existing under the laws of Alberta,
owned by RFOC;
WHEREAS, ResMor presently provides
certain services to RFOC and the ResCap Entities presently provide
certain services to ResMor, and the parties agree that, during the
term of this Agreement, the parties shall continue to render
certain services pursuant to the terms and conditions of this
Agreement;
NOW, THEREFORE, in consideration of
the premises and of the mutual promises herein contained, the
ResCap Entities and ResMor agree as follows:
ARTICLE I
SERVICES PROVIDED
1.01 Services .
(a) The ResCap Entities shall
provide, or shall cause their Affiliates or a third party service
provider (such third party service providers, “
Providers ”) to provide, to ResMor the services that
are identified as ResCap Services on Schedule A hereto
(collectively, as the parties may agree to amend such description
of services pursuant to Section 1.01(c) below, the
“ ResCap Services ”). The ResCap Services shall
be provided in accordance with the terms, limitations and
conditions set forth in this Agreement provided , that
nothing herein will obligate the ResCap Entities to violate any
applicable Law in performance of the ResCap Services. Unless
otherwise agreed to by the parties in writing, the ResCap Entities
shall perform the ResCap Services with substantially the same
degree of care and diligence and using substantially the same
business procedures and policies, standards of care and internal
controls, including loss prevention controls, as those used by the
ResCap Entities in providing the ResCap Services to ResMor or
others prior to the Closing. The parties do not intend this
Agreement to change, in any material respect, the type, quantity,
quality, timeliness or manner of performance of any ResCap Services
from those provided prior to the Closing.
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(b) ResMor shall provide, or shall
cause its Affiliates or Providers to provide, to RFOC the services
that are identified as ResMor Services on Schedule A hereto
(collectively, as the parties may agree to amend such description
of services pursuant to Section 1.01(c) below, the
“ ResMor Services ”). The ResMor Services shall
be provided in accordance with the terms, limitations and
conditions set forth in this Agreement; provided , that
nothing herein will obligate ResMor to violate any applicable Law
in performance of the ResMor Services. Unless otherwise agreed to
by the parties in writing, ResMor shall perform the ResMor Services
with substantially the same degree of care and diligence and using
substantially the same business procedures and policies, standards
of care and internal controls, including loss prevention controls,
as those used by ResMor in providing the ResMor Services to RFOC or
others prior to the Closing. The parties do not intend this
Agreement to change, in any material respect, the type, quantity,
quality, timeliness or manner of performance of any ResMor Services
from those provided prior to the Closing.
(c) Prior to the Closing, the
parties shall negotiate in good faith to amend this Agreement to
include terms and provisions that comply with all applicable Laws,
including Guideline B-10 of OSFI, if and to the extent necessary.
The parties shall negotiate in good faith to provide further
details of and pricing for the ResCap Services and the ResMor
Services consistent with Schedule A .
1.02 Term .
(a) The ResCap Entities shall
provide the ResCap Services to ResMor commencing on the Effective
Date and continuing for six months after the Effective Date (the
“ Initial Term ”), subject to earlier
termination under Section 5.01 . The ResCap Entities
and ResMor shall terminate any ResCap Services upon 30 days’
prior written notice from ResMor that it no longer desires to
receive such ResCap Service.
(b) ResMor shall provide the ResMor
Services to ResCap during the Initial Term, subject to earlier
termination under Section 5.01 . ResMor and the ResCap
Entities shall terminate any ResMor Services upon 30 days’
prior written notice from RFOC that it no longer desires to receive
such ResCap Service.
(c) The ResCap Entities and ResMor
may renew this Agreement after the Initial Term on such terms, and
for such period, as they may mutually agree (the “ Renewal
Term ”). The parties acknowledge and agree that the
ResCap Entities and ResMor may agree to reduce the number of ResCap
Services or ResMor Services, as applicable, and that the fees for
such ResCap Services or ResMor Services, as applicable, may
consequently be reduced as mutually agreed. Should the parties not
reach agreement on the fees and ResCap Services and ResMor Services
for the Renewal Term at least 30 days prior to the expiration of
this Agreement, this Agreement shall expire by its terms at the
conclusion of the Initial Term. Neither the ResCap Entities nor
ResMor shall be obligated to provide ResCap Services or ResMor
Services, as applicable, during the Renewal Term if the parties are
unable to reach a mutually acceptable agreement for such Renewal
Term
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1.03 Use of Services . RFOC
shall use the ResMor Services for substantially the same purposes
and in substantially the same manner as RFOC used such ResMor
Services prior to the Closing. ResMor shall use the ResCap Services
for substantially the same purposes and in substantially the same
manner as ResMor used such ResCap Services prior to the
Closing.
1.04 Personnel .
(a) All employees of the ResCap
Entities and their Affiliates and those of any Providers hired by
the ResCap Entities (excluding any employees of ResCap and its
Affiliates hired by ResMor after termination of the Employee
Leasing Agreement) (“ ResCap Personnel ”) will
remain employees of the ResCap Entities, their Affiliates and
Providers, as applicable, and shall not be considered employees of
ResMor. The ResCap Entities, their Affiliates and the applicable
Providers shall be solely responsible for (i) all salaries,
benefits and other compensation or payments to ResCap Personnel
(including subcontractors), (ii) making all deductions and
withholdings from its employees’ salaries and other
compensation and (iii) the payment of all contributions, taxes
and assessments applicable to its employees.
(b) All employees of ResMor and its
Affiliates and those of any Providers hired by ResMor (“
ResMor Personnel ”) will remain employees of ResMor,
its Affiliates and Providers, as applicable, and shall not be
considered employees of the ResCap Entities. ResMor, its Affiliates
and the applicable Providers shall be solely responsible for
(i) all salaries, benefits and other compensation or payments
to ResMor Personnel (including subcontractors), (ii) making
all deductions and withholdings from its employees’ salaries
and other compensation and (iii) the payment of all
contributions, taxes and assessments applicable to its
employees.
1.05 Access .
(a) The ResCap Entities agree to
provide ResMor with all information reasonably requested by ResMor
in order to provide the ResMor Services required pursuant to this
Agreement. ResMor shall treat all such information as Confidential
Information (as defined below). If ResMor or any of its Affiliates
is given or gains access, including unintentional or accidental
access, to any of the ResCap Entities’, or any of their
Affiliates’ or other Persons’ who receive any ResMor
Services from ResMor, computer or electronic systems or data
storage due, directly or indirectly, to ResMor’s rendering of
the ResMor Services, ResMor shall limit such access and use solely
to the performance of the ResMor Services or use of the ResCap
Services, as applicable, and will not attempt to access such
computer system, electronic files, software or other electronic
services other than those specifically required to perform the
ResMor Services or use the ResCap Services, as applicable. ResMor
shall (i) limit such access to ResMor Personnel who have an
express requirement to have such access in connection with this
Agreement, and (ii) follow all reasonable security rules and
procedures of the ResCap Entities for use of the ResCap
Entities’ electronic resources (provided that the
ResCap
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Entities have informed ResMor of
such rules and procedures and all changes thereto). All use of
identification numbers and passwords disclosed, unintentional or
otherwise, to ResMor or its Affiliates and any information obtained
by ResMor or its Affiliates, regardless of the means, as a result
of ResMor’s access to, and use of, the ResCap Entities’
computer and electronic storage systems shall be deemed to be, and
shall be treated as, Confidential Information.
(b) ResMor agrees to provide the
ResCap Entities with all information reasonably requested by the
ResCap Entities in order to provide the ResCap Services required
pursuant to this Agreement. The ResCap Entities shall treat all
such information as Confidential Information. If the ResCap
Entities or any of their Affiliates is given or gains access,
including unintentional or accidental access, to any of
ResMor’s, or any of its Affiliates or other Persons who
receive any receive ResMor Services from ResMor’s computer or
electronic systems or data storage due, directly or indirectly, to
the ResCap Entities’ rendering of the ResCap Services, the
ResCap Entities shall limit such access and use solely to the
performance of the ResCap Services or the use of the ResMor
Services, as applicable, and will not attempt to access such
computer system, electronic files, software or other electronic
services other than those specifically required to perform the
ResCap Services or use the ResMor Services, as applicable. The
ResCap Entities shall (i) limit such access to ResCap
Personnel who have an express requirement to have such access in
connection with this Agreement, and (ii) follow all reasonable
security rules and procedures of ResMor for use of ResMor’s
electronic resources (provided that ResMor has informed the ResCap
Entities of such rules and procedures and all changes thereto). All
use of identification numbers and passwords disclosed,
unintentional or otherwise, to the ResCap Entities or their
Affiliates and any information obtained by the ResCap Entities or
their Affiliates, regardless of the means, as a result of the
ResCap Entities’ access to, and use of, ResMor’s
computer and electronic storage systems shall be deemed to be, and
shall be treated as, Confidential Information.
ARTICLE II
PAYMENT
2.01 Fees . The ResCap
Entities shall invoice ResMor on a monthly basis in arrears in
accordance with Schedule A for all ResCap Services they
provided during such month and ResMor shall make payment to the
ResCap Entities within 30 days of receipt of such invoice. ResMor
shall invoice the ResCap Entities on a monthly basis in arrears in
accordance with Schedule A for all ResMor Services it
provided during such month and ResMor shall make payment to the
ResCap Entities within 30 days of receipt of such
invoice.
ARTICLE III
DISCLAIMER
3.01 DISCLAIMER . EACH PARTY
ACKNOWLEDGES THAT THE RESCAP ENTITIES AND RESMOR ARE PROVIDING THE
RESCAP SERVICES AND THE RESMOR SERVICES AS AN ACCOMMODATION TO THE
PARTIES’ TRANSITION FOLLOWING THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED BY THE PURCHASE AGREEMENT. EXCEPT AS
EXPRESSLY SET FORTH IN THIS
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AGREEMENT, THE RESCAP ENTITIES DISCLAIM ALL
WARRANTIES AND GUARANTEES WITH RESPECT TO THE RESCAP SERVICES,
WHETHER EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF
MERCHANTABILI
