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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 FORM 10-Q
(Mark One)
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2022
OR
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from __________ to __________
Commission File Number: 001-38352
adt-20220630_g1.jpg
ADT Inc.
(Exact name of registrant as specified in its charter)
Delaware47-4116383
(State or other jurisdiction
of incorporation or organization)
(I.R.S. Employer
Identification No.)
1501 Yamato Road
Boca Raton, Florida 33431
(561) 988-3600
(Address of principal executive offices, including zip code, Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, par value $0.01 per shareADTNew York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes x   No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes x  No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filer Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
As of July 29, 2022, there were 856,732,127 shares outstanding of the registrant’s common stock, $0.01 par value per share, and 54,744,525 shares outstanding of the registrant’s Class B common stock, $0.01 par value per share.



TABLE OF CONTENTS
Page



PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.

ADT INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share and per share data) 
June 30, 2022December 31, 2021
Assets
Current assets:
Cash and cash equivalents$43,609 $24,453 
Accounts receivable, net of allowance for credit losses of $61,597 and $54,032, respectively
528,113 442,158 
Inventories, net313,829 277,323 
Work-in-progress82,789 70,528 
Prepaid expenses and other current assets215,353 178,069 
Total current assets1,183,693 992,531 
Property and equipment, net368,651 364,108 
Subscriber system assets, net2,981,419 2,867,528 
Intangible assets, net5,237,681 5,413,351 
Goodwill5,967,424 5,943,403 
Deferred subscriber acquisition costs, net968,952 850,489 
Other assets607,318 462,941 
Total assets$17,315,138 $16,894,351 
Liabilities and stockholders' equity
Current liabilities:
Current maturities of long-term debt$844,195 $117,592 
Accounts payable462,265 474,976 
Deferred revenue388,125 373,532 
Accrued expenses and other current liabilities670,265 737,245 
Total current liabilities2,364,850 1,703,345 
Long-term debt8,998,735 9,575,098 
Deferred subscriber acquisition revenue1,431,311 1,199,293 
Deferred tax liabilities926,932 867,203 
Other liabilities213,911 300,693 
Total liabilities13,935,739 13,645,632 
Commitments and contingencies (See Note 13)
Stockholders' equity:
Preferred stock—authorized 1,000,000 shares of $0.01 par value; zero issued and outstanding as of June 30, 2022 and December 31, 2021.
— — 
Common stock—authorized 3,999,000,000 shares of $0.01 par value; issued and outstanding shares of 856,642,103 and 846,825,868 as of June 30, 2022 and December 31, 2021, respectively.
8,566 8,468 
Class B common stock—authorized 100,000,000 shares of $0.01 par value; issued and outstanding shares of 54,744,525 as of June 30, 2022 and December 31, 2021.
547 547 
Additional paid-in capital7,295,665 7,261,267 
Accumulated deficit(3,874,045)(3,952,590)
Accumulated other comprehensive loss(51,334)(68,973)
Total stockholders' equity3,379,399 3,248,719 
Total liabilities and stockholders' equity$17,315,138 $16,894,351 
See Notes to Condensed Consolidated Financial Statements
1



ADT INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share data)
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Monitoring and related services$1,145,792 $1,083,520 $2,267,088 $2,146,286 
Installation, product, and other455,238 220,897 878,689 462,835 
Total revenue1,601,030 1,304,417 3,145,777 2,609,121 
Cost of revenue (exclusive of depreciation and amortization shown separately below)507,813 381,585 1,017,581 762,751 
Selling, general, and administrative expenses487,069 445,636 969,417 895,238 
Depreciation and intangible asset amortization399,416 474,271 875,539 944,080 
Merger, restructuring, integration, and other(3,845)4,804 (3,317)25,311 
Operating income (loss)210,577 (1,879)286,557 (18,259)
Interest expense, net(81,651)(166,525)(87,958)(214,249)
Loss on extinguishment of debt— — — (156)
Other income (expense)1,463 1,533 2,959 3,336 
Income (loss) before income taxes and equity in net earnings (losses) of equity method investee130,389 (166,871)201,558 (229,328)
Income tax benefit (expense)(37,924)41,021 (57,448)55,584 
Income (loss) before equity in net earnings (losses) of equity method investee92,465 (125,850)144,110 (173,744)
Equity in net earnings (losses) of equity method investee(948)— (948)— 
Net income (loss)$91,517 $(125,850)$143,162 $(173,744)
Net income (loss) per share - basic:
Common Stock$0.10 $(0.15)$0.16 $(0.21)
Class B Common Stock$0.10 $(0.15)$0.16 $(0.21)
Weighted-average shares outstanding - basic:
Common Stock848,242 765,922 846,048 764,322 
Class B Common Stock54,745 54,745 54,745 54,745 
Net income (loss) per share - diluted:
Common Stock$0.10 $(0.15)$0.15 $(0.21)
Class B Common Stock$0.10 $(0.15)$0.15 $(0.21)
Weighted-average shares outstanding - diluted:
Common Stock910,809 765,922 911,005 764,322 
Class B Common Stock54,745 54,745 54,745 54,745 
See Notes to Condensed Consolidated Financial Statements
2



ADT INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(in thousands)
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Net income (loss)$91,517 $(125,850)$143,162 $(173,744)
Other comprehensive income (loss), net of tax:
Cash flow hedges6,561 11,371 17,653 23,037 
Other(5)38 (14)884 
Total other comprehensive income (loss), net of tax 6,556 11,409 17,639 23,921 
Comprehensive income (loss)$98,073 $(114,441)$160,801 $(149,823)
See Notes to Condensed Consolidated Financial Statements
3



ADT INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
(in thousands)

Three Months Ended June 30, 2022
Number of Common SharesNumber of Class B Common SharesCommon StockClass B Common StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive Income (Loss)Total Stockholders' Equity
Beginning balance851,324 54,745 $8,513 $547 $7,262,237 $(3,933,140)$(57,890)$3,280,267 
Net income (loss)— — — — — 91,517 — 91,517 
Other comprehensive income (loss), net of tax— — — — — — 6,556 6,556 
Issuance of common stock4,704 — 47 — 15,321 — — 15,368 
Dividends— — — — — (31,944)— (31,944)
Share-based compensation expense— — — — 16,932 — — 16,932 
Transactions related to employee share-based compensation plans and other614 — — 1,175 (478)— 703 
Ending balance856,642 54,745 $8,566 $547 $7,295,665 $(3,874,045)$(51,334)$3,379,399 

Three Months Ended June 30, 2021
Number of Common SharesNumber of Class B Common SharesCommon StockClass B Common StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive Income (Loss)Total Stockholders' Equity
Beginning balance774,884 54,745 $7,749 $547 $6,644,332 $(3,568,615)$(106,103)$2,977,910 
Net income (loss)— — — — — (125,850)— (125,850)
Other comprehensive income (loss), net of tax— — — — — — 11,409 11,409 
Dividends— — — — — (29,184)— (29,184)
Share-based compensation expense— — — — 13,587 — — 13,587 
Transactions related to employee share-based compensation plans and other1,426 — 14 — 7,226 (490)— 6,750 
Ending balance776,310 54,745 $7,763 $547 $6,665,145 $(3,724,139)$(94,694)$2,854,622 
See Notes to Condensed Consolidated Financial Statements
4



ADT INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
(in thousands)

Six Months Ended June 30, 2022
Number of Common SharesNumber of Class B Common SharesCommon StockClass B Common StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive Income (Loss)Total Stockholders' Equity
Beginning balance846,826 54,745 $8,468 $547 $7,261,267 $(3,952,590)$(68,973)$3,248,719 
Net income (loss)— — — — — 143,162 — 143,162 
Other comprehensive income (loss), net of tax— — — — — — 17,639 17,639 
Issuance of common stock4,704 — 47 — 15,321 — — 15,368 
Dividends— — — — — (63,702)— (63,702)
Share-based compensation expense— — — — 32,952 — — 32,952 
Transactions related to employee share-based
compensation plans and other
5,112 — 51 — (13,875)(915)— (14,739)
Ending balance856,642 54,745 $8,566 $547 $7,295,665 $(3,874,045)$(51,334)$3,379,399 

Six Months Ended June 30, 2021
Number of Common SharesNumber of Class B Common SharesCommon StockClass B Common StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive Income (Loss)Total Stockholders' Equity
Beginning balance771,014 54,745 $7,710 $547 $6,640,763 $(3,491,069)$(118,615)$3,039,336 
Net income (loss)— — — — — (173,744)— (173,744)
Other comprehensive income (loss), net of tax— — — — — — 23,921 23,921 
Dividends, including dividends reinvested in
common stock
— — — — (58,320)— (58,316)
Share-based compensation expense— — — — 29,606 — — 29,606 
Transactions related to employee share-based
compensation plans and other
5,296 — 53 — (5,228)(1,006)— (6,181)
Ending balance776,310 54,745 $7,763 $547 $6,665,145 $(3,724,139)$(94,694)$2,854,622 
See Notes to Condensed Consolidated Financial Statements
5



ADT INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Six Months Ended June 30,
20222021
Cash flows from operating activities:
Net income (loss)$143,162 $(173,744)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and intangible asset amortization875,539 944,080 
Amortization of deferred subscriber acquisition costs75,989 58,830 
Amortization of deferred subscriber acquisition revenue(111,884)(77,888)
Share-based compensation expense32,952 29,606 
Deferred income taxes50,251 (62,596)
Provision for losses on receivables and inventory45,835 18,568 
Loss on extinguishment of debt— 156 
Intangible asset impairments— 17,883 
Unrealized (gain) loss on interest rate swap contracts(204,562)(92,057)
Other non-cash items, net78,604 70,800 
Changes in operating assets and liabilities, net of effects of acquisitions:
Deferred subscriber acquisition costs(195,746)(147,593)
Deferred subscriber acquisition revenue166,452 129,854 
Other, net(133,956)69,761 
Net cash provided by (used in) operating activities822,636 785,660 
Cash flows from investing activities:
Dealer generated customer accounts and bulk account purchases(341,586)(339,655)
Subscriber system asset expenditures(378,571)(339,250)
Purchases of property and equipment(87,621)(83,991)
Acquisition of businesses, net of cash acquired(13,154)(16,411)
Proceeds from sale of business, net of cash sold26,681 — 
Other investing, net(13,189)2,145 
Net cash provided by (used in) investing activities(807,440)(777,162)
Cash flows from financing activities:
Proceeds from long-term borrowings380,000 10,729 
Proceeds from receivables facility 139,642 71,276 
Repayment of long-term borrowings, including call premiums(340,099)(32,068)
Repayment of receivables facility(46,980)(16,693)
Dividends on common stock(63,288)(58,049)
Payments on finance leases(22,165)(14,392)
Payments on interest rate swaps(24,903)(27,568)
Deferred financing costs(182)(174)
Other financing, net(14,952)7,199 
Net cash provided by (used in) financing activities7,073 (59,740)
Cash and cash equivalents and restricted cash and restricted cash equivalents:
Net increase (decrease) during the period22,269 (51,242)
Beginning balance33,277 207,747 
Ending balance$55,546 $156,505 
See Notes to Condensed Consolidated Financial Statements

6


ADT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.     DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business and Organization
ADT Inc., together with its wholly-owned subsidiaries (collectively, the “Company”), is a leading provider of security, interactive, and smart home solutions serving consumer, small business, and commercial customers in the United States (“U.S.”). Since the acquisition of Compass Solar Group, LLC (now named ADT Solar LLC) (“ADT Solar”) (the “ADT Solar Acquisition”) in December 2021, the Company also provides residential solar and energy storage solutions. The Company primarily conducts business under the ADT brand name.
ADT Inc. was incorporated in the State of Delaware in May 2015 as a holding company with no assets or liabilities. In July 2015, the Company acquired Protection One, Inc. and ASG Intermediate Holding Corp. (collectively, the “Formation Transactions”), which were instrumental in the commencement of the Company’s operations. In May 2016, the Company acquired The ADT Security Corporation (formerly named The ADT Corporation) (“The ADT Corporation”) (the “ADT Acquisition”).
The Company is majority-owned by Prime Security Services TopCo (ML), L.P., which is majority-owned by Prime Security Services TopCo Parent, L.P. (“Ultimate Parent”). Ultimate Parent is majority-owned by Apollo Investment Fund VIII, L.P. and its related funds that are directly or indirectly managed by affiliates of Apollo Global Management, Inc. (together with its subsidiaries and affiliates, “Apollo” or the “Sponsor”).
Basis of Presentation
The condensed consolidated financial statements include the consolidated results of ADT Inc. and its wholly-owned subsidiaries and have been prepared in U.S. dollars in accordance with generally accepted accounting principles in the United States of America (“GAAP”). In addition, the Company uses the equity method of accounting to account for an investment in which it has the ability to exercise significant influence but does not control.
All intercompany transactions have been eliminated. The results of companies acquired are included in the condensed consolidated financial statements from the effective date of acquisition. Certain prior period amounts have been reclassified to conform with the current period presentation.
The condensed consolidated financial statements included herein are unaudited, but in the opinion of management, such financial statements include all adjustments, consisting of normal recurring adjustments, necessary to summarize fairly the Company’s financial position, results of operations, and cash flows for the interim periods presented. The interim results reported herein should not be taken as indicative of results that may be expected for future interim periods or the full year.
The Condensed Consolidated Balance Sheet as of December 31, 2021 included herein was derived from the audited consolidated financial statements as of that date but does not include all the footnote disclosures required in the annual consolidated financial statements. For a more comprehensive understanding of the Company and its interim results, these condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Annual Report”), which was filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 1, 2022.
Segments
The Company has three operating and reportable segments organized based on customer type: Consumer and Small Business (“CSB”), Commercial, and Solar. The Company’s segments are based on the manner in which the Company’s Chief Executive Officer, who is the chief operating decision maker (the “CODM”), evaluates performance and makes decisions about how to allocate resources. The accounting policies of the Company’s reportable segments are the same as those of the Company.
Refer to Note 3 “Segment Information” for additional information.
Use of Estimates
The preparation of the condensed consolidated financial statements in accordance with GAAP requires the Company to select accounting policies and make estimates that affect amounts reported in the condensed consolidated financial statements and the accompanying notes. The Company’s estimates are based on the relevant information available at the end of each period. Actual results could differ materially from these estimates under different assumptions or market conditions.
7


ADT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
COVID-19 Pandemic
During March 2020, the World Health Organization declared the outbreak of a novel coronavirus as a pandemic (the “COVID-19 Pandemic”). While responses have varied by individuals, businesses, and state and local governments, the COVID-19 Pandemic, including subsequent variants of the coronavirus, caused certain notable impacts on general economic conditions, including temporary and permanent closures of many businesses, increased governmental regulations, supply chain disruptions, and changes in consumer spending. To protect its employees and serve its customers, the Company implemented and is continuously monitoring and evolving certain measures as necessary, such as (i) detailed protocols for infectious disease safety for employees, (ii) employee daily wellness checks, and (iii) certain work from home actions, including for the majority of the Company’s call center professionals. The Company’s response plan has not materially changed from that described in the 2021 Annual Report, and the Company continues to provide relevant updates to management, employees, and customers as necessary.
The Company considered the on-going and pervasive economic impact of the COVID-19 Pandemic in the assessment of its financial position, results of operations, and cash flows, as well as certain accounting estimates, as of and for the periods presented. However, the evolving and uncertain nature of the COVID-19 Pandemic and its economic impact, as well as the evolving nature of the regulatory environment which may require vaccines or vaccine boosters or other actions that could impact the Company’s employee base or impose additional costs on the business, could materially impact the Company’s estimates and financial results in future reporting periods.
Recent Accounting Pronouncements
Recently Adopted Accounting Pronouncements
Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2021-01, Reference Rate Reform (Topic 848): Scope, amends ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, and clarifies the scope and guidance of Topic 848 to allow derivatives impacted by the reference rate reform to qualify for certain optional expedients and exceptions for contract modifications and hedge accounting. The guidance is optional and is effective for a limited period of time through December 31, 2022. As of June 30, 2022, this guidance had no impact on the condensed consolidated financial statements. However, the Company will continue to evaluate this guidance in subsequent periods.
Recently Issued Accounting Pronouncements
ASU 2022-02, Financial Instruments — Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”), eliminates the accounting guidance for troubled debt restructurings by creditors while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. ASU 2022-02 also requires public business entities to disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases. This guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. It should also be applied prospectively, with an option to apply a modified retrospective transition method in relation to the recognition and measurement of troubled debt restructurings, resulting in a cumulative-effect adjustment to retained earnings in the period of adoption. Early adoption is permitted, including adoption in an interim period, in which case the guidance should be applied as of the beginning of the fiscal year that includes the interim period. The Company is currently evaluating the impact of this guidance.
ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”), clarifies the accounting guidance for equity securities subject to contractual sale restrictions, stating an entity should not consider the contractual sale restriction when measuring the equity security’s fair value. ASU 2022-03 also introduces new disclosure requirements related to equity securities subject to contractual sale restrictions, including the fair value of such equity securities reflected in the balance sheet, the nature and remaining duration of the restrictions, and circumstances that could cause a lapse in the restrictions. The guidance is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. It should be applied prospectively with any adjustments from the adoption of the amendments recognized in earnings and disclosed on the date of adoption. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of this guidance.
8


ADT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Summary of Significant Accounting Policies
Unless otherwise noted, the Company’s accounting policies used in the preparation of these condensed consolidated financial statements as discussed below, or included within the respective footnotes herein, do not materially differ from those disclosed in the 2021 Annual Report.
Cash and Cash Equivalents and Restricted Cash and Restricted Cash Equivalents
All highly liquid investments with original maturities of three months or less from the time of purchase are considered to be cash equivalents.
Cash and cash equivalents that are restricted for a specific purpose and cannot be presented within the general cash and cash equivalents account are considered restricted cash and restricted cash equivalents and are reflected in prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets.
Cash and cash equivalents and restricted cash and restricted cash equivalents as reported in the Condensed Consolidated Balance Sheets reconcile to the amounts shown in the Condensed Consolidated Statements of Cash Flows as follows:
(in thousands)June 30, 2022December 31, 2021
Cash and cash equivalents$43,609 $24,453 
Restricted cash and restricted cash equivalents11,937 8,824 
Ending balance$55,546 $33,277 
Subscriber System Assets and Deferred Subscriber Acquisition Costs
Subscriber system assets represent capitalized equipment and installation costs incurred in connection with transactions in which the Company retains ownership of the security system. Upon termination of the contract with the customer, the Company may retrieve such assets. Deferred subscriber acquisition costs represent selling expenses (primarily commissions) that are incremental to acquiring customers.
The Company records subscriber system assets and deferred subscriber acquisition costs in the Condensed Consolidated Balance Sheets as these assets embody a probable future economic benefit for the Company through the generation of future monitoring and related services revenue.
Subscriber system assets and any related deferred subscriber acquisition costs are accounted for on a pooled basis based on the month and year of customer acquisition. The Company depreciates and amortizes these pooled costs using an accelerated method over the estimated life of the customer relationship, which is 15 years.
(in thousands)June 30, 2022December 31, 2021
Gross carrying amount$5,867,896 $5,499,703 
Accumulated depreciation(2,886,477)(2,632,175)
Subscriber system assets, net$2,981,419 $2,867,528 
Depreciation of subscriber system assets and amortization of deferred subscriber acquisition costs are reflected in depreciation and intangible asset amortization and selling, general, and administrative expenses, respectively, in the Condensed Consolidated Statements of Operations as follows:
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2022202120222021
Depreciation of subscriber system assets$137,486 $123,912 $270,608 $246,906 
Amortization of deferred subscriber acquisition costs
$39,050 $30,188 $75,989 $58,830 
9


ADT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Accrued Expenses and Other Current Liabilities
(in thousands)June 30, 2022December 31, 2021
Accrued interest$134,644 $124,579 
Payroll-related accruals146,371 196,165 
Operating lease liabilities39,656 37,359 
Fair value of interest rate swaps (1)
— 50,360 
Other accrued liabilities349,594 328,782 
Accrued expenses and other current liabilities$670,265 $737,245 
________________
(1)    Refer to Note 8 “Derivative Financial Instruments” for presentation of the aggregate fair value of interest rate swaps within the Condensed Consolidated Balance Sheets.
Radio Conversion Program
The Company commenced a program in 2019 to replace the 3G and Code-Division Multiple Access (“CDMA”) cellular equipment used in many of its security systems to prepare for the retirement of the 3G and CDMA networks during 2022. From inception of this program through June 30, 2022, the Company incurred $299 million of radio conversion costs, net of related incremental radio conversion revenue.
Radio conversion costs and radio conversion revenue are reflected in selling, general, and administrative expenses and monitoring and related services revenue, respectively, in the Condensed Consolidated Statements of Operations as follows:
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2022202120222021
Radio conversion costs$8,242 $70,758 $26,375 $140,427 
Radio conversion revenue
$7,698 $10,123 $15,891 $21,063 
Fair Value of Financial Instruments
The Company’s financial instruments primarily consist of cash and cash equivalents, restricted cash and restricted cash equivalents, accounts receivable, retail installment contract receivables, accounts payable, debt, and derivative financial instruments. Due to their short-term and/or liquid nature, the fair values of cash, restricted cash, accounts receivable, and accounts payable approximate their respective carrying amounts.
Cash Equivalents - Included in cash and cash equivalents as applicable from time to time are investments in money market mutual funds. These investments are classified as Level 1 fair value measurements, which represent unadjusted quoted prices in active markets for identical assets or liabilities.
Investments in money market mutual funds were not material as of June 30, 2022, or December 31, 2021.
Long-Term Debt Instruments - The fair values of the Company’s long-term debt instruments are determined using broker-quoted market prices, which represent quoted prices for similar assets or liabilities as well as other observable market data, and are classified as Level 2 fair value measurements. The carrying amounts of debt outstanding, if any, under the Company’s revolving credit facility and receivables facility approximate their fair values as interest rates on these borrowings approximate current market rates.
June 30, 2022December 31, 2021
(in thousands)Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
Long-term debt instruments, excluding finance lease obligations, subject to fair value disclosures$9,748,875 $8,992,157 $9,599,610 $10,043,877 
10


ADT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Derivative Financial Instruments - Derivative financial instruments are reported at fair value as either assets or liabilities in the Condensed Consolidated Balance Sheets. These fair values are primarily calculated using discounted cash flow models utilizing observable inputs, such as quoted forward interest rates, and incorporate credit risk adjustments to reflect the risk of default by the counterparty or the Company. The resulting fair values are classified as Level 2 fair value measurements.
Refer to Note 8 “Derivative Financial Instruments” for the fair values of the Company’s derivative financial instruments.
Retail Installment Contract Receivables - The fair values of the Company’s retail installment contract receivables are determined using a discounted cash flow model and are classified as Level 3 fair value measurements.
June 30, 2022December 31, 2021
(in thousands)Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
Retail installment contract receivables, net$444,514 $340,939 $330,605 $255,147 
2.     REVENUE AND RECEIVABLES
Revenue
The Company allocates transaction price to each performance obligation based on relative standalone selling price, which is determined using observable internal and external pricing, profitability, and operational metrics.
Disaggregated Revenue
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2022202120222021
CSB:
Monitoring and related services$1,011,442 $965,233 $2,004,470 $1,916,481
Installation, product, and other77,047 57,414 146,608 144,771
Total CSB1,088,489 1,022,647 2,151,078 2,061,252
Commercial:
Monitoring and related services134,350 118,287 262,618 229,805
Installation, product, and other163,136 163,483 325,045 318,064
Total Commercial297,486 281,770 587,663 547,869
Solar:
Installation, product, and other215,055 407,036 
Total Solar215,055 407,036 — 
Total revenue$1,601,030 $1,304,417 $3,145,777 $2,609,121
Revenue is recognized in the Condensed Consolidated Statements of Operations net of sales and other taxes. Amounts collected from customers for sales and other taxes are reported as a liability net of the related amounts remitted.
When customers terminate a contract early, contract termination charges are assessed in accordance with the contract terms and are recognized in monitoring and related services revenue in the Condensed Consolidated Statements of Operations when collectability is probable.
Company-Owned - In transactions in which the Company provides monitoring and related services but retains ownership of the security system (referred to as Company-owned transactions), the Company’s performance obligations primarily include (i) monitoring and related services and (ii) a material right associated with the one-time non-refundable fees in connection with the initiation of a monitoring contract which the customer will not be required to pay again upon a renewal of the contract (referred to as deferred subscriber acquisition revenue). Since March 2021, substantially all new CSB transactions have taken place under a Company-owned model.
11


ADT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The portion of the transaction price associated with monitoring and related services is recognized when these services are provided to the customer and is reflected in monitoring and related services revenue in the Condensed Consolidated Statements of Operations.
The portion of the transaction price associated with the material right is deferred upon initiation of a monitoring contract and reflected as deferred subscriber acquisition revenue in the Condensed Consolidated Balance Sheets. Deferred subscriber acquisition revenue is amortized on a pooled basis over the estimated life of the customer relationship using an accelerated method consistent with the treatment of subscriber system assets and deferred subscriber acquisition costs and is reflected in installation, product, and other revenue in the Condensed Consolidated Statements of Operations.
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)
2022202120222021
Amortization of deferred subscriber acquisition revenue$58,461 $40,729 $111,884 $77,888 
Customer-Owned - In transactions involving security systems sold outright to the customer (referred to as outright sales), the Company’s performance obligations generally include the sale and installation of the system and any monitoring and related services.
The portion of the transaction price associated with the sale and installation of a system is recognized either at a point in time or over time based upon the nature of the transaction and contractual terms and is reflected in installation, product, and other revenue in the Condensed Consolidated Statements of Operations. For revenue recognized over time, progress toward complete satisfaction of the performance obligation is primarily measured using a cost-to-cost measure of progress method. The cost input driving revenue recognition for these contracts is based primarily on contract cost incurred to date compared to total estimated contract cost. This measure of progress method includes forecasts based on the best information available and reflects the Company’s judgment to faithfully depict the value of the services transferred to the customer. Approximately half of installation, product, and other revenue generated by the Commercial segment is recognized over time.
The portion of the transaction price associated with monitoring and related services is recognized when services are provided to the customer and is reflected in monitoring and related services revenue in the Condensed Consolidated Statements of Operations.
Solar - In transactions within the Solar business, the Company’s performance obligations generally include the sale and installation of a solar system, and may also include additional performance obligations such as roofing services or the sale and installation of additional products such as batteries. Revenue is recognized when control over the products and services are transferred to the customer and is reflected in installation, product, and other revenue in the Condensed Consolidated Statements of Operations.
The Company also enters into agreements with third-party lenders in order to access loan products for the Company’s Solar customers. These lenders remit the amount of such loans, net of fees, upon installation or based on other contractual terms with the third-party lenders. These fees are recorded as a reduction of installation, product, and other revenue and were approximately $40 million and $78 million during the three and six months ended June 30, 2022, respectively.
During the three months ended June 30, 2022, one of the Company’s third-party lenders that provided loan products for the Company’s Solar customers entered a formal insolvency proceeding to effectuate the wind-down of its operations. The Company recorded charges to the provision for credit losses and revenue in an aggregate amount of $11 million associated with the estimated amount of receivables and rebates that are not expected to be collected from this lender.
Product and System Sales
Revenue from product and system sales is included in installation, product, and other revenue in the Condensed Consolidated Statements of Operations. Cost of revenue from product and system sales is exclusive of depreciation and amortization.
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)
2022202120222021
Revenue from product and system sales$298,912 $177,876 $599,762 $380,622 
Cost of revenue from product and system sales$220,729 $147,269 $441,294 $307,455 
12


ADT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Deferred Revenue
Deferred revenue represents customer billings for services not yet rendered and is primarily related to recurring monitoring and related services. In addition, payments received for the sale and installation of a system after the agreement is signed but before performance obligations are satisfied are recorded as deferred revenue.
These amounts are recorded as current deferred revenue in the Condensed Consolidated Balance Sheets as the Company expects to satisfy any remaining performance obligations, as well as recognize the related revenue, within the next twelve months when performance obligations are satisfied. Accordingly, the Company has applied the practical expedient regarding deferred revenue to exclude the value of remaining performance obligations if (i) the contract has an original expected term of one year or less or (ii) the Company recognizes revenue in proportion to the amount it has the right to invoice for services performed.
Accounts Receivable
Accounts receivable represent unconditional rights to consideration from customers in the ordinary course of business and are generally due in one year or less. The Company’s accounts receivable are recorded at amortized cost less an allowance for credit losses not expected to be recovered. The allowance for credit losses is recognized at inception and reassessed each reporting period.
The Company evaluates its allowance for credit losses on accounts receivable in pools based on customer type. For each customer pool, the allowance for credit losses is estimated based on the delinquency status of the underlying receivables and the related historical loss experience, as adjusted for current and expected future conditions, if applicable. The allowance for credit losses is not material for the individual pools of customers.
Changes in the Allowance for Credit Losses:
Six Months Ended June 30,
(in thousands)20222021
Beginning balance$54,032 $68,342 
Provision for credit losses47,582 25,745 
Write-offs, net of recoveries (1)
(40,017)(31,867)
Ending balance$61,597 $62,220 
________________
(1)Recoveries were not material for the periods presented. As such, the Company presented write-offs, net of recoveries.
Retail Installment Contract Receivables
The Company’s retail installment contract option for security system transactions occurring under both Company-owned and customer-owned equipment models allows qualifying residential customers to pay the fees due at installation over a 24-, 36-, or 60-month interest-free period. The financing component of retail installment contract receivables is not significant.
The Company’s retail installment contract receivables are recorded at amortized cost less an allowance for credit losses not expected to be recovered. The allowance for credit losses is recognized at inception and reassessed each reporting period. The allowance for credit losses relates to retail installment contract receivables from outright sales transactions and is not material.
Upon origination of a retail installment contract, the Company utilizes external credit scores to assess customer credit quality and determine eligibility. In addition, customers are required to enroll in the Company’s automated payment process in order to enter into a retail installment contract.
Subsequent to origination, the Company monitors the delinquency status of retail installment contract receivables as the key credit quality indicator. As of June 30, 2022, the current and delinquent billed retail installment contract receivables were not material.
13


ADT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Unbilled retail installment contract receivables reflected in the Condensed Consolidated Balance Sheets include:
(in thousands)June 30, 2022December 31, 2021
Retail installment contract receivables, gross$445,251 $331,512 
Allowance for credit losses(737)(907)
Retail installment contract receivables, net$444,514 $330,605 
Classification:
Accounts receivable, net$138,738 $100,385 
Other assets305,776 230,220 
Retail installment contract receivables, net$444,514 $330,605 
As of June 30, 2022 and December 31, 2021, retail installment contract receivables, net, used as collateral for borrowings under the Company’s uncommitted receivables securitization financing agreement (the “Receivables Facility”) were $402 million and $299 million, respectively. Refer to Note 7 “Debt” for further discussion regarding the Receivables Facility.
Contract Assets
Contract assets represent the Company’s right to consideration in exchange for goods or services transferred to the customer. The contract asset is reclassified to accounts receivable when the Company’s right to the consideration becomes unconditional as additional services are performed and billed. The Company has the right to bill customers as services are provided over time, which generally occurs over the course of a 24-, 36-, or 60-month period. The financing component of contract assets is not significant.
The Company records an allowance for credit losses against its contract assets for amounts not expected to be recovered. The allowance is recognized at inception and is reassessed each reporting period. The allowance for credit losses on contract assets was not material for the periods presented.
During the three and six months ended June 30, 2022 and 2021, contract assets recognized were not material.
Contract assets for residential transactions reflected in the Condensed Consolidated Balance Sheets includes:
(in thousands)June 30, 2022December 31, 2021
Contract assets, gross$76,282 $106,810 
Allowance for credit losses(7,470)(12,300)
Contract assets, net$68,812 $94,510 
Classification:
Prepaid expenses and other current assets$48,249 $58,452 
Other assets20,563 36,058 
Contract assets, net$68,812 $94,510 
3.     SEGMENT INFORMATION
As discussed in Note 1 “Description of Business and Summary of Significant Accounting Policies,” the Company reports results in three operating and reportable segments based on the manner in which the CODM evaluates performance and makes decisions about how to allocate resources.
The Company organizes its segments based on customer type as follows:
CSB - The CSB segment primarily includes (i) revenue and operating costs from the sale, installation, servicing, and monitoring of integrated security and automation systems, as well as other related offerings; (ii) other operating costs associated with support functions related to these operations; and (iii) general corporate costs and other income and expense items not included in the Commercial and Solar segments. Customers in the CSB segment are comprised of residential homeowners, small business operators, and other individual consumers.
14


ADT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Commercial - The Commercial segment primarily includes (i) revenue and operating costs from the sale, installation, servicing, and monitoring of integrated security and automation systems, fire detection and suppression systems, and other related offerings; (ii) other operating costs associated with support functions related to these operations; and (iii) certain dedicated corporate costs and other income and expense items. Customers in the Commercial segment are comprised of larger businesses with more expansive facilities (typically larger than 10,000 square feet) and/or multi-site operations, which often require more sophisticated integrated solutions.
Solar - The Solar segment primarily includes (i) revenue and operating costs from the design and installation of solar and related solutions and services; (ii) other operating costs associated with support functions related to these operations; and (iii) certain dedicated corporate costs and other income and expense items. Customers in the Solar segment are comprised of residential homeowners who purchase solar and energy storage solutions, energy efficiency upgrades, and roofing services.
The CODM uses Adjusted EBITDA, which is the segment profit measure, to evaluate segment performance. Adjusted EBITDA is defined as net income or loss adjusted for (i) interest; (ii) taxes; (iii) depreciation and amortization, including depreciation of subscriber system assets and other fixed assets and amortization of dealer and other intangible assets; (iv) amortization of deferred costs and deferred revenue associated with subscriber acquisitions; (v) share-based compensation expense; (vi) merger, restructuring, integration, and other; (vii) losses on extinguishment of debt; (viii) radio conversion costs, net; and (ix) other income/gain or expense/loss items such as impairment charges, financing and consent fees, or acquisition-related adjustments.
The CODM does not review the Company's assets by segment; therefore, such information is not presented.
The following table presents total revenue by segment and a reconciliation to consolidated total revenue:
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2022202120222021
CSB$1,088,489 $1,022,647 $2,151,078 $2,061,252 
Commercial297,486 281,770 587,663 547,869 
Solar215,055 — 407,036 — 
Total Revenue$1,601,030 $1,304,417 $3,145,777 $2,609,121 
15


ADT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The following table presents Adjusted EBITDA by segment and a reconciliation to consolidated income (loss) before income taxes and equity in net earnings (losses) of equity method investee:
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2022202120222021
Adjusted EBITDA by segment:
CSB$580,701 $509,897 $1,141,246 $1,029,375 
Commercial31,363 31,968 54,993 54,621 
Solar(14,815)— 2,007 — 
Total$597,249 $541,865 $1,198,246 $1,083,996 
Reconciliation:
Total segment Adjusted EBITDA$597,249 $541,865 $1,198,246 $1,083,996 
Less:
Interest expense, net81,651 166,525 87,958 214,249 
Depreciation and intangible asset amortization399,416 474,271 875,539 944,080 
Amortization of deferred subscriber acquisition costs39,050 30,188 75,989 58,830 
Amortization of deferred subscriber acquisition revenue(58,461)(40,729)(111,884)(77,888)
Share-based compensation expense16,932 13,587 32,952 29,606 
Merger, restructuring, integration, and other(3,845)4,804 (3,317)25,311 
Loss on extinguishment of debt— — — 156 
Radio conversion costs, net544 60,635 10,484 119,364 
Acquisition related adjustments(1)
1,328 (229)37,623 (477)
Equity in net earnings (losses) of equity method investee(948)— (948)— 
Other(2)
(8,807)(316)(7,708)93 
Income (loss) before income taxes and equity in net earnings (losses) of equity method investee$130,389 $(166,871)$201,558 $(229,328)
________________
(1)    During 2022, primarily represents the amortization of the customer backlog intangible asset acquired in the ADT Solar Acquisition, which was fully amortized as of March 2022.
(2)    During 2022, primarily represents the gain on sale of a business.
4.     ACQUISITIONS AND DISPOSITION
During the six months ended June 30, 2022, total consideration related to business acquisitions was approximately $31 million, including approximately $15 million in shares of the Company’s common stock. This resulted in the recognition of approximately $24 million of goodwill.
ADT Solar Acquisition
In December 2021, the Company acquired ADT Solar. Total consideration was approximately $750 million, which consisted of cash paid of $142 million, net of cash acquired, and approximately 75.0 million unregistered shares of the Company’s common stock, par value of $0.01 per share, with a fair value of $569 million (the “Equity Consideration”), including $40 million related to approximately 5.3 million shares of the Company’s common stock that were unissued as of the acquisition date (the “Delayed Shares”). The total fair value of $569 million was based on the closing stock price of the Company’s common stock on December 8, 2021, the acquisition date, adjusted for the impact of contractual restrictions on the ability for the holders to sell their shares.
In June 2022, approximately 2.6 million shares of the Delayed Shares were issued. The remaining Delayed Shares are expected to be issued in equal installments in September and December 2022.
There were no material adjustments to the preliminary purchase price allocation during the six months ended June 30, 2022.
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ADT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Disposition
During the six months ended June 30, 2022, proceeds related to disposal activities totaled approximately $27 million, resulting in a gain of approximately $10 million recognized in selling, general, and administrative expenses in the Condensed Consolidated Statements of Operations.
5.     EQUITY METHOD INVESTMENTS
The Company uses the equity method of accounting to account for an investment in which it has the ability to exercise significant influence but does not control. The carrying amount of the investment is reflected in other assets in the Condensed Consolidated Balance Sheets and is subsequently adjusted to recognize the Company’s proportionate share of the investee’s net income or loss, which is reflected in equity in net earnings (losses) of equity method investee in the Condensed Consolidated Statements of Operations. The Company evaluates an equity method investment whenever events or changes in circumstances indicate the carrying amounts of such investments may be impaired. If a decline in the value of an equity method investment is determined to be other than temporary, the Company records a loss in earnings in the current period.
Canopy Investment
In April 2022, the Company closed on its previously announced transaction with Ford Motor Company (“Ford”) to form a new entity, SNTNL LLC (“Canopy”), which combines ADT’s professional security monitoring and Ford’s AI-driven video camera technology to help customers strengthen security of new and existing vehicles across automotive brands. ADT and Ford expect to invest approximately $100 million collectively during the three years following the closing of the transaction, of which ADT will contribute 40%. As part of the initial funding at closing, the Company contributed cash of approximately $11 million (the “Initial Contribution”).
As of June 30, 2022, Canopy did not have any common stock equivalents or dilutive securities that would, if converted, exercised, or issued, significantly change the Company’s proportionate share of Canopy’s net assets or net income or loss.
Variable Interest Entity (“VIE”)
The Company accounts for its investment in Canopy under the equity method of accounting. In addition, Canopy meets the definition of a VIE, as the Company holds a variable interest through its 40% investment held in Canopy’s preferred class of equity (the “Preferred Units”) and fees received under the Canopy Commercial Agreements described below. The Company is not the primary beneficiary, and therefore, does not consolidate Canopy’s assets, liabilities, and financial results of operations. The Company records its proportionate share of Canopy’s net income or loss on a one-month delay.
As of June 30, 2022, the carrying amount of the Company’s investment in Canopy was approximately $10 million and is presented in other assets in the Condensed Consolidated Balance Sheets. The balance reflects the Initial Contribution as well as the Company’s proportionate share of Canopy’s net loss during the period.
As of June 30, 2022, Canopy’s assets and liabilities primarily consisted of approximately $20 million of cash, the majority of which was received from the initial contributions made by the Company and Ford.
Canopy Commercial Agreements
In connection with the investment in Canopy, the Company entered into various commercial agreements (the “Canopy Commercial Agreements”) through which it will be performing various services on behalf of Canopy, including supply chain support, product engineering support, and monitoring services for Canopy customers. The Company is also party to a trade name licensing agreement with Canopy. The impact to the condensed consolidated financial statements from the Canopy Commercial Agreements was not material for the periods presented.
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ADT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
6.     GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill
Changes in the carrying amounts of goodwill by reportable segment were as follows:
(in thousands)CSBCommercialSolarTotal
Balance as of December 31, 2021$4,915,832 $332,845 $694,726 $5,943,403 
Acquisitions(1)
17,270 6,804 11,678 35,752 
Disposition— (11,731)— (11,731)
Balance as of June 30, 2022$4,933,102 $327,918 $706,404 $5,967,424 
________________
(1)     Includes the impact of measurement period adjustments. During the six months ended June 30, 2022, measurement period adjustments were not material.
The Company had no accumulated goodwill impairment losses as of June 30, 2022 or December 31, 2021.
Other Intangible Assets
June 30, 2022December 31, 2021
(in thousands)Gross Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
Definite-lived intangible assets:
Contracts and related customer relationships$6,735,224 $(3,876,871)$2,858,353 $8,719,363 $(5,753,345)$2,966,018 
Dealer relationships1,518,020 (499,051)1,018,969 1,518,020 (459,248)1,058,772 
Other224,783 (197,424)27,359 263,133 (207,572)55,561 
Total definite-lived intangible assets8,478,027 (4,573,346)3,904,681 10,500,516 (6,420,165)4,080,351 
Indefinite-lived intangible assets:
Trade name1,333,000 — 1,333,000 1,333,000 — 1,333,000 
Intangible assets$9,811,027 $(4,573,346)$5,237,681 $11,833,516 $(6,420,165)$5,413,351 
    
The change in the net carrying amount of contracts and related customer relationships during the period was as follows:
(in thousands)
Balance as of December 31, 2021$2,966,018 
Acquisition of customer relationships3,000 
Customer contract additions, net of dealer charge-backs(1)
347,361 
Amortization(456,388)
Other(1,638)
Balance as of June 30, 2022$2,858,353 
________________
(1)     The weighted-average amortization period for customer contract additions was 14 years.
During the six months ended June 30, 2022, the Company paid $342 million related to customer contract additions under the Company’s authorized dealer program and from other third parties, which is included in dealer generated customer accounts and bulk account purchases on the Condensed Consolidated Statements of Cash Flows.
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ADT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Contracts and related customer relationships includes customer accounts purchased from certain other third parties during the six months ended June 30, 2022 for an aggregate contractual purchase price of $84 million, subject to reduction based on customer retention. The Company paid initial cash at the closings in the aggregate amount of $63 million, which is included in the payments for dealer generated customer accounts and bulk account purchases described above.
Additionally, the Company retired certain customer relationship intangible assets acquired in the ADT Acquisition that became fully amortized during the six months ended June 30, 2022.
Aggregate Amortization Expense:
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2022202120222021
Definite-lived intangible asset amortization expense$210,738 $300,208 $502,685 $599,535 

7.     DEBT
The Company’s debt is comprised of the following (in thousands):
DescriptionIssuedMaturity
Interest Rate(1)
Interest PayableJune 30, 2022December 31, 2021
First Lien Term Loan due 20269/23/20199/23/2026
Adj. LIBOR +2.75%
Quarterly$2,744,164 $2,758,058 
First Lien Revolving Credit Facility3/16/20186/23/2026
Adj. LIBOR +2.75%
Quarterly80,000 25,000 
Second Lien Notes due 20281/28/20201/15/20286.250%1/15 and 7/151,300,000 1,300,000 
First Lien Notes due 20244/4/20194/15/20245.250%2/15 and 8/15750,000 750,000 
First Lien Notes due 20264/4/20194/15/20265.750%3/15 and 9/151,350,000 1,350,000 
First Lien Notes due 20278/20/20208/31/20273.375%6/15 and 12/151,000,000 1,000,000 
First Lien Notes due 20297/29/20218/1/20294.125%2/1 and 8/11,000,000 1,000,000 
ADT Notes due 20231/14/20136/15/20234.125%6/15 and 12/15700,000 700,000 
ADT Notes due 20325/2/20167/15/20324.875%1/15 and 7/15728,016 728,016 
ADT Notes due 20427/5/20127/15/20424.875%1/15 and 7/1521,896 21,896 
Receivables Facility3/5/20205/20/2027
SOFR +0.85%
Monthly291,638 199,056 
Other debt(2)
3,528 4,732 
Total debt principal, excluding finance leases9,969,242 9,836,758 
Plus: Finance lease liabilities(3)
94,055 93,080 
Less: Unamortized debt discount, net(15,071)(16,678)
Less: Unamortized deferred financing costs(57,291)(64,014)
Less: Unamortized purchase accounting fair value adjustment and other(148,005)(156,456)
Total debt9,842,930 9,692,690 
Less: Current maturities of long-term debt, net of unamortized debt discount(844,195)(117,592)
Long-term debt$8,998,735 $9,575,098 
_________________
(1)    LIBOR refers to the London Interbank Offered Rate. SOFR refers to the Secured Overnight Financing Rate.
(2)    Other debt primarily consists of vehicle loans at various interest rates and maturities.
(3)    Refer to Note 14 “Leases” for additional information regarding the Company’s finance leases.
19


ADT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Significant changes in the Company’s debt during the six months ended June 30, 2022 were as follows:
First Lien Credit Agreement
The Company’s first lien credit agreement, dated as of July 1, 2015 (together with subsequent amendments and restatements, the “First Lien Credit Agreement”), contains a first lien term loan facility (the “First Lien Term Loan due 2026”) and a first lien revolving credit facility (the “First Lien Revolving Credit Facility”). As of June 30, 2022 and December 31, 2021, the Company had $495 million and $550 million, respectively, in available borrowing capacity under the First Lien Revolving Credit Facility.
During the six months ended June 30, 2021, the Company borrowed $380 million and repaid $325 million under its First Lien Revolving Credit Facility.
ADT Notes due 2023
As of June 30, 2022, the Company had an outstanding balance of $700 million under its notes due 2023 (the “ADT Notes due 2023”) that was classified as a current liability, net of any unamortized debt discount, in the Condensed Consolidated Balance Sheets. The Company is in the process of seeking financing to replace the ADT Notes due 2023 prior to June 15, 2023, which is the maturity date.
Receivables Facility
Under the Receivables Facility, the Company obtains financing by selling or contributing certain retail installment contract receivables to the Company’s wholly-owned consolidated bankruptcy-remote special purpose entity (“SPE”), which then grants a security interest in those retail installment contract receivables as collateral for cash borrowings.
The Receivables Facility permits up to $400 million of uncommitted financing secured by the Company’s retail installment contract receivables owned by the SPE. The Company services the transferred retail installment contract receivables and is responsible for ensuring the related collections are remitted to a segregated bank account in the name of the SPE. On a monthly basis, the segregated account is utilized to make required principal, interest, and other payments due under the Receivables Facility. The segregated account is considered restricted cash, and any outstanding balance is reflected in prepaid expenses and other current assets in the Company’s Condensed Consolidated Balance Sheets.
In May 2022, the Company amended the Receivables Facility to change the benchmark rate from 1-month LIBOR to Daily SOFR. In addition, the May 2022 amendment extended the scheduled termination date for the uncommitted revolving period from October 2022 to May 2023, and amended certain other terms to increase the advance rate on pledged collateral.
During the six months ended June 30, 2022, the Company received proceeds of $140 million under the Receivables Facility and repaid $47 million, which are reflected as cash flows from financing activities in the Condensed Consolidated Statements of Cash Flows.
As of June 30, 2022 and December 31, 2021, the Company had an uncommitted available borrowing capacity under the Receivables Facility of $108 million and $201 million, respectively.
The Receivables Facility did not have a material impact to the Condensed Consolidated Statements of Operations during the six months ended June 30, 2022 and 2021.
Variable Interest Entity
The SPE borrower under the Receivables Facility is a separate legal entity with its own creditors who will be entitled, prior to and upon the liquidation of the SPE, to be satisfied out of the SPE’s assets prior to any assets of the SPE becoming available to the Company (other than the SPE). Accordingly, the assets of the SPE are not available to pay creditors of the Company (other than the SPE), although collections from the transferred retail installment contract receivables in excess of amounts required to repay amounts then due and payable to the SPE’s creditors may be released to the Company and subsequently used by the Company (including to pay other creditors). The SPE’s creditors under the Receivables Facility have legal recourse to the transferred retail installment contract receivables owned by the SPE, and to the Company for certain performance and operational obligations relating to the Receivables Facility, but do not have any recourse to the Company (other than the SPE) for the payment of principal and interest on the advances under the Receivables Facility.
20


ADT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The SPE meets the definition of a VIE for which the Company is the primary beneficiary as it has the power to direct the SPE’s activities and the obligation to absorb losses or the right to receive benefits of the SPE. As such, the SPE’s assets, liabilities, and financial results of operations are consolidated in the Company’s condensed consolidated financial statements.
As of June 30, 2022 and December 31, 2021, the SPE’s assets and liabilities primarily consisted of unbilled retail installment contract receivables, net, as discussed in Note 2 “Revenue and Receivables,” of $402 million and $299 million, respectively, and borrowings under the Receivables Facility, as presented above.
SOFR Transition
By June 2023, the forward LIBOR will be replaced with SOFR (the “SOFR Transition Date”), at which point the applicable benchmark for all existing and new issuances under the Company’s current debt instruments with a variable rate component will be based on SOFR. The First Lien Term Loan due 2026 and First Lien Revolving Credit Facility are and will continue to be based on LIBOR until the SOFR Transition Date. However, any modification, such as a repricing entered into after December 31, 2021, will require transition to SOFR. Additionally, any new issuances with a variable rate debt component entered into after December 31, 2021 will utilize SOFR per the terms of the credit agreement.
8.     DERIVATIVE FINANCIAL INSTRUMENTS
The Company's derivative financial instruments primarily consist of LIBOR-based interest rate swap contracts, which were entered into with the objective of managing exposure to variability in interest rates on the Company's debt. All interest rate swap contracts are reported in the Condensed Consolidated Balance Sheets at fair value.
For interest rate swap contracts that are:
Not designated as cash flow hedges: Unrealized gains and losses are recognized in interest expense, net, in the Condensed Consolidated Statements of Operations.
Designated as cash flow hedges: Unrealized gains and losses are recognized as a component of accumulated other comprehensive income (loss) (“AOCI”) in the Condensed Consolidated Balance Sheets and are reclassified into interest expense, net, in the same period in which the related interest on debt affects earnings.
For interest rate swap contracts that have been de-designated as cash flow hedges and for which forecasted cash flows are:
Probable or reasonably possible of occurring: Unrealized gains and losses previously recognized as a component of AOCI are reclassified into interest expense, net, in the same period in which the related interest on variable-rate debt affects earnings through the original maturity date of the related interest rate swap contracts.
Probable of not occurring: Unrealized gains and losses previously recognized as a component of AOCI are immediately reclassified into interest expense, net.
The cash flows associated with interest rate swap contracts that included an other-than-insignificant financing element at inception are reflected as cash flows from financing activities in the Condensed Consolidated Statements of Cash Flows.
Beginning in March 2020, the Company de-designated interest rate swap contracts previously designated as cash flow hedges with an aggregate notional amount of $3.0 billion. As the forecasted cash flows are probable or reasonably possible of occurring, unrealized losses previously recognized as a component of AOCI are reclassified into interest expense, net.
The Company’s interest rate swaps as of June 30, 2022 consisted of the following (in thousands):
ExecutionMaturityDesignationNotional Amount
October 2019September 2026Not designated$2,800,000 
During April 2022, the Company’s January and February 2019 interest rate swaps with an aggregate notional amount of $425 million reached maturity. The impact related to this was not material.
21


ADT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Fair Value of Interest Rate Swaps:
Balance Sheet Classification (in thousands)
June 30, 2022December 31, 2021
Assets
Prepaid expenses and other current assets$24,220 $— 
Other assets$62,006 $— 
Liabilities
Accrued expenses and other current liabilities$— $50,360 
Other liabilities$— $67,976 
Unrealized Gain (Loss) on Interest Rate Swaps:
Three Months Ended June 30,Six Months Ended June 30,
Statement of Operations Classification (in thousands)
2022202120222021
Interest expense, net$59,273 $(14,460)$204,562 $92,057 
Reclassifications out of AOCI:
Amounts reclassified out of AOCI associated with previously designated cash flow hedges were as follows:
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)
2022202120222021
Reclassifications to interest expense$8,647 $15,027 $23,267 $30,443 
Reclassifications to income tax benefit$(2,086)$(3,656)$(5,614)$(7,406)
Other Information
As of June 30, 2022 and December 31, 2021, AOCI, net of tax, related to previously designated cash flow hedges was $54 million and $71 million, respectively.
As of June 30, 2022, approximately $21 million of AOCI associated with previously designated cash flow hedges is estimated to be reclassified to interest expense, net, within the next twelve months.
During the six months ended June 30, 2022 and 2021, the Company paid $25 million and $28 million, respectively, related to settlements on interest rate swap contracts that included an other-than-insignificant financing element at inception.
9.     INCOME TAXES
Unrecognized Tax Benefits
The Company’s unrecognized tax benefits relate to tax years that remain subject to audit by the taxing authorities in the U.S. federal, state and local, and foreign jurisdictions. During the six months ended June 30, 2022, the Company did not have a material change to its unrecognized tax benefits. Based on the current status of its income tax audits, the Company does not believe a significant portion of its unrecognized tax benefits will be resolved in the next twelve months.
Effective Tax Rate
The effective tax rate can vary from period to period due to permanent tax adjustments, discrete items such as the settlement of income tax audits and changes in tax laws, as well as recurring factors such as changes in the overall state tax rate.
22


ADT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The Company’s income tax expense for the three months ended June 30, 2022 was $38 million, resulting in an effective tax rate for the period of 29.1%. The effective tax rate primarily represents the federal statutory rate of 21.0%, a state statutory tax rate, net of federal benefits, of 5.5%, and a 3.0% unfavorable impact of prior year return adjustments related to executive compensation, partially offset by a 1.6% favorable impact from the release of a capital loss valuation allowance related to disposal activities.
The Company’s income tax benefit for the three months ended June 30, 2021 was $41 million, resulting in an effective tax rate for the period of 24.6%. The effective tax rate primarily represents the federal statutory rate of 21.0%, a state statutory tax rate, net of federal benefits, of 2.8%, and a 0.6% favorable impact from prior year tax return adjustments.
The Company’s income tax expense for the six months ended June 30, 2022 was $57 million, resulting in an effective tax rate for the period of 28.5%. The effective tax rate primarily represents the federal statutory rate of 21.0%, a state statutory tax rate, net of federal benefits, of 5.9%, a 2.0% unfavorable impact of prior year return adjustments related to executive compensation, and a 1.4% unfavorable impact of permanent items, partially offset by a 1.0% favorable impact from the release of a capital loss valuation allowance related to disposal activities.
The Company’s income tax benefit for the six months ended June 30, 2021 was $56 million, resulting in an effective tax rate for the period of 24.2%. The effective tax rate primarily represents the federal statutory tax rate of 21.0%, a state statutory tax rate, net of federal benefits, of 2.8%, and a 1.0% favorable impact of share-based compensation.
COVID-19 Pandemic
In response to the COVID-19 Pandemic, the American Rescue Plan Act of 2021 and the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) were signed into law in March 2021 and March 2020, respectively, and included significant corporate income tax and payroll tax provisions intended to provide economic relief to address the impact of the COVID-19 Pandemic.
During 2020, the Company recognized favorable cash flow impacts related to the accelerated refund of previously generated alternative minimum tax credits, as well as from the deferral of remittance of certain 2020 payroll taxes, with 50% of the deferred amount due by the end of 2021, and the remainder due by the end of 2022. The Company also recognized a benefit from an increase in the interest expense limitation from 30% to 50% for tax years 2019 and 2020.
Delayed Effective Dates for Tax Law Changes under the Tax Cuts and Jobs Act
Certain changes to U.S. federal tax law included in the Tax Cuts and Jobs Act had a delayed effective date and have taken effect for tax years beginning after December 31, 2021. Under Internal Revenue Code (“IRC”) Section 163(j), the limitation on net business interest expense deductions will no longer be increased by deductions for depreciation, amortization, or depletion. Under IRC Section 174, specified research and experimentation expenditures must now be capitalized and amortized.
10.     EQUITY
Common Stock and Class B Common Stock
The Company has two classes of common stock, including common stock (“Common Stock”) and Class B common stock (“Class B Common Stock”), both of which entitle stockholders to one vote per share except as described below.
The Company’s Common Stock trades on the New York Stock Exchange under the symbol “ADT” since the Company’s initial public offering in January 2018.
Class B Common Stock was issued in September 2020 to Google LLC (“Google”) in a private placement pursuant to a securities purchase agreement dated July 31, 2020 (the “Securities Purchase Agreement”). Each share of Class B Common Stock has equal status and rights to dividends as a share of Common Stock. The holders of Class B Common Stock have one vote for each share of Class B Common Stock held on all matters on which stockholders are entitled to vote generally except for voting on the election, appointment, or removal of directors of the Company. Additionally, each share of Class B Common Stock will immediately become convertible into one share of Common Stock, at the option of the holder, subject to certain timing and restrictions.
23


ADT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Dividends
(in thousands, except per share data)
Common StockClass B Common Stock
Declaration DateRecord DatePayment DatePer ShareAggregatePer ShareAggregate
Six Months Ended June 30, 2022
3/1/20223/17/20224/4/2022$0.035 $29,842 $0.035 $1,916 
5/5/20226/16/20227/5/20220.035 30,028 0.035 1,916 
Total$0.070 $59,870 $0.070 $3,832 
Six Months Ended June 30, 2021
2/25/20213/18/20214/1/2021$0.035 $27,220 $0.035 $1,916 
5/5/20216/17/20217/1/20210.035 27,268 0.035 1,916 
Total$0.070 $54,488 $0.070 $3,832 
Subsequent Event - On August 4, 2022, the Company announced a dividend of $0.035 per share to holders of Common Stock and Class B Common Stock of record on September 15, 2022, which will be distributed on October 4, 2022.
Accumulated Other Comprehensive Income (Loss)
Refer to Note 8 “Derivative Financial Instruments” for AOCI reclassifications associated with cash flow hedges. There were no other reclassifications out of AOCI.
11.     SHARE-BASED COMPENSATION
Share-Based Compensation Expense
Share-based compensation expense recognized in selling, general, and administrative expenses in the Condensed Consolidated Statements of Operations was as follows:
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)
2022202120222021
Share-based compensation expense$16,932 $13,587 $32,952 $29,606 
Restricted Stock Units
During the six months ended June 30, 2022, the Company granted approximately 6.3 million restricted stock units (“RSUs”) under its 2018 Omnibus Incentive Plan, as amended (the “2018 Plan”). These RSUs are service-based awards, primarily with a three-year graded vesting period from the date of grant. The fair value of the RSUs is equal to the closing price per share of the Company’s Common Stock on the date of grant, which resulted in a weighted-average grant date fair value of $7.87.
The RSUs’ retirement provisions allow awards to continue to vest in accordance with the granted terms in its entirety when a participant reaches retirement eligibility, as long as 12 months of service have been provided since the grant date.
RSUs are entitled to dividend equivalent units (unless otherwise stipulated in the applicable award agreement), which are granted as additional RSUs and are subject to the same vesting and forfeiture conditions as the underlying RSUs.
Performance Share Units
In June 2022, the Company issued 1.6 million performance share units (“PSUs”) in connection with a business combination that the Company will account for as share-based compensation. These PSUs contain both service and performance vesting conditions that must be met on an annual basis with the final vesting date in October 2025. The fair value of the PSUs is equal to the closing price per share of the Company’s Common Stock on the date of grant, which resulted in a weighted-average grant date fair value of $7.46. The PSUs are not entitled to dividend equivalent units.
24


ADT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
12.     NET INCOME (LOSS) PER SHARE
The Company applies the two-class method for computing and presenting net income (loss) per share for each class of common stock, which allocates current period net income (loss) to each class of common stock and participating securities based on (i) dividends declared and (ii) participation rights in the remaining undistributed earnings (losses).
Basic net income (loss) per share is computed by dividing the net income (loss) allocated to each class of common stock by the related weighted-average number of shares outstanding during the period. Diluted net income (loss) per share gives effect to all securities representing potential common shares that were dilutive and outstanding during the period for each class of common stock.
Potential shares of Common Stock include (i) incremental shares of Common Stock calculated using the treasury stock method for share-based compensation awards, (ii) incremental shares of Common Stock issuable upon the conversion of Class B Common Stock, and (iii) incremental shares of Common Stock calculated using the treasury stock method for warrants to purchase additional shares of Common Stock issued in connection with a business combination. There were no potential shares of Class B Common Stock during the periods presented.
For the three and six months ended June 30, 2022, the computation of diluted earnings per share for Common Stock excludes potentially dilutive securities whose effect would have been anti-dilutive in the amounts of approximately 19.9 million shares and 18.6 million shares, respectively, from share-based compensation awards and approximately 0.1 million warrants, respectively, to purchase additional shares of Common Stock.
Approximately 9.4 million unvested shares of the Company’s Common Stock are excluded from the basic and diluted earnings per share computations, as their vesting is contingent upon achievement of certain performance requirements which have not been met as of June 30, 2022.
The computations of basic and diluted net income (loss) per share under the two-class method are shown below (in thousands, except per share amounts):
Common Stock:
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Allocation of net income (loss) - basic$85,994 $(117,446)$134,499 $(162,109)
Dilutive effect (including conversion of Class B Common Stock)2,149 — 4,156 — 
Allocation of net income (loss) - diluted$88,143 $(117,446)$138,655 $(162,109)
Weighted-average shares outstanding - basic848,242 765,922 846,048 764,322 
Dilutive effect (including conversion of Class B Common Stock)62,567 — 64,957 — 
Weighted-average shares outstanding - diluted910,809 765,922 911,005 764,322 
Net income (loss) per share - basic$0.10 $(0.15)$0.16 $(0.21)
Net income (loss) per share - diluted$0.10 $(0.15)$0.15 $(0.21)
25


ADT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Class B Common Stock:
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Allocation of net income (loss) - basic$5,523 $(8,404)$8,663 $(11,635)
Dilutive effect(233)— (323)— 
Allocation of net income (loss) - diluted$5,290 $(8,404)$8,340 $(11,635)
Weighted-average shares outstanding - basic54,745 54,745 54,745 54,745 
Dilutive effect— — — — 
Weighted-average shares outstanding - diluted54,745 54,745 54,745 54,745 
Net income (loss) per share - basic$0.10 $(0.15)$0.16 $(0.21)
Net income (loss) per share - diluted$0.10 $(0.15)$0.15 $(0.21)
13.     COMMITMENTS AND CONTINGENCIES
Contractual Obligations
There have been no material changes to the Company’s contractual obligations as compared to December 31, 2021, except as discussed below:
Google Commercial Agreement
The Company and Google entered into a Master Supply, Distribution, and Marketing Agreement (the “Google Commercial Agreement”), pursuant to which Google has agreed to supply the Company with certain Google devices as well as certain Google video and analytics services (“Google Devices and Services”), for sale to the Company’s customers. Subject to customary termination rights related to breach and change of control, the Google Commercial Agreement has an initial term of seven years from the date that the Google Devices and Services are successfully integrated into the Company’s end-user security and automation platform. Further, subject to certain carve-outs, the Company has agreed to exclusively sell Google Devices and Services to its customers.
In June 2022, the Company amended the Google Commercial Agreement to extend the date for the launch of the integrated Google Devices and Services until September 30, 2022. If the integrated Google Devices and Services are not launched by September 30, 2022, Google has the contractual right to require the Company, with certain exceptions, until such integration, to exclusively offer Google Devices and Services without integration for all new professional installations and for existing customers who do not have ADT Pulse or ADT Control interactive services. The Company has already begun providing Google video services and devices and will continue to do so on a non-integrated basis, and is working closely with Google toward an integrated solution.
Other Obligations
In 2021, the Company entered into agreements for potential future customer account purchases from two distinct third parties, assuming certain conditions are met, over the course of those agreements. As of June 30, 2022, remaining commitments for those potential future customer account purchases were not material.
Guarantees
In the normal course of business, the Company is liable for contract completion and product performance. The Company’s guarantees primarily relate to standby letters of credit related to its insurance programs and totaled $86 million and $76 million as of June 30, 2022 and December 31, 2021, respectively. The Company does not believe such obligations will materially affect its financial position, results of operations, or cash flows.
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ADT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
During March 2022, the Company entered into an unsecured Credit Agreement with Goldman Sachs Mortgage Company, as administrative agent and issuing lender (the “Issuing Lender”), together with other lenders party thereto, pursuant to which the Company may request the Issuing Lender to issue one or more letters of credit for its own account or the account of its subsidiaries, in an aggregate face amount not to exceed $75 million at any one time.
Legal Proceedings
The Company is subject to various claims and lawsuits in the ordinary course of business, which include contractual disputes; worker’s compensation; employment matters; product, general, and auto liability claims; claims that the Company has infringed on the intellectual property rights of others; claims related to alleged security system failures; and consumer and employment class actions. The Company is also subject to regulatory and governmental examinations, information requests and subpoenas, inquiries, investigations, and threatened legal actions and proceedings. In connection with such formal and informal inquiries, the Company receives numerous requests, subpoenas, and orders for documents, testimony, and information in connection with various aspects of its activities. There have been no material changes to these matters from those disclosed in the 2021 Annual Report except as described below.
The Company records accruals for losses that are probable and reasonably estimable. These accruals are based on a variety of factors such as judgment, probability of loss, opinions of internal and external legal counsel, and actuarially determined estimates of claims incurred but not yet reported based upon historical claims experience. Legal costs in connection with claims and lawsuits in the ordinary course of business are expensed as incurred. Additionally, the Company records insurance recovery receivables from third-party insurers when recovery has been determined to be probable. The Company has not accrued for any losses for which the likelihood of loss cannot be assessed, is less than probable, or the range of possible loss cannot be estimated.
As of June 30, 2022 and December 31, 2021, the Company’s accrual for ongoing claims and lawsuits within the scope of an insurance program totaled $101 million and $90 million, respectively. The Company’s accrual related to ongoing claims and lawsuits not within the scope of an insurance program is not material.
Unauthorized Access by a Former Technician
In April 2020, after investigating a customer inquiry, the Company self-disclosed that a former technician based in Dallas, Texas had, during service visits, added his personal email address to approximately 200 of the Company’s customers’ accounts, which provided this employee with varying levels of unauthorized personal access to such customers’ in-home security systems. In response, the Company initiated an affirmative outreach effort to notify all customers affected by this activity and to address their concerns. Since the disclosure, seven lawsuits have been filed against the Company, and the Company intervened in an eighth lawsuit filed against the former technician. Four of these lawsuits were originally filed as putative class actions and four as individual claims.
The Company was also served with arbitration demands from fifteen separate customers affected by this incident. As of July 27, 2022, the Company and its insurers had settled or have reached agreements in principle to settle all pending lawsuits, arbitrations, and demands arising from this incident, with the exception of one immaterial lawsuit. This includes all of the Company’s previously reported matters, which were all filed and pending in the U.S. District Court for the Southern District of Florida, as follows: Shana Doty v. ADT LLC (filed May 18, 2020); Alexia Preddy v. ADT LLC (filed May 18, 2020), Randy Doty v. ADT LLC (filed April 2, 2021) and Stefanie Bryant, et al. v. ADT LLC (filed December 15, 2021). These matters alleged actions for damages relating to some or all of the following: breach of contract, negligence, intrusion upon seclusion, violation of the Computer Fraud and Abuse Act, negligent hiring, supervision and retention, and intentional infliction of emotional distress. All such pending settlements and agreements are for monetary amounts within the Company’s insured levels.
14.     LEASES
Company as Lessee
As part of normal operations, the Company leases real estate, vehicles, and equipment from various counterparties with lease terms and maturities through 2033. For these transactions, the Company applies the practical expedient to not separate the lease and non-lease components and accounts for the combined component as a lease. Additionally, the Company’s right-of-use assets and lease liabilities include leases with initial lease terms of 12 months or less.
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ADT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The Company’s right-of-use assets and lease liabilities primarily represent lease payments fixed at the commencement of a lease and variable lease payments dependent on an index or rate. Lease payments are recognized as lease cost on a straight-line basis over the lease term, which is determined as the non-cancelable period, including periods in which termination options are reasonably certain of not being exercised and periods in which renewal options are reasonably certain of being exercised. The discount rate is determined using the Company’s incremental borrowing rate coinciding with the lease term at the commencement of a lease. The incremental borrowing rate is estimated based on publicly available data for the Company’s debt instruments and other instruments with similar characteristics.
Lease payments that are neither fixed nor dependent on an index or rate and vary because of changes in usage or other factors are included in variable lease costs. Variable lease costs are recorded in the period in which the obligation is incurred and primarily relate to fuel, repair, and maintenance payments as they vary based on the usage of leased vehicles and buildings.
The Company’s leases do not contain material residual value guarantees or restrictive covenants. The Company’s subleases are not material.
Right-of-Use Assets and Lease Liabilities:
(in thousands)
June 30, 2022December 31, 2021
Presentation and Classification:
OperatingCurrentPrepaid expenses and other current assets$288 $230 
OperatingNon-currentOther assets121,708 125,945 
FinanceNon-current
Property and equipment, net(1)
92,044 88,962 
Total right-of-use assets$214,040 $215,137 
OperatingCurrentAccrued expenses and other current liabilities$39,656 $37,359 
FinanceCurrentCurrent maturities of long-term debt43,248 38,730 
OperatingNon-currentOther liabilities93,202 99,734 
FinanceNon-currentLong-term debt50,807 54,350 
Total lease liabilities$226,913 $230,173 
_________________
(1)Finance right-of-use assets are recorded net of accumulated depreciation of approximately $97 million and $78 million as of June 30, 2022 and December 31, 2021, respectively.
Lease Cost:
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)
2022202120222021
Operating lease cost$12,032 $12,159 $24,517 $25,052 
Finance lease cost:
Amortization of right-of-use assets10,791 6,867 20,643 13,178 
Interest on lease liabilities869 681 1,700 1,376 
Variable lease costs25,864 20,154 48,998 33,132 
Total lease cost $49,556 $39,861 $95,858 $72,738 
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ADT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Cash Flow and Supplemental Information:
Six Months Ended June 30,
(in thousands)
20222021
Cash paid for amounts included in the measurement of lease liabilities:
Operating leases:
Operating cash flows$23,572 $24,072 
Finance leases:
Operating cash flows$1,700 $1,376 
Financing cash flows$22,165 $14,392 
Right-of-use assets obtained in exchange for lease obligations:
Operating leases$16,322 $7,861 
Finance leases$23,670 $17,353 
Company as Lessor
The Company is a lessor in certain Company-owned transactions as the Company has identified a lease component associated with the right-of-use of the security system and a non-lease component associated with the monitoring and related services.
For transactions in which (i) the timing and pattern of transfer is the same for the lease and non-lease components and (ii) the lease component would be classified as an operating lease if accounted for separately, the Company applies the practical expedient to aggregate the lease and non-lease components and accounts for the combined transaction based upon its predominant characteristic, which is the non-lease component. The Company accounts for the combined component as a single performance obligation under the applicable revenue guidance and recognizes the underlying assets within subscriber system assets, net, in the Condensed Consolidated Balance Sheets.
For transactions that do not qualify for the practical expedient as the lease component represents a sales-type lease, the Company accounts for the lease and non-lease components separately. The Company’s sales-type leases are not material.
15.     RELATED PARTY TRANSACTIONS
The Company’s related party transactions primarily relate to products and services received from, or monitoring and related services provided to, other entities controlled by Apollo, as well as management, consulting, and transaction advisory services provided by Apollo to the Company. There were no significant related party transactions during the periods presented other than as described below:
Sunlight Financial LLC
ADT Solar uses Sunlight Financial LLC (“Sunlight”), a related party controlled by Apollo, to access certain loan products for ADT Solar customers, as discussed in Note 2 “Revenue and Receivables.” Total loans funded by Sunlight were approximately $131 million and $243 million, respectively, for the three and six months ended June 30, 2022. As of June 30, 2022, $6 million was reflected in accounts receivable, net, and $10 million was reflected in deferred revenue in the Condensed Consolidated Balance Sheets related to such funded loans. Additionally, the Company incurred $15 million and $30 million, respectively, of financing fees for the three and six months ended June 30, 2022.
Rackspace US, Inc.
During October 2020, the Company entered into a master services agreement with Rackspace US, Inc., a related party controlled by Apollo, for the provision of cloud storage, equipment, and services to facilitate the implementation of the Company’s cloud migration strategy for certain applications. The master services agreement includes a minimum purchase commitment of $50 million over a seven year term. As of June 30, 2022, total purchases under this agreement since inception were approximately $12 million, with approximately $3 million and $6 million occurring during the three and six months ended June 30, 2022, respectively.
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ADT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
TD SYNNEX Corporation
The Company uses TD SYNNEX Corporation (“TD SYNNEX”), a related party controlled by Apollo, for certain technical services encompassing the purchase and support of IT equipment in the ordinary course of business. TD SYNNEX fees totaled approximately $0.4 million and $1.9 million during the three and six months ended June 30, 2022, respectively.
Intrado Corporation
The Company uses Intrado Corporation (“Intrado”), a related party controlled by Apollo, for certain technology and communications services in the ordinary course of business. The Company is party to an agreement with Intrado for the provision of certain emergency response and telecommunication services, which includes remaining commitments through 2025 of approximately $4 million as of June 30, 2022. Intrado fees totaled approximately $0.5 million and $1.2 million for the three and six months ended June 30, 2022, respectively.
Alorica, Inc.
The Company uses Alorica Inc. (“Alorica”), a related party controlled by Apollo, as a digital customer experience partner in the ordinary course of business. Alorica fees totaled approximately $0.9 million and $1.6 million during the three and six months ended June 30, 2022, respectively. The Company also provides monitoring and related services to Alorica in the ordinary course of business. Amounts received from Alorica during the three and six months ended June 30, 2022 were not material.
Canopy
Canopy is considered a related party under GAAP, as the Company accounts for its investment in Canopy under the equity method of accounting. Except for the transactions described in Note 5 “Equity Method Investments,” there were no other material related party transactions with Canopy during the period.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
INTRODUCTION
To obtain a more comprehensive understanding of our financial condition, changes in financial condition, and results of operations, the following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q, as well as our audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Annual Report”), which was filed with the United States (“U.S.”) Securities and Exchange Commission (the “SEC”) on March 1, 2022.
The following discussion and analysis contains forward-looking statements about our business, operations, and financial performance based on current plans and estimates that involve risks, uncertainties, and assumptions. Actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause such differences are discussed in the sections of this Quarterly Report on Form 10-Q titled “Cautionary Statements Regarding Forward-Looking Statements” and Item 1A “Risk Factors.”
Table of Contents
Overview and Basis of Presentation
Factors Affecting Operating Results
Key Performance Indicators
Results of Operations
Non-GAAP Measures
Liquidity and Capital Resources
Critical Accounting Policies and Estimates
Cautionary Statements Regarding Forward-Looking Statements
OVERVIEW AND BASIS OF PRESENTATION
Business Overview
ADT Inc., together with its wholly-owned subsidiaries (collectively, the “Company,” “we,” “our,” “us,” and “ADT”), is a leading provider of security, interactive, and smart home solutions serving residential, small business, and commercial customers in the U.S. Since the acquisition of Compass Solar Group, LLC (now named ADT Solar LLC) (“ADT Solar”) (the “ADT Solar Acquisition”) in December 2021, we also provide residential solar and energy storage solutions. Our mission is to empower people to protect and connect to what matters most - their families, homes, and businesses - by delivering safe, smart, and sustainable lifestyle-driven solutions through professionally installed, do-it-yourself (“DIY”), and mobile or other digital-based offerings supported by our 24/7 professional monitoring services.
Basis of Presentation
All financial information presented in this section has been prepared in U.S. dollars in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and includes the accounts of ADT Inc. and its wholly-owned subsidiaries. All intercompany transactions have been eliminated. In addition, we use the equity method of accounting to account for an investment in which we have the ability to exercise significant influence but do not control.
We report financial and operating information in the following three segments:
Consumer and Small Business - The Consumer and Small Business (“CSB”) segment primarily includes the sale, installation, servicing, and monitoring of integrated security and automation systems and other related offerings to residential homeowners, small business operators, and other individual consumers, as well as general corporate costs and other income and expense items not included in another segment.
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Commercial - The Commercial segment primarily includes the sale, installation, servicing, and monitoring of integrated security and automation systems, fire detection and suppression systems, and other related offerings to larger businesses and/or multi-site operations, which often require more sophisticated integrated solutions, as well as certain dedicated corporate and other costs.
Solar - The Solar segment primarily includes the design and installation of solar and related solutions and services to residential homeowners who purchase solar and energy storage solutions, energy efficiency upgrades, and roofing services, as well as certain dedicated corporate and other costs.
Our chief operating decision maker (the “CODM”) uses Adjusted EBITDA, which is considered the segment profit measure, to evaluate segment performance. Our definition of Adjusted EBITDA, a reconciliation of Adjusted EBITDA to net income (loss), and additional information, including a description of the limitations relating to the use of Adjusted EBITDA, are provided under “—Non-GAAP Measures.”
Refer to Note 3 “Segment Information” for additional information on the Company’s segments.
COVID-19 Pandemic Update
During March 2020, the World Health Organization declared the outbreak of a novel coronavirus as a pandemic (the “COVID-19 Pandemic”). While responses have varied by individuals, businesses, and state and local governments, the COVID-19 Pandemic, including recent variants, caused certain notable impacts on general economic conditions, including temporary and permanent closures of many businesses, increased governmental regulations, supply chain disruptions, and changes in consumer spending. To protect our employees and serve our customers, we have implemented and are continuously monitoring and evolving certain measures as necessary, such as (i) detailed protocols for infectious disease safety for employees, (ii) employee daily wellness checks, and (iii) certain work from home actions, including for the majority of our call center professionals. Our response plan has not materially changed from that described in the 2021 Annual Report, and we continue to provide relevant updates to management, employees, and our customers as necessary.
We believe our overall recurring revenue and highly variable subscriber acquisition cost model provides a solid financial foundation for strong cash flow generation despite the impact from the COVID-19 Pandemic. We anticipate maintaining sufficient liquidity and capital resources to continue (i) providing essential services, (ii) satisfying our debt requirements, and (iii) having the ability to return capital to our stockholders in the form of a regular quarterly dividend during this challenging macroeconomic environment.
We considered the on-going and pervasive economic impact of the COVID-19 Pandemic in our assessment of our financial position, results of operations, and cash flows, as well as certain accounting estimates as of and for the periods presented. However, the evolving and uncertain nature of the COVID-19 Pandemic and its economic impact, as well as the evolving nature of the regulatory environment which may require vaccines or vaccine boosters or other actions that could impact our employee base or impose additional costs on our business, could materially impact our estimates and financial results in future reporting periods.
FACTORS AFFECTING OPERATING RESULTS
We have been building a strong platform for growth by focusing on improving customer satisfaction, increasing our recurring monthly revenue through customer acquisition, improving customer retention, reducing our revenue payback period, increasing the value of our offerings through new products and services, and increasing the rate at which new customers opt for our interactive services.
In December 2021, we expanded into the residential solar market with the closing of the ADT Solar Acquisition. We believe solar is the next logical extension for our offerings, which enhances our ability to offer an integrated safe, smart, and sustainable home experience.
As of June 30, 2022, we served approximately 6.7 million security monitoring service subscribers. Generally, a significant upfront investment is required to acquire new customers for our subscriber-based offerings that then provide ongoing and predictable recurring revenue generated from our monitoring and other services. Although the economics of an installation may vary depending on the customer type, acquisition channel, and product offering, we generally achieve revenue break-even in less than two and a half years.
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In addition, our results are impacted by the mix of transactions under a Company-owned equipment model versus a customer-owned equipment model for our subscriber-based offerings, as there are different accounting treatments applicable to each model. As we continue building our partnership with Google LLC (“Google”), introducing new or enhancing our current offerings, and refining our go-to-market approach, we expect to see a shift toward an increasing proportion of transactions under a customer-owned equipment model (referred to as outright sales), which will impact results in future periods.
Our ability to add new customers and grow our businesses also depends on the overall demand for our products and services, which is driven by a number of external factors such as the overall economic conditions in the geographies in which we operate, the price and quality of our products and services compared to those of our competitors, as well as changes in competition such as from the acquisition or disposition of similar businesses by our competitors. The demand for our products and services in our customer channels is also impacted by the following:
Growth in our residential and small business customer base can be influenced by the overall state of the housing market, the perceived threat of crime, the occurrence of significant life events such as the birth of a child or opening of a new business, or the availability of financial incentives such as those provided by insurance carriers.
Growth in our commercial customer base can be influenced by the rate at which new businesses begin operations or existing businesses grow, as well as applicable building codes and insurance policies.
Growth in our solar customer base can be influenced by the availability of certain rebates, tax credits, and other financial incentives, the availability and cost of consumer financing options, and traditional energy prices and grid reliability.
We believe advancements in technology, younger generations of consumers, and shifts to de-urbanization have increased consumer interest in smart home offerings and other mobile technology applications; and we have made significant progress toward increasing the variety of our offerings to accommodate these changing interests. In addition, we believe uncertainties around the economic environment and the COVID-19 Pandemic have, in general, increased consumer and business awareness of the need for security. However, we may experience an increase in costs associated with factors such as (i) offering a wider variety of products and services; (ii) providing a greater mix of interactive and smart home solutions; (iii) replacing or upgrading certain system components due to technological advancements or otherwise; (iv) supply chain disruptions; (v) inflationary pressures on costs such as materials, labor, and fuel; and (vi) other changes in prices or terms from our suppliers, vendors, or third-party lenders that provide loan products to our Solar customers.
We have implemented certain actions across our business segments such as our virtual service support program (the “Virtual Assistance Program”) in our CSB segment, which we launched in July 2021. The Virtual Assistance Program provides our customers the ability to troubleshoot and resolve certain service issues through a live video stream with our skilled technicians. This provides customers with more options for receiving certain services that best fit their lifestyles while reducing the cost for us to provide these services.
Attrition has a direct impact on our financial results, including revenue, operating income, and cash flows. A portion of our customer base can be expected to cancel its service every year as customers may choose not to renew or may terminate their contracts for a variety of reasons, including relocation, cost, loss to competition, or service issues. In addition, customers who do not transition prior to the applicable 3G or Code-Division Multiple Access (“CDMA”) network sunset date, as discussed below, may experience a loss of signal, which could impact attrition in the future.
Prior to 2020, new customer additions and our disconnect rates on our residential monitored security customers were typically higher during the second and third calendar quarters of each year relative to the first and fourth quarters due to several factors including the timing of household moves and the overall state of the housing market. We believe the COVID-19 Pandemic affected these seasonal trends beginning in 2020. During 2020, we experienced a lower volume of customer relocations which was followed by a slight increase during 2021 as the number of household moves increased. During 2022, we are beginning to see favorable trends in gross customer revenue attrition as a result of a lower volume of customer relocations. We are currently unable to determine whether there will be any ongoing or further impacts on our seasonality, and we may continue to experience fluctuations in certain trends, such as relocations, in the future.
We have not sought or requested government assistance as a result of the COVID-19 Pandemic, but we did experience a favorable cash flow impact during 2020 and other benefits associated with certain income tax and payroll tax provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), including the deferral of remittance of certain 2020 payroll taxes. We paid the majority of the first 50% of the deferred amount during the fourth quarter of 2021, with the remainder due by the end of 2022.
The factors described above and elsewhere in this section could have a material adverse effect on our business, financial condition, results of operations, cash flows, and key performance indicators.
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Other Events and Updates
Radio Conversion Costs - During 2019, we commenced a program to replace the 3G and CDMA cellular equipment used in many of our security systems as a result of the cellular network providers notifying us they will be retiring their 3G and CDMA networks beginning in February 2022. As of the start of the 3G sunset process in February 2022, we had converted substantially all of our remaining 3G customers. For those customers who do not transition prior to or since the completion of the applicable network sunset, the loss of signal to our security systems and certain services we provide may impact our ability to bill and/or collect from these customers in the future. Until the cellular network providers complete the applicable sunset processes, we cannot estimate the impact of the conversion on our attrition rate.
We do not expect the remaining radio conversion costs and related incremental revenue to be material.
Google - In July 2020, the Company and Google entered into a Master Supply, Distribution, and Marketing Agreement (the “Google Commercial Agreement”), pursuant to which Google has agreed to supply the Company with certain Google devices as well as certain Google video and analytics services (“Google Devices and Services”) for sale to the Company’s customers. Subject to customary termination rights related to breach and change of control, the Google Commercial Agreement has an initial term of seven years from the date that the Google Devices and Services are successfully integrated into our end-user security and automation platform. Further, subject to certain carve-outs, we have agreed to exclusively sell Google Devices and Services to our customers.
In June 2022, we amended the Google Commercial Agreement to extend the date for the launch of the integrated Google Devices and Services until September 30, 2022. If the integrated Google Devices and Services are not launched by September 30, 2022, Google has the contractual right to require us, with certain exceptions, until such integration, to exclusively offer Google Devices and Services without integration for all new professional installations and for existing customers who do not have ADT Pulse or ADT Control interactive services. We have already begun providing Google video services and devices and will continue to do so on a non-integrated basis as we work closely with Google toward an integrated solution. We launched the Google Nest doorbell during the first quarter of 2022, rolled out mesh Wi-Fi during the second quarter of 2022, and launched Google indoor and outdoor cameras in August 2022.
The Google Commercial Agreement further specifies each party shall contribute $150 million towards the joint marketing of devices and services; customer acquisition; training of our employees on the sales, installation, customer service, and maintenance of the product and service offerings; and technology updates for products included in such offerings. Each party is required to contribute such funds in three equal tranches, subject to the attainment of certain milestones.
Canopy Investment - In April 2022, we closed on our previously announced transaction with Ford Motor Company (“Ford”) to form a new entity, SNTNL LLC (“Canopy”), which combines ADT’s professional security monitoring and Ford’s AI-driven video camera technology to help customers strengthen security of new and existing vehicles across automotive brands. ADT and Ford expect to invest approximately $100 million collectively during the next three years, of which ADT will contribute 40%. As part of the initial funding at closing, our contribution totaled approximately $11 million.
In connection with the investment, we also entered into several commercial agreements (the “Canopy Commercial Agreements”). Refer to Note 5 “Equity Method Investments” for additional information.
Updates Related to Existing and Potential Tax Legislation
Delayed Effective Dates for Tax Law Changes under the Tax Cuts and Jobs Act
Certain changes to U.S. federal tax law included in the Tax Cuts and Jobs Act had a delayed effective date and have taken effect for tax years beginning after December 31, 2021. Under Internal Revenue Code (“IRC”) Section 163(j), the limitation on net business interest expense deductions will no longer be increased by deductions for depreciation, amortization, or depletion. Under IRC Section 174, specified research and experimentation expenditures must now be capitalized and amortized. These items could result in increased taxable income and acceleration of net operating loss utilization, which could impact our tax expense and ultimately, our net income or loss.
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Potential Federal Tax Legislation
The White House released its fiscal year 2023 budget in March 2022, which includes a proposal to raise the corporate tax rate to 28%. If the proposed tax rate increase is passed, the Company would need to revalue its deferred tax liabilities, which could further increase the Company’s effective tax rate. The fiscal year 2023 budget also includes a provision that would reinstate current deductibility for IRC Section 174 research and experimentation expenditures that became subject to capitalization and amortization beginning this year.
Potential for Future Valuation Allowance
As discussed in our 2021 Annual Report, we had a significant amount of deferred tax assets as of December 31, 2021, against which we take valuation allowances that relate to the uncertainty of our ability to utilize these deferred tax assets in future periods. These valuation allowances were not material in 2021. We review periodically those matters that can influence our decision as to whether or not a valuation allowance is appropriate. Among those matters considered are pending and enacted legislation such as the updates described above. We will consider each quarter whether any developments to such legislation, together with the other factors we consider, require a valuation allowance. We believe that our deferred tax assets for disallowed interest under IRC Section 163(j) will grow meaningfully during 2022 and in subsequent years from their December 31, 2021 level. There is currently significant uncertainty in the matters we consider when determining whether it is appropriate to take additional valuation allowances. While we have not reported any material changes to our valuation allowances as disclosed in our 2021 Annual Report, we may determine to do so in any of the remaining quarters in 2022 or in subsequent years. Any material change to our valuation allowance would materially and adversely affect our operating results and may result in a net loss position for any given period.
KEY PERFORMANCE INDICATORS
We evaluate our results using certain key performance indicators, including the operating metrics recurring monthly revenue (“RMR”) and gross customer revenue attrition, as well as the non-GAAP measure Adjusted EBITDA. Computations of our key performance indicators may not be comparable to other similarly titled measures reported by other companies. Certain operating metrics are approximated, as there may be variations to reported results due to certain adjustments we might make in connection with the integration over several periods of acquired companies that calculated these metrics differently or periodic reassessments and refinements in the ordinary course of business, including changes due to system conversions or historical methodology differences in legacy systems.
Recurring Monthly Revenue
RMR is generated by contractual recurring fees for monitoring and other recurring services provided to our customers.
We use RMR to evaluate our overall sales, installation, and retention performance. Additionally, we believe the presentation of RMR is useful to investors because it measures the volume of revenue under contract at a given point in time. RMR is also a useful measure for forecasting future revenue performance as the majority of our revenue comes from recurring sources.
Gross Customer Revenue Attrition
Gross customer revenue attrition is defined as RMR lost as a result of customer attrition, net of dealer charge-backs and reinstated customers, excluding contracts monitored but not owned and DIY customers. Customer sites are considered canceled when all services are terminated. Dealer charge-backs represent customer cancellations charged back to the dealers because the customer canceled service during the charge-back period, which is generally thirteen months.
Gross customer revenue attrition is calculated on a trailing twelve-month basis, the numerator of which is the RMR lost during the period due to attrition, net of dealer charge-backs and reinstated customers, and the denominator of which is total annualized RMR based on an average of RMR under contract at the beginning of each month during the period, in each case, excluding contracts monitored but not owned and DIY customers.
We use gross customer revenue attrition to evaluate our retention and customer satisfaction performance, as well as evaluate subscriber trends by vintage year. Additionally, we believe the presentation of gross customer revenue attrition is useful to investors as it provides a means to evaluate drivers of customer attrition and the impact of retention initiatives.
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Adjusted EBITDA
We also disclose Adjusted EBITDA, which is a non-GAAP measure. Our definition of Adjusted EBITDA, a reconciliation of Adjusted EBITDA to net income (loss) (the most comparable GAAP measure), and additional information, including a description of the limitations relating to the use of Adjusted EBITDA, are provided under “—Non-GAAP Measures.”
RESULTS OF OPERATIONS
(in thousands, except as otherwise indicated)
Three Months Ended June 30,Six Months Ended June 30,
Results of Operations:
20222021$ Change20222021$ Change
Monitoring and related services$1,145,792 $1,083,520 $62,272 $2,267,088 $2,146,286 $120,802 
Installation, product, and other455,238 220,897 234,341 878,689 462,835 415,854 
Total revenue1,601,030 1,304,417 296,613 3,145,777 2,609,121 536,656 
Cost of revenue (exclusive of depreciation and amortization shown separately below)507,813 381,585 126,228 1,017,581 762,751 254,830 
Selling, general, and administrative expenses487,069 445,636 41,433 969,417 895,238 74,179 
Depreciation and intangible asset amortization399,416 474,271 (74,855)875,539 944,080 (68,541)
Merger, restructuring, integration, and other(3,845)4,804 (8,649)(3,317)25,311 (28,628)
Operating income (loss)210,577 (1,879)212,456 286,557 (18,259)304,816 
Interest expense, net(81,651)(166,525)84,874 (87,958)(214,249)126,291 
Loss on extinguishment of debt— — — — (156)156 
Other income (expense)1,463 1,533 (70)2,959 3,336 (377)
Income (loss) before income taxes and equity in net earnings (losses) of equity method investee130,389 (166,871)297,260 201,558 (229,328)430,886 
Income tax benefit (expense)(37,924)41,021 (78,945)(57,448)55,584 (113,032)
Income (loss) before equity in net earnings (losses) of equity method investee$92,465 $(125,850)$218,315 $144,110 $(173,744)$317,854 
Equity in net earnings (losses) of equity method investee(948)— (948)(948)— (948)
Net income (loss)$91,517 $(125,850)$217,367 $143,162 $(173,744)$316,906 
Key Performance Indicators: (1)
RMR$368,768 $352,428 $16,340 $368,768 $352,428 $16,340 
Gross customer revenue attrition (percent)12.7%13.3%N/A12.7%13.3%N/A
Adjusted EBITDA (2)
$597,249 $541,865 $55,384 $1,198,246 $1,083,996 $114,250 
_______________________
(1)Refer to the “Key Performance Indicators” section for the definitions of these key performance indicators.
(2)Adjusted EBITDA is a non-GAAP measure. Refer to the “Non-GAAP Measures” section for the definition of this term and a reconciliation to the most comparable GAAP measure.
N/A — Not applicable.
Monitoring and Related Services Revenue (“M&S Revenue”):
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)
20222021$ Change20222021$ Change
CSB$1,011,442 $965,233 $46,209 $2,004,470 $1,916,481 $87,989 
Commercial134,350 118,287 16,063 262,618 229,805 32,813 
Total M&S Revenue(1)
$1,145,792 $1,083,520 $62,272 $2,267,088 $2,146,286 $120,802 
_________________
(1)     M&S Revenue is not applicable to our Solar segment.
Monitoring and related services revenue is primarily comprised of revenue generated from providing recurring monthly monitoring and other services to our customers.
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The increase in total M&S Revenue for the three and six months ended June 30, 2022 as compared to the prior year periods was primarily attributable to higher recurring revenue in our CSB segment.
CSB - For the three and six months ended June 30, 2022, higher recurring revenue was driven by improvements in average pricing as new and existing customers selected higher priced interactive and other services, as well as an increase in the number of active subscribers since the prior year periods primarily due to investments in subscriber growth.
Commercial - For the three and six months ended June 30, 2022, higher M&S revenue was driven by an increase in average prices and higher revenue per service call.
RMR - Total RMR increased to $369 million as of June 30, 2022 from $352 million as of June 30, 2021. RMR added since the prior year period reflects the impact from improvements in average pricing, as new and existing customers selected higher priced interactive and other services, and our subscriber growth initiatives.
Gross Customer Revenue Attrition - Trailing twelve-month gross customer revenue attrition decreased to 12.7% as of June 30, 2022 from 13.3% as of June 30, 2021. The improvement was primarily attributable to a decrease in relocations and fewer voluntary disconnects primarily resulting from customer retention initiatives.
Installation, Product, and Other Revenue:
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)
20222021$ Change20222021$ Change
CSB$77,047 $57,414 $19,633 $146,608 $144,771 $1,837 
Commercial163,136 163,483 (347)325,045 318,064 6,981 
Solar215,055 — 215,055 407,036 — 407,036 
Total installation, product, and other revenue$455,238 $220,897 $234,341 $878,689 $462,835 $415,854 
Installation, product, and other revenue is primarily comprised of revenue from the sale and installation of security and solar systems, as well as the amortization of deferred subscriber acquisition revenue.
The increase in total installation, product, and other revenue for the three and six months ended June 30, 2022, as compared to the prior year periods, was primarily due to revenue from Solar installations as a result of the ADT Solar Acquisition in December 2021.
CSB - For the three and six months ended June 30, 2022, the increase in installation, product, and other revenue reflected additional amortization of deferred subscriber acquisition revenue. For the six months ended June 30, 2022, this was offset by a decrease in installation revenue from a lower volume of outright sales in the first quarter. These changes were primarily a result of our transition to a predominately Company-owned model in the first quarter of 2021.
Commercial - For the three and six months ended June 30, 2022, installation, product, and other revenue remained relatively flat, reflecting the impact of supply chain delays.
Solar - For the six months ended June 30, 2022, installation, product, and other revenue included a reduction of approximately $30 million in the first quarter of 2022 from the amortization of purchase accounting adjustments.
Cost of Revenue:
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)
20222021$ Change20222021$ Change
CSB$171,204 $187,766 $(16,562)$342,384 $381,137 $(38,753)
Commercial203,704 193,819 9,885 406,888 381,614 25,274 
Solar132,905 — 132,905 268,309 — 268,309 
Total cost of revenue$507,813 $381,585 $126,228 $1,017,581 $762,751 $254,830 
Cost of revenue is primarily comprised of costs related to the installation of our security and solar systems, as well as field service and call center costs.
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The increase in total cost of revenue for the three and six months ended June 30, 2022, as compared to the prior year periods, was primarily due to higher installation costs as a result of the ADT Solar Acquisition in December 2021.
CSB - For the three months ended June 30, 2022, CSB field service and call center costs decreased, as compared to the prior year period, primarily as a result of cost savings initiatives such as our Virtual Assistance Program implemented in July 2021, despite rising costs and providing service to a larger number of customers, including a higher mix of interactive services.
The decrease for the six months ended June 30, 2022, as compared to the prior year period, is primarily driven by a decrease in installation costs due to a lower volume of outright sales transactions in the first quarter compared to the same period in the prior year as a result of our transition to a predominately Company-owned model, which was completed during March 2021, as well as a decrease in field service and call center costs as described above for the three months ended June 30, 2022.
Commercial - For the three and six months ended June 30, 2022, cost of revenue increased, as compared to the prior year periods, primarily due to higher prices on materials, labor, and fuel.
Selling, General, and Administrative Expenses (“SG&A”):
For the three and six months ended June 30, 2022, the increase in SG&A, as compared to the prior year periods, was primarily driven by:
incremental expenses of approximately $97 million and $173 million, respectively, as a result of the ADT Solar Acquisition in December 2021, and
increases in the provision for credit losses (excluding ADT Solar) of approximately $13 million and $19 million, respectively, primarily in our CSB segment due to lower provision in the prior year as a result of the COVID-19 Pandemic.
These increases were partially offset by:
decreases in radio conversion costs of $63 million and $114 million, respectively, primarily due to a decrease in the number of conversions, and
decreases in advertising costs (excluding ADT Solar) of approximately $18 million and $38 million, respectively, primarily due to our efforts to optimize our advertising model in our CSB segment.
Depreciation and Intangible Asset Amortization:
For the three and six months ended June 30, 2022, the decrease in depreciation and intangible asset amortization, as compared to the prior year periods, was primarily driven by:
a decrease in the amortization of customer relationship intangible assets acquired as part of the acquisition of The ADT Security Corporation in 2016 (the “ADT Acquisition”), partially offset by
increases in the amortization of customer contracts acquired under our authorized dealer program and from other third parties and depreciation of subscriber system assets primarily due to investments in subscriber growth.
The majority of the remaining net book value of customer relationship intangible assets acquired in the ADT Acquisition will be amortized during 2022 with the remainder amortized during 2023.
Merger, Restructuring, Integration, and Other:
During the six months ended June 30, 2021, merger, restructuring, integration, and other primarily included an $18 million impairment charge in CSB due to lower than expected benefits from our developed-technology intangible asset acquired during November 2020.
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Interest Expense, net:
For the three and six months ended June 30, 2022, the decrease in interest expense, net was primarily driven by the unrealized impact on interest rate swap contracts not designated as cash flow hedges primarily due to fluctuations in the forward London Interbank Offered Rate (“LIBOR”). Refer to Note 8 “Derivative Financial Instruments” for additional information.
Income Tax Benefit (Expense):
The effective tax rate can vary from period to period due to permanent tax adjustments, discrete items such as the settlement of income tax audits and changes in tax laws, as well as recurring factors such as changes in the overall state tax rate.
Income tax expense for the three months ended June 30, 2022 was $38 million, resulting in an effective tax rate for the period of 29.1%. The effective tax rate primarily represents the federal statutory rate of 21.0%, a state statutory tax rate, net of federal benefits, of 5.5%, and a 3.0% unfavorable impact of prior year return adjustments related to executive compensation, partially offset by a 1.6% favorable impact from the release of a capital loss valuation allowance related to disposal activities.
Income tax benefit for the three months ended June 30, 2021 was $41 million, resulting in an effective tax rate for the period of 24.6%. The effective tax rate primarily represents the federal statutory rate of 21.0%, a state statutory tax rate, net of federal benefits, of 2.8%, and a 0.6% favorable impact from prior year tax return adjustments.
Income tax expense for the six months ended June 30, 2022 was $57 million, resulting in an effective tax rate for the period of 28.5%. The effective tax rate primarily represents the federal statutory rate of 21.0%, a state statutory tax rate, net of federal benefits, of 5.9%, a 2.0% unfavorable impact of prior year return adjustments related to executive compensation, and a 1.4% unfavorable impact of permanent items, partially offset by a 1.0% favorable impact from the release of a capital loss valuation allowance related to disposal activities.
Income tax benefit for the six months ended June 30, 2021 was $56 million, resulting in an effective tax rate for the period of 24.2%. The effective tax rate primarily represents the federal statutory tax rate of 21.0%, a state statutory tax rate, net of federal benefits, of 2.8%, and a 1.0% favorable impact of share-based compensation.
NON-GAAP MEASURES
To provide investors with additional information in connection with our results as determined in accordance with GAAP, we disclose Adjusted EBITDA as a non-GAAP measure. This measure is not a financial measure calculated in accordance with GAAP, and it should not be considered as a substitute for net income, operating income, or any other measure calculated in accordance with GAAP, and may not be comparable to similarly titled measures reported by other companies.
Adjusted EBITDA
We believe Adjusted EBITDA is useful to investors to measure the operational strength and performance of our business. We believe the presentation of Adjusted EBITDA is useful as it provides investors additional information about our operating profitability adjusted for certain non-cash items, non-routine items we do not expect to continue at the same level in the future, as well as other items not core to our operations. Further, we believe Adjusted EBITDA provides a meaningful measure of operating profitability because we use it for evaluating our business performance, making budgeting decisions, and comparing our performance against other peer companies using similar measures.
We define Adjusted EBITDA as net income or loss adjusted for (i) interest; (ii) taxes; (iii) depreciation and amortization, including depreciation of subscriber system assets and other fixed assets and amortization of dealer and other intangible assets; (iv) amortization of deferred costs and deferred revenue associated with subscriber acquisitions; (v) share-based compensation expense; (vi) merger, restructuring, integration, and other; (vii) losses on extinguishment of debt; (viii) radio conversion costs, net; and (ix) other income/gain or expense/loss items such as impairment charges, financing and consent fees, or acquisition-related adjustments.
There are material limitations to using Adjusted EBITDA. Adjusted EBITDA does not take into account certain significant items, including depreciation and amortization, interest, taxes, and other adjustments which directly affect our net income (loss). These limitations are best addressed by considering the economic effects of the excluded items independently and by considering Adjusted EBITDA in conjunction with net income or loss as calculated in accordance with GAAP.
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The table below reconciles Adjusted EBITDA to net income (loss):
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)20222021$ Change20222021$ Change
Net income (loss)$91,517 $(125,850)$217,367 $143,162 $(173,744)$316,906 
Interest expense, net81,651 166,525 (84,874)87,958 214,249 (126,291)
Income tax expense (benefit)37,924 (41,021)78,945 57,448 (55,584)113,032 
Depreciation and intangible asset amortization399,416 474,271 (74,855)875,539 944,080 (68,541)
Amortization of deferred subscriber acquisition costs39,050 30,188 8,862 75,989 58,830 17,159 
Amortization of deferred subscriber acquisition revenue(58,461)(40,729)(17,732)(111,884)(77,888)(33,996)
Share-based compensation expense16,932 13,587 3,345 32,952 29,606 3,346 
Merger, restructuring, integration, and other(3,845)4,804 (8,649)(3,317)25,311 (28,628)
Loss on extinguishment of debt— — — — 156 (156)
Radio conversion costs, net544 60,635 (60,091)10,484 119,364 (108,880)
Acquisition related adjustments(1)
1,328 (229)1,557 37,623 (477)38,100 
Other(2)
(8,807)(316)(8,491)(7,708)93 (7,801)
Adjusted EBITDA$597,249 $541,865 $55,384 $1,198,246 $1,083,996 $114,250 
________________
(1)    During 2022, primarily represents the amortization of the customer backlog intangible asset acquired in the ADT Solar Acquisition, which was fully amortized as of March 2022.
(2)    During 2022, primarily represents the gain on sale of a business.
Adjusted EBITDA in total and by segment was as follows:
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)20222021$ Change20222021$ Change
CSB$580,701 $509,897 $70,804 $1,141,246 $1,029,375 $111,871 
Commercial31,363 31,968 (605)54,993 54,621 372 
Solar(14,815)— (14,815)2,007 — 2,007 
Adjusted EBITDA$597,249 $541,865 $55,384 $1,198,246 $1,083,996 $114,250 
The explanations below exclude amounts outside of our definition of Adjusted EBITDA, as applicable.
The change in total Adjusted EBITDA for the three and six months ended June 30, 2022, as compared to the prior year, was primarily due to the following:
CSB Adjusted EBITDA increased primarily due to an increase in M&S Revenue, as well as decreases in advertising costs and field service and call center costs, partially offset by an increase in the provision for credit losses.
Commercial Adjusted EBITDA remained relatively flat and primarily included an increase in M&S Revenue, offset by an increase in field service and call center costs.
In addition, Solar Adjusted EBITDA for the three and six months ended June 30, 2022 includes $11 million of charges associated with the estimated amount of receivables and rebates that are not expected to be collected from a former third-party lender that provided loan products for our Solar customers due to this third-party lender entering a formal insolvency proceeding to effectuate the wind-down of its operations.
Refer to the discussions above under “—Results of Operations” for further details.
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LIQUIDITY AND CAPITAL RESOURCES
Liquidity and capital resources primarily consisted of the following:
(in thousands)June 30, 2022
Cash and cash equivalents$43,609 
Availability under First Lien Revolving Credit Facility$495,000 
Uncommitted available borrowing capacity under Receivables Facility$108,362 
Carrying amount of total debt outstanding$9,842,930 
Liquidity
We expect our ongoing sources of liquidity to include cash generated from operations, borrowings under our first lien revolving credit facility (the “First Lien Revolving Credit Facility”) and our uncommitted receivables securitization financing agreement (the “Receivables Facility”), and the issuance of equity and/or debt securities as appropriate given market conditions. Our future cash needs are expected to include cash for operating activities, working capital, capital expenditures, strategic investments, periodic principal and interest payments on our debt, and potential dividend payments to our stockholders. In addition, we are closely monitoring the impact of recent inflationary pressures and changes in interest rates on our cash position.
We are a highly leveraged company with significant debt service requirements. We may periodically seek to repay, redeem, repurchase, or refinance our indebtedness, or seek to retire or purchase our outstanding securities through cash purchases in the open market, privately negotiated transactions, a 10b5-1 repurchase plan, or otherwise, and any such transactions may involve material amounts.
The Company’s notes due 2023 in the outstanding aggregate principal amount of $700 million (the “ADT Notes due 2023”) mature on June 15, 2023 (the “Maturity Date”). As of June 30, 2022, the Company is in the process of seeking financing to replace the ADT Notes due 2023 prior to the Maturity Date.
We believe our cash position, borrowing capacity available under our First Lien Revolving Credit Facility and Receivables Facility, and cash provided by operating activities are, and will continue to be, adequate to meet our operational and business needs in the next twelve months, as well as our long-term liquidity needs.
Certain of our variable rate debt instruments are based on LIBOR. By June 2023, LIBOR will be replaced with the Secured Overnight Financing Rate (“SOFR”) (the “SOFR Transition Date”), at which point the applicable benchmark for all existing and new issuances under our current debt instruments with a variable rate component will be based on SOFR. Our first lien term loan facility (the “First Lien Term Loan due 2026”) and First Lien Revolving Credit Facility are and will continue to be based on LIBOR until the SOFR Transition Date. However, any future modification, such as a repricing, will require transition to SOFR. Additionally, any new issuances with a variable rate debt component entered into after December 31, 2021 will utilize SOFR per the terms of the credit agreement. As of June 30, 2022, our Receivables Facility is based on SOFR as discussed below. The impact of the transition to SOFR is not expected to be material.
Material Cash Requirements
There have been no significant changes to our short-term or long-term material cash requirements, or our commitments and contractual obligations from those disclosed in our 2021 Annual Report, except as discussed below:
Customer Account Purchases
In 2021, we entered into agreements for potential future customer account purchases from two distinct third parties, assuming certain conditions are met, over the course of those agreements. As of June 30, 2022, the remaining commitments for those potential future customer account purchases were not material.
Off-Balance Sheet Arrangements
During the six months ended June 30, 2022, there have been no material changes to our off-balance sheet arrangements as disclosed in our 2021 Annual Report, except as discussed below:
During March 2022, we entered into an unsecured Credit Agreement with Goldman Sachs Mortgage Company, as administrative agent and issuing lender (the “Issuing Lender”), together with other lenders party thereto, pursuant to which we may request the Issuing Lender to issue one or more letters of credit for its own account or the account of its subsidiaries, in an aggregate face amount not to exceed $75 million at any one time.
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Long-Term Debt
There have been no material changes to our long-term debt from those disclosed in our 2021 Annual Report, except as discussed below:
First Lien Credit Agreement
As of June 30, 2022, we had $80 million in outstanding borrowings under our First Lien Revolving Credit Facility; and during the six months ended June 30, 2022, we borrowed $380 million and repaid $325 million.
Receivables Facility
As of June 30, 2022, we had an outstanding balance of $292 million under the Receivables Facility; and during the six months ended June 30, 2022, we received proceeds of $140 million and repaid $47 million.
In May 2022, we amended the Receivables Facility to change the benchmark rate from 1-month LIBOR to Daily SOFR. In addition, the May 2022 amendment extended the scheduled termination date for the uncommitted revolving period from October 2022 to May 2023, and amended certain other terms to increase the advance rate on pledged collateral.
ADT Notes due 2023
As of June 30, 2022, we had an outstanding balance of $700 million under the ADT Notes due 2023 that was classified as a current liability, net of any unamortized discount, in the Condensed Consolidated Balance Sheets. As described above, we are in the process of seeking financing to replace the ADT Notes due 2023 prior to June 15, 2023, which is the maturity date.
Debt Covenants
As of June 30, 2022, we were in compliance with all financial covenant and other maintenance tests for all our debt obligations. We do not believe there is a material risk of future noncompliance with our financial covenant and other maintenance tests as a result of the COVID-19 Pandemic, or otherwise.
Dividends
During the six months ended June 30, 2022 and 2021, we declared aggregate dividends of $60 million ($0.035 per share) and $54 million ($0.035 per share) on our Common Stock, respectively, and $4 million ($0.035 per share) on our Class B Common Stock during both periods.
On August 4, 2022, we announced a dividend of $0.035 per share to holders of Common Stock and Class B Common Stock of record on September 15, 2022, which will be distributed on October 4, 2022.
Cash Flow Analysis
Six Months Ended June 30,
(in thousands)20222021$ Change
Net cash provided by (used in) operating activities$822,636 $785,660 $36,976 
Net cash provided by (used in) investing activities$(807,440)$(777,162)$(30,278)
Net cash provided by (used in) financing activities$7,073 $(59,740)$66,813 
Cash Flows from Operating Activities
The increase in cash provided by operating activities was primarily due to:
a decrease in payments related to radio conversion costs, net of the related incremental revenue, of $111 million, and
a decrease in cash interest of $11 million from various refinancing transactions of our long-term debt.
These activities were partially offset by:
an increase in payments related to our annual incentive compensation plan of $49 million due to a partial payment in the prior year, and
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timing of payments to and receipts from vendors primarily related to accounts payable and inventory.
The remainder of the activity related to changes in assets and liabilities due to the volume and timing of other operating cash receipts and payments with respect to when the transactions are reflected in earnings.
Refer to the discussions above under “—Results of Operations” for further details.
Cash Flows from Investing Activities
Cash flows used in investing activities increased primarily due to:
an increase of $39 million in subscriber system assets expenditures as a result of more Company-owned transactions and our growth initiatives, as well as
cash paid of $11 million related to our investment in Canopy during 2022, partially offset by
proceeds of $27 million related to disposal activities during 2022.
Cash Flows from Financing Activities
During the six months ended June 30, 2022, net cash provided by financing activities primarily consisted of:
net proceeds of $93 million under the Receivables Facility and $55 million under the First Lien Revolving Credit Facility, partially offset by
dividends on common stock of $63 million, as well as
payments related to interest rate swap contracts that included an other-than-insignificant financing element at inception of $25 million.
During the six months ended June 30, 2021, net cash used in financing activities primarily consisted of:
dividends on common stock of $58 million, as well as
payments related to interest rate swap contracts that included an other-than-insignificant financing element at inception of $28 million, partially offset by
$55 million of net proceeds under the Receivables Facility.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The accompanying condensed consolidated financial statements are prepared in accordance with GAAP, which requires us to select accounting policies and make estimates that affect amounts reported in the condensed consolidated financial statements and the accompanying notes. Management’s estimates are based on the relevant information available at the end of each period. Actual results could differ materially from these estimates under different assumptions or market conditions.
We disclosed our accounting policies and critical accounting estimates in our 2021 Annual Report, which are based on, among other things, estimates and judgments made by management that include inherent risks and uncertainties.
Refer to Note 1 “Description of Business and Summary of Significant Accounting Policies” to the condensed consolidated financial statements for further information about recent accounting pronouncements and adoptions.
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains certain information that may constitute “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and are made in reliance on the safe harbor protections provided thereunder. While we have specifically identified certain information as being forward-looking in the context of its presentation, we caution you that all statements contained in this report that are not clearly historical in nature, including statements regarding anticipated financial performance; management’s plans and objectives for future operations; our acquisition of ADT Solar and its anticipated impact on our business and financial condition; business prospects; outcomes of regulatory proceedings; market conditions; our ability to successfully respond to the challenges posed by the COVID-19 Pandemic; our strategic partnership and ongoing relationship with Google; the expected timing of product commercialization with Google or any changes thereto; the successful internal development, commercialization, and timing of our next generation platform and innovative offerings; the successful commercialization of our joint venture with Ford; the successful conversion of
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customers who continue to utilize 3G services; and other matters are forward-looking. Forward-looking statements are contained principally in the sections of this report entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Without limiting the generality of the preceding sentences, any time we use the words “expects,” “intends,” “will,” “anticipates,” “believes,” “confident,” “continue,” “propose,” “seeks,” “could,” “may,” “should,” “estimates,” “forecasts,” “might,” “goals,” “objectives,” “targets,” “planned,” “projects,” and, in each case, their negative or other various or comparable terminology, and similar expressions, we intend to clearly express that the information deals with possible future events and is forward-looking in nature. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. For ADT, particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include, without limitation:
our ability to keep pace with rapid technological changes, including the development of our next-generation platform, and industry changes;
our ability to effectively implement our strategic partnership with or utilize any of the amounts invested in us by Google;
the impact of the COVID-19 pandemic on our employees, our customers, our suppliers and our ability to carry on our normal operations;
the impact of supply chain disruptions;
our ability to maintain and grow our existing customer base;
our ability to sell our products and services or launch new products and services in highly competitive markets, including the home security and automation market, the commercial fire and security markets, and the solar market, and to achieve market acceptance with acceptable margins;
our ability to successfully upgrade obsolete equipment installed at our customers’ premises in an efficient and cost-effective manner;
changes in law, economic and financial conditions, including tax law changes, changes to privacy requirements, changes to telemarketing, email marketing and similar consumer protection laws, interest volatility, and trade tariffs and restrictions applicable to the products we sell;
any material change to the valuation allowances we take with respect to our deferred tax assets;
the impact of potential information technology, cybersecurity or data security breaches;
our dependence on third-party providers, suppliers, and dealers to enable us to produce and distribute our products and services in a cost-effective manner that protects our brand;
our ability to successfully implement an equipment ownership model that best satisfies the needs of our customers and to successfully implement and maintain our receivables securitization financing agreement or similar arrangements;
our ability to successfully pursue alternate business opportunities and strategies;
our ability to integrate various companies we have acquired in an efficient and cost-effective manner;
the amount and timing of our cash flows and earnings, which may be impacted by customer, competitive, supplier and other dynamics and conditions;
our ability to maintain or improve margins through business efficiencies;
and the other factors that are described in this report under the heading “Risk Factors.”
Forward-looking statements and information involve risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied in, or reasonably inferred from, such statements, including without limitation, the risks and uncertainties disclosed or referenced under the heading “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q and in Part I, Item 1A in our 2021 Annual Report. Therefore, caution should be taken not to place undue reliance on any such forward-looking statements. Much of the information in this report that looks toward future performance of the Company is based on various factors and important assumptions about future events that may or may not actually occur. As a result, our operations and financial results in the future could differ materially and substantially from those we have discussed in the forward-looking statements included in this Quarterly Report on Form 10-Q. We assume no obligation (and specifically disclaim any such obligation) to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Our operations expose us to a variety of market risks, including the effects of changes in interest rates as we have both fixed-rate and variable-rate debt. We monitor and manage these financial exposures as an integral part of our overall risk management program. Our policies allow for the use of specified financial instruments for hedging purposes only. Use of derivatives for speculation purposes is prohibited.
There were no material changes in our interest rate risk exposure to that disclosed in our 2021 Annual Report, except as discussed below.
As of June 30, 2022, the fair value of our debt was $9.0 billion compared to the carrying value of $9.7 billion. A hypothetical 10% change in rates would cause the fair value of our debt to change by approximately $250 million.
44


Additionally, as of June 30, 2022, our interest rate swaps had a notional amount of $2.8 billion with a fair value of $86 million compared to a notional amount of $3.2 billion with a fair value of $(118) million as of December 31, 2021. A hypothetical 10% change in rates would cause the fair value of our interest rate swaps to change by approximately $20 million.
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of June 30, 2022, our disclosure controls and procedures were effective at a reasonable assurance level in ensuring information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.
Changes in Internal Control over Financial Reporting
In connection with the ADT Solar Acquisition discussed in Note 4 “Acquisitions and Disposition,” we are currently in the process of evaluating and integrating ADT Solar into our internal control environment.
During the three months ended June 30, 2022, there were no changes in our internal control over financial reporting identified in our management’s evaluation pursuant to Rules 13a-15(d) and 15d-15(d) of the Exchange Act that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
45


PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
See Note 13 “Commitments and Contingencies” to the condensed consolidated financial statements under the heading “Legal Proceedings” included in this Quarterly Report on Form 10-Q for legal proceedings and related matters.
ITEM 1A. RISK FACTORS.
Our significant business risks are described in Part I, Item 1A “Risk Factors” in our 2021 Annual Report, which was filed with the SEC on March 1, 2022, and in our other filings with the SEC. The risk factors described in our filings with the SEC and other information may not describe every risk facing the Company. There have been no material changes in our risk factors from those disclosed in our 2021 Annual Report.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
Recent Sales of Unregistered Equity Securities
On June 3, 2022, we issued 2,060,119 shares of our Common Stock as consideration for a business acquisition. The issuance of the Common Stock was exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof and Regulation D and Regulation S thereunder.
Use of Proceeds from Registered Equity Securities
We did not receive any proceeds from sales of registered equity securities during the six months ended June 30, 2022.
Issuer Purchases of Equity Securities
There were no repurchases of any shares of our common stock during the three months ended June 30, 2022.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
None.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS.
The exhibits listed on the accompanying Index to Exhibits are filed/furnished or incorporated by reference as part of this Quarterly Report on Form 10-Q.
46


INDEX TO EXHIBITS
The information required by this Item is set forth on the exhibit index below.
Exhibit NumberIncorporated by Reference
Exhibit DescriptionFormExhibitFiling Date
8-K3.19/17/2020
10-K3.23/15/2018
10-Q4.25/6/2022
10-Q4.45/6/2022
10-Q4.65/6/2022
10-Q4.85/6/2022
10-Q4.105/6/2022
10-Q4.125/6/2022
10-Q4.145/6/2022
10-Q10.35/6/2022
10-Q10.55/6/2022
101XBRL Instant Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
104Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document
_________________________
* Filed herewith.
** Furnished herewith.
+ Management contract or compensatory plan or arrangement.
47


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
ADT Inc.
Date:August 4, 2022By:/s/ Jeffrey Likosar
 Name:Jeffrey Likosar
 Title: Chief Financial Officer and President, Corporate Development
(Principal Financial Officer)
48
CONFORMED COPY includes First Amendment and Joinder dated October 29, 2021 Second Amendment dated December 10, 2021 Third Amendment dated May 20, 2022 747634416.3 21671763747634416.9 21671763 RECEIVABLES FINANCING AGREEMENT Dated as of July 16, 2021 by and among ADT FINANCE LLC, as Borrower, THE PERSONS FROM TIME TO TIME PARTY HERETO, as Lenders and as Group Agents, MIZUHO BANK, LTD., as Administrative Agent, Arranger, Collateral Agent and Structuring Agent and ADT LLC, in its individual capacity and as initial Servicer TABLE OF CONTENTS Page 747634416.3 21671763747634416.9 21671763 -i- ARTICLE I DEFINITIONS ................................................................................................. 2 SECTION 1.01. Certain Defined Terms ................................................................... 2 SECTION 1.02. Other Interpretative Matters ..................................................... 4342 ARTICLE II TERMS OF THE LOANS ......................................................................... 4442 SECTION 2.01. Loan Facility ............................................................................ 4442 SECTION 2.02. Making Loans .......................................................................... 4543 SECTION 2.03. Interest and Fees ...................................................................... 4745 SECTION 2.04. [Reserved]Adjusted Daily Simple SOFR Conforming Changes .................................................................................... 4746 SECTION 2.05. Extension of the Scheduled Termination Date ........................ 4746 SECTION 2.06. Benchmark Replacement ......................................................... 4846 ARTICLE III SETTLEMENT PROCEDURES AND PAYMENT PROVISIONS ........ 5048 SECTION 3.01. Settlement Procedures .............................................................. 5048 SECTION 3.02. Deemed Collections; Repayment of Principal, Etc.................. 5351 SECTION 3.03. Payment Provisions .................................................................. 5553 SECTION 3.04. Account Control ....................................................................... 5755 ARTICLE IV YIELD PROTECTION; TAXES ............................................................... 5755 SECTION 4.01. Yield Protection ....................................................................... 5755 SECTION 4.02. Funding Losses ........................................................................ 6058 SECTION 4.03. Taxes ........................................................................................ 6058 SECTION 4.04. Mitigation; Replacement of Lenders ....................................... 6563 ARTICLE V CONDITIONS TO EFFECTIVENESS AND CREDIT EXTENSIONS; SECURITY INTEREST ................................................. 6664 SECTION 5.01. Conditions Precedent to Effectiveness and the Initial Credit Extension.................................................................................. 6664 SECTION 5.02. Conditions Precedent to All Credit Extensions ....................... 6664 SECTION 5.03. Amendment and Restatement .................................................. 6765 SECTION 5.04. Security Interest ....................................................................... 6866 ARTICLE VI REPRESENTATIONS AND WARRANTIES.......................................... 6967 SECTION 6.01. Representations and Warranties of the Borrower .................... 6967 SECTION 6.02. Representations and Warranties of ADT ................................. 7573 ARTICLE VII COVENANTS ........................................................................................... 8078 SECTION 7.01. Affirmative Covenants of the Borrower .................................. 8078 SECTION 7.02. Reporting Requirements of the Borrower ................................ 8381 SECTION 7.03. Negative Covenants of the Borrower ....................................... 8482 SECTION 7.04. Affirmative Covenants of ADT ............................................... 8785 SECTION 7.05. Reporting Requirements of ADT ............................................. 9088 SECTION 7.06. Negative Covenants of ADT .................................................... 9290 TABLE OF CONTENTS (continued) Page 747634416.3 21671763747634416.9 21671763 -ii- SECTION 7.07. Nature of Obligations ............................................................... 9492 SECTION 7.08. Corporate Separateness; Related Matters and Covenants ........ 9492 ARTICLE VIII ADMINISTRATION AND COLLECTION OF RECEIVABLES ........... 9795 SECTION 8.01. Designation of the Servicer ...................................................... 9896 SECTION 8.02. Duties of the Servicer............................................................... 9997 SECTION 8.03. Rights of the Collateral Agent ............................................... 10098 SECTION 8.04. Responsibilities of the Servicer ........................................... 102100 SECTION 8.05. Further Action Evidencing Transfers and Security Interest 102100 SECTION 8.06. Application of Collections ................................................... 102100 ARTICLE IX EVENTS OF TERMINATION ............................................................. 102100 SECTION 9.01. Event of Terminations.......................................................... 102100 SECTION 9.02. Remedies .............................................................................. 105103 ARTICLE X AGENTS ................................................................................................ 106104 SECTION 10.01. Limited Liability of Lenders, Group Agents, Collateral Agent, and the Administrative Agent .................................. 106104 SECTION 10.02. Authorization and Action of each Group Agent .................. 107105 SECTION 10.03. Authorization and Action of the Administrative Agent and Collateral Agent ................................................................... 107105 SECTION 10.04. Delegation of Duties of each Group Agent.......................... 107105 SECTION 10.05. Delegation of Duties of the Administrative Agent and the Collateral Agent ................................................................... 107105 SECTION 10.06. Successor Administrative Agent and Collateral Agent; Termination .......................................................................... 107105 SECTION 10.07. Indemnification .................................................................... 108106 SECTION 10.08. Reliance, etc ......................................................................... 109107 SECTION 10.09. Lenders and Affiliates .......................................................... 109107 SECTION 10.10. Sharing of Recoveries .......................................................... 109107 SECTION 10.11. Non-Reliance ....................................................................... 109107 SECTION 10.12. Erroneous Payment .............................................................. 110108 SECTION 10.13. Disclaimer and Exculpation With Respect to any Rate ............. 109 ARTICLE XI INDEMNIFICATION............................................................................ 112110 SECTION 11.01. Indemnities by the Borrower ............................................... 112110 SECTION 11.02. Indemnities by ADT and the Servicer ................................. 115113 ARTICLE XII MISCELLANEOUS .............................................................................. 116114 SECTION 12.01. Amendments Etc .................................................................. 116114 SECTION 12.02. Notices, Etc .......................................................................... 116114 SECTION 12.03. Successors and Assigns; Participations; Assignments ......... 117115 SECTION 12.04. No Waiver; Remedies; Set-Off ............................................ 118116 SECTION 12.05. Binding Effect; Survival ...................................................... 119117 TABLE OF CONTENTS (continued) Page 747634416.3 21671763747634416.9 21671763 -iii- SECTION 12.06. Costs and Expenses .............................................................. 120118 SECTION 12.07. No Proceedings; Limited Recourse ..................................... 121119 SECTION 12.08. Confidentiality ..................................................................... 122120 SECTION 12.09. Captions and Cross References ............................................ 126124 SECTION 12.10. Integration ............................................................................ 126124 SECTION 12.11. Governing Law .................................................................... 126124 SECTION 12.12. Waiver of Jury Trial ............................................................. 127125 SECTION 12.13. Consent to Jurisdiction; Waiver of Immunities ................... 127125 SECTION 12.14. Execution in Counterparts.................................................... 127125 SECTION 12.15. Pledge to a Federal Reserve Bank ....................................... 128126 SECTION 12.16. Severability .......................................................................... 128126 SECTION 12.17. Acknowledgement and Consent to Bail-In of EEA Financial Institutions ............................................................ 128126 SECTION 12.18. PATRIOT Act Notice .......................................................... 129127 SECTION 12.19. EU Securitisation Regulation; Information; Indemnity ....... 129127 EXHIBITS EXHIBIT A – Form of Loan Request EXHIBIT B – Form of Assignment and Acceptance Agreement EXHIBIT C – Credit and Collection Policy EXHIBIT D – Form of Information Package EXHIBIT E – Form of Compliance Certificate EXHIBIT F – Closing Memorandum EXHIBIT G-1 – Form of Customer-Owned Equipment Contract Originated on or prior to December 15, 2019 EXHIBIT G-2 – Form of Customer-Owned Equipment Contract Originated after December 15, 2019 EXHIBIT G-3 – Form of Customer-Owned Equipment Contract Originated after April 17, 2020 EXHIBIT H – Form of Paydown Notice SCHEDULES SCHEDULE I – Loan Limits and CP Rates SCHEDULE II – Lock-Boxes, Collection Accounts and Account Banks SCHEDULE III – Notice Addresses SCHEDULE IV – UCC Information SCHEDULE V -- Advance Rate Matrix


 
747634416.3 21671763747634416.9 21671763 This RECEIVABLES FINANCING AGREEMENT (as amended, restated, supplemented or otherwise modified from time to time, this “Agreement”) is entered into as of July 16, 2021 by and among the following parties: (i) ADT FINANCE LLC, a Delaware limited liability company, as Borrower (together with its successors and assigns, the “Borrower”); and (ii) the Persons from time to time party hereto as Lenders and as Group Agents; and (iii) MIZUHO BANK, LTD. (“Mizuho”), as Administrative Agent, Arranger, Collateral Agent, and Structuring Agent; and (iv) ADT LLC, a Delaware limited liability company (“ADT”), in its individual capacity and as initial Servicer (in such capacity, together with its successors and assigns in such capacity, the “Servicer”). PRELIMINARY STATEMENTS The Borrower, ADT and Mizuho as sole Purchaser, Purchaser Agent, Administrative Agent, Arranger, Collateral Agent and Structuring Agent are parties to the Receivables Purchase Agreement dated as of March 5 2020, as amended as of April 17, 2020, September 17, 2020, January 29, 2021 and March 5, 2021 (as so amended, the “Existing Purchase Agreement”), pursuant to which the Borrower has sold certain Receivables and Related Assets (the “Existing Receivable Pool”) to the Collateral Agent on behalf of the Lenders. The Borrower acquired the Existing Receivable Pool from ADT as the Originator pursuant to the Receivables Sale and Contribution Agreement dated as of April 17, 2020 (the “Existing Sale Agreement”) between the Borrower and the Originator. The parties hereto wish to amend and restate the Existing Purchase Agreement in its entirety in the form of this Agreement to provide for the sale by the Collateral Agent back to the Borrower of the Existing Receivable Pool (including all Collections thereon), and to provide for Loans that may be made from time to time to the Borrower at the Borrower’s request and at the discretion of the Lenders, which Loans shall be secured by the Existing Receivable Pool, together with all Receivables and Related Assets hereafter acquired by the Borrower, as well as all other assets of the Borrower, whether now existing or hereafter acquired. Concurrently with this Agreement, the Existing Sale Agreement is being amended and restated in its entirety (as so amended and restated and as it may be further amended from time to time, the “Sale Agreement”). The Borrower may acquire from time to time additional Receivables and Related Assets from the Originator pursuant to the Sale Agreement. The Borrower may from time to time request that the Lenders make Loans to the Borrower, on the terms, and subject to the conditions set forth herein, secured by, among other things, the Pool Receivables and the Related Assets. 747634416.3 21671763747634416.9 21671763 2 In consideration of the mutual agreements, provisions and covenants contained herein, the sufficiency of which is hereby acknowledged, the parties hereto agree that as of the Closing Date, subject to the satisfaction of the conditions precedent set forth in Section 5.01, the Existing Purchase Agreement is amended and restated as follows: ARTICLE I DEFINITIONS SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined): “Acceleration Date” means the date specified in Section 9.02 following the occurrence of an Event of Termination. “Account Bank” means any of the banks or other financial institutions holding one or more Collection Accounts or the Payment Account. “Adjusted Daily Simple SOFR” means, for any day (a “SOFR Rate Day”), a rate per annum equal to the greater of (a) the sum of (i) SOFR for the day (such day, a “SOFR Determination Day”) that is (A) if such SOFR Rate Day is a U.S. Government Securities Business Day, such SOFR Rate Day or (B) if such SOFR Rate Day is not a U.S. Government Securities Business Day, the U.S. Government Securities Business Day immediately preceding such SOFR Rate Day, in each case, as such SOFR is published by the SOFR Administrator on the SOFR Administrator’s Website; provided that if by 5:00 p.m. (New York City time) on the second (2nd) U.S. Government Securities Business Day immediately following any SOFR Determination Day, SOFR in respect of such SOFR Determination Day has not been published on the SOFR Administrator’s Website and a Benchmark Replacement Date with respect to Adjusted Daily Simple SOFR has not occurred, then SOFR for such SOFR Determination Day will be SOFR as published in respect of the first preceding U.S. Government Securities Business Day for which such SOFR was published on the SOFR Administrator’s Website; provided further that SOFR as determined pursuant to this proviso shall be utilized for purposes of calculation of Adjusted Daily Simple SOFR for no more than three (3) consecutive SOFR Rate Days and (ii) the SOFR Adjustment, and (b) the Floor. Any change in Adjusted Daily Simple SOFR due to a change in SOFR shall be effective from and including the effective date of such change in SOFR without notice to the Borrower. “Administrative Agent” means Mizuho, in its capacity as contractual representative for the Credit Parties, and any successor thereto in such capacity appointed pursuant to Article X. “Administrative Agent’s Account” means the special account of the Administrative Agent (Account No. H79-740-005344, ABA No. 026 004 307) maintained at Mizuho or such other account as the Administrative Agent shall designate to the Borrower and ADT. “ADT” has the meaning set forth in the preamble to this Agreement. “ADT Credit Agreement” means the Eleventh Amended and Restated First Lien Credit Agreement as last amended and restated as of July 2, 2021 among Prime Security Services Holdings, LLC, Prime Security Services Borrower, LLC, The ADT Security Corporation, Barclays Bank PLC, as administrative agent and the other parties thereto. 747634416.3 21671763747634416.9 21671763 3 “ADT Collateral Agreements” means, each of (i) the Collateral Agreement (First Lien), dated as of July 1, 2015, among Prime Security Services Borrower, LLC, each Subsidiary Loan Party thereto, and Barclays Bank PLC (as successor in interest to Credit Suisse AG, Cayman Islands Branch, as collateral agent), and (ii) the Collateral Agreement (Second Lien), dated as of January 28, 2020, among Prime Security Services Borrower, LLC, Prime Finance Inc., each Subsidiary Guarantor party thereto, and Wells Fargo Bank, National Association, as collateral agent. “ADT Credit Score” means the designated credit score of an Obligor assigned by ADT in accordance with ADT’s internal scoring system and the Credit and Collection Policy. “ADT Entity” means ADT, the Servicer (if the Servicer is an Affiliate of the Parent), the Borrower and the Parent. “ADT Indentures” means, each of (i) the indentures dated as of April 4, 2019, among Prime Security Services Borrower, LLC, as issuer, Prime Finance Inc., as Co-Issuer, the guarantors party thereto from time to time, and Wells Fargo Bank, National Association, as trustee, (ii) indenture dated as of July 5, 2012, between the ADT Corporation, as issuer, and Wells Fargo Bank, National Association, as trustee, (iii) indenture dated as of May 2, 2016, between Prime Security One MS, Inc., as issuer, and Wells Fargo Bank, National Association, as trustee, (iv) the indenture dated as of January 28, 2020, among Prime Security Services Borrower, LLC, as issuer, Prime Finance Inc., as issuer, the subsidiary guarantors party thereto from time to time, and Wells Fargo Bank, National Association, as trustee and collateral agent and (v) the indenture, dated as of August 20, 2020, among, inter alia, Prime Security Services Borrower, LLC, as issuer, Prime Finance Inc., as co-issuer, and Wells Fargo Bank, National Association, as trustee. “ADT Intercreditor Agreement” means the First Lien/First Lien Intercreditor Agreement, dated as of May 2, 2016, among Barclays Bank PLC and Wells Fargo Bank, National Association. “ADT Lien Release Acknowledgement” means that certain Lien Release Request and Acknowledgement, dated as of July 16, 2021, between Prime Securities Borrower, LLC, as pledger, and Barclays Bank PLC, as collateral agent. “ADT Obligations” means any obligation owed by any ADT Entity (other than the Borrower) to the Collateral Agent, the Administrative Agent, any Group Agent, any Lender, any Indemnified Party, any other Affected Person, arising out of or in connection with this Agreement and each other Transaction Document, whether now or hereafter existing, due or to become due, direct or indirect or absolute or contingent, including, all Indemnified Amounts payable pursuant to Section 11.02 and without duplication, all Erroneous Payment Subrogation Rights arising pursuant to Section 10.12. “Advance Rate” means, in respect of any Receivable, the applicable “Advance Rate” set forth in the Advance Rate Matrix corresponding to such Receivable based upon its Product Type and Remaining Term as determined on the Borrowing Date in respect of such Receivable. For the avoidance of doubt, any Receivable with a Product Type other than “Tier 1”, “Tier 2”, Tier 3”, “Burglar Alarm”, or “CCTV” or with an Original Term or Remaining Term exceeding 60 months, will be zero. 747634416.3 21671763747634416.9 21671763 4 “Advance Rate Matrix” means the Advance Rate Matrix attached as Schedule V to this Agreement, as may be amended from time to time with the consent of all Group Agents. “Adverse Claim” means any claim of ownership or any Lien other than any Permitted Adverse Claims. “Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution. “Affected Person” means each Credit Party, each Program Support Provider, the parent or holding company that Controls any Credit Party or Program Support Provider, and any of their respective Affiliates that are party to, or entitled to any payment under, the Transaction Documents. “Affiliate” means, with respect to a specified Person, another Person that directly or indirectly Controls, is Controlled by or is under common Control with the Person specified. “Agent” means the Administrative Agent or the Collateral Agent. “Aggregate Interest” means, at any time of determination, the aggregate accrued and unpaid Interest on the Loans of all Lenders at such time. “Aggregate Principal” means, at any time of determination, the aggregate outstanding Principal of all Lenders at such time. “Agreement” has the meaning set forth in the preamble to this Agreement. “Allocated Share” is defined in Section 2.01. “Applicable Cooling Off Period” means, in respect of a Receivable, the period of time after origination thereof during which the related Obligor shall have the right to cancel or terminate such Contract without fee, premium or penalty whether by Law or under the terms of the related Contract or otherwise. “Applicable Law” means, with respect to any Person, any statutes, laws, treaties, rules, regulations, orders, decrees, writs, judgments, injunctions or determinations of any arbitrator or court or other Governmental Authority, in each case binding upon such Person or any of its property or to which such Person or any of its property is subject. “Arranger” means Mizuho, in its capacity as Arranger for the transactions contemplated by this Agreement and the other Transaction Documents. “Assignment and Acceptance Agreement” means an assignment and acceptance agreement entered into by a Lender, an Eligible Assignee, such Lender’s Group Agent and the Administrative Agent, and, if required, the Borrower, pursuant to which such Eligible Assignee may become a party to this Agreement, in substantially the form of Exhibit B hereto.


 
747634416.3 21671763747634416.9 21671763 5 “Available Tenor” means, as of any date of determination and with respect to the then- current Benchmark, as applicable, any tenor for such Benchmark or payment period for interest calculated with reference to such Benchmark, as applicable, that is or may be used for determining the length of an Interest Period pursuant to this Agreement as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to clause (e) of Section 2.06. “Average Life” means, as of any date of determination, with respect to any Receivable in the Receivable Pool which is an Eligible Receivable, the quotient obtained by dividing (i) the sum of the products of (a) the number of months (rounded to the nearest one hundredth thereof) from such date of determination to the respective dates of each successive unpaid monthly installment owed in respect of the Financed Unpaid Balance of such Receivable for the Remaining Term by the applicable Obligor under the Contract giving rise to such Receivable, and (b) the respective monthly installment amounts on such monthly installment dates, by (ii) the Financed Unpaid Balance in respect of such Receivable. “Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an Affected Financial Institution. “Bail-In Legislation” means, (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their Affiliates (other than through liquidation, administration or other insolvency proceedings). “Bank Rate” means, for any day falling in a particular Interest Period with respect to any Rate Tranche and any Group, an interest rate per annum equal to the applicable Benchmark for such day, provided that “Bank Rate” shall be 0.59443% per annum for the Interest Period commencing on and including April 20, 2022 to and excluding May 20, 2022. “Bankruptcy Code” means the United States Bankruptcy Reform Act of 1978 (11 U.S.C. § 101, et seq.), as amended from time to time. “Base Rate” means, with respect to any Lender, as of any date of determination, a fluctuating rate of interest per annum equal to the highest of: (a) the applicable Prime Rate for such date; and (b) the Federal Funds Rate for such date, plus 0.50%.; and (c ) the Adjusted Daily Simple SOFR for such date, plus 1.00%. “Benchmark” means, initially, the LIBO RateAdjusted Daily Simple SOFR; provided that if a Benchmark Transition Event, a Term SOFR Transition Event or an Early Opt-in Election, as 747634416.3 21671763747634416.9 21671763 6 applicable, and its related Benchmark Replacement Date have occurred with respect to the LIBO RateAdjusted Daily Simple SOFR or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to clause (a) or (b) of Section 2.06. “Benchmark Replacement” means, for any Available Tenor, the first alternative set forth in the order below that can be determined by the Administrative Agent for the applicable Benchmark Replacement Date: (1) the sum of: (a) Term SOFR and (b) the related Benchmark Replacement Adjustment; (2) the sum of: (a) Daily Simple SOFR and (b) the related Benchmark Replacement Adjustment; (3) “Benchmark Replacement” means, with respect to any Benchmark Transition Event, the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent and the Borrower as the replacement for the then-current Benchmark for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement forto the then-current Benchmark for U.S. dollar-denominatedDollar-denominated syndicated credit facilities at such time and (b) the related Benchmark Replacement Adjustment; provided that, if such Benchmark Replacement as so determined would be less than the Floor, such Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Transaction Documents. provided that, in the case of clause (1), such Unadjusted Benchmark Replacement is displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion; provided further that, notwithstanding anything to the contrary in this Agreement or in any other Transaction Document, upon the occurrence of a Term SOFR Transition Event, and the delivery of a Term SOFR Notice, on the applicable Benchmark Replacement Date the “Benchmark Replacement” shall revert to and shall be deemed to be the sum of (a) Term SOFR and (b) the related Benchmark Replacement Adjustment, as set forth in clause (1) of this definition (subject to the first proviso above). If the Benchmark Replacement as determined pursuant to clause (1) or (3) above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Transaction Documents. “Benchmark Replacement Adjustment” means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Interest Period and Available Tenor for any setting of such Unadjusted Benchmark Replacement: (1) for purposes of clauses (1) and (2) of the definition of “Benchmark Replacement,” the first alternative set forth in the order below that can be determined by the Administrative Agent: (a) the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) as of the Reference Time such 747634416.3 21671763747634416.9 21671763 7 Benchmark Replacement is first set for such Interest Period that has been selected or recommended by the Relevant Governmental Body for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for the applicable Corresponding Tenor; (b) the spread adjustment (which may be a positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first set for such Interest Period that would apply to the fallback rate for a derivative transaction referencing the ISDA Definitions to be effective upon an index cessation event with respect to such Benchmark for the applicable Corresponding Tenor; and (2) for purposes of clause (3) of the definition of “Benchmark Replacement,” Adjustment” means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Borrower for the applicable Corresponding Tenor giving due consideration to (ia) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement Date or (iib) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for U.S. dollar- denominatedDollar-denominated syndicated credit facilities; at such time. provided that, in the case of clause (1) above, such adjustment is displayed on a screen or other information service that publishes such Benchmark Replacement Adjustment from time to time as selected by the Administrative Agent in its reasonable discretion. “Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Bank Rate”, the definition of “Business Day,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest (including Interest for Rate Tranches), timing of loan requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions and Liquidation Fee, and other technical, administrative or operational matters) that the Administrative Agent decides in its reasonable discretion, after consultation with the Borrower, may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides in its reasonable discretion that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines in its reasonable discretion that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides, after consultation with the Borrower, is reasonably necessary in connection with the administration of this Agreement and the other Transaction Documents). “Benchmark Replacement Date” means the earliest to occur of the following events with respect to the then-current Benchmark: 747634416.3 21671763747634416.9 21671763 8 (1) (a) in the case of clause (1a) or (2b) of the definition of “Benchmark Transition Event,” the later of (ai) the date of the public statement or publication of information referenced therein and (bii) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or (2) (b) in the case of clause (3c) of the definition of “Benchmark Transition Event,” the first date of the publicon which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be non-representative; provided that such non-representativeness will be determined by reference to the most recent statement or publication of information referenced therein;in such clause (c) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date. (3) in the case of a Term SOFR Transition Event, the date that is thirty (30) days after the date a Term SOFR Notice is provided to the Lenders and the Borrower pursuant to clause (b) of Section 2.06; or (4) in the case of an Early Opt-in Election, the sixth (6th) Business Day after the date notice of such Early Opt-in Election is provided to the Group Agents, so long as the Administrative Agent has not received, by 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Early Opt-in Election is provided to the Group Agents, written notice of objection to such Early Opt-in Election from Lenders comprising the Required Lenders. For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (1a) or (b) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof). “Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark: (1) (a) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); (2) (b) a public statement or publication of information by the regulatory supervisor for


 
747634416.3 21671763747634416.9 21671763 9 the administrator of such Benchmark (or the published component used in the calculation thereof), the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or (3) (c) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are no longer representative. For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof). “Benchmark Transition Start Date” means, in the case of a Benchmark Transition Event, the earlier of (a) the applicable Benchmark Replacement Date and (b) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the 90th day prior to the expected date of such event as of such public statement or publication of information (or if the expected date of such prospective event is fewer than 90 days after such statement or publication, the date of such statement or publication). “Benchmark Unavailability Period” means the period (if any) (x) beginning at the time that a Benchmark Replacement Date pursuant to clauses (1) or (2) of that definition has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Transaction Document in accordance with Section 2.06 and (y) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Transaction Document in accordance with Section 2.06. “Billing Address” means, the billing address of each Obligor relating to a Receivable specified in the Records of the Servicer. “Borrower” has the meaning set forth in the preamble to this Agreement. “Borrower Creditor” is defined in Section 12.07. “Borrower Obligations” means all present and future indebtedness, reimbursement obligations and other liabilities and obligations (howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, or due or to become due) of the Borrower to any Credit 747634416.3 21671763747634416.9 21671763 10 Party, any Indemnified Party and/or any Affected Person, arising under this Agreement or any other Transaction Document or the transactions contemplated hereby or thereby, and shall include, without limitation and without duplication, all Principal and Interest on the Loans, all Fees, all Erroneous Payment Subrogation Rights and all other amounts due or to become due under the Transaction Documents (whether in respect of fees, costs, expenses, indemnifications or otherwise), including, without limitation, interest, fees and other obligations that accrue after the commencement of any Insolvency Proceeding with respect to the Borrower (in each case whether or not allowed as a claim in such proceeding). “Borrowing Base” means, at any time, the amount equal to (a) the Net Portfolio Balance, minus (b) the Required Reserves. “Borrowing Date” is defined in Section 2.01. “Business Day” means a day other than Saturday or Sunday or on which commercial banks in New York City, New York are authorized or required by applicable law to be closed for business; provided, that, when used with respect to an Interest Rate or associated Rate Tranche based on the applicable LIBO Rate, “Business Day” shall also exclude any day on which banks are not open for domestic and international business (including dealings in U.S. Dollar deposits) in London, England.. “Cash Equivalents” means (a) cash, (b) direct general obligations of the United States of America or obligations the prompt payment of the principal of and interest on which is unconditionally guaranteed by the United States of America, (c) U.S. dollar-denominated commercial paper notes which are rated at least “A-1+” by S&P and at least “P-1” by Moody’s, or (d) time deposits at, or certificates of deposit and bankers acceptances issued by, commercial banks located in the United States (including domestic branches or agencies of foreign banks) having short-term deposit ratings of “A-1” by S&P and “P-1” by Moody’s, provided that each such investment specified in clauses (b), (c) and (d) is payable in Dollars, has a maturity of the lesser of (i) ninety-one (91) days, and (ii) the days remaining until the next Settlement Date, and is payable in the United States of America, or (e) U.S. Dollar-denominated money market funds of United States issuers that have ratings of at least “AAAm” by S&P and at least “Aaa” by Moody’s (or equivalent long-term ratings) and permit daily liquidation of investments. Ratings by S&P which include an “r” designation are not eligible to be Cash Equivalents unless approved by S&P or otherwise meet the rating conditions of S&P. “Change in Law” means the occurrence, after the Closing Date, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the compliance by any Affected Person with any written request, rule, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the Closing Date; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to the agreements 747634416.3 21671763747634416.9 21671763 11 reached by the Basel Committee on Banking Supervision in “Basel III: A Global Regulatory Framework for More Resilient Banks and Banking Systems” (as amended, supplemented or otherwise modified or replaced from time to time), shall in each case, to the extent requiring any change to the compliance policies and practices (including relating to capital, liquidity or leverage requirements) of any Affected Person after the date hereof, be deemed to be a “Change in Law,” regardless of the date enacted, adopted or issued, but only to the extent such Affected Person is imposing applicable increased costs or applicable costs in connection with capital adequacy requirements similar to those described in Section 4.01 on other borrowers of syndicated loans in the United States. “Change of Control” means the occurrence of any of the following: (a) all of the outstanding Voting Securities of the Borrower shall cease to be owned by ADT; or (b) all of the outstanding Voting Securities of ADT shall cease to be directly or indirectly owned by the Parent. “Closing Date” means July 16, 2021. “Code” means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time. “Collateral” has the meaning set forth in Section 5.04(a). “Collateral Agent” means Mizuho, in its capacity as contractual representative for the Credit Parties, and any successor thereto in such capacity appointed pursuant to Article X. “Collateral Trustee” means, with respect to any Conduit Lender, a collateral trustee for the benefit of the holders of the Commercial Paper Notes of such Conduit Lender appointed pursuant to such entity’s program documents. “Collection Account” means each collection account of the Borrower maintained with an Eligible Bank into which Collections are to be remitted. “Collection Agent” means any collection agent sub-servicer, special servicer or similar agent which is not an Affiliate of ADT appointed by the Servicer to assist it with its collection duties hereunder. “Collection Agent Fees” all fees and expenses of any Collection Agent retained by the Servicer to collect any Receivable which are netted against the amount of, or otherwise reduce the amount of the Collections paid by, the Obligor of such Receivable. “Collections” means with respect to any Receivable and the Related Assets, (a) all cash collections and other cash proceeds of such Receivable or Related Assets, from or on behalf of the related Obligors in payment of any amounts owed in respect of such Receivable or Related Assets, or applied to such other charges in respect of such Receivable or Related Assets, or applied to such amounts owed by such Obligors, (b) Deemed Collections, (c) amounts treated as Collections in 747634416.3 21671763747634416.9 21671763 12 accordance with Section 8.03(d), and (d) all other amounts required to be remitted to the Payment Account pursuant to any Transaction Document. For the avoidance of doubt the term “Collections” in respect of a Receivable and the Related Assets shall include all amounts allocated to such Receivable in accordance with the related Contract and Section 7.04(m). “Commercial Paper Notes” means short-term promissory notes issued or to be issued by a Conduit Lender to fund its investments in accounts receivable or other financial assets. “Conditional Service Guaranty” means the conditional service guaranty advertised by ADT to customers as in effect on the Closing Date, which generally provides that refunds for any system-related issues will only be issued after ADT has attempted to resolve the issue, has not been able to resolve such issue within the first six months of the Contract, and any related Equipment has been removed, as the same may be amended with the consent of the Administrative Agent, the Collateral Agent and the Lenders. “Conditional Service Guaranty Receivable” means, any Receivable which was originated when the Conditional Service Guaranty was in effect or to which the Conditional Service Guaranty applies, to the extent that the relevant Obligor still has the right to claim a refund for any system or service related concerns, including, without limitation, any Receivable in respect of which the related Obligor has notified any ADT Entity of a system or service concern within the first six (6) months of the effective date of the related Contract and such issue was not conclusively resolved within the first six (6) months of the effected date of the related contract. “Conditional Service Guaranty Reserve” means, as of any date: (i) if the Level 1 Ratings Trigger is in effect, the Financed Unpaid Balance of all Conditional Service Guaranty Receivables that are Pool Receivables; and (ii) otherwise, zero. “Conduit Lender” means each commercial paper conduit that is or becomes a party to this Agreement in the capacity of a “Conduit Lender.” “Conforming Changes” means, with respect to either the use or administration of Adjusted Daily Simple SOFR or the use, administration, adoption or implementation of any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Bank Rate,” the definition of “Business Day,” the definition of “U.S. Government Securities Business Day, the definition of “Interest Period” or any similar or analogous definition (or the addition of a concept of “interest period”), timing and frequency of determining rates and making payments of interest (including Interest for Rate Tranches), timing of loan requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, the applicability of Section 4.02, breakage provisions and Liquidation Fee, and other technical, administrative or operational matters) that the Administrative Agent decides in its reasonable discretion, after consultation with the Borrower, may be appropriate to reflect the adoption and implementation of any such rate or to permit the use and administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides in its reasonable discretion that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines in its reasonable discretion that no market practice for the administration of any such rate exists, in such other manner of administration as the Administrative Agent decides, after consultation with the


 
747634416.3 21671763747634416.9 21671763 13 Borrower, is reasonably necessary in connection with the administration of this Agreement and the other Transaction Documents). “Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes. “Constituent Documents” means, with respect to any Person, the organization documents of such Person, including (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement or limited liability company agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity. “Contract” means, with respect to any Receivable, any retail installment agreement, contract, or other document (including any purchase order or invoice), between ADT and an Obligor, pursuant to which such Receivable arises or governing or evidencing such Receivable. “Control” means, with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto. “Control Agreement” means an agreement with respect to any Collection Account, the Payment Account or any other account of the Borrower, in form and substance reasonably satisfactory to the Administrative Agent and the Collateral Agent, pursuant to which the Collateral Agent has “control” over such account within the meaning of Article 8 of the UCC (in the case of a securities account) and/or Article 9 of the UCC (in the case of a deposit account), and the related Account Bank has agreed to comply with the instructions of the Collateral Agent without further consent of the Borrower, ADT or any other Person. “Corresponding Tenor” with respect to any Available Tenor means, as applicable, either a tenor (including overnight) or an interest payment period having approximately the same length (disregarding business day adjustment) as such Available Tenor. “CP Rate” means, for any period and with respect to any Rate Tranche funded by Commercial Paper Notes of any Conduit Lender, the per annum rate specified as such for such Conduit Lender in Schedule I hereto. “Credit and Collection Policy” means the Servicer’s credit and collection policies, practices and procedures, relating to the Contracts and the Receivables, a copy of which is attached as Exhibit C hereto, as they may modified from time to time after the Closing Date in compliance with this Agreement. 747634416.3 21671763747634416.9 21671763 14 “Credit Extension” means the making of any Loan, including, for the avoidance of doubt, the Initial Loan. “Credit Party” means each Lender, the Administrative Agent, the Collateral Agent and each Group Agent. “Cut-off Date” means (i) with respect to the initial Settlement Period beginning on the Closing Date, the last day of the calendar month immediately preceding the Closing Date, and (ii) otherwise the last day of each Settlement Period. “Daily Simple SOFR” means, for any day, SOFR, with the conventions for this rate (which will include a lookback) being established by the Administrative Agent in accordance with the conventions for this rate selected or recommended by the Relevant Governmental Body for determining “Daily Simple SOFR” for syndicated business loans; provided, that if the Administrative Agent decides that any such convention is not administratively feasible for the Administrative Agent, then the Administrative Agent may establish another convention in its reasonable discretion. “Debt” means, with respect to any Person, (i) all obligations (whether secured or unsecured) of such Person for money borrowed and all other obligations (contingent or otherwise) of such Person with respect to surety bonds, letters of credit and bankers’ acceptances, whether or not matured, (ii) all obligations of such Person evidenced by notes, bonds, debentures, loan agreements, reimbursement agreements, or similar instruments (including senior, mezzanine and junior borrowings, (iii) all obligations of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property); (iv) all capital lease obligations of such Person, (v) all obligations in respect of derivative instruments to the extent required to be reflected as a liability on a balance sheet of such Person under GAAP, (vi) liabilities in respect of unfunded vested benefits under plans covered by Title VI of ERISA, (vii) all indebtedness referred to in clause (i), (ii), (iii) or (iv) above secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property (including accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such indebtedness, and (viii) all indebtedness of others referred to in clause (i), (ii), (iii), (iv), (v) or (vi) above Guaranteed by such Person or for which such Person has otherwise assumed responsibility on, before or after the date such indebtedness is incurred. “Deemed Collections” is defined in Section 3.02(a). “Defaulted Receivable” means a Receivable (a) as to which any payment, or part thereof or any payment or part of the related Service Charge Receivable, if any, remains unpaid for 90 days or more from the original due date for such payment (b) any ADT Entity or the Servicer has knowledge or notice that the Obligor thereof is subject to an Event of Bankruptcy and the related bankruptcy case, action, or proceeding has not been dismissed by the applicable court, and such Obligor’s obligations with respect to such Receivable have not been reaffirmed by such Obligor with the approval of the applicable court, or (c) which, consistent with the Credit and Collection Policy, is or should have been written off as uncollectible or defaulted. 747634416.3 21671763747634416.9 21671763 15 “Defaulting Lender” means all of the Lenders of a Group, (a) that have failed, within two (2) Business Days of the date required to be funded or paid hereunder, to fund any portion of Loans hereunder that they have, in accordance with Section 2.02 agreed to fund, unless such failure is cured or the Group Agent for such Group at any time notifies the Administrative Agent in writing that such failure is the result of the good faith determination by such Group that a condition precedent to funding (specifically identified and with supporting facts) has not been satisfied, or (b) (i) if any Lender in such Group has become the subject of an Event of Bankruptcy, or (ii) become the subject of a Bail-in Action. “Delinquency Ratio” means, with respect to any Settlement Period, a ratio (expressed as a percentage) calculated as (i) the sum of the Financed Unpaid Balances of all Delinquent Receivables that constitute Pool Receivables as of the Cut-off Date for such Settlement Period, divided by (ii) the aggregate Financed Unpaid Balance of Pool Receivables that constitute Eligible Receivables as of the Cut-off Date for such Settlement Period. “Delinquent Receivable” means a Receivable that is not a Defaulted Receivable as to which any payment or part thereof, or any payment or part thereof of the related Service Charge Receivable, if any (other than any Service Charge Receivable related to a Defaulted Receivable), remains unpaid for more than 60 days from the original due date for such payment; provided, that once a Receivable has been written off as uncollectible it shall no longer be a Delinquent Receivable. “Demand Certifications” is defined in Section 3.03. “Dilution” means, as of any date of determination, with respect to any Pool Receivable, the amount by which the Unpaid Balance of such Pool Receivable is either (a) reduced or canceled as a result of (i) any defective, rejected, or returned merchandise or services, any cash discount, or any failure by any ADT Entity to deliver any merchandise or services or otherwise perform under the underlying contract or invoice, (ii) any change in or cancellation of any of the terms of such contract or invoice or any other adjustment by ADT which reduces the amount payable by the Obligor on the related Receivable, or (iii) any setoff in respect of any claim by the Obligor thereof (whether such claim arises out of the same or a related transaction or an unrelated transaction), or (b) subject to any specific dispute, offset, counterclaim, or defense whatsoever between the Obligor and the Borrower, ADT, the Servicer, or any Affiliate thereof, in each case, other than to the extent arising from the bankruptcy or insolvency of the related Obligor, or the financial or credit condition or financial default, of such related Obligor. “Direct Deposit Obligor” means, as of any date of determination and with respect to any Receivable, an Obligor which has pursuant to the Contract authorized ADT to, from time to time, withdraw from the bank account of such Obligor and/or charge from the credit or debit card of such Obligor all amounts necessary to pay the Unpaid Balance of such Receivable when due and payable, to the extent such authorization has not been revoked or rescinded by such Obligor as of such date of determination. “Dollars”, “$” and “U.S. Dollars” each mean the lawful currency of the United States of America. 747634416.3 21671763747634416.9 21671763 16 “EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent. “EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway. “EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution. “Early Opt-in Election” means, if the then-current Benchmark is the LIBO Rate, the occurrence of: (1) a notification by the Administrative Agent to (or the request by the Borrower to the Administrative Agent to notify) each of the other parties hereto that at least five currently outstanding U.S. dollar-denominated syndicated credit facilities at such time contain (as a result of amendment or as originally executed) a SOFR-based rate (including SOFR, a term SOFR or any other rate based upon SOFR) as a benchmark rate (and such syndicated credit facilities are identified in such notice and are publicly available for review), and (2) the joint election by the Administrative Agent and the Borrower to trigger a fallback from the LIBO Rate and the provision by the Administrative Agent of written notice of such election to the Group Agents. “Eligible Assignee” means (i) the Administrative Agent, any Group Agent, any Lender, or any of their respective Affiliates that are financial institutions or banks, (ii) any Program Support Provider or any Program Administrator, (iii) any commercial paper conduit or similar entity that is managed by the Administrative Agent, any Lender or any Group Agent or any of their respective Affiliates, (iv) any other financial or other institution that is acceptable to the Administrative Agent, and solely with respect to this clause (iv) so long as no Unmatured Event of Termination or Event of Termination has occurred and is continuing, with the consent of the Borrower (such consent not to be unreasonably withheld, conditioned, or delayed), and (v) a collateral agent, trustee, or similar party which holds the assets of a Conduit Lender on behalf of the holders of the Commercial Paper Notes issued by such Conduit Lender. “Eligible Bank” means a financial institution which has a senior short-term unsecured debt rating (or where such financial institution does not have such a rating, the senior short-term unsecured debt rating of the parent of such financial institution) from both Moody’s and S&P of at least P-1 and A-1 respectively or the long-term unsecured debt rating equivalent thereof which, for the avoidance of doubt, is a long-term unsecured debt rating of at least A3, in the case of Moody’s, and at least A-, in the case of S&P.


 
747634416.3 21671763747634416.9 21671763 17 “Eligible Contract” means a Contract governed by the law of the United States of America or of any State thereof that contains an obligation to pay a specified sum of money and that has been duly authorized by each party thereto and that (i) does not require the Obligor thereunder to consent to any transfer, sale, or assignment thereof or of the related Receivable or any proceeds thereof, (ii) is not subject to a confidentiality provision or similar covenant of non-disclosure that would restrict the ability of the Administrative Agent, the Collateral Agent or any Lender to fully exercise or enforce its rights under the Transaction Documents (including any rights thereunder assigned or originated to them hereunder), (iii) remains in full force and effect, (iv) provides for a total Original Term of up to 60 months, (v) the first installment in respect of which is required to be paid by the related Obligor upon completion of the installation of the Equipment which is the subject matter of such Contract, (vi) is substantially in the form of Exhibit G-1, Exhibit G-2, or Exhibit G-3 hereto, as applicable based on the date of origination of such Contract, or which is in such other form approved in writing by the Administrative Agent and, except to the extent resulting from the Conditional Service Guaranty, is not subject to any amendment, supplement or other modification as a result of any promotional activity, advertising or other statement or warranty (including on any ADT Entity's website, except for such amendment, supplement or modification permitted under Section 7.03(b)), and (vii) is not assignable by the related Obligor without the consent of ADT. “Eligible Receivable” means, as of any date of determination, a Receivable: (a) (i) which represents all or part of the sales price of the Equipment and the installation cost of such Equipment (or in respect of an Eligible Contract in the form of Exhibit G-3, the installation cost of such Equipment), sold and provided by ADT in the ordinary course of its business and which Receivable has been sold or contributed to the Borrower pursuant to the Sale Agreement, and (ii) which is not owed to ADT or the Borrower as a bailee or consignee for another Person; (b) which constitutes Chattel Paper, an “account” (as defined in Section 9-102(a) of the UCC) or a “payment intangible” (as defined in Section 9-102(a) of the UCC); (c) which is not a Service Charge Receivable; (d) which is not a Defaulted Receivable; (e) with regard to which the representations of the Borrower in respect of such Receivable are true and correct; (f) the sale or contribution of which pursuant to the Sale Agreement and this Agreement does not violate or contravene any Law or the related Contract; (g) which is denominated and payable only in U.S. Dollars in the United States; (h) the Obligor of which, as of the related Transfer Date is a Direct Deposit Obligor with respect to such Receivable and has been instructed by ADT that to the extent that its payments will not be made through the withdrawal from its bank account and/or the charge of its credit or debit card, such payments shall be made to a Lock-Box relating to a Collection Account that is subject to a Control Agreement; 747634416.3 21671763747634416.9 21671763 18 (i) the Obligor of which is domiciled or organized in the United States of America (but excluding a Receivable the Obligor of which is domiciled or organized in the Commonwealth of Puerto Rico or the Virgin Islands of the United States) and with respect to which ADT has a Billing Address for such Obligor in the United States; (j) which arises under an Eligible Contract that, together with such Receivable, (i) is in full force and effect and constitutes the legal, valid, and binding obligation of the related Obligor to pay the full Unpaid Balance of such Receivable, enforceable against such Obligor in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization, or similar laws relating to and limiting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or in Law), (ii) as of the date of its Transfer, is not subject to any dispute, offset, netting, litigation, counterclaim, or defense whatsoever (including defenses arising out of violations of usury Laws) (other than potential discharge in a bankruptcy of the related Obligor) or other event or circumstance that would give rise to a Deemed Collection, and (iii) is not subject to any Adverse Claim; (k) that together with the Contract related thereto, does not contravene any Law applicable thereto (including Laws relating to usury, consumer protection, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices, and privacy) in any respect, with respect to which the origination thereof did not violate any such Law in any such respect and with respect to which no party to the Contract related thereto is in violation of any Law; (l) which (i) was originated by ADT in the ordinary course of its business, (ii) satisfies the requirements of the Credit and Collection Policy, and (iii) has been acquired by the Borrower from ADT pursuant to and in accordance with the terms of the Sale Agreement; (m) the Obligor of which is not, any ADT Entity or an Affiliate of any ADT Entity; (n) the Obligor of which is not a Sanctioned Person; (o) the Obligor of which is required to make payments no less frequently than monthly under the related Contract; (p) which represents the sales price of goods or services within the meaning of Section 3(c)(5) of the Investment Company Act; (q) the Obligor of which (i) is a residential customer of ADT in good standing and listed in the Records of ADT as having an “active status”, (ii) satisfies at least one of the following: (x) it has not been the Obligor under a Delinquent Receivable during the twelve (12) months immediately preceding the date of Transfer, (y) it has a minimum Telco98 score of 625 and an ADT Credit Score of “A”, “B” or “C”, or (z) it has an ADT Credit Score of “N”, “X”, or “Y”, (iii) is not an Obligor in respect of any Defaulted Receivable, and (iv) is not subject to cancellation or disconnection in respect of ADT’s Monitoring Services in accordance with the Credit and Collection Policy, the terms of the Contract or otherwise; 747634416.3 21671763747634416.9 21671763 19 (r) which does not constitute a Delinquent Receivable; (s) which relates to Equipment which is designated on the Records of ADT and in accordance with the Credit and Collection Policy as a product type “Tier 1”, “Tier 2”, “Tier 3”, “Burglar Alarm” or “CCTV” for the purpose of installing home security monitoring equipment systems for a single site; (t) which is non-executory and has been fully earned by performance on the part of ADT; (u) in respect of which no further action is required to be performed by ADT or any other Person with respect thereto pursuant to the terms of the Contract, any promotional activity, advertising or any other statement or warranty or otherwise (subject, to the extent applicable with respect to any Receivable, only to the Conditional Service Guaranty), other than payment thereon by the applicable Obligor; (v) in respect of which the payment of the Unpaid Balance thereof by the related Obligor is not contingent upon such Obligor receiving Monitoring Services and the termination of the Monitoring Services provided by ADT to the related Obligor will not affect the obligation of such Obligor to pay the full Unpaid Balance of such Receivable or otherwise affect the rights of ADT, the Borrower or the Collateral Agent under the related Contract in respect of such Receivable; (w) the Obligor of which is not a Governmental Authority and is a residential customer; (x) the related Contract in respect of which cannot be cancelled or terminated unless the related Obligor pays the full Unpaid Balance of such Receivable; (y) which has been outstanding beyond the Applicable Cooling Off Period or, except to the extent provided by the Conditional Service Guaranty, any other period prior to which such Receivable can be cancelled or terminated in any manner, which would excuse the related Obligor of its obligation to pay all or any portion of the Unpaid Balance thereof, and with respect to which the first installment payment thereof has been paid by the related Obligor and collected and applied by the Servicer; (z) the Unpaid Balance of which is not, as of the date of Transfer, subject to reduction, cancellation, setoff, offset, special refunds, or credits for any reason, including without limitation as a result of defective or rejected Equipment or other goods; (aa) in respect of which all sales taxes to be paid in connection with the related Equipment and installation thereof have been fully paid by ADT, or if not due and payable as of the Borrowing Date in respect of such Receivable, has been fully paid by the due date thereof (except for any such sales taxes that are being appropriately contested in good faith by appropriate proceedings and with respect to which adequate reserves in conformity with GAAP have been provided); (bb) the Financed Unpaid Balance of which does not exceed $20,000; 747634416.3 21671763747634416.9 21671763 20 (cc) without limiting any of the foregoing, no portion of which (i) is subject to any Lien in favor of any Governmental Authority, or (ii) results in (or, in the case of non- payment of any such governmental fee, surcharge, or tax by any Person, would result in) any Adverse Claim on such Receivable or any proceeds thereof in favor of any Governmental Authority (other than, for the avoidance of doubt, Adverse Claims that may be imposed by any Governmental Authority from time to time on the assets of ADT generally (or any Person treated as the same Person as ADT for tax purposes) in respect of any governmental fees, surcharges or taxes that will be paid or contested in compliance with Section 7.01(o) and Section 7.04(k)); (dd) which as of the related Transfer Date, has not been compromised or (except for modifications of a ministerial nature to cure ambiguities or to correct, complete or supplement any provision in the related Contract which may be defective or inconsistent with any other provision therein, which modifications do not directly or indirectly cure, waive or forgive any default or delinquency by the related Obligor, could not reasonably be expected to adversely affect the Borrower’s or any Credit Party’s interests in such Receivable and are fully reflected in the express terms of the Contract on or prior to the Transfer Date in connection with the origination of such Receivable), adjusted or otherwise modified (including by the extension of time for payment or the granting of any discounts, allowances, or credit), including as a result of any promotional activity, advertising or other statement or warranty (including on any ADT Entity’s website), other than the Conditional Service Guaranty; (ee) if any Deemed Collection arises in respect of such Receivable, the Originator is not in default of its obligation to pay the full amount of such Deemed Collection in accordance with the Sale Agreement; (ff) the Obligor of which is receiving Monitoring Services provided by ADT commensurate with the related Contract, except pursuant to a voluntary termination of such Monitoring Services by such Obligor after the Transfer Date of such Receivable; (gg) the Unpaid Balance of which is payable by the related Obligor in up to 60 equal monthly installments under the related Contract; and (hh) which is not a Receivable in respect of which, pursuant to the Conditional Service Guaranty the related Obligor has notified any ADT Entity of a request for a refund and the relevant ADT Entity has not conclusively resolved the issue in order to void such claim within the period required by and pursuant to the terms of the Conditional Service Guaranty then in effect with respect to such Receivable. “Enhancement Agreement” means any agreement between a Conduit Lender and any other Person(s), entered into to provide (directly or indirectly) credit enhancement to such Conduit Lender’s commercial paper facility. “Enhancement Provider” means any Person providing credit support to a Conduit Lender under an Enhancement Agreement, including pursuant to an unfunded commitment, or any similar entity with respect to any permitted assignee of such Conduit Lender.


 
747634416.3 21671763747634416.9 21671763 21 “Equipment” means in respect of a Contract, all alarm system and monitoring equipment installed by ADT pursuant to such Contract. “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any rule or regulation issued thereunder. “ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or 414(c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414(m) or 414(o) of the Code. “ERISA Event” means (a) any “reportable event”, as defined in Section 4043(c)(1), (6) or (10) of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period referred to in Section 4043(a) is waived), (b) any failure by any Plan to satisfy the minimum funding standards (within the meaning of Sections 412 or 430 of the Code or Section 302 of ERISA) applicable to such Plan, whether or not waived, (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan, (d) the incurrence by any ADT Entity, or any ERISA Affiliate thereof of any liability under Title IV of ERISA with respect to the termination of any Plan, (e) the receipt by any ADT Entity, or any ERISA Affiliate thereof from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan under Section 4042 of ERISA, (f) the incurrence by any ADT Entity, or any ERISA Affiliate thereof of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan, or (g) the receipt by any ADT Entity, or any ERISA Affiliate thereof of any notice, or the receipt by any Multiemployer Plan from ADT, the Servicer, the Parent, the Originator, or any ERISA Affiliate thereof of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent within the meaning of Section 4245 of ERISA, or is in reorganization within the meaning of Section 4241 of ERISA, or in endangered or critical status (within the meaning of Section 432 of the Code or Section 305 or Title IV of ERISA). “Erroneous Payment” has the meaning assigned to it in Section 10.12(a). “Erroneous Payment Deficiency Assignment” has the meaning assigned to it in Section 10.12(d). “Erroneous Payment Return Deficiency” has the meaning assigned to it in Section 10.12(d). “Erroneous Payment Subrogation Rights” has the meaning assigned to it in Section 10.12(dc). “EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time. “EU Securitisation Regulation” means Regulation (EU) 2017/2402 of the European Parliament and of the Council of 12 December 2017 laying down a general framework for securitisation and creating a specific framework for simple, transparent and standardized 747634416.3 21671763747634416.9 21671763 22 securitisation and amending certain other European Union directives and regulations (as amended by Regulation (EU) 2021/557) and, except as otherwise stated, means such Regulation as further amended from time to time. “EU Securitisation Regulation Rules” means the EU Securitisation Regulation, together with all relevant implementing regulations in relation thereto, all regulatory and/or implementing technical standards in relation thereto or applicable in relation thereto pursuant to any transitional arrangements made pursuant to the EU Securitisation Regulation and, in each case, any relevant official binding guidance and directions published in relation thereto by the European Banking Authority, the European Securities and Markets Authority or the European Insurance and Occupational Pensions Authority (or in each case, any predecessor, successor or replacement organization thereto)) or by the European Commission (all, except as otherwise stated, as amended from time to time). “Event of Bankruptcy” shall be deemed to have occurred with respect to a Person if either: (a) (i) a case or other proceeding shall be commenced, without the application or consent of such Person, in any court, seeking the liquidation, reorganization, debt arrangement, dissolution, winding up, or composition or readjustment of debts of such Person, the appointment of a trustee, receiver, custodian, liquidator, assignee, sequestrator (or other similar official) for such Person or all or substantially all of its assets, or any similar action with respect to such Person under any Law relating to bankruptcy, insolvency, reorganization, winding up, or composition or adjustment of debts, and such case or proceeding shall continue unstayed or undismissed for a period of sixty (60) consecutive days (or, for purposes of Section 9.01(c), if such case or proceeding is in respect of the Borrower, zero (0) days); or (ii) an order for relief in respect of such Person shall be entered in an involuntary case under federal bankruptcy laws or other similar Laws now or hereafter in effect; or (b) such Person (i) shall commence a voluntary case or other proceeding under any applicable bankruptcy, insolvency, reorganization, debt arrangement, dissolution, or other similar Law now or hereafter in effect, (ii) shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) for, such Person or for any substantial part of its property, or (iii) shall make any general assignment for the benefit of creditors, or shall fail to, or admit in writing its inability to, pay its debts generally as they become due, or, if a corporation or similar entity, its board of directors (or any board or Person holding similar rights to control the activities of such Person) shall vote to implement any of the foregoing. “Event of Termination” has the meaning set forth in Section 9.01. For the avoidance of doubt, an Event of Termination shall occur only after applicable cure periods, if any, specified in Section 9.01 have expired, and any Event of Termination that occurs shall be deemed to be continuing at all times thereafter unless and until waived in accordance with Section 12.01. “Excess ADT Credit Score B Concentration Amount” means, as of any date of determination, the amount, if any, by which (a) the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool related to Obligors with an ADT Credit Score of “B”, 747634416.3 21671763747634416.9 21671763 23 as of such date of determination, exceeds (b) 30.0027.50% of the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool, as of such date of determination. “Excess ADT Credit Score B, C, N, Q, W, X, Y, Z and Null Concentration Amount” means, as of any date of determination, the amount, if any, by which (a) the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool related to Obligors with an ADT Credit Score of “B”, “C”, “N”, “Q”, “W”, “X”, “Y”, “Z” and “Null” as of such date of determination, exceeds (b) 50.0045.00% of the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool, as of such date of determination. “Excess ADT Credit Score C Concentration Amount” means, as of any date of determination, the amount, if any, by which (a) the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool related to Obligors with an ADT Credit Score of “C”, as of such date of determination, exceeds (b) 15.0012.00% of the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool, as of such date of determination. “Excess ADT Credit Score C, N, Q, W, X, Y, Z and Null Concentration Amount” means, as of any date of determination, the amount, if any, by which (a) the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool related to Obligors with an ADT Credit Score of “C”, “N”, “Q”, “W”, “X”, “Y”, “Z” and “Null” as of such date of determination, exceeds (b) 35.0025.00% of the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool, as of such date of determination. “Excess CCTV Concentration Amount” means, as of any date of determination, the amount, if any by which (a) the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool which relate to the “CCTV” Product Type, as of such date of determination, exceeds (b) 4.0010.00% of the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool, as of such date of determination. “Excess Concentration Amount” means, as of any date of determination, the sum, as calculated without duplication for any Eligible Receivable that falls into more than one of the following, of (a) the Excess Single State Unpaid Balance Concentration Amount, (b) the Excess Third Largest State Obligor Concentration Amount, (c) the Excess Second Largest State Obligor Concentration Amount, (d) the Excess Largest State Obligor Concentration Amount, (e) the Excess ADT Credit Score B Concentration Amount, (f) the Excess ADT Credit Score C Concentration Amount, (g) the Excess N, Q, W, X, Y, Z and Null ADT Credit Score Concentration Amount, (h) the Excess ADT Credit Score B, C, N, Q, W, X, Y, Z and Null Concentration Amount, (i) the Excess ADT Credit Score C, N, Q, W, X, Y, Z and Null Concentration Amount, (j) the Excess Financed Unpaid Balance Over $5,000 Concentration Amount, and (k) the Excess CCTV Concentration Amount. In order to avoid duplication in calculating the Excess Concentration Amount, each component of the Excess Concentration Amount shall be determined in the order set forth above, and the aggregate Financed Unpaid Balances of any Eligible Receivables that are included in the Excess Concentration Amount in any prior step shall be deemed not to constitute Eligible Receivables in the numerator of any otherwise applicable subsequent step. “Excess Financed Unpaid Balance Over $5,000 Concentration Amount” means, as of any date of determination, the amount, if any, by which (a) the aggregate Financed Unpaid Balances 747634416.3 21671763747634416.9 21671763 24 of all Eligible Receivables in the Receivable Pool which relate to Obligors with a Financed Unpaid Balance over $5,000, as of such date of determination, exceeds (b) 5.00% of the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool, as of such date of determination. “Excess Largest State Obligor Concentration Amount” means as of any date of determination, the amount, if any, by which (a) the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool which relate to Obligors with Billing Addresses in the Largest State, as of such date of determination, exceeds (b) 20.00% of the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool, as of such date of determination. “Excess Second Largest State Obligor Concentration Amount” means, as of any date of determination, the amount, if any, by which (a) the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool which relate to Obligors with Billing Addresses in the Second Largest State, as of such date of determination, exceeds (b) 20.00% of the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool, as of such date of determination. “Excess Single State Unpaid Balance Concentration Amount” means, as of any date of determination, the amount, if any, by which (a) the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool which relate to an Obligor with a Billing Address in any single State (or commonwealth) in the United States, as of such date of determination, other than the Obligors in the Largest State, the Second Largest State or the Third Largest State, exceeds (b) 10.00% of the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool, as of such date of determination. “Excess Third Largest State Obligor Concentration Amount” means, as of any date of determination, the amount, if any by which (a) the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool which relate to Obligors with Billing Addresses in the Third Largest State, as of such date of determination, exceeds (b) 20.00% of the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool, as of such date of determination. “Excess N, Q, W, X, Y, Z and Null ADT Credit Score Concentration Amount” means, as of any date of determination, the amount, if any, by which (a) the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool related to Obligors with an ADT Credit Score of “N”,“Q”, “W”, “X”, “Y”, “Z” and “Null”, as of such date of determination, exceeds (b) 20.00% of the aggregate Financed Unpaid Balances of all Eligible Receivables in the Receivable Pool, as of such date of determination. “Excluded Taxes” means (i) any Taxes based upon, or measured by, any Affected Person’s net income, net receipts, net profits, net worth or capital (including franchise or similar Taxes imposed in lieu of such Taxes), including any such Taxes imposed by a taxing authority (a) in a jurisdiction (or political subdivision thereof) in which such Affected Person has its principal office, or under the laws of which such Affected Person is organized or incorporated, (b) in a jurisdiction (or political subdivision thereof) in which such Affected Person maintains the applicable lending


 
747634416.3 21671763747634416.9 21671763 25 office (or branch), (ii) any franchise Taxes, branch Taxes or branch profits Taxes or any similar Taxes imposed by any jurisdiction (or political subdivision thereof) described in clause (i), (iii) with regard to any Affected Person, any withholding Tax to the extent it is (a) imposed on amounts payable to such Affected Person because such Affected Person designates a new lending office, except to the extent that such Affected Person was entitled, at the time of designation of a new lending office, to receive amounts in respect of such Taxes from any of the Borrower, ADT or the Servicer, as applicable, pursuant to Section 4.03, (b) attributable to such Affected Person’s failure to comply with Section 4.03(v), or (c) imposed on amounts payable to such Affected Person with respect to an applicable interest in Pool Receivables or Related Assets pursuant to a law in effect on the date on which such Affected Person acquires such interest (other than pursuant to an assignment request by the Borrower under Section 4.04(b)), except to the extent that, in the case of an assignment to such Affected Person, such Affected Person’s assignor was entitled, immediately before the time of such assignment, to receive amounts in respect of such Taxes from the Borrower, ADT or the Servicer, as applicable, pursuant to Section 4.03, and (iv) any FATCA Withholding Tax. For the avoidance of doubt, Excluded Taxes shall include any backup withholding in respect of income or branch profits under Section 3406 of the Code or any similar provision of state, local or foreign law. “Existing Purchase Agreement” is defined in the Preliminary Statements. “Existing Receivable Pool” is defined in the Preliminary Statements. “Existing Sale Agreement” is defined in the Preliminary Statements. “Exiting Lender” is defined in Section 2.05. “Extension Request” is defined in Section 2.05. “Facility Limit” means, at any time of determination, the aggregate Lender Loan Limits of all Lenders, which as of the Closing Date is equal to $200,000,000.00. “FATCA” means Sections 1471 through 1474 of the Code and the current or future U.S. Treasury Regulations issued thereunder, as the same may be amended, modified, or supplemented from time to time (so long as any future, amended, modified, supplemented, or successor version is substantively comparable and not materially more onerous to comply with), corresponding provisions of successor Law, official interpretations thereof, and any agreements entered into pursuant to Section 1471(b) of the Code and any published intergovernmental agreements entered into in connection with the implementation of such Sections of the Code and any fiscal or regulatory legislation, rules, or practices adopted pursuant to any such intergovernmental agreement. “FATCA Withholding Tax” means any withholding Tax imposed under FATCA. “Federal Funds Rate” means, for any period, a fluctuating interest rate per annum, determined by the Administrative Agent, equal (for each day during such period) to: (a) the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as 747634416.3 21671763747634416.9 21671763 26 published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York; or (b) if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by it. “Federal Reserve Board” means the Board of Governors of the Federal Reserve System, or any entity succeeding to any of its principal functions. “Fee Letters” means any fee letter among any of the Borrower or ADT, on the one hand, and the Administrative Agent, the Collateral Agent, or the Group Agents, on the other hand, setting out the fees and expenses payable in connection with this Agreement or other Transaction Documents. “Fees” means all fees payable by the Borrower pursuant to any Fee Letter, including the Funded Fee. “Final Payout Date” means the date on or after the Termination Date when (i) the Aggregate Principal and Aggregate Interest have been paid in full, (ii) all non-contingent Borrower Obligations then owed by the Borrower shall have been paid in full, (iii) all other non-contingent amounts then owing to the Credit Parties and any other Indemnified Party or Affected Person hereunder and under the other Transaction Documents have been paid in full, and (iv) all accrued Servicing Fees (other than those payable to ADT or an Affiliate of ADT) have been paid in full. “Financed Unpaid Balance” means, as of any time of determination with respect to a Pool Receivable, the sum of all remaining unpaid monthly installment payments (up to a maximum of the next 36 such monthly installment payments in the case of a Pool Receivable with a Product Type “Burglar Alarm” or in respect of which no credit check was performed in connection with its origination), owed by the related Obligor in respect of such Pool Receivable as of such time of determination. “First Amendment Date” means October 29, 2021. “Floor” means the benchmark rate floor, if any, provided in this Agreement initially (as of the execution of this Agreement, the modification, amendment or renewal of this Agreement or otherwise) with respect to the LIBOBenchmark Rate. For the avoidance of doubt, the Floor as of the Closing Date is zero (0.00%) per annum. “Funded Fee” is defined in the related Fee Letter. “Funded Fee Percentage” is defined in the related Fee Letter. “GAAP” means generally accepted accounting principles in the United States of America, consistently applied; provided, however, that if any Person hereafter changes its accounting standards in accordance with applicable laws and regulations, including those of the SEC, to adopt International Financial Reporting Standards, GAAP with respect to such Person will mean such International Financial Reporting Standards after the effective date of such adoption. 747634416.3 21671763747634416.9 21671763 27 “Governmental Authority” means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank). “Group” means, (i) for any Conduit Lender, such Conduit Lender, together with such Conduit Lender’s Related Lenders and related Group Agent, (ii) for Mizuho, Mizuho as a Lender and as a Group Agent, (iii) for any other Lender that does not have a Related Conduit Lender, such Lender, together with such Lender’s related Group Agent and each other Lender for which such Group Agent acts as a Group Agent hereunder. “Group Agent” means each Person acting as agent on behalf of a Group and designated as the Group Agent for such Group on the signature pages to this Agreement or any other Person who becomes a party to this Agreement as a Group Agent for any Group pursuant to an Assignment and Acceptance Agreement or otherwise in accordance with this Agreement. “Group Agent’s Account” means, with respect to any Group, the account(s) from time to time designated in writing by the applicable Group Agent to the Administrative Agent, the Borrower and the Servicer for purposes of receiving payments to or for the account of the members of such Group hereunder. “Group Loan Limit” means, with respect to any Group, at any time of determination, the aggregate Lender Loan Limits of all Lenders within such Group. “Guarantee” by any Person means any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Debt or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise), or (ii) entered into for the purpose of assuring in any other manner the obligee of such Debt or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided, that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business or customary and reasonable indemnity obligations incurred in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning. “Hedge Rate” means, for any date of determination, the sum of (i) the Weighted Average Swap Rate, (ii) 2.0%, (iii) the Funded Fee Percentage, and (iv) the Servicing Fee Rate. “Indemnified Amounts” has the meaning set forth in Section 11.01. “Indemnified Party” has the meaning set forth in Section 11.01. 747634416.3 21671763747634416.9 21671763 28 “Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made or deemed made by or on account of any obligation of the Borrower (or the Servicer on behalf of the Borrower) under any Transaction Document, and (b) Other Taxes. “Independent Manager” means a natural person who (I) is not at the time of initial appointment, or at any time while serving as Independent Manager of the Borrower, and has not been at any time during the preceding five (5) years: (a) a member, partner, equityholder, manager, director, officer or employee of ADT or the Parent, or any of their respective Affiliates (other than as special member, independent director, independent manager, or similar capacity, of the Borrower or any Affiliate of the Borrower that is a securitization vehicle or is similarly structured to be a special purpose bankruptcy remote entity); (b) a creditor, supplier, service provider (including a provider of professional services) or any other Person who derives any material portion of its revenues from its activities with the Borrower, the Parent, or ADT or any of their respective Affiliates (other than as a provider of corporate services in the ordinary course of business or as special member, independent director, independent manager, or similar capacity, of the Borrower or any Affiliate of the Borrower that is a securitization vehicle or is similarly structured to be a special purpose bankruptcy remote entity); or (c) a member of the immediate family of any such disqualified Person described in clauses (a) or (b) above and (II) (1) has prior experience as a special member, independent director, independent manager or similar capacity for an entity that is a securitization vehicle or is similarly structured to be a special purpose bankruptcy remote entity whose Constituent Documents required the unanimous consent of all independent managers before such entity could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy, and (2) has at least three years of employment experience with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management, or placement services to issuers of securitization or structured finance instruments, agreements, or securities, including, without limitation, Citadel SPV (USA) LLC, Corporation Service Company, CT Corporation, Lord Securities Corporation, Wilmington Trust, National Association or Wilmington Trust SP Services, Inc. “Information” is defined in Section 12.06. “Information Package” is defined in Section 3.01. “Initial Loan” is defined in Section 2.02. “Insolvency Proceeding” means (a) any case, action or proceeding before any court or other Governmental Authority relating to bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors, (b) any general assignment for the benefit of creditors of a Person, composition, marshaling of assets for creditors of a Person, or other, similar arrangement in respect of its creditors generally or any substantial portion of its creditors, in each of cases (a) and (b) undertaken under U.S. Federal, state or foreign law, including the Bankruptcy Code. “Interest” means, for any day with respect to any Rate Tranche: {(LTP x IR)/360} + LF


 
747634416.3 21671763747634416.9 21671763 29 where: IR = the Interest Rate for such Rate Tranche on such day; LTP = Lenders’ Tranche Principal in such Rate Tranche on such day; and LF = the Liquidation Fee, if any, for such day. “Interest and Fee Reserve” means as of any date of determination, the product of: (a) the Weighted Average Life divided by 12; times (b) the Hedge Rate; times (c) the Financed Unpaid Balance of all Pool Receivables; times (d) the Weighted Average Advance Rate; times (e) one (1) minus the Hedge Rate (expressed as a decimal). “Interest Period” means for any Rate Tranche, the period from and including the Closing Date to and excluding the first Settlement Date occurring hereunder, and thereafter, each period from and including each Settlement Date and to but excluding the immediately following Settlement Date. “Interest Rate” means for any Rate Tranche on any day: (a) in the case of a Rate Tranche funded by a Conduit Lender through the issuance of Commercial Paper Notes, the applicable CP Rate; and (b) in the case of a Rate Tranche not funded by Commercial Paper Notes, the applicable Bank Rate for such Rate Tranche; provided, that on any day when any Event of Termination, shall have occurred that remains continuing the applicable Interest Rate for each Rate Tranche means a rate per annum equal to the higher of (A) the applicable Base Rate, plus 2.00% per annum and (B) the rate per annum otherwise applicable to such Rate Tranche during the current Interest Period or Settlement Period, as applicable plus 2.00% per annum. “Investment Company Act” means the Investment Company Act of 1940, as amended or otherwise modified from time to time. “IRS” means the United States Internal Revenue Service. “ISDA Definitions” means the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from time to time by the International Swaps and Derivatives Association, Inc. or such successor thereto. 747634416.3 21671763747634416.9 21671763 30 “Largest State” means, as of any date of determination, the state (or commonwealth) in the United States, in respect of which the largest amount of aggregate Financed Unpaid Balances of Eligible Receivables in the Receivable Pool in respect of Obligors with Billing Addresses in such state (or commonwealth) relate. “Law” means any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree, judgment, award, or similar item of or by a Governmental Authority or any interpretation, implementation or application thereof. “Lender Loan Limit” means, with respect to any Lender, the maximum aggregate amount which such Person may lend or pay hereunder on account of all Loans, on a combined basis, as set forth on Schedule I or in the other agreement pursuant to which it became a Lender, as such amount may be modified in connection with any subsequent assignment pursuant to Section 12.03. “Lenders” means Mizuho and each other Person that is or becomes a party to this Agreement in the capacity of a “Lender”. Each Conduit Lender shall constitute a Lender for all purposes of this Agreement. “Level 1 Ratings Trigger” means a condition that is in effect at any time when ADT Inc.: (i) has a long-term “corporate family rating” of “B3” or less by Moody’s and a long-term “issuer rating” of “B-” or less by S&P, (ii) has a long-term “corporate family rating” of “B1” with negative outlook or “B2” or less by Moody’s and a long-term “issuer rating” of less than “B-” or “B-” with negative outlook by S&P, (iii) has a long-term “corporate family rating” of less than “B3” or “B3” with negative outlook by Moody’s and a long-term “issuer rating” of “B+” with negative outlook or “B” or less by S&P, (iv) has a long-term “corporate family rating” of “Caa1” or less by Moody’s, (v) has a long-term “issuer rating” of “CCC+” or less by S&P, or (vi) is not rated by either S&P or Moody’s. “LIBO Rate” means for any Interest Period, the rate per annum equal to the greater of (i) 0.00% and (ii) (a) the interest rate per annum designated as the LIBO Rate by the applicable Group Agent for a period of time comparable to such Interest Period that appears on the Reuters Screen LIBO Page (or on any successor or substitute page of such service providing rate quotations comparable to those currently provided on such page of such service, as determined by such Group Agent from time to time) for purposes of providing quotations of the London interbank offered rate or, if for any reason such rate is not available, the rate determined by the applicable Group Agent from another recognized source or interbank quotation for deposits in U.S. dollars as of 11:00 a.m. (London, England time) with respect to such Group Agent or related Lender on the second Business Day preceding the first day of such Interest Period or (b) if a rate cannot be determined under the foregoing clause, an annual rate equal to the average (rounded upwards if necessary to the nearest 1/100th of 1%) of the rates per annum at which deposits in U.S. Dollars with a duration comparable to such Interest Period in a principal amount substantially equal to the principal amount of the applicable Rate Tranche are offered to the principal London office of the applicable Group Agent (or its related Lender) by three London banks, selected by the Administrative Agent in good faith, at about 11:00 a.m. London time on the second Business Day preceding the first day of such Interest Period. 747634416.3 21671763747634416.9 21671763 31 “Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), preference, priority, or other security agreement or preferential arrangement of any kind or nature whatsoever, including any conditional sale or other title retention agreement and any financing lease having substantially the same economic effect as any of the foregoing. “Liquidation Fee” means, as of any date of determination (other than a Settlement Date) on which a Lender’s Tranche Principal is reduced pursuant to Section 3.02(b), for each Rate Tranche (or portion thereof) so reduced, the amount, if any (without duplication of any amounts payable pursuant to Section 4.02), by which: (a) the additional Interest (without duplication and without regard to the Liquidation Fee component thereof) which would have accrued on the portion of such Lender’s Tranche Principal so reduced, if such reductions had not been made until the next Settlement Date, exceeds (b) the greater of (x) the actual income, if any, received by the affected Lender for the corresponding period from investing the proceeds of such reductions of such Lender’s Tranche Principal and (y) zero. “Liquidity Advance” means a loan, advance, purchase, or other similar action made by a Liquidity Provider pursuant to a Liquidity Agreement. “Liquidity Agreement” means any agreement entered into, directly or indirectly, in connection with or related to, this Agreement pursuant to which a Liquidity Provider agrees to make loans or advances to, or purchase assets from, a Conduit Lender (directly or indirectly) in order to provide liquidity or other enhancement for such Conduit Lender’s Commercial Paper Notes or other senior indebtedness. “Liquidity Provider” means any lender, credit enhancer, or liquidity provider that is at any time party to a Liquidity Agreement or any successor or assign of such lender, credit enhancer, or liquidity provider or any similar entity with respect to any permitted assignee of a Conduit Lender. “Loan” means any loan made by a Lender pursuant to Section 2.02. “Loan Request” means a letter in substantially the form of Exhibit A hereto executed and delivered by the Borrower to the Administrative Agent and the Group Agents pursuant to Section 2.02(a). “Lock-Box” means a post office box maintained by a Lock-box Bank relating to a Collection Account. “Lock-Box Bank” means any of the banks party to a Lock-box agreement. “Loss Ratio” means, with respect to any Settlement Period, a ratio (expressed as a percentage) calculated as (i) the sum of the Financed Unpaid Balances of all Defaulted Receivables (other than any Defaulted Receivables that have been written off) that constitute Pool Receivables as of the Cut-off Date for such Settlement Period, plus, without duplication, the sum of all Losses 747634416.3 21671763747634416.9 21671763 32 during such Settlement Period, divided by (ii) the aggregate Financed Unpaid Balance of all Pool Receivables that constitute Eligible Receivables as of the Cut-off Date for such Settlement Period. “Loss Reserve” means as of any time of determination, the product of (i) the result of (A) one (1) minus (B) the Weighted Average Advance Rate for the Receivable Pool as of such time of determination, multiplied by (ii) the Net Portfolio Balance on such time of determination. “Losses” means the Financed Unpaid Balance (net of recoveries) of any Pool Receivables that have been, or should have been, written-off as uncollectible by the Servicer in accordance with the Credit and Collection Policies. “Material Adverse Effect” means with respect to any event or circumstance, a material adverse effect on: (a) (i) if a particular Person is specified, the ability of such Person to perform its obligations under this Agreement or any other Transaction Document, or (ii) if a particular Person is not specified, the ability of any ADT Entity or the Servicer to perform its respective obligations under this Agreement or any other Transaction Document; (b) (i) the validity or enforceability of any Transaction Document, or (ii) the value, validity, enforceability, or collectability of all or any portion of Pool Receivables or the Related Assets with respect thereto; (c) the assets, operations, business or financial condition of any ADT Entity; or (d) the status, existence, perfection, priority, enforceability, or other rights and remedies of any Lender, the Collateral Agent or the Administrative Agent associated with its respective interest in the Pool Receivables or the Related Assets; provided, that no Material Adverse Effect shall be deemed to have occurred if any event or circumstance, individually or in the aggregate, has a material adverse effect as set forth above on only an insignificant portion of the Pool Receivables and the Related Assets, and after the occurrence of such event or circumstance, the Aggregate Principal does not exceed the Borrowing Base. “Material Subsidiary” means, in respect of any Person, any Subsidiary of such Person that satisfies (or would have satisfied) the definition of “Material Subsidiary” in the ADT Credit Agreement as such definition is in effect on the Closing Date. “Maturity Date” means the earlier of (a) the Acceleration Date, and (b) the date which is 60 months after the Termination Date. “Mizuho” has the meaning set forth in the preamble to this Agreement. “Monitoring Services” means the monitoring and notification services provided by ADT under any contract which give rise to the Service Charge Receivables.


 
747634416.3 21671763747634416.9 21671763 33 “Monthly Collections” means, with respect to each Settlement Date, the aggregate amount of Collections deposited to the Payment Account during the immediately preceding Settlement Period, plus any Deemed Collections with respect to such Settlement Period deposited to the Payment Account three (3) Business Days prior to such Settlement Date as required pursuant to Section 3.02. “Moody’s” means Moody’s Investors Service, Inc. and any successor thereto that is a nationally recognized statistical rating organization. “Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA. “Net Portfolio Balance” means, at any time in any calendar month: (a) prior to applying Collections in accordance with Section 3.01(d) on the Settlement Date in such calendar month, an amount equal to: (i) the aggregate Financed Unpaid Balance, determined as of the most recent Cut-off Date, of all Eligible Receivables included in the Receivable Pool on such Cut-off Date (excluding any Eligible Receivables added to the Receivable Pool through Transfers occurring after such Cut-off Date), minus (ii) the sum of: (x) the Excess Concentration Amount determined as of the most recent Cut-off Date (without giving effect to any Transfers that occurred after such Cut-off Date), plus (y) without duplication of any amounts already removed from the Net Portfolio Balance (including as a result of the related Pool Receivable no longer constituting an Eligible Receivable), all cash Collections and security deposits allocable to the reduction of the Financed Unpaid Balances of such Eligible Receivables as of the most recent Cut-off Date that have not yet been applied to reduce such Financed Unpaid Balances as of such Cut-off Date, plus (z) without duplication of any such amounts already removed from the Net Portfolio Balance (including as result of the related Pool Receivable no longer constituting an Eligible Receivable), the aggregate amount, as of the end of the most recent Cut-off Date, for all Pool Receivables that are Eligible Receivables, of all Dilutions and discounts, rebates or other credits that reduce the Financed Unpaid Balance in respect of such Pool Receivables that have not yet been applied to reduce such Financed Unpaid Balances as of such Cut-off Date; and (b) upon and after applying Collections in accordance with Section 3.01(d) on the Settlement Date in such calendar month, an amount equal to: 747634416.3 21671763747634416.9 21671763 34 (i) the amount determined pursuant to clause (a)(i) above, plus (ii) the aggregate Financed Unpaid Balance, determined as of the most recent Cut-off Date, of all Eligible Receivables that were added to the Receivable Pool after such Cut-off Date as a result of any Transfers that occurred after such Cut-off Date and prior to the time of determination of the Net Portfolio Balance pursuant to this clause (b), minus (iii) the sum of: (x) the Excess Concentration Amount determined as of the most recent Cut-off Date with respect to the combined Receivable Pool that includes any Receivables that were added to the Receivable Pool as a result of any Transfers that occurred after such Cut-off Date and prior to the time of determination of the Net Portfolio Balance pursuant to this clause (b), based on Financed Unpaid Balances as of such Cut-off Date, plus (y) without duplication of any amounts already removed from the Net Portfolio Balance (including as a result of the related Pool Receivable no longer constituting an Eligible Receivable), all cash Collections and security deposits allocable to the reduction of the Financed Unpaid Balances of any Eligible Receivables in the combined Receivable Pool (including Receivables Transferred since the most recent Cut-off Date and prior to the time of determination of the Net Portfolio Balance pursuant to this clause (b)) as of the most recent Cut-off Date that have not yet been applied to reduce such Financed Unpaid Balances as of such Cutoff Date, plus (z) without duplication of any such amounts already removed from the Net Portfolio Balance (including as result of the related Pool Receivable no longer constituting an Eligible Receivable), the aggregate amount, as of the most recent Cut-off Date, of all Dilutions and discounts, rebates or other credits that reduce the Financed Unpaid Balance in respect of Pool Receivables that are Eligible Receivables in the combined Receivable Pool (including Receivables Transferred since the most recent Cut-off Date and prior to the time of determination of the Net Portfolio Balance pursuant to this clause (b)) as of the most recent Cut-off Date that have not yet been applied to reduce such Financed Unpaid Balances as of such Cut-off Date. “Non-Consenting Lender” is defined in Section 4.04(b). “Non-Public Obligor Data” means all Obligor Information that may constitute nonpublic and/or personal information protected under the Privacy Requirements. “Obligations” means Borrower Obligations and ADT Obligations. 747634416.3 21671763747634416.9 21671763 35 “Obligor” means a Person obligated to make payments under a Contract with respect to a Receivable, including any guarantor thereof. “Obligor Information” means any personally identifiable information or records in any form (oral, written, graphic, electronic, machine-readable, or otherwise) relating to an Obligor, including but not limited to: an Obligor’s name, address, telephone number, account number, or transactional account history, account status; the fact that the Obligor has a relationship with ADT or any of its Affiliates; and any other personally identifiable information, in each case, other than any such information provided in a manner that does not personally identify such Obligor and in compliance with applicable Privacy Requirements. “Original Term” means, with respect to any Receivable, the total number of months over which monthly installment payments are due under the related Contract. “Originator” means ADT in its capacity as Originator under the Sale Agreement. “Other Connection Taxes” means, with respect to an Affected Person, Taxes imposed as a result of a present or former connection between the Affected Person and the jurisdiction imposing such Tax (other than connections arising from the Affected Person having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Transaction Document, or sold or assigned an interest in any Loan or Transaction Document. “Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing and other similar Taxes payable or determined to be payable in connection with the execution, delivery, filing, recording, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, this Agreement or the other Transaction Documents, or with respect to the Pool Receivables, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than pursuant to an assignment request by the Borrower under Section 4.04(b)). “Parent” means ADT Inc., a Delaware corporation. “Participant” has the meaning set forth in Section 12.03(b). “Participant Register” has the meaning set forth in Section 12.03(b). “Paydown Notice” means a notice in substantially the form of Exhibit H hereto executed and delivered by the Borrower to the Agents pursuant to Section 3.02(b). “Payment Account” means the segregated account of the Borrower described as such on Schedule II and any successor account maintained with an Eligible Bank in accordance with Section 3.04. “Payment Recipient” has the meaning assigned to it in Section 10.12(a). “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions. 747634416.3 21671763747634416.9 21671763 36 “Performance Support Agreement” means the Amended and Restated Performance Support Agreement, dated on or about the Closing Date, among the Parent, the Administrative Agent and the Collateral Agent, in form and substance acceptable to the Collateral Agent, the Administrative Agent and the Required Lenders. “Permitted Adverse Claims” means any Lien (a) created under the Transaction Documents in favor of the Lenders, the Collateral Agent, the Administrative Agent, the Affected Persons, and the Group Agents, (b) created under the Sale Agreement in favor of the Borrower, or (c) as to which no enforcement collection, execution, levy, or foreclosure proceeding shall have been commenced or threatened and that solely secure the payment of taxes, assessments and/or governmental charges or levies, if and to the extent the same are either (x) not yet due and payable, or (y) being contested in good faith and as to which adequate reserves have been provided in accordance with GAAP, but, in any case, only to the extent that such Lien securing payment of such taxes or assessments or other governmental charges constitutes an inchoate tax lien. “Permitted Lien Filings” has the meaning set forth in Section 6.01(j). “Person” means an individual, partnership, corporation (including a business trust), joint stock company, trust, unincorporated association, joint venture, limited liability company or other entity, or a government or any political subdivision or agency thereof. “Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which any ADT Entity or any ERISA Affiliate thereof is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA. “Pool Deficiency Amount” means as of any time of determination, an amount equal to the sum, without duplication, of (i) the amount, if any, necessary to reduce the Aggregate Principal at such time to an amount equal to the Borrowing Base at such time, plus (ii) the amount, if any, which is necessary to reduce the aggregate Principal of all Exiting Lenders to zero, plus (iii) the amount, if any, necessary to reduce the Aggregate Principal to an amount equal to the Facility Limit, plus (iv) the amount, if any, necessary to reduce each Group’s aggregate Principal to an amount equal to the related Group Loan Limit. “Pool Receivable” means a Receivable in the Receivable Pool. “Prime Rate” means a rate per annum equal to the rate of interest quoted in the print edition of The Wall Street Journal, Money Rates Section as the USA “Prime Rate”, as published for such day (or, if such day is not a Business Day, for the preceding Business Day), or, if such rate is not so published for any day which is a Business Day, the rate announced by the Administrative Agent from time to time as its prime rate of interest at its principal office in New York, New York, such rate to change as and when such designated rate changes. “Principal” means, with respect to any Lender, the aggregate principal amount of all Loans made to the Borrower by such Lender pursuant to Article II, as reduced from time to time by Collections distributed and applied on account of such Principal pursuant to Section 3.01; provided, that if such Principal shall have been reduced by any distribution and thereafter all or a


 
747634416.3 21671763747634416.9 21671763 37 portion of such distribution is rescinded or must otherwise be returned for any reason, such Principal shall be increased by the amount of such rescinded or returned distribution as though it had not been made. “Privacy Requirements” means (i) Title V of the Gramm-Leach-Bliley Act, 15 U.S.C. § 6801 et seq.; (ii) federal regulations implementing such act and codified at 12 C.F.R. Part 1016 and 16 C.F.R. Part 313; (iii) Interagency Guidelines Establishing Standards For Safeguarding Obligor Information and codified at 12 C.F.R. Parts 30, 208, 211, 225, 263, 308, 364, 568, and 570, and 16 C.F.R. Part 314; (iv) the Health Insurance Portability and Accountability Act of 1996, 29 U.S.C. § 1181 et seq.; (v) the California Consumer Privacy Act of 2018, CAL. CIV. CODE § 1798.100 et seq. and implementing regulations, and (vi) other applicable federal, state and local laws, rules, regulations, and orders relating to the privacy and security of Obligor Information including, but not limited to, information security requirements promulgated by the Massachusetts Office of Consumer Affairs and Business Regulation and codified at 201 C.M.R. Part 17.00. “Product Type” means the type of product sold to the Obligor under the Contract, including “Tier 1”, “Tier 2”, “Tier 3”, “Burglar Alarm” or “CCTV”, each as designated in accordance with ADT’s Credit & Collection Policy. “Program Administration Agreement” means that certain administration agreement between a Conduit Lender and Program Administrator governing certain aspects of the administration of such Conduit Lender’s commercial paper facility or any other agreement having similar purposes, as in effect from time to time. “Program Administrator” means, with respect to any Conduit Lender, the administrator designated for such Conduit Lender under its Program Administration Agreement. “Program Information” is defined in Section 12.08. “Program Support Provider” means, with respect to a Conduit Lender, any Enhancement Provider, any Liquidity Provider and any bank, insurance company or other funding institution providing liquidity, credit enhancement or back-up purchase support or facilities to such Conduit Lender. “Ratable Share” means, for any Group, (x) at any time prior to the Termination Date, a percentage equal to (a) the Group Loan Limit of such Group divided by (b) the Facility Limit and (y) at any time from and after the Termination Date, zero. “Rate Tranche” means, at any time, a portion of a Lender’s Principal selected by the applicable Group Agent pursuant to Section 2.03 and designated as a Rate Tranche solely for purposes of computing Interest. “Receivable” means any right to payment from a Person, whether constituting an account, chattel paper, instrument, or a general intangible (as such terms are defined under the UCC), arising from the financing of the sale and installation costs of Equipment by ADT pursuant to a Contract and including any payment obligations of such Person with respect thereto; provided, however that no right to payment or other indebtedness owing by a Sanctioned Person shall (i) constitute a 747634416.3 21671763747634416.9 21671763 38 Receivable, (ii) be deemed to have been sold or contributed to the Borrower by ADT pursuant to the Sale Agreement, or (iii) pledged hereunder by the Borrower. “Receivable Pool” means at any time all of the outstanding Receivables that have been sold, assigned, contributed or otherwise transferred to the Borrower from time to time pursuant to the Sale Agreement (including all “Transferred Receivables” as defined in the Sale Agreement). “Records” means all Contracts and other documents, instruments, books, records, purchase orders, agreements, reports, and other information (including computer programs, tapes, disks, other information storage media, data processing software, and related property and rights) prepared or maintained by ADT, the Servicer, or the Borrower, respectively, with respect to the Pool Receivables, the Related Assets, the related Service Charge Receivables and the Obligors of such Pool Receivables. For the avoidance of doubt, “Records” shall include any Chattel Paper (tangible or electronic) evidencing any Pool Receivables. “Reference Time” with respect to any setting of the then-current Benchmark means (1) if such Benchmark is the LIBO Rate, 11:00 a.m. (London time) on the day that is two London banking days preceding the date of such setting, and (2) if such Benchmark is not the LIBO Rate, the time determined by the Administrative Agent in its reasonable discretion. “Register” has the meaning set forth in Section 12.03(e). “Related Assets” means (a) with respect to any Pool Receivable, (x) all security interests, hypothecations, reservations of ownership, liens, or other Adverse Claims, and property subject thereto from time to time purporting to secure payment of such Pool Receivable, including pursuant to the Contract pursuant to which such Pool Receivable was originated, together with all financing statements, registrations, hypothecations, charges, or other similar filings or instruments against an Obligor and all security agreements describing any collateral securing such Pool Receivable, if any, (y) all interest in any Equipment relating to any Contract giving rise to such Pool Receivable in respect of which such Equipment is sold or purported to be sold by ADT, including without limitation, the right to repossess such Equipment, and (z) all guarantees, insurance policies, and other agreements or arrangements of whatsoever character from time to time supporting of such Pool Receivable whether pursuant to the Contract pursuant to which such Pool Receivable was originated, including any obligation of any party under the Transaction Documents to promptly deposit amounts received in respect of Collections to an account, (b) all Collections in respect of, and other proceeds of, such Pool Receivable in respect of the period from and after the Cut-off Date immediately preceding the Transfer Date relating to such Pool Receivables, (c) all rights and remedies (but none of the obligations) of the Borrower under the Sale Agreement and the other Transaction Documents and any other rights or assets pledged, sold, or otherwise transferred to the Borrower thereunder, and (d) all the products and proceeds of any of the foregoing; provided, that the term “Related Assets” when used to refer to the Related Assets sold, assigned, contributed or transferred to the Borrower under the Sale Agreement shall refer to such term as defined in the Sale Agreement. “Related Conduit Lender” means, with respect to any Lender, each Conduit Lender which is, or pursuant to any Assignment and Acceptance Agreement or otherwise pursuant to this Agreement becomes, included as a Conduit Lender in such Lender’s Group, as designated on its 747634416.3 21671763747634416.9 21671763 39 signature page hereto or in such Assignment and Acceptance Agreement or other agreement executed by such Lender, as the case may be. “Related Lender” means with respect to any Conduit Lender, each Lender listed as a Related Lender for each Conduit Lender as set forth on the signature pages of this Agreement or in any Assignment and Acceptance Agreement. “Relevant Governmental Body” means the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or any successor thereto. “Remaining Term” means, as of any date of determination, with respect to any Receivable, the number of remaining unpaid monthly installment payments due under the related Contract for the payment of the Financed Unpaid Balance following such date of determination. “Reporting Date” is defined in Section 3.01. “Required Lenders” means, at any time, Lenders whose aggregate Principal at such time aggregate to more than 50.00% of the Lenders’ Aggregate Principal at such time; provided, however, that if at such time any Lender is a Defaulting Lender, the Principal of such Defaulting Lender shall be disregarded for purposes of determining the Required Lenders unless such Defaulting Lender is the sole Lender or all Lenders are Defaulting Lenders. “Required Reserves” means the sum of (i) the Loss Reserve, (ii) the Interest and Fee Reserve, and (iii) the Conditional Service Guaranty Reserve. At any time during any calendar month prior to applying Collections in accordance with Section 3.01(d) on the Settlement Date in such calendar month, the Required Reserves shall be calculated as of the most recent Cut-off Date without giving effect to any Transfers occurring after such Cut-off Date. At any time during any calendar month after applying Collections in accordance with Section 3.01(d) on the Settlement Date in such calendar month, the Required Reserves shall be calculated based upon (x) the combined Receivable Pool that includes any Receivables that were added to the Receivable Pool as a result of any Transfers that occurred after such Cut-off Date, based on Financed Unpaid Balances as of such Cut-off Date and (y) data with respect to all applicable Receivables as of such Cut-off Date. “Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority. “Response Date” is defined in Section 2.05. “Responsible Officer” means in respect of an ADT Entity or the Servicer any executive officer, assistant treasurer, treasurer, or controller of such ADT Entity, and any other officer of such ADT Entity or the Servicer, as the case may be, responsible for the administration of this Agreement. “Retained Interest” has the meaning set forth in Section 12.19. 747634416.3 21671763747634416.9 21671763 40 “S&P” means S&P Global Ratings and any successor thereto that is a nationally recognized statistical rating organization. “Sale Agreement” has the meaning set forth in the Preliminary Statements. “Sanctioned Country” means, at any time, a country or territory which is the subject or target of any Sanctions, including, without limitation, as of the date hereof, Cuba, Crimea (Ukraine), Iran, Sudan, Syria, and North Korea. “Sanctioned Person” means, at any time, (a) any Person currently the subject or the target of any Sanctions, including any Person listed in any Sanctions-related list of designated Persons maintained by OFAC (or any successor thereto) or the U.S. Department of State, available at: http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx, or as otherwise published from time to time; (b) that is fifty-percent or more owned, directly or indirectly, in the aggregate by one or more Persons described in clause (a) above; (c) that is operating, organized or resident in a Sanctioned Country; (d) with whom engaging in trade, business, or other activities is otherwise prohibited or restricted by Sanctions; or (e) (i) an agency of the government of a Sanctioned Country, (ii) an organization controlled by a Sanctioned Country, or (iii) a person resident in a Sanctioned Country, to the extent subject to a sanctions program administered by OFAC. “Sanctions” is defined in Section 6.01(y)(ii). “Sanctions Laws” is defined in Section 6.01(y)(ii). “SEC” means the U.S. Securities and Exchange Commission. “Securities Exchange Act” means the United States Securities Exchange Act of 1934, as amended. “Second Largest State” means as of any date of determination, the state (or commonwealth) in the United States, in respect of which the second largest amount of aggregate Financed Unpaid Balances of Eligible Receivables in the Receivable Pool in respect of Obligors with Billing Addresses in such state (or commonwealth) relate. “Secured Parties” means each Credit Party, each Indemnified Party and each Affected Person. “Service Charge Receivable” means any right to payment from a Person, whether constituting an account, chattel paper, instrument, a payment intangible or a general intangible (as such terms are defined under the UCC), arising from ADT’s providing the Monitoring Services pursuant to a contract and including any payment obligations of such Person with respect thereto. “Servicer” has the meaning set forth in the preamble to this Agreement. “Servicing Fee” means in respect of the Receivable Pool, for any day, an amount equal to the product of (i) the Servicing Fee Rate, times the Financed Unpaid Balance of all Pool Receivables at the end of such day, and (ii) 1/360.


 
747634416.3 21671763747634416.9 21671763 41 “Servicing Fee Rate” means 0.50%. “Set-off Party” is defined in Section 12.04. “Settlement Date” means (a) the twentieth (20th) day of each calendar month (or, if such day is not a Business Day, the immediately succeeding Business Day), and (b) on and after the Acceleration Date, each additional day selected from time to time by the Administrative Agent (it being understood that the Administrative Agent may select such Settlement Date to occur daily); provided, that the first Settlement Date shall be July 20, 2021; provided, further, that the last Settlement Date shall be the Final Payout Date. “Settlement Period” means each calendar month; provided, that the last Settlement Period shall end on the Final Payout Date. “SOFR” means, with respect to any Business Day, a rate per annum equal to the secured overnight financing rate for such Business Day publishedas administered by the SOFR Administrator on the SOFR Administrator’s Website on the immediately succeeding Business Day. “SOFR Adjustment” means a percentage equal to 0.10% (10.00 basis points) per annum. “SOFR Administrator” means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate). “SOFR Administrator’s Website” means the website of the Federal Reserve Bank of New York, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time. “SOFR Determination Day” has the meaning specified in the definition of “Adjusted Daily Simple SOFR”. “SOFR Rate Day” has the meaning specified in the definition of “Adjusted Daily Simple SOFR”. “Structuring Agent” means Mizuho, in its capacity as structuring agent for the transactions contemplated by this Agreement and the other Transaction Documents. “Subsidiary” means, as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock of each class or other interests having ordinary voting power (other than stock or other interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such entity are at the time owned, or management of which is otherwise controlled: (a) by such Person, (b) by one or more Subsidiaries of such Person or (c) by such Person and one or more Subsidiaries of such Person. “Successor Notice” is defined in Section 8.01. “Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto. 747634416.3 21671763747634416.9 21671763 42 “Telco98” means the numeric credit modeling score developed by Equifax. “Termination Date” means the earlier to occur of (a) October 28May 22, 20222023 (the “Scheduled Termination Date”), and (b) the occurrence of an Event of Termination. “Term SOFR” means, for the applicable Corresponding Tenor as of the applicable Reference Time, the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body. “Term SOFR Notice” means a notification by the Administrative Agent to the Group Agents and the Borrower of the occurrence of a Term SOFR Transition Event. “Term SOFR Transition Event” means the determination by the Administrative Agent that (a) Term SOFR has been recommended for use by the Relevant Governmental Body, (b) the administration of Term SOFR is administratively feasible for the Administrative Agent and (c) a Benchmark Transition Event has previously occurred resulting in a Benchmark Replacement in accordance with Section 2.05 that is not Term SOFR. “Third Largest State” means, as of any date of determination, the state (or commonwealth) in the United States, in respect of which the third largest amount of aggregate Financed Unpaid Balances of Eligible Receivables in the Receivable Pool in respect of Obligors with Billing Addresses in such state (or commonwealth) relate. “Tranche Principal” means in relation to any Rate Tranche and any Lender, the amount of such Lender’s Principal allocated by the related Group Agent to such Rate Tranche pursuant to Article II; provided, that at all times the aggregate amounts allocated to all Rate Tranches of all Lenders shall equal the Aggregate Principal; provided, further, that at all times the aggregate amounts allocated to all Rate Tranches in respect of any Lender shall equal the aggregate Principal of such Lender. “Transaction Documents” means (i) this Agreement, the Sale Agreement, the Fee Letters, each Control Agreement, the limited liability company agreement of the Borrower, the Performance Support Agreement, all amendments, waivers and other modification to any of the above-referenced agreements executed and delivered by any ADT Entity, and (ii) each other agreement designated as a “Transaction Document” by the Administrative Agent, the Borrower and ADT. “Transfer” means a sale or contribution of Receivables and Related Assets by the Originator to the Borrower under the Sale Agreement. “Transfer Date” means the date on which a Transfer occurs under the Sale Agreement. “True Sale” means, with respect to any Receivable, the sale, contribution or transfer of an ownership interest in such Receivable (not the granting of a security interest therein), within the meaning of all applicable Law, including the Bankruptcy Code, which sale or transfer was not made with the intent to hinder, delay or defraud any present or future creditors and is not voidable or subject to avoidance under the Bankruptcy Code. 747634416.3 21671763747634416.9 21671763 43 “UCC” means the Uniform Commercial Code as from time to time in effect in the applicable jurisdiction. “UK Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended form time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain Affiliates of such credit institutions or investment firms. “UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution. “Unadjusted Benchmark Replacement” means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment. “Unmatured Event of Termination” means an event that but for notice or lapse of time or both would constitute an Event of Termination. “Unpaid Balance” means, as of any time with respect to a Receivable, an amount equal to the sum of all remaining unpaid monthly installment payments owed by the related Obligor in respect of such Receivable under the related Contract as of such time of determination. “USA PATRIOT Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. No. 107 56 (signed into law October 26, 2001)). “U.S. Government Securities Business Day” means any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities. “Voting Securities” of any Person means the stock or other ownership or equity interests, of whatever class or classes, the holders of which ordinarily have the power to vote for the election of the members of the board of directors, managers, trustees, or other voting members of the governing body of such Person (other than stock or other ownership or equity interests having such power only by reason of the happening of a contingency). “Weighted Average Advance Rate” means, as of any date of determination, the lesser of (A) 85.00%, and (B) the percentage obtained by (i) multiplying the Advance Rate applicable to each Eligible Receivable in the Receivable Pool with a fraction, (x) the numerator of which is the Financed Unpaid Balance of such Eligible Receivable, and (y) the denominator of which is the aggregate Financed Unpaid Balance of all Eligible Receivables in the Receivable Pool, and (ii) summing all of the products calculated pursuant to clause (i). “Weighted Average Life” means, as of any date of determination, with respect to all Receivables in the Receivable Pool which are Eligible Receivables, the number of months obtained by: 747634416.3 21671763747634416.9 21671763 44 (a) summing the products obtained by multiplying (i) the Average Life as of such date of determination of each such Receivable, by (ii) the Financed Unpaid Balance of such Pool Receivable; and dividing such sum by: (b) the aggregate Financed Unpaid Balances at such time of all Pool Receivables which are Eligible Receivables. “Weighted Average Swap Rate” means, as of any date of determination, the interpolated swap rate on such date for a notional USD LIBORSOFR fixed-to-floating interest rate swap (as such SOFR swap rate is published by a nationally recognized source, including by Bloomberg on page IRSB (under SOFR Swap tab) or under ticker USOSFR1 for 1-year SOFR swap rate, USOSFR2 for 2-year SOFR swap rate, and USOSFR3 for 3-year SOFR swap rate having a tenor (expressed in years) equal to the quotient of the Weighted Average Life as of such date, divided by 12; provided, however, that if on any date of determination the LIBO RateAdjusted Daily Simple SOFR is no longer the Benchmark or if the Administrative Agent has determined that the USD LIBORSOFR swap rates necessary for such interpolation are no longer published by a nationally recognized source for interest and swap rate quotations, then either (a) the foregoing reference to “USD LIBORSOFR” shall be deemed to mean (and to have been replaced by) a substitute reference rate corresponding to the Benchmark and selected by the Administrative Agent, for which swap rates at the necessary tenors are then being published a nationally recognized source for interest and swap rate quotations, or (b) if in the Administrative Agent’s judgment (i) no substitute reference rate meeting the criteria set forth in clause (a) above is then available or (ii) the applicable published swap rates do not adequately and fairly reflect the cost of entering into actual fixed-to-floating interest rate swaps based on such reference rate and having the applicable tenors, then the “Weighted Average Swap Rate” shall mean any substitute rate per annum selected by the Administrative Agent in its reasonable discretion. For purposes of this definition, any interpolated swap rate shall be determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) as the swap rate that results from interpolating on a linear basis between: (A) the applicable swap rate for the longest tenor then published by a nationally recognized source for interest and swap rate quotations that is shorter than the tenor of the applicable notional interest rate swap (calculated as the Weighted Average Life as of such date, divided by 12) and (B) the applicable swap rate for the shortest tenor then published by a nationally recognized source for interest and swap rate quotations that is longer than the tenor of the applicable notional interest rate swap (calculated as the Weighted Average Life as of such date, divided by 12). “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA. “Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In


 
747634416.3 21671763747634416.9 21671763 45 Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that Person or any other Person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers. SECTION 1.02. Other Interpretative Matters. All accounting terms not specifically defined herein shall be construed in accordance with GAAP. All terms used in Article 9 of the UCC in the State of New York and not specifically defined herein, are used herein as defined in such Article 9. Unless otherwise expressly indicated, all references herein to “Article,” “Section,” “Schedule” or “Exhibit” shall mean articles and sections of, and schedules and exhibits to, this Agreement. For purposes of this Agreement, unless the context otherwise requires: (a) references to any amount as on deposit or outstanding on any particular date means such amount at the close of business on such day; (b) the words “hereof,” “herein” and “hereunder” and words of similar import refer to this Agreement as a whole and not to any particular provision of this Agreement (and the words “thereof,” “therein” and “thereunder” have a corresponding meaning when used with other agreements or documents); (c) references to any Article, Section, Schedule or Exhibit are references to Articles, Sections, Schedules and Exhibits in or to such agreement (or the certificate or other document in which the reference is made), and references to any paragraph, subsection, clause or other subdivision within any Section or definition refer to such paragraph, subsection, clause or other subdivision of such Section or definition; (d) the term “including” means “including without limitation”; (e) references to any Applicable Law where a particular date or timeframe is relevant refer to that Applicable Law as amended or otherwise modified and as in effect on such date or within such timeframe and, if applicable, includes any successor Applicable Law; (f) references to any agreement where a particular date or timeframe is relevant refer to that agreement as amended or otherwise modified and as in effect on such date or within such timeframe; otherwise references to any agreement refer to that agreement as from time to time amended, restated, extended, or supplemented or as the terms of such agreement are waived or modified in accordance with its terms; (g) references to any Person include that Person’s permitted successors and assigns; (h) headings and captions are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof; (i) unless otherwise provided, in the calculation of time from a specified date to a later specified date, the term “from” means “from and including”, and the terms “to” and “until” each means “to but excluding”; (j) terms in one gender include the parallel terms in the neuter and opposite gender; (k) references to any amount as on deposit or outstanding on any particular date means such amount at the close of business on such day and (l) the term “or” is not exclusive. ARTICLE II TERMS OF THE LOANS SECTION 2.01. Loan Facility. Upon a request by the Borrower pursuant to Section 2.02, and on the terms and subject to the conditions hereinafter set forth, the Lenders may, in their respective sole discretion, make Loans to the Borrower from time to time on a revolving basis, during the period from the Closing Date to the Termination Date. Under no circumstances shall any Lender be obligated to make any such Loan to the extent that, after giving effect to such Loan 747634416.3 21671763747634416.9 21671763 46 and all other Loans being made on the proposed Borrowing Date and the application of Collections pursuant to Section 3.01(d) on such date: (i) the Aggregate Principal would exceed the Facility Limit; (ii) the sum of (A) the Principal of such Lender, plus (B) the aggregate outstanding Principal of the other Lenders in its Group, would exceed the Group Loan Limit of such Lender’s Group; (iii) the aggregate outstanding Principal of such Lender would exceed its Lender Loan Limit; or (iv) the Aggregate Principal would exceed the Borrowing Base. The Borrower may use the proceeds of the Loans to (w) purchase the Existing Receivable Pool, (x) pay the purchase price of Receivables and Related Assets under the Sale Agreement, (y) pay its other expenses and liabilities under the Transaction Documents or (z) make distributions in respect of its equity to the extent permitted under this Agreement. SECTION 2.02. Making Loans. (a) The Borrower hereby requests an initial Loan in the principal amount of $130,357,302.35 to be made on the Closing Date (the “Initial Loan”) as contemplated in Section 5.03, the proceeds of which shall be retained by the Lenders as contemplated in such Section 5.03. Each other Loan hereunder shall be made on at least five (5) days’ prior written request from the Borrower to the Administrative Agent and each Group Agent in the form of a Loan Request attached hereto as Exhibit A. Each such request for a Loan shall be made no later than 11:00 a.m. (New York City time) on a Business Day (it being understood that any such request made after such time shall be deemed to have been made on the following Business Day) and shall specify (i) the amount of the Loan(s) requested (which shall not be less than $1,000,000 and shall be an integral multiple of $100,000), (ii) the account to which the proceeds of such Loans shall be distributed, (iii) the date such requested Loan is to be made (which shall be a Business Day and a Settlement Date) (a “Borrowing Date”), (iv) a detailed list of the Receivables, if any, proposed to be sold to the Borrower on such proposed Borrowing Date, including in respect of each Receivable the name and Billing Address of the related Obligor (or the identification number or code of such Obligor, provided that it includes the State (or commonwealth) in the United States in respect of such Billing Address), the account number or Contract identification number, the Remaining Term, the ADT Credit Score, the Product Type, whether a credit check was completed, the Unpaid Balance, the Financed Unpaid Balance, the aggregate Unpaid Balance of all such Receivables, and such additional detail that the Administrative Agent may from time to time reasonably request, of each Receivable in each case as of the immediately preceding Cut-off Date, and (v) an Information Package in respect of the Settlement Period immediately preceding such proposed Borrowing Date specified in such Loan Request and as of the most recent Cut-off Date and which shall also contain the pro forma information regarding any such proposed Loans required by Section 3.01(c). (b) Not later than 1:00 pm (New York City time) on the same Business Day of its receipt of a Loan Request together with the related Information Package pursuant to the foregoing clause (a) (it being understood that if any such Loan Request or Information Package is 747634416.3 21671763747634416.9 21671763 47 received by the Administrative Agent after 11:00 a.m. (New York City time) such Loan Request and Information Package shall be deemed to have been received on the following Business Day), the Administrative Agent shall deliver a copy of such Loan Request and Information Package to each Group Agent along with the allocation of the requested Loans among the Groups (which shall be ratable based on the Group Loan Limits). Each Group Agent shall notify the Administrative Agent no later than 4:00 p.m. (New York City time) on the second (2nd) Business Day preceding such proposed Borrowing Date whether the Lenders in its Group approve or reject the making of the requested Loans; provided, that to the extent that any Group Agent does not notify the Administrative Agent that such Lenders approve such requested Loans on or before 4:00 p.m. (New York City time) on such day, it shall be deemed to have rejected the requested Loans, unless on such day and prior to any proposed reallocation by the Administrative Agent of such Group’s deemed rejected portion of the Ratable Share of the Loans in respect of such requested borrowing, such non-responding Group Agent approves in writing such proposed borrowing in the full amount of such requested Loans. In the event that some but not all of the Groups agree to fund their Ratable Share of the requested Loans, the Borrower may request the Administrative Agent to re- allocate the rejected portion of the requested Loans, and seek approval among the Groups that approved the original requested borrowing, based on the Ratable Share of the Group Loan Limits of such Groups; provided, that there shall be no obligation of any Lender in any Group to fund any such incremental Loans. Upon final allocation, which shall in no event result in the Principal of any Group to exceed its Group Loan Limit, the Administrative Agent shall advise each Group Agent of the amount of the requested Loans to be funded by each Lender in its Group and the allocated share of each Lender of such borrowing (the “Allocated Share”), and each such approving Lender shall make available to the Borrower its Allocated Share of the applicable Loans on the proposed Borrowing Date in accordance with clause (c) below. For the avoidance of doubt, no Lender shall have any obligation to approve any Loan Request and no Loans shall be made on a day which does not constitute a Settlement Date. (c) On each Borrowing Date for any Loans which have been requested and approved in accordance with clause (a) and (b) above, the applicable Lenders shall, upon satisfaction of the applicable conditions set forth herein (including in Article V) and upon the completion of the application of Collections in accordance with Section 3.01(d) with respect to such Settlement Date, make available to the Administrative Agent in immediately available funds their Allocated Share of the Loans with respect to such borrowing, which shall equal the lesser of: (i) the amount requested by the Borrower under clause (a) above, and (ii) the amount which, after giving effect to such Loans and the application of all Collections in accordance with Section 3.01(d), in each case, on such Borrowing Date, is the largest amount that will not cause (a) the Aggregate Principal to exceed the Facility Limit, or (b) the Aggregate Principal to exceed the Borrowing Base. The Administrative Agent shall make all such funds so received available to the Borrower in like funds, by wire transfer of such funds in accordance with the instructions provided in the applicable Loan Request. (d) Unless the Administrative Agent shall have received notice from a Lender prior to the proposed Borrowing Date that such Lender will not make available to the Administrative Agent such Lender’s Allocated Share of such borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.02(c) and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its Allocated Share of the 747634416.3 21671763747634416.9 21671763 48 applicable borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of a payment to be made by such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, and (ii) in the case of a payment to be made by the Borrower, the interest rate applicable to the Loans. If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period. If such Lender pays its Allocated Share of the applicable borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such Borrowing. (e) No Lender shall be responsible for the failure of any other Lender to make funds available to the Borrower in connection with any Loan hereunder. (f) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender, with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation. SECTION 2.03. Interest and Fees. (a) On each Settlement Date, the Borrower shall, in accordance with the terms and priorities for payment set forth in Section 3.01, pay to each applicable Group Agent, each applicable Lender, the Administrative Agent and/or the Structuring Agent certain fees (collectively, the “Fees”) in the amounts set forth in the fee letter agreements from time to time entered into, among the Borrower, the members of the applicable Group (or their Group Agent on their behalf) and/or the Administrative Agent or the Structuring Agent (each such fee letter agreement, as amended, restated, supplemented or otherwise modified from time to time, collectively being referred to herein as the “Fee Letter”). (b) Each Rate Tranche of the Principal of each Lender shall accrue interest on each day when such Principal remains outstanding at the then applicable Interest Rate for such Lender and Rate Tranche. The Borrower shall pay all Interest and Fees accrued during each Settlement Period on the immediately following Settlement Date in accordance with the terms and priorities for payment set forth in Section 3.01.


 
747634416.3 21671763747634416.9 21671763 49 SECTION 2.04. [Reserved]Adjusted Daily Simple SOFR Conforming Changes. In connection with the use or administration of Adjusted Daily Simple SOFR, the Administrative Agent will have the right, in consultation with the Borrower, to make Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Transaction Document, any amendments implementing such Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Transaction Document. The Administrative Agent will promptly notify the Borrower and the Group Agents of the effectiveness of any Conforming Changes in connection with the use or administration of Adjusted Daily Simple SOFR. SECTION 2.05. Extension of the Scheduled Termination Date. Provided that no Unmatured Event of Termination or Event of Termination has occurred and is continuing, no earlier than three (3) months prior to (but no later than forty-five (45) days prior to) the then current Scheduled Termination Date, the Borrower (or the Servicer on the Borrower’s behalf) may request an extension of the then current Scheduled Termination Date by submitting a request for an extension (each, an “Extension Request”) to the Collateral Agent and the Administrative Agent, which the Administrative Agent shall, upon receipt, forward to each Group Agent. Such Extension Request must specify (i) the date (which must be at least thirty (30) days after the applicable Extension Request is delivered to the Collateral Agent and the Administrative Agent) as of which each Lender is requested to respond to such Extension Request by (each, a “Response Date”). Promptly upon receipt of an Extension Request, each Group Agent (on behalf of its Lenders) shall notify the Servicer (on behalf of the Borrower) as to whether each Lender in its Group approves such Extension Request (it being understood that each Lender in a Group may accept or decline such Extension Request in its sole discretion). The failure of any Lender to affirmatively notify the Servicer (on behalf of the Borrower) of such Lender’s election regarding such Extension Request by the applicable Response Date shall be deemed to be a refusal by such Lender to grant the requested extension. In the event that the Administrative Agent and the Lenders with Lender Loan Limits which aggregate to an amount at least equal to 75% of the then current Lenders’ Lender Loan Limit shall approve of such request (such date, the “Approval Date”), then the current Scheduled Termination Date shall be extended to the date which is 364 days after such Approval Date and each such Lender and the other parties hereto that approved such Extension Request shall enter into such documents as the Administrative Agent and such Lenders may deem necessary or appropriate to reflect such extension. In the event that the Lenders relating to a Group decline an Extension Request (each such declining Lender, an “Exiting Lender”), the Group Agent for such Exiting Lenders shall so notify the Servicer (on behalf of the Borrower), the Collateral Agent, the Administrative Agent, and each of the other parties hereto of such Exiting Lender’s determination. If the Lenders of a Group become Exiting Lenders, such Groups’ Group Loan Limit shall automatically be reduced to zero on the then-current Termination Date, without giving effect to any other Lenders of any other Group’s agreement to extend the Termination Date, if any. This Section 2.05 shall not be deemed to limit or restrict the ability of the parties hereto to extend the Termination Date pursuant to an amendment in accordance with Section 12.01. SECTION 2.06. Benchmark Replacement. (a) Benchmark Replacement. Notwithstanding anything to the contrary herein or in any other TransactionLoan Document, ifupon the occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date 747634416.3 21671763747634416.9 21671763 50 have occurred prior to the Reference Time in respect of any setting of, the Administrative Agent and the Borrower may amend this Agreement to replace the then-current Benchmark, then (x) if with a Benchmark Replacement is determined in accordance with clause (1) or (2) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Transaction Document in respect of such Benchmark setting and subsequent Benchmark settings without any amendment to, or further action or consent of any other party to, this Agreement or any other Transaction Document and (y) if a Benchmark Replacement is determined in accordance with clause (3) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Transaction Document in respect of any Benchmark setting at or after. Any such amendment with respect to a Benchmark Transition Event will become effective at 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to each Group Agent without any amendment to, or further action or consent of any other party to, this Agreement or any other Transaction DocumentAdministrative Agent has posted such proposed amendment to all affected Lenders and the Borrower so long as the Administrative Agent has not received, by such time, written notice of objection to such Benchmark Replacementamendment from Lenders comprising the Required Lenders. No replacement of a Benchmark with a Benchmark Replacement pursuant to this Section 2.06(a) will occur prior to the applicable Benchmark Transition Start Date. (b) Notwithstanding anything to the contrary herein or in any other Transaction Document and subject to the proviso below in this paragraph, if a Term SOFR Transition Event and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then the applicable Benchmark Replacement will replace the then-current Benchmark for all purposes hereunder or under any Transaction Document in respect of such Benchmark setting and subsequent Benchmark settings, without any amendment to, or further action or consent of any other party to, this Agreement or any other Transaction Document; provided that, this clause (b) shall not be effective unless the Administrative Agent has delivered to the Group Agents and the Borrower a Term SOFR Notice. (b) (c) Benchmark Replacement Conforming Changes. In connection with the use, administration, adoption or implementation of a Benchmark Replacement, the Administrative Agent will have the right to make Benchmark Replacement, in consultation with the Borrower, to make Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Transaction Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Transaction Document. (c) (d) Notices; Standards for Decisions and Determinations. The Administrative Agent will promptly notify the Borrower and each Group Agent of (i) any occurrence of a Benchmark Transition Event, a Term SOFR Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date, (ii) thethe implementation of any Benchmark Replacement, and (iiiii) the effectiveness of any Benchmark Replacement Conforming Changes, (iv) in connection with the use, administration, adoption or implementation of a Benchmark Replacement. The Administrative Agent will notify the Borrower of (x) the removal or reinstatement of any tenor of a Benchmark pursuant to clause (ed) below and (vy) the 747634416.3 21671763747634416.9 21671763 51 commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent, any Lender or any Group Agent pursuant to this Section, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Transaction Document, except, in each case, as expressly required pursuant to this Section. (d) (e) Unavailability of Tenor of Benchmark. Notwithstanding anything to the contrary herein or in any other Transaction Document, at any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including Term SOFR or the LIBO Rate) and either (A) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion or (B) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is not or will be no longernot be representative, then the Administrative Agent may modify the definition of “Interest Period” (or any similar or analogous definition) for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is not or will no longernot be representative for a Benchmark (including a Benchmark Replacement), then the Administrative Agent may modify the definition of “Interest Period” (or any similar or analogous definition) for all Benchmark settings at or after such time to reinstate such previously removed tenor. (e) (f) Benchmark Unavailability Period. During any Benchmark Unavailability Period, the Interest that would be computed using the LIBO Rate shall be computed usingcomponent of the Base Rate based upon the then-current Benchmark will not be used in any determination of the Base Rate. ARTICLE III SETTLEMENT PROCEDURES AND PAYMENT PROVISIONS SECTION 3.01. Settlement Procedures. The parties hereto will take the following actions with respect to each Settlement Date: (a) By no later than the fifth (5th) Business Day prior to each Settlement Date and on the Closing Date (each a “Reporting Date” for and related to the Settlement Period ending immediately prior to such date and, to the extent required in clause (b) below, the Interest Period ending immediately prior to such Settlement Date), the Servicer shall deliver to the Collateral Agent and the Administrative Agent, which the Administrative Agent shall, upon receipt, forward to each Group Agent, an e-mail attaching an Excel file and a file in .pdf or similar format signed by a Responsible Officer of the Servicer containing the information described in Exhibit D, including the information calculated by the Servicer pursuant to this Section 3.01 (each, an 747634416.3 21671763747634416.9 21671763 52 “Information Package”) for and related to the Settlement Period ending immediately prior to such Reporting Date; provided, that the loan level data tape set forth in Exhibit D shall only be required to be provided in connection with the Settlement Dates occurring in March, June, September and December, and upon request thereof by Mizuho, within ten (10) Business Days of such request; provided further, that during the continuance of an Unmatured Event of Termination or Event of Termination, the Administrative Agent may (or at the request of the Required Lenders shall) request, in its reasonable discretion, the Servicer to, and the Servicer agrees to, deliver any information related to the Pool Receivables and Related Assets, or the transactions contemplated hereby as the Administrative Agent or the Required Lenders shall request (including a calculation of the Net Portfolio Balance, the Required Reserves, the Borrowing Base and each component or subcomponent thereof (including as determined on dates other than as set forth therein), the daily Collections, etc.) on each Business Day. (b) On or before the second (2nd) Business Day prior to each Reporting Date, each Group Agent shall notify the Administrative Agent and the Servicer of (i) the amount of Interest accrued in respect of each related Rate Tranche funded by the Lenders in each Group for each day during the most recently ended Settlement Period, and (ii) all Fees accrued each day during the most recently ended Settlement Period, and (iii) all other amounts payable or to be paid by the Borrower under this Agreement and the other Transaction Documents on the immediately succeeding Settlement Date (other than amounts described in clause (c) below) to such Group Agent or any Lender in, or Affected Person related to, any Group. Such Interest, Fees and other amounts accrued in respect of such immediately preceding Settlement Period or Interest Period, as applicable, shall be due and payable by the Borrower on the next succeeding Settlement Date. (c) On each Reporting Date, the Servicer shall include in the Information Package, calculations, as of the most recent Cut-off Date for the related Settlement Period, the following: (i) without taking into account any Receivables included in any Transfers following such Cut-off Date, (A) the Unpaid Balance and Financed Unpaid Balance of each of the Pool Receivables, the Aggregate Principal, the aggregate Principal of each Group, the Required Reserves, the Net Portfolio Balance, the Borrowing Base and each component of each of the foregoing, (B) the amount of the reduction or increase (if any) in each of the Required Reserves, the Net Portfolio Balance, the Borrowing Base, the Aggregate Principal and the aggregate Principal of each Group since the Cut-off Date immediately preceding the Cut-off Date for the most recently ended Settlement Period, and each component of each of the foregoing (including a breakdown of Collections and Deemed Collections and any related Dilutions or other reductions, if any, during such Settlement Period), (C) the excess (if any) of the Aggregate Principal over the Borrowing Base, (D) the excess (if any) of the Aggregate Principal, over the Facility Limit, (E) the excess (if any) of the aggregate Principal of each Group, over the Group Loan Limit of each such Group, (F) the aggregate Principal of any Exiting Lenders, (G) the Pool Deficiency Amount (if any), (H) the total Deemed Collections for such Settlement Period, (I) the amount of all other Obligations payable on the next Settlement Date, (J) the Excess Concentration Amount, (K) the Pool Receivables (and the aggregate Financed Unpaid Balance thereof) that are subject to the Conditional Service Guaranty and have been


 
747634416.3 21671763747634416.9 21671763 53 originated within the six (6) months prior to such Reporting Date, and (L) the amount of Monthly Collections; (ii) the information specified in clause (i) above as determined (including on a pro forma basis, as applicable) based on Financed Unpaid Balances as of the Cut-off Date, after giving effect to all Transfers effected since the most recent Cut-off Date, including any such Transfers to be effected on or prior to the next Settlement Date; (iii) the computation of the Collections available for allocation pursuant to each sub-sections (i) through (vii) of Section 3.01(d) on the next Settlement Date; and (iv) the computation of the Loans, if any, to be funded by the Lenders on the next Settlement Date. (d) The Servicer shall, on each Settlement Date, to the extent funds are available in the Payment Account, transfer to the Administrative Agent the Monthly Collections for the Administrative Agent to distribute for the following purposes and in the following order of priority as identified in the related Information Package: (i) first, to the Servicer, all accrued then due and unpaid Servicing Fee; (ii) second, to the Collateral Agent and the Administrative Agent in respect of all costs, expenses, Fees and Indemnified Amounts then due and payable to the Collateral Agent and the Administrative Agent (solely in their capacities as such) under this Agreement and the other Transaction Documents; provided, that the expenses and Indemnified Amounts payable under this clause (ii) on any Settlement Date shall not in the aggregate exceed $500,000; (iii) third, on a pari passu basis, to each Group Agent ratably (based on the aggregate accrued and unpaid Interest and Fees due and payable to them and the members of their respective Groups) Interest accrued and unpaid on all Rate Tranches relating to the Receivable Pool for the Lenders in its Group howsoever funded or maintained during or prior to the most recently ended Settlement Period and to the accrued and unpaid Fees for its Group then due and payable; (iv) fourth, to the Group Agents to the reduction of the Aggregate Principal (A) if clause (C) below does not apply, to reduce, to the extent necessary, the Pool Deficiency Amount to zero in the priority set forth in Section 3.01(e), ratably (based upon the respective amounts of reduction of Principal owed to each Group in respect of each application to the Lenders in each such Group Agent’s Group), determined without taking into account any Receivables to be acquired by the Borrower on such Settlement Date funded by Loans made on such Settlement Date, (B) if clause (C) below does not apply, in the amount required (without duplication of any amounts otherwise paid under this Section 3.01(d)) pursuant to an optional prepayment in accordance with Section 3.02(b), ratably (based upon their respective aggregate Principal), or (C) during the continuance of an Event of Termination or an Unmatured Event of Termination or following the Termination Date, ratably (based upon their respective aggregate Principal) to reduce the 747634416.3 21671763747634416.9 21671763 54 Aggregate Principal to zero; provided, that for the avoidance of doubt, any amounts paid to any Group Agent pursuant to this clause (iv) shall be applied in reduction of the Principal of the relevant Lenders in such Group Agent’s Group; (v) fifth, to the Group Agents and the Lenders ratably (based on the aggregate accrued and unpaid Borrower Obligations owing) in respect of all costs, expenses and Indemnified Amounts due and payable to the Group Agents and the Lenders (solely in their capacities as such) under this Agreement and the other Transaction Documents; (vi) sixth, ratably (based upon the amounts due and payable), to the Collateral Agent and the Administrative Agent in respect of expenses and Indemnified Amounts due and payable to the Collateral Agent and the Administrative Agent, to the extent such amounts were not paid pursuant to clause (ii) above, (vii) seventh, to each Group Agent ratably (based on the aggregate accrued and unpaid Borrower Obligations owing to their respective Groups) all accrued and unpaid other Borrower Obligations due and payable to any Affected Persons in such Group Agent’s Group; (viii) eighth, to the account bank(s) maintaining any Collection Account or Payment Account, any fees, returned item amounts or other amounts due and owing to such account bank(s) in respect of such accounts or the related Control Agreements that remain unpaid; and (ix) ninth, to the Borrower, for its own account, any remaining amounts. (e) The Administrative Agent shall apply Monthly Collections in the Payment Account which are available to reduce the Pool Deficiency Amount in accordance with clause (iv)(A) of Section 3.01(d) to the applicable Group Agents, pari passu based upon respective amounts owed to each Lender in the related Groups for each such specified applications in the following order: (i) first, to reduce the Aggregate Principal to an amount equal to the Borrowing Base at such time, (ii) second, to reduce the Aggregate Principal to an amount equal to the Facility Limit, (iii) third, to reduce each Group’s aggregate Principal to an amount equal to the related Group Loan Limit, and (iv) fourth to reduce the aggregate Principal of all Exiting Lenders to zero. SECTION 3.02. Deemed Collections; Repayment of Principal, Etc. (a) Deemed Collections. If on any day: (i) the Unpaid Balance of any Pool Receivable is reduced, cancelled, subject to set-off, offset, netting, special refund or credit as a result of Dilution or for any other reason, including pursuant to the Conditional Service Guaranty (other than solely as a result of such Pool Receivable becoming a Defaulted Receivable in accordance with the Credit and Collection Policy as a result of the bankruptcy or insolvency of the related Obligor or a payment default of the related Obligor); 747634416.3 21671763747634416.9 21671763 55 (ii) the actual Financed Unpaid Balance of any Pool Receivable as of the relevant determination date in any Information Package is less than the amount included to represent such amount as of such date in calculating the Net Portfolio Balance for purposes of such Information Package; (iii) any Pool Receivable (or the terms of any related Contract governing such Pool Receivable) is extended, amended, waived, or otherwise modified or adjusted without the prior written consent of the Administrative Agent, except for extensions (which are separately addressed in clause (iv) below) or as expressly permitted under Section 8.02(b); (iv) the due date for payment of any Pool Receivable is extended to a date that is more than thirty (30) days after such Pool Receivable’s original due date; (v) (A) any of the representations or warranties of the Borrower set forth in clauses (j) or (n) or (bb) of Section 6.01 or the Servicer set forth in Section 6.02(t) were untrue when made with respect to any Pool Receivable, or (B) if the Level 1 Ratings Trigger is in effect, any Pool Receivable is a Conditional Service Guaranty Receivable; or (vi) any Collection Agent Fee is paid, including by setoff, offset or reduction of any Collections; then, on such day, the Borrower shall be deemed to have received a Collection of such Pool Receivable and, in respect of such Collections deemed received during any Settlement Period, and subject to the proviso below, the Borrower shall cause to be deposited to the Payment Account, by the date which is no later than three (3) Business Days (x) in respect of clause (ii) or (v) above, after the Borrower, ADT or the Servicer has knowledge thereof or has received notice thereof, and (y) in respect of any other clause above, prior to the Settlement Date immediately succeeding such Settlement Period or after the occurrence of an Event of Termination that remains continuing, within one (1) Business Day from the event giving rise to such Deemed Collection) for application by the Servicer pursuant to Section 3.01(d) as provided in this Agreement an amount equal to: (1) in the case of clause (i) above, the amount of such reduction, set-off, offset, netting, special refund, credit or cancellation; in the case of clause (ii) above, the difference between the actual Financed Unpaid Balance and the amount included to represent such amount in respect of such Pool Receivable in calculating the Net Portfolio Balance in such Information Package; or, in the case of clause (iv) above, in the amount that such extension affects the Financed Unpaid Balance of the related Pool Receivable in the sole determination of the Administrative Agent, as applicable, by notice to ADT, the Borrower and the Servicer; provided, that the aggregate amount of Deemed Collections paid by the Borrower pursuant to this clause 1 in respect of any Pool Receivable shall not exceed its Financed Unpaid Balance; or 747634416.3 21671763747634416.9 21671763 56 (2) in the case of clause (iii) or (v) above, the amount of the entire Financed Unpaid Balance of the relevant Pool Receivable or Pool Receivables (as determined immediately prior to the applicable event) with respect to which such extension, amendment, waiver, or modification occurs or such representations or warranties were or are untrue, or from and after the date of the Level 1 Ratings Trigger which constitutes or constituted a Conditional Service Guaranty Receivable while the Level 1 Ratings Trigger is in effect; or (3) in the case of clause (vi) above, the amount by which such Collection Agent Fee exceeds the lesser of (i) the ordinary course and customary collection fees and expenses payable to Collection Agents by the Servicer and consistent with its past practices as reasonably demonstrated by the Servicer to the Administrative Agent, and (ii) an amount equal to 20% of the Financed Unpaid Balance of the applicable Pool Receivable as determined immediately prior to the payment of such Collection Agent Fee; provided, that so long as no Event of Termination or Unmatured Event of Termination shall have occurred and be continuing, in the event the Borrower has paid Deemed Collections in respect of a Pool Receivable at least equal to the amount of the full Financed Unpaid Balance thereof to the Payment Account (and the Servicer shall have provided notice thereof to the Collateral Agent), in accordance with and pursuant to this Section 3.02, such Pool Receivable and the Related Assets thereof shall be deemed repurchased by the Borrower and shall be automatically released from the security interest of the Collateral Agent upon such payment in full of such Deemed Collections to the Payment Account; provided, further, that for the avoidance of doubt, no ADT Entity shall initiate any amendments to any Pool Receivable or otherwise take any action that would result in a Deemed Collection for the purpose of repurchasing any Pool Receivable, and any such action shall constitute an Event of Termination under Section 9.01(q). Collections deemed received by the Borrower under this Section 3.2(a) are herein referred to as “Deemed Collections”. To the extent no Pool Deficiency Amount would result therefrom, the Borrower may, at its option, net the amount of Deemed Collections required to be deposited in the Payment Account prior to any Settlement Date, from the amount of Collections scheduled to be payable to the Borrower on such next Settlement Date pursuant to Section 3.01(d)(ix). If on any day the Originator is required to make a cash payment of Deemed Collections to the Borrower under the Sale Agreement, the Borrower shall deposit (or cause the Originator to deposit) the amount of such Deemed Collections, subject to any permitted netting, to the Payment Account for application as Collections in accordance with Section 3.01(d). The Borrower shall promptly enforce the Originator’s obligations to pay Deemed Collections in accordance with the terms of the Sale Agreement. (b) Optional Repayment of Principal. The Borrower may at any time and from time to time elect to reduce (in whole or in part) the Aggregate Principal by giving or causing the Servicer to give the Collateral Agent and the Administrative Agent at least five (5) Business Days’


 
747634416.3 21671763747634416.9 21671763 57 prior written notice (which shall be in substantially the form of Exhibit H hereto) of such elected reduction, which notice shall include (i) the proposed date of such reduction, which if not a Settlement Date, shall require the payment, without duplication, of Liquidation Fee and any applicable amounts payable pursuant to Section 4.02, and (ii) the amount of any such proposed reduction (which amount shall be not less than $5,000,000 and shall be an integral multiple of $100,000 thereafter). Any such requested reduction in the Aggregate Principal shall be applied to reduce the Principal of each Lender to the extent Monthly Collections are then available therefor in excess of the sum (without duplication) of the related Liquidation Fee, any applicable amounts payable pursuant to Section 4.02 and the amounts scheduled to be payable on the next succeeding Settlement Date in accordance with Section 3.01(d)(i) through (iii). (c) Mandatory Repayment of Principal at Maturity Date. The Borrower shall repay the Aggregate Principal in full on the Maturity Date. SECTION 3.03. Payment Provisions. (a) Payments. All amounts to be paid to, or deposited by the Borrower, the Servicer, ADT or any other ADT Entity with, the Collateral Agent, the Administrative Agent, any Group Agent, any Lender, any Indemnified Party or any other Person hereunder shall, except as otherwise expressly provided herein, be paid or deposited in accordance with the terms hereof no later than 11:00 a.m. (New York City time) on the day when due in U.S. Dollars in same day funds to the Administrative Agent’s Account. The Administrative Agent will promptly distribute, in accordance with the applicable directions received by the Administrative Agent pursuant to this Article III, to each applicable Group Agent, Lender or other Person its applicable share of such payment in like funds as received by wire transfer to such recipient’s applicable office as designated in writing by such recipient to the Administrative Agent from time to time. Each Group Agent, upon its receipt in the applicable Group Agent’s Account of any such payments or distributions, shall distribute such amounts to the applicable Lenders, Affected Persons and the Indemnified Parties within its Group ratably; provided that if such Group Agent shall have received insufficient funds to pay all of the above amounts in full on any such date, such Group Agent shall pay such amounts to the applicable Lenders, Affected Persons and the Indemnified Parties within its Group in accordance with the priority of payments set forth above, and with respect to any such category above for which there are insufficient funds to pay all amounts owing on such date, ratably (based on the amounts in such categories owing to each such Person in such Group) among all such Persons in such Group entitled to payment thereof. Amounts remitted to the Administrative Agent’s Account in respect of ADT Obligations shall be distributed on each Settlement Date for the payment of ADT Obligations due and payable on or prior to such Settlement Date (i) to the Administrative Agent and the Collateral Agent for ADT Obligations then due and payable to it in accordance with the terms of this Agreement, and (ii) to the applicable Group Agent for ADT Obligations then due and payable to it, its related Lenders, its related Affected Persons and its related Indemnified Parties. For purposes of making the applications set forth in the immediately preceding sentence, subject to Section 3.01(d), the Administrative Agent shall rely upon the certifications (the “Demand Certifications”) of each of the Collateral Agent (if other than the Administrative Agent) and each of the Group Agents (if other than the Administrative Agent) as to the ADT Obligations then due and payable to it (or in 747634416.3 21671763747634416.9 21671763 58 respect of a Group Agent owing to it and its related Lenders, Affected Persons and Indemnified Parties). Each of the Collateral Agent (if other than the Administrative Agent) and each Group Agent shall provide the Administrative Agent with a Demand Certification upon making any demand or claim for payment of any ADT Obligations, which Demand Certification shall specify the date upon which such ADT Obligations are due and payable and the ADT Obligation giving rise to such payment. If amounts remitted in respect of ADT Obligations which are on deposit in the Administrative Agent’s Account on any Settlement Date are insufficient to pay in full all ADT Obligations which are then due and payable on such Settlement Date, the Administrative Agent shall distribute such funds on a pro rata basis to the relevant parties based upon the ADT Obligations then due and payable to such parties based upon the amount of the ADT Obligations then due and payable to it (in respect of each of its capacities hereunder) and the Demand Certifications which the Administrative Agent has received. The Administrative Agent shall have no liability for making payments in accordance with this Section 3.03(a) based upon the Demand Certifications. (b) Late Payments. Each ADT Entity shall pay to the Administrative Agent, for the benefit of the applicable Affected Person, interest on all amounts not paid or deposited by such party on the date when due hereunder at an annual rate equal to 2.00% above the Base Rate, payable on demand, provided, that such interest rate shall not at any time exceed the maximum rate permitted by applicable Law. (c) Method of Computation. All computations of interest, Interest, Liquidation Fee, Interest and Fee Reserve, any Fees payable under Section 2.03, and any other fees payable by the Borrower to the Collateral Agent, any Lender, any Group Agent, the Administrative Agent, or any other Affected Person in connection with Loans hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first day but excluding the last day) elapsed (except that calculations with respect to the Prime Rate shall be on the basis of a year of 365 or 366 days, as the case may be). (d) Payment of Currency and Setoff. All payments by any ADT Entity or the Servicer to any Affected Person or any other Person in connection with the Transaction Documents shall be made in U.S. Dollars and without set-off or counterclaim, except, for the avoidance of doubt, any netting expressly permitted herein. Any ADT Entity’s obligations hereunder shall not be satisfied by any tender or recovery of another currency except to the extent such tender or recovery results in receipt of the full amount of U.S. Dollars. (e) If and to the extent the Administrative Agent, any Credit Party, any Affected Person or any Indemnified Party shall be required for any reason to return to the Borrower or any underlying Obligor (including to any trustee, receiver, custodian or similar official thereof as a result of any Insolvency Proceeding with respect to the Borrower or such Obligor) any amount received on its behalf hereunder, such amount shall be deemed not to have been so received but rather to have been retained by the Borrower and, accordingly, the Administrative Agent, such Credit Party, such Affected Person or such Indemnified Party, as the case may be, shall have a claim (which claim may be contingent or subject to defenses) against the Borrower for such amount. 747634416.3 21671763747634416.9 21671763 59 SECTION 3.04. Account Control. The Servicer acknowledges, represents and agrees that it has caused the Borrower to establish the Payment Account and each of the Collection Accounts and further acknowledges, represents and agrees that each such Collection Account and Payment Account is a deposit account maintained at an Eligible Bank. Neither the Borrower nor the Servicer shall instruct or permit any disbursements to be made from the Payment Account other than to the Administrative Agent or with the consent of the Administrative Agent. Without limiting the Servicer’s obligation pursuant to clauses (c) or (d) of Section 7.06, if, at any time any Collection Account or the Payment Account ceases to be with an Eligible Bank, the Servicer, and the Borrower shall, as promptly as practicable and in any event within thirty (30) days after the Servicer or the Borrower has knowledge thereof, (i) establish or cause to be established a new Collection Account and Payment Account with a depository institution that is an Eligible Bank, (ii) transfer any amounts held in such Collection Account and Payment Account to such new Collection Account or Payment Account, as applicable, and (iii) cause a Control Agreement to be in full force and effect in respect of such Eligible Bank. Neither the Servicer nor the Borrower shall terminate any Collection Account or the Payment Account except as contemplated by this Section 3.04, Section 7.03(d) or Section 7.06(c). Without the prior written consent of the Collateral Agent, neither the Servicer nor the Borrower shall cause or instruct any account bank maintaining any Collection Account or Payment Account to incur fees, costs and expenses other than the ordinary course fees, costs and expenses (including relating to returned items) relating to maintaining such Collection Account or Payment Account. ARTICLE IV YIELD PROTECTION; TAXES SECTION 4.01. Yield Protection. (a) If any Change in Law: (i) shall subject an Affected Person to any duty, cost or other charge (other than Taxes, which shall be governed by Section 4.03) with respect to any Loan owned, maintained or funded by it (or its participation in any of the forgoing), or any obligations or right to make Loans or to provide funding or maintenance therefor (or its participation in any of the foregoing); (ii) shall impose, modify, or deem applicable any reserve, special deposit, or similar requirement against assets of any Affected Person, deposits, or obligations with or for the account of any Affected Person or with or for the account of any Affiliate (or entity deemed by the Federal Reserve Board or other Governmental Authority to be an affiliate) of any Affected Person, or credit extended by any Affected Person; (iii) shall impose any other condition affecting any Loan owned, maintained, or funded in whole or in part by any Affected Person, or its obligations or rights, if any, to make (or participate in) Loans or to provide (or participate in) funding therefor or the maintenance thereof; 747634416.3 21671763747634416.9 21671763 60 (iv) shall change the rate for, or changes the manner in which the Federal Deposit Insurance Corporation (or a successor thereto) or similar Person assesses, deposit insurance premiums, or similar charges which an Affected Person is obligated to pay; or (v) shall (i) change the amount of capital maintained or required or requested or directed to be maintained by any Affected Person or (ii) subject any Affected Person to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (ii) through (iv) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its Loans, the Receivable Pool or Related Assets, commitments, or other obligations, or its deposits, reserves, other liabilities, or capital attributable thereto; and the result of any of the foregoing is or would be, in each case, as determined by the applicable Group Agent or the applicable Affected Person: (A) to increase the cost to (or impose a cost on) (1) an Affected Person funding or making or maintaining any Loans, any corresponding purchases, or loans or other extensions of credit under any Liquidity Agreement, any Enhancement Agreement, or any commitment (hereunder or under any Liquidity Agreement or any Enhancement Agreement) of such Affected Person with respect to any of the foregoing, or (2) the Collateral Agent, any Group Agent, or the Administrative Agent for continuing its relationship with any Lender in such capacities hereunder; (B) to reduce the amount of any sum received or receivable by an Affected Person under this Agreement, or any corresponding amount received or receivable under any Liquidity Agreement or any Enhancement Agreement (or its participation in any such Liquidity Agreement or Enhancement Agreement) with respect thereto; or (C) to reduce the rate of return on the capital of such Affected Person as a consequence of its obligations hereunder, any corresponding obligations under any Liquidity Agreement or under any Enhancement Agreement (or its participation in any such Liquidity Agreement or Enhancement Agreement), including its funding or maintenance of any portion of any Principal, or arising in connection herewith (or therewith) to a level below that which such Affected Person could otherwise have achieved hereunder or thereunder, then, the Borrower shall pay to the Payment Account, by the date that is no later than three (3) Business Days prior to the Settlement Date following the Settlement Period in which it receives notice of the related claim from such Affected Person (or by the Administrative Agent or a Group Agent on its behalf) for payment to such Affected Person on such Settlement Date in accordance with Section 4.01(c).


 
747634416.3 21671763747634416.9 21671763 61 (b) Each Affected Person (or the Administrative Agent or a Group Agent on its behalf), shall use commercially reasonable efforts to promptly notify the Servicer (on behalf of the Borrower) and the Administrative Agent of any event of which it has actual knowledge which will entitle such Affected Person to compensation pursuant to this Section 4.01; provided, that the Borrower shall not be required to compensate an Affected Person pursuant to this Section 4.01 for any increased costs or reductions incurred more than 180 days prior to the date that such Affected Person notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Affected Person’s intention to claim compensation therefor; provided, further, that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 180 day period referred to above shall be extended to include the period of retroactive effect thereof. (c) In determining any amount provided for or referred to in this Section 4.01, an Affected Person may use any reasonable averaging and attribution methods that it, in its sole discretion, shall deem applicable. Any Affected Person (or the Administrative Agent or a Group Agent on its behalf) when making a claim under this Section 4.01 shall submit to the Servicer (on behalf of the Borrower) and the Administrative Agent a written statement of such increased cost or reduced return, which statement, in the absence of manifest error, shall be conclusive and binding; provided, that any such statement claiming amounts described in clause (x) or (y) of the definition of “Change in Law” shall, in addition, state the basis upon which such amount has been calculated and certify that such Affected Person’s demand for payment of such costs hereunder, and such method of allocation is not inconsistent with its treatment of other borrowers under similar warehouse securitization facilities which, as a credit matter, are similarly situated to the Borrower and which are subject to similar provisions. (d) Except as set forth in Section 4.01(b), no failure or delay on the part of any Affected Person (or the Administrative Agent or any Group Agent) to demand compensation pursuant to this Section 4.01 shall not constitute a waiver of such Affected Person’s (or the Administrative Agent’s or any Group Agent’s on its behalf) right to demand such compensation or otherwise adversely affect the rights of any Affected Person to such compensation. (e) The Borrower acknowledges that any Affected Person may institute measures in anticipation of a Change in Law (including, without limitation, the imposition of internal charges on such Affected Person’s interests or obligations under this Agreement), and may commence allocating charges to or seeking compensation from the Borrower under this Section 4.01 in connection with such measures, in advance of the effective date of such Change in Law, and the Borrower agrees to pay such charges or compensation to such Affected Person, to the extent such charges or compensation would otherwise be payable by the Borrower under this Section 4.01 after such effective date of such Change in Law, following demand therefor without regard to whether such effective date has occurred but only to the extent of, and on or after such Affected Person’s measures must be implemented prior to such effective date at the demand of the applicable prudential regulator. The Borrower further acknowledges that any charge or compensation demanded hereunder may take the form of a monthly charge to be assessed by such Affected Person. SECTION 4.02. Funding Losses. If any Affected Person incurs any cost, loss, or expense (including any loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Affected Person), at any time, as a result of (a) any optional or 747634416.3 21671763747634416.9 21671763 62 required settlement or repayment with respect to any Lender’s Tranche Principal of any Rate Tranche, howsoever funded, being made on any day other than a Settlement Date, (b) any Loan not being borrowed by the Borrower in accordance with its request therefor under Article II, or (c) the failure to exercise or complete (in accordance with Section 3.02(b)) any reduction in the Aggregate Principal elected to be made under Section 3.02(b), (d) any reduction in the Aggregate Principal elected under Section 3.02(b) exceeding the total amount of Rate Tranches, howsoever funded, with respect to which the last day of the related Interest Period is the date of such reduction, or (e) the failure to reduce the Aggregate Principal, then, upon written notice from such Affected Person (or the Administrative Agent or a Group Agent on its behalf) to the Servicer (on behalf of the Borrower), the Borrower shall pay the amount of such cost, loss or expense (without duplication of any applicable Liquidation Fee paid by the Borrower pursuant to Section 3.02(b)) to the Payment Account by the date which is no later than three (3) Business Days prior to the Settlement Date immediately succeeding the Settlement Period in which such written notice is delivered by such Affected Person. Such written notice shall, in the absence of manifest error, be conclusive and binding upon the Borrower and the Servicer. If an Affected Person incurs any cost, loss, or expense (including any loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Affected Person), at any time, and is not entitled to reimbursement for such loss or expense in the manner set forth above, such Affected Person shall individually bear such loss or expense without recourse to, or payment from, any other Affected Person. SECTION 4.03. Taxes. (i) Except to the extent required by applicable Law, any and all payments and deposits required to be made hereunder, under any other Transaction Document or under any instrument delivered hereunder or thereunder to any Affected Person or otherwise hereunder or thereunder by or on account of any obligation of the Borrower or the Servicer shall be made free and clear of, and without withholding or deduction for, any and all present or future Indemnified Taxes. If the Borrower or the Servicer shall be required by applicable Law to make any such withholding or deduction, (A) the Borrower (or the Servicer, on its behalf) shall make an additional payment to such Affected Person, in an amount sufficient so that, after making all required withholdings or deductions (including withholdings or deductions applicable to additional sums payable under this Section 4.03), such Affected Person receives an amount equal to the sum it would have received had no such withholdings or deductions been made, (B) the Borrower (or the Servicer, on its behalf) shall make such deductions, and (C) the Borrower (or the Servicer, on its behalf) shall pay the full amount deducted to the relevant taxation authority or other Governmental Authority in accordance with applicable Law. (ii) The Borrower will indemnify each Affected Person for the full amount of Indemnified Taxes (including any Indemnified Taxes imposed by any jurisdiction on amounts payable under this Section) paid by such Affected Person, as the case may be, and any reasonable expenses payable by such Affected Person arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. Notwithstanding anything to the contrary in this Agreement, no Affected Person shall recover, whether through a payment of additional amounts pursuant to Section 4.03(i) or a payment pursuant to the 747634416.3 21671763747634416.9 21671763 63 indemnification obligations of this Section 4.03(ii), more than once for any Tax imposed. Any indemnification under this Section 4.03(ii) shall be paid by the Borrower to the Payment Account by the date which is no later than three (3) Business Days prior to the Settlement Date immediately succeeding the Settlement Period in which written demand therefor is made by any Affected Person, together with a statement of reasons for such demand and the calculations of such amount. Such calculations, if made in good faith, absent manifest error, shall be final and conclusive on all parties. (iii) Within five (5) days after the date of any payment of Taxes withheld by the Borrower or the Servicer, as applicable, in respect of any payment to any Affected Person, the Borrower or the Servicer, as applicable, will furnish to the Administrative Agent, the original or a certified copy of a receipt evidencing payment thereof (or other evidence reasonably satisfactory to the Administrative Agent). (iv) Without prejudice to the survival of any other agreement contained herein, the agreements and obligations contained in this Section shall survive the resignation or replacement of, or any assignment by, any Affected Person, and the payment in full of Obligations hereunder. (v) (A) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Transaction Document shall deliver to the Servicer (on behalf of the Borrower) and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Servicer and at the time or times prescribed by applicable Law, such properly completed and executed documentation reasonably requested by the Borrower or the Servicer as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower or the Servicer, shall deliver such other documentation prescribed by applicable Law or reasonably requested by the Borrower, the Servicer or the Administrative Agent as will enable the Borrower, the Servicer or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding the foregoing, submission of such documentation (other than any documentation required by clause (B) below) shall not be required if in the Lender’s reasonable judgment such completion, execution, or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender. (B) Without limiting the generality of the foregoing, (1) Each Lender that is not a “United States person,” within the meaning of Section 7701(a)(30) of the Code, shall, on or before the date it becomes a party to this Agreement, deliver to the Servicer (on behalf of the Borrower) and the Administrative Agent such certificates, documents, or other evidence, as required by the Code or Treasury Regulations issued pursuant thereto, including Internal Revenue Service Form W-8BEN, Form W-8BEN-E, Form W-8ECI, W-IMY (or any successor form), with appropriate attachments, or any other applicable certificate or statement of exemption, properly completed and duly executed 747634416.3 21671763747634416.9 21671763 64 by such Lender establishing that any payment made or deemed made to such Lender is (i) not subject to United States Federal withholding Tax under the Code because such payments are effectively connected with the conduct by such Lender of a trade or business in the United States, (ii) exempt or entitled to a reduction from United States Federal withholding tax under a provision of an applicable Tax treaty, (iii) eligible for the benefits of the exemption for portfolio interest under Section 881(c) of the Code, in which case such Lender shall also deliver a certificate to the effect that such Lender is not (A) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrower, within the meaning of Section 881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code, or (iv) made to a person who is not the beneficial owner of the payments. In addition, each such Lender shall, if legally able to do so, thereafter deliver such certificates, documents or other evidence from time to time establishing that payments received hereunder are not subject to, or subject to a reduced rate of, such withholding upon receipt of a written request therefor from the Borrower or the Administrative Agent. (2) Each Lender that is a “United States person,” shall, on or before the date it becomes a party to this Agreement, deliver to the Servicer (on behalf of the Borrower) and the Administrative Agent such certificates, documents, or other evidence, as required by the Code or Treasury Regulations issued pursuant thereto, including Internal Revenue Service Form W-9 (or any successor form) or any other applicable certificate or statement of exemption properly completed and duly executed by such Lender establishing that payment made to such Lender is not subject to United States Federal backup withholding Tax under the Code. In addition, each such Lender shall, if legally able to do so, thereafter deliver such certificates, documents, or other evidence from time to time establishing that payments received hereunder are not subject to such withholding upon receipt of a written request therefor from the Borrower or the Administrative Agent. (3) Each Lender that is entitled to any exemption or reduction of non-U.S. withholding tax with respect to any payment under this Agreement shall, on or before the date it becomes a party to this Agreement, deliver to the Servicer (on behalf of the Borrower) and the Administrative Agent such certificates, documents, or other evidence as may reasonably be requested by the Servicer (on behalf of the Borrower) or the Administrative Agent, establishing that such payment is not subject to, or is subject to a reduced rate of, withholding. In addition, each such Lender shall, if legally able to do so, thereafter deliver such certificates, documents, or other evidence from time to time establishing that payments received hereunder are not subject to such withholding, or are subject to a reduced rate of withholding, upon receipt of a written request therefor from the Servicer (on behalf of the Borrower) or the Administrative Agent.


 
747634416.3 21671763747634416.9 21671763 65 (4) If a payment made to a Lender under any Transaction Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower (or the Servicer on behalf of the Borrower) and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower (or the Servicer on behalf of Borrower) or the Administrative Agent such documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower (or the Servicer on behalf of Borrower) or the Administrative Agent as may be necessary for the Borrower (or the Servicer on behalf of the Borrower) and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. (vi) For purposes of this Section 4.03, “applicable Law” includes FATCA. (vii) Each Lender (or in respect of a Conduit Lender, the Group Agent on behalf of such Conduit Lender) shall severally indemnify the Administrative Agent, within five (5) days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that the Borrower or ADT has not already indemnified the Administrative Agent for such Indemnified Taxes and without limited the obligation of the Borrower or ADT to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 12.03(b) relating to the maintenance of a Participant Register, and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Transaction Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant taxing authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Transaction Document or otherwise payable by the Administrative Agent to such Lender from any other source against any amount due to the Administrative Agent under this paragraph (vii). (viii) Any Affected Person claiming compensation under Section 4.01(a) or any Indemnified Taxes or additional amounts payable pursuant to this Section 4.03 shall use reasonable efforts (consistent with its internal policies and legal and regulatory restrictions) to, at the expense of the Servicer, file any certificate or document reasonably requested in writing by the Borrower or the Servicer or to change the jurisdiction of its applicable lending office if the making of such a filing or change would avoid the need for or reduce the amount of any such additional amounts which may thereafter accrue and would not, in the sole determination of such Affected Person, be otherwise disadvantageous to such Affected Person. 747634416.3 21671763747634416.9 21671763 66 (ix) If any party receives a refund in respect of any Taxes as to which it has been indemnified pursuant to this Section, it shall promptly repay such refund to the indemnifying party under this Section with respect to such refund), net of all out-of-pocket expenses (including Taxes imposed with respect to such refund) of such indemnified party and without interest (other than interest paid by the relevant taxing authority with respect to such refund); provided, however, that the indemnifying party upon the request of such indemnified party, agrees to return such refund (plus penalties, interest, or other charges) to such indemnified party in the event such indemnified party is required to repay such refund. Notwithstanding anything to the contrary in this paragraph (ix), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (ix) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. Nothing in this Section shall obligate any Affected Person to apply for any such refund. (x) The Servicer (on behalf of the Borrower) shall pay, or at the option of the Administrative Agent timely reimburse it for the payment of, Other Taxes. (xi) Nothing contained in this Section shall require any Affected Person to make available any of its Tax returns (or any other information relating to its Taxes which it deems to be confidential). (xii) If the Borrower determines that a reasonable basis exists for contesting an Indemnified Tax or Other Tax for which the Borrower has paid additional amounts or indemnification payments, the related Affected Person shall use reasonable efforts to cooperate with the Borrower as the Borrower may reasonably request in challenging such Tax. The Borrower shall indemnify and hold each Affected Person harmless against any out-of-pocket expenses incurred by such person in connection with any request made by the Borrower pursuant to this Section 4.03(xii). Nothing in this Section 4.03(xii) shall obligate any Affected Person to take any action that such Affected Person, in its sole discretion, determines could result in a material detriment to such Affected Person. For purposes of this Section 4.03, the term “Affected Person” shall include any assignee pursuant to Section 12.01(c) or 12.03(d). SECTION 4.04. Mitigation; Replacement of Lenders. (a) If any Affected Person requests compensation under Section 4.01, or if the Borrower is required to pay any additional amount to any Affected Person or any Governmental Authority for the account of any Affected Person pursuant to Section 4.03, then such Affected Person and its related Group Agent shall use reasonable efforts to designate a different office, branch or Affiliate for funding or booking its Principal hereunder or to assign its rights and obligations hereunder to another of its offices, branches or Affiliates, if, in the reasonable judgment of such Affected Person or such Group Agent, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 4.01 or Section 4.03, in the future, and (ii) would 747634416.3 21671763747634416.9 21671763 67 not subject such Affected Person or its related Group Agent to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Affected Person or its related Group Agent. ADT hereby agrees to pay all reasonable costs and expenses incurred by such Affected Person and its related Group Agent in connection with any such designation or assignment. (b) If (i) any Lender (or Affiliate of such Lender) requests compensation under Section 4.01, (ii) if the Borrower is required to pay any additional amount to any Affected Person or any Governmental Authority for the account of any Affected Person pursuant to Section 4.03, (iii) any Lender has become an Exiting Lender or a Defaulting Lender, or (iv) any Lender (such Lender, a “Non-Consenting Lender”) has failed to consent to any matter that requires the consent of all Lenders and all affected Lenders and with respect to which the Required Lenders shall have granted their consent, then, in each case, so long as no Event of Termination or Unmatured Event of Termination has occurred and remains continuing, the Borrower may, at ADT’s sole expense (including payment of any applicable processing and recordation fees), upon notice to the Collateral Agent, the related Group Agent and the Administrative Agent, require all Lenders in the Group relating to such Lender to assign, without recourse (and in accordance with and subject to the restrictions contained in this Agreement; provided, that if the Lender being removed has failed to comply with all applicable requirements and restrictions on its part within one Business Day of the Borrower’s request, such compliance shall not be required), all of their respective interests, rights (other than their existing rights to payments pursuant to Section 4.01, Section 4.02 or Section 4.03), and obligations under this Agreement and the other Transaction Documents to a willing assignee that is an Eligible Assignee and that assumes such interests, rights, and obligations; provided, that (A) each member of such assigning Group shall have received payment of an amount equal to all outstanding Principal and Interest in respect thereof, accrued fees and all other amounts payable to it hereunder, either from the assignee or the Borrower, (B) any such assigning Lender shall remain a beneficiary of any of this Agreement’s terms that expressly survive termination of this Agreement, with respect to the period during which it was a Lender, and (C) if the Person then serving as the Collateral Agent and/or the Administrative Agent is a member of the Group being removed pursuant to this Section, such Person shall cease to be the Administrative Agent and/or Collateral Agent, as applicable, upon the foregoing assignment and such assignment shall not be effective until a successor Collateral Agent and/or Administrative Agent, as the case may be, has been appointed by the Required Lenders and has accepted such appointment and assumed all of the obligations of such Person. Each applicable Lender and each of the Agents shall reasonably cooperate with the Borrower in connection with effectuating the assignments contemplated by this Section 4.04(b). ARTICLE V CONDITIONS TO EFFECTIVENESS AND CREDIT EXTENSIONS; SECURITY INTEREST SECTION 5.01. Conditions Precedent to Effectiveness and the Initial Credit Extension. This Agreement and the amendment and restatement it represents of the Existing Purchase Agreement shall become effective as of the Closing Date when (a) the Administrative Agent, the Collateral Agent and each Group Agent shall have received (unless otherwise waived) each of the documents, agreements (in fully executed form), opinions of counsel, lien search results, UCC filings, certificates and other deliverables listed on the closing memorandum attached as Exhibit F 747634416.3 21671763747634416.9 21671763 68 hereto, in each case, in form and substance reasonably satisfactory to the Administrative Agent, the Collateral Agent and each Group Agent and (b) all fees and expenses due and payable by the Borrower on the Closing Date to the Credit Parties have been paid in full in accordance with the terms of the Transaction Documents. SECTION 5.02. Conditions Precedent to All Credit Extensions. Each Credit Extension hereunder on or after the Closing Date shall be subject to the conditions precedent that: (a) the Borrower shall have delivered to the Administrative Agent, the Collateral Agent and each Group Agent a Loan Request for such Loan in accordance with Section 2.02(a); (b) the Servicer shall have delivered to the Administrative Agent, the Collateral Agent and each Group Agent a pro forma Information Package, reflecting the Aggregate Principal, Required Reserves, the Net Portfolio Balance and the Borrowing Base, each as calculated after giving effect to the proposed Credit Extension and the application of Collections on the upcoming Settlement Date; (c) on the date of such Credit Extension the following statements shall be true and correct (and upon the occurrence of such Credit Extension, the Borrower and ADT shall be deemed to have represented and warranted that such statements are then true and correct): (i) each of the representations and warranties contained in this Agreement and in each other Transaction Document are true and correct on and as of such date as though made on and as of such date unless such representations and warranties by their terms refer to an earlier date, in which case they shall be true and correct on and as of such earlier date; (ii) no event has occurred or would result from such Credit Extension that constitutes an Event of Termination or an Unmatured Event of Termination that remains continuing; and (iii) no Pool Deficiency Amount (calculated without giving effect to clause (ii) of the definition thereof) exists or would exist after giving effect to such Credit Extension and the application of Collections in accordance with Section 3.01(d); and (d) the Termination Date shall not have occurred; and (e) the applicable Group Agent has approved of the related Loan Request in accordance with Section 2.02. SECTION 5.03. Amendment and Restatement. (a) This Agreement amends and restates the Existing Purchase Agreement as of the Closing Date and the terms and provisions of the Existing Purchase Agreement are restated hereby in their entirety as of the Closing Date. The Administrative Agent, the Collateral Agent, the Group Agents and the Lenders hereby further consent to the concurrent amendment and restatement of the Existing Sale Agreement through the entry into the Sale Agreement and the


 
747634416.3 21671763747634416.9 21671763 69 concurrent second amendment and restatement of the limited liability company agreement of the Borrower on the Closing Date, in substantially the form delivered to the Administrative Agent and the Collateral Agent. From and after the date hereof, each reference to the Existing Purchase Agreement in any other document, instrument or agreement shall mean and be a reference to this Agreement, each reference to the Existing Sale Agreement in any other document, instrument or agreement shall mean and be a reference to the Sale Agreement, and each reference to the limited liability company agreement of the Borrower in any other document, instrument or agreement shall mean and be a reference to the limited liability company agreement of the Borrower as so amended. For the avoidance of doubt, except to the extent expressly contemplated in Section 5.03(b) below, (i) all obligations and liabilities of the Borrower and ADT under or in connection with the Existing Purchase Agreement (including all Obligations) shall remain outstanding hereunder and shall be enforceable against the applicable parties under this Agreement and (ii) the first priority perfected security interest granted by the Borrower pursuant to the Existing Purchase Agreement to the Collateral Agent, for the benefit of the Affected Parties, in, to and under the Collateral remains outstanding (and uninterrupted) as a first priority perfected security interest in the Collateral pursuant to the terms of this Agreement. This Agreement does not constitute a novation of the Existing Purchase Agreement (or a novation of any of the obligations thereunder). (b) The parties acknowledge that the Borrower, ADT and their Affiliates intended for the Existing Purchase Agreement to contemplate, in economic substance, a secured lending arrangement, rather than to effectuate the economic equivalent of a sale of the Existing Receivable Pool from the Borrower to the Collateral Agent; it being understood that no Secured Party shall have any responsibility or liability with respect to any such characterization whatsoever, or otherwise as a result of the foregoing acknowledgement. To the extent that, notwithstanding the foregoing, the arrangement under the Existing Purchase Agreement is deemed to have constituted a transfer from the Borrower to the Collateral Agent of the Existing Receivable Pool or any interest therein, then the parties agree that upon the effectiveness of this Agreement on the Closing Date, the Collateral Agent (on behalf of Mizuho Bank, Ltd. as the sole Purchaser under the Existing Purchase Agreement) is hereby deemed to sell, convey, transfer and assign to the Borrower, without recourse or warranty, the Existing Receivable Pool, including all Collections thereon and all other interests therein, subject to the security interest therein granted by the Borrower to the Collateral Agent pursuant to Section 5.04 (it being understood and agreed that the security interest granted by the Borrower pursuant to Section 9.1 of the Existing Purchase Agreement shall survive and continue pursuant to Section 5.04 hereof), in exchange for a purchase price equal to (1) $130,357,302.35, the payment of which is funded by the Initial Loan under this Agreement (the proceeds of which Initial Loan shall be applied by the Administrative Agent directly to payment of such cash purchase price), (2) the extinguishment of any RPA Deferred Purchase Price under the Existing Purchase Agreement, (3) the payment on the Settlement Date immediately following the Closing Date to Mizuho Bank, Ltd. as the sole Purchaser under the Existing Purchase Agreement of the Yield accrued during June 2021 under the Existing Purchase Agreement in the amount of $ 97,503.14 pursuant to Section 3.01(d)(iii), and (4) the payment on the Settlement Date in August 2021 to Mizuho Bank, Ltd. as the sole Purchaser under the Existing Purchase Agreement of the Yield accrued during July 2021 under the Existing Purchase Agreement prior to the Closing Date in the amount of $ 51,240.20 pursuant to Section 3.01(d)(iii). SECTION 5.04. Security Interest. 747634416.3 21671763747634416.9 21671763 70 (a) As security for the performance by the Borrower of all the terms, covenants and agreements on the part of the Borrower to be performed under this Agreement or any other Transaction Document, including the punctual payment when due of the Aggregate Principal and all Interest in respect of the Loans and all other Borrower Obligations, the Borrower hereby confirms and reaffirms the grant under the Existing Purchase Agreement, and without limiting the foregoing, hereby grants, to the Collateral Agent for its benefit and the ratable benefit of the Secured Parties of, and hereby grants to the Collateral Agent for its benefit and the ratable benefit of the Secured Parties, a continuing security interest in all of the Borrower’s right, title and interest in, to and under all of the following, whether now or hereafter owned, existing or arising (collectively, the “Collateral”): all of the Borrower’s right, title, and interest now or hereafter existing in, to and under the following of the Borrower’s assets, whether now owned or existing or hereafter acquired, and wherever located (whether or not in the possession or control of the Borrower), and all proceeds of the foregoing: (I) all Receivables comprising the Receivable Pool; (II) the Related Assets in respect of the Receivable Pool; (III) the Collections in respect of the Receivable Pool; (IV) all Transaction Documents; (V) all Contracts related to the Receivable Pool; (VI) the Sale Agreement and all rights and remedies of the Borrower thereunder; (VII) all other assets in the Receivable Pool and Related Assets; (VIII) each Collection Account and the Payment Account; (IX) all accounts, chattel paper, commercial tort claims, deposit accounts, documents, fixtures, general intangibles (including payment intangibles), goods (including equipment and inventory), instruments, investment property, letter-of-credit rights, letters of credit, money, as- extracted collateral, oil, gas and other minerals before extraction, software, supporting obligations, insurance policies and things in action; (X) all rights, interests, remedies, and privileges of the Borrower relating to any of the foregoing including the right to sue for past, present, or future infringement of any or all of the foregoing; and (XI) to the extent not otherwise included, all products and Proceeds (the terms in clauses (I) through (XI) not otherwise defined in this Agreement, as defined in the UCC) of the foregoing clauses (I) through (X) and all accessions to, substitutions and replacements for, and rents, profits, and products of the of the foregoing (including insurance proceeds), and all distributions (whether in money, securities, or other property) and collections from or with respect to any of the foregoing. (b) The parties hereto agree that this Agreement is not intended to constitute a novation or a termination of the obligations under the Existing Purchase Agreement and that the security interest created pursuant to the Existing Purchase Agreement is hereby confirmed and is intended to continue and to secure the Borrower Obligations under this Agreement which amends and restates the Existing Purchase Agreement. (c) The Collateral Agent (for the benefit of the Secured Parties) shall have, with respect to all the Collateral, and in addition to all the other rights and remedies available to the Administrative Agent (for the benefit of the Secured Parties), all the rights and remedies of a secured party under any applicable UCC. The Borrower hereby authorizes the Collateral Agent (for the benefit of the Secured Parties) to file financing statements in each jurisdiction the Collateral Agent deems necessary and appropriate to perfect its security interest in the Collateral, describing the collateral covered thereby as “all of the debtor’s personal property or assets” or words to that effect, notwithstanding that such wording may be broader in scope than the collateral described in this Agreement. The Borrower acknowledges and agrees that the existing UCC financing statement filed against the Borrower in favor of the Collateral Agent under the Existing 747634416.3 21671763747634416.9 21671763 71 Purchase Agreement continues to perfect the interest of the Collateral Agent in the Existing Receivable Pool. (d) To the fullest extent it may lawfully so agree, the Borrower and the Servicer agree that it will not at any time insist upon, claim, plead, or take any benefit or advantage of any appraisal, valuation, stay, extension, moratorium, redemption, or similar Law now or hereafter in force in order to prevent, delay, or hinder the enforcement hereof or the absolute sale of any part of the Collateral; the Borrower and the Servicer, each for itself and all who claim through it, so far as it or they now or hereafter lawfully may do so, hereby waive the benefit of all such Laws and all right to have the Collateral marshaled upon any foreclosure hereof, and agrees that any court having jurisdiction to foreclose this Agreement may order the sale of the Collateral in its entirety. Without limiting the generality of the foregoing, the Borrower and the Servicer hereby waive and release any and all right to require the Collateral Agent or the Administrative Agent to collect any of such obligations from any specific item or items of the Collateral or from any other party liable as guarantor or in any other manner in respect of any of such obligations or from any collateral for any of such obligations. ARTICLE VI REPRESENTATIONS AND WARRANTIES SECTION 6.01. Representations and Warranties of the Borrower. The Borrower represents and warrants as of the Closing Date, as of each day on which a Credit Extension shall have occurred and as of each Settlement Date and, in respect of clauses (k) and (n) below, as of the date of each Information Package, as follows: (a) Organization and Good Standing. It has been duly organized in, and is validly existing and in good standing under the Laws of its jurisdiction of organization, with organizational power and authority to own its properties and to conduct its business as such properties are presently owned and such business is presently conducted. (b) Due Qualification. It has obtained all necessary licenses, approvals, and qualifications, if any, in connection with its execution and delivery of the Transaction Documents to which it is a party and the performance by it of its obligations contemplated in the Transaction Documents. (c) Power and Authority; Due Authorization. It (i) has all necessary power and authority to (A) execute and deliver this Agreement and the other Transaction Documents to which it is a party in any capacity and (B) perform its obligations under the Transaction Documents applicable to it and (ii) has duly authorized by all necessary limited liability company action the execution, delivery, and performance of this Agreement and the other Transaction Documents to which it is a party. (d) Valid Sale; Binding Obligations. This Agreement constitutes a security agreement granting a security interest in the Pool Receivables and Related Assets to the Collateral Agent (on behalf of the Secured Parties); and this Agreement and each other Transaction Document to which it is a party when duly executed and delivered by it will constitute its legal, 747634416.3 21671763747634416.9 21671763 72 valid, and binding obligation enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. (e) No Violation. The execution and delivery of each of the Transaction Documents to which it is a party, the consummation of the transactions contemplated by this Agreement and the other Transaction Documents and the performance by it of the terms hereof and thereof will not (i) violate or result in a default under, (A) its Constituent Documents, (B) any indenture, agreement, or instrument binding on it or any of its assets or properties, or (C) the ADT Credit Agreement, any ADT Indenture or any ADT Collateral Agreement, (ii) result in the creation or imposition of any Adverse Claim upon any of its assets or properties pursuant to the terms of any such indenture, agreement, or instrument to which it is a party or by which it or any of its properties is bound, other than any Adverse Claim created in connection with this Agreement and the other Transaction Documents, or (iii) violate any Law applicable to it or any of its assets or properties. (f) No Proceedings. There are no actions, suits, or proceedings by or before any arbitrator or Governmental Authority pending against or, to its knowledge, threatened against or affecting it, the Receivable Pool or Related Assets or any of its other assets or properties (i) asserting the invalidity of this Agreement or any other Transaction Document, (ii) seeking to prevent the sale and assignment of all or any portion of the Receivable Pool or Related Assets under the Sale Agreement, the grant of a security interest in all or any portion of the Collateral hereunder, or the consummation of any of the transactions contemplated by, or the purposes of, this Agreement or of any of the other Transaction Documents, (iii) seeking any determination or ruling that could materially and adversely affect the performance by any ADT Entity of its obligations under any Transaction Document or (iv) could otherwise reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. (g) Bulk Sales Act. No transaction contemplated hereby requires compliance by the Borrower with any bulk sales act or similar Law. (h) Governmental Approvals. No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is required for its due execution, delivery, and performance of this Agreement or any other Transaction Document or the transactions contemplated thereby, except for the filing of the UCC financing statements referred to in Exhibit F. (i) Use of Proceeds. The use of all funds obtained by it under this Agreement will not conflict with or contravene any of Regulations T, U, and X promulgated by the Board of Governors of the Federal Reserve System. (j) Quality of Title. It has acquired from ADT, for fair consideration and reasonably equivalent value, all of the right, title, and interest in each Pool Receivable and the Related Assets in respect thereof and such acquisition constitutes a True Sale. Each Contract and Pool Receivable and the Related Assets related thereto, are owned by it free and clear of any Adverse Claim; and upon any Transfer the Collateral Agent (for the benefit of the Secured Parties)


 
747634416.3 21671763747634416.9 21671763 73 shall have acquired and shall at all times thereafter continuously have the benefit of a first priority perfected security interest in each Pool Receivable, together with the Related Assets, free and clear of any Adverse Claim; and no valid effective financing statement or other instrument similar in effect covering any Pool Receivable, any interest therein or the Related Assets is on file in any recording office except for the following (“Permitted Lien Filings”): (i) such a financing statement or other instrument filed (x) in favor of ADT or the Borrower in accordance with any Transaction Document (and assigned to the Collateral Agent) or (y) in favor of the Collateral Agent for the benefit of the Secured Parties in accordance with this Agreement or any Transaction Document, (ii) such a financing statement or other instrument that meets the following conditions: (x) it names Barclays Bank PLC (or the applicable successor agent thereunder) as secured party, (y) it relates to liens that are subject to the ADT Lien Release Acknowledgement and (z) it does not have the effect of perfecting any security interest in any Pool Receivable, Related Asset or interest therein, (iii) financing statement number 2020 0668089 filed on January 28, 2020 with the Secretary of State of Delaware naming ADT as debtor and Wells Fargo Bank, National Association (or the applicable successor agent thereunder) as secured party, provided that it does not have the effect of perfecting any security interest in any Pool Receivable, Related Asset or interest therein, and (iv) such a financing statement or other instrument naming ADT as debtor that meets the following conditions: (x) it is filed after all filings referred to in the foregoing clause (i), and (y) except as permitted under clause (i) above, it does not have the effect of perfecting any security interest in any Pool Receivable, Related Asset or interest therein. Without limiting the foregoing, no Chattel Paper evidencing Pool Receivables (x) is in the possession of (or, in the case of electronic Chattel Paper, under the control of) any Person other than the Servicer (for the benefit of the Collateral Agent and the Borrower), the Collateral Agent or the Collateral Agent’s designee, or (y) has any marks or notations indicating that it has been pledged, assigned, or otherwise conveyed to any Person other than the Borrower or the Collateral Agent. (k) Accurate Reports. None of the reports, financial statements, certificates, or other written information (other than forward-looking statements, projections, and statements of a general industry nature, as to which it represents only that it acted in good faith and utilized assumptions reasonable at the time made and due care in the preparation of such statement or projection) furnished or to be furnished by or on behalf of it or any other ADT Entity (including, without limitation, by electronic delivery) to the Administrative Agent, any Lender, or any Group Agent in connection with this Agreement or any other Transaction Document or any amendment hereto or delivered hereunder or thereunder (as modified or supplemented by other information so furnished) including without limitation, each Loan Request, each Information Package and the reports and information provided pursuant to Section 7.05(f) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading. 747634416.3 21671763747634416.9 21671763 74 (l) UCC Details. It is a “registered organization” (as defined in Section 9- 102(a) of the UCC) that is formed or organized solely under the laws of the State of Delaware and is “located” in Delaware for purposes of Section 9-307 of the UCC and the offices where it keeps all its physical Records (to the extent not electronically available) and tangible chattel paper or other physical collateral, if any, are located at the addresses specified in Schedule IV (or at such other locations, notified to the Collateral Agent and the Administrative Agent in accordance with Section 7.01(f)), in jurisdictions where all action required by Section 8.05 has been taken and completed. It has never had any, trade names, fictitious names, assumed names, or “doing business as” names and is “located” in Delaware for purposes of Section 9-307 of the UCC. It is organized only in a single jurisdiction. (m) Accounts. The Lock-Boxes and names and addresses of all of the Account Banks, together with the account numbers of the related Collection Accounts at such Account Banks, are specified in Schedule II (or have been notified to and approved by the Collateral Agent and the Administrative Agent in accordance with Section 7.03(d)). The Collection Accounts and the Payment Account, the account numbers for each such account and the Account Banks maintaining each such account are specified in Schedule II except for such changes as are expressly permitted by Section 3.04, Section 7.03(d) or Section 7.06(c). (n) Eligible Receivables. Each Pool Receivable listed as an Eligible Receivable in any Loan Request or Information Package or included as an Eligible Receivable in the calculation of Net Portfolio Balance on any date is an Eligible Receivable as of the effective date of the information reported in such Loan Request or Information Package or as of the date of such calculation, as the case may be, or has been cured through a repurchase or Deemed Collection payment in accordance with the Sale Agreement. No selection process was utilized for choosing such Eligible Receivables, from among all Eligible Receivables, that could reasonably be expected to be adverse or disadvantageous to the interests of the Lenders, and the Borrower does not otherwise have any reason to expect that the performance of the Eligible Receivables owned by it would be worse than any Eligible Receivables that are not being offered for sale to it under the Sale Agreement, and (ii) each such Receivable adheres to the Credit and Collection Policy. As of each Transfer Date, it has no knowledge of any fact (including any defaults by the Obligor thereunder or any Service Charge Receivable) that would cause it to expect any payment on any Eligible Receivable transferred on such Transfer Date not to be paid in full when due. (o) Adverse Change. Since the Closing Date, (i) there has been no material adverse change in the value, validity, collectability, or enforceability of all or a material portion of the Pool Receivables, and (ii) there has been no Material Adverse Effect with respect to the Borrower. (p) Credit and Collection Policy. It has engaged the Servicer to service the Pool Receivables in accordance with the Credit and Collection Policy and all applicable Law. It has complied in all material respects with all applicable Law and with the Credit and Collection Policy. (q) Financial Information. All of its and its Affiliates’ financial statements delivered to the Administrative Agent in accordance with this Agreement present fairly, in all material respects, the actual financial position and results of operations of it and its Affiliates, as 747634416.3 21671763747634416.9 21671763 75 the case may be, as of the date and for the period presented or provided, in each case in accordance with GAAP. (r) Investment Company Act; Covered Fund. It is not required to register as an “Investment Company” under (and as defined in) the Investment Company Act. It is not a “covered fund” as defined in Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. In determining that the Borrower is not such a “covered fund,” the Borrower relies on, and is entitled to rely on, the exemption from the definition of “investment company” set forth in Section 3(c)(5) of the Investment Company Act (although other exclusions or exemptions may also be available to the Borrower). (s) No Other Obligations. It does not have outstanding any security of any kind except membership interests issued to ADT in connection with its organization and has not incurred, assumed, guaranteed or otherwise become directly or indirectly liable for, or in respect of, any Debt, and no Person has any commitment or other arrangement to extend credit to the Borrower, in each case, other than as will occur in accordance with the Transaction Documents. (t) Representations and Warranties in Other Transactions Documents. It hereby makes for the benefit of the Collateral Agent, the Administrative Agent, each Group Agent and each Lender all of the representations and warranties that the Borrower makes, in any capacity, under the Sale Agreement, as if such representations and warranties (together with the related and ancillary provisions) were set forth in full herein. (u) Ordinary Course of Business. Each remittance of Collections by or on behalf of the Borrower to the Lenders (or to the Collateral Agent, the Administrative Agent or any Group Agent on their behalf) under this Agreement will have been (i) in payment of a debt incurred by the Borrower in the ordinary course of business or financial affairs of the Borrower, and (ii) made in the ordinary course of business or financial affairs of the Borrower. (v) Tax Matters. It has filed all federal income tax returns and all other tax returns that are required to be filed by it and has paid all taxes due pursuant to such returns or pursuant to any assessment received by it, except for any such taxes or assessments, if any, that are being appropriately contested in good faith by appropriate proceedings and with respect to which adequate reserves in conformity with GAAP have been provided. No tax lien has been filed, and, to the knowledge of the Borrower, no claim is being asserted, with respect to any such tax or assessment, except where such tax or lien is being contested as set forth above. It has paid all sales taxes to be paid by it in connection with the Equipment and installation related to each Pool Receivable in compliance with Section 7.01(p), and has promptly notified the Administrative Agent of (i) any failure to pay any sales taxes with respect to any Receivable and whether or not such sales taxes are being contested as set forth above, and (ii) any asserted tax lien relating to any such sales taxes and whether or not such lien is being contested as set forth above. (w) Tax Status. It has not made, at any time, any entity classification election under Treas. Reg. Sec. 301.7701-3 nor is it otherwise treated as an association or publicly traded partnership taxable as a corporation for U.S. federal income tax purposes. It is treated as disregarded as separate from its owner for U.S. federal income tax purposes with such owner being a United States person within the meaning of section 7701(a)(30) of the Code. It is not subject to 747634416.3 21671763747634416.9 21671763 76 any Tax in any jurisdiction outside the United States. It has not taken any action that could subject it nor is it otherwise subject to any material amount of Tax imposed by a state or local taxing authority. (x) No Event of Termination, Etc. No event has occurred and is continuing, or would result from any Loan that constitutes or would constitute an Unmatured Event of Termination or Event of Termination. (y) Anti-Corruption Laws, Anti-Terrorism Laws, and Sanctions. (i) Each ADT Entity and their respective Subsidiaries is in compliance in all material respects with the material provisions of the USA PATRIOT Act, and, on or prior to the Closing Date, the Borrower has provided or caused to be provided to the Administrative Agent all information related to the ADT Entities (including names, addresses and tax identification numbers (if applicable)) reasonably requested in writing by the Administrative Agent not less than 10 Business Days prior to the Closing Date and mutually agreed to be required under “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act, to be obtained by the Administrative Agent or any Lender. (ii) None of the ADT Entities, any of their respective Subsidiaries, nor, to the knowledge of the Borrower, any director, officer, agent, employee or Affiliate of any ADT Entity is currently the target of any sanctions administered by the United States, including the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”) and the U.S. State Department, the United Nations Security Council, Her Majesty’s Treasury, the European Union or relevant member states of the European Union (collectively, the “Sanctions”) and each ADT Entity and, to the knowledge of the Borrower, their respective directors, officers, employees and agents are in compliance with sanctions laws and regulations administered by the United States, including OFAC and the U.S. State Department, the United Nations Security Council, Her Majesty’s Treasury, the European Union or relevant member states of the European Union (collectively, the “Sanctions Laws”) in all material respects. The Borrower will not directly or indirectly use the proceeds of any Loans or otherwise make available such proceeds to any person, for the purpose of financing the activities of any person that is currently the target of any Sanctions or for the purpose of funding, financing or facilitating any activities, business or transaction with or in any country that is the target of the Sanctions, to the extent such activities, businesses or transaction would be prohibited by the Sanctions Laws, or in any manner that would result in the violation of any Sanctions Laws applicable to any party hereto. (iii) Each ADT Entity, each of their respective Subsidiaries, and to the knowledge of the Borrower, their directors, officers, agents or employees, are in compliance with the U.S. Foreign Corrupt Practices Act of 1977 or similar law of a jurisdiction in which the ADT Entities conduct their business and to which they are lawfully subject (“Anti-Corruption Laws”), in each case, in all material respects. No part of the proceeds of any Loans made hereunder will be used to make any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment.


 
747634416.3 21671763747634416.9 21671763 77 (z) The Borrower does not hold (nor will it hold throughout the term of this Agreement) “plan assets” within the meaning of the Department of Labor regulations located at 29 C.F.R. Section 2510.3-101, as modified by Section 3(42) of ERISA. (aa) Accounting Treatment. The Borrower and ADT expect that the Receivables, Related Assets, and Collections relating to the Receivable Pool will be included on the consolidated balance sheet of the Parent and ADT for purposes of GAAP to the extent they are outstanding as of the end of any reporting period. (bb) Advertisements, Promotions. No Pool Receivable is subject to any advertisement, promotion or other arrangement offered by any ADT Entity, subject to which such Pool Receivable or the Contract related to such Pool Receivable can be cancelled or terminated, in any manner which would excuse the related Obligor of its obligation to pay all or any part of the Unpaid Balance thereof, except pursuant to the Conditional Service Guaranty. (cc) Pool Deficiency Amount. Immediately after giving effect to any Loan on a Borrowing Date and the application of the Collections in accordance with Section 3.01(d) on such Borrowing Date, no Pool Deficiency Amount (calculated without giving effect to clause (ii) of the definition thereof) will exist. (dd) Control. A Control Agreement is in full force and effect in respect of each Collection Account and the Payment Account. (ee) Rule 3a-7 Eligible Assets. Each Loan constitutes an “eligible asset” within the meaning of Rule 3a-7 promulgated under the Investment Company Act. SECTION 6.02. Representations and Warranties of ADT. ADT represents and warrants as of the Closing Date, as of each day on which a Credit Extension shall have occurred and as of each Settlement Date and, in respect of clauses (j) and (l) below, as of the date of each Information Package, as follows: (a) Organization and Good Standing. It has been duly organized and is validly existing as a limited liability company in good standing under the Laws of its jurisdiction of organization, with power and authority to own its properties and to conduct its business as such properties are presently owned and such business is presently conducted. (b) Due Qualification. It is duly qualified to do business as a foreign limited liability company in good standing, and has obtained all necessary qualifications, licenses, and approvals, in all jurisdictions in which the ownership or lease of property or the conduct of its business (including the servicing of the Pool Receivables) requires such qualifications, licenses, or approvals, except where the failure to do so could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect. (c) Power and Authority; Due Authorization. It (i) has all necessary power and authority to (A) execute and deliver this Agreement and the other Transaction Documents to which it is a party in any capacity, and (B) carry out the terms of and perform its obligations under the Transaction Documents applicable to it, and (ii) has duly authorized by all necessary limited 747634416.3 21671763747634416.9 21671763 78 liability company action the execution, delivery, and performance of this Agreement and the other Transaction Documents to which it is a party. (d) Binding Obligations. This Agreement constitutes, and each other Transaction Document to be signed by it when duly executed and delivered by it will constitute, the legal, valid, and binding obligation of it, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. (e) No Violation. The execution and delivery of each of the Transaction Documents to which it is a party and the consummation of the transactions contemplated by this Agreement and the other Transaction Documents and the performance by it of the terms hereof and thereof will not (i) violate or result in a default under, (A) its Constituent Documents, (B) any indenture, agreement or instrument binding on it or its assets or properties or (C) the ADT Credit Agreement, any ADT Indenture or any ADT Collateral Agreement, (ii) result in the creation or imposition of any Adverse Claim upon any of its assets or properties pursuant to the terms of any such indenture, agreement, or instrument, except as contemplated by the Sale Agreement, or (iii) violate any Law applicable to it or any of its assets or properties, except in the case of this clause (iii) to the extent that any such violations individually or in the aggregate could not reasonably be expected to result in a Material Adverse Effect. (f) No Proceedings. There are no actions, suits, or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Servicer, threatened against or affecting the Servicer or any of its assets or properties (i) asserting the invalidity of this Agreement or any other Transaction Document, (ii) seeking to prevent the sale and assignment of all or any portion of the Receivable Pool or Related Assets under the Sale Agreement, the grant of a security interest in all or any portion of the Collateral hereunder, or the consummation of any of the transactions contemplated by, or the purposes of, this Agreement or of any of the other Transaction Documents, (iii) seeking any determination or ruling that could materially and adversely affect the performance by any ADT Entity of its obligations under any Transaction Document or (iv) could otherwise reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. (g) Governmental Approvals. No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is required for its due execution, delivery, and performance of this Agreement or any other Transaction Document or the transactions contemplated thereby, except for (x) the filing of the UCC financing statements referred to in Article V, and (y) such authorizations, approvals, actions, notices or filings as have been obtained or made or for which the failure to obtain or make the same, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. (h) Quality of Title. The Borrower has acquired from ADT, for fair consideration and reasonably equivalent value, all of the right, title, and interest in each Pool Receivable and the Related Assets in respect thereof and such acquisition constitutes a True Sale. Immediately prior to each sale or contribution of a Receivable under the Sale Agreement, ADT owned each Contract and Pool Receivable and the Related Assets related thereto free and clear of 747634416.3 21671763747634416.9 21671763 79 any Adverse Claim; and upon any Transfer under the Sale Agreement, the Collateral Agent (for the benefit of the Secured Parties) has acquired and at all times thereafter continuously has the benefit of a first priority perfected security interest in each Pool Receivable, together with the Related Assets, free and clear of any Adverse Claim; and no valid effective financing statement or other instrument similar in effect covering any Pool Receivable, any interest therein or the Related Assets is on file in any recording office except Permitted Lien Filings. Without limiting the foregoing, no Chattel Paper evidencing Pool Receivables (x) is in the possession of (or, in the case of electronic Chattel Paper, under the control of) any Person other than the Servicer (for the benefit of the Collateral Agent and the Borrower), the Collateral Agent or the Collateral Agent’s designee, or (y) has any marks or notations indicating that it has been pledged, assigned, or otherwise conveyed to any Person other than the Borrower or the Collateral Agent. (i) Financial Condition. All financial statements of the ADT Entities and their respective Subsidiaries (including the notes thereto) delivered to the Collateral Agent, the Administrative Agent, and each Group Agent pursuant to Section 7.05(a), present fairly, in all material respects, the actual financial position and results of operations and cash flows of such entities as of the dates and for the periods presented or provided other than in the case of annual financial statements, in each case in accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes in the case of all interim balance sheets of the Parent and ADT. (j) Accurate Reports. None of the reports, financial statements, certificates, or other written information (other than forward-looking statements, projections, and statements of a general industry nature, as to which it represents only that it acted in good faith and utilized assumptions reasonable at the time made and due care in the preparation of such statement or projection) furnished or to be furnished by or on behalf of it or any other ADT Entity (including each Loan Request and each Information Package furnished by the Servicer and each report furnished pursuant to Section 7.05(f)) (including, without limitation, by electronic delivery) to the Collateral Agent, the Administrative Agent, any Lender, or any Group Agent in connection with this Agreement or any other Transaction Document or any amendment hereto or delivered hereunder or thereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading. (k) Accounts. The Lock-Boxes, names and addresses of all of the Account Banks, together with the account numbers of the Collection Accounts at such Account Banks, are specified in Schedule II (or have been notified to and approved by the Collateral Agent and the Administrative Agent in accordance with Section 7.03(d)). The Collection Accounts and the Payment Account, the account numbers for each such account and the Account Bank maintaining each such account are specified in Schedule II, except for such changes as are expressly permitted by Section 3.04, Section 7.03(d) or Section 7.06(c). (l) Eligible Receivables. Each Pool Receivable listed as an Eligible Receivable in any Loan Request or Information Package or included as an Eligible Receivable in the calculation of Net Portfolio Balance on any date is an Eligible Receivable as of the effective date of the information reported in such Loan Request or Information Package or as of the date of such calculation, as the case may be, or has been cured through a repurchase in accordance with the 747634416.3 21671763747634416.9 21671763 80 Sale Agreement. In selecting the Eligible Receivables to be sold or contributed to the Borrower pursuant to the Sale Agreement (i) it did not utilize any selection process for choosing such Eligible Receivables, from among all Eligible Receivables, that could reasonably be expected to be adverse or disadvantageous to the interests of the Lenders, and ADT does not otherwise have any reason to expect that the performance of the Eligible Receivables sold under the Sale Agreement would be worse than any Eligible Receivables that it is not offering for sale under the Sale Agreement, and (ii) each such Receivable adheres to the Credit and Collection Policy. As of each Transfer Date, it has no knowledge of any fact (including any defaults by the Obligor thereunder or any Service Charge Receivable) that would cause it to expect any payment on any Eligible Receivable transferred on such Transfer Date not to be paid in full when due. (m) Adverse Change. Since the Closing Date, (i) there has been no material adverse change in the value, validity, collectability, or enforceability of all or a material portion of the Pool Receivables, and (ii) there has been no Material Adverse Effect with respect to ADT or the Parent. (n) Credit and Collection Policy; Law. It has complied with the Credit and Collection Policy and such policies have not changed in any respect since the Closing Date, except as permitted under Sections 7.03(c) and 7.05(g). It has complied with all applicable Law, except where the failure to so comply, individually or in the aggregate could not reasonably be expected to result in a Material Adverse Effect. (o) Investment Company Act. It is not required to register as an “Investment Company” under (and as defined in) the Investment Company Act. (p) ERISA. No ERISA Event has occurred or is reasonably expected to occur, except as could not reasonably be expected to have a Material Adverse Effect. (q) Tax Returns and Payments. It has filed all federal income tax returns and all other tax returns that are required to be filed by it and has paid all taxes due pursuant to such returns or pursuant to any assessment received by it, except for any such taxes or assessments, if any, that are being appropriately contested in good faith by appropriate proceedings and with respect to which adequate reserves in conformity with GAAP have been provided. No tax lien has been filed, and, to the knowledge of the Servicer, no claim is being asserted, with respect to any such tax or assessment, except where such tax or lien is being contested as set forth above. It has paid all sales taxes to be paid by it in connection with the Equipment and installation related to each Pool Receivable in compliance with Section 7.04(k), and has promptly notified the Administrative Agent of (i) any failure to pay any sales taxes with respect to any Receivable and whether or not such sales taxes are being contested as set forth above, and (ii) any asserted tax lien relating to any such sales taxes and whether or not such lien is being contested as set forth above. (r) No Event of Termination, Etc. No event has occurred and is continuing, or would result from any Loan, that constitutes or would constitute an Unmatured Event of Termination or Event of Termination. (s) Anti-Corruption Laws, Anti-Terrorism Laws, and Sanctions.


 
747634416.3 21671763747634416.9 21671763 81 (i) Each ADT Entity is in compliance in all material respects with the material provisions of the USA PATRIOT Act, and, on or prior to the Closing Date, the Servicer has provided or caused to be provided to the Administrative Agent all information related to the ADT Entities (including names, addresses and tax identification numbers (if applicable)) reasonably requested in writing by the Administrative Agent not less than 10 Business Days prior to the Closing Date and mutually agreed to be required under “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act, to be obtained by the Administrative Agent or any Lender. (ii) None of the ADT Entities, or an of their respective Subsidiaries, nor, to the knowledge of the Servicer, any director, officer, agent, employee or Affiliate of any ADT Entity is currently the target of any Sanctions and each ADT Entity and, to the knowledge of the Servicer, their respective directors, officers, employees and agents are in compliance with Sanctions Laws in all material respects. The Servicer will not directly or indirectly cause the proceeds of any Loans to be used or otherwise make available such proceeds to any person, for the purpose of financing the activities of any person that is currently the target of any Sanctions or for the purpose of funding, financing or facilitating any activities, business or transaction with or in any country that is the target of the Sanctions, to the extent such activities, businesses or transaction would be prohibited by the Sanctions Laws, or in any manner that would result in the violation of any Sanctions Laws applicable to any party hereto. (iii) Each ADT Entity, each of their respective Subsidiaries, and to the knowledge of the Servicer, their directors, officers, agents or employees, are in compliance with Anti-Corruption Laws in all material respects. No part of the proceeds of any Loans made hereunder will be used to make any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment. (t) Advertisements, Promotions. No Pool Receivable is subject to any advertisement, promotion or other arrangement offered by any ADT Entity, subject to which such Pool Receivable or the Contract related to such Pool Receivable can be cancelled or terminated, in any manner which would excuse the related Obligor of its obligation to pay all or any part of the Unpaid Balance thereof, except pursuant to the Conditional Service Guaranty. (u) Pool Deficiency Amount. Immediately after giving effect to any Loan on a Borrowing Date and the application of Collections in accordance with Section 3.01(d) on such Borrowing Date, no Pool Deficiency Amount (calculated without giving effect to clause (ii) of the definition thereof) will exist. (v) Control. A Control Agreement is in full force and effect in respect of each Collection Account and a Control Agreement is in full force and effect in respect of the Payment Account. (w) Permitted Securitization Financing. The transactions contemplated by this Agreement, including the transfer and pledge of Receivables in connection with the financing contemplated hereby, constitute a Permitted Securitization (as defined in the ADT Credit Agreement) and the entry by any ADT Entity into any Transaction Document and their respective 747634416.3 21671763747634416.9 21671763 82 performance thereunder is permitted by the ADT Credit Agreement, each ADT Indenture and each ADT Collateral Agreement, and will not conflict with or violate the terms of the ADT Credit Agreement, any ADT Indenture or any ADT Collateral Agreement. The Pool Receivables, the Related Assets, related Collections and other Collateral are free and clear of any Adverse Claim. ARTICLE VII COVENANTS SECTION 7.01. Affirmative Covenants of the Borrower. At all times from the Closing Date until the Final Payout Date, the Borrower shall: (a) Compliance with Laws, Etc. Comply with all applicable Laws, in respect of the conduct of its business, the Pool Receivables, and each of the related Contracts, except where the failure to so comply, individually or in the aggregate could not reasonably be expected to adversely affect any Pool Receivable, or otherwise give rise to a Material Adverse Effect. (b) Preservation of Existence. Preserve and maintain its existence, rights, franchises, and privileges in the jurisdiction of its organization, and qualify and remain qualified in good standing in each jurisdiction, except where the failure to qualify or preserve or maintain such existence, rights, franchises, or privileges could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. (c) Inspections. From time to time, at the expense of ADT upon reasonable prior notice, upon the request by the Administrative Agent or the Required Lenders (or any Group Agent if an Unmatured Event of Termination or Event of Termination has occurred and is continuing) and during regular business hours, permit the Collateral Agent, the Administrative Agent, and the Group Agents, or any of their respective representatives to visit and inspect its properties, to examine and make extracts from its Records, and to discuss its affairs, finances, and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested; provided that, unless an Event of Termination, or an Unmatured Event of Termination has occurred and is continuing at the time of any such inspection, ADT shall only be required to reimburse the reasonable documented out-of-pocket costs and expenses related to one such inspection of the Borrower during any 12-month period, which inspection shall be requested and scheduled by the Administrative Agent; provided, further, that the Collateral Agent, the Administrative Agent and the Group Agents shall use reasonable efforts to coordinate the timing of any inspections made of the Borrower pursuant to this Section 7.01(c) and of ADT pursuant to Section 5.2(a) of the Sale Agreement and Section 7.04(c). (d) Keeping of Records and Books of Account; Delivery. Maintain and implement, or cause to be maintained and implemented, administrative and operating procedures (including an ability to recreate records evidencing the Pool Receivables, the Related Assets and the Service Charge Receivables in the event of the destruction of the originals thereof, backing up on at least a daily basis on a separate backup computer from which electronic file copies can be readily produced and distributed to third parties being agreed to suffice for this purpose), and keep and maintain, or cause to be kept and maintained, all documents, books, records, and other information necessary or advisable for the collection of the Pool Receivables and Related Assets 747634416.3 21671763747634416.9 21671763 83 (including records adequate to permit the daily identification of (i) each new Pool Receivable, all Collections relating to each Pool Receivable and adjustments to each existing Pool Receivable received, made or otherwise processed on that day, and (ii) the portion of the amounts received from each Obligor that constitute Collections on the related Pool Receivables and the portion that relates to Collections in respect of Service Charge Receivables in order to effect the priority of payments set forth in the related Contracts). (e) Performance and Compliance with Pool Receivables and Contracts. At ADT’s expense, timely and fully perform and comply with all provisions, covenants and other promises required to be observed by it under the Contracts related to the Pool Receivables, except where the failure to so perform or comply, individually or in the aggregate could not reasonably be expected to adversely affect any Pool Receivable or Related Assets or otherwise result in a Material Adverse Effect. (f) Location of Records. Keep all its physical Records (to the extent not electronically available) and tangible chattel paper or other physical collateral (and any original documents relating thereto), if any, at the address(es) of the Borrower referred to in Section 6.01(l) or, upon thirty (30) days’ prior written notice to the Collateral Agent and the Administrative Agent, at such other locations in jurisdictions where all action required to protect and perfect the Collateral Agent’s first priority perfected security interest in the Receivable Pool and the Related Assets free and clear of any Adverse Claim shall have been taken and completed. (g) Credit and Collection Policy. Cause the Servicer to service the Pool Receivables, Related Assets, and Contracts in respect of the Receivable Pool in accordance with the Credit and Collection Policy and not agree to any changes thereto, except as permitted under Section 7.03(c). (h) Collections. Cause the Servicer to promptly withdraw from the bank accounts and/or charge the credit or debit cards of the Direct Deposit Obligors all amounts necessary to effect the timely payment when due of the Unpaid Balance of the Pool Receivables relating to such Direct Deposit Obligors and immediately remit such amounts within one (1) Business Day of the date of withdrawal, debit or credit, directly to a Collection Account subject to a Control Agreement, without any commingling of such amounts with any other funds. Instruct, or cause the Servicer to instruct, each Obligor that to the extent any payment in respect of the related Pool Receivable is not to be made through the Servicer’s withdrawal from the bank account of each such Obligor and/or through the charge of the credit or debit card of each such Obligor, all Collections in respect of the Pool Receivables of each such Obligor shall be made to (i) a Collection Account covered by a Control Agreement or (ii) a Lock-Box that remits such amounts directly to a Collection Account covered by a Control Agreement, in each case, without any commingling of such amounts with any other funds. Cause the Servicer to as promptly as practicable and in any event within one (1) Business Day of receipt in any Collection Account of any Collections, remit, or cause to be remitted, such amounts directly to the Payment Account, without any commingling of such amounts with any other funds. (i) Right and Title. Hold all right, title, and interest in each Pool Receivable, except to the extent that any such right, title, or interest has been transferred or granted to the Collateral Agent (on behalf of the Secured Parties). 747634416.3 21671763747634416.9 21671763 84 (j) Transaction Documents. Without limiting its covenants or agreements set forth herein or in any other Transaction Document, (i) comply with each and every of its covenants and agreements under the Sale Agreement and its Constituent Documents, and (ii) take all actions reasonably necessary to ensure that each Transaction Document, except as may be terminated with the consent of the Administrative Agent, the Collateral Agent and each Group Agent, or in accordance with its terms, remains enforceable and in effect. (k) Enforcement of Sale Agreement. On its own behalf and on behalf of Lenders, Group Agents, the Collateral Agent, and the Administrative Agent, (x) promptly enforce all covenants and obligations of ADT contained in the Sale Agreement, and (y) deliver to the Collateral Agent and the Administrative Agent (which will deliver such consents to each Group Agent) all consents, approvals, directions, notices, and waivers and take other actions under the Sale Agreement as may be reasonably directed by the Collateral Agent, the Administrative Agent or the Required Lenders. (l) Filing of Financing Statements. At ADT’s expense, take all actions necessary (including all filings) to vest in, and maintain in the Collateral Agent (on behalf of the Secured Parties) a valid, first priority perfected security interest in the Pool Receivables and Related Assets and the other Collateral free and clear of any Adverse Claims. Without limiting the foregoing, at ADT’s expense, as promptly as practicable (within five (5) Business Days) following such request execute, authorize and deliver all instruments and documents and take all action, necessary or reasonably requested by the Collateral Agent, the Administrative Agent, or any Group Agent (including the filing of financing or continuation statements, amendments thereto, or assignments thereof) to enable the Collateral Agent to exercise and enforce all of its rights hereunder and to vest and maintain vested in the Collateral Agent a valid, first priority perfected security interest in the Pool Receivables, the Related Assets with respect thereto, the Sale Agreement, the Collections with respect thereto and the other Collateral free and clear of any Adverse Claim. The Borrower hereby authorizes the Administrative Agent and the Collateral Agent to file any continuation statements, amendments thereto, and assignments thereof as the Collateral Agent, the Administrative Agent, or any Group Agent may from time to time determine to be necessary or desirable to perfect or maintain the perfection or priority of its security interest in the Pool Receivables, the Collections with respect thereto, the Related Assets with respect thereto, the Sale Agreement, and the other Collateral free and clear of any Adverse Claims. (m) Location. Maintain at all times its jurisdiction of organization and its chief executive office within a jurisdiction in the United States in which Article 9 of the UCC (2001 or later revision) is in effect. (n) Tax Matters. Pay all applicable taxes required to be paid by it when due and payable in connection with the transfer of the Pool Receivables and Related Assets by the Borrower; the Borrower acknowledges that none of the Collateral Agent, the Administrative Agent, any Group Agent, or any Lender shall have any responsibility with respect thereto. Pay and discharge, or cause the payment and discharge of, all federal income taxes (and all other material taxes) when due and payable, except such as may be contested in good faith by appropriate proceeding and for which an adequate reserve has been established and is maintained in accordance with GAAP.


 
747634416.3 21671763747634416.9 21671763 85 (o) Certain Governmental Fees, Surcharges, and Taxes. With respect to any portion of a Receivable attributable to governmental fees, surcharges, or taxes, pay (or cause to be paid) such governmental fees, surcharges, or taxes to the applicable Governmental Authority when due in accordance with applicable Law (except for any such governmental fees, surcharges, or taxes that are being appropriately contested in good faith by appropriate proceedings and with respect to which adequate reserves in conformity with GAAP have been provided), and none of the Collateral Agent, the Administrative Agent, any Group Agent, or any Lender shall have any obligation to make any such payment or shall have any other responsibility with respect thereto. (p) Anti-Corruption Laws, Anti-Terrorism Laws, and Sanctions. Maintain in effect and enforce policies and procedures reasonably designed to ensure compliance in all material respects, by the Borrower and its directors, officers, employees, and agents with Anti- Corruption Laws and applicable Sanctions Laws in connection with its business operations, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. (q) Accounting Treatment. Provide the Collateral Agent and the Administrative Agent with written notice delivered not less than twenty (20) days prior to the last day of each fiscal quarter or fiscal year, if the Receivables relating to the Receivable Pool will not be included on the consolidated balance sheet of ADT for purposes of GAAP as of such date. (r) Payment of Principal and Interest. Duly and punctually pay Principal, Interest, Fees and all other amounts payable by the Borrower hereunder in accordance with the terms of this Agreement. SECTION 7.02. Reporting Requirements of the Borrower. From the date hereof until the Final Payout Date, the Borrower shall furnish to the Collateral Agent and the Administrative Agent (who shall promptly send the same to the Group Agents): (a) Financial Statements. As soon as available and in any event within 75 days after the end of its fiscal year, copies of the unaudited annual income statement and balance sheet of the Borrower, prepared in conformity with GAAP (which may be furnished through the delivery of the consolidated financial statements of ADT and the Parent pursuant to Section 7.05(a)). (b) Events of Termination, Etc. Notice of the occurrence of any Event of Termination or Unmatured Event of Termination accompanied by a written statement of an appropriate officer of the Borrower (or the Servicer on its behalf) setting forth details of such event and the action that the Borrower proposes to take with respect thereto, such notice to be provided promptly (but not later than two (2) Business Days) after any Responsible Officer of the Borrower or the Servicer obtains actual knowledge thereof. (c) Other Information. Promptly, from time to time, such Records or other information, documents, records, or reports respecting the condition or operations, financial or otherwise, of the Borrower, its performance under the Transaction Document and the Pool Receivables and Related Assets as the Collateral Agent, the Administrative Agent, or any Group Agent may from time to time reasonably request. 747634416.3 21671763747634416.9 21671763 86 (d) Notices Under Sale Agreement. A copy of each notice received by the Borrower from ADT pursuant to any provision of the Sale Agreement. (e) ERISA. Written notice of any ERISA Event. (f) Annual Lien Opinion. No later than April 20 of each year, at the expense of the Borrower, a legal opinion of counsel reasonably satisfactory to the Collateral Agent and in form and substance satisfactory to the Collateral Agent (accompanied by recent lien searches against the Borrower and ADT), addressing the perfection and priority under the UCC of the Transfers to the Borrower and of the security interests granted to the Collateral Agent under the Transaction Documents and the absence of any financing statements or other instruments filed against ADT or the Borrower reflected in such lien searches covering any Pool Receivable, Related Asset or interest therein other than Permitted Lien Filings. SECTION 7.03. Negative Covenants of the Borrower. From the date hereof until the Final Payout Date, the Borrower shall not: (a) Sales, Adverse Claims, Etc. Except as otherwise provided herein or in the Sale Agreement, sell, assign (by operation of Law or otherwise), or otherwise dispose of, or create or suffer to exist any Adverse Claim (other than the Borrower's ownership interest or contingent claim to ownership) upon or with respect to any Pool Receivable, Related Assets or any other Collateral. (b) Extension or Amendment of Receivables. Except as provided in Section 8.02(b) and to the extent resulting from the Conditional Service Guaranty, extend, amend or otherwise modify the terms of any Pool Receivable (in each case, including, without limitation, by means of any promotional activity, advertising or other statement or warranty (including on any ADT Entity’s website)), or amend, modify or waive any term or condition of any Contract related thereto or permit the Servicer to do the same. (c) Change in Credit and Collection Policy, Business, or Constituent Documents. (i) Make or consent to any change or amendment to the Credit and Collection Policy or permit the Servicer to make any such change or amendment if such proposed change or amendment could reasonably be expected to adversely affect the value, validity, collectability, or enforceability of any Pool Receivables or the Related Assets or decrease the credit quality of any Pool Receivable or the Related Assets or otherwise give rise to a Material Adverse Effect without (x) the prior written consent of the Collateral Agent, the Administrative Agent, and each Group Agent, or (y) in the case of any such change or amendment required by Law, upon delivery to the Collateral Agent and the Administrative Agent of a certificate of a Responsible Officer of ADT which certifies, that based upon advice of reputable counsel, such change or amendment is required to be made as a result of a change in Law, or (ii) make any change in the character of its business or amend or otherwise modify its Constituent Documents in any respect without the prior written consent of the Collateral Agent, the Administrative Agent and the Required Lenders. (d) Change in Accounts. (i) Add any bank, lock-box or lock-box account not listed on Schedule II as an Account Bank, Lock-Box or Collection Account unless the Collateral Agent and the Administrative Agent shall have previously approved and received duly executed 747634416.3 21671763747634416.9 21671763 87 copies of the proper forms of Control Agreements duly executed by the parties thereto, (ii) terminate any Account Bank, or related Lock-Box, Collection Account or the Payment Account without the prior written consent of the Collateral Agent, the Administrative Agent and, in each case, only if prior to such termination it has instructed all affected Obligors to make payments to another Lock-Box or Collection Account or established a substitute Payment Account, as the case may be, in each case, satisfying the requirements of this Agreement, and all affected Obligors (other than Obligors in respect of Delinquent Receivables or Defaulted Receivables) have made at least one payment to such other Lock-Box or Collection Account, and has provided such certifications or undertakings reasonably satisfactory to the Collateral Agent and the Administrative Agent regarding any Obligor payments that may continue to be made to a Lock- Box or Collection Account that is being terminated, or (iii) affirmatively consent to any amendment, supplement, or other modification of any Lock-Box agreement without the prior written consent of the Collateral Agent and the Administrative Agent. (e) Deposits to Accounts. Deposit or otherwise credit, or cause or permit to be so deposited or credited, or direct any Obligor to deposit or remit, any Collections on Pool Receivables to any account not covered by the proper Control Agreement, or (ii) permit any amount to be deposited, credited or remitted to any Collection Account or the Payment Account other than Collections in respect of Pool Receivables. Permit any Collections in respect of Pool Receivables to be deposited, or credited in any account which is not subject to a Control Agreement which is in full force and effect. (f) Name Change, Mergers, Acquisitions, Sales, etc. (i) Change its name or the location of any office at which its physical Records (to the extent not electronically available) and tangible chattel paper or other physical collateral, if any, are maintained, (ii) be a party to any merger or consolidation, or purchase or otherwise acquire all or substantially all of the assets or any stock of any class of, or any partnership or joint venture interest (or similar ownership interest) in, any other Person; or, sell, transfer, convey, contribute, or lease all or any substantial part of its assets, or sell or assign with or without recourse any Pool Receivables or any interest therein (other than pursuant hereto and to the Sale Agreement) to any Person, or (iii) have any subsidiaries. (g) Debt and Business Activity. Incur, assume, guarantee, or otherwise become directly or indirectly liable for or in respect of any Debt or other obligation, purchase any asset (or make any investment by share purchase loan or otherwise), or engage in any other activity (whether or not pursued for gain or other pecuniary advantage), in any case, other than as will occur in accordance with this Agreement or the other Transaction Documents. (h) Change in Organization, Etc. Change its jurisdiction of organization or its name, identity, or corporate structure or make any other change such that any financing statement filed or other action taken to perfect the Collateral Agent’s interests under this Agreement would become misleading or would otherwise be rendered ineffective, unless the Borrower shall have given the Administrative Agent and the Collateral Agent not less than thirty (30) days’ prior written notice of such change and shall have cured such circumstances. The Borrower shall not amend or otherwise modify or waive its Constituent Documents or any provision thereof without the prior written consent of the Collateral Agent and the Administrative Agent. 747634416.3 21671763747634416.9 21671763 88 (i) Actions Impairing Quality of Title. Take any action that could reasonably be expected to cause any Pool Receivable, together with the Related Assets, not to be owned by it free and clear of any Adverse Claim; or take any action that could cause the Collateral Agent not to have a first priority perfected security interest in the Receivable Pool and Related Assets and the other Collateral and all products and proceeds of the foregoing, free and clear of any Adverse Claim, or suffer the existence of any valid effective financing statement or other instrument similar in effect covering any Pool Receivable, any Related Asset, any Contract, any other Collateral or any proceeds thereof on file in any recording office, except Permitted Lien Filings. (j) Actions by ADT. Notwithstanding anything to the contrary set forth in the Sale Agreement, consent to (i) any change or removal of any notation required to be made by ADT pursuant to Section 3.3 of the Sale Agreement, or (ii) any waiver of or departure from any term set forth in Section 5.4 of the Sale Agreement, in each case, without the prior written consent of the Collateral Agent, the Administrative Agent and each Group Agent. (k) Tax Status. Take (or permit any other Person to take) any action that could (or could reasonably be expected to) cause the Borrower to be treated as other than disregarded as separate from its owner for U.S. federal income tax purposes with such owner being a United States person within the meaning of section 7701(a)(30) of the Code. The Borrower shall not take (or permit any other Person to take) any action that could cause it to be subject to any Tax in any jurisdiction outside the United States. The Borrower shall not take (or permit any other Person to take) any action that could cause it to be subject to any material amount of Tax imposed by a state or local taxing authority (which shall not be deemed to include, for the avoidance of doubt, any annual Taxes, franchise Taxes or similar Taxes). (l) Chattel Paper. Permit any Chattel Paper relating to the Pool Receivable or Related Assets to be in the possession of (or, in the case of electronic Chattel Paper, under the control of) any Person other than the Servicer (for the benefit of the Collateral Agent and the Borrower), the Collateral Agent or the Collateral Agent’s designee. (m) Restricted Payments. If an Event of Termination or Unmatured Event of Termination has occurred and is continuing, (i) purchase or redeem any of its membership interests, (ii) declare or pay any dividend or distribution or set aside any funds for any such purpose, (iii) prepay, purchase or redeem any Debt other than in accordance with or pursuant to any Transaction Document, (iv) lend or advance any funds or (v) repay any loans or advances to, for or from any of its Affiliates. SECTION 7.04. Affirmative Covenants of ADT. From the date hereof until the Final Payout Date, ADT, individually and when acting as the Servicer, shall: (a) Compliance with Laws, Etc. Comply with all applicable Laws in respect of the conduct of its business, its assets and properties, the Pool Receivables, the related Contracts and the servicing and collection thereof, except where the failure to so comply, individually or in the aggregate could not reasonably be expected to adversely affect any Pool Receivable, or otherwise give rise to a Material Adverse Effect.


 
747634416.3 21671763747634416.9 21671763 89 (b) Preservation of Corporate Existence. Preserve and maintain its corporate existence, rights, franchises, and privileges in the jurisdiction of its incorporation, and qualify and remain qualified in good standing in each jurisdiction except where the failure to preserve or maintain such existence, rights, franchises, or privileges or to be so qualified could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. (c) Inspections. From time to time, at its expense, upon reasonable prior notice, upon the reasonable request by the Administrative Agent or the Required Lenders (or any Group Agent if an Unmatured Event of Termination or Event of Termination has occurred and is continuing) and during regular business hours, permit the Administrative Agent, the Collateral Agent, and the Group Agents, or any of their respective representatives to visit and inspect its properties, to examine and make extracts from its Records, and to discuss its affairs, finances, and condition with its officers and independent accountants with respect to the Pool Receivables and the Related Assets and the performance of its obligations (as Servicer or otherwise) under the Transaction Documents as often as reasonably requested; provided that, unless an Event of Termination, or an Unmatured Event of Termination has occurred and is continuing at the time of any such inspection, the Servicer shall only be required to reimburse the reasonable documented out-of-pocket costs and expenses related to one such inspection pursuant to Section 5.2(a) of the Sale Agreement or this Section 7.04(c) during any 12-month period, which inspection shall be requested and scheduled by the Administrative Agent; provided, further, that the Collateral Agent, the Administrative Agent and the Group Agents shall use reasonable efforts to coordinate the timing of any inspections made of ADT pursuant to this Section 7.04(c) and of the Borrower pursuant to Section 7.01(c). (d) Keeping of Records and Books of Account; Delivery; Location of Records. Maintain and implement, or cause to be maintained and implemented, administrative and operating procedures (including an ability to recreate records evidencing the Pool Receivables, the Related Assets and the Service Charge Receivables in the event of the destruction of the originals thereof, backing up on at least a daily basis on a separate backup computer from which electronic file copies can be readily produced and distributed to third parties being agreed to suffice for this purpose), and keep and maintain, or cause to be kept and maintained, all documents, books, records, and other information necessary or advisable for the collection of all Pool Receivables, and Related Assets (including records adequate to permit the daily identification of (i) each new Pool Receivable, all Collections relating to each Pool Receivable and adjustments to each existing Pool Receivable received, made or otherwise processed on that day, and (ii) the portion of the amounts received from each Obligor that constitute Collections on the related Pool Receivables and the portion that relates to Collections in respect of Service Charge Receivables in order to effect the priority of payments set forth in the related Contracts). In addition, it shall keep its physical Records (to the extent not electronically available) and tangible chattel paper or other physical collateral (and any original documents relating thereto), if any, at the address(es) referred to in Annex 2 of the Sale Agreement or at such other address(es) as set forth in the Sale Agreement or, upon thirty (30) days’ prior written notice to the Collateral Agent and the Administrative Agent, at such other locations in jurisdictions where all action required by Section 8.05 hereof shall have been taken and completed. (e) Performance and Compliance with Receivables and Contracts. At its expense, timely and fully perform and comply with all provisions, covenants, and other promises 747634416.3 21671763747634416.9 21671763 90 required to be observed by it under the Contracts and the Pool Receivables relating to the Receivable Pool, except where the failure to so perform or comply, individually or in the aggregate, could not reasonably be expected to adversely affect any Pool Receivable or Related Assets or otherwise result in a Material Adverse Effect. (f) Credit and Collection Policy. Comply with the Credit and Collection Policy in regard to each Pool Receivable, the Related Assets, each Service Charge Receivable, the related Contract and the servicing and collection thereof. (g) Collections. Promptly withdraw from the bank accounts and/or charge the credit or debit cards of the Direct Deposit Obligors all amounts necessary to effect the timely payment when due of the Unpaid Balance of the Pool Receivables relating to such Direct Deposit Obligors and immediately remit such amounts, within one (1) Business Day of the date of withdrawal, debit or credit directly to a Collection Account, without any commingling of such amounts with any other funds. Instruct each Obligor that to the extent any payment in respect of the related Pool Receivable is not to be made through the Servicer’s withdrawal from the bank account of each such Obligor and/or through the charge of the credit or debit card of each such Obligor, all Collections in respect of the Pool Receivables of each such Obligor shall be made to (i) a Collection Account covered by a Control Agreement or (ii) a Lock-Box that remits such amounts directly to a Collection Account covered by a Control Agreement, in each case, without any commingling of such amounts with any other funds. As promptly as practicable and in any event within one (1) Business Day of receipt in any Collection Account of any Collections, remit, or cause to be remitted, such amounts directly to the Payment Account, without any commingling of such amounts with any other funds. (h) Filing of Financing Statements. At its expense, take all actions necessary (including all filings) to vest in, and maintain in the Collateral Agent (on behalf of the Secured Parties) a valid, first priority perfected security interest in the Pool Receivables and Related Assets free and clear of any Adverse Claims. Without limiting the foregoing, cause the financing statements described in Exhibit F, that have not previously been filed, to be duly filed in the appropriate jurisdictions at its expense, as promptly as practicable (and in any event, within five (5) Business Days) following such request and to execute, authorize, and deliver all instruments and documents and take all action, necessary or reasonably requested by the Collateral Agent, the Administrative Agent, or any Group Agent (including the filing of financing or continuation statements, amendments thereto, or assignments thereof) to enable the Collateral Agent to exercise and enforce all of its rights hereunder and to vest and maintain vested in the Collateral Agent a valid, first priority perfected security interest in the Pool Receivables, the Related Assets with respect thereto, the Sale Agreement, the Collections with respect thereto, and the other Collateral free and clear of any Adverse Claim. The Servicer hereby authorizes the Collateral Agent and the Administrative Agent to file any continuation statements, amendments thereto, and assignments thereof as the Collateral Agent, the Administrative Agent, or any Group Agent may from time to time determine to be necessary or desirable to perfect or maintain the perfection or priority of its security interest in the Pool Receivables, the Collections with respect thereto, the Related Assets with respect thereto, the Sale Agreement, and the other Collateral free and clear of any Adverse Claims. 747634416.3 21671763747634416.9 21671763 91 (i) Transaction Documents. Without limiting its covenants or agreements set forth herein or in any other Transaction Document, (i) comply with each and every of its covenants and agreements under the Sale Agreement and (ii) take all actions reasonably necessary to ensure that each Transaction Document, except as may be terminated with the consent of the Administrative Agent, the Collateral Agent and each Group Agent, or in accordance with its terms, remains enforceable and in effect. (j) Tax Matters. Pay all applicable taxes required to be paid by it when due and payable in connection with the transfer of the Receivables to the Borrower under the Sale Agreement; ADT acknowledges that none of the Collateral Agent, the Administrative Agent, any Group Agent, or any Lender shall have any responsibility with respect thereto. Pay and discharge, or cause the payment and discharge of, all federal income taxes (and all other material taxes) when due and payable, except such as may be contested in good faith by appropriate proceeding and for which an adequate reserve has been established and is maintained in accordance with GAAP. (k) Certain Governmental Fees, Surcharges, and Taxes. With respect to any portion of a Receivable attributable to governmental fees, surcharges, or taxes, pay (or cause to be paid) such governmental fees, surcharges, or taxes to the applicable Governmental Authority when due in accordance with applicable Law (except for any such governmental fees, surcharges, or taxes that are being appropriately contested in good faith by appropriate proceedings and with respect to which adequate reserves in conformity with GAAP have been provided, and none of the Collateral Agent, the Administrative Agent, any Group Agent, or any Lender shall have any obligation to make any such payment or shall have any other responsibility with respect thereto. Pay all sales taxes to be paid in connection with the Equipment and installation related to each Pool Receivable by the due date thereof (except for any such sales taxes that are being appropriately contested in good faith by appropriate proceedings and with respect to which adequate reserves in conformity with GAAP have been provided). (l) Anti-Corruption Laws, Anti-Terrorism Laws, and Sanctions. Maintain in effect and enforce policies and procedures reasonably designed to ensure compliance in all material respects, by ADT, its Subsidiaries and their respective directors, officers, employees, and agents with Anti-Corruption Laws and applicable Sanctions Laws in connection with ADT’s or its Subsidiaries’ business operations, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. (m) Application of Obligor Payments. Apply payments made by an Obligor under a Contract relating to a Pool Receivable to amounts billed on such Obligor’s invoice in the following order: (i) first, to amounts due in respect of the related Pool Receivables; (ii) second, to amounts due in respect of the related Service Charge Receivables; and (iii) third, other amounts owing by such Obligor. For the avoidance of doubt, any amounts paid by any Obligor in respect of Service Charge Receivables that must be applied pursuant to clause (i) above shall be deemed to be Collections and remitted to the Payment Account pursuant to the terms of this Agreement and the other Transaction Documents as such. (n) Servicing Programs. If a license or approval is required for the Collateral Agent’s, the Administrative Agent’s, or such successor Servicer’s use of any customized or proprietary software or other computer program used by ADT in the servicing of the Receivables, 747634416.3 21671763747634416.9 21671763 92 then, following delivery of a Successor Notice, at its own expense make commercially reasonable efforts to arrange for the Collateral Agent, the Administrative Agent, or such successor Servicer to receive any such required license or approval. (o) Corporate Separateness; Related Matters and Covenants. Cause the Borrower to fully comply with its covenants in Section 7.08, it being understood that the foregoing shall in no event be deemed to obligate ADT to make any capital or other contributions to the Borrower. Maintain in place all policies and procedures, and take and continue to take all actions, applicable to it described in the assumptions as to the facts set forth in, and forming the basis of, the opinions set forth in the opinion letters delivered by Paul, Weiss, Rifkind, Wharton & Garrison LLP to the Collateral Agent, Administrative Agent, Lenders and Group Agent on July 16, 2021, except to the extent that any failure to maintain in place such policies and procedures or failure to continue to take all such actions could not materially and adversely affect the conclusions set forth in such opinion letters. (p) Permitted Securitization. Cause the trustee, administrative agent and/or collateral agent, as applicable, in respect of the ADT Indentures, ADT Credit Agreement, ADT Intercreditor Agreement and the ADT Collateral Agreements to promptly take any actions from time to time, as may be reasonably requested by the Collateral Agent, to facilitate or cause the transfer of any Pool Receivables and the Related Assets or proceeds thereof to the extent then in the possession or control of such trustee, administrative agent and/or collateral agent, as applicable, to or at the direction of ADT or the Collateral Agent. SECTION 7.05. Reporting Requirements of ADT. From the date hereof until the Final Payout Date, ADT shall furnish to the Collateral Agent and the Administrative Agent (who shall promptly send the same to the Group Agents): (a) Financial Statements. (i) Within forty-five (45) days after the close of each of the first three fiscal quarters of each fiscal year of ADT and the Parent, the Parent’s Form 10-Q as filed with the SEC (which shall be deemed delivered upon the filing of such Form 10-Q on the SEC’s website). (ii) Annual Financial Statements. Within ninety (90) days after the end of each fiscal year of ADT and the Parent, the audited consolidated statements of operations, changes in stockholders’ equity and cash flows of each of ADT and the Parent and their respective Subsidiaries for such fiscal year, and the related audited consolidated balance sheet for ADT and the Parent and their respective Subsidiaries as of the end of such fiscal year, setting forth in each case in comparative form the corresponding figures for the previous fiscal year, all reported on by PricewaterhouseCoopers LLP or other independent public accountants of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit that are inconsistent with the standards of the Public Company Accounting Oversight Board), to the effect that such audited consolidated financial statements present fairly in all material respects the financial condition and results of operations of ADT and the Parent and their respective Subsidiaries on a consolidated basis in accordance with


 
747634416.3 21671763747634416.9 21671763 93 GAAP consistently applied (which shall be deemed delivered upon the filing of the Parent’s Form 10-K on the SEC’s website). (iii) Compliance Certificate. Together with the financial statements required hereunder, a compliance certificate in substantially the form of Exhibit E signed by an authorized officer of ADT and the Parent, respectively and dated the date of such annual financial statement or such quarterly financial statement, as the case may be. (b) Financial Statements and Other Information. The following: (i) promptly after the same become publicly available, copies of all proxy statements, financial statements and regular or special reports which ADT or the Parent files with the SEC (which shall be deemed delivered upon the filing thereof on the SEC’s website); (ii) promptly following a request therefor, any documentation or other information (including with respect to the Borrower and the Parent) that the Collateral Agent, the Administrative Agent, any Group Agent or any Lender reasonably requests in order to comply with its ongoing obligations under the applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act including the provision of information regarding beneficial ownership required by 31 C.F.R. §1010.230; and (iii) from time to time such further information regarding the business, affairs and financial condition of the Borrower, ADT, the Parent and their Affiliates as the Collateral Agent, the Administrative Agent or the Required Lenders shall reasonably request. (c) Written notice of any ERISA Event. (d) Events of Termination, Etc. Notice of the occurrence of any Event of Termination or Unmatured Event of Termination, accompanied by a written statement of an appropriate officer of the Servicer setting forth details of such event and the action that it proposes to take with respect thereto, such notice to be provided promptly (but not later than two (2) Business Days) after a Responsible Officer of the Servicer obtains actual knowledge thereof. (e) Litigation. As soon as possible, and in any event within two (2) Business Days of knowledge of any Responsible Officer thereof, notice of any litigation, investigation, or proceeding initiated against the Borrower or, to the extent it could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, against ADT, the Servicer, and/or the Parent. (f) Agreed Upon Procedures Report. Not later than three (3) months after the end of each fiscal year of the Servicer (at the sole cost and expense of the Servicer), a copy of an agreed upon procedures report of a consulting firm or accounting firm reasonably acceptable to the Collateral Agent and the Administrative Agent (who shall promptly send the same to the Group Agents), addressed to the Collateral Agent, the Administrative Agent, and each Group Agent and setting forth the results of such firm’s performance of agreed upon procedures with respect to the 747634416.3 21671763747634416.9 21671763 94 performance of the Servicer for the prior fiscal year or twelve (12) month period, as reasonably requested by the Collateral Agent, the Administrative Agent or any Group Agent. The scope of the above agreed upon procedures report shall be as reasonably requested by the Collateral Agent, the Administrative Agent and the Required Lenders. For the avoidance of doubt, Protiviti Inc. (or applicable Affiliates) shall be deemed to be a consulting firm for purposes of this subsection; provided, that whether or not such consulting firm is reasonably acceptable shall remain subject to the discretion and determination of the Collateral Agent and the Administrative Agent with respect to any future agreed upon procedures reports to be delivered pursuant to this subsection. (g) Change in Credit and Collection Policy. Prior to (i) the effectiveness of any change in or amendment to the Credit and Collection Policy, a description or, if available, a copy of the Credit and Collection Policy then in effect and a written notice (A) indicating such change or amendment, and (B) if such proposed change or amendment could reasonably be expected to adversely affect the value, validity, collectability, or enforceability of the Pool Receivables or decrease the credit quality of any Pool Receivables or otherwise give rise to a Material Adverse Effect, requesting the Collateral Agent’s, the Administrative Agent’s and each Group Agent’s consent thereto. (h) Other Information. Promptly, from time to time, such Records or other information, documents, records, or reports regarding the Pool Receivables, Related Assets or other Collateral, related Service Charge Receivables, the performance of ADT, the Parent and the Borrower under the Transaction Documents, or otherwise relating to the Transaction Documents and the transactions contemplated thereby, as the Collateral Agent or the Administrative Agent may from time to time reasonably request, subject to compliance with applicable laws. SECTION 7.06. Negative Covenants of ADT. From the date hereof until the Final Payout Date, ADT shall not: (a) Extension or Amendment of Receivables. Except as provided in Section 8.02(b) and to the extent resulting from the Conditional Service Guaranty, extend, amend or otherwise modify the terms of any Pool Receivable, or amend, modify or waive any term or condition of any Contract (in each case, including, without limitation, by means of any promotional activity, advertising or other statement or warranty (including on any ADT Entity’s website)) related thereto. (b) Change in Credit and Collection Policy. Make or consent to any change or amendment to the Credit and Collection Policy or to its origination or servicing practices with respect to any Pool Receivables or related Service Charge Receivables, in each case, if such proposed change or amendment could reasonably be expected to adversely affect the value, validity, collectability, or enforceability of any Pool Receivable or the Related Assets or decrease the credit quality of any Pool Receivables or the Related Assets, or otherwise give rise to a Material Adverse Effect, without (i) the prior written consent of the Collateral Agent, the Administrative Agent and each Group Agent or (ii) in the case of any such change or amendment required by Law, upon delivery to the Collateral Agent and the Administrative Agent of a certificate of a Responsible Officer of ADT which certifies, that based upon advice of reputable counsel, such change or amendment is required to be made as a result of a change in Law. 747634416.3 21671763747634416.9 21671763 95 (c) Change in Lock-Box Banks. (i) Add any bank, lock-box or collection account not listed on Schedule II as an Account Bank, Lock-Box or Collection Account unless the Collateral Agent and the Administrative Agent shall have previously approved and received duly executed copies of the proper forms of Control Agreements, duly executed by the parties thereto, (ii) terminate any Account Bank, or related Lock-Box, Collection Account or the Payment Account without the prior written consent of the Collateral Agent, the Administrative Agent and, in each case, only if prior to such termination it has instructed all affected Obligors to make payments to another Lock-Box or Collection Account or established a substitute Payment Account, as the case may be, in each case, satisfying the requirements of this Agreement, and all affected Obligors (other than Obligors in respect of Delinquent Receivables or Defaulted Receivables) have made at least one payment to such other Lock-Box or Collection Account, and has provided such certifications or undertakings reasonably satisfactory to the Collateral Agent and the Administrative Agent regarding any Obligor payments that may continue to be made to a Lock- Box or Collection Account that is being terminated, or (iii) affirmatively consent to any amendment, supplement, or other modification of any Lock-Box agreement without the prior written consent of the Collateral Agent and the Administrative Agent. (d) Deposits to Accounts. Deposit or otherwise credit, or cause or permit to be so deposited or credited, or direct any Obligor to deposit or remit, any Collections on Pool Receivables to any account not covered by the proper Control Agreement. Permit any Collections in respect of Pool Receivables to be deposited, or credited in any account which is not subject to a Control Agreement which is in full force and effect. (e) Mergers, Acquisitions, Sales, Etc. Consolidate or merge with or into any other Person or sell, lease or transfer all or substantially all of its property and assets, or agree to do any of the foregoing, unless (i) no Event of Termination or Unmatured Event of Termination has occurred and is continuing or would result immediately after giving effect thereto, (ii) if ADT is not the surviving entity or if ADT sells or transfers all or substantially all of its property and assets, the surviving entity or the Person purchasing the assets is an Affiliate of ADT and agrees to be bound by the terms and provisions applicable to ADT hereunder, (iii) no Change of Control shall result, (iv) the Parent has reaffirmed in a writing, in form and substance reasonably satisfactory to the Collateral Agent, the Administrative Agent and the Required Lenders, that its obligations under the Performance Support Agreement shall apply to the surviving entity and are in full force and effect, (v) no Material Adverse Effect could reasonably be expected to result therefrom, and (vi) the Collateral Agent, the Administrative Agent and each Group Agent receive such additional certifications and opinions of counsel as the Collateral Agent, the Administrative Agent or the Required Lenders shall reasonably request. (f) Sales, Adverse Claims, Etc. Except as otherwise provided herein or in the Sale Agreement, (I) sell, assign (by operation of Law or otherwise), or otherwise dispose of, or create or suffer to exist any Adverse Claim upon or with respect to, (i) any Pool Receivable, (ii) any other Receivable the proceeds or collections of which are commingled with the proceeds of any Pool Receivable (unless subject to an intercreditor arrangement reasonably approved by the Collateral Agent in writing), (iii) any Service Charge Receivable related to any Pool Receivable under any asset backed financing, securitization or other asset-specific financing (unless subject to an intercreditor arrangement reasonably approved by the Collateral Agent in writing), (iv) any Contract or Related Assets, the related Equipment, or any proceeds, in each case, in respect of any 747634416.3 21671763747634416.9 21671763 96 of the foregoing or any interest therein, (v) any Collection Account, the Payment Account or any other account to which any Collections of any Pool Receivable are sent, or (vi) any right to receive income or proceeds from or in respect of any of the foregoing or (II) purport to do any of the foregoing. (g) Chattel Paper. Permit any Chattel Paper relating to any Pool Receivable to be in the possession of (or, in the case of electronic Chattel Paper, under the control of) any Person other than the Servicer (for the benefit of the Collateral Agent and the Borrower), the Collateral Agent, or the Collateral Agent’s designee. (h) Corporate Separateness; Related Matters and Covenants. Take any action, on its part, to cause the Borrower to violate its covenants in Section 7.08, it being understood that the foregoing shall in no event be deemed to obligate ADT to make any capital or other contributions to the Borrower. SECTION 7.07. Nature of Obligations. Notwithstanding anything to the contrary contained herein or in any other Transaction Document, the Borrower’s obligations hereunder to repay in full the Aggregate Principal and to pay all Interest, Fees and other Borrower Obligations are full recourse general obligations of the Borrower, and all obligations of ADT (as Servicer or otherwise) so specified hereunder shall be full recourse general obligations of ADT. SECTION 7.08. Corporate Separateness; Related Matters and Covenants. The Borrower covenants and agrees to take such actions as shall be necessary in order that: (a) Special Purpose Entity. The Borrower will be a special purpose limited liability company whose activities are restricted in its Constituent Documents to: (i) negotiating, authorizing, executing, delivering, entering into and performing its obligations under the Transaction Documents to which it is a party and undertaking any other activities related thereto, including (A) purchasing or otherwise acquiring Pool Receivables, Related Assets and other assets from ADT, and owning, holding, transferring, assigning, selling, contributing to capital, pledging and otherwise dealing with such assets, (B) entering into and performing its obligations under agreements for the selling, servicing and financing of the Receivable Pool, (C) opening, maintaining and/or terminating any accounts in connection therewith, (D) borrowing Loans hereunder and making all payments of Principal, Interest, Fees and other amounts owed by it under or in connection with this Agreement and the other Transaction Documents, and (E) making cash payments to ADT as purchase price in accordance with the Sale Agreement or paying dividends and distributions to ADT; and (ii) engaging in any lawful act or activity and exercising any powers not prohibited under the Transaction Documents and permitted to limited liability companies organized under the laws of the State of Delaware that are related or incidental to, and necessary, convenient or advisable for the accomplishment of the above-mentioned purposes. (b) Commingling. Except as otherwise expressly permitted by this Agreement, the Borrower shall not commingle any of its assets or funds with those of any of its Affiliates. (c) Independent Manager. At least one member of the Borrower’s board of directors shall be an Independent Manager and the limited liability company agreement of the Borrower shall provide: (i) for substantially the same definition of “Independent Manager” as


 
747634416.3 21671763747634416.9 21671763 97 used herein, (ii) that prior to the Final Payout Date, no Person shall be authorized or empowered to, and the Borrower shall not, without the prior unanimous written consent of the Borrower’s board of managers and the Independent Manager, file a voluntary bankruptcy petition or file or consent to the filing of any bankruptcy, insolvency or reorganization petition under any applicable federal or state law relating to bankruptcy naming the Borrower as debtor or otherwise institute bankruptcy or insolvency proceedings by or against the Borrower or otherwise seek with respect to such entity relief under any laws relating to the relief from debts or the protection of debtors generally, and (iii) that the provisions required by clauses (i) and (ii) of this sentence cannot be amended prior to the Final Payout Date without the prior written consent of the Administrative Agent and the Collateral Agent, and the prior unanimous written consent of the Borrower’s board of managers and the Independent Manager. (d) Corporate Formalities. The Borrower will strictly observe corporate formalities in its dealings with the Servicer, ADT, and any Affiliates thereof. Except as expressly contemplated by this Agreement, the Borrower shall not maintain joint bank accounts or other depository accounts to which the Servicer, ADT, and any Affiliates (other than the Borrower) thereof has independent access. The Borrower shall maintain its Constituent Documents in conformity with this Agreement. (e) Conduct of Business. The Borrower shall conduct its affairs strictly in accordance with its organizational documents and observe all necessary, appropriate, and customary company formalities, including, but not limited to, holding all regular and special members’ and board of directors’ (or managers’) meetings appropriate to authorize all corporate action, keeping separate and accurate minutes of its meetings, passing all resolutions or consents necessary to authorize actions taken or to be taken, and maintaining accurate and separate books, records and accounts, including, but not limited to, payroll and intercompany transaction accounts (to the extent applicable). (f) No Other Business or Debt. The Borrower shall not engage in any business or activity except as set forth in the Transaction Documents nor, incur any Debt other than pursuant to this Agreement and the other Transaction Documents and Debt which is incidental thereto, incurred in the ordinary course of business. (g) Books and Records. The Borrower shall maintain (or cause to be maintained) company records, books of account and financial statements separate from those of any of its Affiliates, in a manner such that it will not be difficult or costly to segregate, ascertain, or otherwise identify the assets and liabilities of the Borrower from the assets and liabilities of its Affiliates, including ADT and the Parent. (h) Operating Expenses. Except as expressly contemplated by the Transaction Documents, and except from capital contributions from its members, the Borrower’s operating expenses will not be borne by any of its Affiliates, including ADT and the Parent. (i) Disclosure of Transactions. All financial statements of the Parent, ADT and any other Affiliates of the Borrower that are consolidated to include the Borrower will include notes or other disclosure that will clearly reflect that the assets of the Borrower are owned by the Borrower, and not available to pay creditors of Parent, ADT or the Borrower’s other Affiliates. 747634416.3 21671763747634416.9 21671763 98 (j) Arm’s-Length Relationships. The Borrower shall maintain an arm’s-length relationship with the Parent, ADT, and its other Affiliates. Neither the Borrower on the one hand, or ADT, or any of its other Affiliates on the other hand will be or will hold itself out to be liable for the debts of the other. The Borrower, ADT, and its other Affiliates will immediately correct any known misrepresentation with respect to the foregoing, and they will not operate or purport to operate as an integrated single economic unit with respect to each other or in their dealing with any other entity. (k) Allocation of Overhead. To the extent that the Borrower, on the one hand, and ADT or any Affiliate of ADT (other than the Borrower), on the other hand, have offices in the same location, there shall be a fair and appropriate allocation of overhead costs between them, and the Borrower shall bear its fair share of such expenses, which may be paid through the Servicing Fee or otherwise. (l) Identification. The Borrower shall at all times hold itself out to the public under its own name as a legal entity separate and distinct from its equity holders, members, managers, ADT, the Parent or any of its other Affiliates. (m) Capital. The Borrower shall maintain adequate capital in light of its contemplated business operations. (n) In respect of the Borrower: (i) the Borrower shall not issue any security of any kind except membership interests issued to ADT in accordance with the Borrower’s Constituent Documents, or incur, assume, guarantee, or otherwise become directly or indirectly liable for or in respect of any Debt or other obligation other than (i) in connection with the Transaction Documents, and (ii) ordinary course operating expenses; (ii) the Borrower shall not sell, pledge, or dispose of any of its assets, except as permitted by, or as provided in, the Transaction Documents; (iii) the Borrower shall not purchase any asset (or make any investment, by share purchase, loan, or otherwise) except as permitted by, or as provided in, the Transaction Documents; (iv) the Borrower shall not make any payment, directly or indirectly, to, or for the account or benefit of, any owner of any Voting Securities, security interest, or equity interest in the Borrower or any Affiliate of any such owner (except, in each case, as expressly permitted by the Transaction Documents); (v) the Borrower shall not make, declare, or otherwise commence or become obligated in respect of, any dividend, stock, or other security redemption or purchase, distribution, or other payment to, or for the account or benefit of, any owner of any Voting Securities or other equity interest in the Borrower to any such owner or any Affiliate of any such owner other than from funds received by it for its own account under Section 3.01(d)(ix), from the proceeds of Loans hereunder, or if applicable, from cash capital contributions from its owner for the payment of its expenses or liabilities or 747634416.3 21671763747634416.9 21671763 99 otherwise that remain unused, or the issuance of additional equity interests to ADT in connection with contributions of cash or other assets, and so long as, in any of the foregoing cases, the result would not directly or indirectly cause the Borrower to be considered insolvent and would not result in a Pool Deficiency Amount; (vi) The Borrower shall not have any employees or subsidiaries; (vii) The Borrower will provide for not less than ten (10) Business Days’ prior written notice to the Collateral Agent and the Administrative Agent of any removal, replacement, or appointment of any manager that is currently serving or is proposed to be appointed as an Independent Manager of the Borrower, such notice to include the identity of the proposed replacement Independent Manager, together with a certification that such replacement satisfies the requirements for an Independent Manager set forth in this Agreement and the limited liability company agreement of the Borrower; and (viii) The Borrower will maintain in place all policies and procedures, and take and continue to take all actions, applicable to it described in the assumptions as to the facts set forth in, and forming the basis of, the opinions set forth in the opinion letters delivered by Paul, Weiss, Rifkind, Wharton & Garrison LLP to the Collateral Agent, Administrative Agent, Lenders and Group Agent on July 16, 2021, except to the extent that any failure to maintain in place such policies and procedures or failure to continue to take all such actions could not materially and adversely affect the conclusions set forth in such opinion letters. ARTICLE VIII ADMINISTRATION AND COLLECTION OF RECEIVABLES SECTION 8.01. Designation of the Servicer. (a) ADT as the Servicer. The servicing, administering, and collection of the Pool Receivables on behalf of the Borrower, the Administrative Agent, Group Agents, the Collateral Agent, and Lenders shall be conducted in accordance with this Agreement by the Person designated as the Servicer hereunder (the “Servicer”) from time to time in accordance with this Section 8.01. Until the Collateral Agent (with the consent, or acting at the direction of, the Required Lenders) delivers to ADT and the Borrower a Successor Notice in accordance with Section 8.01(b), ADT is hereby designated as, and hereby agrees to perform the duties and obligations of, the Servicer pursuant to the terms hereof. The Servicer shall receive a daily Servicing Fee in respect of the Receivable Pool, payable monthly in arrears for each Settlement Period on each subsequent Settlement Date, subject to the priorities of payments in Section 3.01(d), for the performance of its duties hereunder. The Borrower, the Administrative Agent, the Collateral Agent, Lenders, and Group Agents hereby acknowledge and agree to this appointment of the Servicer. (b) Successor Notice. In the event that an Event of Termination has occurred and is continuing, upon the written direction of the Required Lenders or the Administrative Agent, 747634416.3 21671763747634416.9 21671763 100 the Collateral Agent shall, by notice to ADT and the Borrower, immediately designate a successor Servicer pursuant to the terms hereof (a “Successor Notice”) which successor shall be selected by the Administrative Agent with the written consent of the Required Lenders (which consent shall not be unreasonably withheld, conditioned or delayed); it being understood and agreed that, in any event, the Administrative Agent, with the written consent of the Required Lenders (which consent shall not be unreasonably withheld, conditioned or delayed), may (but shall not be obligated to) serve as successor Servicer. Upon receipt of a Successor Notice, ADT agrees that it shall terminate its activities as the Servicer hereunder in a manner that the Administrative Agent determines will facilitate the transition of the performance of such activities to the successor Servicer, and such successor Servicer shall assume each and all of ADT’s rights and obligations to service and administer the Pool Receivables, on the terms and subject to the conditions herein set forth, and ADT shall do all things necessary or appropriate to assist such successor Servicer in assuming such obligations. The Collateral Agent shall not give, and the Administrative Agent and the Lenders shall not instruct the Collateral Agent to give, ADT a Successor Notice except after the occurrence of any Event of Termination that remains continuing. (c) Subservicers; Subcontracts. The Servicer may not subcontract with any Person or otherwise delegate any of its duties or obligations hereunder except (at its own expense) (i) to Collection Agents to collect amounts owed from the Obligors in respect of Defaulted Receivables, (ii) to third party service providers engaged by the Servicer in the ordinary course of business for certain functions relating to the servicing, administering, and collection of Receivables generally (and not limited to Pool Receivables), or (iii) with the prior written consent of the Collateral Agent, the Administrative Agent and the Required Lenders (such consents not to be unreasonably withheld, conditioned, or delayed); provided, that, notwithstanding any such designation, delegation, or subcontract or any replacement or substitution of Servicer pursuant to clause (a) or (b) above, the Servicer shall remain primarily and directly liable for the performance of all the duties and obligations of the Servicer pursuant to the terms hereof. SECTION 8.02. Duties of the Servicer. The Servicer shall take or cause to be taken all such actions as may be necessary or advisable to collect, administer, and service each Pool Receivable from time to time with reasonable care and diligence and, in any event, with no less care and diligence than it uses in the collection, administration and servicing of its own assets, and in accordance with (i) applicable Laws, (ii) the Credit and Collection Policy, and (iii) this Agreement. During the continuance of an Event of Termination, the Collateral Agent shall have the sole right to direct the Servicer to commence or settle any legal actions to enforce collection of any Pool Receivables; provided, that the Servicer shall have no obligation to commence any legal actions or enforce collection of any Pool Receivable in a commercially unreasonable manner, taking into account the costs and recoveries expected in connection with such legal action or enforcement. (a) Allocation of Collections; Segregation. The Servicer shall apply and remit Collections in accordance with the terms of this Agreement, including without limitation, Section 7.04(g). (b) Extension and Modification of Receivables. So long as no Event of Termination or Unmatured Event of Termination is continuing or would result therefrom, the Servicer, may solely, in accordance with the Credit and Collection Policy extend, waive, amend,


 
747634416.3 21671763747634416.9 21671763 101 or otherwise modify the terms of any Pool Receivables as the Servicer may reasonably determine to be appropriate to maximize Collections thereof, in a manner that does not adversely affect any Pool Receivable, including the validity, enforceability or collectability of any Pool Receivable or result in such Pool Receivable not constituting an Eligible Receivable, or otherwise give rise to a Material Adverse Effect; provided, that, (A) after giving effect to such extension, amendment, waiver, or other modification, the Aggregate Principal shall not exceed the Borrowing Base, (B) no such extension, amendment, waiver, or other modification shall make or be deemed to make any such Pool Receivable current or otherwise modify the aging thereof, or limit or reduce the rights of the Borrower or any Secured Party under this Agreement, and (C) following the occurrence of the Termination Date, during the continuation of an Unmatured Event of Termination or Event of Termination, the Servicer may only extend, waive, amend or otherwise modify the terms of the any Pool Receivables with the prior written consent of the Administrative Agent. (c) Documents and Records. The Borrower and ADT shall deliver to the Servicer, and the Servicer shall hold in trust for the Borrower, the Administrative Agent, the Collateral Agent, each Group Agent, and each Lender, all Records (and any original documents relating thereto) (and after the occurrence of an Event of Termination or Unmatured Event of Termination that remains continuing, shall deliver the same to the Collateral Agent or its designees promptly upon the Collateral Agent’s written request). Upon the reasonable written request of the Collateral Agent, the Administrative Agent or any Group Agent, the Servicer shall provide the Collateral Agent, the Administrative Agent and each Group Agent with the location(s) of all physical Records (to the extent not electronically available) and tangible chattel paper or other physical collateral (and any original documents relating thereto), if any. (d) Termination. ADT’s authorization as Servicer under this Agreement shall terminate upon the earlier to occur of (i) the Final Payout Date, and (ii) the effective date of the replacement of the Servicer with a successor servicer in accordance with Section 8.01(b). (e) Power of Attorney. The Borrower hereby grants to the Servicer, an irrevocable power of attorney, with full power of substitution, coupled with an interest, to take in the name of the Borrower any and all steps which are necessary or advisable to endorse, negotiate, or otherwise realize on any writing or other right of any kind held or transmitted by the Borrower or transmitted or received by the Borrower in connection with any Pool Receivable or under the related Records. Each of the Borrower and the Servicer hereby grants during the continuance of an Event of Termination to the Administrative Agent and the Collateral Agent, an irrevocable power of attorney, with full power of substitution, coupled with an interest, to take in the name of the Borrower and the Servicer any and all steps which are necessary or advisable to endorse, negotiate, or otherwise realize on any writing or other right of any kind held or transmitted by the Borrower or the Servicer or transmitted or received by the Borrower or the Servicer in connection with any Pool Receivable or under the related Records, including such actions as may be necessary or desirable, in the reasonable determination of the Administrative Agent and the Collateral Agent, as the case may be, to collect any and all amounts or portions thereof due under the Pool Receivables, Related Assets and all other Collateral, including indorsing the name of the Borrower on checks and other instruments representing Collections and enforcing all of the rights and remedies of the Collateral Agent and the Administrative Agent under and in connection with this Agreement and the other Transaction Documents. 747634416.3 21671763747634416.9 21671763 102 (f) Resignation of ADT as the Servicer. ADT shall not resign in its capacity as the Servicer hereunder without the prior written consent of the Collateral Agent, the Administrative Agent and each Group Agent, which consent shall be given or withheld in the sole and absolute discretion of the Collateral Agent, the Administrative Agent, and each Group Agent, except following the receipt of a Successor Notice and in accordance with Section 8.01(b). (g) Servicing Expenses. For the avoidance of doubt, in consideration of the Servicing Fee payable hereunder, the Servicer shall pay all of the costs and expenses it incurs in connection with the servicing and administration of the Receivable Pool and Related Assets and the performance of its obligations under the Transaction Documents, including, without limitation, all fees payable to account banks with respect to any Collection Account, the Payment Account or related Control Agreements and all costs and expenses of enforcement of the Receivables against the Obligors and all Collection Agent Fees. SECTION 8.03. Rights of the Collateral Agent. In addition to all of its other rights herein including under Articles IX and X, under the other Transaction Documents or at Law or in equity, the Administrative Agent and Collateral Agent shall have the other following rights set forth in this Section 8.03: (a) Notice to Obligors. At any time during the continuance of any Event of Termination upon the written direction of the Required Lenders or the Administrative Agent, (A) the Collateral Agent may notify the Obligors of Pool Receivables, or any of them, of its interests in the Receivable Pool or Related Assets and instruct them to make payments on the Pool Receivables as instructed by, the Collateral Agent, and may debit and/or charge Obligors’ accounts and credit cards directly or through automated clearing house or ACH, and (B) the Servicer shall (on behalf of the Borrower), at the Servicer’s expense, give notice of the Collateral Agent’s interest in the Pool Receivables to each said Obligor and instruct them to make payments on the Pool Receivables as instructed in writing by, the Collateral Agent or the Administrative Agent. (b) Other Rights. At any time during the continuance of any Event of Termination, the Servicer shall, (A) at the Collateral Agent’s request and at the Servicer’s expense, assemble all of the Records and deliver such Records to the Collateral Agent or its designee, and (B) at the request of the Collateral Agent or its designee, exercise or enforce any of their respective rights hereunder, under any other Transaction Document, Pool Receivable, or under any Related Asset (to the extent permitted hereunder or thereunder). Without limiting the generality of the foregoing, at any time, each of the Servicer and the Borrower shall upon the request of the Administrative Agent, the Collateral Agent, any of their respective designee or the Required Lenders and at the Servicer’s expense: (I) authorize, execute (if required) and file such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices, as may be necessary or appropriate; and (II) mark its master data processing records evidencing that the Pool Receivables have been sold in accordance with this Agreement. 747634416.3 21671763747634416.9 21671763 103 (c) Additional Financing Statements; Performance by the Administrative Agent. The Borrower hereby authorizes the Collateral Agent and the Administrative Agent or their respective designees to file one or more financing or continuation statements, and amendments thereto and assignments thereof, or any similar instruments in any relevant jurisdiction to perfect the Collateral Agent’s security interest in the Collateral, identifying the Borrower as the relevant debtor. If the Borrower or the Servicer fails to perform any of its agreements or obligations under this Agreement or any other Transaction Document, the Collateral Agent, the Administrative Agent, or any of their respective designees may (but shall not be required to) itself perform, or cause performance of, such agreement or obligation, and the expenses of the Collateral Agent or the Administrative Agent or its designee incurred in connection therewith shall be payable by the Borrower as provided in Section 12.06. (d) Investment of Funds on Deposit in the Payment Account. The Servicer may cause the Borrower to invest and reinvest, in its own name or in the name of its nominee, amounts on deposit in the Payment Account, in Cash Equivalents, having maturities not exceeding the next succeeding Settlement Date. All such Cash Equivalents and interest and income thereon and the net proceeds realized on the sale or redemption thereof shall for all purposes of this Agreement be deemed to be Collections credited to the Payment Account. The Servicer may cause the Borrower to liquidate Cash Equivalents from time to time to the extent necessary or appropriate, in the sole discretion of the Servicer, to effect the applications of Collections to be made on each Settlement Date pursuant to Section 3.01(d). The Collateral Agent shall have no liability for (i) the investment performance of any amounts invested by the Collateral Agent pursuant to this Section 8.03(d), or (ii) any loss resulting from the sale or liquidation of any such investment prior to its stated maturity date. SECTION 8.04. Responsibilities of the Servicer. Anything herein to the contrary notwithstanding: (a) Contracts. The Servicer shall perform all of its obligations under the Records to the same extent as if the Receivable Pool and Related Assets had not been sold to the Borrower and the exercise by the Collateral Agent or its designee of its rights hereunder shall not relieve the Servicer from such obligations. (b) Limitation of Liability. None of the Collateral Agent, the Administrative Agent, any Lender, or any Group Agent shall have any obligation or liability with respect to any Pool Receivables, Related Assets or Contracts related thereto, nor shall any of them be obligated to perform any of the obligations of the Servicer, ADT, or the Borrower thereunder. SECTION 8.05. Further Action Evidencing Transfers and Security Interest. ADT agrees that from time to time, at its expense, it shall (or cause the Servicer to) promptly execute and deliver all further instruments and documents, and take all further actions, that the Collateral Agent, the Administrative Agent, any of their respective designees or the Required Lenders may 747634416.3 21671763747634416.9 21671763 104 reasonably request or that are necessary in order to perfect, protect or more fully evidence the transactions contemplated by the Transaction Documents. SECTION 8.06. Application of Collections. Subject to Section 7.04(m), unless the Collateral Agent instructs otherwise, any payment by an Obligor in respect of any Pool Receivable shall, except as otherwise specified in writing or otherwise by such Obligor, required by Law or by the underlying Contract, or except to the extent necessary to accomplish a segregation of Collections from proceeds of other Receivables or assets of the Originator in the same or a substantially similar manner as in effect on the Closing Date, be applied using the same systems, practices, and procedures as the Servicer uses for the application of payments on all of the residential receivables serviced by it for itself and its Affiliates whether or not such payments are being made with respect to Pool Receivables. ARTICLE IX EVENTS OF TERMINATION SECTION 9.01. Event of Terminations. If any of the following events (each a “Event of Termination”) shall occur: (a) Any of the following events: (i) the Servicer or any ADT Entity shall fail to perform or observe any covenant or agreement as and when required hereunder or under any other Transaction Document (other than any covenant or agreement referred to in clause (a)(ii) below) and such failure remains unremedied for twenty (20) days after the earlier of the date (A) such Person receives notice of such failure from the Collateral Agent, the Administrative Agent or the Required Lenders, or (B) a Responsible Officer obtains knowledge of such failure; (ii) any ADT Entity or the Servicer shall fail to make any payment or deposit or transfer of monies required to be made by it hereunder or under any other Transaction Document (including, without limitation, any ADT Obligation) as and when due and such failure is not remedied within two (2) Business Days; (iii) the Servicer shall fail to deliver any Information Package when due pursuant to Section 3.01(a) and such failure is not remedied within three (3) Business Days; or (b) any representation or warranty made or deemed to be made by any Servicer, ADT Entity (or any of their officers) under or in connection with any Transaction Document or any certificate, Loan Request, Paydown Notice, Information Package, or any other report, financial statement or other written information delivered in connection therewith shall prove to have been false or incorrect in any material respect when made or deemed to be made (without duplication as to any materiality modifiers, qualifications, or limitations applicable thereto) and solely to the extent capable of cure, shall continue unremedied for twenty (20) days after the earlier of the date (A) such Person receives notice of such breach from the Collateral Agent, the Administrative Agent or the Required Lenders, or (B) a Responsible Officer obtains knowledge of such breach; or


 
747634416.3 21671763747634416.9 21671763 105 (c) an Event of Bankruptcy shall have occurred with respect to any ADT Entity; or (d) a Change of Control shall occur; or (e) the Collateral Agent, for the benefit of the Affected Persons, fails at any time to have a first priority perfected security interest in the Pool Receivables and the Related Assets (or any portion thereof) or any other Collateral and all proceeds of any of the foregoing, in each case, free and clear of any Adverse Claim; or (f) the occurrence of any ERISA Event that, individually or together with all other ERISA Events that have occurred, could reasonably be expected to have a Material Adverse Effect; or (g) any ADT Entity shall be required to register as an “investment company” under (and as defined in) the Investment Company Act; or (h) any material provision of this Agreement or any other Transaction Documents shall cease to be the valid and binding obligation enforceable against any ADT Entity, as applicable, except to the extent terminated in accordance with its terms or with the consent of the Administrative Agent, the Collateral Agent and each Group Agent; or (i) the Borrower shall fail to pay in full all of its Borrower Obligations to the Collateral Agent, the Administrative Agent, or any Lender hereunder by the Maturity Date or any ADT Entity shall fail to pay in full all of its ADT Obligations to the applicable person or the Administrative Agent on their behalf in accordance with the terms of this Agreement by the Maturity Date; or (j) one or more final judgments for the payment of money in an aggregate amount in excess of $84,000,000 in the case of ADT, the Parent or any other Material Subsidiary of the Parent or $1,000,000 in the case of the Borrower and the same shall not be vacated, discharged or stayed or bonded pending appeal for a period of sixty (60) consecutive days, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of ADT, the Parent or any Material Subsidiary of the Parent to enforce any such judgment; or (k) the Borrower, ADT, the Parent or any of their respective Material Subsidiaries shall fail to pay any principal of or premium or interest on any of its Debt which is outstanding in a principal amount of at least, in respect of the Borrower, $1,000,000, or in respect of the Borrower, ADT, the Parent or any of their respective Material Subsidiaries $84,000,000, in the aggregate when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period specified in the agreement or instrument relating to such Debt; or any other event shall occur or condition shall exist under any agreement or instrument relating to any such Debt and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such Debt; or any such Debt shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment), redeemed, purchased or 747634416.3 21671763747634416.9 21671763 106 defeased, or an offer to repay, redeem, purchase or defease such Debt shall be required to be made, in each case prior to the stated maturity thereof; or (l) the breach of any of the financial covenants set forth in the ADT Credit Agreement, any ADT Indenture or any ADT Collateral Agreements as in effect on the Closing Date or an event of default (or similar event) shall have occurred thereunder, in each case without regard to any waivers of such breaches or defaults; or (m) the average of the Delinquency Ratios for the three preceding Settlement Periods, as determined on any Reporting Date, shall exceed 32.5%; or (n) the average of the Loss Ratios for the three preceding Settlement Periods, as determined on any Reporting Date, shall exceed 2.53.0%; or (o) either (i) on any Reporting Date, the Aggregate Principal exceeds the Borrowing Base, as determined based on clause (a) in the definition of “Net Portfolio Balance”, before giving effect to (x) the application of Monthly Collections in accordance with Section 3.01(d) on the immediately following Settlement Date, (y) any Transfer occurring since the most recent Cut-off Date and (z) any Loan to be made on such Settlement Date), or (ii) on any Settlement Date, the Aggregate Principal exceeds the Borrowing Base, as determined based on clause (b) of the definition of “Net Portfolio Balance”, after giving effect to (x) the application of Monthly Collections in accordance with Section 3.01(d) on such Settlement Date, (y) any Transfer occurring on or prior to such Settlement Date and (z) any Loan being made on such Settlement Date; or (p) the Performance Support Agreement is canceled, rescinded, amended, or modified without the prior written consent of the Collateral Agent, the Administrative Agent and each Group Agent; or (q) the Servicer or any ADT Entity shall take any action that materially and adversely affects the collectability of all or any significant portion of the Pool Receivables or the ability of the Borrower, or ADT (as Servicer or otherwise) or the Parent to perform its respective obligations under this Agreement or any other Transaction Document; or (r) ADT ceases to provide Monitoring Services generally; or (s) (i) any Collection Account or the Payment Account shall cease to be subject to a Control Agreement, or any Control Agreement shall cease to be in full force and effect, except (A) if being simultaneously replaced with a proper Control Agreement which is in full force and effect, or (B) with the consent of the Administrative Agent, the Collateral Agent and each Group Agent, (ii) without the prior written consent of the Collateral Agent, cause or permit any amounts on deposit in any Collection Account to be remitted to an account other than the Payment Account, or (iii) in the event any party to a Control Agreement (other than the Collateral Agent) has provided notice of termination of such Control Agreement, by no later than (1) the 15th calendar day following notice of a termination for cause and (2) the 30th calendar day following notice of termination without cause, fail to (A) establish a replacement Collection Account or Payment Account, as the case may be, with a new depository institution that is an Eligible Bank, (B) enter into new Control Agreement(s) with respect to such replacement account(s), (C) cause all amounts 747634416.3 21671763747634416.9 21671763 107 held in the accounts for which Control Agreements are being terminated to be transferred to such replacement account(s), and (D) take all other actions necessary for such replacement accounts to comply with the requirements and covenants hereunder that are applicable to Collections, any Collection Account or the Payment Account, as the case may be, including without limitation, the actions required pursuant to Section 7.01(l) and instructing any applicable Obligors to make payments on the applicable Pool Receivables to new Collection Account(s). An Event of Termination shall be deemed to be continuing until waived in writing by the Administrative Agent, the Collateral Agent and the Required Lenders. SECTION 9.02. Remedies. Upon, or any time after, the occurrence of an Event of Termination (other than an Event of Termination described in Section 9.01(c)) that remains continuing, the Collateral Agent or the Administrative Agent shall, at the request, or may with the consent, of the Required Lenders, by notice to the Borrower and the Servicer (on the Borrower’s behalf) (x) declare the Acceleration Date to have occurred and shall have all of the remedies herein, including without limitation Section 8.01(b) and this Section 9.02, and (y) declare the Aggregate Principal and all other non-contingent Borrower Obligations to be immediately due and payable (in which case the Aggregate Principal and all other non-contingent Borrower Obligations shall be immediately due and payable. In addition, upon the occurrence of an Event of Termination, the Administrative Agent may (i) designate another person to succeed ADT as Servicer, which successor may be the Administrative Agent in accordance with Section 8.01(b), and (ii) direct the Obligors in respect of each Pool Receivables to, or direct ADT to instruct such Obligors to, pay all amounts payable under the Contracts related to the Pool Receivables directly to such account as the Administrative Agent shall designate. Upon the occurrence of an Event of Termination described in Section 9.01(c), the Acceleration Date shall occur automatically and the Aggregate Principal and all other non-contingent Borrower Obligations shall be immediately due and payable. Upon, or at any time after, the occurrence of the Acceleration Date, no additional Loans thereafter will be made. Upon the declaration or automatic occurrence of the Acceleration Date pursuant to this Section 9.02, the Collateral Agent, on behalf of the Lenders and the other Affected Persons, shall have, in addition to all other rights and remedies under this Agreement, any other Transaction Document, or under applicable Law, all other rights and remedies provided under the UCC of each applicable jurisdiction and other applicable Laws (including all the rights and remedies of a secured party upon default under the UCC (including the right to sell any or all of the Collateral subject hereto)), all of which rights shall be cumulative. Subject to Section 10.01, upon, or at any time after, the Acceleration Date, the Administrative Agent and the Collateral Agent shall in respect of the exercise of the rights and remedies under this Section 9.02 act or refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Lenders. ARTICLE X AGENTS SECTION 10.01. Limited Liability of Lenders, Group Agents, Collateral Agent, and the Administrative Agent. The obligations of the Collateral Agent, the Administrative Agent, each Lender and each Group Agent under the Transaction Documents are solely the corporate obligations of such Person. Except with respect to any claim arising out of the willful misconduct or gross negligence of such Person, no claim may be made by the Borrower, the Servicer or ADT, 747634416.3 21671763747634416.9 21671763 108 against the Collateral Agent, the Administrative Agent, any Lender, or any Group Agent, or their respective Affiliates, directors, members, managers, officers, employees, attorneys, or agents for any special, indirect, consequential, or punitive damages in respect of any claim for breach of contract or any other theory of liability arising out of or related to the transactions contemplated by this Agreement or any other Transaction Document, or any act, omission, or event occurring in connection therewith; and the Borrower and ADT hereby waives, releases, and agrees not to sue upon any claim for any such damages not expressly permitted by this Section 10.01, whether or not accrued and whether or not known or suspected to exist in its favor. Notwithstanding any provision of this Agreement or any other Transaction Document to the contrary: (i) in no event shall the Collateral Agent, the Administrative Agent, or any Group Agent ever be required to take any action which exposes it to personal liability or which is contrary to the provision of any Transaction Document or applicable Law, and (ii) neither the Collateral Agent, the Administrative Agent, nor any Group Agent shall have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any party hereto or any other Person, and no implied covenants, functions, responsibilities, duties, obligations, or liabilities on the part of the Collateral Agent, the Administrative Agent, or any Group Agent shall be read into this Agreement or the other Transaction Documents or otherwise exist against the Collateral Agent, the Administrative Agent, or any Group Agent. Neither the Administrative Agent nor the Collateral Agent shall be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders. Nothing herein or in any other Transaction Document or related documents shall obligate the Administrative Agent or the Collateral Agent to advance, expend or risk its own funds, or to take any action which in its reasonable judgment may cause it to incur any expense or financial or other liability for which it does not reasonably expect to be indemnified to its satisfaction. Neither the Administrative Agent nor the Collateral Agent shall be liable for any action taken or omitted to be taken by it or them under or in connection with this Agreement or any of the other Program Documents, except for its or their own gross negligence or willful misconduct. In performing its functions and duties hereunder, the Collateral Agent and the Administrative Agent shall act solely as the agent of the Lenders and the Group Agents, as applicable, and does not assume nor shall be deemed to have assumed any obligation or relationship of trust or agency with or for any ADT Entity or any other Person. SECTION 10.02. Authorization and Action of each Group Agent . By its execution hereof, in the case of each Lender, and by accepting the benefits hereof, each Program Support Provider, each such party hereby designates and appoints its related Group Agent to take such action as agent on its behalf and to exercise such powers as are delegated to such Group Agent by the terms hereof, together with such powers as are reasonably incidental thereto. Each Group Agent reserves the right, in its sole discretion, to take any actions and exercise any rights or remedies, in each case, authorized or provided for under this Agreement or any other Transaction Document and any related agreements and documents. SECTION 10.03. Authorization and Action of the Administrative Agent and Collateral Agent. By its execution hereof, in the case of each Lender and Group Agent, each such party hereby designates and appoints Mizuho as the Administrative Agent and Mizuho as the Collateral Agent to take such action as agent on its behalf and to exercise such powers as are delegated to such party by the terms hereof, together with such powers as are reasonably incidental thereto. Subject to Section 9.02, the Administrative Agent and the Collateral Agent reserve the right, in its sole discretion, to take any actions and exercise any rights or remedies, in each case, authorized or


 
747634416.3 21671763747634416.9 21671763 109 provided for under this Agreement or any other Transaction Document and any related agreements and documents. If any provision of any Transaction Document permits the Collateral Agent or the Administrative Agent to take any action in its discretion, this paragraph shall not limit such discretionary right. SECTION 10.04. Delegation of Duties of each Group Agent. Each Group Agent may execute any of its duties through agents or attorneys in fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. No Group Agent shall be responsible to any Lender in its Group for the negligence or misconduct of any agents or attorneys in fact selected by it with reasonable care. SECTION 10.05. Delegation of Duties of the Administrative Agent and the Collateral Agent. The Collateral Agent and the Administrative Agent may execute any of its duties through agents or attorneys in fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. Neither the Collateral Agent nor the Administrative Agent shall be responsible to any Lender, any Group Agent, or any other Person for the negligence or misconduct of any agents or attorneys in fact selected by it with reasonable care. SECTION 10.06. Successor Administrative Agent and Collateral Agent; Termination. (a) The Administrative Agent may, upon at least thirty (30) days’ notice to the Servicer, the Borrower and each Group Agent, resign as an Administrative Agent. Such resignation shall not become effective until a successor agent (i) is appointed by the Required Lenders and so long as no Event of Termination has occurred and is continuing, and such assignment is not to an Affiliate of Mizuho, is consented to by the Servicer and the Borrower (each such consent not to be unreasonably withheld, conditioned, or delayed), and (ii) has accepted such appointment. Upon such acceptance of its appointment as the Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall succeed to and become vested with all the rights and duties of the Administrative Agent, and such retiring Administrative Agent shall be discharged from its duties and obligations under the Transaction Documents. (b) The Collateral Agent may, upon at least thirty (30) days’ notice to the Servicer (on the Borrower’s behalf), the Administrative Agent, and each Group Agent, resign as Collateral Agent. Such resignation shall not become effective until a successor Collateral Agent (i) is appointed by the Required Lenders and so long as no Event of Termination has occurred and is continuing, and such assignment is not to an Affiliate of Mizuho or is consented to by the Servicer and the Borrower (each such consent not to be unreasonably withheld, conditioned, or delayed), and (ii) has accepted such appointment. Upon such acceptance of its appointment as the Collateral Agent hereunder by a successor Collateral Agent, such successor Collateral Agent shall succeed to and become vested with all the rights and duties of such retiring Collateral Agent, and such retiring Collateral Agent shall be discharged from its duties and obligations under the Transaction Documents. (c) If the Collateral Agent breaches in any material respect any of its obligations under this Agreement and such breach is not cured (if capable of being cured) within thirty (30) days after the Collateral Agent receives notice of such breach from any Group Agent, the Required Lenders may, upon at least ten (10) Business Days’ notice to the Servicer, the Borrower, the Collateral Agent, the Administrative Agent, and each Group Agent, terminate the 747634416.3 21671763747634416.9 21671763 110 Collateral Agent and appoint a successor to the Collateral Agent. Such termination shall not become effective until a successor Collateral Agent (i) is appointed by the Required Lenders and so long as no Event of Termination has occurred and is continuing, consented to by the Servicer and the Borrower (each such consent not to be unreasonably withheld, conditioned, or delayed), and (ii) has accepted such appointment and is made a party to this Agreement and each other Transaction Document to which the Collateral Agent is a party. Upon such acceptance of its appointment as the Collateral Agent hereunder by a successor Collateral Agent, such successor Collateral Agent shall succeed to and become vested with all the rights and duties of such retiring Collateral Agent, and such retiring Collateral Agent shall be discharged from its duties and obligations under the Transaction Documents. (d) The appointment and authorization of the Collateral Agent, and the Administrative Agent under this Agreement shall terminate upon the earlier to occur of (i) the Final Payout Date, and (ii) the effective date of the replacement of such Collateral Agent, Administrative Agent, as applicable, with a successor in accordance with this Section 10.06. SECTION 10.07. Indemnification. Each Lender (or in the case of a Conduit Lender, the related Group Agent) shall indemnify and hold harmless the Collateral Agent and the Administrative Agent and their respective officers, directors, employees, representatives, and agents (to the extent not reimbursed by the Borrower or the Servicer and without limiting the obligation of the Borrower or the Servicer to do so), ratably in accordance with its Lender Loan Limit (or its Loans, if its Lender Loan Limit is zero) from and against any and all liabilities, obligations, losses, damages, penalties, judgments, settlements, costs, expenses, and disbursements of any kind whatsoever (including in connection with any investigative or threatened proceeding, whether or not such Person is designated a party thereto) that may at any time be imposed on, incurred by or asserted against the Collateral Agent or the Administrative Agent for such Person as a result of, or related to, any of the transactions contemplated by the Transaction Documents or the execution, delivery, or performance of the Transaction Documents or any other document furnished in connection therewith. SECTION 10.08. Reliance, etc. Without limiting the generality of Section 10.01, the Collateral Agent, the Administrative Agent, and each Group Agent: (a) may consult with legal counsel, independent certified public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants, or experts; (b) makes no warranty or representation to any Lender or any other holder of any interest in Pool Receivables and shall not be responsible to any Lender or any such other holder for any statements, warranties, or representations made by other Persons in or in connection with any Transaction Document; (c) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants, or conditions of any Transaction Document on the part of the Borrower or to inspect the property (including the books and records) of the Borrower; (d) shall not be responsible to any Lender or any other holder of any interest in Pool Receivables for the due execution, legality, validity, enforceability, genuineness, sufficiency, or value of any Transaction Document; and (e) shall incur no liability under or in respect of this Agreement or any other Transaction Document by acting upon any notice (including notice by telephone), consent, certificate, or other instrument or writing (which may be by facsimile or telex) believed by it to be genuine and signed or sent by the proper party or parties. 747634416.3 21671763747634416.9 21671763 111 SECTION 10.09. Lenders and Affiliates . Each of the Lenders, the Group Agents, the Collateral Agent, the Administrative Agent and any of their respective Affiliates may engage in any kind of business with any ADT Entity or any Obligor, any of their respective Affiliates, and any Person who may do business with or own securities of any ADT Entity, any Obligor or any of their respective Affiliates. SECTION 10.10. Sharing of Recoveries. Each Lender agrees that if it receives any recovery, through set-off, judicial action or otherwise (including pursuant to Section 12.04), on any amount payable or recoverable hereunder in a greater proportion than should have been received hereunder or otherwise inconsistent with the provisions hereof, then the recipient of such recovery shall purchase for cash an interest in the Loans owing to the other Lenders (as payment of Principal or otherwise), without representation or warranty except for the representation and warranty that such interest is being sold by each such other Lender free and clear of any Lien created or granted by such other Lender, in the amount necessary to create proportional participation (based on proportional Principal before giving effect to such recovery) by the Lender in such recovery. If all or any portion of such amount is thereafter recovered from the recipient, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest. SECTION 10.11. Non-Reliance. Each Lender expressly acknowledges that none of the Collateral Agent, the Administrative Agent, the Group Agents nor any of their respective officers, directors, members, partners, certificateholders, employees, agents, attorneys-in-fact, or Affiliates has made any representations or warranties to it and that no act by the Collateral Agent, the Administrative Agent, or any Group Agent hereafter taken, including any review of the affairs of any ADT Entity, shall be deemed to constitute any representation or warranty by the Collateral Agent, the Administrative Agent, or any Group Agent. Each Lender represents and warrants to the Collateral Agent, the Administrative Agent, and each Group Agent that, independently and without reliance upon the Collateral Agent, the Administrative Agent, any Group Agent, or any other Lender and based on such documents and information as it has deemed appropriate, it has made and will continue to make its own appraisal of and investigation into the business, operations, property, prospects, financial, and other conditions and creditworthiness of any ADT Entity and the Receivables and its own decision to enter into this Agreement and to take, or omit, action under any Transaction Document. Without limiting the foregoing, the Lenders and the Group Agents acknowledge and agree that (i) the Administrative Agent has made certain of its own analytics, credit evaluations, models and/or projections regarding the performance and expected performance of the Receivable Pool available to certain Lenders and/or Group Agents, (ii) such information was made available to it solely as an accommodation by the Administrative Agent and that it has made its own independent credit analysis and investigation regarding the performance and expected performance of the Receivable Pool, and (iii) the Administrative Agent shall have no responsibility or liability for the accuracy or completeness of any such information. Except for items specifically required to be delivered hereunder, neither the Collateral Agent nor the Administrative Agent shall have any duty or responsibility to provide any Group Agent or Lender with any information concerning any ADT Entity, or any of their Affiliates that comes into its possession or any of its officers, directors, members, partners, certificateholders, employees, agents, attorneys-in-fact, or Affiliates. SECTION 10.12. Erroneous Payment. 747634416.3 21671763747634416.9 21671763 112 (a) If anthe Administrative Agent notifies a Credit Party, or any Person who has received funds on behalf of a Credit Party (any such Credit Party or other recipientLender (any such Lender, a “Payment Recipient”) that suchthe Administrative Agent has determined in its sole discretion (whether or not after receipt of any notice under immediately succeeding clause (b)) that any funds received by such Payment Recipient from suchthe Administrative Agent or any of its Affiliates were erroneously transmitted to, or otherwise erroneously or mistakenly received by, such Payment Recipient (whether or not known to such Credit Party or other Payment Recipient on its behalf) (any such funds, whether received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise, individually and collectively, an “Erroneous Payment”) and demands the return of such Erroneous Payment (or a portion thereof), such Erroneous Payment shall at all times remain the property of suchthe Administrative Agent and shall be segregated by the Payment Recipient and held in trust for the benefit of suchthe Administrative Agent, and such Credit Party shall (or, with respect to any Payment Recipient who received such funds on its behalf, shall cause such Payment Recipient to)shall promptly, but in no event later than two Business Days thereafter, return to suchthe Administrative Agent the amount of any such Erroneous Payment (or portion thereof) as to which such a demand was made, in same day funds (in the currency so received), together with interest thereon in respect of each day from and including the date such Erroneous Payment (or portion thereof) was received by such Payment Recipient to the date such amount is repaid to suchthe Administrative Agent in same day funds at the greater of the Federal Funds Rate and a rate determined by suchthe Administrative Agent in accordance with banking industry rules on interbank compensation from time to time in effect. A notice of suchthe Administrative Agent to any Payment Recipient under this clause (a) shall be conclusive, absent manifest error. (b) Without limiting immediately preceding clause (a), each Credit Party, or any Person who has received funds on behalf of a Credit Party,Payment Recipient hereby further agrees that if it receives a payment, prepayment or repayment (whether received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise) from anthe Administrative Agent (or any of its Affiliates) (x) that is in a different amount than, or on a different date from, that specified in a notice of payment, prepayment or repayment sent by suchthe Administrative Agent (or any of its Affiliates) with respect to such payment, prepayment or repayment, (y) that was not preceded or accompanied by a notice of payment, prepayment or repayment sent by suchthe Administrative Agent (or any of its Affiliates), or (z) that such Credit Party, or other such recipientPayment Recipient, otherwise becomes aware was transmitted, or received, in error or by mistake (in whole or in part) in each case: (i) (A) in the case of immediately preceding clauses (x) or (y), an error shall be presumed to have been made (absent written confirmation from suchthe Administrative Agent to the contrary) or (B) an error has been made (in the case of immediately preceding clause (z)), in each case, with respect to such payment, prepayment or repayment; and (ii) such Credit PartyPayment Recipient shall (and shall cause any other recipient that receives funds on its respective behalf to) promptly (and, in all events, within one Business Day of its knowledge of such error) notify suchthe Administrative Agent of its receipt of such payment, prepayment or repayment, the details thereof (in reasonable


 
747634416.3 21671763747634416.9 21671763 113 detail) and that it is so notifying suchthe Administrative Agent pursuant to this Section 10.12(b). (c) Each Credit PartyPayment Recipient hereby authorizes eachthe Administrative Agent to set off, net and apply any and all amounts at any time owing to such Credit PartyPayment Recipient under any Transaction Document, or otherwise payable or distributable by suchthe Administrative Agent to such Credit PartyPayment Recipient from any source, against any amount due to suchthe Administrative Agent under immediately preceding clause (a) or under the indemnification provisions of this Agreement. (d) In the event that an Erroneous Payment (or portion thereof) is not recovered by an Agent for any reason, after demand therefor by such Agent in accordance with immediately preceding clause (a), from any Lender that has received such Erroneous Payment (or portion thereof) (and/or from any Payment Recipient who received such Erroneous Payment (or portion thereof) on its respective behalf) (such unrecovered amount, an “Erroneous Payment Return Deficiency”), upon such Agent’s notice to such Lender at any time, (i) such Lender shall be deemed to have assigned its Loans (but not its Lender Loan Limit) with respect to which such Erroneous Payment was made in an amount equal to the Erroneous Payment Return Deficiency (or such lesser amount as such Agent may specify) (such assignment of the Loans (but not Lender Loan Limit), the “Erroneous Payment Deficiency Assignment”) at par plus any accrued and unpaid interest (with the assignment fee to be waived by such Agent in such instance), and is hereby (together with the Borrower) deemed to execute and deliver an Assignment and Acceptance Agreement with respect to such Erroneous Payment Deficiency Assignment, (ii) such Agent as the assignee Lender shall be deemed to acquire the Erroneous Payment Deficiency Assignment, (iii) upon such deemed acquisition, such Agent as the assignee Lender shall become a Lender hereunder with respect to such Erroneous Payment Deficiency Assignment and the assigning Lender shall cease to be a Lender hereunder with respect to such Erroneous Payment Deficiency Assignment, excluding, for the avoidance of doubt, its obligations under the indemnification provisions of this Agreement and its applicable Lender Loan Limit which shall survive as to such assigning Lender and (iv) such Agent may reflect in the Register its ownership interest in the Loans subject to the Erroneous Payment Deficiency Assignment. Such Agent may, in its discretion, sell any Loans acquired pursuant to an Erroneous Payment Deficiency Assignment and upon receipt of the proceeds of such sale, the Erroneous Payment Return Deficiency owing by the applicable Lender shall be reduced by the net proceeds of the sale of such Loan (or portion thereof), and such Agent shall retain all other rights, remedies and claims against such Lender (and/or against any recipient that receives funds on its respective behalf). For the avoidance of doubt, no Erroneous Payment Deficiency Assignment will reduce the Lender Loan Limit of any Lender. In addition, each party hereto agrees that, except to the extent that such Agent has sold a Loan (or portion thereof) acquired pursuant to an Erroneous Payment Deficiency Assignment, and irrespective of whether suchthe Administrative Agent may be equitably subrogated, suchthe Administrative Agent shall be contractually subrogated to all the rights and interests of the applicable Credit PartyPayment Recipient under the LoanTransaction Documents with respect to each Erroneous Payment Return Deficiency(or portion thereof that is not returned to the Administrative Agent as provided herein) (the “Erroneous Payment Subrogation Rights”). (d) (e) The parties hereto agree that an Erroneous Payment shall not pay, prepay, repay, discharge or otherwise satisfy any Obligations owed by the Borrower or any other 747634416.3 21671763747634416.9 21671763 114 ADT Entity, except, in each case, to the extent such Erroneous Payment is, and solely with respect to the amount of such Erroneous Payment that is, comprised of funds received by an Agent from the Borrower or any other ADT Entity for the purpose of making such Erroneous Payment. . (e) (f) To the extent permitted by applicable law, no Payment Recipient shall assert any right or claim to an Erroneous Payment, and hereby waives, and is deemed to waive, any claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by anthe Administrative Agent for the return of any Erroneous Payment received, including without limitation waiver of any defense based on “discharge for value” or any similar doctrine. (f) (g) Each party’s obligations, agreements and waivers under this Section 10.12 shall survive the resignation or replacement of anythe Administrative Agent, any transfer of rights or obligations by, or the replacement of, a Lender, the termination of the Facility LimitLender Loan Limits and/or the repayment, satisfaction or discharge of all Borrower Obligations and ADT Obligations (or any portion thereof) under any LoanTransaction Document. SECTION 10.13. Disclaimer and Exculpation With Respect to any Rate. The Administrative Agent does not warrant or accept any responsibility for, and shall not have any liability with respect to, the administration, submission or any other matter related to Adjusted Daily Simple SOFR or any Benchmark or with respect to any alternative, successor or replacement rate thereof (including any Benchmark Replacement), or any calculation, component definition thereof or rate referenced in the definition thereof, including, without limitation, (i) any such alternative, successor or replacement rate (including any Benchmark Replacement) implemented pursuant to Section 2.06, upon the occurrence of a Benchmark Transition Event, and (ii) the effect, implementation or composition of any Conforming Changes pursuant to Section 2.06, including without limitation, whether the composition or characteristics of any such alternative, successor or replacement reference rate (including any Benchmark Replacement) will be similar to, or produce the same value or economic equivalence of, Adjusted Daily Simple SOFR or any Benchmark or have the same volume or liquidity as did Adjusted Daily Simple SOFR or any Benchmark prior to its discontinuance or unavailability. In addition, the discontinuation of Adjusted Daily Simple SOFR or any Benchmark and any alternative, successor or replacement reference rate may result in a mismatch between the reference rate referenced in this Agreement and other financial instruments of the parties hereto, including potentially those that are intended as hedges. The Administrative Agent and its Affiliates and/or other related entities may engage in transactions that affect the calculation of Adjusted Daily Simple SOFR, any Benchmark or any alternative, successor or replacement rate (including any Benchmark Replacement) and/or any relevant adjustments thereto, in each case, with all determinations of such Adjusted Daily Simple SOFR, any Benchmark or such alternative, successor or replacement rate by the Administrative Agent to be conclusive, absent manifest error. The Administrative Agent may select information sources or services in its reasonable discretion to ascertain Adjusted Daily Simple SOFR, any Benchmark or any such alternative, successor or replacement rate, in each case pursuant to the terms of this Agreement (as amended, amended and restated, supplemented or otherwise modified from time to time), and shall have no liability to any ADT Entity, any Lender or any other person or entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in 747634416.3 21671763747634416.9 21671763 115 equity), for any error or calculation of any such rate (or component thereof) provided by any such information source or service. ARTICLE XI INDEMNIFICATION SECTION 11.01. Indemnities by the Borrower. (a) General Indemnity. Without limiting any other rights which any such Person may have hereunder or under applicable Law, the Borrower agrees to indemnify and hold harmless the Collateral Agent, the Administrative Agent, each Lender, each Group Agent, each other Affected Person, each of their respective Affiliates, and all members, managers, directors, shareholders, officers, employees, and attorneys, or agents of any of the foregoing (each an “Indemnified Party”), forthwith on demand, from and against any and all damages, losses, claims, liabilities, and related costs and expenses, including reasonable and documented attorneys’ fees and disbursements (subject to the limitations in respect of attorneys’ fees and disbursements set forth in the proviso to Section 12.06)] but excluding Taxes (other than Taxes specifically enumerated below) (all of the foregoing being collectively referred to as “Indemnified Amounts”) awarded against or incurred by any of them arising out of, relating to or in connection with this Agreement or the other Transaction Documents, any of the transactions contemplated hereby or thereby, or the ownership, maintenance or funding, directly or indirectly, of the Pool Receivables or Related Assets (or any portion thereof) or otherwise arising out of or relating to or resulting from the actions or inactions of any ADT Entity, the Servicer or any of their respective Affiliates, provided, however, notwithstanding anything to the contrary in this Article XI, excluding Indemnified Amounts solely to the extent resulting from the fraud, bad faith, gross negligence or willful misconduct on the part of such Indemnified Party as determined by a final non-appealable judgment by a court of competent jurisdiction. Without limiting the generality of the foregoing but subject to the express limitations set forth in this Section 11.01, the Borrower shall indemnify and hold harmless each Indemnified Party for any and all Indemnified Amounts arising out of, relating to, or resulting from: (i) the transfer by the Borrower of any interest in any Pool Receivable or Related Asset; (ii) any representation or warranty made by the Borrower under or in connection with any Transaction Document, any Loan Request, any Information Package, or any other information or report delivered by or on behalf of the Borrower pursuant hereto, which shall have been untrue, false, or incorrect when made or deemed made; (iii) the failure of the Borrower to comply with the terms of any Transaction Document, any applicable Law any Contract, any Pool Receivable, or Related Assets or the nonconformity of any Contract, Pool Receivable, or Related Assets with any such Law; 747634416.3 21671763747634416.9 21671763 116 (iv) the failure to vest in favor of the Collateral Agent a first priority perfected security interest in any Pool Receivables and all Related Assets against all Persons including any bankruptcy trustee or similar Person; (v) the failure to file, or any delay in filing of, financing statements or other similar instruments or documents under the UCC of any applicable jurisdiction or under any other applicable Laws with respect to any Pool Receivable or Related Assets whether at the time of any Loan or at any time thereafter; (vi) any suit or claim related to the Pool Receivables or any Related Asset or any Transaction Document (including any products liability or environmental liability claim arising out of or in connection with merchandise or services that are the subject of any Pool Receivable); (vii) failure by the Borrower to comply with the “bulk sales” or analogous Laws of any jurisdiction; (viii) any loss arising, directly or indirectly, as a result of the imposition of sales or similar transfer type taxes or the failure by the Borrower to timely collect and remit to the appropriate authority any such taxes; (ix) any commingling of any Collections of Pool Receivables with any other funds; (x) the failure or delay to provide any Obligor with an invoice or other evidence of indebtedness; (xi) any failure of the Borrower or ADT to pledge or assign, as applicable, any Pool Receivable or Related Asset contemplated to be so pledged or assigned under the Transaction Documents; or the violation or breach by any ADT Entity of any confidentiality provision, or of any similar covenant of non- disclosure, with respect to any Contract, or any other Indemnified Amount payable hereunder with respect to or resulting from any such violation or breach; (xii) the existence or assertion of any Adverse Claim in favor of any Governmental Authority or any other Person against the Payment Account, any Collection Account, Lock-Box, Collections, Receivable, Service Charge Receivable, or any related Contract or any portion or proceeds thereof, including, without limitation, as a result of any portion of any such Collection Account, Lock- Box, Collections, Receivable, Service Charge Receivable, or any related Contract being attributable to governmental fees, surcharges, or taxes; (xiii) any Pool Receivable failing to constitute an Eligible Receivable; (xiv) any dispute, claim, offset or defense (other than discharge in bankruptcy of the Obligor) of the Obligor to the payment of any Pool Receivable in, or purporting to be in, the Receivable Pool (including, without limitation, a defense based on such Receivable or the related Contract not being a legal, valid


 
747634416.3 21671763747634416.9 21671763 117 and binding obligation of such Obligor enforceable against it in accordance with its terms), or any other claim resulting from the sale of the merchandise or services related to such Receivable or the furnishing or failure to furnish such merchandise or services or relating to collection activities with respect to such Pool Receivable; (xv) any investigation, litigation or proceeding related to any Transaction Document or the use of proceeds, of the Loans or the ownership of Pool Receivables or the Related Assets; (xvi) any claim brought by any Person other than an Indemnified Party arising from any activity by the Borrower or any Affiliate of the Borrower in servicing, administering or collecting any Receivable; (xvii) the facts or circumstances giving rise to any Event of Termination or Unmatured Event of Termination; or (xviii) any inability to litigate any claim against any Obligor in respect of any Pool Receivable as a result of such Obligor being immune from civil and commercial law and suit on the grounds of sovereignty or otherwise from any legal action, suit or proceeding. (b) Contribution. If for any reason the indemnification provided above in this Section 11.01 is unavailable to an Indemnified Party or is insufficient to hold an Indemnified Party harmless, then the Borrower shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, claim, damage, or liability in such proportion as is appropriate to reflect not only the relative benefits received by such Indemnified Party on the one hand and the Borrower on the other hand but also the relative fault of such Indemnified Party as well as any other relevant equitable consideration. (c) For the avoidance of doubt, there shall be no recourse to the Servicer for the Borrower’s indemnification obligations under this Section 11.01 other than to the extent expressly provided for in this Agreement or in any other Transaction Document. SECTION 11.02. Indemnities by ADT and the Servicer. Without limiting any other rights which any such Person may have hereunder or under applicable Law, each of ADT and the Servicer agree to indemnify and hold harmless each Indemnified Party from any and all Indemnified Amounts incurred by any of them and arising out of, relating to or resulting from: (i) any breach by it (in any capacity) of any of its obligations or duties under this Agreement or any other Transaction Document; (ii) the untruth or inaccuracy of any representation or warranty made by it (in any capacity) hereunder or under any other Transaction Document; (iii) the failure of any information contained in any Loan Request or Information Package to be true and correct, or the failure of any other information provided to any such Indemnified Party by, or on behalf of, the Servicer (in any capacity) to be true and correct; (iv) any negligence or willful misconduct on its part (in any capacity) arising out of, relating to, in connection with, or affecting any transaction contemplated by the Transaction Documents, any Contract, any Pool Receivable or any Related Asset; (v) the failure by it (in any capacity) to comply with any applicable Law, rule, or regulation with respect to any Pool Receivable or the related Contract or its servicing thereof; (vi) any 747634416.3 21671763747634416.9 21671763 118 commingling of any funds by it (in any capacity) relating to any Pool Receivables or Related Assets with any of its funds or the funds of any other Person; (vii) the failure or delay to provide any Obligor with an invoice or other evidence of indebtedness; (viii) any failure of the Borrower or it to pledge or assign, as applicable, any Pool Receivable or Related Asset purported to be pledged or assigned as contemplated under the Transaction Documents, or the violation or breach by any ADT Entity of any confidentiality provision, or of any similar covenant of non-disclosure, with respect to any Contract, or any other Indemnified Amount payable hereunder with respect to or resulting from any such violation or breach; (ix) the existence or assertion of any Adverse Claim in favor of any Governmental Authority or any other Person against the Payment Account, Collection Account, Lock-Box, Collections, Receivable, Service Charge Receivable, or any related Contract, or any portion or proceeds thereof, including, without limitation, as a result of any portion of the Payment Account, any such Collection Account, Lock-Box, Collections, Receivable, Service Charge Receivable, or any related Contract being attributable to governmental fees, surcharges, or taxes; (x) Mizuho’s entry into any Control Agreement, and the arrangements and transactions contemplated thereby; (xi) any third party claim against an Indemnified Party for damages caused by the Servicer’s servicing, administration or collection of Pool Receivables; (xii) any investigation or proceeding against an Indemnified Party based on the Servicer’s servicing, administration or collection of Pool Receivables; (xiii) any obligations of the Borrower under Section 4.03; and (xiv) any breach of the representations of Section 6.01(w) or the covenants of Section 7.03(k); provided, however, notwithstanding anything to the contrary in this Article XI, excluding Indemnified Amounts solely to the extent (w) resulting from the fraud, bad faith, gross negligence or willful misconduct on the part of such Indemnified Party as determined by a final non-appealable judgment by a court of competent jurisdiction, (x) resulting from the uncollectability of any such Pool Receivables not arising from any action or breach of any ADT Entity, (y) they constitute recourse with respect to a Pool Receivable by reason of bankruptcy or insolvency, or the financial or credit condition or financial default, of the related Obligor, or (z) they constitute special, indirect, consequential, or punitive damages (other than special, indirect, consequential or punitive damages payable by an Indemnified Party to a third party). ARTICLE XII MISCELLANEOUS SECTION 12.01. Amendments Etc. No amendment, modification, or waiver of any provision of this Agreement or consent to any departure by the Borrower or ADT therefrom shall in any event be effective unless the same shall be in writing and signed by the Borrower, ADT, the Collateral Agent, the Administrative Agent, and the Required Lenders, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver, or modification shall (i) decrease the outstanding amount of, or extend the repayment of or any scheduled payment date for the payment of, any Interest in respect of the Principal or any Fees owed to any Lender, the Collateral Agent, any Group Agent or the Administrative Agent without the prior written consent of such Person; (ii) forgive or waive or otherwise excuse any repayment of the Aggregate Principal without the prior written consent of each Lender and the related Group Agent affected thereby; (iii) increase the Group Loan Limit in respect of any Group without its prior written consent; (iv) amend or modify the provisions of this Section 12.01, or the definition of “Acceleration Date”, “Delinquent Receivable”, “Defaulted Receivable”, “Eligible Receivable”, “Event of Termination”, 747634416.3 21671763747634416.9 21671763 119 “Unmatured Event of Termination”, “Required Lenders”, “Net Portfolio Balance”, “Termination Date” (other than pursuant to an extension thereof in accordance with Section 2.05), “Required Reserves”, “Interest Period” or “Settlement Period” (or any of the definitions used in any such preceding definition in a manner that would circumvent the intention of the restrictions set forth in this Section 12.01), in each case, without the prior written consent of each Lender and Group Agent, or (v) release all or any material part of the Pool Receivables or Related Assets from the security interest granted by the Borrower to the Collateral Agent hereunder except as expressly provided for herein or in the Transaction Documents without the prior written consent of each Lender and Group Agent; provided, further, that the consent of ADT and the Borrower shall not be required for the effectiveness of any amendment which modifies on a prospective basis, the representations, warranties, covenants, or responsibilities of the Servicer at any time when the Servicer is not an Affiliate of ADT or the fees and expenses payable to any such Servicer. Notwithstanding anything in any Transaction Document to the contrary, none of the Borrower or ADT shall amend, waive, or otherwise modify any other Transaction Document, or consent to any such amendment or modification, without the prior written consent of the Collateral Agent, the Administrative Agent, and the Required Lenders. SECTION 12.02. Notices, Etc. All notices and other communications provided for hereunder shall, unless otherwise stated herein, be in writing (including facsimile and email communication) and shall be personally delivered or sent by express mail or nationally recognized overnight courier or by certified mail, first class postage prepaid, or by facsimile or email, to the intended party at the address, facsimile number, or email address of such party set forth in Schedule III or at such other address, facsimile number, or email address as shall be designated by such party in a written notice to the other parties hereto. All such notices and communications shall be effective, (a) if personally delivered or sent by express mail or courier or if sent by certified mail, when received, and (b) if transmitted by facsimile or email, when receipt is confirmed by telephonic or electronic means. SECTION 12.03. Successors and Assigns; Participations; Assignments. (a) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Except as otherwise provided herein, the Borrower and ADT may not assign or transfer any of their rights or delegate any of their duties hereunder or under any Transaction Document without the prior consent of the Collateral Agent, the Administrative Agent and each Group Agent. (b) Participations. Any Lender may sell to one or more Persons (each a “Participant”) participating interests in the interests of such Lender hereunder; provided, however, that no Lender shall grant any participation under which the Participant shall have rights to approve any amendment, waiver or other modification of this Agreement or any other Transaction Document. Such Lender shall remain solely responsible for performing its obligations hereunder, and the Borrower, ADT, the Servicer, the Collateral Agent, each Group Agent, each other Lender and the Administrative Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations hereunder. Each Participant shall be subject to the requirements under Section 4.03(v) as if such Participant were a Lender, it being understood that the documentation required under such section shall be delivered to the participating Lender. A Lender shall not agree with a Participant to restrict such Lender’s right to agree to any 747634416.3 21671763747634416.9 21671763 120 amendment hereto, except amendments that require the consent of all Lenders or all Group Agents. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the Loans (and Interest, fees, and other similar amounts under this Agreement) of each Participant’s interest in the interests of such Lender under the Transaction Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any Pool Receivables or Related Assets or other obligations under any Transaction Document) to any Person except to the extent that such disclosure is necessary to establish that such interest or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, neither the Collateral Agent nor the Administrative Agent (in its capacity as Administrative Agent) shall have any responsibility for maintaining a Participant Register. (c) Assignment by Lenders. Each Lender may freely assign to any Eligible Assignee, without the consent of the Borrower, ADT or the Servicer except as required pursuant to clause (iv) of the definition of Eligible Assignee, all or a portion of its rights and obligations under this Agreement or in any other Transaction Document (including all or a portion of its interest in the Loans and the security interest in the Pool Receivables or Related Assets) in each case, with the prior written consent (such consent not to be unreasonably withheld) of the Collateral Agent, the Administrative Agent, the related Group Agent and with prior written notice to Servicer (on its and the Borrower’s behalf); provided, however, the parties to each such assignment shall execute and deliver to the Collateral Agent, the Administrative Agent, each Group Agent and the Servicer (on its and the Borrower’s behalf), for its recording in the Register, a duly executed and enforceable Assignment and Acceptance Agreement. From and after the effective date specified in such Assignment and Acceptance Agreement, (x) the assignee thereunder shall be a party to this Agreement and, to the extent that rights and obligations under this Agreement have been assigned to it pursuant to such Assignment and Acceptance Agreement, have the rights of a Lender thereunder and (y) the assigning Lender shall, to the extent that rights and obligations have been assigned by it pursuant to such Assignment and Acceptance, relinquish such rights and be released from such obligations under this Agreement. In addition, any Lender that constitutes a banking institution may assign all or any portion of its rights (including its interest in the Loans and the security interest in the Pool Receivables or Related Assets) under this Agreement to any Federal Reserve Bank or any central bank having jurisdiction over such Lender without notice to or consent of the Borrower, the Servicer, any other Lender, the Collateral Agent, or the Administrative Agent. (d) Register. (i) The Administrative Agent (acting in this capacity as an agent of the Borrower) shall in respect of the Receivable Pool maintain a register for the recordation of the names and addresses of the Lenders, and the Loans (and Interest, fees, and other similar amounts under this Agreement) pursuant to the terms hereof from time to time (the


 
747634416.3 21671763747634416.9 21671763 121 “Register”). The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Servicer, the Administrative Agent, the Collateral Agent, and the Lenders shall be entitled to conclusively rely on the information contained in the Register for all purposes hereunder (including with respect to the identities of the Lenders and the amount of their Principal) and otherwise treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender for all purposes hereunder and under the other Transaction Documents. The Register shall be available for inspection by the Borrower, the Servicer and any Lender, at any reasonable time and from time to time upon reasonable prior notice. (ii) The Administrative Agent shall also maintain in the Register each assignee’s interest or obligations under the Transaction Documents with respect to each assignment pursuant to Section 12.03(c) or 12.03(d) and shall record such assignment upon notice from the applicable Lender. The entries in the Register shall be conclusive absent manifest error. (e) Status of Conduit Lenders. So long as any Conduit Lender holds any Loans, such Conduit Lender shall be a multi-seller asset-backed commercial paper conduit. SECTION 12.04. No Waiver; Remedies; Set-Off. No failure on the part of the Collateral Agent, the Administrative Agent, any Affected Person, any Lender, any Group Agent, or any Indemnified Party to exercise, and no delay in exercising, any right, power, or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power, or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power, or remedy. The rights and remedies herein provided are cumulative and not exclusive of any rights, or remedies provided by Law. Any waiver of this Agreement shall be effective only in the specific instance and for the specific purpose for which given. Without limiting the foregoing, each Lender, each Group Agent, the Administrative Agent, the Collateral Agent, each Affected Person, and any of their Affiliates (each a “Set-off Party”) are each hereby authorized at any time during the continuance of an Event of Termination, (in addition to any other rights it may have) to setoff, appropriate, and apply (without presentment, demand, protest, or (subject to the last sentence hereof) any other notice, each of which are hereby expressly waived) any deposits and any other indebtedness held or owing by such Set-off Party (including by any branches or agencies of such Set-off Party) to, or for the account of, any ADT Entity against amounts owing by any ADT Entity under this Agreement or the other Transaction Documents (even if contingent or unmatured). For the avoidance of doubt, the applicable Set-off Party shall not set off against any deposits of any other ADT Entity with respect to any obligations of the Borrower or against the Borrower for any obligations of any other ADT Entity. Each Set-off Party (or its related Group Agent, if applicable) shall promptly notify the Administrative Agent, the Collateral Agent, each Group Agent, the Borrower and ADT of its exercise of set-off rights pursuant to this Section 12.04, which notice shall specify (i) the amount of the Obligations setoff, (ii) whether such Obligations constitute Borrower Obligations or ADT Obligations, (iii) if the setoff was against amounts payable to any ADT Entity (other than the Borrower), the type of ADT Obligation to which such setoff relates, and (iv) the effective date of such setoff. The Administrative Agent’s receipt of any such notice from a Set-off Party (or its related Group Agent, if applicable) in respect of the exercise of setoff rights against any ADT Obligation 747634416.3 21671763747634416.9 21671763 122 shall be deemed to constitute a Demand Certification made by such Set-off Party in respect of such ADT Obligation for the amount so set off, and the Administrative Agent shall make any appropriate adjustments to the amounts distributable by it pursuant to Section 3.03(a) to reflect such exercise of setoff rights. Following the Collateral Agent’s receipt of any such notice from a Set-off Party (or its related Group Agent, if applicable) in respect of the exercise of setoff rights against any Borrower Obligation, the Collateral Agent shall make appropriate adjustments to the amounts allocated and distributed pursuant to Section 3.01(d) to reflect such setoff of such Borrower Obligation by such Set-off Party; provided that the Collateral Agent shall have no obligation to make any such adjustment in respect of a Settlement Date unless it has received the applicable notice of setoff on or prior to the Reporting Date immediately preceding such Settlement Date. For purposes of the above adjustments by the Collateral Agent, all setoffs effected by a Set-off Party shall be deemed to have been applied to Borrower Obligations in the reverse order of application of the Borrower Obligations as set forth in Section 3.01(d). SECTION 12.05. Binding Effect; Survival. (a) This Agreement shall be binding upon and inure to the benefit of the Borrower, ADT, the Servicer, the Collateral Agent, the Administrative Agent, each Lender, and the provisions of Section 4.01 and Article XI shall inure to the benefit of the Affected Persons and Indemnified Parties, respectively, and their respective successors and assigns. (b) Each Program Support Provider and each other Affected Person are express third party beneficiaries hereof. This Agreement shall not confer any rights or remedies upon any other Person, other than the parties hereto and the third party beneficiaries specified in this Section 12.05(b). (c) This Agreement shall create and constitute the continuing obligations of the parties hereto in accordance with its terms, and shall remain in full force and effect until the Final Payout Date. The rights and remedies with respect to any breach of any representation and warranty made by the Borrower pursuant to Article VI and the indemnification and payment provisions of Article XI and Sections 3.02, 3.03, 4.01, 4.02, 4.03, 10.07, 12.04, 12.05, 12.06, 12.07, 12.08, 12.11, 12.12, 12.13, and 12.16 shall be continuing and shall survive any termination of this Agreement. SECTION 12.06. Costs and Expenses. The Borrower shall promptly pay, (x) on the Closing Date, with respect to all such costs and expenses incurred on or prior to the Closing Date and for which invoices have been provided reasonably prior to the Closing Date and (y) by remittance to the Payment Account within three (3) Business Days of demand, for subsequent application in accordance with Section 3.01(d), with respect to all other such costs and expenses, all reasonable and documented out-of-pocket costs and expenses incurred by or on behalf of the Collateral Agent, the Administrative Agent, each Lender and each Group Agent in connection with: (a) the negotiation, preparation, execution, and delivery of this Agreement and the other Transaction Documents and any amendment of or consent or waiver under any of the 747634416.3 21671763747634416.9 21671763 123 Transaction Documents (whether or not consummated), or the enforcement of, or any actual or claimed breach of, this Agreement or any of the other Transaction Documents including reasonable and documented accountants’, auditors’, consultants’, and attorneys’ fees and expenses to any of such Persons and the reasonable and documented fees and charges of any nationally recognized statistical rating agency or any independent accountants, auditors, consultants, or other agents incurred in connection with any of the foregoing or in advising such Persons as to their respective rights and remedies under any of the Transaction Documents in connection with any of the foregoing; and (b) subject only to the limitations in Sections 7.01(c) and 7.04(c), the administration (including periodic auditing and inspections as provided for herein) of this Agreement and the other Transaction Documents and the transactions contemplated thereby, including all reasonable and documented expenses and accountants’, consultants’, and attorneys’ fees incurred in connection with the administration and maintenance of this Agreement and the other Transaction Documents and the transactions contemplated thereby; provided, that so long as no Unmatured Event of Termination or Event of Termination has occurred and remains continuing, the Borrower’s obligation to pay the reasonable and documented attorneys’ fees and expenses incurred by the Collateral Agent, the Administrative Agent, the Lenders and the Group Agents shall be limited to paying the reasonable and documented fees and expenses of two (one if the Collateral Agent and the Administrative Agent are Affiliates or the same Person) law firms, each one selected by the Collateral Agent and the Administrative Agent in its sole discretion; provided, however, that such limitation shall not be applicable in respect of any Person if such limitation on representation would be inappropriate due to an actual or potential conflict of interest between the Collateral Agent, the Administrative Agent, any Group Agent or any Lender, including situations in which there are one or more legal defenses available to one such Person that are different from or additional to those available to any other such Person; provided, further, that, for the avoidance of doubt, no limitation on the reasonable and documented attorneys’ fees and expenses incurred by the Collateral Agent, the Administrative Agent, any Lender, or any Group Agent during the continuance of an Unmatured Event of Termination or Event of Termination shall be applicable even if such event subsequently ceases to be continuing. SECTION 12.07. No Proceedings; Limited Recourse. (a) The Borrower, ADT, the Servicer, the Collateral Agent, the Administrative Agent, each Lender, and each Group Agent, each hereby agrees that it will not institute against any Conduit Lender, or join any other Person in instituting against any Conduit Lender, any proceeding of the type referred to in the definition of Event of Bankruptcy from the Closing Date until one year plus one day following the last day on which all Commercial Paper Notes and other publicly or privately placed indebtedness of such Conduit Lender shall have been indefeasibly paid in full. The foregoing shall not limit any such Person’s right to file any claim in or otherwise take any action with respect to any insolvency proceeding that was instituted by any Person other than such parties. (b) The Servicer, ADT, the Collateral Agent, the Administrative Agent, each Lender, and each Group Agent, each hereby agrees, and each Affected Person, Indemnified Party, Set-off Party and each other Person (other than the Borrower) obtaining any benefits from this 747634416.3 21671763747634416.9 21671763 124 Agreement and the Transaction Documents, by its acceptance of such benefits, shall be deemed to have agreed, that it will not institute against the Borrower, or join any other Person in instituting against the Borrower, any proceeding of the type referred to in the definition of Event of Bankruptcy. The foregoing shall not limit the right of any such Person (each, a “Borrower Creditor”) right to file any claim in or otherwise take any action with respect to any insolvency proceeding that was instituted by any Person other than such Borrower Creditor, to the extent such Borrower Creditor has not otherwise caused the institution of such proceeding. All claims against the Borrower of any Borrower Creditor that has instituted or has caused the institution of such a proceeding shall be subordinated to the claims of each Borrower Creditor that has not instituted or caused the institution of such a proceeding, and the foregoing agreement shall constitute a “subordination agreement” within the meaning of Section 510 of the Bankruptcy Code. Notwithstanding anything to the contrary contained herein or in any other Transaction Document, the obligations of the Borrower hereunder and thereunder are solely the obligations of the Borrower, payable solely from the Borrower’s own assets. (c) Notwithstanding anything to the contrary contained herein, the obligations of any Conduit Lender under this Agreement are solely the obligations of such Conduit Lender and shall be payable at such time as funds are received by or are available to such Conduit Lender in excess of funds necessary to pay in full all outstanding Commercial Paper Notes of such Conduit Lender and, if applicable, all obligations and liabilities of such Conduit Lender to any related Commercial Paper Note issuer, and, to the extent funds are not available to pay such obligations, the claims relating thereto shall not constitute a claim against such Conduit Lender but shall continue to accrue. Each party hereto agrees that the payment of any claim (as defined in Section 101 of Title 11, of the Bankruptcy Code) of any such party shall be subordinated to the payment in full of all Commercial Paper Notes; provided, however, that each party hereto agrees that for purposes of this Section 12.07(c), a Conduit Lender does not own a direct interest in the Pool Receivables, the Related Assets, Collections and the proceeds therefrom, but only a right to the amounts set forth as payable to it herein, and accordingly this Section 12.07(c) does not contemplate that amounts payable to the Borrower or Servicers from the proceeds of Pool Receivables and Related Assets, including Collections, all as set forth herein, would be subordinated to the payment of a Conduit Lender’s Commercial Paper Notes. (d) No recourse under any obligation, covenant or agreement of any Conduit Lender contained in this Agreement shall be had against any member, manager, officer, director, employee or agent of such Conduit Lender or any of their Affiliates (solely by virtue of such capacity) by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute or otherwise; it being expressly agreed and understood that this Agreement is solely an obligation of each Conduit Lender individually, and that no personal liability whatever shall attach to or be incurred by any incorporator, stockholder, officer, director, member, employee or agent of any Conduit Lender or any of their Affiliates (solely by virtue of such capacity) or any of them under or by reason of any of the obligations, covenants or agreements of such Conduit Lender contained in this Agreement, or implied therefrom, and that any and all personal liability for breaches by any Conduit Lender of any of such obligations, covenants or agreements, either at common law or at equity, or by statute, rule or regulation, of every such member, manager, officer, director, employee or agent is hereby expressly waived as a condition of and in consideration for the execution of this Agreement; provided that the foregoing shall not relieve any such Person


 
747634416.3 21671763747634416.9 21671763 125 from any liability it might otherwise have as a result of fraudulent actions taken or omissions made by them. (e) Except as expressly provided in any Transaction Document, no recourse shall be had for the payment of any amount owing by the Borrower in respect of this Agreement or the other Transaction Documents or for the payment of any fee hereunder or for any other obligation or claim arising out of or based upon this Agreement against the Servicer, any other ADT Entity or any Affiliate of any of the foregoing (other than the Borrower), or any stockholder, employee, officer, director, incorporator or beneficial owner of any of the foregoing; provided, however, that, the foregoing shall not in any manner affect, limit or waive any of the obligations of the Servicer, any other ADT Entity or any Affiliate of any of the foregoing that such Person may have under any Transaction Document. SECTION 12.08. Confidentiality. (a) Each party hereto acknowledges that the Collateral Agent, the Administrative Agent, each Lender, and each Group Agent regards the terms of the transactions contemplated by this Agreement to be proprietary and confidential, and each such party severally agrees that: (i) it will not disclose without the prior consent of the Collateral Agent, the Administrative Agent (other than to its Collateral Trustee (if any), and its and its Affiliates’ directors, officers, employees, agents, accountants, auditors, and counsel or other advisors (collectively, “representatives”) of such party, each of whom shall be informed by such party of the confidential nature of the Program Information (as defined below) and of the terms of this Section 12.08), (1) any information regarding the pricing terms in, or copies of, this Agreement, any other Transaction Document or any transaction contemplated hereby or thereby, (2) any information regarding the organization, business, or operations of any Lender generally or the services performed by the Collateral Agent or the Administrative Agent for any Lender, or (3) any information which is furnished by the Collateral Agent or the Administrative Agent to such party and is designated by the Collateral Agent or the Administrative Agent to such party in writing as confidential (the information referred to in clauses (1), (2), and (3) is collectively referred to as the “Program Information”); provided that such party may disclose any such Program Information: (A) to any other party to this Agreement (and any representatives so long as they are informed that such information is confidential and agree to keep such information confidential) for the purposes contemplated hereby, (B) to the extent requested by any regulatory authority or by applicable Laws, (C) as may be required by any Governmental Authority having jurisdiction over such party, (x) in order to comply with any Law applicable to such party or (y) subject to subsection (c), in the event such party is legally compelled (by interrogatories, requests for information or copies, subpoena, civil investigative demand, or similar process) to disclose any such Program Information, (D) to any permitted assignee of such party’s rights and obligations hereunder to the extent they agree to be bound by this Section 12.08, (E) in connection with the exercise of any remedies hereunder or any suit, action, or proceeding relating to this Agreement or the enforcement of rights hereunder, (F) to any nationally recognized statistical rating organization as contemplated by Section 17g-5 of the Securities Exchange Act or in connection with 747634416.3 21671763747634416.9 21671763 126 obtaining or monitoring a rating on any Commercial Paper Notes, or (G) in connection with filings (including exhibit filings) required under the Securities Exchange Act, as reasonably determined by the applicable filing party to be necessary or appropriate for the purposes of complying with applicable Law; (ii) it, and any Person to which it discloses such information, will use the Program Information solely for the purposes of evaluating, administering, performing and enforcing the transactions contemplated by this Agreement and making any necessary business judgments with respect thereto; and (iii) it, and any Person to which it discloses such information, will, upon written demand from the Collateral Agent or the Administrative Agent, return (and cause each of its representatives to return) to the Collateral Agent or the Administrative Agent or destroy (whether to return or destroy being in the sole discretion of such party), all documents or other written material received from the Collateral Agent or the Administrative Agent, as the case may be, pursuant to clauses (2) or (3) of subsection (i) above and all copies thereof made by such party which contain all Program Information; provided however that it may retain one copy of such document or material and any Program Information incorporated into any of its credit review documentation, or as it otherwise deem necessary in order to comply with ordinary and customary retention requirements of financial institutions, sound banking practices and audit and examination requirements or as otherwise may be required by applicable Law. Any Person required to maintain the confidentiality of any information as provided in this Section 12.08(a) shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such information as such Person would accord to its own confidential information. (b) Availability of Confidential Information. Section 12.08(a) shall be inoperative as to such portions of the Program Information which are or become generally available to the public or such party on a nonconfidential basis from a source other than the Collateral Agent or the Administrative Agent or were known to such party on a nonconfidential basis prior to its disclosure by the Collateral Agent or the Administrative Agent. (c) Legal Compulsion to Disclose. In the event that any party or anyone to whom such party or its representatives transmits the Program Information is requested or becomes legally compelled (by interrogatories, requests for information or documents, subpoena, civil investigative demand, or similar process) to disclose any of the Program Information, to the extent permitted by applicable Law and if practical to do so under the circumstances, such party shall provide the Collateral Agent, the Administrative Agent, each Group Agent, and ADT with prompt written notice so that the Collateral Agent or the Administrative Agent may at the expense of ADT seek a protective order or other appropriate remedy and/or if it so chooses, agree that such party may disclose such Program Information pursuant to such request or legal compulsion. In the event that such protective order or other remedy is not obtained, or the Collateral Agent and the Administrative Agent waive compliance with the provisions of this Section 12.08(c), such party will furnish only that portion of the Program Information which (in such party’s good faith judgment) is legally required to be furnished and will exercise commercially reasonable efforts to obtain reliable assurance that confidential treatment will be accorded the Program Information. 747634416.3 21671763747634416.9 21671763 127 (d) Disclosure of Tax Treatment and Structure. Notwithstanding anything herein to the contrary, each party (and each employee, representative, or other agent of each party) hereto may disclose to any and all Persons, without limitation of any kind, any information with respect to the United States federal income “tax treatment” and “tax structure” (in each case, within the meaning of U.S. Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby and all materials of any kind (including opinions or other Tax analyses) that are provided to such parties (or their representatives) relating to such tax treatment and tax structure; provided, that with respect to any document or similar item that in either case contains information concerning the tax treatment or tax structure of the transaction as well as other information, this sentence shall only apply to such portions of the document or similar item that relate to the United States federal income tax treatment or tax structure of the transactions contemplated hereby. (e) Confidentiality of the Collateral Agent, the Administrative Agent, and Lenders. The Collateral Agent, the Administrative Agent, each Lender, each Group Agent, each Affected Person, and their successors and assigns agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (i) to its Collateral Trustee (if any) and its and its Affiliates’ directors, officers, employees, and agents, including accountants, auditors, legal counsel, and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and be instructed and agree or be otherwise bound to keep such Information confidential on terms at least as restrictive as this Section 12.08(e)), (ii) to the extent requested by any regulatory authority or by applicable Laws, (iii) to the extent required by any subpoena or similar legal process, provided, however, to the extent permitted by applicable Law and if practical to do so under the circumstances, that the Person relying on this clause (iii) shall provide ADT and the Borrower with prompt notice of any such required disclosure so that ADT or the Borrower, as applicable, may seek a protective order or other appropriate remedy, and in the event that such protective order or other remedy is not obtained, such Person will furnish only that portion of the Information which is legally required, (iv) to any other Affected Person (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and be instructed and agree or be otherwise bound to keep such Information confidential on terms at least as restrictive as this Section 12.08(e)), (v) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, (vi) to any prospective participant or assignee provided such person agrees to be bound by this Section 12.08(e), (vii) with the consent of the Borrower and ADT, (viii) to the extent such Information becomes publicly available other than as a result of a breach of this Section 12.08(e) or any agreement contemplated by this Section 12.08(e) or (ix) to any nationally recognized statistical rating organization as contemplated by Section 17g-5 of the Securities Exchange Act or in connection with obtaining or monitoring a rating on any Commercial Paper Notes. For the purposes of this Section, “Information” means all information received from ADT or any Affiliate of ADT, including any Obligor Information (and to the extent applicable, any Non-Public Obligor Data, which shall remain subject to the applicable provisions of Section 12.08(f)), other than any such information that is available to such Person on a nonconfidential basis prior to disclosure by ADT or any Affiliate of ADT. (f) Privacy Requirements. Notwithstanding anything to the contrary in this Agreement, Mizuho, as Administrative Agent, the Collateral Agent, Lender and Group Agent agrees that it is, and will remain, in compliance with the Privacy Requirements, will not utilize, 747634416.3 21671763747634416.9 21671763 128 and will not permit any affiliate or any representative to utilize, Non-Public Obligor Data for any purpose not in connection with the transactions contemplated under this Agreement or the related Transaction Documents, and will maintain reasonable and adequate safeguards for the protection of all Non-Public Obligor Data, in accordance with its internal privacy policies and as required by the Privacy Requirements and other applicable Law. Mizuho has provided ADT with a true and correct copy of its information security policies and procedures as in effect on March 12, 2020. None of the Administrative Agent, the Collateral Agent, any Lender or any Group Agent shall provide any Non-Public Obligor Data to any other Lender, Group Agent, successor Collateral Agent or Administrative Agent, or any other prospective participant or assignee thereof, unless ADT shall have provided its consent thereto to the Administrative Agent. For the avoidance of doubt, once ADT provides its consent in respect of a Person, no additional ADT consent shall be required for future disclosure of Non-Public Obligor Data to such Person. Upon receipt of such consent, the Administrative Agent shall forward a copy thereof to the Lenders and the Group Agents. In respect of each such Person, ADT shall provide the consent contemplated above if such Person has agreed to maintain reasonable and adequate safeguards for the protection of all Non- Public Obligor Data in a manner reasonably satisfactory to ADT. Notwithstanding anything to the contrary herein or in any other Transaction Document, (i) subject to clause (iii) below, each ADT Entity shall be entitled to remove any Non-Public Obligor Data from any report, document or information required to be delivered hereunder, including the Information Package, and shall not be liable to any Person by reason thereof, (ii) delivery by the Administrative Agent or the Collateral Agent of any notice or information required to be provided by it under this Agreement or the other Transaction Documents, including the Information Package, shall not be deemed to be a breach of this Section 12.08(f), and (iii) upon request by the Collateral Agent or the Administrative Agent, each ADT Entity shall separately provide to the Collateral Agent and the Administrative Agent with each report, document and information from which any Non-Public Obligor Data has been removed, without such Non-Public Obligor Data removed; provided, that neither the Collateral Agent nor the Administrative Agent shall provide (and shall not be deemed to be required to provide) such Non-Public Obligor Data to any other Lender, Group Agent, successor Collateral Agent or Administrative Agent, or any other prospective participant or assignee thereof except in accordance with this Section 12.08(f) or with ADT’s consent, and in no event shall Mizuho, as the Collateral Agent or the Administrative Agent, be obligated to provide (or be liable for not providing) any Non-Public Obligor Data to any other Person. Each of the Administrative Agent, Collateral Agent, each Lender and each Group Agent also agree that it will not, and will not permit any affiliate or representative other than the Servicer or its authorized delegees to, contact any Obligor for any purpose; provided, however, that the Administrative Agent or the Collateral Agent (or their respective agents) may contact an Obligor following an Event of Termination, to the extent expressly set forth herein, or if ADT is terminated as the Servicer and a successor servicer is acting as servicer or a collection agent in respect of the applicable Pool Receivables. Except to the extent expressly set forth herein following an Event of Termination, each of the Administrative Agent, Collateral Agent, each Lender and each Group Agent (or their respective agents) shall not take any action to service, collect or administer any Pool Receivable during the period that ADT has the right to act as the Servicer under this Agreement. ADT and the Borrower shall not deliver (or instruct the Administrative Agent or the Collateral Agent to deliver) to any Lender or Group Agent any Non-Public Obligor Data in connection with the transactions contemplated hereby, except with such Lender’s or Group Agent’s prior written consent.


 
747634416.3 21671763747634416.9 21671763 129 SECTION 12.09. Captions and Cross References. The various captions (including the table of contents) in this Agreement are provided solely for convenience of reference and shall not affect the meaning or interpretation of any provision of this Agreement. Unless otherwise indicated, references in this Agreement to any Section, Article, Appendix, Schedule, or Exhibit are to such Section or Article of, or Appendix, Schedule, or Exhibit to this Agreement, as the case may be, and references in any Section, subsection, or clause to any subsection, clause, or subclause are to such subsection, clause, or subclause of such Section, subsection, or clause. SECTION 12.10. Integration. This Agreement, together with the other Transaction Documents, contains a final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire understanding among the parties hereto with respect to the subject matter hereof, superseding all prior oral or written understandings. SECTION 12.11. Governing Law. THIS AGREEMENT, INCLUDING THE RIGHTS AND DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT WITHOUT REGARD TO ANY OTHER CONFLICTS OF LAW PROVISIONS THEREOF, EXCEPT TO THE EXTENT THAT THE PERFECTION, THE EFFECT OF PERFECTION OR PRIORITY OF THE INTERESTS OF THE COLLATERAL AGENT, THE ADMINISTRATIVE AGENT, OR ANY LENDER IN THE COLLATERAL IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK). SECTION 12.12. Waiver of Jury Trial. EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR UNDER ANY AMENDMENT, INSTRUMENT, OR DOCUMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING OR OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT A JURY. SECTION 12.13. Consent to Jurisdiction; Waiver of Immunities. EACH PARTY HERETO HEREBY ACKNOWLEDGES AND AGREES THAT: (a) IT IRREVOCABLY (i) SUBMITS TO THE JURISDICTION, FIRST, OF ANY UNITED STATES FEDERAL COURT, AND SECOND, IF FEDERAL JURISDICTION IS NOT AVAILABLE, OF ANY NEW YORK STATE COURT, IN EITHER CASE SITTING IN NEW YORK CITY, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OTHER TRANSACTION DOCUMENT, (ii) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED ONLY IN SUCH NEW YORK STATE OR FEDERAL COURT AND NOT IN ANY OTHER COURT, AND (iii) WAIVES, TO THE FULLEST 747634416.3 21671763747634416.9 21671763 130 EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING. (b) TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID TO EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, IT HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER OR IN CONNECTION WITH THIS AGREEMENT. SECTION 12.14. Execution in Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Agreement. Delivery of an executed counterpart hereof by facsimile or other electronic means shall be equally effective as delivery of an originally executed counterpart. Each of the parties hereto agrees that this Agreement and any other documents to be delivered in connection herewith may be electronically signed, provided that no electronic signatures may be affixed through the use of a third-party service provider. The parties agree that any digital or electronic signatures (including pdf, facsimile or electronically imaged signatures) appearing on this Agreement or such other documents are the same as handwritten signatures for the purposes of validity, enforceability and admissibility, and that delivery of any such electronic signature to, or a signed copy of, this Agreement and such other documents may be made by facsimile, email or other electronic transmission. SECTION 12.15. Pledge to a Federal Reserve Bank. Notwithstanding anything to the contrary set forth herein (including in Section 12.03), (i) each Lender that constitutes a banking institution or any assignee or participant thereof other than a Conduit Lender, or (ii) in the event that any Conduit Lender assigns any of its interest in, to and under the Pool Receivables or Related Assets to any Program Support Provider, any such Person, may at any time pledge, grant a security interest in or otherwise transfer all or any portion of its interest in the Loans and the security interest in the Pool Receivables or Related Assets or under this Agreement to secure the obligations of such Person to a Federal Reserve Bank or otherwise to any other federal Governmental Authority or special purpose entity formed or sponsored by any such federal Governmental Authority or any central bank having jurisdiction over such Person, in each case without notice to or the consent of the Borrower, ADT or the Servicer, but such pledge, grant, or transfer shall not relieve any Person from its obligations hereunder, and each of the other parties hereto shall be entitled to treat such Lender’s Principal and its interest under this Agreement as not having been assigned, pledged or otherwise transferred for all purposes under this Agreement. SECTION 12.16. Severability. Any provisions of this Agreement which are 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. 747634416.3 21671763747634416.9 21671763 131 SECTION 12.17. Acknowledgement and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in any Transaction Document or in any other agreement, arrangement, or understanding among any such parties, each party hereto acknowledges that any liability of any Affected Financial Institution arising under any Transaction Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of the applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by: (a) the application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an Affected Financial Institution; and (b) the effects of any Bail-in Action on any such liability, including, if applicable: (i) a reduction in full or in part or cancellation of any such liability; (ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Transaction Document; or (iii) the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of the applicable Resolution Authority. SECTION 12.18. PATRIOT Act Notice. Each of the Administrative Agent and the Collateral Agent (for itself and not on behalf of any Lender or Group Agent) and each Group Agent and Lender hereby notifies ADT and the Borrower that pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record information that identifies ADT and the Borrower. Such information includes the name and address of ADT and the Borrower and other information that will allow the Administrative Agent, the Collateral Agent, such Group Agent or such Lender to identify ADT and the Borrower in accordance with the USA PATRIOT Act. SECTION 12.19. EU Securitisation Regulation; Information; Indemnity. (a) EU Securitisation Regulation. ADT hereby represents, warrants and agrees, for the benefit of those Credit Parties that are subject to Article 5 of the EU Securitisation Regulation, on the First Amendment Date until the Final Payout Date that: (i) ADT, based on the reasonable understanding that it is an originator for purposes of the EU Securitisation Regulation, shall retain, on an ongoing basis, a material net economic interest in the Pool Receivables in an amount not less than 5% of the nominal value of the Pool Receivables in the form of a first loss tranche determined in accordance with sub-paragraph (d) of Article 6(3) of the EU Securitisation Regulation (as in effect on the First Amendment Date), which material net economic interest shall be based on ADT’s direct or indirect ownership of all of the membership interest of the 747634416.3 21671763747634416.9 21671763 132 Borrower, which has the right to receive payments under Section 3.01(d)(ix) (the “Retained Interest”). (ii) each of ADT and the Borrower shall not, and shall not permit any of its Affiliates to, hedge or otherwise mitigate its credit risk under, or associated with the Retained Interest, or sell, transfer or otherwise surrender all or part of the rights, benefits or obligations arising from, the Retained Interest, except to the extent permitted under the EU Securitisation Regulation Rules (as in effect at the relevant time) ; (iii) ADT shall not change the manner in which it retains or the method of calculating the Retained Interest, except to the extent permitted under the EU Securitisation Regulation Rules (as in effect at the relevant time); (iv) ADT shall provide ongoing confirmation as to the continued compliance with the foregoing clauses (i) through (iii) above (A) by providing such confirmation to the Servicer on a monthly basis for inclusion in each Information Package, (B) promptly following the occurrence of any Event of Termination or Unmatured Event of Termination and (C) from time to time promptly upon written request by the Administrative Agent (on behalf of any Credit Party) or any Group Agent (on behalf of any member of its Group) in connection with any material change in the performance or the risk characteristics of the Pool Receivables or the transaction contemplated by the Transaction Documents or any material breach of the Transaction Documents; (v) ADT shall notify the Administrative Agent and each Group Agent promptly and in any event within five (5) Business Days of: (A) any change in the identity of the Person or Persons, if any, through which it is retaining and holding such Retained Interest or (B) any breach of clause (i) through (iii) above; (vi) ADT was not established for, and does not operate for, the sole purpose of securitizing exposures; (vii) the Originator has complied with the Credit and Collection Policy in connection with originating the Pool Receivables; and (viii) each of the Pool Receivables arises under and is governed by a Contract containing the terms and conditions required by the forms of Eligible Contract required by this Agreement. (b) Information. ADT covenants that it shall provide such additional information as may reasonably be requested by the Administrative Agent (on behalf of any Credit Party) or any Group Agent (on behalf of any member of its Group) for purposes of Article 5 of the EU Securitisation Regulation (as in effect as of the First Amendment Date) (A) as of the First Amendment Date, and (B) following the First Amendment Date, solely as regards the provision of information in the possession or under the control of ADT and to the extent the same is not subject to a duty of confidentiality (provided that, where any such information is subject to confidentiality restrictions, ADT shall use reasonable efforts to obtain consent for the disclosure of such information); provided that neither ADT, the Borrower nor any other party to the transaction contemplated by this Agreement shall be required to provide any information or


 
747634416.3 21671763747634416.9 21671763 133 disclosure for purposes of, or in connection with, Article 7 of the EU Securitisation Regulation, or to take any other action in accordance with, or in a manner contemplated by, Article 7 of the EU Securitisation Regulation (or otherwise for purposes of any person’s compliance with Article 5(1)(e) of the EU Securitisation Regulation). [Signature Pages Follow] 747634416.3 21671763747634416.9 21671763 S-1 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written. ADT FINANCE LLC By: _______________________________________ Name: Title: ADT LLC, in its individual capacity and as the Servicer By: _______________________________________ Name: Title: 747634416.3 21671763747634416.9 21671763 S-2 MIZUHO BANK, LTD., as Administrative Agent By: _______________________________________ Name: Title: MIZUHO BANK, LTD., as Group Agent for the Mizuho Group By: _______________________________________ Name: Title: MIZUHO BANK, LTD., as a Lender By: _______________________________________ Name: Title: 747634416.3 21671763747634416.9 21671763 S-3 MIZUHO BANK, LTD., as Structuring Agent By: _______________________________________ Name: Title: MIZUHO BANK, LTD., as Collateral Agent By: _______________________________________ Name: Title:


 
747634416.3 21671763747634416.9 21671763 Exhibit A-1 EXHIBIT A Form of Loan Request [Letterhead of Borrower] [Date] Mizuho Bank, Ltd. as Administrative Agent [Group Agents] Re: Loan Request Ladies and Gentlemen: Reference is hereby made to that certain Receivables Financing Agreement, dated as of July 16, 2021, among ADT Finance LLC (the “Borrower”), ADT LLC, as Servicer (the “Servicer”), the Lenders party thereto, the Group Agents party thereto and Mizuho Bank, Ltd., as Administrative Agent (in such capacity, the “Administrative Agent”), Collateral Agent, Structuring Agent and Arranger (as amended, supplemented or otherwise modified from time to time, the “Agreement”). Capitalized terms used in this Loan Request and not otherwise defined herein shall have the meanings assigned thereto in the Agreement. This letter constitutes a Loan Request pursuant to Section 2.02(a) of the Agreement. The Borrower hereby request a Loan in the amount of [$_______] to be made on [_____, 20__], a Settlement Date (of which $[___] will be funded by the Mizuho Group, and $[___] will be funded by the [___] Group). The proceeds of such Loan should be deposited to [Account number], at [Name, Address and ABA Number of Bank] [and will be applied to pay a purchase price to ADT LLC as Originator under the Sale Agreement]. After giving effect to such Loan, the Aggregate Principal will be [$_______]. The Borrower hereby represents and warrants as of the date hereof, and after giving effect to such Credit Extension, as follows: (i) each of the representations and warranties contained in this Agreement and in each other Transaction Document are true and correct on and as of such date as though made on and as of such date unless such representations and warranties by their terms refer to an earlier date, in which case they shall be true and correct on and as of such earlier date; (ii) no event has occurred or would result from such Credit Extension that constitutes an Event of Termination or an Unmatured Event of Termination that remains continuing; and (iii) no Pool Deficiency Amount (calculated without giving effect to clause (ii) of the definition thereof) exists or would exist after giving effect to such Credit Extension and the application of Collections in accordance with Section 3.01(d) of the Agreement. 747634416.3 21671763747634416.9 21671763 Exhibit A-2 IN WITNESS WHEREOF, the undersigned has executed this letter by its duly authorized officer as of the date first above written. Very truly yours, ADT FINANCE LLC By: ________________________________________ Name: Title: Exhibit B-1 747634416.3 21671763747634416.9 21671763 EXHIBIT B [Form of Assignment and Acceptance Agreement] Dated as of ___________, 20__ Section 1. Lender Loan Limit assigned: $[_____] Assignor’s remaining Lender Loan Limit: $[_____] Principal allocable to Lender Loan Limit assigned: $[_____] Assignor’s remaining Principal: $[_____] Interest (if any) allocable to Principal assigned: $[_____] Interest (if any) allocable to Assignor’s remaining Principal: $[_____] Section 2. Effective Date of this Assignment and Acceptance Agreement: [__________] Upon execution and delivery of this Assignment and Acceptance Agreement by the assignee and the assignor and the satisfaction of the other conditions to assignment specified in Section 12.03(b) of the Agreement (as defined below), from and after the effective date specified above, the assignee shall become a party to, and, to the extent of the rights and obligations thereunder being assigned to it pursuant to this Assignment and Acceptance Agreement, shall have the rights and obligations of a Lender under that certain Receivables Financing Agreement, dated as of July 16, 2021 among ADT Finance LLC, ADT LLC, in its individual capacity and as Servicer, the Lenders party thereto, the Group Agents party thereto and Mizuho Bank, Ltd., as Administrative Agent, Collateral Agent, Structuring Agent and Arranger (as amended, supplemented or otherwise modified from time to time, the “Agreement”). Capitalized terms used and not otherwise defined herein shall have the meanings assigned thereto in the Agreement. By executing this Assignment and Acceptance Agreement, the assignee hereby covenants and agrees with each other party to the Agreement that: (i) until the date that is one year plus one day after the Commercial Paper Notes or other outstanding senior indebtedness of any Conduit Lender have been paid in full, it will not institute or cause or participate in the institution of any Insolvency Proceeding against such Conduit Lender, and (ii) until the date that is one year plus one day after the Final Payout Date, it will not institute or cause or participate in the institution of any Insolvency Proceeding against the Borrower. This covenant shall survive any termination of the Agreement. (Signature Pages Follow) Exhibit B-2 747634416.3 21671763747634416.9 21671763 ASSIGNOR: [_________] By: Name: Title ASSIGNEE: [_________] By: Name: Title: [Address] Accepted as of date first above written: MIZUHO BANK, LTD., as Administrative Agent By: Name: Title: ADT FINANCE LLC, as Borrower By: Name: Title:


 
Exhibit C-1 747634416.3 21671763747634416.9 21671763 EXHIBIT C Credit and Collection Policy Exhibit D 747634416.3 21671763747634416.9 21671763 EXHIBIT D Form of Information Package Exhibit E-1 747634416.3 21671763747634416.9 21671763 EXHIBIT E Form of Compliance Certificate To: Mizuho Bank, Ltd., as Administrative Agent This Compliance Certificate is furnished pursuant to that certain Receivables Financing Agreement, dated as of July 16, 2021 among ADT Finance LLC (the “Borrower”), ADT LLC, in its individual capacity and as Servicer (the “Servicer”), the Lenders party thereto, the Group Agents party thereto and Mizuho Bank, Ltd., as Administrative Agent (in such capacity, the “Administrative Agent”), collateral agent, structuring agent and arranger (as amended, supplemented or otherwise modified from time to time, the “Agreement”). Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to them in the Agreement. THE UNDERSIGNED HEREBY CERTIFIES THAT: 1. I am the duly elected ________________of ADT LLC and ADT Inc. (the “Parent”). 2. I have reviewed the terms of the Agreement and each of the other Transaction Documents and I have made, or have caused to be made under my supervision, a detailed review of the transactions and condition of the Borrower and ADT LLC during the accounting period covered by the attached financial statements. 3. The examinations described in paragraph 2 above did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes an Event of Termination or an Unmatured Event of Termination, as each such term is defined under the Agreement, during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate [, except as set forth in paragraph 5 below]. 4. Schedule I attached hereto sets forth financial statements of the ADT Entities for the periods referenced on such Schedule I. [5. Described below are the exceptions, if any, to paragraph 3 above by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which the ADT Entities have taken, are taking, or propose to take with respect to each such condition or event:] Exhibit E-2 747634416.3 21671763747634416.9 21671763 The foregoing certifications are made and delivered this ______ day of ___________________, 20___. ADT LLC By: Name: Title: ADT INC. By: Name: Title:


 
747634416.3 21671763747634416.9 21671763 SCHEDULE I TO COMPLIANCE CERTIFICATE A. Schedule of Compliance as of ___________________, 20__ with Section(s) ____ of the Agreement. Unless otherwise defined herein, the terms used in this Compliance Certificate have the meanings ascribed thereto in the Agreement. This schedule relates to the month ended: __________________. B. The following financial statements of the Servicer and its Subsidiaries for the period ending on ______________, 20__, are attached hereto: 747634416.3 21671763747634416.9 21671763 Exhibit F-1 EXHIBIT F CLOSING MEMORANDUM Exhibit G-1-1 747634416.3 21671763747634416.9 21671763 EXHIBIT G-1 Form of Customer-Owned Equipment Contract Originated on or prior to December 15, 2019 Exhibit G-2-1 747634416.3 21671763747634416.9 21671763 EXHIBIT G-2 Form of Customer-Owned Equipment Contract Originated after December 15, 2019


 
Exhibit G-3-1 747634416.3 21671763747634416.9 21671763 EXHIBIT G-3 Form of Customer-Owned Equipment Contract Originated after April 17, 2020 Exhibit H-1 747634416.3 21671763747634416.9 21671763 EXHIBIT H FORM OF PAYDOWN NOTICE ____________________, 20_____ Mizuho Bank, Ltd. as Administrative Agent Ladies and Gentlemen: Reference is hereby made to the Receivables Financing Agreement, dated as of July 16, 2021 (as amended, restated, supplemented or otherwise modified from time to time, the “Receivables Financing Agreement”), among ADT FINANCE LLC, as Borrower (“Borrower”), ADT LLC., in its individual capacity and as Servicer, the various Lenders and Group Agents from time to time party thereto, and Mizuho Bank, Ltd., as collateral agent, administrative agent, arranger and structuring agent. Capitalized terms used in this notice and not otherwise defined herein shall have the meanings assigned thereto in the Receivables Financing Agreement. This letter constitutes a notice of the Borrower’s optional reduction of the Aggregate Principal pursuant to Section 3.03 of the Receivables Financing Agreement. The Borrower desires to reduce the Lenders’ Principal on [SPECIFY PAYMENT DATE], _____1 by $____________________2. Subsequent to such reduction, the Aggregate Principal will be $________________. 1Notice must be given at least five (5) Business Days prior to the requested date of such reduction. The Borrower shall use reasonable efforts to choose a reduction amount, and the date of commencement thereof, so that such reduction shall commence and conclude in the same Settlement Period. 2Such reduction shall not be less than $5,000,000 and shall be in integral multiples of $100,000 in excess thereof. Exhibit H-2 747634416.3 21671763747634416.9 21671763 IN WITNESS WHEREOF, the undersigned has caused this paydown notice to be executed by its duly authorized officer as of the date first above written. ADT LLC, on behalf of the Borrower By: Name: Title: Schedule I-1 747634416.3 21671763747634416.9 21671763 SCHEDULE I Loan Limits Mizuho Group Group Loan Limit: $200,000,000 Party Capacity Lender Loan Limit Mizuho Lender $200,000,000 Mizuho Group Agent N/A MUFG Group Group Loan Limit: $100,000,000 Party Capacity Lender Loan Limit MUFG Bank, Ltd. Lender $100,000,000 MUFG Bank, Ltd. Group Agent N/A BNPP Group Group Loan Limit: $100,000,000 Party Capacity Lender Loan Limit Starbird Funding Corporation and BNP Paribas (collectively) Lenders $100,000,000 BNP Paribas Group Agent N/A The CP Rate with respect to Starbird Funding Corporation shall be the Bank Rate.


 
Schedule II-1 747634416.3 21671763747634416.9 21671763 SCHEDULE II LOCK-BOX AND ACCOUNT INFORMATION COLLECTION ACCOUNT INFORMATION PAYMENT ACCOUNT INFORMATION Schedule III-1 747634416.3 21671763747634416.9 21671763 SCHEDULE III Notice Addresses Schedule IV-1 747634416.3 21671763747634416.9 21671763 SCHEDULE IV UCC INFORMATION 747634416.3 21671763747634416.9 21671763 Schedule V-1 SCHEDULE V Advance Rate Matrix Advance Rate(1) Remaining Term(2) Tier 1-3 or CCTV w/ Credit Check Tier 1-3 or CCTV wo/ Credit Check(3) Burglar Alarm w/ Credit Check Burglar Alarm wo/ Credit Check(3) 60 71.5582.79% 69.24% 59 72.1483.02% 69.67% 58 72.7383.26% 70.10% 57 73.3283.50% 70.52% 56 73.9083.74% 70.95% 55 74.4983.98% 71.38% 54 75.0884.22% 71.81% 53 75.6784.46% 72.23% 52 76.2584.70% 72.66% 51 76.8484.94% 73.09% 50 77.4385.18% 73.51% 49 78.0285.42% 73.94% 48 78.6085.65% 74.37% 47 79.1985.89% 74.80% 46 79.7886.13% 75.22% 45 80.3786.37% 75.65% 44 80.9586.61% 76.08% 43 81.5486.85% 76.50% 42 82.1387.09% 76.93% 41 82.7287.33% 77.36% 40 83.3087.57% 77.79% 39 83.8987.81% 78.21% 38 84.4888.05% 78.64% 37 85.0788.28% 79.07% 36 85.6788.52% 69.59% 84.2979.49% 64.64% 35 85.7088.55% 69.65% 84.3979.51% 64.77% 34 85.7488.59% 69.72% 84.4879.54% 64.90% 33 85.7988.64% 69.78% 84.5679.58% 65.06% 32 85.8388.71% 69.86% 84.6779.66% 65.20% 31 85.8888.80% 70.01% 85.2279.74% 65.44% 30 86.2488.90% 71.01% 85.6179.83% 66.63% 29 86.6189.04% 72.01% 86.0079.96% 67.81% 28 86.9789.20% 73.01% 86.3980.08% 68.99% 27 87.3489.40% 74.01% 86.7880.28% 70.17% 26 87.7089.60% 75.01% 87.1780.46% 71.36%


 
747634416.3 21671763747634416.9 21671763 Schedule V-2 Advance Rate(1) Remaining Term(2) Tier 1-3 or CCTV w/ Credit Check Tier 1-3 or CCTV wo/ Credit Check(3) Burglar Alarm w/ Credit Check Burglar Alarm wo/ Credit Check(3) 25 88.0789.84% 76.00% 87.5680.76% 72.54% 24 88.4390.10% 77.00% 87.9681.03% 73.72% 23 88.8090.37% 78.00% 88.3581.39% 74.90% 22 89.1690.69% 79.00% 88.7481.80% 76.08% 21 89.5391.05% 80.00% 89.1382.30% 77.27% 20 89.8991.47% 81.00% 89.5282.77% 78.45% 19 90.2691.86% 82.00% 89.9183.33% 79.63% 18 90.6292.38% 83.00% 90.3083.99% 80.81% 17 90.9992.80% 84.00% 90.7084.61% 82.00% 16 91.3593.26% 85.00% 91.0985.25% 83.18% 15 91.7293.78% 86.00% 91.4886.04% 84.36% 14 92.0894.28% 87.00% 91.8787.08% 85.54% 13 92.4594.85% 88.00% 92.2688.15% 86.72% 12 92.8195.00% 89.00% 92.6589.49% 87.91% 11 93.1895.00% 90.00% 93.0490.56% 89.09% 10 93.5495.00% 91.00% 93.4391.88% 90.27% 9 93.9195.00% 92.00% 93.8393.48% 91.45% 8 94.2795.00% 93.00% 94.2295.00% 92.64% 7 94.6495.00% 94.00% 94.6195.00% 93.82% 6 95.00% 95.00% 95.00% 95.00% 5 95.00% 95.00% 95.00% 95.00% 4 95.00% 95.00% 95.00% 95.00% 3 95.00% 95.00% 95.00% 95.00% 2 95.00% 95.00% 95.00% 95.00% 1 95.00% 95.00% 95.00% 95.00% (1) Subject to 85% maximum advance rate in aggregate (2) The number of remaining installments at the time such Eligible Receivable is acquired by the Borrower (3) Any Eligible Receivable with an ADT Credit Score “N”, “X”, or “Y”, or that has not been the Obligor under a Delinquent Receivable during the twelve (12) months immediately preceding the date of Loan but does not have a minimum Telco98 score of 625 or an ADT Credit Score of “A”, “B” or “C”, shall be deemed to be “wo/ Credit Check” 740144827 21671763 Summary report: Litera Compare for Word 11.2.0.54 Document comparison done on 7/7/2022 2:09:35 PM Style name: Default Style Intelligent Table Comparison: Active Original DMS: iw://AMEDMS/AMECURRENT/747634416/3 Modified DMS: iw://AMEDMS/AMECURRENT/747634416/9 Changes: Add 384 Delete 392 Move From 0 Move To 0 Table Insert 0 Table Delete 0 Table moves to 0 Table moves from 0 Embedded Graphics (Visio, ChemDraw, Images etc.) 0 Embedded Excel 0 Format changes 0 Total Changes: 776


 
ADT LLC Administrative Committee Certificate of Committee Action Pursuant to the authority granted to the Administrative Committee in accordance with the Administrative Committee Charter, which gives the Administrative Committee plan sponsor authority to adopt amendments to the retirement plans and programs sponsored by ADT LLC (the “Company”), so long as the aggregate cost with respect to each amendment that is adopted does not exceed $200,000, and by acting in their capacity as members of the Administrative Committee, the Administrative Committee hereby takes the following actions: 1. Adopt Amendment 2021-1 to the ADT LLC Supplemental Savings and Retirement Plan (the “SSRP”). Certify and adopt Amendment 2021-1 to the SSRP in substantially the same form as attached hereto as of the date set forth below to: (a) Amount of Deferral Election. Changing the limit of Bonus Compensation deferrals to 80%. Executed this __ day of December, 2021 ___________________________ _________________________________ Date Brian Casey ___________________________ _________________________________ Date Dan Pikelny ___________________________ _________________________________ Date Peeyush Agarwal DocuSign Envelope ID: 0F91DF74-2EB7-42A2-825B-0BF8118CC7EE 12/15/2021 | 2:19:45 PM PST 12/15/2021 | 5:20:02 PM EST 12/15/2021 | 5:13:09 PM EST 2 #83060449_v1 AMENDMENT 2021-1 TO THE ADT LLC SUPPLEMENTAL SAVINGS AND RETIREMENT PLAN The ADT LLC Supplemental Savings and Retirement Plan, as amended and restated (the “SSRP”), is hereby amended as follows: 1. Section 5.2 (Amount of Deferral Election) of the SSRP is hereby amended and restated in its entirety to read as follows: Pursuant to each Enrollment and Payment Agreement for a Plan Year a Participant shall irrevocably elect to defer as a whole percentage: (i) up to 50% of his or her Base Salary for the applicable Plan Year (or remainder of the year, as the case may be) and/or (ii) up to 80% of his or her Bonus Compensation (net of required withholding) for the applicable Fiscal Year, provided that no election to defer Bonus Compensation that is made on or after the first day of the applicable Fiscal Year will be effective unless (i) the Bonus Compensation qualifies as “performance-based compensation” under Section 409A of the Code, (ii) there are at least six months left in the performance period at the time the election is made, (iii) the Eligible Employee performs, or has performed, services for the Company continuously from the later of the beginning of the performance period or the date the performance criteria are established through the date of such election and (iv) the Bonus Compensation is not readily ascertainable at the time of such election.


 
Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V1 – Core National Version RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. 2. Non-Competition Covenant (a) Participant agrees that, during Participant’s employment or service with the Company, and for the greater of (a) the period commencing with the date of the Participant’s Retirement from A-2 employment or service through the final Vesting Date, or (b) the one (1) year period after separation of Participant’s employment or service with the Company (the “Non-Compete Period”), Participant will not directly or indirectly, own, manage, operate, control (including indirectly through a debt or equity investment), provide services to, or be employed by, any person or entity engaged in any business that is both: (i) located in, or provides services or products to, a region with respect to which Participant had substantial responsibilities during the twenty-four (24) months preceding Participant’s separation of employment or services with the Company; and (ii) competitive with either (A) the line of business or businesses of the Company that Participant was employed with during the twenty-four (24) months preceding Participant’s separation of employment or services with the Company (including any prospective business to be developed or acquired that was proposed at the date of separation), or (B) any other business of the Company with respect to which Participant had substantial exposure during the twenty-four (24) months preceding Participant’s separation of employment or services with the Company. (b) Participant’s agreement not to provide such services applies regardless of whether Participant does so as an employee, owner, partner, principal, advisor, independent contractor, consultant, agent, officer, director, investor, or shareholder. Notwithstanding the foregoing, Participant’s ownership of less than 1% of the outstanding shares of a publicly traded company that constitutes a competitor as described in Section 2(a) above shall not be deemed to be providing services to such Competitor solely by virtue of owning such shares. 3. Non-Solicitation Covenant – ADT Personnel (a) Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or service through the final Vesting Date, or (b) the two (2) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not, directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, recruit, aid, or induce any Company Personnel to leave their employment with the Company in order to accept employment with or render services to another person or entity unaffiliated with the Company, or knowingly take any action to assist or aid any other person or entity in identifying, soliciting, recruiting, inducing or hiring any such Company Personnel; or (ii) otherwise interfere with the relationship of the Company with any Company Personnel. (b) Participant agrees that during the Non-Solicit Period, Participant shall not, directly or indirectly, engage in any conduct intended or reasonably calculated to induce or urge any Participant or contractor of the Company to discontinue, in whole or in part, his/her employment relationship or engagement with the Company. (c) “Company Personnel” means any person who was employed by the Company during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company and either (i) with whom Participant had direct contact for business purposes, or (ii) whom Participant knew about because of Participant’s access to the Company’s Confidential Information or trade secrets. A-3 4. Non-Solicitation Covenant – Customer (a) Participant agrees that, during Participant’s employment or service with the Company, and during the Non-Solicit Period, Participant will not directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, aid, or induce any Customer of the Company to purchase goods or services then sold by the Company from another person or entity, or assist or aid any other persons or entity in identifying or soliciting any such Customer(s); or (ii) initiate any contact or communication with any Customer regarding any new employment or business affiliation Participant may accept or be intending to accept following separation of Participant’s employment with the Company; or (iii) otherwise interfere with the relationship of the Company with any of their Participants, customers, vendors, agents, or representatives. (b) “Customer(s)” means a customer (person or entity) of the Company that Participant, directly or indirectly (e.g., through employees whom Participant supervised), called upon, solicited, worked with, or became acquainted with at any time during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company. (c) Participant acknowledges that as a result of Participant’s employment or service with the Company, Participant will be acting as a representative of the Company and will be using the Company’s assets and resources, and will be benefiting from the Company’s goodwill, name recognition, reputation, and experience in regard to these Customers, and Participant will gain Confidential Information about Company Customers, and consequently, the covenants set forth above are reasonable and necessary to protect the Company’s legitimate business interests. Participant agrees that the covenants in this paragraph will apply to all Customers as defined above, even if the identity of certain Customers of the Company may be publicly known, and even if Participant knew or had previous dealings with one or more such Customers prior to Participant’s employment with the Company. 5. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. (b) Participant agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Participant failed to comply with the covenants contained in this RC Agreement. (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a A-4 court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 6. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 7. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then this RC Agreement will be deemed amended to the extent necessary to render the otherwise unenforceable Provision, and the rest of this RC Agreement, valid and enforceable. If a court or arbitrator declines to amend this RC Agreement as provided herein, the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement. 8. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. 9. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party-in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. 10. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement.


 
A-5 Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement. Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V2 – Blue Pencil Version RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. 2. Non-Competition Covenant (a) Participant agrees that, during Participant’s employment or service with the Company, and for the greater of (a) the period commencing with the date of the Participant’s Retirement from A-2 employment or service through the final Vesting Date, or (b) the one (1) year period after separation of Participant’s employment or service with the Company (the “Non-Compete Period”), Participant will not provide services to, or be employed by, any person or entity engaged in any business that is both: (i) located in, or provides services or products to, a region with respect to which Participant had substantial responsibilities during the twelve (12) months preceding Participant’s separation of employment or services with the Company; and (ii) competitive with either (A) the line of business or businesses of the Company that Participant was employed with during the twelve (12) months preceding Participant’s separation of employment or services with the Company, or (B) any other business of the Company with respect to which Participant had substantial exposure during the twelve (12) months preceding Participant’s separation of employment or services with the Company. (b) Participant’s agreement not to provide such services applies regardless of whether Participant does so as an employee, owner, partner, principal, advisor, independent contractor, consultant, agent, officer, director, investor, or shareholder. Notwithstanding the foregoing, Participant’s ownership of less than 1% of the outstanding shares of a publicly traded company that constitutes a competitor as described in Section 2(a) above shall not be deemed to be providing services to such competitor solely by virtue of owning such shares. 3. Non-Solicitation Covenant – ADT Personnel (a) Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or service through the final Vesting Date, or (b) the one(1) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not, directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, recruit, aid, or induce any Company Personnel to leave their employment with the Company in order to accept employment with or render services to another person or entity unaffiliated with the Company, or knowingly take any action to assist or aid any other person or entity in identifying, soliciting, recruiting, inducing or hiring any such Company Personnel; or (ii) otherwise interfere with the relationship of the Company with any Company Personnel. (b) Participant agrees that during the Non-Solicit Period, Participant shall not, directly or indirectly, engage in any conduct intended or reasonably calculated to induce or urge any Participant or contractor of the Company to discontinue, in whole or in part, his/her employment relationship or engagement with the Company. (c) “Company Personnel” means any person who was employed by the Company during the twelve (12) month period prior to Participant’s last day of employment or service with the Company and with whom Participant had direct contact for business purposes. 4. Non-Solicitation Covenant – Customer (a) Participant agrees that, during Participant’s employment or service with the Company, and during the Non-Solicit Period, Participant will not directly or indirectly, on Participant’s own behalf or on behalf of another: A-3 (i) solicit, aid, or induce any Customer of the Company to purchase goods or services then sold by the Company from another person or entity, or assist or aid any other persons or entity in identifying or soliciting any such Customer(s); or (ii) otherwise interfere with the relationship of the Company with any of their Participants, customers, vendors, agents, or representatives. (b) “Customer(s)” means an existing customer (person or entity) of the Company that Participant, directly or indirectly (e.g., through employees whom Participant supervised), called upon, solicited, or worked with at any time during the twelve (12) month period prior to Participant’s last day of employment or service with the Company. (c) Participant acknowledges that as a result of Participant’s employment or service with the Company, Participant will be acting as a representative of the Company and will be using the Company’s assets and resources, and will be benefiting from the Company’s goodwill, name recognition, reputation, and experience in regard to these Customers, and Participant will gain Confidential Information about Company Customers, and consequently, the covenants set forth above are reasonable and necessary to protect the Company’s legitimate business interests. Participant agrees that the covenants in this paragraph will apply to all Customers as defined above, even if the identity of certain Customers of the Company may be publicly known, and even if Participant knew or had previous dealings with one or more such Customers prior to Participant’s employment with the Company. 5. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. (b) Participant agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Participant failed to comply with the covenants contained in this RC Agreement. (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 6. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such


 
A-4 individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 7. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement. It is the intention of the parties that, if any court or arbitrator construes any provision or clause of this RC Agreement, or any portion thereof, to be illegal, void or unenforceable because of the duration of such provision or the area or matter covered thereby, such court shall reduce the duration, area, or matter of such provision to the extent permitted by law, and, in its reduced form, such provision shall then be enforceable and shall be enforced. 8. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. 9. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party-in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. 10. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement. Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V3 – Red Pencil Version (NE,VA,WY) RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. A-2 2. Non-Solicitation Covenant – ADT Personnel Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or service through the final Vesting Date, or (b) the one (1) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not solicit any current employee of the Company with whom Employee had personal contact during the 18 months immediately preceding Employee’s last day of employment with the Company. 3. Non-Solicitation Covenant – Customer (a) Participant agrees that, during Participant’s employment or service with the Company, and during the Non-Solicit Period, Participant will not solicit any Customers. (b) “Customer(s)” means a current customer (person or entity) of the Company with which Participant actually did business and had personal contact during the 18 months immediately preceding Participant’s last day of employment or service with the Company. (c) Participant acknowledges that as a result of Participant’s employment or service with the Company, Participant will be acting as a representative of the Company and will be using the Company’s assets and resources, and will be benefiting from the Company’s goodwill, name recognition, reputation, and experience in regard to these Customers, and Participant will gain Confidential Information about Company Customers, and consequently, the covenants set forth above are reasonable and necessary to protect the Company’s legitimate business interests. 4. Separate and Severable Covenants The restrictive covenants set forth in Sections 2 and 3 above are intended by the Parties to be separate and severable covenants. If either Section 2 or Section 3 is held to be unenforceable, the invalidity or unenforceability of that Section shall not affect the validity or enforceability of the remaining Section, which shall be enforced as if the offending Section had not been included in this Agreement. 5. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. 6. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party- in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to A-3 assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. 7. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement.


 
Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V4 – CA/ND Version RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality and Trade Secrets (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Participant understands and agrees that Participant’s agreement not to use or disclose Confidential Information and trade secrets includes, but is not limited to, that Participant will not, directly or indirectly: (i) use Company trade secrets to identify or target existing customers for Participant’s own personal benefit or the benefit of any other firm or entity; (ii) use trade secrets to facilitate the solicitation, for Participant’s own personal benefit or the benefit of any other firm or entity, of any existing customers; and/or (iii) use trade secrets to otherwise unfairly compete with the Company. (d) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an A-2 attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. 2. Non-Solicitation Covenant – ADT Personnel (a) Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or service through the final Vesting Date, or (b) the two (2) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not, directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, recruit, aid, or induce any Company Personnel to leave their employment with the Company in order to accept employment with or render services to another person or entity unaffiliated with the Company, or knowingly take any action to assist or aid any other person or entity in identifying, soliciting, recruiting, inducing or hiring any such Company Personnel; or (ii) otherwise interfere with the relationship of the Company with any Company Personnel. (b) Participant agrees that during the Non-Solicit Period, Participant shall not, directly or indirectly, engage in any conduct intended or reasonably calculated to induce or urge any Participant or contractor of the Company to discontinue, in whole or in part, his/her employment relationship or engagement with the Company. (c) “Company Personnel” means any person who was employed by the Company during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company, (i) with whom Participant had direct contact for business purposes, or (ii) whom Participant knew about because of Participant’s access to the Company’s Confidential Information or trade secrets. 3. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. A-3 (b) Participant agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Participant failed to comply with the covenants contained in this RC Agreement. (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 4. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 5. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then this RC Agreement will be deemed amended to the extent necessary to render the otherwise unenforceable Provision, and the rest of this RC Agreement, valid and enforceable. If a court or arbitrator declines to amend this RC Agreement as provided herein, the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement. 6. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. 7. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party- in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to A-4 assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. 8. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement.


 
Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V5 – AL Version RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. 2. Non-Competition Covenant (a) Participant agrees that, during Participant’s employment or service with the Company, and for the greater of (a) the period commencing with the date of the Participant’s Retirement from A-2 employment or service through the final Vesting Date, or (b) the one (1) year period after separation of Participant’s employment or service with the Company (the “Non-Compete Period”), Participant will not directly or indirectly, own, manage, operate, control (including indirectly through a debt or equity investment), provide services to, or be employed by, any person or entity engaged in any business that is both: (i) located in, or provides services or products to, a region with respect to which Participant had substantial responsibilities during the twenty-four (24) months preceding Participant’s separation of employment or services with the Company and in which the Company carries on a like business; and (ii) competitive with (A) the line of business or businesses of the Company that Participant was employed with during the twenty-four (24) months preceding Participant’s separation of employment or services with the Company, or (B) any other business of the Company with respect to which Participant had substantial exposure during the twenty-four (24) months preceding Participant’s separation of employment or services with the Company. (b) Participant’s agreement not to provide such services applies regardless of whether Participant does so as an employee, owner, partner, principal, advisor, independent contractor, consultant, agent, officer, director, investor, or shareholder. Notwithstanding the foregoing, Participant’s ownership of less than 1% of the outstanding shares of a publicly traded company that constitutes a competitor as described in Section 2(a) above shall not be deemed to be providing services to such competitor solely by virtue of owning such shares. 3. Non-Solicitation Covenant – ADT Personnel (a) Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or service through the final Vesting Date, or (b) the two (2) year period after separation of Participant’s employment or service with the Company, Participant will not, directly or indirectly, on Participant’s own behalf or on behalf of another, hire or employ any agent, servant or employee of the Company who holds a position uniquely essential to the management, organization, or service of the business of the Company. 4. Non-Solicitation Covenant – Customer (a) Participant agrees that, during Participant’s employment or service with the Company, and during the 18-month period after separation of Employee’s employment with the Company, Participant will not directly or indirectly, on Participant’s own behalf or on behalf of another, solicit any Customer of the Company to purchase goods or services then sold by the Company from another person or entity, or assist or aid any other persons or entity in soliciting any such Customer(s), so long as the Company carries on a like business. (b) “Customer(s)” means a current customer (person or entity) of the Company that Participant, directly or indirectly (e.g., through employees whom Participant supervised), called upon, solicited, worked with, or became acquainted with at any time during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company. (c) Participant acknowledges that as a result of Participant’s employment or service with the Company, Participant will be acting as a representative of the Company and will be using the Company’s assets and resources, and will be benefiting from the Company’s goodwill, name recognition, reputation, A-3 and experience in regard to these Customers, and Participant will gain Confidential Information about Company Customers, and consequently, the covenants set forth above are reasonable and necessary to protect the Company’s legitimate business interests. Participant agrees that the covenants in this paragraph will apply to all Customers as defined above, even if the identity of certain Customers of the Company may be publicly known, and even if Participant knew or had previous dealings with one or more such Customers prior to Participant’s employment with the Company. 5. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. (b) Participant agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Participant failed to comply with the covenants contained in this RC Agreement. (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 6. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 7. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then this RC Agreement will be deemed amended to the extent necessary to render the otherwise unenforceable Provision, and the rest of this RC Agreement, valid and enforceable. If a court or arbitrator declines to amend this RC Agreement as provided herein, the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement. 8. Choice of Law, Jurisdiction & Venue A-4 This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. 9. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party-in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. 10. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement.


 
Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V6 – MA Version RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. 2. Non-Solicitation Covenant – ADT Personnel (a) Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from A-2 employment or service through the final Vesting Date, or (b) the two (2) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not, directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, recruit, aid, or induce any Company Personnel to leave their employment with the Company in order to accept employment with or render services to another person or entity unaffiliated with the Company, or knowingly take any action to assist or aid any other person or entity in identifying, soliciting, recruiting, inducing or hiring any such Company Personnel; or (ii) otherwise interfere with the relationship of the Company with any Company Personnel. (b) Participant agrees that during the Non-Solicit Period, Participant shall not, directly or indirectly, engage in any conduct intended or reasonably calculated to induce or urge any Participant or contractor of the Company to discontinue, in whole or in part, his/her employment relationship or engagement with the Company. (c) “Company Personnel” means any person who was employed by the Company during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company and either (i) with whom Participant had direct contact for business purposes, or (ii) whom Participant knew about because of Participant’s access to the Company’s Confidential Information or trade secrets. 3. Non-Solicitation Covenant – Customer (a) Participant agrees that, during Participant’s employment or service with the Company, and during the Non-Solicit Period, Participant will not directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, aid, or induce any Customer of the Company to purchase goods or services then sold by the Company from another person or entity, or assist or aid any other persons or entity in identifying or soliciting any such Customer(s); or (ii) initiate any contact or communication with any Customer regarding any new employment or business affiliation Participant may accept or be intending to accept following separation of Participant’s employment with the Company; or (iii) otherwise interfere with the relationship of the Company with any of their Participants, customers, vendors, agents, or representatives. (b) “Customer(s)” means a customer (person or entity) of the Company that Participant, directly or indirectly (e.g., through employees whom Participant supervised), called upon, solicited, worked with, or became acquainted with at any time during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company. (c) Participant acknowledges that as a result of Participant’s employment or service with the Company, Participant will be acting as a representative of the Company and will be using the Company’s assets and resources, and will be benefiting from the Company’s goodwill, name recognition, reputation, and experience in regard to these Customers, and Participant will gain Confidential Information about Company Customers, and consequently, the covenants set forth above are reasonable and necessary to protect the Company’s legitimate business interests. Participant agrees that the covenants in this paragraph will apply to all Customers as defined above, even if the identity of certain Customers of the A-3 Company may be publicly known, and even if Participant knew or had previous dealings with one or more such Customers prior to Participant’s employment with the Company. 4. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. (b) Participant agrees that in the event Participant breaches a fiduciary duty to the Company, or unlawfully takes the Company’s property, then the Restricted Period shall be extended for the duration of the two year period immediately following the termination of Participant’s employment or services with the Company. (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 5. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 6. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then this RC Agreement will be deemed amended to the extent necessary to render the otherwise unenforceable Provision, and the rest of this RC Agreement, valid and enforceable. If a court or arbitrator declines to amend this RC Agreement as provided herein, the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement. 7. Choice of Law, Jurisdiction & Venue (a) This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws A-4 principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. (b) Participant and the Company agree that the exclusive and mandatory venue for adjudicating any disputes under this RC Agreement shall be the United States District Court for the District of Massachusetts, or the Suffolk County Superior Court. In the event a dispute is litigated in the Massachusetts Superior Court, the Company and Participant hereby agree that they will request that the case be assigned to the Business Litigation Sessions located in the Suffolk County Superior Court. Participant and the Company hereby consent to jurisdiction in such courts for such purpose, and specifically waive any objection to venue in Suffolk County. Participant consents to service of process by mail in respect of any such suit, action or proceeding. Participant and the Company further agree not to file any action relating in any way to this RC Agreement in any court other than as specified in this Section 7(b), and not to file any motion to transfer venue out of the court(s) specified herein (whether by motion to transfer or motion to dismiss on forum non conveniens grounds). Notwithstanding any of the foregoing, if any dispute under this Agreement is subject to resolution by arbitration under an agreement or program agreed to by Participant and the Company, then such arbitration shall be the sole and exclusive venue for adjudicating such disputes, other than any requests for a temporary restraining order and/or a temporary or preliminary injunction pending arbitration, which are reserved exclusively for adjudication in courts specified herein pursuant to Section 4 above even in otherwise arbitrable disputes. 8. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party-in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. 9. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement.


 
Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V7 – OK Version RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. A-2 2. Non-Solicitation Covenant – ADT Personnel (a) Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or service through the final Vesting Date, or (b) the two (2) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not, directly or indirectly, on Participant’s own behalf or on behalf of another solicit any Company Personnel to leave their employment with the Company in order to accept employment with or render services to another person or entity unaffiliated with the Company, or knowingly take any action to assist or aid any other person or entity in soliciting any such Company Personnel. (b) “Company Personnel” means any person who was employed by the Company during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company and either (i) with whom Participant had direct contact for business purposes, or (ii) whom Participant knew about because of Participant’s access to the Company’s Confidential Information or trade secrets. 3. Non-Solicitation Covenant – Customer (a) Participant agrees that during the Non-Solicit Period, Participant will not directly solicit any Customer of the Company to purchase goods or services, or a combination of goods and services, then sold by the Company from another person or entity. (b) “Customer(s)” means an established customer (person or entity) of the Company that Participant, directly or indirectly (e.g., through employees whom Participant supervised), called upon, solicited, worked with, or became acquainted with at any time during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company. (c) Participant acknowledges that as a result of Participant’s employment or service with the Company, Participant will be acting as a representative of the Company and will be using the Company’s assets and resources, and will be benefiting from the Company’s goodwill, name recognition, reputation, and experience in regard to these Customers, and Participant will gain Confidential Information about Company Customers, and consequently, the covenants set forth above are reasonable and necessary to protect the Company’s legitimate business interests. 4. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. (b) Participant agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Participant failed to comply with the covenants contained in this RC Agreement. A-3 (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 5. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 6. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then this RC Agreement will be deemed amended to the extent necessary to render the otherwise unenforceable Provision, and the rest of this RC Agreement, valid and enforceable. If a court or arbitrator declines to amend this RC Agreement as provided herein, the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement. 7. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. 8. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party- in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. A-4 9. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement.


 
Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V8 – LA/SD Version RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. 2. Non-Competition Covenant (a) Participant agrees that, during Participant’s employment or service with the Company, and for the greater of (a) the period commencing with the date of the Participant’s Retirement from A-2 employment or service through the final Vesting Date, or (b) the one (1) year period after separation of Participant’s employment or service with the Company (the “Non-Compete Period”), Participant will not, in the Restricted Territory, provide services to, or be employed by, any person or entity engaged in any business similar to that of the Company that is competitive with either (A) the line of business or businesses of the Company that Participant was employed with during the twelve (12) months preceding Participant’s separation of employment or services with the Company, or (B) any other business of the Company with respect to which Participant had substantial exposure during the twelve (12) months preceding Participant’s separation of employment or services with the Company. (b) Participant’s agreement not to provide such services applies regardless of whether Participant does so as an employee, owner, partner, principal, advisor, independent contractor, consultant, agent, officer, director, investor, or shareholder. Notwithstanding the foregoing, Participant’s ownership of less than 1% of the outstanding shares of a publicly traded company that constitutes a competitor as described in Section 2(a) above shall not be deemed to be providing services to such competitor solely by virtue of owning such shares. (c) For purposes of this RC Agreement, the business of the Company is as follows: (i) If Participant was employed with or provided services to ADT LLC at any time during the twelve (12) months immediately preceding termination of employment or services, then the business of the Company is to sell, install, monitor and/or maintain security, fire, life safety and automation equipment and services for residential and small business premises, including burglar alarm systems, security cameras, home automation and access control systems, as well as intrusion, temperature, flood, fire, smoke, carbon monoxide, emergency, medical alert and fall detection monitoring and response services. (ii) If Participant was employed with or providing services to ADT Commercial LLC at any time during the twelve (12) months immediately preceding termination of employment or services, then the business of the Company is to sell, install, monitor and/or maintain security, fire, and life safety services and to provide risk consulting solutions for commercial, governmental and other institutional settings, including burglar alarm systems, security cameras, and fire suppression and access control systems, as well as response services. (iii) If Participant was employed with or providing services to both ADT LLC and ADT Commercial LLC at any time during the twelve (12) months immediately preceding termination of employment or services, either simultaneously or at different times during that time period, then the business of the Company is both the definitions set forth in sections 1(c)(i) and (ii) above. (iv) Participant acknowledges that Participant is familiar with the business of the Company sufficiently to understand the nature of the Company’s business and that no further definition of the business of the Company is necessary. (d) “Restricted Territory” is defined as follows: (i) If Participant last worked for or provided services to the Company in Louisiana, “Restricted Territory” means any of the following Parishes in Louisiana: Plaquemines, Jefferson, St. Bernard, Orleans, St. Charles, St. John the Baptist, St. James, Lafourche, Terrebonne, St. Tammany, St. Mary, Assumption, Ascension, Livingston, Tangipahoa, Washington, St. Helen, East Feliciana, West Feliciana, East Baton Rouge, West Baton Rouge, Iberville, Pointe Coupee, Iberia, Vermilion, Lafayette, St. Martin, Acadia, St. Landry, Jefferson Davis, Cameron, Calcasieu, Beauregard, Allen, Evangeline, Avoyelles, Rapides, Vernon, Concordia, Catahoula, LaSalle, Grant, Natchitoches, Sabine, DeSoto, Red A-3 River, Winn, Catahoula, Tensas, Franklin, Madison, Richland, Ouachita, Jackson, Bienville, Lincoln, Caddo, Bossier, Webster, Claiborne, Union, Morehouse, West Carrol, East Carrol. (ii) If Participant last worked for or provided services to the Company in South Dakota or any other state, territory or District, “Restricted Territory” means the geographic area or areas for which Employee was responsible at any time during the twelve (12) months immediately preceding Employee’s termination of employment with the Company. 3. Non-Solicitation Covenant – ADT Personnel (a) Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or service through the final Vesting Date, or (b) the one (1) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not, in the Restricted Territory, directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, recruit, aid, or induce any Company Personnel to leave their employment with the Company in order to accept employment with or render services to another person or entity unaffiliated with the Company, or knowingly take any action to assist or aid any other person or entity in identifying, soliciting, recruiting, inducing or hiring any such Company Personnel; or (ii) otherwise interfere with the relationship of the Company with any Company Personnel. (b) Participant agrees that during the Non-Solicit Period, Participant shall not, directly or indirectly, engage in any conduct intended or reasonably calculated to induce or urge any Participant or contractor of the Company to discontinue, in whole or in part, his/her employment relationship or engagement with the Company. (c) “Company Personnel” means any person who was employed by the Company and with whom Participant had direct contact for business purposes during the twelve (12) month period prior to Participant’s last day of employment or service with the Company. 4. Non-Solicitation Covenant – Customer (a) Participant agrees that, during Participant’s employment or service with the Company, and during the Non-Solicit Period, Participant will not, in the Restricted Territory, directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, aid, or induce any Customer of the Company to purchase goods or services then sold by the Company from another person or entity, or assist or aid any other persons or entity in identifying or soliciting any such Customer(s); or (ii) otherwise interfere with the relationship of the Company with any of their Participants, customers, vendors, agents, or representatives. (b) “Customer(s)” means an existing customer (person or entity) of the Company that Participant, directly or indirectly (e.g., through employees whom Participant supervised), called upon, solicited, or worked with at any time during the twelve (12) month period prior to Participant’s last day of employment or service with the Company. A-4 (c) Participant acknowledges that as a result of Participant’s employment or service with the Company, Participant will be acting as a representative of the Company and will be using the Company’s assets and resources, and will be benefiting from the Company’s goodwill, name recognition, reputation, and experience in regard to these Customers, and Participant will gain Confidential Information about Company Customers, and consequently, the covenants set forth above are reasonable and necessary to protect the Company’s legitimate business interests. Participant agrees that the covenants in this paragraph will apply to all Customers as defined above, even if the identity of certain Customers of the Company may be publicly known, and even if Participant knew or had previous dealings with one or more such Customers prior to Participant’s employment with the Company. 5. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. (b) Participant agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Participant failed to comply with the covenants contained in this RC Agreement, but in no event longer than 24 months from the date of Participant’s termination of employment of services with the Company. (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 6. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 7. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement.


 
A-5 It is the intention of the parties that, if any court or other tribunal construes any provision or clause of this RC Agreement, or any portion thereof, to be illegal, void or unenforceable because of the duration of such provision or the area or matter covered thereby, such court shall reduce the duration, area, or matter of such provision to the extent permitted by law, and, in its reduced form, such provision shall then be enforceable and shall be enforced. 8. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. 9. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party-in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. 10. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement. Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V9 – CO Version RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality and Trade Secrets (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Participant understands and agrees that Participant’s agreement not to use or disclose Confidential Information and trade secrets includes, but is not limited to, that Participant will not, directly or indirectly: (i) use Company trade secrets to identify or target existing customers for Participant’s own personal benefit or the benefit of any other firm or entity; (ii) use trade secrets to facilitate the solicitation, for Participant’s own personal benefit or the benefit of any other firm or entity, of any existing customers; and/or (iii) use trade secrets to otherwise unfairly compete with the Company. (d) Permitted Disclosures. (i) Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for A-2 the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. (ii) The foregoing sections 1(a)-(c) will not apply to information that (i) arises from Participant’s general training, knowledge, skill, or expertise, whether gained on the job or otherwise; (ii) was known to the public prior to its disclosure to Participant; (iii) becomes known to the public subsequent to disclosure to Participant through no wrongful act of Participant or any representative of Participant; (iv) Participant has a right to disclose as legally protected conduct; or (v) Participant is required to disclose by applicable law, regulation or legal process (provided that Participant provides the Employer with prior notice of the contemplated disclosure and reasonably cooperates with the Employer at its expense in seeking a protective order or other appropriate protection of such information). Despite clauses (ii) and (iii) of the preceding sentence, Participant’s obligation to maintain such disclosed information in confidence will not terminate where only portions of the information are in the public domain. 2. Non-Competition Covenant (a) Participant agrees that, during Participant’s employment or service with the Company, and for the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or service through the final Vesting Date, or (b) the one (1) year period after separation of Participant’s employment or service with the Company (the “Non-Compete Period”), Participant will not directly or indirectly, own, manage, operate, control (including indirectly through a debt or equity investment), provide services to, or be employed by, any person or entity engaged in any business that is both: (i) located in, or provides services or products to, a region with respect to which Participant had substantial responsibilities during the twenty-four (24) months preceding Participant’s separation of employment or services with the Company; and (ii) competitive with either (A) the line of business or businesses of the Company that Participant was employed with during the twenty-four (24) months preceding Participant’s separation of employment or services with the Company (including any prospective business to be developed or acquired that was proposed at the date of separation), or (B) any other business of the Company with respect to which Participant had substantial exposure during the twenty-four (24) months preceding Participant’s separation of employment or services with the Company. (b) Participant’s agreement not to provide such services applies regardless of whether Participant does so as an employee, owner, partner, principal, advisor, independent contractor, consultant, agent, officer, director, investor, or shareholder. Notwithstanding the foregoing, Participant’s ownership of less than 1% of the outstanding shares of a publicly traded company that constitutes a competitor as described in Section 2(a) above shall not be deemed to be providing services to such Competitor solely by virtue of owning such shares. A-3 3. Non-Solicitation Covenant – ADT Personnel (a) Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or service through the final Vesting Date, or (b) the two (2) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not, directly or indirectly, on Participant’s own behalf or on behalf of another, solicit any Company Personnel to leave their employment with the Company. (b) “Company Personnel” means any person who was employed by the Company during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company, (i) with whom Participant had direct contact for business purposes, or (ii) whom Participant knew about because of Participant’s access to the Company’s Confidential Information or trade secrets. 4. Non-Solicitation Covenant – Customer (a) Participant agrees that, during Participant’s employment or service with the Company, and during the Non-Solicit Period, Participant will not directly or indirectly, on Participant’s own behalf or on behalf of another, solicit, aid, or induce any Customer of the Company to purchase goods or services then sold by the Company from another person or entity, or assist or aid any other persons or entity in identifying or soliciting any such Customer(s). (b) “Customer(s)” means a customer (person or entity) of the Company that Participant, directly or indirectly (e.g., through employees whom Participant supervised), called upon, solicited, worked with, or became acquainted with at any time during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company. (c) Participant acknowledges that as a result of Participant’s employment or service with the Company, Participant will gain trade secret information about Company Customers, and consequently, the covenants set forth above are reasonable and necessary to protect the Company’s legitimate business interests. 5. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. (b) Participant agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Participant failed to comply with the covenants contained in this RC Agreement.


 
A-4 (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 6. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 7. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then this RC Agreement will be deemed amended to the extent necessary to render the otherwise unenforceable Provision, and the rest of this RC Agreement, valid and enforceable. If a court or arbitrator declines to amend this RC Agreement as provided herein, the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement. 8. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. 9. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party- in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. A-5 10. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement. Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V10 – Core National Version RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. 2. Non-Solicitation Covenant – ADT Personnel (a) Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from A-2 employment or service through the final Vesting Date, or (b) the two (2) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not, directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, recruit, aid, or induce any Company Personnel to leave their employment with the Company in order to accept employment with or render services to another person or entity unaffiliated with the Company, or knowingly take any action to assist or aid any other person or entity in identifying, soliciting, recruiting, inducing or hiring any such Company Personnel; or (ii) otherwise interfere with the relationship of the Company with any Company Personnel. (b) Participant agrees that during the Non-Solicit Period, Participant shall not, directly or indirectly, engage in any conduct intended or reasonably calculated to induce or urge any Participant or contractor of the Company to discontinue, in whole or in part, his/her employment relationship or engagement with the Company. (c) “Company Personnel” means any person who was employed by the Company during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company and either (i) with whom Participant had direct contact for business purposes, or (ii) whom Participant knew about because of Participant’s access to the Company’s Confidential Information or trade secrets. 3. Non-Solicitation Covenant – Customer (a) Participant agrees that, during Participant’s employment or service with the Company, and during the Non-Solicit Period, Participant will not directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, aid, or induce any Customer of the Company to purchase goods or services then sold by the Company from another person or entity, or assist or aid any other persons or entity in identifying or soliciting any such Customer(s); or (ii) initiate any contact or communication with any Customer regarding any new employment or business affiliation Participant may accept or be intending to accept following separation of Participant’s employment with the Company; or (iii) otherwise interfere with the relationship of the Company with any of their Participants, customers, vendors, agents, or representatives. (b) “Customer(s)” means a customer (person or entity) of the Company that Participant, directly or indirectly (e.g., through employees whom Participant supervised), called upon, solicited, worked with, or became acquainted with at any time during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company. (c) Participant acknowledges that as a result of Participant’s employment or service with the Company, Participant will be acting as a representative of the Company and will be using the Company’s assets and resources, and will be benefiting from the Company’s goodwill, name recognition, reputation, and experience in regard to these Customers, and Participant will gain Confidential Information about Company Customers, and consequently, the covenants set forth above are reasonable and necessary to protect the Company’s legitimate business interests. Participant agrees that the covenants in this paragraph will apply to all Customers as defined above, even if the identity of certain Customers of the


 
A-3 Company may be publicly known, and even if Participant knew or had previous dealings with one or more such Customers prior to Participant’s employment with the Company. 4. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. (b) Participant agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Participant failed to comply with the covenants contained in this RC Agreement. (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 5. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 6. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then this RC Agreement will be deemed amended to the extent necessary to render the otherwise unenforceable Provision, and the rest of this RC Agreement, valid and enforceable. If a court or arbitrator declines to amend this RC Agreement as provided herein, the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement. 7. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. A-4 8. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party-in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. 9. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement. Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V11 – Blue Pencil Version RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. 2. Non-Solicitation Covenant – ADT Personnel (a) Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from A-2 employment or service through the final Vesting Date, or (b) the one(1) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not, directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, recruit, aid, or induce any Company Personnel to leave their employment with the Company in order to accept employment with or render services to another person or entity unaffiliated with the Company, or knowingly take any action to assist or aid any other person or entity in identifying, soliciting, recruiting, inducing or hiring any such Company Personnel; or (ii) otherwise interfere with the relationship of the Company with any Company Personnel. (b) Participant agrees that during the Non-Solicit Period, Participant shall not, directly or indirectly, engage in any conduct intended or reasonably calculated to induce or urge any Participant or contractor of the Company to discontinue, in whole or in part, his/her employment relationship or engagement with the Company. (c) “Company Personnel” means any person who was employed by the Company during the twelve (12) month period prior to Participant’s last day of employment or service with the Company and with whom Participant had direct contact for business purposes. 3. Non-Solicitation Covenant – Customer (a) Participant agrees that, during Participant’s employment or service with the Company, and during the Non-Solicit Period, Participant will not directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, aid, or induce any Customer of the Company to purchase goods or services then sold by the Company from another person or entity, or assist or aid any other persons or entity in identifying or soliciting any such Customer(s); or (ii) otherwise interfere with the relationship of the Company with any of their Participants, customers, vendors, agents, or representatives. (b) “Customer(s)” means an existing customer (person or entity) of the Company that Participant, directly or indirectly (e.g., through employees whom Participant supervised), called upon, solicited, or worked with at any time during the twelve (12) month period prior to Participant’s last day of employment or service with the Company. (c) Participant acknowledges that as a result of Participant’s employment or service with the Company, Participant will be acting as a representative of the Company and will be using the Company’s assets and resources, and will be benefiting from the Company’s goodwill, name recognition, reputation, and experience in regard to these Customers, and Participant will gain Confidential Information about Company Customers, and consequently, the covenants set forth above are reasonable and necessary to protect the Company’s legitimate business interests. Participant agrees that the covenants in this paragraph will apply to all Customers as defined above, even if the identity of certain Customers of the Company may be publicly known, and even if Participant knew or had previous dealings with one or more such Customers prior to Participant’s employment with the Company.


 
A-3 4. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. (b) Participant agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Participant failed to comply with the covenants contained in this RC Agreement. (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 5. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 6. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement. It is the intention of the parties that, if any court or arbitrator construes any provision or clause of this RC Agreement, or any portion thereof, to be illegal, void or unenforceable because of the duration of such provision or the area or matter covered thereby, such court shall reduce the duration, area, or matter of such provision to the extent permitted by law, and, in its reduced form, such provision shall then be enforceable and shall be enforced. 7. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. A-4 8. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party-in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. 9. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement. Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V12 – Red Pencil Version (NE,VA,WY) RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. 2. Non-Solicitation Covenant – ADT Personnel Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or A-2 service through the final Vesting Date, or (b) the one (1) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not solicit any current employee of the Company with whom Employee had personal contact during the 18 months immediately preceding Employee’s last day of employment with the Company. 3. Non-Solicitation Covenant – Customer (a) Participant agrees that, during Participant’s employment or service with the Company, and during the Non-Solicit Period, Participant will not solicit any Customers. (b) “Customer(s)” means a current customer (person or entity) of the Company with which Participant actually did business and had personal contact during the 18 months immediately preceding Participant’s last day of employment or service with the Company. (c) Participant acknowledges that as a result of Participant’s employment or service with the Company, Participant will be acting as a representative of the Company and will be using the Company’s assets and resources, and will be benefiting from the Company’s goodwill, name recognition, reputation, and experience in regard to these Customers, and Participant will gain Confidential Information about Company Customers, and consequently, the covenants set forth above are reasonable and necessary to protect the Company’s legitimate business interests. 4. Separate and Severable Covenants The restrictive covenants set forth in Sections 2 and 3 above are intended by the Parties to be separate and severable covenants. If either Section 2 or Section 3 is held to be unenforceable, the invalidity or unenforceability of that Section shall not affect the validity or enforceability of the remaining Section, which shall be enforced as if the offending Section had not been included in this Agreement. 5. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. 6. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party-in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another.


 
A-3 7. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement. Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V13 – CA/ND Version RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality and Trade Secrets (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Participant understands and agrees that Participant’s agreement not to use or disclose Confidential Information and trade secrets includes, but is not limited to, that Participant will not, directly or indirectly: (i) use Company trade secrets to identify or target existing customers for Participant’s own personal benefit or the benefit of any other firm or entity; (ii) use trade secrets to facilitate the solicitation, for Participant’s own personal benefit or the benefit of any other firm or entity, of any existing customers; and/or (iii) use trade secrets to otherwise unfairly compete with the Company. (d) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an A-2 attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. 2. Non-Solicitation Covenant – ADT Personnel (a) Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or service through the final Vesting Date, or (b) the two (2) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not, directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, recruit, aid, or induce any Company Personnel to leave their employment with the Company in order to accept employment with or render services to another person or entity unaffiliated with the Company, or knowingly take any action to assist or aid any other person or entity in identifying, soliciting, recruiting, inducing or hiring any such Company Personnel; or (ii) otherwise interfere with the relationship of the Company with any Company Personnel. (b) Participant agrees that during the Non-Solicit Period, Participant shall not, directly or indirectly, engage in any conduct intended or reasonably calculated to induce or urge any Participant or contractor of the Company to discontinue, in whole or in part, his/her employment relationship or engagement with the Company. (c) “Company Personnel” means any person who was employed by the Company during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company, (i) with whom Participant had direct contact for business purposes, or (ii) whom Participant knew about because of Participant’s access to the Company’s Confidential Information or trade secrets. 3. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. A-3 (b) Participant agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Participant failed to comply with the covenants contained in this RC Agreement. (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 4. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 5. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then this RC Agreement will be deemed amended to the extent necessary to render the otherwise unenforceable Provision, and the rest of this RC Agreement, valid and enforceable. If a court or arbitrator declines to amend this RC Agreement as provided herein, the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement. 6. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. 7. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party- in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to


 
A-4 assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. 8. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement. Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V14 – LA/SD Version RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. A-2 2. Non-Solicitation Covenant – ADT Personnel (a) Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or service through the final Vesting Date, or (b) the one (1) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not, in the Restricted Territory, directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, recruit, aid, or induce any Company Personnel to leave their employment with the Company in order to accept employment with or render services to another person or entity unaffiliated with the Company, or knowingly take any action to assist or aid any other person or entity in identifying, soliciting, recruiting, inducing or hiring any such Company Personnel; or (ii) otherwise interfere with the relationship of the Company with any Company Personnel. (b) Participant agrees that during the Non-Solicit Period, Participant shall not, directly or indirectly, engage in any conduct intended or reasonably calculated to induce or urge any Participant or contractor of the Company to discontinue, in whole or in part, his/her employment relationship or engagement with the Company. (c) “Company Personnel” means any person who was employed by the Company and with whom Participant had direct contact for business purposes during the twelve (12) month period prior to Participant’s last day of employment or service with the Company. 3. Non-Solicitation Covenant – Customer (a) Participant agrees that, during Participant’s employment or service with the Company, and during the Non-Solicit Period, Participant will not, in the Restricted Territory, directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, aid, or induce any Customer of the Company to purchase goods or services then sold by the Company from another person or entity, or assist or aid any other persons or entity in identifying or soliciting any such Customer(s); or (ii) otherwise interfere with the relationship of the Company with any of their Participants, customers, vendors, agents, or representatives. (b) “Customer(s)” means an existing customer (person or entity) of the Company that Participant, directly or indirectly (e.g., through employees whom Participant supervised), called upon, solicited, or worked with at any time during the twelve (12) month period prior to Participant’s last day of employment or service with the Company. (c) For purposes of this RC Agreement, the business of the Company is as follows: (i) If Participant was employed with or provided services to ADT LLC at any time during the twelve (12) months immediately preceding termination of employment or services, then the business of the Company is to sell, install, monitor and/or maintain security, fire, life safety and automation equipment and services for residential and small business premises, including burglar alarm systems, security cameras, home automation and access control systems, as well as intrusion, temperature, flood, A-3 fire, smoke, carbon monoxide, emergency, medical alert and fall detection monitoring and response services. (ii) If Participant was employed with or providing services to ADT Commercial LLC at any time during the twelve (12) months immediately preceding termination of employment or services, then the business of the Company is to sell, install, monitor and/or maintain security, fire, and life safety services and to provide risk consulting solutions for commercial, governmental and other institutional settings, including burglar alarm systems, security cameras, and fire suppression and access control systems, as well as response services. (iii) If Participant was employed with or providing services to both ADT LLC and ADT Commercial LLC at any time during the twelve (12) months immediately preceding termination of employment or services, either simultaneously or at different times during that time period, then the business of the Company is both the definitions set forth in sections 1(c)(i) and (ii) above. (iv) Participant acknowledges that Participant is familiar with the business of the Company sufficiently to understand the nature of the Company’s business and that no further definition of the business of the Company is necessary. (d) “Restricted Territory” is defined as follows: (i) If Participant last worked for or provided services to the Company in Louisiana, “Restricted Territory” means any of the following Parishes in Louisiana: Plaquemines, Jefferson, St. Bernard, Orleans, St. Charles, St. John the Baptist, St. James, Lafourche, Terrebonne, St. Tammany, St. Mary, Assumption, Ascension, Livingston, Tangipahoa, Washington, St. Helen, East Feliciana, West Feliciana, East Baton Rouge, West Baton Rouge, Iberville, Pointe Coupee, Iberia, Vermilion, Lafayette, St. Martin, Acadia, St. Landry, Jefferson Davis, Cameron, Calcasieu, Beauregard, Allen, Evangeline, Avoyelles, Rapides, Vernon, Concordia, Catahoula, LaSalle, Grant, Natchitoches, Sabine, DeSoto, Red River, Winn, Catahoula, Tensas, Franklin, Madison, Richland, Ouachita, Jackson, Bienville, Lincoln, Caddo, Bossier, Webster, Claiborne, Union, Morehouse, West Carrol, East Carrol. (ii) If Participant last worked for or provided services to the Company in South Dakota or any other state, territory or District, “Restricted Territory” means the geographic area or areas for which Employee was responsible at any time during the twelve (12) months immediately preceding Employee’s termination of employment with the Company. (e) Participant acknowledges that as a result of Participant’s employment or service with the Company, Participant will be acting as a representative of the Company and will be using the Company’s assets and resources, and will be benefiting from the Company’s goodwill, name recognition, reputation, and experience in regard to these Customers, and Participant will gain Confidential Information about Company Customers, and consequently, the covenants set forth above are reasonable and necessary to protect the Company’s legitimate business interests. Participant agrees that the covenants in this paragraph will apply to all Customers as defined above, even if the identity of certain Customers of the Company may be publicly known, and even if Participant knew or had previous dealings with one or more such Customers prior to Participant’s employment with the Company. 4. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the


 
A-4 Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. (b) Participant agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Participant failed to comply with the covenants contained in this RC Agreement, but in no event longer than 24 months from the date of Participant’s termination of employment of services with the Company. (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 5. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 6. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement. It is the intention of the parties that, if any court or other tribunal construes any provision or clause of this RC Agreement, or any portion thereof, to be illegal, void or unenforceable because of the duration of such provision or the area or matter covered thereby, such court shall reduce the duration, area, or matter of such provision to the extent permitted by law, and, in its reduced form, such provision shall then be enforceable and shall be enforced. 7. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. A-5 8. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party-in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. 9. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement. Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V15 – IL Version RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. 2. Non-Solicitation Covenant – ADT Personnel (a) Provided that Participant presently meets the statutory wage threshold set forth in Section 4 below, Participant agrees that, during Participant’s employment or service with the Company and for A-2 the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or service through the final Vesting Date, or (b) the two (2) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not, directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, recruit, aid, or induce any Company Personnel to leave their employment with the Company in order to accept employment with or render services to another person or entity unaffiliated with the Company, or knowingly take any action to assist or aid any other person or entity in identifying, soliciting, recruiting, inducing or hiring any such Company Personnel; or (ii) otherwise interfere with the relationship of the Company with any Company Personnel. (b) Participant agrees that during the Non-Solicit Period, Participant shall not, directly or indirectly, engage in any conduct intended or reasonably calculated to induce or urge any Participant or contractor of the Company to discontinue, in whole or in part, his/her employment relationship or engagement with the Company. (c) “Company Personnel” means any person who was employed by the Company during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company, (i) with whom Participant had direct contact for business purposes, or (ii) whom Participant knew about because of Participant’s access to the Company’s Confidential Information or trade secrets. 3. Non-Solicitation Covenant – Customer (a) Provided that Participant presently meets the statutory wage threshold set forth in Section 4 below, Participant agrees that, during Participant’s employment or service with the Company, and during the Non-Solicit Period, Participant will not directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, aid, or induce any Customer of the Company to purchase goods or services then sold by the Company from another person or entity, or assist or aid any other persons or entity in identifying or soliciting any such Customer(s); or (ii) initiate any contact or communication with any Customer regarding any new employment or business affiliation Participant may accept or be intending to accept following separation of Participant’s employment with the Company; or (iii) otherwise interfere with the relationship of the Company with any of their Participants, customers, vendors, agents, or representatives. (b) “Customer(s)” means a customer (person or entity) of the Company that Participant, directly or indirectly (e.g., through employees whom Participant supervised), called upon, solicited, worked with, or became acquainted with at any time during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company. (c) Participant acknowledges that as a result of Participant’s employment or service with the Company, Participant will be acting as a representative of the Company and will be using the Company’s assets and resources, and will be benefiting from the Company’s goodwill, name recognition, reputation, and experience in regard to these Customers, and Participant will gain Confidential Information about Company Customers, and consequently, the covenants set forth above are reasonable and necessary to


 
A-3 protect the Company’s legitimate business interests. Participant agrees that the covenants in this paragraph will apply to all Customers as defined above, even if the identity of certain Customers of the Company may be publicly known, and even if Participant knew or had previous dealings with one or more such Customers prior to Participant’s employment with the Company. 4. Statutory Wage Threshold for Non-Solicitation Clauses; Attorney Review; 14 Days to Review RC Agreement (a) The non-solicitation clauses set forth in Sections 2 and 3 above do not apply to Participant unless, as of the time of execution of this RC Agreement, Participant’s actual or expected annualized rate of earnings with the Company exceed Forty-five thousand dollars ($45,000) per year (or such other amount as may later be established by subsequent statutory modifications) (hereinafter the “Wage Threshold”). If Participant does not meet with Wage Threshold, then Sections 2 and 3 of this RC Agreement are of no force or effect as to Participant. (b) The Company advises Participant to have this RC Agreement reviewed by an attorney of Participant’s own choosing to receive legal advice about the RC Agreement prior to Participant signing the RC Agreement. (c) Participant acknowledges and agrees that Participant received at least 14 days to review this RC Agreement before Participant was required to sign the RC Agreement, although Participant may choose to sign in fewer than 14 days. 5. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. (b) Participant agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Participant failed to comply with the covenants contained in this RC Agreement. (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 6. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such A-4 individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 7. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then this RC Agreement will be deemed amended to the extent necessary to render the otherwise unenforceable Provision, and the rest of this RC Agreement, valid and enforceable. If a court or arbitrator declines to amend this RC Agreement as provided herein, the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement. 8. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. 9. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party-in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. 10. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement. Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V16 – OK Version RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. A-2 2. Non-Solicitation Covenant – ADT Personnel (a) Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or service through the final Vesting Date, or (b) the two (2) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not, directly or indirectly, on Participant’s own behalf or on behalf of another solicit any Company Personnel to leave their employment with the Company in order to accept employment with or render services to another person or entity unaffiliated with the Company, or knowingly take any action to assist or aid any other person or entity in soliciting any such Company Personnel. (b) “Company Personnel” means any person who was employed by the Company during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company and either (i) with whom Participant had direct contact for business purposes, or (ii) whom Participant knew about because of Participant’s access to the Company’s Confidential Information or trade secrets. 3. Non-Solicitation Covenant – Customer (a) Participant agrees that during the Non-Solicit Period, Participant will not directly solicit any Customer of the Company to purchase goods or services, or a combination of goods and services, then sold by the Company from another person or entity. (b) “Customer(s)” means an established customer (person or entity) of the Company that Participant, directly or indirectly (e.g., through employees whom Participant supervised), called upon, solicited, worked with, or became acquainted with at any time during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company. (c) Participant acknowledges that as a result of Participant’s employment or service with the Company, Participant will be acting as a representative of the Company and will be using the Company’s assets and resources, and will be benefiting from the Company’s goodwill, name recognition, reputation, and experience in regard to these Customers, and Participant will gain Confidential Information about Company Customers, and consequently, the covenants set forth above are reasonable and necessary to protect the Company’s legitimate business interests. 4. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. (b) Participant agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Participant failed to comply with the covenants contained in this RC Agreement.


 
A-3 (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 5. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 6. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then this RC Agreement will be deemed amended to the extent necessary to render the otherwise unenforceable Provision, and the rest of this RC Agreement, valid and enforceable. If a court or arbitrator declines to amend this RC Agreement as provided herein, the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement. 7. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. 8. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party- in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. A-4 9. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement. Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. A-2 2. Non-Solicitation Covenant – ADT Personnel (a) Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or service through the final Vesting Date, or (b) the two (2) year period after separation of Participant’s employment or service with the Company, Participant will not, directly or indirectly, on Participant’s own behalf or on behalf of another, hire or employ any agent, servant or employee of the Company who holds a position uniquely essential to the management, organization, or service of the business of the Company. 3. Non-Solicitation Covenant – Customer (a) Participant agrees that, during Participant’s employment or service with the Company, and during the 18-month period after separation of Employee’s employment with the Company, Participant will not directly or indirectly, on Participant’s own behalf or on behalf of another, solicit any Customer of the Company to purchase goods or services then sold by the Company from another person or entity, or assist or aid any other persons or entity in soliciting any such Customer(s), so long as the Company carries on a like business. (b) “Customer(s)” means a current customer (person or entity) of the Company that Participant, directly or indirectly (e.g., through employees whom Participant supervised), called upon, solicited, worked with, or became acquainted with at any time during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company. (c) Participant acknowledges that as a result of Participant’s employment or service with the Company, Participant will be acting as a representative of the Company and will be using the Company’s assets and resources, and will be benefiting from the Company’s goodwill, name recognition, reputation, and experience in regard to these Customers, and Participant will gain Confidential Information about Company Customers, and consequently, the covenants set forth above are reasonable and necessary to protect the Company’s legitimate business interests. Participant agrees that the covenants in this paragraph will apply to all Customers as defined above, even if the identity of certain Customers of the Company may be publicly known, and even if Participant knew or had previous dealings with one or more such Customers prior to Participant’s employment with the Company. 4. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. (b) Participant agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Participant failed to comply with the covenants contained in this RC Agreement.


 
A-3 (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 5. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 6. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then this RC Agreement will be deemed amended to the extent necessary to render the otherwise unenforceable Provision, and the rest of this RC Agreement, valid and enforceable. If a court or arbitrator declines to amend this RC Agreement as provided herein, the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement. 7. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. 8. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party- in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. A-4 9. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement. Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V18 – CO Version RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality and Trade Secrets (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Participant understands and agrees that Participant’s agreement not to use or disclose Confidential Information and trade secrets includes, but is not limited to, that Participant will not, directly or indirectly: (i) use Company trade secrets to identify or target existing customers for Participant’s own personal benefit or the benefit of any other firm or entity; (ii) use trade secrets to facilitate the solicitation, for Participant’s own personal benefit or the benefit of any other firm or entity, of any existing customers; and/or (iii) use trade secrets to otherwise unfairly compete with the Company. (d) Permitted Disclosures. (i) Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by A-2 Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. (ii) The foregoing sections 1(a)-(c) will not apply to information that (i) arises from Participant’s general training, knowledge, skill, or expertise, whether gained on the job or otherwise; (ii) was known to the public prior to its disclosure to Participant; (iii) becomes known to the public subsequent to disclosure to Participant through no wrongful act of Participant or any representative of Participant; (iv) Participant has a right to disclose as legally protected conduct; or (v) Participant is required to disclose by applicable law, regulation or legal process (provided that Participant provides the Employer with prior notice of the contemplated disclosure and reasonably cooperates with the Employer at its expense in seeking a protective order or other appropriate protection of such information). Despite clauses (ii) and (iii) of the preceding sentence, Participant’s obligation to maintain such disclosed information in confidence will not terminate where only portions of the information are in the public domain. 2. Non-Solicitation Covenant – ADT Personnel (a) Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or service through the final Vesting Date, or (b) the two (2) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not, directly or indirectly, on Participant’s own behalf or on behalf of another, solicit any Company Personnel to leave their employment with the Company. (b) “Company Personnel” means any person who was employed by the Company during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company, (i) with whom Participant had direct contact for business purposes, or (ii) whom Participant knew about because of Participant’s access to the Company’s Confidential Information or trade secrets. 3. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. (b) Participant agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Participant failed to comply with the covenants contained in this RC Agreement. (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a


 
A-3 court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 4. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 5. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then this RC Agreement will be deemed amended to the extent necessary to render the otherwise unenforceable Provision, and the rest of this RC Agreement, valid and enforceable. If a court or arbitrator declines to amend this RC Agreement as provided herein, the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement. 6. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. 7. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party-in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. 8. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. A-4 Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement.


 
Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V1 – Core National Version RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. 2. Non-Competition Covenant (a) Participant agrees that, during Participant’s employment or service with the Company, and for the greater of (a) the period commencing with the date of the Participant’s Retirement from A-2 employment or service through the final Vesting Date, or (b) the one (1) year period after separation of Participant’s employment or service with the Company (the “Non-Compete Period”), Participant will not directly or indirectly, own, manage, operate, control (including indirectly through a debt or equity investment), provide services to, or be employed by, any person or entity engaged in any business that is both: (i) located in, or provides services or products to, a region with respect to which Participant had substantial responsibilities during the twenty-four (24) months preceding Participant’s separation of employment or services with the Company; and (ii) competitive with either (A) the line of business or businesses of the Company that Participant was employed with during the twenty-four (24) months preceding Participant’s separation of employment or services with the Company (including any prospective business to be developed or acquired that was proposed at the date of separation), or (B) any other business of the Company with respect to which Participant had substantial exposure during the twenty-four (24) months preceding Participant’s separation of employment or services with the Company. (b) Participant’s agreement not to provide such services applies regardless of whether Participant does so as an employee, owner, partner, principal, advisor, independent contractor, consultant, agent, officer, director, investor, or shareholder. Notwithstanding the foregoing, Participant’s ownership of less than 1% of the outstanding shares of a publicly traded company that constitutes a competitor as described in Section 2(a) above shall not be deemed to be providing services to such Competitor solely by virtue of owning such shares. 3. Non-Solicitation Covenant – ADT Personnel (a) Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or service through the final Vesting Date, or (b) the two (2) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not, directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, recruit, aid, or induce any Company Personnel to leave their employment with the Company in order to accept employment with or render services to another person or entity unaffiliated with the Company, or knowingly take any action to assist or aid any other person or entity in identifying, soliciting, recruiting, inducing or hiring any such Company Personnel; or (ii) otherwise interfere with the relationship of the Company with any Company Personnel. (b) Participant agrees that during the Non-Solicit Period, Participant shall not, directly or indirectly, engage in any conduct intended or reasonably calculated to induce or urge any Participant or contractor of the Company to discontinue, in whole or in part, his/her employment relationship or engagement with the Company. (c) “Company Personnel” means any person who was employed by the Company during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company and either (i) with whom Participant had direct contact for business purposes, or (ii) whom Participant knew about because of Participant’s access to the Company’s Confidential Information or trade secrets. A-3 4. Non-Solicitation Covenant – Customer (a) Participant agrees that, during Participant’s employment or service with the Company, and during the Non-Solicit Period, Participant will not directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, aid, or induce any Customer of the Company to purchase goods or services then sold by the Company from another person or entity, or assist or aid any other persons or entity in identifying or soliciting any such Customer(s); or (ii) initiate any contact or communication with any Customer regarding any new employment or business affiliation Participant may accept or be intending to accept following separation of Participant’s employment with the Company; or (iii) otherwise interfere with the relationship of the Company with any of their Participants, customers, vendors, agents, or representatives. (b) “Customer(s)” means a customer (person or entity) of the Company that Participant, directly or indirectly (e.g., through employees whom Participant supervised), called upon, solicited, worked with, or became acquainted with at any time during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company. (c) Participant acknowledges that as a result of Participant’s employment or service with the Company, Participant will be acting as a representative of the Company and will be using the Company’s assets and resources, and will be benefiting from the Company’s goodwill, name recognition, reputation, and experience in regard to these Customers, and Participant will gain Confidential Information about Company Customers, and consequently, the covenants set forth above are reasonable and necessary to protect the Company’s legitimate business interests. Participant agrees that the covenants in this paragraph will apply to all Customers as defined above, even if the identity of certain Customers of the Company may be publicly known, and even if Participant knew or had previous dealings with one or more such Customers prior to Participant’s employment with the Company. 5. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. (b) Participant agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Participant failed to comply with the covenants contained in this RC Agreement. (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a A-4 court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 6. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 7. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then this RC Agreement will be deemed amended to the extent necessary to render the otherwise unenforceable Provision, and the rest of this RC Agreement, valid and enforceable. If a court or arbitrator declines to amend this RC Agreement as provided herein, the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement. 8. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. 9. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party-in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. 10. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement.


 
A-5 Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement. Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V2 – Blue Pencil Version RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. 2. Non-Competition Covenant (a) Participant agrees that, during Participant’s employment or service with the Company, and for the greater of (a) the period commencing with the date of the Participant’s Retirement from A-2 employment or service through the final Vesting Date, or (b) the one (1) year period after separation of Participant’s employment or service with the Company (the “Non-Compete Period”), Participant will not provide services to, or be employed by, any person or entity engaged in any business that is both: (i) located in, or provides services or products to, a region with respect to which Participant had substantial responsibilities during the twelve (12) months preceding Participant’s separation of employment or services with the Company; and (ii) competitive with either (A) the line of business or businesses of the Company that Participant was employed with during the twelve (12) months preceding Participant’s separation of employment or services with the Company, or (B) any other business of the Company with respect to which Participant had substantial exposure during the twelve (12) months preceding Participant’s separation of employment or services with the Company. (b) Participant’s agreement not to provide such services applies regardless of whether Participant does so as an employee, owner, partner, principal, advisor, independent contractor, consultant, agent, officer, director, investor, or shareholder. Notwithstanding the foregoing, Participant’s ownership of less than 1% of the outstanding shares of a publicly traded company that constitutes a competitor as described in Section 2(a) above shall not be deemed to be providing services to such competitor solely by virtue of owning such shares. 3. Non-Solicitation Covenant – ADT Personnel (a) Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or service through the final Vesting Date, or (b) the one(1) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not, directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, recruit, aid, or induce any Company Personnel to leave their employment with the Company in order to accept employment with or render services to another person or entity unaffiliated with the Company, or knowingly take any action to assist or aid any other person or entity in identifying, soliciting, recruiting, inducing or hiring any such Company Personnel; or (ii) otherwise interfere with the relationship of the Company with any Company Personnel. (b) Participant agrees that during the Non-Solicit Period, Participant shall not, directly or indirectly, engage in any conduct intended or reasonably calculated to induce or urge any Participant or contractor of the Company to discontinue, in whole or in part, his/her employment relationship or engagement with the Company. (c) “Company Personnel” means any person who was employed by the Company during the twelve (12) month period prior to Participant’s last day of employment or service with the Company and with whom Participant had direct contact for business purposes. 4. Non-Solicitation Covenant – Customer (a) Participant agrees that, during Participant’s employment or service with the Company, and during the Non-Solicit Period, Participant will not directly or indirectly, on Participant’s own behalf or on behalf of another: A-3 (i) solicit, aid, or induce any Customer of the Company to purchase goods or services then sold by the Company from another person or entity, or assist or aid any other persons or entity in identifying or soliciting any such Customer(s); or (ii) otherwise interfere with the relationship of the Company with any of their Participants, customers, vendors, agents, or representatives. (b) “Customer(s)” means an existing customer (person or entity) of the Company that Participant, directly or indirectly (e.g., through employees whom Participant supervised), called upon, solicited, or worked with at any time during the twelve (12) month period prior to Participant’s last day of employment or service with the Company. (c) Participant acknowledges that as a result of Participant’s employment or service with the Company, Participant will be acting as a representative of the Company and will be using the Company’s assets and resources, and will be benefiting from the Company’s goodwill, name recognition, reputation, and experience in regard to these Customers, and Participant will gain Confidential Information about Company Customers, and consequently, the covenants set forth above are reasonable and necessary to protect the Company’s legitimate business interests. Participant agrees that the covenants in this paragraph will apply to all Customers as defined above, even if the identity of certain Customers of the Company may be publicly known, and even if Participant knew or had previous dealings with one or more such Customers prior to Participant’s employment with the Company. 5. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. (b) Participant agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Participant failed to comply with the covenants contained in this RC Agreement. (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 6. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such


 
A-4 individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 7. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement. It is the intention of the parties that, if any court or arbitrator construes any provision or clause of this RC Agreement, or any portion thereof, to be illegal, void or unenforceable because of the duration of such provision or the area or matter covered thereby, such court shall reduce the duration, area, or matter of such provision to the extent permitted by law, and, in its reduced form, such provision shall then be enforceable and shall be enforced. 8. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. 9. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party-in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. 10. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement. Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V3 – Red Pencil Version (NE,VA,WY) RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. A-2 2. Non-Solicitation Covenant – ADT Personnel Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or service through the final Vesting Date, or (b) the one (1) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not solicit any current employee of the Company with whom Employee had personal contact during the 18 months immediately preceding Employee’s last day of employment with the Company. 3. Non-Solicitation Covenant – Customer (a) Participant agrees that, during Participant’s employment or service with the Company, and during the Non-Solicit Period, Participant will not solicit any Customers. (b) “Customer(s)” means a current customer (person or entity) of the Company with which Participant actually did business and had personal contact during the 18 months immediately preceding Participant’s last day of employment or service with the Company. (c) Participant acknowledges that as a result of Participant’s employment or service with the Company, Participant will be acting as a representative of the Company and will be using the Company’s assets and resources, and will be benefiting from the Company’s goodwill, name recognition, reputation, and experience in regard to these Customers, and Participant will gain Confidential Information about Company Customers, and consequently, the covenants set forth above are reasonable and necessary to protect the Company’s legitimate business interests. 4. Separate and Severable Covenants The restrictive covenants set forth in Sections 2 and 3 above are intended by the Parties to be separate and severable covenants. If either Section 2 or Section 3 is held to be unenforceable, the invalidity or unenforceability of that Section shall not affect the validity or enforceability of the remaining Section, which shall be enforced as if the offending Section had not been included in this Agreement. 5. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. 6. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party- in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to A-3 assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. 7. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement.


 
Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V4 – CA/ND Version RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality and Trade Secrets (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Participant understands and agrees that Participant’s agreement not to use or disclose Confidential Information and trade secrets includes, but is not limited to, that Participant will not, directly or indirectly: (i) use Company trade secrets to identify or target existing customers for Participant’s own personal benefit or the benefit of any other firm or entity; (ii) use trade secrets to facilitate the solicitation, for Participant’s own personal benefit or the benefit of any other firm or entity, of any existing customers; and/or (iii) use trade secrets to otherwise unfairly compete with the Company. (d) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an A-2 attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. 2. Non-Solicitation Covenant – ADT Personnel (a) Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or service through the final Vesting Date, or (b) the two (2) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not, directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, recruit, aid, or induce any Company Personnel to leave their employment with the Company in order to accept employment with or render services to another person or entity unaffiliated with the Company, or knowingly take any action to assist or aid any other person or entity in identifying, soliciting, recruiting, inducing or hiring any such Company Personnel; or (ii) otherwise interfere with the relationship of the Company with any Company Personnel. (b) Participant agrees that during the Non-Solicit Period, Participant shall not, directly or indirectly, engage in any conduct intended or reasonably calculated to induce or urge any Participant or contractor of the Company to discontinue, in whole or in part, his/her employment relationship or engagement with the Company. (c) “Company Personnel” means any person who was employed by the Company during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company, (i) with whom Participant had direct contact for business purposes, or (ii) whom Participant knew about because of Participant’s access to the Company’s Confidential Information or trade secrets. 3. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. A-3 (b) Participant agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Participant failed to comply with the covenants contained in this RC Agreement. (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 4. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 5. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then this RC Agreement will be deemed amended to the extent necessary to render the otherwise unenforceable Provision, and the rest of this RC Agreement, valid and enforceable. If a court or arbitrator declines to amend this RC Agreement as provided herein, the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement. 6. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. 7. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party- in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to A-4 assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. 8. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement.


 
Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V5 – AL Version RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. 2. Non-Competition Covenant (a) Participant agrees that, during Participant’s employment or service with the Company, and for the greater of (a) the period commencing with the date of the Participant’s Retirement from A-2 employment or service through the final Vesting Date, or (b) the one (1) year period after separation of Participant’s employment or service with the Company (the “Non-Compete Period”), Participant will not directly or indirectly, own, manage, operate, control (including indirectly through a debt or equity investment), provide services to, or be employed by, any person or entity engaged in any business that is both: (i) located in, or provides services or products to, a region with respect to which Participant had substantial responsibilities during the twenty-four (24) months preceding Participant’s separation of employment or services with the Company and in which the Company carries on a like business; and (ii) competitive with (A) the line of business or businesses of the Company that Participant was employed with during the twenty-four (24) months preceding Participant’s separation of employment or services with the Company, or (B) any other business of the Company with respect to which Participant had substantial exposure during the twenty-four (24) months preceding Participant’s separation of employment or services with the Company. (b) Participant’s agreement not to provide such services applies regardless of whether Participant does so as an employee, owner, partner, principal, advisor, independent contractor, consultant, agent, officer, director, investor, or shareholder. Notwithstanding the foregoing, Participant’s ownership of less than 1% of the outstanding shares of a publicly traded company that constitutes a competitor as described in Section 2(a) above shall not be deemed to be providing services to such competitor solely by virtue of owning such shares. 3. Non-Solicitation Covenant – ADT Personnel (a) Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or service through the final Vesting Date, or (b) the two (2) year period after separation of Participant’s employment or service with the Company, Participant will not, directly or indirectly, on Participant’s own behalf or on behalf of another, hire or employ any agent, servant or employee of the Company who holds a position uniquely essential to the management, organization, or service of the business of the Company. 4. Non-Solicitation Covenant – Customer (a) Participant agrees that, during Participant’s employment or service with the Company, and during the 18-month period after separation of Employee’s employment with the Company, Participant will not directly or indirectly, on Participant’s own behalf or on behalf of another, solicit any Customer of the Company to purchase goods or services then sold by the Company from another person or entity, or assist or aid any other persons or entity in soliciting any such Customer(s), so long as the Company carries on a like business. (b) “Customer(s)” means a current customer (person or entity) of the Company that Participant, directly or indirectly (e.g., through employees whom Participant supervised), called upon, solicited, worked with, or became acquainted with at any time during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company. (c) Participant acknowledges that as a result of Participant’s employment or service with the Company, Participant will be acting as a representative of the Company and will be using the Company’s assets and resources, and will be benefiting from the Company’s goodwill, name recognition, reputation, A-3 and experience in regard to these Customers, and Participant will gain Confidential Information about Company Customers, and consequently, the covenants set forth above are reasonable and necessary to protect the Company’s legitimate business interests. Participant agrees that the covenants in this paragraph will apply to all Customers as defined above, even if the identity of certain Customers of the Company may be publicly known, and even if Participant knew or had previous dealings with one or more such Customers prior to Participant’s employment with the Company. 5. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. (b) Participant agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Participant failed to comply with the covenants contained in this RC Agreement. (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 6. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 7. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then this RC Agreement will be deemed amended to the extent necessary to render the otherwise unenforceable Provision, and the rest of this RC Agreement, valid and enforceable. If a court or arbitrator declines to amend this RC Agreement as provided herein, the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement. 8. Choice of Law, Jurisdiction & Venue A-4 This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. 9. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party-in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. 10. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement.


 
Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V6 – MA Version RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. 2. Non-Solicitation Covenant – ADT Personnel (a) Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from A-2 employment or service through the final Vesting Date, or (b) the two (2) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not, directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, recruit, aid, or induce any Company Personnel to leave their employment with the Company in order to accept employment with or render services to another person or entity unaffiliated with the Company, or knowingly take any action to assist or aid any other person or entity in identifying, soliciting, recruiting, inducing or hiring any such Company Personnel; or (ii) otherwise interfere with the relationship of the Company with any Company Personnel. (b) Participant agrees that during the Non-Solicit Period, Participant shall not, directly or indirectly, engage in any conduct intended or reasonably calculated to induce or urge any Participant or contractor of the Company to discontinue, in whole or in part, his/her employment relationship or engagement with the Company. (c) “Company Personnel” means any person who was employed by the Company during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company and either (i) with whom Participant had direct contact for business purposes, or (ii) whom Participant knew about because of Participant’s access to the Company’s Confidential Information or trade secrets. 3. Non-Solicitation Covenant – Customer (a) Participant agrees that, during Participant’s employment or service with the Company, and during the Non-Solicit Period, Participant will not directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, aid, or induce any Customer of the Company to purchase goods or services then sold by the Company from another person or entity, or assist or aid any other persons or entity in identifying or soliciting any such Customer(s); or (ii) initiate any contact or communication with any Customer regarding any new employment or business affiliation Participant may accept or be intending to accept following separation of Participant’s employment with the Company; or (iii) otherwise interfere with the relationship of the Company with any of their Participants, customers, vendors, agents, or representatives. (b) “Customer(s)” means a customer (person or entity) of the Company that Participant, directly or indirectly (e.g., through employees whom Participant supervised), called upon, solicited, worked with, or became acquainted with at any time during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company. (c) Participant acknowledges that as a result of Participant’s employment or service with the Company, Participant will be acting as a representative of the Company and will be using the Company’s assets and resources, and will be benefiting from the Company’s goodwill, name recognition, reputation, and experience in regard to these Customers, and Participant will gain Confidential Information about Company Customers, and consequently, the covenants set forth above are reasonable and necessary to protect the Company’s legitimate business interests. Participant agrees that the covenants in this paragraph will apply to all Customers as defined above, even if the identity of certain Customers of the A-3 Company may be publicly known, and even if Participant knew or had previous dealings with one or more such Customers prior to Participant’s employment with the Company. 4. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. (b) Participant agrees that in the event Participant breaches a fiduciary duty to the Company, or unlawfully takes the Company’s property, then the Restricted Period shall be extended for the duration of the two year period immediately following the termination of Participant’s employment or services with the Company. (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 5. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 6. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then this RC Agreement will be deemed amended to the extent necessary to render the otherwise unenforceable Provision, and the rest of this RC Agreement, valid and enforceable. If a court or arbitrator declines to amend this RC Agreement as provided herein, the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement. 7. Choice of Law, Jurisdiction & Venue (a) This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws A-4 principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. (b) Participant and the Company agree that the exclusive and mandatory venue for adjudicating any disputes under this RC Agreement shall be the United States District Court for the District of Massachusetts, or the Suffolk County Superior Court. In the event a dispute is litigated in the Massachusetts Superior Court, the Company and Participant hereby agree that they will request that the case be assigned to the Business Litigation Sessions located in the Suffolk County Superior Court. Participant and the Company hereby consent to jurisdiction in such courts for such purpose, and specifically waive any objection to venue in Suffolk County. Participant consents to service of process by mail in respect of any such suit, action or proceeding. Participant and the Company further agree not to file any action relating in any way to this RC Agreement in any court other than as specified in this Section 7(b), and not to file any motion to transfer venue out of the court(s) specified herein (whether by motion to transfer or motion to dismiss on forum non conveniens grounds). Notwithstanding any of the foregoing, if any dispute under this Agreement is subject to resolution by arbitration under an agreement or program agreed to by Participant and the Company, then such arbitration shall be the sole and exclusive venue for adjudicating such disputes, other than any requests for a temporary restraining order and/or a temporary or preliminary injunction pending arbitration, which are reserved exclusively for adjudication in courts specified herein pursuant to Section 4 above even in otherwise arbitrable disputes. 8. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party-in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. 9. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement.


 
Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V7 – OK Version RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. A-2 2. Non-Solicitation Covenant – ADT Personnel (a) Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or service through the final Vesting Date, or (b) the two (2) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not, directly or indirectly, on Participant’s own behalf or on behalf of another solicit any Company Personnel to leave their employment with the Company in order to accept employment with or render services to another person or entity unaffiliated with the Company, or knowingly take any action to assist or aid any other person or entity in soliciting any such Company Personnel. (b) “Company Personnel” means any person who was employed by the Company during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company and either (i) with whom Participant had direct contact for business purposes, or (ii) whom Participant knew about because of Participant’s access to the Company’s Confidential Information or trade secrets. 3. Non-Solicitation Covenant – Customer (a) Participant agrees that during the Non-Solicit Period, Participant will not directly solicit any Customer of the Company to purchase goods or services, or a combination of goods and services, then sold by the Company from another person or entity. (b) “Customer(s)” means an established customer (person or entity) of the Company that Participant, directly or indirectly (e.g., through employees whom Participant supervised), called upon, solicited, worked with, or became acquainted with at any time during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company. (c) Participant acknowledges that as a result of Participant’s employment or service with the Company, Participant will be acting as a representative of the Company and will be using the Company’s assets and resources, and will be benefiting from the Company’s goodwill, name recognition, reputation, and experience in regard to these Customers, and Participant will gain Confidential Information about Company Customers, and consequently, the covenants set forth above are reasonable and necessary to protect the Company’s legitimate business interests. 4. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. (b) Participant agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Participant failed to comply with the covenants contained in this RC Agreement. A-3 (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 5. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 6. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then this RC Agreement will be deemed amended to the extent necessary to render the otherwise unenforceable Provision, and the rest of this RC Agreement, valid and enforceable. If a court or arbitrator declines to amend this RC Agreement as provided herein, the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement. 7. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. 8. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party- in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. A-4 9. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement.


 
Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V8 – LA/SD Version RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. 2. Non-Competition Covenant (a) Participant agrees that, during Participant’s employment or service with the Company, and for the greater of (a) the period commencing with the date of the Participant’s Retirement from A-2 employment or service through the final Vesting Date, or (b) the one (1) year period after separation of Participant’s employment or service with the Company (the “Non-Compete Period”), Participant will not, in the Restricted Territory, provide services to, or be employed by, any person or entity engaged in any business similar to that of the Company that is competitive with either (A) the line of business or businesses of the Company that Participant was employed with during the twelve (12) months preceding Participant’s separation of employment or services with the Company, or (B) any other business of the Company with respect to which Participant had substantial exposure during the twelve (12) months preceding Participant’s separation of employment or services with the Company. (b) Participant’s agreement not to provide such services applies regardless of whether Participant does so as an employee, owner, partner, principal, advisor, independent contractor, consultant, agent, officer, director, investor, or shareholder. Notwithstanding the foregoing, Participant’s ownership of less than 1% of the outstanding shares of a publicly traded company that constitutes a competitor as described in Section 2(a) above shall not be deemed to be providing services to such competitor solely by virtue of owning such shares. (c) For purposes of this RC Agreement, the business of the Company is as follows: (i) If Participant was employed with or provided services to ADT LLC at any time during the twelve (12) months immediately preceding termination of employment or services, then the business of the Company is to sell, install, monitor and/or maintain security, fire, life safety and automation equipment and services for residential and small business premises, including burglar alarm systems, security cameras, home automation and access control systems, as well as intrusion, temperature, flood, fire, smoke, carbon monoxide, emergency, medical alert and fall detection monitoring and response services. (ii) If Participant was employed with or providing services to ADT Commercial LLC at any time during the twelve (12) months immediately preceding termination of employment or services, then the business of the Company is to sell, install, monitor and/or maintain security, fire, and life safety services and to provide risk consulting solutions for commercial, governmental and other institutional settings, including burglar alarm systems, security cameras, and fire suppression and access control systems, as well as response services. (iii) If Participant was employed with or providing services to both ADT LLC and ADT Commercial LLC at any time during the twelve (12) months immediately preceding termination of employment or services, either simultaneously or at different times during that time period, then the business of the Company is both the definitions set forth in sections 1(c)(i) and (ii) above. (iv) Participant acknowledges that Participant is familiar with the business of the Company sufficiently to understand the nature of the Company’s business and that no further definition of the business of the Company is necessary. (d) “Restricted Territory” is defined as follows: (i) If Participant last worked for or provided services to the Company in Louisiana, “Restricted Territory” means any of the following Parishes in Louisiana: Plaquemines, Jefferson, St. Bernard, Orleans, St. Charles, St. John the Baptist, St. James, Lafourche, Terrebonne, St. Tammany, St. Mary, Assumption, Ascension, Livingston, Tangipahoa, Washington, St. Helen, East Feliciana, West Feliciana, East Baton Rouge, West Baton Rouge, Iberville, Pointe Coupee, Iberia, Vermilion, Lafayette, St. Martin, Acadia, St. Landry, Jefferson Davis, Cameron, Calcasieu, Beauregard, Allen, Evangeline, Avoyelles, Rapides, Vernon, Concordia, Catahoula, LaSalle, Grant, Natchitoches, Sabine, DeSoto, Red A-3 River, Winn, Catahoula, Tensas, Franklin, Madison, Richland, Ouachita, Jackson, Bienville, Lincoln, Caddo, Bossier, Webster, Claiborne, Union, Morehouse, West Carrol, East Carrol. (ii) If Participant last worked for or provided services to the Company in South Dakota or any other state, territory or District, “Restricted Territory” means the geographic area or areas for which Employee was responsible at any time during the twelve (12) months immediately preceding Employee’s termination of employment with the Company. 3. Non-Solicitation Covenant – ADT Personnel (a) Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or service through the final Vesting Date, or (b) the one (1) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not, in the Restricted Territory, directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, recruit, aid, or induce any Company Personnel to leave their employment with the Company in order to accept employment with or render services to another person or entity unaffiliated with the Company, or knowingly take any action to assist or aid any other person or entity in identifying, soliciting, recruiting, inducing or hiring any such Company Personnel; or (ii) otherwise interfere with the relationship of the Company with any Company Personnel. (b) Participant agrees that during the Non-Solicit Period, Participant shall not, directly or indirectly, engage in any conduct intended or reasonably calculated to induce or urge any Participant or contractor of the Company to discontinue, in whole or in part, his/her employment relationship or engagement with the Company. (c) “Company Personnel” means any person who was employed by the Company and with whom Participant had direct contact for business purposes during the twelve (12) month period prior to Participant’s last day of employment or service with the Company. 4. Non-Solicitation Covenant – Customer (a) Participant agrees that, during Participant’s employment or service with the Company, and during the Non-Solicit Period, Participant will not, in the Restricted Territory, directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, aid, or induce any Customer of the Company to purchase goods or services then sold by the Company from another person or entity, or assist or aid any other persons or entity in identifying or soliciting any such Customer(s); or (ii) otherwise interfere with the relationship of the Company with any of their Participants, customers, vendors, agents, or representatives. (b) “Customer(s)” means an existing customer (person or entity) of the Company that Participant, directly or indirectly (e.g., through employees whom Participant supervised), called upon, solicited, or worked with at any time during the twelve (12) month period prior to Participant’s last day of employment or service with the Company. A-4 (c) Participant acknowledges that as a result of Participant’s employment or service with the Company, Participant will be acting as a representative of the Company and will be using the Company’s assets and resources, and will be benefiting from the Company’s goodwill, name recognition, reputation, and experience in regard to these Customers, and Participant will gain Confidential Information about Company Customers, and consequently, the covenants set forth above are reasonable and necessary to protect the Company’s legitimate business interests. Participant agrees that the covenants in this paragraph will apply to all Customers as defined above, even if the identity of certain Customers of the Company may be publicly known, and even if Participant knew or had previous dealings with one or more such Customers prior to Participant’s employment with the Company. 5. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. (b) Participant agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Participant failed to comply with the covenants contained in this RC Agreement, but in no event longer than 24 months from the date of Participant’s termination of employment of services with the Company. (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 6. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 7. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement.


 
A-5 It is the intention of the parties that, if any court or other tribunal construes any provision or clause of this RC Agreement, or any portion thereof, to be illegal, void or unenforceable because of the duration of such provision or the area or matter covered thereby, such court shall reduce the duration, area, or matter of such provision to the extent permitted by law, and, in its reduced form, such provision shall then be enforceable and shall be enforced. 8. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. 9. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party-in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. 10. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement. Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V9 – CO Version RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality and Trade Secrets (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Participant understands and agrees that Participant’s agreement not to use or disclose Confidential Information and trade secrets includes, but is not limited to, that Participant will not, directly or indirectly: (i) use Company trade secrets to identify or target existing customers for Participant’s own personal benefit or the benefit of any other firm or entity; (ii) use trade secrets to facilitate the solicitation, for Participant’s own personal benefit or the benefit of any other firm or entity, of any existing customers; and/or (iii) use trade secrets to otherwise unfairly compete with the Company. (d) Permitted Disclosures. (i) Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for A-2 the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. (ii) The foregoing sections 1(a)-(c) will not apply to information that (i) arises from Participant’s general training, knowledge, skill, or expertise, whether gained on the job or otherwise; (ii) was known to the public prior to its disclosure to Participant; (iii) becomes known to the public subsequent to disclosure to Participant through no wrongful act of Participant or any representative of Participant; (iv) Participant has a right to disclose as legally protected conduct; or (v) Participant is required to disclose by applicable law, regulation or legal process (provided that Participant provides the Employer with prior notice of the contemplated disclosure and reasonably cooperates with the Employer at its expense in seeking a protective order or other appropriate protection of such information). Despite clauses (ii) and (iii) of the preceding sentence, Participant’s obligation to maintain such disclosed information in confidence will not terminate where only portions of the information are in the public domain. 2. Non-Competition Covenant (a) Participant agrees that, during Participant’s employment or service with the Company, and for the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or service through the final Vesting Date, or (b) the one (1) year period after separation of Participant’s employment or service with the Company (the “Non-Compete Period”), Participant will not directly or indirectly, own, manage, operate, control (including indirectly through a debt or equity investment), provide services to, or be employed by, any person or entity engaged in any business that is both: (i) located in, or provides services or products to, a region with respect to which Participant had substantial responsibilities during the twenty-four (24) months preceding Participant’s separation of employment or services with the Company; and (ii) competitive with either (A) the line of business or businesses of the Company that Participant was employed with during the twenty-four (24) months preceding Participant’s separation of employment or services with the Company (including any prospective business to be developed or acquired that was proposed at the date of separation), or (B) any other business of the Company with respect to which Participant had substantial exposure during the twenty-four (24) months preceding Participant’s separation of employment or services with the Company. (b) Participant’s agreement not to provide such services applies regardless of whether Participant does so as an employee, owner, partner, principal, advisor, independent contractor, consultant, agent, officer, director, investor, or shareholder. Notwithstanding the foregoing, Participant’s ownership of less than 1% of the outstanding shares of a publicly traded company that constitutes a competitor as described in Section 2(a) above shall not be deemed to be providing services to such Competitor solely by virtue of owning such shares. A-3 3. Non-Solicitation Covenant – ADT Personnel (a) Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or service through the final Vesting Date, or (b) the two (2) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not, directly or indirectly, on Participant’s own behalf or on behalf of another, solicit any Company Personnel to leave their employment with the Company. (b) “Company Personnel” means any person who was employed by the Company during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company, (i) with whom Participant had direct contact for business purposes, or (ii) whom Participant knew about because of Participant’s access to the Company’s Confidential Information or trade secrets. 4. Non-Solicitation Covenant – Customer (a) Participant agrees that, during Participant’s employment or service with the Company, and during the Non-Solicit Period, Participant will not directly or indirectly, on Participant’s own behalf or on behalf of another, solicit, aid, or induce any Customer of the Company to purchase goods or services then sold by the Company from another person or entity, or assist or aid any other persons or entity in identifying or soliciting any such Customer(s). (b) “Customer(s)” means a customer (person or entity) of the Company that Participant, directly or indirectly (e.g., through employees whom Participant supervised), called upon, solicited, worked with, or became acquainted with at any time during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company. (c) Participant acknowledges that as a result of Participant’s employment or service with the Company, Participant will gain trade secret information about Company Customers, and consequently, the covenants set forth above are reasonable and necessary to protect the Company’s legitimate business interests. 5. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. (b) Participant agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Participant failed to comply with the covenants contained in this RC Agreement.


 
A-4 (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 6. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 7. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then this RC Agreement will be deemed amended to the extent necessary to render the otherwise unenforceable Provision, and the rest of this RC Agreement, valid and enforceable. If a court or arbitrator declines to amend this RC Agreement as provided herein, the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement. 8. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. 9. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party- in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. A-5 10. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement. Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V10 – Core National Version RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. 2. Non-Solicitation Covenant – ADT Personnel (a) Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from A-2 employment or service through the final Vesting Date, or (b) the two (2) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not, directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, recruit, aid, or induce any Company Personnel to leave their employment with the Company in order to accept employment with or render services to another person or entity unaffiliated with the Company, or knowingly take any action to assist or aid any other person or entity in identifying, soliciting, recruiting, inducing or hiring any such Company Personnel; or (ii) otherwise interfere with the relationship of the Company with any Company Personnel. (b) Participant agrees that during the Non-Solicit Period, Participant shall not, directly or indirectly, engage in any conduct intended or reasonably calculated to induce or urge any Participant or contractor of the Company to discontinue, in whole or in part, his/her employment relationship or engagement with the Company. (c) “Company Personnel” means any person who was employed by the Company during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company and either (i) with whom Participant had direct contact for business purposes, or (ii) whom Participant knew about because of Participant’s access to the Company’s Confidential Information or trade secrets. 3. Non-Solicitation Covenant – Customer (a) Participant agrees that, during Participant’s employment or service with the Company, and during the Non-Solicit Period, Participant will not directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, aid, or induce any Customer of the Company to purchase goods or services then sold by the Company from another person or entity, or assist or aid any other persons or entity in identifying or soliciting any such Customer(s); or (ii) initiate any contact or communication with any Customer regarding any new employment or business affiliation Participant may accept or be intending to accept following separation of Participant’s employment with the Company; or (iii) otherwise interfere with the relationship of the Company with any of their Participants, customers, vendors, agents, or representatives. (b) “Customer(s)” means a customer (person or entity) of the Company that Participant, directly or indirectly (e.g., through employees whom Participant supervised), called upon, solicited, worked with, or became acquainted with at any time during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company. (c) Participant acknowledges that as a result of Participant’s employment or service with the Company, Participant will be acting as a representative of the Company and will be using the Company’s assets and resources, and will be benefiting from the Company’s goodwill, name recognition, reputation, and experience in regard to these Customers, and Participant will gain Confidential Information about Company Customers, and consequently, the covenants set forth above are reasonable and necessary to protect the Company’s legitimate business interests. Participant agrees that the covenants in this paragraph will apply to all Customers as defined above, even if the identity of certain Customers of the


 
A-3 Company may be publicly known, and even if Participant knew or had previous dealings with one or more such Customers prior to Participant’s employment with the Company. 4. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. (b) Participant agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Participant failed to comply with the covenants contained in this RC Agreement. (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 5. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 6. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then this RC Agreement will be deemed amended to the extent necessary to render the otherwise unenforceable Provision, and the rest of this RC Agreement, valid and enforceable. If a court or arbitrator declines to amend this RC Agreement as provided herein, the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement. 7. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. A-4 8. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party-in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. 9. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement. Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V11 – Blue Pencil Version RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. 2. Non-Solicitation Covenant – ADT Personnel (a) Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from A-2 employment or service through the final Vesting Date, or (b) the one(1) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not, directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, recruit, aid, or induce any Company Personnel to leave their employment with the Company in order to accept employment with or render services to another person or entity unaffiliated with the Company, or knowingly take any action to assist or aid any other person or entity in identifying, soliciting, recruiting, inducing or hiring any such Company Personnel; or (ii) otherwise interfere with the relationship of the Company with any Company Personnel. (b) Participant agrees that during the Non-Solicit Period, Participant shall not, directly or indirectly, engage in any conduct intended or reasonably calculated to induce or urge any Participant or contractor of the Company to discontinue, in whole or in part, his/her employment relationship or engagement with the Company. (c) “Company Personnel” means any person who was employed by the Company during the twelve (12) month period prior to Participant’s last day of employment or service with the Company and with whom Participant had direct contact for business purposes. 3. Non-Solicitation Covenant – Customer (a) Participant agrees that, during Participant’s employment or service with the Company, and during the Non-Solicit Period, Participant will not directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, aid, or induce any Customer of the Company to purchase goods or services then sold by the Company from another person or entity, or assist or aid any other persons or entity in identifying or soliciting any such Customer(s); or (ii) otherwise interfere with the relationship of the Company with any of their Participants, customers, vendors, agents, or representatives. (b) “Customer(s)” means an existing customer (person or entity) of the Company that Participant, directly or indirectly (e.g., through employees whom Participant supervised), called upon, solicited, or worked with at any time during the twelve (12) month period prior to Participant’s last day of employment or service with the Company. (c) Participant acknowledges that as a result of Participant’s employment or service with the Company, Participant will be acting as a representative of the Company and will be using the Company’s assets and resources, and will be benefiting from the Company’s goodwill, name recognition, reputation, and experience in regard to these Customers, and Participant will gain Confidential Information about Company Customers, and consequently, the covenants set forth above are reasonable and necessary to protect the Company’s legitimate business interests. Participant agrees that the covenants in this paragraph will apply to all Customers as defined above, even if the identity of certain Customers of the Company may be publicly known, and even if Participant knew or had previous dealings with one or more such Customers prior to Participant’s employment with the Company.


 
A-3 4. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. (b) Participant agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Participant failed to comply with the covenants contained in this RC Agreement. (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 5. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 6. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement. It is the intention of the parties that, if any court or arbitrator construes any provision or clause of this RC Agreement, or any portion thereof, to be illegal, void or unenforceable because of the duration of such provision or the area or matter covered thereby, such court shall reduce the duration, area, or matter of such provision to the extent permitted by law, and, in its reduced form, such provision shall then be enforceable and shall be enforced. 7. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. A-4 8. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party-in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. 9. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement. Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V12 – Red Pencil Version (NE,VA,WY) RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. 2. Non-Solicitation Covenant – ADT Personnel Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or A-2 service through the final Vesting Date, or (b) the one (1) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not solicit any current employee of the Company with whom Employee had personal contact during the 18 months immediately preceding Employee’s last day of employment with the Company. 3. Non-Solicitation Covenant – Customer (a) Participant agrees that, during Participant’s employment or service with the Company, and during the Non-Solicit Period, Participant will not solicit any Customers. (b) “Customer(s)” means a current customer (person or entity) of the Company with which Participant actually did business and had personal contact during the 18 months immediately preceding Participant’s last day of employment or service with the Company. (c) Participant acknowledges that as a result of Participant’s employment or service with the Company, Participant will be acting as a representative of the Company and will be using the Company’s assets and resources, and will be benefiting from the Company’s goodwill, name recognition, reputation, and experience in regard to these Customers, and Participant will gain Confidential Information about Company Customers, and consequently, the covenants set forth above are reasonable and necessary to protect the Company’s legitimate business interests. 4. Separate and Severable Covenants The restrictive covenants set forth in Sections 2 and 3 above are intended by the Parties to be separate and severable covenants. If either Section 2 or Section 3 is held to be unenforceable, the invalidity or unenforceability of that Section shall not affect the validity or enforceability of the remaining Section, which shall be enforced as if the offending Section had not been included in this Agreement. 5. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. 6. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party-in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another.


 
A-3 7. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement. Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V13 – CA/ND Version RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality and Trade Secrets (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Participant understands and agrees that Participant’s agreement not to use or disclose Confidential Information and trade secrets includes, but is not limited to, that Participant will not, directly or indirectly: (i) use Company trade secrets to identify or target existing customers for Participant’s own personal benefit or the benefit of any other firm or entity; (ii) use trade secrets to facilitate the solicitation, for Participant’s own personal benefit or the benefit of any other firm or entity, of any existing customers; and/or (iii) use trade secrets to otherwise unfairly compete with the Company. (d) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an A-2 attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. 2. Non-Solicitation Covenant – ADT Personnel (a) Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or service through the final Vesting Date, or (b) the two (2) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not, directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, recruit, aid, or induce any Company Personnel to leave their employment with the Company in order to accept employment with or render services to another person or entity unaffiliated with the Company, or knowingly take any action to assist or aid any other person or entity in identifying, soliciting, recruiting, inducing or hiring any such Company Personnel; or (ii) otherwise interfere with the relationship of the Company with any Company Personnel. (b) Participant agrees that during the Non-Solicit Period, Participant shall not, directly or indirectly, engage in any conduct intended or reasonably calculated to induce or urge any Participant or contractor of the Company to discontinue, in whole or in part, his/her employment relationship or engagement with the Company. (c) “Company Personnel” means any person who was employed by the Company during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company, (i) with whom Participant had direct contact for business purposes, or (ii) whom Participant knew about because of Participant’s access to the Company’s Confidential Information or trade secrets. 3. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. A-3 (b) Participant agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Participant failed to comply with the covenants contained in this RC Agreement. (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 4. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 5. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then this RC Agreement will be deemed amended to the extent necessary to render the otherwise unenforceable Provision, and the rest of this RC Agreement, valid and enforceable. If a court or arbitrator declines to amend this RC Agreement as provided herein, the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement. 6. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. 7. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party- in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to


 
A-4 assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. 8. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement. Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V14 – LA/SD Version RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. A-2 2. Non-Solicitation Covenant – ADT Personnel (a) Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or service through the final Vesting Date, or (b) the one (1) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not, in the Restricted Territory, directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, recruit, aid, or induce any Company Personnel to leave their employment with the Company in order to accept employment with or render services to another person or entity unaffiliated with the Company, or knowingly take any action to assist or aid any other person or entity in identifying, soliciting, recruiting, inducing or hiring any such Company Personnel; or (ii) otherwise interfere with the relationship of the Company with any Company Personnel. (b) Participant agrees that during the Non-Solicit Period, Participant shall not, directly or indirectly, engage in any conduct intended or reasonably calculated to induce or urge any Participant or contractor of the Company to discontinue, in whole or in part, his/her employment relationship or engagement with the Company. (c) “Company Personnel” means any person who was employed by the Company and with whom Participant had direct contact for business purposes during the twelve (12) month period prior to Participant’s last day of employment or service with the Company. 3. Non-Solicitation Covenant – Customer (a) Participant agrees that, during Participant’s employment or service with the Company, and during the Non-Solicit Period, Participant will not, in the Restricted Territory, directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, aid, or induce any Customer of the Company to purchase goods or services then sold by the Company from another person or entity, or assist or aid any other persons or entity in identifying or soliciting any such Customer(s); or (ii) otherwise interfere with the relationship of the Company with any of their Participants, customers, vendors, agents, or representatives. (b) “Customer(s)” means an existing customer (person or entity) of the Company that Participant, directly or indirectly (e.g., through employees whom Participant supervised), called upon, solicited, or worked with at any time during the twelve (12) month period prior to Participant’s last day of employment or service with the Company. (c) For purposes of this RC Agreement, the business of the Company is as follows: (i) If Participant was employed with or provided services to ADT LLC at any time during the twelve (12) months immediately preceding termination of employment or services, then the business of the Company is to sell, install, monitor and/or maintain security, fire, life safety and automation equipment and services for residential and small business premises, including burglar alarm systems, security cameras, home automation and access control systems, as well as intrusion, temperature, flood, A-3 fire, smoke, carbon monoxide, emergency, medical alert and fall detection monitoring and response services. (ii) If Participant was employed with or providing services to ADT Commercial LLC at any time during the twelve (12) months immediately preceding termination of employment or services, then the business of the Company is to sell, install, monitor and/or maintain security, fire, and life safety services and to provide risk consulting solutions for commercial, governmental and other institutional settings, including burglar alarm systems, security cameras, and fire suppression and access control systems, as well as response services. (iii) If Participant was employed with or providing services to both ADT LLC and ADT Commercial LLC at any time during the twelve (12) months immediately preceding termination of employment or services, either simultaneously or at different times during that time period, then the business of the Company is both the definitions set forth in sections 1(c)(i) and (ii) above. (iv) Participant acknowledges that Participant is familiar with the business of the Company sufficiently to understand the nature of the Company’s business and that no further definition of the business of the Company is necessary. (d) “Restricted Territory” is defined as follows: (i) If Participant last worked for or provided services to the Company in Louisiana, “Restricted Territory” means any of the following Parishes in Louisiana: Plaquemines, Jefferson, St. Bernard, Orleans, St. Charles, St. John the Baptist, St. James, Lafourche, Terrebonne, St. Tammany, St. Mary, Assumption, Ascension, Livingston, Tangipahoa, Washington, St. Helen, East Feliciana, West Feliciana, East Baton Rouge, West Baton Rouge, Iberville, Pointe Coupee, Iberia, Vermilion, Lafayette, St. Martin, Acadia, St. Landry, Jefferson Davis, Cameron, Calcasieu, Beauregard, Allen, Evangeline, Avoyelles, Rapides, Vernon, Concordia, Catahoula, LaSalle, Grant, Natchitoches, Sabine, DeSoto, Red River, Winn, Catahoula, Tensas, Franklin, Madison, Richland, Ouachita, Jackson, Bienville, Lincoln, Caddo, Bossier, Webster, Claiborne, Union, Morehouse, West Carrol, East Carrol. (ii) If Participant last worked for or provided services to the Company in South Dakota or any other state, territory or District, “Restricted Territory” means the geographic area or areas for which Employee was responsible at any time during the twelve (12) months immediately preceding Employee’s termination of employment with the Company. (e) Participant acknowledges that as a result of Participant’s employment or service with the Company, Participant will be acting as a representative of the Company and will be using the Company’s assets and resources, and will be benefiting from the Company’s goodwill, name recognition, reputation, and experience in regard to these Customers, and Participant will gain Confidential Information about Company Customers, and consequently, the covenants set forth above are reasonable and necessary to protect the Company’s legitimate business interests. Participant agrees that the covenants in this paragraph will apply to all Customers as defined above, even if the identity of certain Customers of the Company may be publicly known, and even if Participant knew or had previous dealings with one or more such Customers prior to Participant’s employment with the Company. 4. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the


 
A-4 Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. (b) Participant agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Participant failed to comply with the covenants contained in this RC Agreement, but in no event longer than 24 months from the date of Participant’s termination of employment of services with the Company. (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 5. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 6. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement. It is the intention of the parties that, if any court or other tribunal construes any provision or clause of this RC Agreement, or any portion thereof, to be illegal, void or unenforceable because of the duration of such provision or the area or matter covered thereby, such court shall reduce the duration, area, or matter of such provision to the extent permitted by law, and, in its reduced form, such provision shall then be enforceable and shall be enforced. 7. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. A-5 8. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party-in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. 9. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement. Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V15 – IL Version RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. 2. Non-Solicitation Covenant – ADT Personnel (a) Provided that Participant presently meets the statutory wage threshold set forth in Section 4 below, Participant agrees that, during Participant’s employment or service with the Company and for A-2 the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or service through the final Vesting Date, or (b) the two (2) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not, directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, recruit, aid, or induce any Company Personnel to leave their employment with the Company in order to accept employment with or render services to another person or entity unaffiliated with the Company, or knowingly take any action to assist or aid any other person or entity in identifying, soliciting, recruiting, inducing or hiring any such Company Personnel; or (ii) otherwise interfere with the relationship of the Company with any Company Personnel. (b) Participant agrees that during the Non-Solicit Period, Participant shall not, directly or indirectly, engage in any conduct intended or reasonably calculated to induce or urge any Participant or contractor of the Company to discontinue, in whole or in part, his/her employment relationship or engagement with the Company. (c) “Company Personnel” means any person who was employed by the Company during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company, (i) with whom Participant had direct contact for business purposes, or (ii) whom Participant knew about because of Participant’s access to the Company’s Confidential Information or trade secrets. 3. Non-Solicitation Covenant – Customer (a) Provided that Participant presently meets the statutory wage threshold set forth in Section 4 below, Participant agrees that, during Participant’s employment or service with the Company, and during the Non-Solicit Period, Participant will not directly or indirectly, on Participant’s own behalf or on behalf of another: (i) solicit, aid, or induce any Customer of the Company to purchase goods or services then sold by the Company from another person or entity, or assist or aid any other persons or entity in identifying or soliciting any such Customer(s); or (ii) initiate any contact or communication with any Customer regarding any new employment or business affiliation Participant may accept or be intending to accept following separation of Participant’s employment with the Company; or (iii) otherwise interfere with the relationship of the Company with any of their Participants, customers, vendors, agents, or representatives. (b) “Customer(s)” means a customer (person or entity) of the Company that Participant, directly or indirectly (e.g., through employees whom Participant supervised), called upon, solicited, worked with, or became acquainted with at any time during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company. (c) Participant acknowledges that as a result of Participant’s employment or service with the Company, Participant will be acting as a representative of the Company and will be using the Company’s assets and resources, and will be benefiting from the Company’s goodwill, name recognition, reputation, and experience in regard to these Customers, and Participant will gain Confidential Information about Company Customers, and consequently, the covenants set forth above are reasonable and necessary to


 
A-3 protect the Company’s legitimate business interests. Participant agrees that the covenants in this paragraph will apply to all Customers as defined above, even if the identity of certain Customers of the Company may be publicly known, and even if Participant knew or had previous dealings with one or more such Customers prior to Participant’s employment with the Company. 4. Statutory Wage Threshold for Non-Solicitation Clauses; Attorney Review; 14 Days to Review RC Agreement (a) The non-solicitation clauses set forth in Sections 2 and 3 above do not apply to Participant unless, as of the time of execution of this RC Agreement, Participant’s actual or expected annualized rate of earnings with the Company exceed Forty-five thousand dollars ($45,000) per year (or such other amount as may later be established by subsequent statutory modifications) (hereinafter the “Wage Threshold”). If Participant does not meet with Wage Threshold, then Sections 2 and 3 of this RC Agreement are of no force or effect as to Participant. (b) The Company advises Participant to have this RC Agreement reviewed by an attorney of Participant’s own choosing to receive legal advice about the RC Agreement prior to Participant signing the RC Agreement. (c) Participant acknowledges and agrees that Participant received at least 14 days to review this RC Agreement before Participant was required to sign the RC Agreement, although Participant may choose to sign in fewer than 14 days. 5. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. (b) Participant agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Participant failed to comply with the covenants contained in this RC Agreement. (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 6. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such A-4 individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 7. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then this RC Agreement will be deemed amended to the extent necessary to render the otherwise unenforceable Provision, and the rest of this RC Agreement, valid and enforceable. If a court or arbitrator declines to amend this RC Agreement as provided herein, the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement. 8. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. 9. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party-in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. 10. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement. Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V16 – OK Version RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. A-2 2. Non-Solicitation Covenant – ADT Personnel (a) Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or service through the final Vesting Date, or (b) the two (2) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not, directly or indirectly, on Participant’s own behalf or on behalf of another solicit any Company Personnel to leave their employment with the Company in order to accept employment with or render services to another person or entity unaffiliated with the Company, or knowingly take any action to assist or aid any other person or entity in soliciting any such Company Personnel. (b) “Company Personnel” means any person who was employed by the Company during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company and either (i) with whom Participant had direct contact for business purposes, or (ii) whom Participant knew about because of Participant’s access to the Company’s Confidential Information or trade secrets. 3. Non-Solicitation Covenant – Customer (a) Participant agrees that during the Non-Solicit Period, Participant will not directly solicit any Customer of the Company to purchase goods or services, or a combination of goods and services, then sold by the Company from another person or entity. (b) “Customer(s)” means an established customer (person or entity) of the Company that Participant, directly or indirectly (e.g., through employees whom Participant supervised), called upon, solicited, worked with, or became acquainted with at any time during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company. (c) Participant acknowledges that as a result of Participant’s employment or service with the Company, Participant will be acting as a representative of the Company and will be using the Company’s assets and resources, and will be benefiting from the Company’s goodwill, name recognition, reputation, and experience in regard to these Customers, and Participant will gain Confidential Information about Company Customers, and consequently, the covenants set forth above are reasonable and necessary to protect the Company’s legitimate business interests. 4. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. (b) Participant agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Participant failed to comply with the covenants contained in this RC Agreement.


 
A-3 (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 5. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 6. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then this RC Agreement will be deemed amended to the extent necessary to render the otherwise unenforceable Provision, and the rest of this RC Agreement, valid and enforceable. If a court or arbitrator declines to amend this RC Agreement as provided herein, the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement. 7. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. 8. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party- in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. A-4 9. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement. Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Permitted Disclosures: Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. A-2 2. Non-Solicitation Covenant – ADT Personnel (a) Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or service through the final Vesting Date, or (b) the two (2) year period after separation of Participant’s employment or service with the Company, Participant will not, directly or indirectly, on Participant’s own behalf or on behalf of another, hire or employ any agent, servant or employee of the Company who holds a position uniquely essential to the management, organization, or service of the business of the Company. 3. Non-Solicitation Covenant – Customer (a) Participant agrees that, during Participant’s employment or service with the Company, and during the 18-month period after separation of Employee’s employment with the Company, Participant will not directly or indirectly, on Participant’s own behalf or on behalf of another, solicit any Customer of the Company to purchase goods or services then sold by the Company from another person or entity, or assist or aid any other persons or entity in soliciting any such Customer(s), so long as the Company carries on a like business. (b) “Customer(s)” means a current customer (person or entity) of the Company that Participant, directly or indirectly (e.g., through employees whom Participant supervised), called upon, solicited, worked with, or became acquainted with at any time during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company. (c) Participant acknowledges that as a result of Participant’s employment or service with the Company, Participant will be acting as a representative of the Company and will be using the Company’s assets and resources, and will be benefiting from the Company’s goodwill, name recognition, reputation, and experience in regard to these Customers, and Participant will gain Confidential Information about Company Customers, and consequently, the covenants set forth above are reasonable and necessary to protect the Company’s legitimate business interests. Participant agrees that the covenants in this paragraph will apply to all Customers as defined above, even if the identity of certain Customers of the Company may be publicly known, and even if Participant knew or had previous dealings with one or more such Customers prior to Participant’s employment with the Company. 4. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. (b) Participant agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Participant failed to comply with the covenants contained in this RC Agreement.


 
A-3 (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 5. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 6. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then this RC Agreement will be deemed amended to the extent necessary to render the otherwise unenforceable Provision, and the rest of this RC Agreement, valid and enforceable. If a court or arbitrator declines to amend this RC Agreement as provided herein, the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement. 7. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. 8. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party- in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. A-4 9. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement. Exhibit A to ADT, Inc. 2018 Omnibus Incentive Plan Award Agreement A-1 V18 – CO Version RESTRICTIVE COVENANT AGREEMENT By accepting the grant of equity hereunder, in addition to any other representations, warranties, and covenants set forth this Restrictive Covenant Agreement (“RC Agreement”), the Omnibus Incentive Plan Participant (the “Participant”) agrees to be subject to and comply with the following covenants. For purposes of this RC Agreement, “the Company” includes ADT Inc. and its Subsidiaries and Affiliates. 1. Confidentiality and Trade Secrets (a) Participant hereby agrees that during Participant’s employment or service with the Company, and thereafter, Participant will not use or disclose “Confidential Information” related to any business of the Company. (b) As used in this RC Agreement, “Confidential Information” means any information or material, not generally known to the public, which may include, for example and without limitation, information and materials, in spoken, printed, electronic, or any other form or medium, relating or pertaining to the Company’s finances, accounting, business plans, strategic plans, personnel and management, development and projects, marketing plans, sales, products and services, pricing or pricing strategies, customer names and addresses and price lists, customer or prospective customer lists, other customer information (including, without limitation, customer methods of operation, requirements, preferences and history of dealings with the Company), vendor lists, vendor information (including, without limitation, their history of dealings with the Company), Participant files, skills, performance and qualifications of the Company's personnel, other confidential information and trade secrets, secret formulations, techniques, methods, processes, technical information, inventions (whether patented or unpatented), copyrights, know-how, algorithms, computer programs, computer codes and related documentation, processes, research, development, licenses, permits, and compilations of any of the foregoing information relating to the actual or anticipated business of the Company, and confidential information of third parties which is given to the Company pursuant to an obligation or agreement to keep such information confidential. “Confidential Information” does not include information regarding Participants’ terms and conditions of employment or other rights protected under the National Labor Relations Act. (c) Participant understands and agrees that Participant’s agreement not to use or disclose Confidential Information and trade secrets includes, but is not limited to, that Participant will not, directly or indirectly: (i) use Company trade secrets to identify or target existing customers for Participant’s own personal benefit or the benefit of any other firm or entity; (ii) use trade secrets to facilitate the solicitation, for Participant’s own personal benefit or the benefit of any other firm or entity, of any existing customers; and/or (iii) use trade secrets to otherwise unfairly compete with the Company. (d) Permitted Disclosures. (i) Notwithstanding anything to the contrary in this Agreement, pursuant to United States federal law as set forth in 18 USC Section 1833(b), Participant understands that Participant shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of any Confidential Information that is a trade secret that is made: (1) confidentially to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. If Participant files a lawsuit for retaliation by A-2 Employer for reporting a suspected violation of law, Participant may disclose such trade secrets to Participant’s attorney and use the trade secret information in related court proceedings, provided that Participant files any document containing the trade secret information under seal and does not disclose the trade secret, except pursuant to court order. (ii) The foregoing sections 1(a)-(c) will not apply to information that (i) arises from Participant’s general training, knowledge, skill, or expertise, whether gained on the job or otherwise; (ii) was known to the public prior to its disclosure to Participant; (iii) becomes known to the public subsequent to disclosure to Participant through no wrongful act of Participant or any representative of Participant; (iv) Participant has a right to disclose as legally protected conduct; or (v) Participant is required to disclose by applicable law, regulation or legal process (provided that Participant provides the Employer with prior notice of the contemplated disclosure and reasonably cooperates with the Employer at its expense in seeking a protective order or other appropriate protection of such information). Despite clauses (ii) and (iii) of the preceding sentence, Participant’s obligation to maintain such disclosed information in confidence will not terminate where only portions of the information are in the public domain. 2. Non-Solicitation Covenant – ADT Personnel (a) Participant agrees that, during Participant’s employment or service with the Company and for the greater of (a) the period commencing with the date of the Participant’s Retirement from employment or service through the final Vesting Date, or (b) the two (2) year period after separation of Participant’s employment or service with the Company (the “Non-Solicit Period”), Participant will not, directly or indirectly, on Participant’s own behalf or on behalf of another, solicit any Company Personnel to leave their employment with the Company. (b) “Company Personnel” means any person who was employed by the Company during the twenty-four (24) month period prior to Participant’s last day of employment or service with the Company, (i) with whom Participant had direct contact for business purposes, or (ii) whom Participant knew about because of Participant’s access to the Company’s Confidential Information or trade secrets. 3. Injunctive Relief; Expedited Discovery (a) In the event that Participant breaches or threatens to breach, or the Company reasonably believes Participant is about to breach, any of the restrictive covenants in this RC Agreement, the Company will be entitled to injunctive relief, in addition to any other rights or remedies to which the Company may be entitled in law or equity. Participant agrees that the Company will suffer immediate and irreparable harm and that money damages will not be adequate to compensate the Company or to preserve the status quo. Therefore, Participant consents to the issuance of a temporary restraining order and other injunctive relief necessary to enforce this RC Agreement. (b) Participant agrees that the duration of any injunction shall be increased in an amount equal to any period of time during which Participant failed to comply with the covenants contained in this RC Agreement. (c) Participant and the Company agree that any application for temporary restraining order and/or temporary or preliminary injunctive relief shall be adjudicated exclusively in a court of competent jurisdiction, even if Participant and the Company are parties to an arbitration agreement that otherwise includes disputes under this RC Agreement. Participant agrees that the injunctive relief to which Participant consents hereinabove, under the circumstances addressed in this section, shall be granted by a


 
A-3 court of competent jurisdiction pending arbitration on the merits in order to preserve the status quo pending such arbitration. 4. Notice of Restrictive Covenants Participant agrees that Participant will tell any prospective new employer, partner in a business venture, investors and/or any entity seeking to engage Participant’s services, prior to accepting employment, engagement as a consultant or contractor, or engaging in a business venture, that this RC Agreement exists. Participant agrees to provide a true and correct copy of this RC Agreement to any such individual or entity prior to accepting any such employment or entering into any such engagement or business venture. Participant further authorizes the Company to provide a copy of this RC Agreement to any such entity(ies) or individual(s). 5. Modification & Severability If any section, provision, paragraph, phrase, word, and/or line (collectively “Provision”) of this RC Agreement is held to be unenforceable, then this RC Agreement will be deemed amended to the extent necessary to render the otherwise unenforceable Provision, and the rest of this RC Agreement, valid and enforceable. If a court or arbitrator declines to amend this RC Agreement as provided herein, the invalidity or unenforceability of any Provision of this RC Agreement shall not affect the validity or enforceability of the remaining Provisions, which shall be enforced as if the offending Provision had not been included in this RC Agreement. 6. Choice of Law, Jurisdiction & Venue This RC Agreement will be governed by, construed, interpreted, and its validity determined under the law of the State, District or Territory of the United States in which Participant last worked or provided services for the Company, without regard to such jurisdiction’s conflicts of laws principles. Such law shall govern regardless of the court or arbitration forum in which a dispute may be adjudicated. 7. Binding Effect & Assignability This RC Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, assigns, affiliated entities, and any party-in-interest. Participant agrees that, should the Company be acquired by, merge with, or otherwise combine with another corporation or business entity, the surviving entity will have all rights to enforce the terms of this RC Agreement as if it were the Company itself enforcing the RC Agreement. Participant further agrees that the Company may assign, and hereby consents to assignment of, this RC Agreement to any affiliate of the Company. Participant agrees that such an assignment is deemed to have been made without any further documentation in the event Participant moves from employment or services with one Company affiliate to another. 8. Attorneys’ Fees & Acknowledgements Participant and the Company agree that in any legal proceeding to enforce this RC Agreement, the prevailing party shall be entitled to reimbursement of its actual costs and expenses, including without limitation reasonable attorneys’ fees, costs, and disbursements. Participant acknowledges and understands that the Company hereby advises that Participant should consult with an attorney prior to entering into the RC Agreement. A-4 Participant’s signature to the 2018 Omnibus Incentive Plan Award Agreement, to which this RC Agreement is an exhibit, constitutes Participant’s acceptance of and agreement to comply in full with this RC Agreement, as set forth on the signature page to the 2018 Omnibus Incentive Plan Award Agreement.


 

Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
I, James D. DeVries, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of ADT Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 4, 2022
 
/s/ James D. DeVries
James D. DeVries
President and Chief Executive Officer


Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
I, Jeffrey Likosar, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of ADT Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 4, 2022
/s/ Jeffrey Likosar
Jeffrey Likosar
Chief Financial Officer and President, Corporate Development


Exhibit 32.1
ADT INC.
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, James D. DeVries, President and Chief Executive Officer of ADT Inc. (the “Company”), do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2022 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
information contained in the Report fairly presents, in all material respects, the financial condition and results of the operations of the Company.
/s/ James D. DeVries
James D. DeVries
President and Chief Executive Officer
August 4, 2022
The foregoing certification is being furnished as an exhibit to the Report pursuant to Item 601(b)(32) of Regulation S-K and Section 1350 of Title 18 of the United States Code and, accordingly, is not being filed with the U.S. Securities and Exchange Commission as part of the Report and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934 (whether made before or after the date of the Report, irrespective of any general incorporation language contained in such filing).




Exhibit 32.2
ADT INC.
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Jeffrey Likosar, Chief Financial Officer and President, Corporate Development of ADT Inc. (the “Company”), do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2022 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
information contained in the Report fairly presents, in all material respects, the financial condition and results of the operations of the Company.
/s/ Jeffrey Likosar
Jeffrey Likosar
Chief Financial Officer and President, Corporate Development
August 4, 2022
The foregoing certification is being furnished as an exhibit to the Report pursuant to Item 601(b)(32) of Regulation S-K and Section 1350 of Title 18 of the United States Code and, accordingly, is not being filed with the U.S. Securities and Exchange Commission as part of the Report and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934 (whether made before or after the date of the Report, irrespective of any general incorporation language contained in such filing).