TABLE OF CONTENTS

 

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	ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101.	Definitions	1
Section 102.	Other Definitions	43
Section 103.	Rules of Construction	44
Section 104.	Incorporation by Reference of TIA	45
Section 105.	Conflict with TIA	45
Section 106.	Compliance Certificates and Opinions	45
Section 107.	Form of Documents Delivered to Trustee	46
Section 108.	Acts of Noteholders; Record Dates	46
Section 109.	Notices, etc., to Trustee and Company	49
Section 110.	Notices to Holders; Waiver	49
Section 111.	Effect of Headings and Table of Contents	50
Section 112.	Successors and Assigns	50
Section 113.	Separability Clause	50
Section 114.	Benefits of Indenture	50
Section 115.	Governing Law	50
Section 116.	Legal Holidays	50
Section 117.	No Personal Liability of Directors, Officers, Employees, Incorporators and Stockholders	51
Section 118.	Exhibits and Schedules	51
Section 119.	Counterparts	51
	ARTICLE II
	NOTE FORMS
Section 201.	Forms Generally	51
Section 202.	Form of Trustee’s Certificate of Authentication	53
Section 203.	Restrictive and Global Note Legends	54
	ARTICLE III
	THE NOTES
Section 301.	Title and Terms	57
Section 302.	Denominations	59
Section 303.	Execution, Authentication and Delivery and Dating	59
Section 304.	Temporary Notes	60

 

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Section 305.	Registrar and Paying Agent	60
Section 306.	Mutilated, Destroyed, Lost and Stolen Notes	62
Section 307.	Payment of Interest Rights Preserved	63
Section 308.	Persons Deemed Owners	64
Section 309.	Cancellation	64
Section 310.	Computation of Interest	64
Section 311.	CUSIP Numbers, ISINs, etc	64
Section 312.	Book-Entry Provisions for Global Notes	65
Section 313.	Special Transfer Provisions	67
Section 314.	Payment of Additional Interest	70
	ARTICLE IV
	COVENANTS
Section 401.	Payment of Principal, Premium and Interest	70
Section 402.	Maintenance of Office or Agency	70
Section 403.	Money for Payments to Be Held in Trust	71
Section 404.	[Reserved].	72
Section 405.	SEC Reports	72
Section 406.	Statement as to Default	73
Section 407.	Limitation on Indebtedness	73
Section 408.	[Reserved].	77
Section 409.	Limitation on Restricted Payments	77
Section 410.	Limitation on Restrictions on Distributions from Restricted Subsidiaries	82
Section 411.	Limitation on Sales of Assets and Subsidiary Stock	84
Section 412.	Limitation on Transactions with Affiliates	87
Section 413.	Limitation on Liens	88
Section 414.	Future Subsidiary Guarantors	89
Section 415.	Purchase of Notes Upon a Change of Control	89
	ARTICLE V
	SUCCESSORS
Section 501.	When the Company May Merge, etc.	91
Section 502.	Successor Company Substituted	92
	ARTICLE VI
	REMEDIES
Section 601.	Events of Default	92
Section 602.	Acceleration of Maturity; Rescission and Annulment	94
Section 603.	Other Remedies; Collection Suit by Trustee	95

 

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Section 604.	Trustee May File Proofs of Claim	95
Section 605.	Trustee May Enforce Claims Without Possession of Notes	95
Section 606.	Application of Money Collected	95
Section 607.	Limitation on Suits	96
Section 608.	Unconditional Right of Holders to Receive Principal and Interest	96
Section 609.	Restoration of Rights and Remedies	96
Section 610.	Rights and Remedies Cumulative	97
Section 611.	Delay or Omission Not Waiver	97
Section 612.	Control by Holders	97
Section 613.	Waiver of Past Defaults	97
Section 614.	Undertaking for Costs	98
Section 615.	Waiver of Stay, Extension or Usury Laws	98
	ARTICLE VII
	THE TRUSTEE
Section 701.	Certain Duties and Responsibilities	99
Section 702.	Notice of Defaults	99
Section 703.	Certain Rights of Trustee	100
Section 704.	Not Responsible for Recitals or Issuance of Notes	101
Section 705.	May Hold Notes	101
Section 706.	Money Held in Trust	101
Section 707.	Compensation and Reimbursement	101
Section 708.	Conflicting Interests	102
Section 709.	Corporate Trustee Required; Eligibility	102
Section 710.	Resignation and Removal; Appointment of Successor	102
Section 711.	Acceptance of Appointment by Successor	103
Section 712.	Merger, Conversion, Consolidation or Succession to Business	104
Section 713.	Preferential Collection of Claims Against the Company	104
Section 714.	Appointment of Authenticating Agent	104
	ARTICLE VIII
HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND THE COMPANY
Section 801.	The Company to Furnish Trustee Names and Addresses of Holders	104
Section 802.	Preservation of Information; Communications to Holders	105
Section 803.	Reports by Trustee	105
	ARTICLE IX
	AMENDMENT, SUPPLEMENT OR WAIVER
Section 901.	Without Consent of Holders	106

 

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Section 902.	With Consent of Holders	106
Section 903.	Execution of Amendments, Supplements or Waivers	107
Section 904.	Revocation and Effect of Consents	108
Section 905.	Conformity with TIA	108
Section 906.	Notation on or Exchange of Notes	108
	ARTICLE X
	REDEMPTION OF NOTES
Section 1001.	Right of Redemption	109
Section 1002.	Applicability of Article	110
Section 1003.	Election to Redeem; Notice to Trustee	110
Section 1004.	Selection by Trustee of Notes to Be Redeemed	111
Section 1005.	Notice of Redemption	111
Section 1006.	Deposit of Redemption Price	112
Section 1007.	Notes Payable on Redemption Date	112
Section 1008.	Mandatory Redemption	113
Section 1009.	Notes Redeemed in Part	113
	ARTICLE XI
	SATISFACTION AND DISCHARGE
Section 1101.	Satisfaction and Discharge of Indenture	113
Section 1102.	Application of Trust Money	115
	ARTICLE XII
	DEFEASANCE OR COVENANT DEFEASANCE
Section 1201.	The Company’s Option to Effect Defeasance or Covenant Defeasance	115
Section 1202.	Defeasance and Discharge	115
Section 1203.	Covenant Defeasance	116
Section 1204.	Conditions to Defeasance or Covenant Defeasance	116
Section 1205.	Deposited Money and U.S. Government Obligations to Be Held in Trust; Other Miscellaneous Provisions	118
Section 1206.	Reinstatement	118
Section 1207.	Repayment to the Company	118
	ARTICLE XIII
	SUBSIDIARY GUARANTEES
Section 1301.	Guarantees Generally	119

 

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Section 1302.	Continuing Guarantees	121
Section 1303.	Release of Subsidiary Guarantees	121
Section 1304.	[Reserved].	122
Section 1305.	Waiver of Subrogation	122
Section 1306.	Notation Not Required	122
Section 1307.	Successors and Assigns of Subsidiary Guarantors	122
Section 1308.	Execution and Delivery of Subsidiary Guarantees	122
Section 1309.	Notices	123
Exhibit A	Form of Initial Note
Exhibit B	Form of Exchange Note
Exhibit C	Form of Certificate of Beneficial Ownership
Exhibit D	Form of Regulation S Certificate
Exhibit E	Form of Supplemental Indenture in Respect of Subsidiary Guarantees
Exhibit F	Form of Certificate from Acquiring Institutional Accredited Investors

 

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Certain Sections of this Indenture relating to Sections 310 through 318
inclusive of the Trust Indenture Act of 1939:

 

Trust Indenture Act Section		Indenture Section
§ 310(a)(1)		709
(a)(2)		709
(a)(3)		Not Applicable
(a)(4)		Not Applicable
(b)		708
§ 311(a)		713
(b)		713
(b)(2)		803
§ 312(a)		801
		802
(b)		802
(c)		802
§ 313(a)		803
(b)		803
(c)		803
(d)		803
§ 314(a)		405
(a)(4)		106
		406
(b)		Not Applicable
(c)(1)		106
(c)(2)		106
(c)(3)		Not Applicable
(d)		Not Applicable
(e)		106
§ 315(a)		701
(b)		702
		803
(c)		701
(d)		701
(d)(1)		701
(d)(2)		701
(d)(3)		612
(e)		614

 

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Trust Indenture Act Section		Indenture Section
§ 316(a)		612
		613
(a)(1)(A)		602
		612
(a)(1)(B)		613
(a)(2)		Not Applicable
(b)		608
(c)		104
§ 317(a)(1)		603
(a)(2)		604
(b)		403
§ 318(a)		105

 

This cross-reference table shall not for any purpose be deemed to be part of this Indenture.

 

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INDENTURE, dated as of July 24, 2008 (as amended, supplemented or otherwise modified from time to time, this “ Indenture ”), among the Company (as defined herein), the Subsidiary Guarantors from time to time parties hereto, and Wilmington Trust FSB, as Trustee.

 

RECITALS OF THE COMPANY

 

The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance of the Notes.

 

All things necessary to make the Original Notes, when executed and delivered by the Company and authenticated and delivered by the Trustee hereunder and duly issued by the Company, the valid obligations of the Company, and to make this Indenture a valid agreement of the Company in accordance with the terms of the Original Notes and this Indenture, have been done.

 

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

 

For and in consideration of the premises and the purchase of the Notes by the Holders thereof, it is mutually agreed, for the benefit of all Holders of the Notes, as follows:

 

ARTICLE I

 

DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION

 

Section 101.           Definitions .

 

“ Acquired Indebtedness ” means Indebtedness of a Person ( i ) existing at the time such Person becomes a Subsidiary or ( ii ) assumed in connection with the acquisition of assets from such Person, in each case other than Indebtedness Incurred in connection with, or in contemplation of, such Person becoming a Subsidiary or such acquisition.  Acquired Indebtedness shall be deemed to be Incurred on the date of the related acquisition of assets from any Person or the date the acquired Person becomes a Subsidiary.

 

“ Acquisition Co. ” means CDRSVM Acquisition Co., Inc., a Delaware corporation.

 

“ Additional Assets ” means ( i ) any property or assets that replace the property or assets that are the subject of an Asset Disposition; ( ii ) any property or assets (other than Indebtedness and Capital Stock) used or to be used by the Company or a Restricted Subsidiary or otherwise useful in a Related Business (including any capital expenditures on any property or assets already so used); ( iii ) the Capital Stock of a Person that is engaged in a Related Business and becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by the Company or another Restricted Subsidiary; or ( iv ) Capital Stock of any Person that at such time is a Restricted Subsidiary acquired from a third party.

 

 

“ Additional Notes ” means any of the Company’s 10.75%/11.50% Senior Toggle Notes due 2015 issued under this Indenture in addition to the Original Notes (other than any Notes issued pursuant to Section 304 , 305 , 306 , 312(c ), 312(d)  or 1009 , or issued in connection with the payment of PIK Interest).

 

“ Affiliate ” of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person.  For the purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

“ Asset Disposition ” means any sale, lease, transfer or other disposition of shares of Capital Stock of a Restricted Subsidiary (other than directors’ qualifying shares, or (in the case of a Foreign Subsidiary) to the extent required by applicable law), property or other assets (each referred to for the purposes of this definition as a “disposition”) by the Company or any of its Restricted Subsidiaries (including any disposition by means of a merger, consolidation or similar transaction), other than ( i ) a disposition to the Company or a Restricted Subsidiary, ( ii ) a disposition in the ordinary course of business, ( iii ) a disposition of Cash Equivalents, Investment Grade Securities or Temporary Cash Investments, ( iv ) the sale or discount (with or without recourse, and on customary or commercially reasonable terms) of accounts receivable or notes receivable arising in the ordinary course of business, or the conversion or exchange of accounts receivable for notes receivable, ( v ) any Restricted Payment Transaction, ( vi ) a disposition that is governed by Article V, ( vii ) any Financing Disposition, ( viii ) any “fee in lieu” or other disposition of assets to any governmental authority or agency that continue in use by the Company or any Restricted Subsidiary, so long as the Company or any Restricted Subsidiary may obtain title to such assets upon reasonable notice by paying a nominal fee, ( ix ) any exchange of property pursuant to or intended to qualify under Section 1031 (or any successor section) of the Code, or any exchange of equipment to be leased, rented or otherwise used in a Related Business, ( x ) any financing transaction with respect to property built or acquired by the Company or any Restricted Subsidiary after the Closing Date, including without limitation any sale/leaseback transaction or asset securitization, ( xi ) any disposition arising from foreclosure, condemnation or similar action with respect to any property or other assets, or exercise of termination rights under any lease, license, concession or other agreement, or pursuant to buy/sell arrangements under any joint venture or similar agreement or arrangement, ( xii ) any disposition of Capital Stock, Indebtedness or other securities of an Unrestricted Subsidiary, ( xiii ) a disposition of Capital Stock of a Restricted Subsidiary pursuant to an agreement or other obligation with or to a Person (other than the Company or a Restricted Subsidiary) from whom such Restricted Subsidiary was acquired, or from whom such Restricted Subsidiary acquired its business and assets (having been newly formed in connection with such acquisition), entered into in connection with such acquisition, ( xiv ) a disposition of not more than 5% of the outstanding Capital Stock of a Foreign Subsidiary that has been approved by the Board of Directors, ( xv ) any disposition or series of related dispositions for aggregate consideration not to exceed $30.0 million, ( xvi ) any Exempt Sale and Leaseback Transaction or ( xvii ) the abandonment or other disposition of patents, trademarks or other

 

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intellectual property that are, in the reasonable judgment of the Company, no longer economically practicable to maintain or useful in the conduct of the business of the Company and its Subsidiaries taken as a whole.

 

“ Authenticating Agent ” means any Person authorized by the Trustee pursuant to Section 714 to act on behalf of the Trustee to authenticate Notes of one or more series.

 

“ Bank Indebtedness ” means any and all amounts, whether outstanding on the Closing Date or thereafter incurred, payable under or in respect of any Credit Facility, including without limitation any principal, premium, interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Company or any Restricted Subsidiary whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations, guarantees, other monetary obligations of any nature and all other amounts payable thereunder or in respect thereof.

 

“ Board of Directors ” means, for any Person, the board of directors or other governing body of such Person or, if such Person does not have such a board of directors or other governing body and is owned or managed by a single entity, the Board of Directors of such entity, or, in either case, any committee thereof duly authorized to act on behalf of such Board of Directors.  Unless otherwise provided, “Board of Directors” means the Board of Directors of the Company.

 

“ Business Day ” means a day other than a Saturday, Sunday or other day on which commercial banking institutions are authorized or required by law to close in New York City (or any other city in which a Paying Agent maintains its office).

 

“ Capital Markets Securities ” means bonds, debentures, notes or other similar debt securities of the Company or any Subsidiary Guarantor (other than the Notes).

 

“ Capital Stock ” of any Person means any and all shares of, rights to purchase, warrants or options for, or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity.

 

“ Capitalized Lease Obligation ” means an obligation that is required to be classified and accounted for as a capitalized lease for financial reporting purposes in accordance with GAAP.  The Stated Maturity of any Capitalized Lease Obligation shall be the date of the last payment of rent or any other amount due under the related lease.

 

“ Captive Insurance Subsidiary ” means any of ( a ) Steward Insurance Company, a Vermont corporation, and any successor in interest thereto, so long as such Person either ( x ) satisfies the requirements of clause ( c ) below or ( y ) does not enter into any new insurance policies after the Closing Date insuring risks of any Persons other than the Company and its Subsidiaries, ( b ) any Subsidiary of any Captive Insurance Subsidiary referred to in clause ( a )

 

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above and ( c ) any Subsidiary of the Company that is subject to regulation as an insurance company (or any Subsidiary thereof).

 

“ Cash Equivalents ” means any of the following:  ( a ) money, ( b ) securities issued or fully guaranteed or insured by the United States of America or a member state of The European Union or any agency or instrumentality of any thereof, ( c ) time deposits, certificates of deposit or bankers’ acceptances of ( i ) any lender under a Senior Credit Agreement or any affiliate thereof or ( ii ) any commercial bank having capital and surplus in excess of $500,000,000 and the commercial paper of the holding company of which is rated at least A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent thereof by Moody’s (or if at such time neither is issuing ratings, then a comparable rating of another nationally recognized rating agency), ( d ) money market instruments, commercial paper or other short-term obligations rated at least A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent thereof by Moody’s (or if at such time neither is issuing ratings, then a comparable rating of another nationally recognized rating agency), ( e ) investments in money market funds subject to the risk limiting conditions of Rule 2a-7 or any successor rule of the SEC under the Investment Company Act of 1940, as amended and ( f ) investments similar to any of the foregoing denominated in foreign currencies approved by the Board of Directors.

 

“ CD&R ” means Clayton, Dubilier & Rice, Inc.

 

“ CD&R Investors ” means, collectively, ( i ) Clayton, Dubilier & Rice Fund VII, L.P., or any legal successor thereto, ( ii ) Clayton, Dubilier & Rice Fund VII (Co-Investment), L.P., or any legal successor thereto, ( iii ) CDR SVM Co-Investor L.P., or any legal successor thereto, ( iv ) CD&R Parallel Fund VII, L.P., or any legal successor thereto, and ( v ) any Affiliate of any CD&R Investor.

 

“ Change of Control ” means:

 

(i)            any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders or a Parent, becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the total voting power of the Voting Stock of the Company, provided that ( x ) so long as the Company is a Subsidiary of any Parent, no “person” shall be deemed to be or become a “beneficial owner” of more than 50% of the total voting power of the Voting Stock of the Company unless such “person” shall be or become a “beneficial owner” of more than 50% of the total voting power of the Voting Stock of such Parent and ( y ) any Voting Stock of which any Permitted Holder is the “beneficial owner” shall not in any case be included in any Voting Stock of which any such “person” is the “beneficial owner”; or

 

(ii)           the Company merges or consolidates with or into, or sells or transfers (in one or a series of related transactions) all or substantially all of the assets of the Company and its Restricted Subsidiaries to, another Person (other than one or more Permitted Holders) and any “person” (as defined in clause ( i ) above), other than one or more Permitted Holders or any Parent, is or becomes the “beneficial owner” (as so defined),

 

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directly or indirectly, of more than 50% of the total voting power of the Voting Stock of the surviving Person in such merger or consolidation, or the transferee Person in such sale or transfer of assets, as the case may be, provided that ( x ) so long as such surviving or transferee Person is a Subsidiary of a parent Person, no “person” shall be deemed to be or become a “beneficial owner” of more than 50% of the total voting power of the Voting Stock of such surviving or transferee Person unless such “person” shall be or become a “beneficial owner” of more than 50% of the total voting power of the Voting Stock of such parent Person and ( y ) any Voting Stock of which any Permitted Holder is the “beneficial owner” shall not in any case be included in any Voting Stock of which any such “person” is the beneficial owner.

 

Notwithstanding anything to the contrary in the foregoing, the Transactions shall not constitute or give rise to a “Change of Control.”

 

“ Clearstream ” means Clearstream Banking, société anonyme, or any successor securities clearing agency.

 

“ Closing Date ” means July 24, 2007.

 

“ Code ” means the Internal Revenue Code of 1986, as amended.

 

“ Commodities Agreement ” means, in respect of a Person, any commodity futures contract, forward contract, option or similar agreement or arrangement (including derivative agreements or arrangements), as to which such Person is a party or beneficiary.

 

“ Company ” means ( i ) Acquisition Co. until its merger with ServiceMaster, and thereafter ( ii ) ServiceMaster, and any successor in interest thereto.

 

“ Company Request ” and “ Company Order ” mean, respectively, a written request, order or consent signed in the name of the Company by an Officer of the Company.

 

“ Consolidated Coverage Ratio ” as of any date of determination means the ratio of ( i ) the aggregate amount of Consolidated EBITDA for the period of the most recent four consecutive fiscal quarters ending prior to the date of such determination for which consolidated financial statements of the Company are available to ( ii ) Consolidated Interest Expense for such four fiscal quarters (in each of the foregoing clauses ( i ) and ( ii ), determined for each fiscal quarter (or portion thereof) of the four fiscal quarters ending prior to the Closing Date, on a pro forma basis to give effect to the Merger as if it had occurred at the beginning of such four-quarter period); provided that

 

(1)           if since the beginning of such period the Company or any Restricted Subsidiary has Incurred any Indebtedness that remains outstanding on such date of determination or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio is an Incurrence of Indebtedness, Consolidated EBITDA and Consolidated Interest Expense for such period shall be calculated after giving effect on a

 

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pro forma basis to such Indebtedness as if such Indebtedness had been Incurred on the first day of such period (except that in making such computation, the amount of Indebtedness under any revolving credit facility outstanding on the date of such calculation shall be computed based on ( A ) the average daily balance of such Indebtedness during such four fiscal quarters or such shorter period for which such facility was outstanding or ( B ) if such facility was created after the end of such four fiscal quarters, the average daily balance of such Indebtedness during the period from the date of creation of such facility to the date of such calculation),

 

(2)           if since the beginning of such period the Company or any Restricted Subsidiary has repaid, repurchased, redeemed, defeased or otherwise acquired, retired or discharged any Indebtedness that is no longer outstanding on such date of determination (each, a “ Discharge ”) or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio involves a Discharge of Indebtedness (in each case other than Indebtedness Incurred under any revolving credit facility unless such Indebtedness has been permanently repaid), Consolidated EBITDA and Consolidated Interest Expense for such period shall be calculated after giving effect on a pro forma basis to such Discharge of such Indebtedness, including with the proceeds of such new Indebtedness, as if such Discharge had occurred on the first day of such period,

 

(3)           if since the beginning of such period the Company or any Restricted Subsidiary shall have disposed of any company, any business or any group of assets constituting an operating unit of a business (any such disposition, a “ Sale ”), the Consolidated EBITDA for such period shall be reduced by an amount equal to the Consolidated EBITDA (if positive) attributable to the assets that are the subject of such Sale for such period or increased by an amount equal to the Consolidated EBITDA (if negative) attributable thereto for such period and Consolidated Interest Expense for such period shall be reduced by an amount equal to ( A ) the Consolidated Interest Expense attributable to any Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased, redeemed, defeased or otherwise acquired, retired or discharged with respect to the Company and its continuing Restricted Subsidiaries in connection with such Sale for such period (including but not limited to through the assumption of such Indebtedness by another Person) plus ( B ) if the Capital Stock of any Restricted Subsidiary is sold, the Consolidated Interest Expense for such period attributable to the Indebtedness of such Restricted Subsidiary to the extent the Company and its continuing Restricted Subsidiaries are no longer liable for such Indebtedness after such Sale,

 

(4)           if since the beginning of such period the Company or any Restricted Subsidiary (by merger, consolidation or otherwise) shall have made an Investment in any Person that thereby becomes a Restricted Subsidiary, or otherwise acquired any company, any business or any group of assets constituting an operating unit of a business, including any such Investment or acquisition occurring in connection with a transaction causing a calculation to be made hereunder (any such Investment or acquisition, a “ Purchase ”), Consolidated EBITDA and Consolidated Interest Expense for such period

 

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shall be calculated after giving pro forma effect thereto (including the Incurrence of any related Indebtedness) as if such Purchase occurred on the first day of such period, and

 

(5)           if since the beginning of such period any Person became a Restricted Subsidiary or was merged or consolidated with or into the Company or any Restricted Subsidiary, and since the beginning of such period such Person shall have Discharged any Indebtedness or made any Sale or Purchase that would have required an adjustment pursuant to clause ( 2 ), ( 3 ) or ( 4 ) above if made by the Company or a Restricted Subsidiary since the beginning of such period, Consolidated EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto as if such Discharge, Sale or Purchase occurred on the first day of such period.

 

For purposes of this definition, whenever pro forma effect is to be given to any Sale, Purchase or other transaction, or the amount of income or earnings relating thereto and the amount of Consolidated Interest Expense associated with any Indebtedness Incurred or repaid, repurchased, redeemed, defeased or otherwise acquired, retired or discharged in connection therewith, the pro forma calculations in respect thereof (including without limitation in respect of anticipated cost savings or synergies relating to any such Sale, Purchase or other transaction) shall be as determined in good faith by the Chief Financial Officer or an authorized Officer of the Company.  If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest expense on such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Interest Rate Agreement applicable to such Indebtedness).  If any Indebtedness bears, at the option of the Company or a Restricted Subsidiary, a rate of interest based on a prime or similar rate, a eurocurrency interbank offered rate or other fixed or floating rate, and such Indebtedness is being given pro forma effect, the interest expense on such Indebtedness shall be calculated by applying such optional rate as the Company or such Restricted Subsidiary may designate.  If any Indebtedness that is being given pro forma effect was Incurred under a revolving credit facility, the interest expense on such Indebtedness shall be computed based upon the average daily balance of such Indebtedness during the applicable period.  Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate determined in good faith by a responsible financial or accounting officer of the Company to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.

 

“ Consolidated EBITDA ” means, for any period, the Consolidated Net Income for such period, plus the following to the extent deducted in calculating such Consolidated Net Income, without duplication:  ( i ) provision for all taxes (whether or not paid, estimated or accrued) based on income, profits or capital (including penalties and interest, if any), ( ii ) Consolidated Interest Expense, all items excluded from the definition of Consolidated Interest Expense pursuant to clause ( iii ) thereof (other than Special Purpose Financing Expense), any Special Purpose Financing Fees, and (for purposes of the Consolidated Total Leverage Ratio) any Special Purpose Financing Expense, ( iii ) depreciation, amortization (including but not limited to amortization of goodwill and intangibles and amortization and write-off of financing costs) and all other non-cash charges or non-cash losses, ( iv ) any expenses or charges related to any Equity Offering, Investment

 

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or Indebtedness permitted by this Indenture (whether or not consummated or incurred, and including any sale of Capital Stock to the extent the proceeds thereof were intended to be contributed to the equity capital of the Company or any of its Restricted Subsidiaries), ( v ) the amount of any minority interest expense, ( vi ) any management, monitoring, consulting and advisory fees and related expenses paid to any of CD&R or any of its Affiliates, ( vii ) interest and investment income, ( viii ) the amount of net cost savings projected by the Company in good faith to be realized as a result of actions taken or to be taken (calculated on a pro forma basis as though such cost savings had been realized on the first day of such period), net of the amount of actual benefits realized during such period from such actions; provided that ( x ) such cost savings are reasonably identifiable and factually supportable, ( y ) such actions have been taken or are to be taken within 12 months after the date of determination to take such action and ( z ) the aggregate amount of cost savings added pursuant to this clause ( viii ) shall not exceed $35.0 million for any four consecutive quarter period (which adjustments may be incremental to (but not duplicative of) pro forma adjustments made pursuant to the proviso to the definition of “Consolidated Coverage Ratio” or “Consolidated Total Leverage Ratio”), ( ix ) the amount of loss on any Financing Disposition, and ( x ) any costs or expenses pursuant to any management or employee stock option or other equity-related plan, program or arrangement, or other benefit plan, program or arrangement, or any stock subscription or shareholder agreement, to the extent funded with cash proceeds contributed to the capital of the Company or an issuance of Capital Stock of the Company (other than Disqualified Stock) and excluded from the calculation set forth in Section 409(a)(3).

 

“ Consolidated Interest Expense ” means, for any period, ( i ) the total interest expense of the Company and its Restricted Subsidiaries to the extent deducted in calculating Consolidated Net Income, net of any interest income of the Company and its Restricted Subsidiaries, including without limitation any such interest expense consisting of ( a ) interest expense attributable to Capitalized Lease Obligations, ( b ) amortization of debt discount, ( c ) interest in respect of Indebtedness of any other Person that has been Guaranteed by the Company or any Restricted Subsidiary, but only to the extent that such interest is actually paid by the Company or any Restricted Subsidiary, ( d ) non-cash interest expense (including any amortization during such period of any capitalized interest), ( e ) the interest portion of any deferred payment obligation and ( f ) commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing, plus ( ii ) Preferred Stock dividends paid in cash in respect of Disqualified Stock of the Company held by Persons other than the Company or a Restricted Subsidiary, minus ( iii ) to the extent otherwise included in such interest expense referred to in clause ( i ) above, amortization or write-off of financing costs, Special Purpose Financing Expense, accretion or accrual of discounted liabilities not constituting Indebtedness, expense resulting from discounting of Indebtedness in conjunction with recapitalization or purchase accounting, and any “additional interest” in respect of registration rights arrangements for any securities (including the Notes), in each case under clauses ( i ) through ( iii ) as determined on a Consolidated basis in accordance with GAAP; provided , that gross interest expense shall be determined after giving effect to any net payments made or received by the Company and its Restricted Subsidiaries with respect to Interest Rate Agreements.

 

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“ Consolidated Net Income ” means, for any period, the net income (loss) of the Company and its Restricted Subsidiaries, determined on a Consolidated basis in accordance with GAAP and before any reduction in respect of Preferred Stock dividends; provided , that there shall not be included in such Consolidated Net Income:

 

(i)            any net income (loss) of any Person that is not the Company or a Restricted Subsidiary, except that the Company’s equity in the net income of any such Person for such period shall be included in such Consolidated Net Income up to the aggregate amount actually distributed by such Person during such period to the Company or a Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution to a Restricted Subsidiary, to the limitations contained in clause ( ii ) below),

 

(ii)           solely for purposes of determining the amount available for Restricted Payments under Section 409(a)(3)(A) , any net income (loss) of any Restricted Subsidiary that is not a Subsidiary Guarantor if such Restricted Subsidiary is subject to restrictions, directly or indirectly, on the payment of dividends or the making of similar distributions by such Restricted Subsidiary, directly or indirectly, to the Company by operation of the terms of such Restricted Subsidiary’s charter or any agreement, instrument, judgment, decree, order, statute or governmental rule or regulation applicable to such Restricted Subsidiary or its stockholders (other than ( x ) restrictions that have been waived or otherwise released, ( y ) restrictions pursuant to the Notes or this Indenture and ( z ) restrictions in effect on the Closing Date with respect to a Restricted Subsidiary and other restrictions with respect to such Restricted Subsidiary that taken as a whole are not materially less favorable to the Noteholders than such restrictions in effect on the Closing Date), except that the Company’s equity in the net income of any such Restricted Subsidiary for such period shall be included in such Consolidated Net Income up to the aggregate amount of any dividend or distribution that was or that could have been made by such Restricted Subsidiary during such period to the Company or another Restricted Subsidiary (subject, in the case of a dividend that could have been made to another Restricted Subsidiary, to the limitation contained in this clause),

 

(iii)          any gain or loss realized upon ( x ) the sale, abandonment or other disposition of any asset of the Company or any Restricted Subsidiary (including pursuant to any sale/leaseback transaction) that is not sold, abandoned or otherwise disposed of in the ordinary course of business (as determined in good faith by the Board of Directors) or ( y ) the disposal, abandonment or discontinuation of operations of the Company or any Restricted Subsidiary, and any income (loss) from disposed, abandoned or discontinued operations,

 

(iv)          any item classified as an extraordinary, unusual or nonrecurring gain, loss or charge (including fees, expenses and charges associated with the Transactions and any acquisition, merger or consolidation after the Closing Date);

 

(v)           the cumulative effect of a change in accounting principles,

 

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(vi)          all deferred financing costs written off and premiums paid in connection with any early extinguishment of Indebtedness or Hedging Obligations or other derivative instruments,

 

(vii)         any unrealized gains or losses in respect of Currency Agreements,

 

(viii)        any unrealized foreign currency transaction gains or losses in respect of Indebtedness of any Person denominated in a currency other than the functional currency of such Person,

 

(ix)           any non-cash compensation charge arising from any grant of stock, stock options or other equity based awards,

 

(x)            to the extent otherwise included in Consolidated Net Income, any unrealized foreign currency translation or transaction gains or losses in respect of Indebtedness or other obligations of the Company or any Restricted Subsidiary owing to the Company or any Restricted Subsidiary,

 

(xi)           any non-cash charge, expense or other impact attributable to application of the purchase or recapitalization method of accounting (including the total amount of depreciation and amortization, cost of sales or other non-cash expense resulting from the write-up of assets to the extent resulting from such purchase accounting adjustments),

 

(xii)          any impairment charge or asset write-off, including any charge or write-off related to intangible assets, long-lived assets or investments in debt and equity securities, and any amortization of intangibles,

 

(xiii)         any fees and expenses (or amortization thereof), and any charges or costs, in connection with any acquisition, Investment, Asset Disposition, issuance of Capital Stock, issuance, repayment or refinancing of Indebtedness, or amendment or modification of any agreement or instrument relating to any Indebtedness (in each case, whether or not completed, and including any such transactions consummated prior to the Closing Date),

 

(xiv)        any accruals and reserves established or adjusted within twelve months after the Closing Date that are established as a result of the Transactions, and any changes as a result of adoption or modification of accounting policies, and

 

(xv)         to the extent covered by insurance and actually reimbursed (or the Company has determined that there exists reasonable evidence that such amount will be reimbursed by the insurer and such amount is not denied by the applicable insurer in writing within 180 days and is reimbursed within 365 days of the date of such evidence (with a deduction in any future calculation of Consolidated Net Income for any amount so added back to the extent not so reimbursed within such 365 day period)), any expenses with respect to liability or casualty events or business interruption.

 

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Notwithstanding the foregoing, for the purpose of Section 409(a)(3)(A)  only, there shall be excluded from Consolidated Net Income, without duplication, any income consisting of dividends, repayments of loans or advances or other transfers of assets from Unrestricted Subsidiaries to the Company or a Restricted Subsidiary, and any income consisting of return of capital, repayment or other proceeds from dispositions or repayments of Investments consisting of Restricted Payments, in each case to the extent such income would be included in Consolidated Net Income and such related dividends, repayments, transfers, return of capital or other proceeds are applied by the Company to increase the amount of Restricted Payments permitted under Section 409(a)(3)(C)  or (D) .

 

In addition, for purposes of Section 409(a)(3)(A) , Consolidated Net Income for any period ending on or prior to the Closing Date shall be determined based upon the net income (loss) reflected in the consolidated financial statements of the Company for such period; and each Person that is a Restricted Subsidiary upon giving effect to the Transactions shall be deemed to be a Restricted Subsidiary, and the Transactions shall not constitute a sale or disposition under clause ( iii ) above, for purposes of such determination.

 

“ Consolidated Tangible Assets ” means, as of any date of determination, the total assets less the sum of the goodwill, net, and other intangible assets, net, in each case reflected on the consolidated balance sheet of the Company and its Restricted Subsidiaries as at the end of the most recently ended fiscal quarter of the Company for which such a balance sheet is available, determined on a Consolidated basis in accordance with GAAP (and, in the case of any determination relating to any Incurrence of Indebtedness or any Investment, on a pro forma basis including any property or assets being acquired in connection therewith).

 

“ Consolidated Total Indebtedness ” means, at the date of determination thereof, an amount equal to ( 1 ) the aggregate principal amount of outstanding Indebtedness of the Company and its Restricted Subsidiaries as of such date consisting of (without duplication) Indebtedness for borrowed money (including Purchase Money Obligations and unreimbursed outstanding drawn amounts under funded letters of credit), Capitalized Lease Obligations and debt obligations evidenced by bonds, debentures, notes or similar instruments, determined on a Consolidated basis in accordance with GAAP (excluding items eliminated in Consolidation, and for the avoidance of doubt, excluding Hedging Obligations), minus ( 2 ) the amount of Unrestricted Cash held by the Company and its Restricted Subsidiaries as of the end of the most recent four consecutive fiscal quarters ending prior to the date of such determination for which consolidated financial statements of the Company are available.

 

“ Consolidated Total Leverage Ratio ” means, as of any date of determination, the ratio of ( x ) Consolidated Total Indebtedness as at such date (after giving effect to any Incurrence or Discharge of Indebtedness on such date) to ( y ) the aggregate amount of Consolidated EBITDA for the period of the most recent four consecutive fiscal quarters ending prior to the date of such determination for which consolidated financial statements of the Company are available (determined, for each fiscal quarter (or portion thereof) of the four fiscal quarters ending prior to

 

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the Closing Date, on a pro forma basis to give effect to the Merger as if it had occurred at the beginning of such four-quarter period), provided that:

 

(i)            if since the beginning of such period the Company or any Restricted Subsidiary shall have made a Sale, the Consolidated EBITDA for such period shall be reduced by an amount equal to the Consolidated EBITDA (if positive) attributable to the assets that are the subject of such Sale for such period or increased by an amount equal to the Consolidated EBITDA (if negative) attributable thereto for such period;

 

(ii)           if since the beginning of such period the Company or any Restricted Subsidiary (by merger, consolidation or otherwise) shall have made a Purchase (including any Purchase occurring in connection with a transaction causing a calculation to be made hereunder), Consolidated EBITDA for such period shall be calculated after giving pro forma effect thereto as if such Purchase occurred on the first day of such period; and

 

(iii)          if since the beginning of such period any Person became a Restricted Subsidiary or was merged or consolidated with or into the Company or any Restricted Subsidiary, and since the beginning of such period such Person shall have made any Sale or Purchase that would have required an adjustment pursuant to clause ( i ) or ( ii ) above if made by the Company or a Restricted Subsidiary since the beginning of such period, Consolidated EBITDA for such period shall be calculated after giving pro forma effect thereto as if such Sale or Purchase occurred on the first day of such period.

 

For purposes of this definition, whenever pro forma effect is to be given to any Sale, Purchase or other transaction, or the amount of income or earnings relating thereto, the pro forma calculations in respect thereof (including without limitation in respect of anticipated cost savings or synergies relating to any such Sale, Purchase or other transaction) shall be as determined in good faith by a responsible financial or accounting Officer of the Company.

 

“ Consolidation ” means the consolidation of the accounts of each of the Restricted Subsidiaries with those of the Company in accordance with GAAP; provided that “Consolidation” will not include consolidation of the accounts of any Unrestricted Subsidiary, but the interest of the Company or any Restricted Subsidiary in any Unrestricted Subsidiary will be accounted for as an investment.  The term “Consolidated” has a correlative meaning.  For purposes of this Indenture for periods ending on or prior to the Closing Date, references to the consolidated financial statements of the Company shall be to the consolidated financial statements of ServiceMaster (with Subsidiaries of ServiceMaster being deemed Subsidiaries of the Company), as the context may require.

 

“ Contingent Obligation ” means, with respect to any Person, any obligation of such Person guaranteeing any obligation that does not constitute Indebtedness (a “primary obligation”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including any obligation of such Person, whether or not contingent, ( 1 ) to purchase any such primary obligation or any property constituting direct or indirect security therefor, ( 2 ) to advance or supply funds ( a ) for the purchase or payment of any such primary obligation, or ( b ) to maintain working

 

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capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, or ( 3 ) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.

 

“ Continuing Notes ” means the Company’s 7.10% Notes due March 1, 2018, 7.45% Notes due August 15, 2027 and 7.25% Notes due March 1, 2038, in each case issued under the Existing Notes Indenture.

 

“ Contribution Amounts ” means the aggregate amount of capital contributions applied by the Company to permit the Incurrence of Contribution Indebtedness pursuant to Section 407(b)(xi) .

 

“ Contribution Indebtedness ” means Indebtedness of the Company or any Restricted Subsidiary in an aggregate principal amount not greater than twice the aggregate amount of cash contributions (other than Excluded Contributions) made to the capital of the Company or such Restricted Subsidiary after the Closing Date (whether through the issuance or sale of Capital Stock or otherwise); provided that such Contribution Indebtedness ( a ) is incurred within 180 days after the making of the related cash contribution and ( b ) is so designated as Contribution Indebtedness pursuant to an Officer’s Certificate on the date of Incurrence thereof.

 

“ Corporate Trust Office ” means the office of the Trustee at which at any particular time its corporate trust business shall be administered, which office on the Issue Date is located at Normandale Lake Center, 8400 Normandale Lake Blvd., Suite 925, Bloomington, MN 55437, Attn: Corporate Client Services.

 

“ Credit Facilities ” means one or more of ( i ) the Senior Term Facility, ( ii ) the Senior Revolving Credit Facility and ( iii ) any other facilities or arrangements designated by the Company, in each case with one or more banks or other lenders or institutions providing for revolving credit loans, term loans, receivables financings (including without limitation through the sale of receivables to such institutions or to special purpose entities formed to borrow from such institutions against such receivables or the creation of any Liens in respect of such receivables in favor of such institutions), letters of credit or other Indebtedness, in each case, including all agreements, instruments and documents executed and delivered pursuant to or in connection with any of the foregoing, including but not limited to any notes and letters of credit issued pursuant thereto and any guarantee and collateral agreement, patent and trademark security agreement, mortgages or letter of credit applications and other guarantees, pledge agreements, security agreements and collateral documents, in each case as the same may be amended, supplemented, waived or otherwise modified from time to time, or refunded, refinanced, restructured, replaced, renewed, repaid, increased or extended from time to time (whether in whole or in part, whether with the original banks, lenders or institutions or other banks, lenders or institutions or otherwise, and whether provided under any original Credit Facility or one or more other credit agreements, indentures, financing agreements or other Credit Facilities or otherwise).  Without limiting the generality of the foregoing, the term “Credit Facility” shall include any agreement ( i ) changing the maturity of any Indebtedness Incurred

 

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thereunder or contemplated thereby, ( ii ) adding Subsidiaries as additional borrowers or guarantors thereunder, ( iii ) increasing the amount of Indebtedness Incurred thereunder or available to be borrowed thereunder or ( iv ) otherwise altering the terms and conditions thereof.

 

“ Currency Agreement ” means, in respect of a Person, any foreign exchange contract, currency swap agreement or other similar agreement or arrangements (including derivative agreements or arrangements), as to which such Person is a party or a beneficiary.

 

“ Default ” means any event or condition that is, or after notice or passage of time or both would be, an Event of Default.

 

“ Delayed Draw Term Loan Commitment ”:  the commitment of a lender under the Senior Term Agreement to make or otherwise fund a Delayed Draw Term Loan pursuant to the Senior Term Agreement.

 

“ Delayed Draw Term Loan Commitment Termination Date ”:  the earliest to occur of ( i ) the date the Delayed Draw Term Loan Commitments are permanently reduced to zero pursuant to the Senior Term Agreement, ( ii ) the date of the termination of all of the Delayed Draw Term Loan Commitments pursuant to the Senior Term Agreement and ( iii ) October 17, 2007.

 

“ Delayed Draw Term Loans ”:  as defined in subsection 2.1(a)(i)(y) of the Senior Term Agreement.

 

“ Depositary ” means The Depository Trust Company, its nominees and successors.

 

“ Designated Noncash Consideration ” means the Fair Market Value of noncash consideration received by the Company or one of its Restricted Subsidiaries in connection with an Asset Disposition that is so designated as Designated Noncash Consideration pursuant to an Officer’s Certificate, setting forth the basis of such valuation.

 

“ Designated Preferred Stock ” means Preferred Stock of the Company (other than Disqualified Stock) or any Parent that is issued for cash (other than to a Restricted Subsidiary) and is so designated as Designated Preferred Stock, pursuant to an Officer’s Certificate of the Company.

 

“ Designated Senior Indebtedness ” means with respect to a Person ( i ) the Bank Indebtedness under or in respect of the Senior Credit Facilities and ( ii ) any other Senior Indebtedness of such Person that, at the date of determination, has an aggregate principal amount equal to or under which, at the date of determination, the holders thereof are committed to lend up to, at least $25.0 million and is specifically designated by such Person in an agreement or instrument evidencing or governing such Senior Indebtedness as “Designated Senior Indebtedness” for purposes of this Indenture.

 

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“ Disinterested Directors ” means, with respect to any Affiliate Transaction, one or more members of the Board of Directors of the Company, or one or more members of the Board of Directors of a Parent, having no material direct or indirect financial interest in or with respect to such Affiliate Transaction.  A member of any such Board of Directors shall not be deemed to have such a financial interest by reason of such member’s holding Capital Stock of the Company or any Parent or any options, warrants or other rights in respect of such Capital Stock.

 

“ Disqualified Stock ” means, with respect to any Person, any Capital Stock (other than Management Stock) that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable or exercisable) or upon the happening of any event (other than following the occurrence of a Change of Control or other similar event described under such terms as a “change of control,” or an Asset Disposition) ( i ) matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise, ( ii ) is convertible or exchangeable for Indebtedness or Disqualified Stock or ( iii ) is redeemable at the option of the holder thereof (other than following the occurrence of a Change of Control or other similar event described under such terms as a “change of control,” or an Asset Disposition), in whole or in part, in each case on or prior to the final Stated Maturity of the Notes; provided that Capital Stock issued to any employee benefit plan, or by any such plan to any employees of the Company or any Subsidiary, shall not constitute Disqualified Stock solely because it may be required to be repurchased or otherwise acquired or retired in order to satisfy applicable statutory or regulatory obligations.

 

“ Domestic Subsidiary ” means any Restricted Subsidiary of the Company other than a Foreign Subsidiary.

 

“ Equity Offering ” means a sale of Capital Stock ( x ) that is a sale of Capital Stock of the Company (other than Disqualified Stock), or ( y ) proceeds of which in an amount equal to or exceeding the Redemption Amount are contributed to the equity capital of the Company or any of its Restricted Subsidiaries.

 

“ Euroclear ” means Euroclear Bank S.A./N.V., as operator of the Euroclear System, or any successor securities clearing agency.

 

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

 

“ Exchange Notes ” means any of the Company’s 10.75%/11.50% Senior Toggle Notes due 2015, containing terms substantially identical to the Initial Notes or any Initial Additional Notes (and any Notes issued in respect of any of the foregoing Notes pursuant to Section 304 , 305 , 306 , 312(c) , 312(d)  or 1009 ) (except that ( i ) such Exchange Notes may omit terms with respect to transfer restrictions and may be registered under the Securities Act, and ( ii ) certain provisions relating to an increase in the stated rate of interest thereon may be eliminated), that are issued and exchanged for ( a ) the Initial Notes, as provided for in a registration rights agreement relating to such Initial Notes and this Indenture (including any amendment or supplement hereto), or ( b ) such Initial Additional Notes as may be provided in any registration rights agreement relating to such Additional Notes and this Indenture (including

 

15

 

any amendment or supplement hereto) or ( c ) any Notes that are issued as PIK Interest in respect of any of the foregoing Notes (and any Notes issued in respect of any of the foregoing Notes pursuant to Section 304 , 305 , 306 , 312(c) , 312(d)  or 1009 ).

 

“ Excluded Contribution ” means Net Cash Proceeds, or the Fair Market Value of property or assets, received by the Company as capital contributions to the Company after the Closing Date or from the issuance or sale (other than to a Restricted Subsidiary) of Capital Stock (other than Disqualified Stock or Designated Preferred Stock) of the Company, in each case to the extent designated as an Excluded Contribution pursuant to an Officer’s Certificate of the Company and not previously included in the calculation set forth in Section 409(a)(3)(B)(x)  for purposes of determining whether a Restricted Payment may be made.

 

“ Exempt Sale and Leaseback Transaction ” means any Sale and Leaseback Transaction ( a ) in which the sale or transfer of property occurs within 90 days of the acquisition of such property by the Company or any of its Subsidiaries or ( b ) that involves property with a book value of $15.0 million or less and is not part of a series of related Sale and Leaseback Transactions involving property with an aggregate value in excess of such amount and entered into with a single Person or group of Persons. For purposes of the foregoing, “Sale and Leaseback Transaction” means any arrangement with any Person providing for the leasing by the Company or any of its Subsidiaries of real or personal property that has been or is to be sold or transferred by the Company or any such Subsidiary to such Person or to any other Person to whom funds have been or are to be advanced by such Person on the security of such property or rental obligations of the Company or such Subsidiary.

 

“ Existing 2007 Notes ” means the Company’s 6.95% Notes due August 15, 2007 issued under the Existing Notes Indenture.

 

“ Existing 2009 Notes ” means the Company’s 7.875% Notes due August 15, 2009 issued under the Existing Notes Indenture.

 

“ Existing Notes Indenture ” means the Indenture between The ServiceMaster Company Limited Partnership, as issuer, and ServiceMaster Limited Partnership, as guarantor, and the Existing Notes Trustee, dated as of August 15, 1997, as supplemented by the First Supplemental Indenture thereto, between The ServiceMaster Company Limited Partnership, as issuer, and ServiceMaster Limited Partnership, as guarantor, and the Existing Notes Trustee, dated as of August 15, 1997, the Second Supplemental Indenture thereto, between the Company, as successor by merger to The ServiceMaster Company Limited Partnership and ServiceMaster Limited Partnership, and the Existing Notes Trustee, dated as of January 1, 1998, the Third Supplemental Indenture thereto, between the Company and the Existing Notes Trustee, dated as of March 2, 1998 and the Fourth Supplemental Indenture, between the Company and the Existing Notes Trustee, dated as of August 10, 1999. For purposes of this definition, “Existing Notes Trustee” means The Bank of New York Mellon Trust Company, N.A., successor to Harris Trust and Savings Bank as trustee under the Existing Notes Indenture.

 

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“ Fair Market Value ” means, with respect to any asset or property, the fair market value of such asset or property as determined in good faith by the Board of Directors, whose determination will be conclusive.

 

“ Financing Disposition ” means any sale, transfer, conveyance or other disposition of, or creation or incurrence of any Lien on, property or assets ( a ) by the Company or any Subsidiary thereof to or in favor of any Special Purpose Entity, or by any Special Purpose Subsidiary, in each case in connection with the Incurrence by a Special Purpose Entity of Indebtedness, or obligations to make payments to the obligor on Indebtedness, which may be secured by a Lien in respect of such property or assets or ( b ) by the Company or any Subsidiary thereof to or in favor of any Special Purpose Entity that is not a Special Purpose Subsidiary.

 

“ Foreign Borrowing Base ” means the sum of ( 1 ) 80% of the book value of Inventory of Foreign Subsidiaries, ( 2 ) 85% of the book value of Receivables of Foreign Subsidiaries, and ( 3 ) cash, Cash Equivalents and Temporary Cash Investments of Foreign Subsidiaries (in each case, determined as of the end of the most recently ended fiscal month of the Company for which internal consolidated financial statements of the Company are available, and, in the case of any determination relating to any Incurrence of Indebtedness, on a pro forma basis including ( x ) any property or assets of a type described above acquired since the end of such fiscal month and ( y ) any property or assets of a type described above being acquired in connection therewith).

 

“ Foreign Subsidiary ” means ( a ) any Restricted Subsidiary of the Company that is not organized under the laws of the United States of America or any state thereof or the District of Columbia and any Restricted Subsidiary of such Foreign Subsidiary and ( b ) any Restricted Subsidiary of the Company that has no material assets other than securities or Indebtedness of one or more Foreign Subsidiaries (or Subsidiaries thereof), and intellectual property relating to such Foreign Subsidiaries (or Subsidiaries thereof) and other assets relating to an ownership interest in any such securities, Indebtedness, intellectual property or Subsidiaries.

 

“ GAAP ” means generally accepted accounting principles in the United States of America as in effect on the Closing Date (for purposes of the definitions of the terms “Consolidated Coverage Ratio,” “Consolidated EBITDA,” “Consolidated Interest Expense,” “Consolidated Net Income,” “Consolidated Tangible Assets,” “Consolidated Total Indebtedness,” “Consolidated Total Leverage Ratio” and “Foreign Borrowing Base,” all defined terms in this Indenture to the extent used in or relating to any of the foregoing definitions, and all ratios and computations based on any of the foregoing definitions) and as in effect from time to time (for all other purposes of this Indenture), including those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as approved by a significant segment of the accounting profession.  All ratios and computations based on GAAP contained in this Indenture shall be computed in conformity with GAAP.

 

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“ Guarantee ” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness or other obligation of any other Person; provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business.  The term “Guarantee” used as a verb has a corresponding meaning.

 

“ Guarantor Subordinated Obligations ” means, with respect to a Subsidiary Guarantor, any Indebtedness of such Subsidiary Guarantor (whether outstanding on the Closing Date or thereafter Incurred) that is expressly subordinated in right of payment to the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee pursuant to a written agreement.

 

“ Hedging Obligations ” of any Person means the obligations of such Person pursuant to any Interest Rate Agreement, Currency Agreement or Commodities Agreement.

 

“ Holder ” or “ Noteholder ” means the Person in whose name a Note is registered in the Note Register.

 

“ Holding ” means CDRSVM Holding, Inc., a Delaware corporation, and any successor in interest thereto.

 

“ Holding Parent ” means ServiceMaster Global Holdings, Inc., a Delaware corporation, and any successor in interest thereto.

 

“ Home Warranty Subsidiary ” means any of ( a ) American Home Shield Corporation, a Delaware corporation, and any successor in interest thereto, ( b ) any Subsidiary of any Home Warranty Subsidiary referred to in clause ( a ) above and ( c ) any Subsidiary of the Company that is subject to regulation as a home warranty, service contract, or similar company (or any Subsidiary thereof).

 

“ Incur ” means issue, assume, enter into any Guarantee of, incur or otherwise become liable for; and the terms “Incurs,” “Incurred” and “Incurrence” shall have a correlative meaning; provided , that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Subsidiary at the time it becomes a Subsidiary.  Accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness will not be deemed to be an Incurrence of Indebtedness.  Any Indebtedness issued at a discount (including Indebtedness on which interest is payable through the issuance of additional Indebtedness) shall be deemed Incurred at the time of original issuance of the Indebtedness at the initial accreted amount thereof.

 

“ Indebtedness ” means, with respect to any Person on any date of determination (without duplication):

 

(i) the principal of indebtedness of such Person for borrowed money,

 

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(ii) the principal of obligations of such Person evidenced by bonds, debentures, notes or other similar instruments,

 

(iii) all reimbursement obligations of such Person in respect of letters of credit, bankers’ acceptances or other similar instruments (the amount of such obligations being equal at any time to the aggregate then undrawn and unexpired amount of such letters of credit, bankers’ acceptances or other instruments plus the aggregate amount of drawings thereunder that have not then been reimbursed),

 

(iv) all obligations of such Person to pay the deferred and unpaid purchase price of property (except Trade Payables), which purchase price is due more than one year after the date of placing such property in final service or taking final delivery and title thereto,

 

(v) all Capitalized Lease Obligations of such Person,

 

(vi) the redemption, repayment or other repurchase amount of such Person with respect to any Disqualified Stock of such Person or (if such Person is a Subsidiary of the Company other than a Subsidiary Guarantor) any Preferred Stock of such Subsidiary, but excluding, in each case, any accrued dividends (the amount of such obligation to be equal at any time to the maximum fixed involuntary redemption, repayment or repurchase price for such Capital Stock, or if less (or if such Capital Stock has no such fixed price), to the involuntary redemption, repayment or repurchase price therefor calculated in accordance with the terms thereof as if then redeemed, repaid or repurchased, and if such price is based upon or measured by the fair market value of such Capital Stock, such fair market value shall be as determined in good faith by the Board of Directors or the board of directors or other governing body of the issuer of such Capital Stock),

 

(vii) all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person; provided that the amount of Indebtedness of such Person shall be the lesser of (A) the fair market value of such asset at such date of determination (as determined in good faith by the Company) and (B) the amount of such Indebtedness of such other Persons,

 

(viii) all Guarantees by such Person of Indebtedness of other Persons, to the extent so Guaranteed by such Person, and

 

(ix) to the extent not otherwise included in this definition, net Hedging Obligations of such Person (the amount of any such obligation to be equal at any time to the termination value of such agreement or arrangement giving rise to such Hedging Obligation that would be payable by such Person at such time);

 

provided that Indebtedness shall not include Contingent Obligations Incurred in the ordinary course of business.

 

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The amount of Indebtedness of any Person at any date shall be determined as set forth above or otherwise provided in this Indenture, or otherwise shall equal the amount thereof that would appear as a liability on a balance sheet of such Person (excluding any notes thereto) prepared in accordance with GAAP.

 

“ Initial Additional Notes ” means Additional Notes issued in an offering not registered under the Securities Act and any Notes issued in connection with the payment of PIK Interest on any such Additional Notes (and any Notes issued in respect of any of the foregoing Notes pursuant to Section 304 , 305 , 306 , 312(c) , 312(d)  or 1009 ).

 

“ Initial Notes ” means any of the Company’s 10.75%/11.50% Senior Toggle Notes due 2015 issued on the Issue Date and any Notes issued in connection with the payment of PIK Interest on any such Initial Notes (and any Notes issued in respect of any of the foregoing Notes pursuant to Section 304 , 305 , 306 , 312(c) , 312(d)  or 1009 ).

 

“ interest ,” with respect to the Notes, means interest on the Notes and, except for purposes of Article IX , additional or special interest pursuant to the terms of any Note.

 

“ Interest Payment Date ” means, when used with respect to any Note and any installment of interest thereon, the date specified in such Note as the fixed date on which such installment of interest is due and payable, as set forth in such Note.

 

“ Interest Rate Agreement ” means, with respect to any Person, any interest rate protection agreement, future agreement, option agreement, swap agreement, cap agreement, collar agreement, hedge agreement or other similar agreement or arrangement (including derivative agreements or arrangements), as to which such Person is party or a beneficiary.

 

“ Inventory ” means goods held for sale, lease or use by a Person in the ordinary course of business, net of any reserve for goods that have been segregated by such Person to be returned to the applicable vendor for credit, as determined in accordance with GAAP.

 

“ Investment ” in any Person by any other Person means any direct or indirect advance, loan or other extension of credit (other than to customers, dealers, licensees, franchisees, suppliers, consultants, directors, officers or employees of any Person in the ordinary course of business) or capital contribution (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others) to, or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by, such Person.  For purposes of the definition of “Unrestricted Subsidiary” and Section 409 only, ( i ) “Investment” shall include the portion (proportionate to the Company’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of any Subsidiary of the Company at the time that such Subsidiary is designated an Unrestricted Subsidiary, provided that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to ( x ) the Company’s “Investment” in such Subsidiary at the time of such redesignation less ( y ) the portion (proportionate to the Company’s equity interest in such

 

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Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at the time of such redesignation, ( ii ) any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value (as determined in good faith by the Company) at the time of such transfer and ( iii ) for purposes of Section 409(a)(3)(C), the amount resulting from the redesignation of any Unrestricted Subsidiary as a Restricted Subsidiary shall be the Fair Market Value of the Investment in such Unrestricted Subsidiary at the time of such redesignation (excluding the amount of such Investment then outstanding pursuant to clause ( xv ) or ( xviii ) of the definition of the term “Permitted Investments” or Sections 409(b)(vii) or (xii) of this Indenture).  Guarantees shall not be deemed to be Investments.  The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced (at the Company’s option) by any dividend, distribution, interest payment, return of capital, repayment or other amount or value received in respect of such Investment; provided , that to the extent that the amount of Restricted Payments outstanding at any time pursuant to Section 409(a)  is so reduced by any portion of any such amount or value that would otherwise be included in the calculation of Consolidated Net Income, such portion of such amount or value shall not be so included for purposes of calculating the amount of Restricted Payments that may be made pursuant to Section 409(a) .

 

“ Investment Grade Securities ” means ( i ) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof (other than Cash Equivalents); ( ii ) debt securities or debt instruments with an Investment Grade Rating, but excluding any debt securities or instruments constituting loans or advances among the Company and its Subsidiaries; ( iii ) investments in any fund that invests exclusively in investments of the type described in clauses ( i ) and ( ii ), which fund may also hold immaterial amounts of cash pending investment or distribution; and ( iv ) corresponding instruments in countries other than the United States customarily utilized for high quality investments.  As used herein, “ Investment Grade Rating ” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, or any equivalent rating by any other nationally recognized rating agency.

 

“ Investment Holding ” means CDRSVM Investment Holding, Inc., a Delaware corporation, and any successor in interest thereto.

 

“ Investors ” means ( i ) the CD&R Investors, BAS Capital Funding Corporation, Banc of America Capital Investors V, L.P., Citigroup Capital Partners II 2007 Citigroup Investment, L.P., Citigroup Capital Partners II Employee Master Fund, L.P., Citigroup Capital Partners II Onshore, L.P., Citigroup Capital Partners II Cayman Holdings, L.P., CPE Co-Investment (ServiceMaster) LLC and J.P. Morgan Ventures Corporation, ( ii ) any Person that acquires Voting Stock of Holding on or prior to the Closing Date and any Affiliate of such Person, and ( iii ) any of their respective legal successors.

 

“ Issue Date ” means the first date on which Initial Notes are issued.

 

“ Liabilities ” means, collectively, any and all claims, obligations, liabilities, causes of action, actions, suits, proceedings, investigations, judgments, decrees, losses, damages, fees, costs and expenses (including without limitation interest, penalties and fees and disbursements of

 

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attorneys, accountants, investment bankers and other professional advisors), in each case whether incurred, arising or existing with respect to third parties or otherwise at any time or from time to time.

 

“ Lien ” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof).

 

“ Management Advances ” means ( 1 ) loans or advances made to directors, officers,  employees or consultants of any Parent, the Company or any Restricted Subsidiary ( x ) in respect of travel, entertainment or moving-related expenses incurred in the ordinary course of business, ( y ) in respect of moving-related expenses incurred in connection with any closing or consolidation of any facility, or ( z ) in the ordinary course of business and (in the case of this clause ( z )) not exceeding $10.0 million in the aggregate outstanding at any time, ( 2 ) promissory notes of Management Investors acquired in connection with the issuance of Management Stock to such Management Investors, ( 3 ) Management Guarantees, or ( 4 ) other Guarantees of borrowings by Management Investors in connection with the purchase of Management Stock, which Guarantees are permitted under Section 407 .

 

“ Management Agreements ” means, collectively, ( i ) the Stock Subscription Agreements, each dated as of the Closing Date, between Holding Parent and each of the Investors party thereto, ( ii ) the Transaction Fee Agreement, dated as of the Closing Date, among Holding Parent and ServiceMaster and each of CD&R, Banc of America Capital Investors V, L.P., Citigroup Alternative Investments LLC and J.P. Morgan Ventures Corporation, ( iii ) the Consulting Agreement, dated as of the Closing Date, among Holding Parent, ServiceMaster and CD&R, ( iv ) the Indemnification Agreements, each dated as of the Closing Date, among Holding Parent and ServiceMaster and each of ( a ) CD&R and each CD&R Investor, ( b ) BAS Capital Funding Corporation and Banc of America Capital Investors V, L.P., ( c ) Citigroup Capital Partners II 2007 Citigroup Investment, L.P., Citigroup Capital Partners II Employee Master Fund, L.P., Citigroup Capital Partners II Onshore, L.P., Citigroup Capital Partners II Cayman Holdings, L.P. and CPE Co Investment (ServiceMaster) LLC and ( d ) J.P. Morgan Ventures Corporation, or Affiliates thereof, respectively, ( v ) the Registration Rights Agreement, dated as of the Closing Date, among Holding Parent and the Investors party thereto and any other Person party thereto from time to time, ( vi ) the Stockholders Agreement, dated as of the Closing Date, by and among Holding Parent and the Investors party thereto and any other Person party thereto from time to time and ( vii ) any other agreement primarily providing for indemnification and/or contribution for the benefit of any Permitted Holder in respect of Liabilities resulting from, arising out of or in connection with, based upon or relating to ( a ) any management consulting, financial advisory, financing, underwriting or placement services or other investment banking activities, ( b ) any offering of securities or other financing activity or arrangement of or by any Parent or any of its Subsidiaries or ( c ) any action or failure to act of or by any Parent or any of its Subsidiaries (or any of their respective predecessors); in each case as the same may be amended, supplemented, waived or otherwise modified from time to time in accordance with the terms thereof and of this Indenture.

 

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“ Management Guarantees ” means guarantees ( x ) of up to an aggregate principal amount outstanding at any time of $25.0 million of borrowings by Management Investors in connection with their purchase of Management Stock or ( y ) made on behalf of, or in respect of loans or advances made to, directors, officers, employees or consultants of any Parent, the Company or any Restricted Subsidiary ( 1 ) in respect of travel, entertainment and moving-related expenses incurred in the ordinary course of business, or ( 2 ) in the ordinary course of business and (in the case of this clause ( 2 )) not exceeding $10.0 million in the aggregate outstanding at any time.

 

“ Management Indebtedness ” means Indebtedness Incurred to any Management Investor to finance the repurchase or other acquisition of Capital Stock of the Company or any Parent (including any options, warrants or other rights in respect thereof) from any Management Investor, which repurchase or other acquisition of Capital Stock is permitted under Section 409.

 

“ Management Investors ” means the officers, directors, employees and other members of the management of any Parent, the Company or any of their respective Subsidiaries, or family members or relatives thereof ( provided that, solely for purposes of the definition of “Permitted Holders,” such relatives shall include only those Persons who are or become Management Investors in connection with estate planning for or inheritance from other Management Investors, as determined in good faith by the Company, which determination shall be conclusive), or trusts, partnerships or limited liability companies for the benefit of any of the foregoing, or any of their heirs, executors, successors and legal representatives, who at any date beneficially own or have the right to acquire, directly or indirectly, Capital Stock of the Company or any Parent.

 

“ Management Stock ” means Capital Stock of the Company or any Parent (including any options, warrants or other rights in respect thereof) held by any of the Management Investors.

 

“ Material Subsidiary ” means any Restricted Subsidiary, other than one or more Restricted Subsidiaries designated by the Company that individually and in the aggregate (if considered a single Person) do not constitute a Significant Subsidiary.

 

“ Merger ” means the merger of Acquisition Co. with and into ServiceMaster, with ServiceMaster as the surviving corporation.

 

“ Moody’s ” means Moody’s Investors Service, Inc., and its successors.

 

“ Net Available Cash ” from an Asset Disposition means cash payments received (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, but excluding any other consideration received in the form of assumption by the acquiring Person of Indebtedness or other obligations relating to the properties or assets that are the subject of such Asset Disposition or received in any other non-cash form) therefrom, in each case net of ( i ) all legal, title and recording tax expenses, commissions and other fees and expenses incurred, and all

 

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Federal, state, provincial, foreign and local taxes required to be paid or to be accrued as a liability under GAAP, as a consequence of such Asset Disposition (including as a consequence of any transfer of funds in connection with the application thereof in accordance with Section 411 ), ( ii ) all payments made, and all installment payments required to be made, on any Indebtedness ( x ) that is secured by any assets subject to such Asset Disposition, in accordance with the terms of any Lien upon such assets, or ( y ) that must by its terms, or in order to obtain a necessary consent to such Asset Disposition, or by applicable law, be repaid out of the proceeds from such Asset Disposition, including but not limited to any payments required to be made to increase borrowing availability under any revolving credit facility, ( iii ) all distributions and other payments required to be made to minority interest holders in Subsidiaries or joint ventures as a result of such Asset Disposition, or to any other Person (other than the Company or a Restricted Subsidiary) owning a beneficial interest in the assets disposed of in such Asset Disposition, ( iv ) any liabilities or obligations associated with the assets disposed of in such Asset Disposition and retained, indemnified or insured by the Company or any Restricted Subsidiary after such Asset Disposition, including without limitation pension and other post-employment benefit liabilities, liabilities related to environmental matters, and liabilities relating to any indemnification obligations associated with such Asset Disposition, and ( v ) the amount of any purchase price or similar adjustment ( x ) claimed by any Person to be owed by the Company or any Restricted Subsidiary, until such time as such claim shall have been settled or otherwise finally resolved, or ( y ) paid or payable by the Company or any Restricted Subsidiary, in either case in respect of such Asset Disposition.

 

“ Net Cash Proceeds ,” with respect to any issuance or sale of any securities or Indebtedness of the Company or any Subsidiary by the Company or any Subsidiary, or any capital contribution, means the cash proceeds of such issuance, sale or contribution net of attorneys’ fees, accountants’ fees, underwriters’ or placement agents’ fees, discounts or commissions and brokerage, consultant and other fees actually incurred in connection with such issuance, sale or contribution and net of taxes paid or payable as a result thereof.

 

“ Non-U.S. Person ” means a Person who is not a U.S. person, as defined in Regulation S.

 

“ Notes ” means the Initial Notes, any Exchange Notes, any Additional Notes and any notes issued in respect thereof pursuant to Section 304 , 305 , 306 , 312(c) , 312(d)  or 1009 , and shall include any increase in the principal amount thereof as a result of a PIK Payment in accordance with this Indenture.

 

“ Obligations ” means, with respect to any Indebtedness, any principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Company or any Restricted Subsidiary whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations, Guarantees of such Indebtedness (or of Obligations in respect thereof), other monetary obligations of any nature and all other amounts payable thereunder or in respect thereof.

 

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“ Officer ” means, with respect to the Company or any other obligor upon the Notes, the Chairman of the Board, the President, the Chief Executive Officer, the Chief Financial Officer, any Vice President, the Controller, the Treasurer or the Secretary ( a ) of such Person or ( b ) if such Person is owned or managed by a single entity, of such entity (or any other individual designated as an “Officer” for the purposes of this Indenture by the Board of Directors).

 

“ Officer’s Certificate ” means, with respect to the Company or any other obligor upon the Notes, a certificate signed by one Officer of such Person.

 

“ Opinion of Counsel ” means a written opinion from legal counsel who is reasonably acceptable to the Trustee.  The counsel may be an employee of or counsel to the Company or the Trustee.

 

“ Original Notes ” means the Initial Notes and any Exchange Notes issued in exchange therefor.

 

“ Outstanding ,” when used with respect to Notes means, as of the date of determination, all Notes theretofore authenticated and delivered under this Indenture, except :

 

(i)            Notes theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;

 

(ii)           Notes for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent in trust for the Holders of such Notes, provided that, if such Notes are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor reasonably satisfactory to the Trustee has been made; and

 

(iii)          Notes in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to this Indenture.

 

A Note does not cease to be Outstanding because the Company or any Affiliate of the Company holds the Note, provided that in determining whether the Holders of the requisite amount of Outstanding Notes have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Notes owned by the Company or any Affiliate of the Company shall be disregarded and deemed not to be Outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such request, demand, authorization, direction, notice, consent or waiver, only Notes which a Responsible Officer of the Trustee actually knows are so owned shall be so disregarded.  Notes so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the reasonable satisfaction of the Trustee the pledgee’s right to act with respect to such Notes and that the pledgee is not the Company or an Affiliate of the Company.

 

“ Parent ” means any of Holding Parent, Holding, Investment Holding, and any Other Parent and any other Person that is a Subsidiary of Holding Parent, Holding, Investment

 

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Holding, or any Other Parent and of which the Company is a Subsidiary.  As used herein, “Other Parent” means a Person of which the Company becomes a Subsidiary after the Closing Date, provided that either ( x ) immediately after the Company first becomes a Subsidiary of such Person, more than 50% of the Voting Stock of such Person shall be held by one or more Persons that held more than 50% of the Voting Stock of a Parent of the Company immediately prior to the Company first becoming such Subsidiary or ( y ) such Person shall be deemed not to be an Other Parent for the purpose of determining whether a Change of Control shall have occurred by reason of the Company first becoming a Subsidiary of such Person.

 

“ Parent Expenses ” means ( i ) costs (including all professional fees and expenses) incurred by any Parent in connection with its reporting obligations under, or in connection with compliance with, applicable laws or applicable rules of any governmental, regulatory or self-regulatory body or stock exchange, this Indenture or any other agreement or instrument relating to Indebtedness of the Company or any Restricted Subsidiary, including in respect of any reports filed with respect to the Securities Act, the Exchange Act or the respective rules and regulations promulgated thereunder, ( ii ) expenses incurred by any Parent in connection with the acquisition, development, maintenance, ownership, prosecution, protection and defense of its intellectual property and associated rights (including but not limited to trademarks, service marks, trade names, trade dress, patents, copyrights and similar rights, including registrations and registration or renewal applications in respect thereof; inventions, processes, designs, formulae, trade secrets, know-how, confidential information, computer software, data and documentation, and any other intellectual property rights; and licenses of any of the foregoing) to the extent such intellectual property and associated rights relate to the business or businesses of the Company or any Subsidiary thereof, ( iii ) indemnification obligations of any Parent owing to directors, officers, employees or other Persons under its charter or by-laws or pursuant to written agreements with any such Person, or obligations in respect of director and officer insurance (including premiums therefor), ( iv ) other operational expenses of any Parent incurred in the ordinary course of business, and ( v ) fees and expenses incurred by any Parent in connection with any offering of Capital Stock or Indebtedness, ( w ) which offering is not completed, or  ( x ) where the net proceeds of such offering are intended to be received by or contributed or loaned to the Company or a Restricted Subsidiary, or ( y ) in a prorated amount of such expenses in proportion to the amount of such net proceeds intended to be so received, contributed or loaned, or ( z ) otherwise on an interim basis prior to completion of such offering so long as any Parent shall cause the amount of such expenses to be repaid to the Company or the relevant Restricted Subsidiary out of the proceeds of such offering promptly if completed.

 

“ Paying Agent ” means any Person authorized by the Company to pay the principal of (and premium, if any) or interest on any Notes on behalf of the Company; provided that neither the Company nor any of its Affiliates shall act as Paying Agent for purposes of Section 1102 or Section 1205 .  The Trustee will initially act as Paying Agent for the Notes.

 

“ Permitted Holder ” means any of the following:  ( i ) any of the Investors or Management Investors, and any of their respective Affiliates; ( ii ) any investment fund or vehicle managed or sponsored by CD&R, BAS Capital Funding Corporation, Banc of America Capital

 

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Investors V, L.P., Citigroup Private Equity LP, J.P. Morgan Ventures Corporation or any Affiliate thereof, and any Affiliate of or successor to any such investment fund or vehicle; ( iii ) any limited or general partners of, or other investors in, any Investor, BAS Capital Funding Corporation, Banc of America Capital Investors V, L.P., Citigroup Private Equity LP, J.P. Morgan Ventures Corporation or any Affiliate thereof, or any such investment fund or vehicle (as to any such limited partner or other investor, solely to the extent of any Capital Stock of the Company or any Parent actually received by way of dividend or distribution from any such Investor, Affiliate, or investment fund or vehicle); and ( iv ) any Person acting in the capacity of an underwriter in connection with a public or private offering of Capital Stock of any Parent or the Company. In addition, any ‘‘person’’ (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) whose status as a ‘‘beneficial owner’’ (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) constitutes or results in a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of the Indenture, together with its Affiliates, shall thereafter constitute Permitted Holders.

 

“ Permitted Investment ” means an Investment by the Company or any Restricted Subsidiary in, or consisting of, any of the following:

 

(i) a Restricted Subsidiary, the Company, or a Person that will, upon the making of such Investment, become a Restricted Subsidiary (and any Investment held by such Person that was not acquired by such Person in contemplation of so becoming a Restricted Subsidiary);

 

(ii) another Person if as a result of such Investment such other Person is merged or consolidated with or into, or transfers or conveys all or substantially all its assets to, or is liquidated into, the Company or a Restricted Subsidiary (and, in each case, any Investment held by such other Person that was not acquired by such Person in contemplation of such merger, consolidation or transfer);

 

(iii) Temporary Cash Investments, Investment Grade Securities or Cash Equivalents;

 

(iv) receivables owing to the Company or any Restricted Subsidiary, if created or acquired in the ordinary course of business;

 

(v) any securities or other Investments received as consideration in, or retained in connection with, sales or other dispositions of property or assets, including Asset Dispositions made in compliance with Section 411 ;

 

(vi) securities or other Investments received in settlement of debts created in the ordinary course of business and owing to, or of other claims asserted by, the Company or any Restricted Subsidiary, or as a result of foreclosure, perfection or enforcement of any Lien, or in satisfaction of judgments, including in connection with any bankruptcy proceeding or other reorganization of another Person;

 

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(vii) Investments in existence or made pursuant to legally binding written commitments in existence on the Closing Date;

 

(viii) Currency Agreements, Interest Rate Agreements, Commodities Agreements and related Hedging Obligations, which obligations are Incurred in compliance with Section 407 ;

 

(ix) pledges or deposits ( x ) with respect to leases or utilities provided to third parties in the ordinary course of business or ( y ) otherwise described in the definition of “Permitted Liens” or made in connection with Liens permitted under Section 413 ;

 

(x) ( 1 ) Investments in or by any Special Purpose Subsidiary, or in connection with a Financing Disposition (described in clause ( a ) of the definition thereof) by or to or in favor of any Special Purpose Entity, including Investments of funds held in accounts permitted or required by the arrangements governing such Financing Disposition or any related Indebtedness, or ( 2 ) any promissory note issued by the Company, or any Parent, provided that if such Parent receives cash from the relevant Special Purpose Entity in exchange for such note, an equal cash amount is contributed by any Parent to the Company;

 

(xi) bonds secured by assets leased to and operated by the Company or any Restricted Subsidiary that were issued in connection with the financing of such assets so long as the Company or any Restricted Subsidiary may obtain title to such assets at any time by paying a nominal fee, canceling such bonds and terminating the transaction;

 

(xii) Notes;

 

(xiii) any Investment to the extent made using Capital Stock of the Company (other than Disqualified Stock), or Capital Stock of any Parent as consideration;

 

(xiv) Management Advances;

 

(xv) Investments in Related Businesses in an aggregate amount outstanding at any time not to exceed the greater of $75.0 million and 5.0% of Consolidated Tangible Assets;

 

(xvi) any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with Section 412(b)  (except transactions described in clauses ( i ), ( v ) and ( vi ) of such paragraph), including any Investment pursuant to any transaction described in clause ( ii ) of such paragraph (whether or not any Person party thereto is at any time an Affiliate of the Company);

 

(xvii) any Investment ( x ) by any Captive Insurance Subsidiary in connection with its provision of insurance to the Company or any of its Subsidiaries or ( y ) by any Home Warranty Subsidiary in connection with its provision of home warranty, service contract or

 

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similar contracts or policies on behalf of the Company or its Subsidiaries, in each case which Investment is made in the ordinary course of business of such Captive Insurance Subsidiary or such Home Warranty Subsidiary, as the case may be, or by reason of applicable law, rule, regulation or order, or is required or approved by any regulatory authority having jurisdiction over such Captive Insurance Subsidiary or such Home Warranty Subsidiary or their respective businesses, as applicable; and

 

(xviii) other Investments in an aggregate amount outstanding at any time not to exceed the greater of $100.0 million and 7.5% of Consolidated Tangible Assets.

 

If any Investment pursuant to clause ( xv ) or ( xviii ) above, or to Section 409(b)(vii), as applicable, is made in any Person that is not a Restricted Subsidiary and such Person thereafter becomes a Restricted Subsidiary, such Investment shall thereafter be deemed to have been made pursuant to clause (i) above and not to clause ( xv ) or ( xviii ) above or to Section 409(b)(vii), as applicable, for so long as such Person continues to be a Restricted Subsidiary.

 

                “ Permitted Liens ” means:

 

(a) Liens for taxes, assessments or other governmental charges not yet delinquent or the nonpayment of which in the aggregate would not reasonably be expected to have a material adverse effect on the Company and its Restricted Subsidiaries or that are being contested in good faith and by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of the Company or a Subsidiary thereof, as the case may be, in accordance with GAAP;

 

(b) carriers’, warehousemen’s, mechanics’, landlords’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business in respect of obligations that are not overdue for a period of more than 60 days or that are bonded or that are being contested in good faith and by appropriate proceedings;

 

(c) pledges, deposits or Liens in connection with workers’ compensation, unemployment insurance and other social security and other similar legislation or other insurance-related obligations (including, without limitation, pledges or deposits securing liability to insurance carriers under insurance or self-insurance arrangements);

 

(d) pledges, deposits or Liens to secure the performance of bids, tenders, trade, government or other contracts (other than for borrowed money), obligations for utilities, leases, licenses, statutory obligations, completion guarantees, surety, judgment, appeal or performance bonds, other similar bonds, instruments or obligations, and other obligations of a like nature incurred in the ordinary course of business;

 

(e) easements (including reciprocal easement agreements), rights-of-way, building, zoning and similar restrictions, utility agreements, covenants, reservations, restrictions, encroachments, charges, and other similar encumbrances or title defects

 

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incurred, or leases or subleases granted to others, in the ordinary course of business, which do not in the aggregate materially interfere with the ordinary conduct of the business of the Company and its Restricted Subsidiaries, taken as a whole;

 

(f) Liens existing on, or provided for under written arrangements existing on, the Closing Date, or (in the case of any such Liens securing Indebtedness of the Company or any of its Subsidiaries existing or arising under written arrangements existing on the Closing Date) securing any Refinancing Indebtedness in respect of such Indebtedness so long as the Lien securing such Refinancing Indebtedness is limited to all or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof) that secured (or under such written arrangements could secure) the original Indebtedness;

 

(g) ( i ) mortgages, liens, security interests, restrictions, encumbrances or any other matters of record that have been placed by any developer, landlord or other third party on property over which the Company or any Restricted Subsidiary of the Company has easement rights or on any leased property and subordination or similar agreements relating thereto and ( ii ) any condemnation or eminent domain proceedings affecting any real property;

 

(h) Liens securing Indebtedness (including Liens securing any Obligations in respect thereof) consisting of Hedging Obligations, Purchase Money Obligations or Capitalized Lease Obligations Incurred in compliance with Section 407 ;

 

(i) Liens arising out of judgments, decrees, orders or awards in respect of which the Company or any Restricted Subsidiary shall in good faith be prosecuting an appeal or proceedings for review, which appeal or proceedings shall not have been finally terminated, or if the period within which such appeal or proceedings may be initiated shall not have expired;

 

(j) leases, subleases, licenses or sublicenses to or from third parties;

 

(k) Liens securing Indebtedness (including Liens securing any Obligations in respect thereof) consisting of (1) Indebtedness Incurred in compliance with Section 407(b)(i) , Section 407(b)(iv) , Section 407(b)(v) , Section 407(b)(vii) , Section 407(b)(viii) , Section 407(b)(ix)  or Section 407(b)(x) , or Section 407(b)(iii)  (other than ( x ) Refinancing Indebtedness Incurred in respect of Indebtedness described in Section 407(a)  or ( y ) Continuing Notes and Refinancing Indebtedness Incurred in respect thereof), ( 2 ) Bank Indebtedness, ( 3 ) the Notes, ( 4 ) Indebtedness of any Restricted Subsidiary that is not a Subsidiary Guarantor, ( 5 ) Indebtedness or other obligations of any Special Purpose Entity, or ( 6 ) obligations in respect of Management Advances or Management Guarantees; in each case including Liens securing any Guarantee of any thereof;

 

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(1) Liens existing on property or assets of a Person at the time such Person becomes a Subsidiary of the Company (or at the time the Company or a Restricted Subsidiary acquires such property or assets, including any acquisition by means of a merger or consolidation with or into the Company or any Restricted Subsidiary); provided , however , that such Liens are not created in connection with, or in contemplation of, such other Person becoming such a Subsidiary (or such acquisition of such property or assets), and that such Liens are limited to all or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof) that secured (or, under the written arrangements under which such Liens arose, could secure) the obligations to which such Liens relate;

 

(m) Liens on Capital Stock, Indebtedness or other securities of an Unrestricted Subsidiary that secure Indebtedness or other obligations of such Unrestricted Subsidiary;

 

(n) any encumbrance or restriction (including, but not limited to, put and call agreements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement;

 

(o) Liens securing Indebtedness (including Liens securing any Obligations in respect thereof) consisting of Refinancing Indebtedness Incurred in respect of any Indebtedness secured by, or securing any refinancing, refunding, extension, renewal or replacement (in whole or in part) of any other obligation secured by, any other Permitted Liens, provided that any such new Lien is limited to all or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof) that secured (or, under the written arrangements under which the original Lien arose, could secure) the obligations to which such Liens relate;

 

(p) Liens ( 1 ) arising by operation of law (or by agreement to the same effect) in the ordinary course of business, ( 2 ) on property or assets under construction (and related rights) in favor of a contractor or developer or arising from progress or partial payments by a third party relating to such property or assets, ( 3 ) on receivables (including related rights), ( 4 ) on cash set aside at the time of the Incurrence of any Indebtedness or government securities purchased with such cash, in either case to the extent that such cash or government securities prefund the payment of interest on such Indebtedness and are held in an escrow account or similar arrangement to be applied for such purpose, ( 5 ) securing or arising by reason of any netting or set-off arrangement entered into in the ordinary course of banking or other trading activities (including in connection with purchase orders and other agreements with customers), ( 6 ) in favor of the Company or any Subsidiary (other than Liens on property or assets of the Company or any Subsidiary Guarantor in favor of any Subsidiary that is not a Subsidiary Guarantor), ( 7 ) arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business, ( 8 ) on inventory or other goods and proceeds securing obligations in respect of bankers’ acceptances issued or created to facilitate the purchase, shipment or storage of such inventory or other goods, ( 9 ) relating to

 

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pooled deposit or sweep accounts to permit satisfaction of overdraft, cash pooling or similar obligations incurred in the ordinary course of business, ( 10 ) attaching to commodity trading or other brokerage accounts incurred in the ordinary course of business, ( 11 ) arising in connection with repurchase agreements permitted under Section 407 on assets that are the subject of such repurchase agreements or ( 12 )   in favor of any Special Purpose Entity in connection with any Financing Disposition; and

 

(q) other Liens securing obligations incurred in the ordinary course of business, which obligations do not exceed $50.0 million at any time outstanding.

 

“ Person ” means any individual, corporation, partnership, joint venture, association, joint-stock company, limited liability company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

 

“ Place of Payment ” means a city or any political subdivision thereof in which any Paying Agent appointed pursuant to Article III is located.

 

“ Predecessor Notes ” of any particular Note means every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purposes of this definition, any Note authenticated and delivered under Section 306 in lieu of a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Note.

 

“ Preferred Stock ” as applied to the Capital Stock of any corporation means Capital Stock of any class or classes (however designated) that by its terms is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such corporation, over shares of Capital Stock of any other class of such corporation.

 

“ Purchase Money Obligations ” means any Indebtedness Incurred to finance or refinance the acquisition, leasing, construction or improvement of property (real or personal) or assets, and whether acquired through the direct acquisition of such property or assets or the acquisition of the Capital Stock of any Person owning such property or assets, or otherwise.

 

“ QIB ” or “ Qualified Institutional Buyer ” means a “qualified institutional buyer,” as that term is defined in Rule 144A.

 

“ Receivable ” means a right to receive payment pursuant to an arrangement with another Person pursuant to which such other Person is obligated to pay, as determined in accordance with GAAP.

 

“ Redemption Date ,” when used with respect to any Note to be redeemed or purchased, means the date fixed for such redemption or purchase by or pursuant to this Indenture and the Notes.

 

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“ Reference Date ” means April 1, 2007.

 

“ refinance ” means refinance, refund, replace, renew, repay, modify, restate, defer, substitute, supplement, reissue, resell or extend (including pursuant to any defeasance or discharge mechanism); and the terms “refinances,” “refinanced” and “refinancing” as used for any purpose in this Indenture shall have a correlative meaning.

 

                “ Refinancing Indebtedness ” means Indebtedness that is Incurred to refinance any Indebtedness existing on the date of this Indenture or Incurred in compliance with this Indenture (including Indebtedness of the Company that refinances Indebtedness of any Restricted Subsidiary (to the extent permitted in this Indenture) and Indebtedness of any Restricted Subsidiary that refinances Indebtedness of another Restricted Subsidiary) including Indebtedness that refinances Refinancing Indebtedness; provided , that ( 1 )( x ) if the Indebtedness being refinanced is Subordinated Obligations or Guarantor Subordinated Obligations, the Refinancing Indebtedness has a final Stated Maturity at the time such Refinancing Indebtedness is Incurred that is equal to or greater than the final Stated Maturity of the Indebtedness being refinanced (or if shorter, the Notes) or ( y ) if the Indebtedness being refinanced is Continuing Notes, the Refinancing Indebtedness has a final Stated Maturity at the time such Refinancing Indebtedness is Incurred that is equal to or greater than the final Stated Maturity of the Indebtedness being refinanced (or if shorter, the Notes) and, if such Refinancing Indebtedness is Guaranteed by any Restricted Subsidiary of the Company, each such Guarantee shall be subordinated to the prior payment in full of the Notes on terms consistent with those for senior subordinated debt securities issued by companies sponsored by CD&R or otherwise customary (in each case, determined in good faith by the Company), ( 2 ) such Refinancing Indebtedness is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the sum of ( x ) the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced, plus ( y ) fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such Refinancing Indebtedness and ( 3 ) Refinancing Indebtedness shall not include ( x ) Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor that refinances Indebtedness of the Company or a Subsidiary Guarantor that could not have been initially Incurred by such Restricted Subsidiary pursuant to Section 407 or ( y ) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary.

 

“ Regular Record Date ” for the interest payable on any Interest Payment Date means the date specified for that purpose in Section 301 .

 

“ Regulation S ” means Regulation S under the Securities Act.

 

“ Regulation S Certificate ” means a certificate substantially in the form attached hereto as Exhibit D .

 

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“ Related Business ” means those businesses in which the Company or any of its Subsidiaries is engaged on the date of this Indenture, or that are similar, related, complementary, incidental or ancillary thereto or extensions, developments or expansions thereof.

 

“ Related Taxes ” means ( x ) any taxes, charges or assessments, including but not limited to sales, use, transfer, rental, ad valorem, value-added, stamp, property, consumption, franchise, license, capital, net worth, gross receipts, excise, occupancy, intangibles or similar taxes, charges or assessments (other than federal, state or local taxes measured by income and federal, state or local withholding imposed by any government or other taxing authority on payments made by any Parent other than to another Parent), required to be paid by any Parent by virtue of its being incorporated or having Capital Stock outstanding (but not by virtue of owning stock or other equity interests of any corporation or other entity other than the Company, any of its Subsidiaries or any Parent), or being a holding company parent of the Company, any of its Subsidiaries or any Parent or receiving dividends from or other distributions in respect of the Capital Stock of the Company, any of its Subsidiaries or any Parent, or having guaranteed any obligations of the Company or any Subsidiary thereof, or having made any payment in respect of any of the items for which the Company or any of its Subsidiaries is permitted to make payments to any Parent pursuant to Section 409 , or acquiring, developing, maintaining, owning, prosecuting, protecting or defending its intellectual property and associated rights (including but not limited to receiving or paying royalties for the use thereof) relating to the business or businesses of the Company or any Subsidiary thereof, ( y ) any taxes attributable to any taxable period (or portion thereof) ending on or prior to the Closing Date, or to any Parent’s receipt of (or entitlement to) any payment in connection with the Transactions, including any payment received after the Closing Date pursuant to any agreement related to the Transactions, or ( z ) any other federal, state, foreign, provincial or local taxes measured by income for which any Parent is liable up to an amount not to exceed, with respect to federal taxes, the amount of any such taxes that the Company and its Subsidiaries would have been required to pay on a separate company basis, or on a consolidated basis as if the Company had filed a consolidated return on behalf of an affiliated group (as defined in Section 1504 of the Code or an analogous provision of state, local or foreign law) of which it were the common parent, or with respect to state and local taxes, the amount of any such taxes that the Company and its Subsidiaries would have been required to pay on a separate company basis, or on a combined basis as if the Company had filed a combined return on behalf of an affiliated group consisting only of the Company and its Subsidiaries.

 

“ Resale Restriction Termination Date ” means, with respect to any Note, the date that is one year (or such other period as may hereafter be provided under Rule 144 under the Securities Act or any successor provision thereto as permitting the resale by non-affiliates of Restricted Securities without restriction) after the later of the original issue date in respect of such Note and the last date on which the Company or any Affiliate of the Company was the owner of such Note (or any Predecessor Note thereto).

 

“ Responsible Officer ” when used with respect to the Trustee means the chairman or vice-chairman of the board of directors, the chairman or vice-chairman of the executive

 

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committee of the board of directors, the president, any vice president or assistant vice president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, the cashier, any assistant cashier, any trust officer or assistant trust officer, the controller and any assistant controller or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject.

 

“ Restricted Payment Transaction ” means any Restricted Payment permitted pursuant to Section 409 , any Permitted Payment, any Permitted Investment, or any transaction specifically excluded from the definition of the term “Restricted Payment” (including pursuant to the exception contained in clause ( i ) and the parenthetical exclusions contained in clauses ( ii ) and ( iii ) of such definition).

 

“ Restricted Security ” has the meaning assigned to such term in Rule 144(a)(3) under the Securities Act; provided , however , that the Trustee shall be entitled to receive, at its request, and conclusively rely on an Opinion of Counsel with respect to whether any Note constitutes a Restricted Security.

 

“ Restricted Subsidiary ” means any Subsidiary of the Company other than an Unrestricted Subsidiary.

 

“ Rule 144A ” means Rule 144A under the Securities Act.

 

“ SEC ” means the Securities and Exchange Commission.

 

“ Securities Act ” means the Securities Act of 1933, as amended.

 

“ Senior Credit Agreements ” means, collectively, the Senior Term Agreement and the Senior Revolving Credit Agreement.

 

“ Senior Credit Facilities ” means, collectively, the Senior Term Facility and the Senior Revolving Credit Facility.

 

“ Senior Indebtedness ” means any Indebtedness of the Company or any Restricted Subsidiary other than, in the case of the Company, Subordinated Obligations, and, in the case of any Subsidiary Guarantor, Guarantor Subordinated Obligations.

 

“ Senior Interim Loan Agreement ” means the Senior Interim Loan Credit Agreement, dated as of the Closing Date, among the Company, the lenders from time to time parties thereto, JPMorgan Chase Bank, N.A., as administrative agent, and Citigroup Global Markets Inc., as syndication agent.

 

“ Senior Revolving Credit Agreement ” means the Credit Agreement, dated as of the Closing Date, among the Company, certain Subsidiaries of the Company party thereto, the

 

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lenders party thereto from time to time, JPMorgan Chase Bank, N.A., as syndication agent, and Citibank, N.A., as administrative agent and collateral agent, as such agreement may be amended, supplemented, waived or otherwise modified from time to time or refunded, refinanced, restructured, replaced, renewed, repaid, increased or extended from time to time (whether in whole or in part, whether with the original administrative agent and lenders or other agents and lenders or otherwise, and whether provided under the original Senior Revolving Credit Agreement or other credit agreements or otherwise, unless such agreement or instrument expressly provides that it is not intended to be and is not a Senior Revolving Credit Agreement hereunder).

 

“ Senior Revolving Credit Facility ” means the collective reference to the Senior Revolving Credit Agreement, any Loan Documents (as defined therein), any notes and letters of credit issued pursuant thereto and any guarantee and collateral agreement, patent and trademark security agreement, mortgages, letter of credit applications and other guarantees, pledge agreements, security agreements and collateral documents, and other instruments and documents, executed and delivered pursuant to or in connection with any of the foregoing, in each case as the same may be amended, supplemented, waived or otherwise modified from time to time, or refunded, refinanced, restructured, replaced, renewed, repaid, increased or extended from time to time (whether in whole or in part, whether with the original agent and lenders or other agents and lenders or otherwise, and whether provided under the original Senior Revolving Credit Agreement or one or more other credit agreements, indentures (including this Indenture) or financing agreements or otherwise, unless such agreement expressly provides that it is not intended to be and is not a Senior Revolving Credit Facility hereunder). Without limiting the generality of the foregoing, the term “Senior Revolving Credit Facility” shall include any agreement ( i ) changing the maturity of any Indebtedness Incurred thereunder or contemplated thereby, ( ii ) adding Subsidiaries of the Company as additional borrowers or guarantors thereunder, ( iii ) increasing the amount of Indebtedness Incurred thereunder or available to be borrowed thereunder or ( iv ) otherwise altering the terms and conditions thereof.

 

“ Senior Term Agreement ” means the Credit Agreement, dated as of the Closing Date, among the Company, the lenders party thereto from time to time, JPMorgan Chase Bank, N.A., as syndication agent, and Citibank, N.A., as administrative agent and collateral agent, as such agreement may be amended, supplemented, waived or otherwise modified from time to time or refunded, refinanced, restructured, replaced, renewed, repaid, increased or extended from time to time (whether in whole or in part, whether with the original administrative agent and lenders or other agents and lenders or otherwise, and whether provided under the original Senior Term Agreement or other credit agreements or otherwise, unless such agreement or instrument expressly provides that it is not intended to be and is not a Senior Term Agreement hereunder).

 

“ Senior Term Facility ” means the collective reference to the Senior Term Agreement, any Loan Documents (as defined therein), any notes and letters of credit issued pursuant thereto and any guarantee and collateral agreement, patent and trademark security agreement, mortgages, letter of credit applications and other guarantees, pledge agreements, security agreements and collateral documents, and other instruments and documents, executed and delivered pursuant to or in connection with any of the foregoing, in each case as the same

 

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may be amended, supplemented, waived or otherwise modified from time to time, or refunded, refinanced, restructured, replaced, renewed, repaid, increased or extended from time to time (whether in whole or in part, whether with the original agent and lenders or other agents and lenders or otherwise, and whether provided under the original Senior Term Agreement or one or more other credit agreements, indentures (including this Indenture) or financing agreements or otherwise, unless such agreement or instrument expressly provides that it is not intended to be and is not a Senior Term Facility hereunder).  Without limiting the generality of the foregoing, the term “Senior Term Facility” shall include any agreement ( i ) changing the maturity of any Indebtedness Incurred thereunder or contemplated thereby, ( ii ) adding Subsidiaries of the Company as additional borrowers or guarantors thereunder, ( iii ) increasing the amount of Indebtedness Incurred thereunder or available to be borrowed thereunder or ( iv ) otherwise altering the terms and conditions thereof.

 

“ ServiceMaster ” means The ServiceMaster Company, a Delaware corporation, and any successor in interest thereto.

 

“ Significant Subsidiary ” means any Restricted Subsidiary that would be a “significant subsidiary” of the Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC, as such Regulation is in effect on the Closing Date.

 

“ Special Purpose Entity ” means ( x ) any Special Purpose Subsidiary or ( y ) any other Person that is engaged in the business of acquiring, selling, collecting, financing or refinancing Receivables, accounts (as defined in the Uniform Commercial Code as in effect in any jurisdiction from time to time), other accounts and/or other receivables, and/or related assets.

 

“ Special Purpose Financing ” means any financing or refinancing of assets consisting of or including Receivables of the Company or any Restricted Subsidiary that have been transferred to a Special Purpose Entity or made subject to a Lien in a Financing Disposition.

 

“ Special Purpose Financing Expense ” means for any period, ( a ) the aggregate interest expense for such period on any Indebtedness of any Special Purpose Subsidiary that is a Restricted Subsidiary, which Indebtedness is not recourse to the Company or any Restricted Subsidiary that is not a Special Purpose Subsidiary (other than with respect to Special Purpose Financing Undertakings), and ( b ) Special Purpose Financing Fees.

 

“ Special Purpose Financing Fees ” means distributions or payments made directly or by means of discounts with respect to any participation interest issued or sold in connection with, and other fees paid to a Person that is not a Restricted Subsidiary in connection with, any Special Purpose Financing.

 

“ Special Purpose Financing Undertakings ” means representations, warranties, covenants, indemnities, guarantees of performance and (subject to clause ( y ) of the proviso below) other agreements and undertakings entered into or provided by the Company or any of its Restricted Subsidiaries that the Company determines in good faith (which determination shall be

 

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conclusive) are customary or otherwise necessary or advisable in connection with a Special Purpose Financing or a Financing Disposition; provided that ( x ) it is understood that Special Purpose Financing Undertakings may consist of or include ( i ) reimbursement and other obligations in respect of notes, letters of credit, surety bonds and similar instruments provided for credit enhancement purposes or ( ii ) Hedging Obligations, or other obligations relating to Interest Rate Agreements, Currency Agreements or Commodities Agreements entered into by the Company or any Restricted Subsidiary, in respect of any Special Purpose Financing or Financing Disposition, and ( y ) subject to the preceding clause ( x ) any such other agreements and undertakings shall not include any Guarantee of Indebtedness of a Special Purpose Subsidiary by the Company or a Restricted Subsidiary that is not a Special Purpose Subsidiary.

 

“ Special Purpose Subsidiary ” means a Subsidiary of the Company that ( a ) is engaged solely in ( x ) the business of acquiring, selling, collecting, financing or refinancing Receivables, accounts (as defined in the Uniform Commercial Code as in effect in any jurisdiction from time to time) and other accounts and receivables (including any thereof constituting or evidenced by chattel paper, instruments or general intangibles), all proceeds thereof and all rights (contractual and other), collateral and other assets relating thereto, and ( y ) any business or activities incidental or related to such business, and ( b ) is designated as a “Special Purpose Subsidiary” by the Company.

 

“ Special Record Date ” for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 307 .

 

“ S&P ” means Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies, Inc., and its successors.

 

“ Stated Maturity ” means, with respect to any Indebtedness, the date specified in such Indebtedness as the fixed date on which the payment of principal of such Indebtedness is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase or repayment of such Indebtedness at the option of the holder thereof upon the happening of any contingency).

 

“ Subordinated Obligations ” means any Indebtedness of the Company (whether outstanding on the date of this Indenture or thereafter Incurred) that is expressly subordinated in right of payment to the Notes pursuant to a written agreement.

 

“ Subsidiary ” of any Person means any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other equity interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by ( i ) such Person or ( ii ) one or more Subsidiaries of such Person.

 

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“ Subsidiary Guarantee ” means any guarantee that may from time to time be entered into by a Restricted Subsidiary of the Company on the Issue Date or after the Issue Date pursuant to Section 414 .

 

“ Subsidiary Guarantor ” means any Restricted Subsidiary of the Company that enters into a Subsidiary Guarantee.

 

“ Successor Company ” shall have the meaning assigned thereto in clause ( i ) under Section 501 .

 

“ Supplemental Indenture ” means a Supplemental Indenture, to be entered into substantially in the form attached hereto as Exhibit E .

 

“ Tax Sharing Agreement ” means the Tax Sharing Agreement, dated as of the Closing Date, among the Company, Holding, Investment Holding and Holding Parent, as the same may be amended, supplemented, waived or otherwise modified from time to time in accordance with the terms thereof and of this Indenture.

 

“ Temporary Cash Investments ” means any of the following:  ( i ) any investment in ( x ) direct obligations of the United States of America, a member state of The European Union or any country in whose currency funds are being held pending their application in the making of an investment or capital expenditure by the Company or a Restricted Subsidiary in that country or with such funds, or any agency or instrumentality of any thereof or obligations Guaranteed by the United States of America or a member state of The European Union or any country in whose currency funds are being held pending their application in the making of an investment or capital expenditure by the Company or a Restricted Subsidiary in that country or with such funds, or any agency or instrumentality of any of the foregoing, or obligations guaranteed by any of the foregoing or ( y ) direct obligations of any foreign country recognized by the United States of America rated at least “A” by S&P or “A-1” by Moody’s (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization), ( ii ) overnight bank deposits, and investments in time deposit accounts, certificates of deposit, bankers’ acceptances and money market deposits (or, with respect to foreign banks, similar instruments) maturing not more than one year after the date of acquisition thereof issued by ( x ) any bank or other institutional lender under a Credit Facility or any affiliate thereof or ( y ) a bank or trust company that is organized under the laws of the United States of America, any state thereof or any foreign country recognized by the United States of America having capital and surplus aggregating in excess of $250.0 million (or the foreign currency equivalent thereof) and whose long term debt is rated at least “A” by S&P or “A-1” by Moody’s (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization) at the time such Investment is made, ( iii ) repurchase obligations for underlying securities or instruments of the types described in clause ( i ) or ( ii ) above entered into with a bank meeting the qualifications described in clause ( ii ) above, ( iv ) Investments in commercial paper, maturing not more than 24 months after the date of acquisition, issued by a Person (other than that of the Company or any of its Subsidiaries), with a

 

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rating at the time as of which any Investment therein is made of “P-2” (or higher) according to Moody’s or “A-2” (or higher) according to S&P (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization), ( v ) Investments in securities maturing not more than 24 months after the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States of America, or by any political subdivision or taxing authority thereof, and rated at least “BBB-” by S&P or “Baa3” by Moody’s (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization), ( vi ) Indebtedness or Preferred Stock (other than of the Company or any of its Subsidiaries) having a rating of “A” or higher by S&P or “A2” or higher by Moody’s (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization), ( vii ) investment funds investing 95% of their assets in securities of the type described in clauses ( i )-( vi ) above (which funds may also hold reasonable amounts of cash pending investment and/or distribution), ( viii ) any money market deposit accounts issued or offered by a domestic commercial bank or a commercial bank organized and located in a country recognized by the United States of America, in each case, having capital and surplus in excess of $250.0 million (or the foreign currency equivalent thereof), or investments in money market funds subject to the risk limiting conditions of Rule 2a-7 (or any successor rule) of the SEC under the Investment Company Act of 1940, as amended, and ( ix ) similar investments approved by the Board of Directors in the ordinary course of business.

 

“ TIA ” means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-7bbbb) as in effect on the date of this Indenture.

 

“ Trade Payables ” means, with respect to any Person, any accounts payable or any indebtedness or monetary obligation to trade creditors created, assumed or guaranteed by such Person arising in the ordinary course of business in connection with the acquisition of goods or services.

 

“ Transactions ” means, collectively, any or all of the following:  ( i ) the Merger, ( ii ) the repayment at maturity or redemption of the Existing 2007 Notes, the redemption of the Existing 2009 Notes and the repayment and termination of the Existing Credit Facilities, ( iii ) the entry into this Indenture, and the offer and issuance of the Notes, ( iv ) the entry into the Senior Credit Facilities and Incurrence of Indebtedness thereunder by one or more of the Company and its Subsidiaries, and ( v ) all other transactions relating to any of the foregoing (including payment of fees and expenses related to any of the foregoing). For purposes of the foregoing, “Existing Credit Facilities” means the Credit Agreement, dated as of May 19, 2004, as amended by Amendment No. 1, dated as of May 6, 2005, each among ServiceMaster, the lenders, JPMorgan Chase Bank and Bank of America, N.A. as syndication agents, SunTrust Bank, as administrative agent, and U.S. Bank National Association and Wachovia Bank, N.A. as documentation agents.

 

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“ Trustee ” means the party named as such in the first paragraph of this Indenture until a successor replaces it and, thereafter, means the successor.

 

“ Unrestricted Cash ” means cash, Cash Equivalents and Temporary Cash Investments, other than ( i ) as disclosed in the consolidated financial statements of the Company as a line item on the balance sheet as “restricted cash” and ( ii ) cash, Cash Equivalents and Temporary Cash Investments of a Captive Insurance Company or Home Warranty Subsidiary to the extent such cash, Cash Equivalents and Temporary Cash Investments are not permitted by applicable law or regulation to be dividended, distributed or otherwise transferred to the Company or any Restricted Subsidiary that is not either a Captive Insurance Company or a Home Warranty Subsidiary.

 

“ Unrestricted Subsidiary ” means ( i ) any Subsidiary of the Company that at the time of determination is an Unrestricted Subsidiary, as designated by the Board of Directors in the manner provided below, and ( ii ) any Subsidiary of an Unrestricted Subsidiary.  The Board of Directors may designate any Subsidiary of the Company (including any newly acquired or newly formed Subsidiary of the Company) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Capital Stock or Indebtedness of, or owns or holds any Lien on any property of, the Company or any other Restricted Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so designated; provided , that ( A ) such designation was made at or prior to the Closing Date, or ( B ) the Subsidiary to be so designated has total consolidated assets of $1,000 or less or ( C ) if such Subsidiary has consolidated assets greater than $1,000, then such designation would be permitted under Section 409 .  The Board of Directors may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided , that immediately after giving effect to such designation ( x ) the Company could Incur at least $1.00 of additional Indebtedness under Section 407(a)  or ( y ) the Consolidated Coverage Ratio would be greater than it was immediately prior to giving effect to such designation or ( z ) such Subsidiary shall be a Special Purpose Subsidiary with no Indebtedness outstanding other than Indebtedness that can be Incurred (and upon such designation shall be deemed to be Incurred and outstanding) pursuant to Section 407(b) .  Any such designation by the Board of Directors shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of the Company’s Board of Directors giving effect to such designation and an Officer’s Certificate of the Company certifying that such designation complied with the foregoing provisions.

 

“ U.S. Government Obligation ” means ( x ) any security that is ( i ) a direct obligation of the United States of America for the payment of which the full faith and credit of the United States of America is pledged or ( ii ) an obligation of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case under the preceding clause ( i ) or ( ii ) is not callable or redeemable at the option of the issuer thereof, and ( y ) any depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any U.S. Government Obligation that is specified in clause ( x ) above and held by such bank for the account of the holder of such depositary receipt, or with respect to any specific payment of principal of or

 

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interest on any U.S. Government Obligation that is so specified and held, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal or interest evidenced by such depositary receipt.

 

“ Voting Stock ” of an entity means all classes of Capital Stock of such entity then outstanding and normally entitled to vote in the election of directors or all interests in such entity with the ability to control the management or actions of such entity.

 

“ Wholly Owned Domestic Subsidiary ” means as to any Person, any Domestic Subsidiary of such Person that is a Material Subsidiary of such Person, and of which such Person owns, directly or indirectly through one or more Wholly Owned Domestic Subsidiaries, all of the Capital Stock of such Domestic Subsidiary.

 

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Section 102.   Other Definitions .

 

Term		Defined in Section
“Act”		108
“Affiliate Transaction”		412
“Agent Members”		312
“AHYDO Redemption Date		1008
“Amendment”		410
“Applicable Premium”		1001
“Authentication Order”		303
“Bankruptcy Law”		601
“Cash Interest		301
“Cash Interest Rate		301
“Certificate of Beneficial Ownership”		313
“Change of Control Offer”		415
“Covenant Defeasance”		1203
“Custodian”		601
“Defaulted Interest”		307
“Defeasance”		1202
“Defeased Notes”		1201
“Distribution Compliance Period”		201
“Election Notice”		301
“Event of Default”		601
“Excess Proceeds”		411
“Expiration Date”		108
“Global Notes”		201
“Initial Agreement”		410
“Initial Lien”		413
“Mandatory Principal Redemption		1008
“Mandatory Principal Redemption Amount		1008
“Minimum Denomination”		302
“Note Register” and “Note Registrar”		305
“Notice of Default”		601
“Offer”		411
“Permanent Regulation S Global Notes”		201
“Permitted Payment”		409
“Physical Notes”		201
“PIK Interest”		301
“PIK Payment”		301
“Private Placement Legend”		203

 

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Term		Defined in Section
“Redemption Amount”		1001
“Redemption Price”		1001
“Refinancing Agreement”		410
“Refunding Capital Stock”		409
“Regular Record Date”		301
“Regulation S Global Notes”		201
“Regulation S Note Exchange Date”		313
“Regulation S Physical Notes”		201
“Reporting Date”		405
“Restricted Payment”		409
“Rule 144A Global Note”		201
“Rule 144A Physical Notes”		201
“Subsidiary Guaranteed Obligations”		1301
“Successor Company”		501
“Temporary Regulation S Global Note”		201
“Treasury Capital Stock		409
“Treasury Rate”		1001

 

Section 103.           Rules of Construction .  For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:

 

(1)   the terms defined in this Indenture have the meanings assigned to them in this Indenture;

 

(2)   “ or ” is not exclusive;

 

(3)   all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP;

 

(4)   the words “ herein ,” “ hereof ” and “ hereunder ” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision;

 

(5)   all references to “ $ ” or “ dollars ” shall refer to the lawful currency of the United States of America;

 

(6)   the words “ include ,” “ included ” and “ including ,” as used herein, shall be deemed in each case to be followed by the phrase “ without limitation ,” if not expressly followed by such phrase or the phrase “ but not limited to ”;

 

(7)   words in the singular include the plural, and words in the plural include the singular;

 

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(8)   references to sections of, or rules under, the Securities Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time; and

 

(9)   any reference to a Section, Article or clause refers to such Section, Article or clause of this Indenture.

 

Section 104.           Incorporation by Reference of TIA .  Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture.  This Indenture is subject to the mandatory provisions of the TIA, which are incorporated by reference in and made a part of this Indenture.  Any terms incorporated by reference in this Indenture that are defined by the TIA, defined by any TIA reference to another statute or defined by SEC rule under the TIA, have the meanings so assigned to them therein.  The following TIA terms have the following meanings:

 

“ indenture securities ” means the Notes.

 

“ indenture trustee ” or “ institutional trustee ” means the Trustee.

 

“ obligor ” on the indenture securities means the Company, any Subsidiary Guarantor, and any successor or other obligor on the indenture securities.

 

Section 105.           Conflict with TIA .  If any provision hereof limits, qualifies or conflicts with a provision of the TIA that is required under the TIA to be a part of and govern this Indenture, the latter provision shall control.  If any provision of this Indenture modifies or excludes any provision of the TIA that may be so modified or excluded, the latter provision shall be deemed ( i ) to apply to this Indenture as so modified or ( ii ) to be excluded, as the case may be.

 

Section 106.           Compliance Certificates and Opinions .  Upon any application or request by the Company or by any other obligor upon the Notes (including any Subsidiary Guarantor) to the Trustee to take any action under any provision of this Indenture, the Company or such other obligor (including any Subsidiary Guarantor), as the case may be, shall furnish to the Trustee such certificates and opinions as may be required under the TIA.  Each such certificate or opinion shall be given in the form of one or more Officer’s Certificates, if to be given by an Officer, or an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the TIA and any other requirements set forth in this Indenture.  Notwithstanding the foregoing, in the case of any such request or application as to which the furnishing of any Officer’s Certificate or Opinion of Counsel is specifically required by any provision of this Indenture relating to such particular request or application, no additional certificate or opinion need be furnished.

 

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (except for certificates provided for in Section 406 ) shall include:

 

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(1)           a statement that the individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

 

(2)           a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

 

(3)           a statement that, in the opinion of such individual, he or she made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and

 

(4)           a statement as to whether, in the opinion of such individual, such condition or covenant has been complied with.

 

Section 107.           Form of Documents Delivered to Trustee .  In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

 

Any certificate or opinion of an Officer may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such Officer knows that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous.  Any such certificate or opinion of counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an Officer or Officers to the effect that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows that the certificate or opinion or representations with respect to such matters are erroneous.

 

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

 

Section 108.           Acts of Noteholders; Record Dates .

 

(a)           Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee, and, where it is hereby expressly required, to the Company, as the case may be.  Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “ Act ” of the Holders signing such instrument or instruments.  Proof

 

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of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 701 ) conclusive in favor of the Trustee, the Company and any other obligor upon the Notes, if made in the manner provided in this Section 108 .

 

(b)           The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof.  Where such execution is by an officer of a corporation or a member of a partnership or other legal entity other than an individual, on behalf of such corporation or partnership or entity, such certificate or affidavit shall also constitute sufficient proof of such Person’s authority.  The fact and date of the execution of any such instrument or writing, or the authority of the person executing the same, may also be proved in any other manner that the Trustee deems sufficient.

 

(c)           The ownership of Notes shall be proved by the Note Register.

 

(d)           Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Note shall bind the Holder of every Note issued upon the transfer thereof or in exchange therefor or in lieu thereof, in respect of anything done, suffered or omitted to be done by the Trustee, the Company or any other obligor upon the Notes in reliance thereon, whether or not notation of such action is made upon such Note.

 

(e)           ( i )  The Company may set any day as a record date for the purpose of determining the Holders of Outstanding Notes entitled to give, make or take any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders of Notes, provided that the Company may not set a record date for, and the provisions of this paragraph shall not apply with respect to, the giving or making of any notice, declaration, request or direction referred to in the next paragraph.  If any record date is set pursuant to this paragraph, the Holders of Outstanding Notes on such record date (or their duly designated proxies), and no other Holders, shall be entitled to take the relevant action, whether or not such Persons remain Holders after such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Notes on such record date.  Nothing in this paragraph shall be construed to prevent the Company from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite principal amount of Outstanding Notes on the date such action is taken.  Promptly after any record date is set pursuant to this paragraph, the Company, at its expense,  shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Trustee in writing and to each Holder of Notes in the manner set forth in Section 110 .

 

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(ii)           The Trustee may set any day as a record date for the purpose of determining the Holders of Outstanding Notes entitled to join in the giving or making of ( A ) any Notice of Default, ( B ) any declaration of acceleration referred to in Section 602 , ( C ) any request to institute proceedings referred to in Section 607(ii)  or (D ) any direction referred to in Section 612 , in each case with respect to Notes.  If any record date is set pursuant to this paragraph, the Holders of Outstanding Notes on such record date, and no other Holders, shall be entitled to join in such notice, declaration, request or direction, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Notes on such record date.  Nothing in this paragraph shall be construed to prevent the Trustee from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite principal amount of Outstanding Notes on the date such action is taken.  Promptly after any record date is set pursuant to this paragraph, the Trustee, at the Company’s expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Company in writing and to each Holder of Notes in the manner set forth in Section 110 .

 

(iii)          With respect to any record date set pursuant to this Section 108 , the party hereto that sets such record dates may designate any day as the “ Expiration Date ” and from time to time may change the Expiration Date to any earlier or later day; provided that no such change shall be effective unless notice of the proposed new Expiration Date is given to the Company or the Trustee, whichever such party is not setting a record date pursuant to this Section 108(e)  in writing, and to each Holder of Notes in the manner set forth in Section 110 , on or prior to the existing Expiration Date.  If an Expiration Date is not designated with respect to any record date set pursuant to this Section 108 , the party hereto that set such record date shall be deemed to have initially designated the 180th day after such record date as the Expiration Date with respect thereto, subject to its right to change the Expiration Date as provided in this paragraph.  Notwithstanding the foregoing, no Expiration Date shall be later than the 180th day after the applicable record date.

 

(iv)          Without limiting the foregoing, a Holder entitled hereunder to take any action hereunder with regard to any particular Note may do so with regard to all or any part of the principal amount of such Note or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such principal amount.

 

(v)           Without limiting the generality of the foregoing, a Holder, including the Depositary, that is the Holder of a Global Note, may make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice,

 

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consent, waiver or other action provided in this Indenture to be made, given or taken by Holders, and the Depositary, as the Holder of a Global Note, may provide its proxy or proxies to the beneficial owners of interests in any such Global Note through such depositary’s standing instructions and customary practices.

 

(vi)          The Company may fix a record date for the purpose of determining the persons who are beneficial owners of interests in any Global Note held by the Depositary entitled under the procedures of such depositary to make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders.  If such a record date is fixed, the Holders on such record date or their duly appointed proxy or proxies, and only such persons, shall be entitled to make, give or take such request, demand, authorization, direction, notice, consent, waiver or other action, whether or not such Holders remain Holders after such record date.  No such request, demand, authorization, direction, notice, consent, waiver or other action shall be valid or effective if made, given or taken more than 90 days after such record date.

 

Section 109.           Notices, etc., to Trustee and Company .  Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with,

 

(1)           the Trustee by any Holder or by the Company or by any other obligor upon the Notes shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at Normandale Lake Center, 8400 Normandale Lake Blvd., Suite 925, Bloomington, MN 55437, Attn: Corporate Client Services (phone: 302-636-6000; fax: 302-636-4143), or at any other address furnished in writing to the Company by the Trustee, or

 

(2)           the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder if in writing and mailed, first-class postage prepaid, to the Company at The ServiceMaster Company, 860 Ridge Lake Boulevard, Memphis, TN 38120, Attention:  Treasurer (telephone:  901-766-1400; telecopier:  901-766-1107); with copies to Debevoise & Plimpton LLP, 919 Third Avenue, New York, New York 10022, Attention:  David A. Brittenham, Esq. and Peter J. Loughran, Esq. (telephone:  212-909-6000; telecopier:  212-909-6836), or at any other address previously furnished in writing to the Trustee by the Company.

 

(3)           The Company or the Trustee, by notice to the other, may designate additional or different addresses for subsequent notices or communications.

 

Section 110.           Notices to Holders; Waiver .  Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, or by overnight air courier guaranteeing next day delivery, to each Holder affected by such event, at such Holder’s address as it appears in the Note Register, not later than the latest date, and not earlier than the

 

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earliest date, prescribed for the giving of such notice.  In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders.

 

Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice.  Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

 

In case, by reason of the suspension of regular mail service, or by reason of any other cause, it shall be impossible to mail notice of any event as required by any provision of this Indenture, then such notification as shall be made with the approval of the Trustee (such approval not to be unreasonably withheld) shall constitute a sufficient notification for every purpose hereunder.

 

Section 111.           Effect of Headings and Table of Contents .  The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

 

Section 112.           Successors and Assigns .  All covenants and agreements in this Indenture by the Company shall bind its respective successors and assigns, whether so expressed or not.  All agreements of the Trustee in this Indenture shall bind its successors.

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