Amendment No. 5 Agreement of Limited Partnership Of ServiceMaster Residential/Commercial Services Limited Partnership

 

 

Provisions

 

NOW THEREFORE, in consideration of the commitments contained in this Amendment and for other good and valuable consideration, the receipt and sufficiency of which the parties acknowledge, the parties agree as follows:

 

1.         Assignment of Partnership Interest . Consumer Services LP assigns its 1% general partnership interest to SM Clean.

 

2.         Partners after Assignment . As a result of the transaction contemplated by this Amendment, SM Clean is the sole general partner of Res/Com LP and Consumer Services LP is the sole limited partner of Res/Com LP.

 

3.         No Other Changes . The parties make no changes to the LP Agreement other than the changes described in this Amendment.

 

IN WITNESS WHEREOF, the parties have executed this Amendment on the date first mentioned above.

 

	ServiceMaster Consumer Services
	Limited Partnership
	By:	ServiceMaster Consumer Services, Inc.
	By:	/s/ Lawrence L. Mariano
		Lawrence L. Mariano, III
		Senior Vice President
	SM Clean L.L.C.
	By:	/s/ Amelia N. Blanton
		Amelia N. Blanton
		Vice President & Secretary

 

 

Amendment No. 4

 

Agreement of Limited Partnership
Of
ServiceMaster Residential/Commercial Services Limited Partnership
Dated December 4, 1990,
As amended August 5, 1998

 

THIS AMENDMENT is made on December 31, 2002, by and between ServiceMaster Consumer Services Limited Partnership, a Delaware limited partnership (“Consumer Services LP”) and ServiceMaster Consumer Services, Inc., a Delaware corporation (“Consumer Services”).

 

Recitals

 

A.       The current partners of ServiceMaster Residential/Commercial Services Limited Partnership (“Res/Com LP”) are as follows:

 

Company		State of  Organization		Partner Type
ServiceMaster Consumer Services Limited Partnership		Delaware		Limited Partner - 99%
ServiceMaster Consumer Services, Inc.		Delaware		General Partner - 1%

 

B.        Pursuant to that certain Agreement of Limited Partnership of ServiceMaster Residential/Commercial Services Limited Partnership, dated December 4, 1990, as amended August 5, 1998 (“LP Agreement”), Consumer Services has exercised its right to assign its 1% general partnership interest to Consumer Services LP.

 

C.        As a result of the transaction contemplated by this Amendment, the partners of Res/Com LP will be as follows:

 

Company		State of  Organization		Partner Type
ServiceMaster Consumer Services Limited Partnership		Delaware		Limited Partner - 99%
ServiceMaster Consumer Services Limited Partnership		Delaware		General Partner - 1%

 

 

Provisions

 

NOW THEREFORE, in consideration of the commitments contained in this Amendment and for other good and valuable consideration, the receipt and sufficiency of which the parties acknowledge, the parties agree as follows:

 

1.         Assignment of Partnership Interest . Consumer Services assigns its 1% general partnership interest to Consumer Services LP.

 

2.         Partners after Assignment . As a result of the transaction contemplated by this Amendment, Consumer Services LP is the sole general partner of Res/Com LP and Consumer Services LP is the sole limited partner of Res/Com LP.

 

3.         No Other Changes . The parties make no changes to the LP Agreement other than the changes described in this Amendment.

 

IN WITNESS WHEREOF, the parties have executed this Amendment on the date first mentioned above.

 

	ServiceMaster Consumer Services
	Limited Partnership
	By:	ServiceMaster Consumer Services, Inc.
	By:	/s/ Lawrence L. Mariano
		Lawrence L. Mariano, III
		Senior Vice President
	ServiceMaster Consumer Services, Inc.
	By:	/s/ Ernest J. Mrozek
		Ernest J. Mrozek
		President

 

 

Amendment No. 3

 

Agreement of Limited Partnership
Of
ServiceMaster Residential/Commercial Services Limited Partnership
Dated December 4, 1990,
As amended August 5, 1998

 

THIS AMENDMENT is made on December 31, 2002, by and between ServiceMaster Consumer Services Limited Partnership, a Delaware limited partnership (“Consumer Services LP”) and ServiceMaster Residential/Commercial Services Management Corporation, a Delaware corporation (“Res/Com Corp.”).

 

Recitals

 

A.       The current partners of ServiceMaster Residential/Commercial Services Limited Partnership (“Res/Com LP”) are as follows:

 

Company		State of  Organization		Partner Type
ServiceMaster Consumer Services Limited Partnership		Delaware		Limited Partner - 99%
ServiceMaster Residential/ Commercial Services Management Corporation		Delaware		General Partner -1%

 

B.        Pursuant to that certain Agreement of Limited Partnership of ServiceMaster Residential/Commercial Services Limited Partnership, dated December 4, 1990, as amended August 5, 1998 (“LP Agreement”), Res/Com Corp has exercised its right to assign its 1% general partnership interest to ServiceMaster Consumer Services, Inc. (“Consumer Services”).

 

C.        As a result of the transaction contemplated by this Amendment, the partners of Res/Com LP will be as follows:

 

Company		State of  Organization		Partner Type
ServiceMaster Consumer Services Limited Partnership		Delaware		Limited Partner - 99%
ServiceMaster Consumer Services, Inc.		Delaware		General Partner - 1%

 

 

Provisions

 

NOW THEREFORE, in consideration of the commitments contained in this Amendment and for other good and valuable consideration, the receipt and sufficiency of which the parties acknowledge, the parties agree as follows:

 

1.         Assignment of Partnership Interest . Res/Com Corp. assigns its 1% general partnership interest to Consumer Services.

 

2.         Partners after Assignment . As a result of the transaction contemplated by this Amendment, Consumer Services is the sole general partner of Res/Com LP and Consumer Services LP is the sole limited partner of Res/Com LP.

 

3.         No Other Changes . The parties make no changes to the LP Agreement other than the changes described in this Amendment.

 

IN WITNESS WHEREOF, the parties have executed this Amendment on the date first mentioned above.

 

	ServiceMaster Consumer Services
	Limited Partnership
	By:	ServiceMaster Consumer Services, Inc.
	By:	/s/ Lawrence L. Mariano
		Lawrence L. Mariano, III
		Senior Vice President
	ServiceMaster Residential/Commercial
	Services Management Corporation
	By:	/s/ Amelia N. Blanton
		Amelia N. Blanton
		Vice President

 

 

Amendment No. 2

 

Agreement of Limited Partnership
of
ServiceMaster Residential/Commercial Services Limited Partnership
dated December 4, 1990

 

THIS AMENDMENT is made on August 5, 1998 by and among ServiceMaster Consumer Services Limited Partnership, a Delaware limited partnership (“ServiceMaster Consumer Services L.P.”), and ServiceMaster Residential/Commercial Services Limited Partnership, a Delaware limited partnership (“ServiceMaster Residential/Commercial Services L.P.”).

 

Recitals

 

A.       The current partners of ServiceMaster Residential/Commercial Services L.P. are as follows:

 

Company		State of  Organization		Partner Type
ServiceMaster Consumer Services L.P.		Delaware		Limited Partner—99.09%
ServiceMaster Residential/Commercial Services Management Corporation		Delaware		General Partner—.01%

 

C.        Pursuant to that certain Agreement of Limited Partnership of ServiceMaster Residential/Commercial Services L.P., dated December 4, 1990 (“LP Agreement”), ServiceMaster Consumer Services L.P. has exercised its right to assign its .09% partner interest to ServiceMaster Residential/Commercial Services Management Corporation.

 

D.        As a result of the transaction contemplated by this Amendment, the partners of ServiceMaster Residential/Commercial Services L.P. will be as follows:

 

Company		State of  Organization		Partner Type
ServiceMaster Consumer Services L.P.		Delaware		Limited Partner—99%
ServiceMaster Residential/Commercial Services Management Corporation		Delaware		General Partner—1%

 

Provisions

 

NOW THEREFORE, in consideration of the commitments contained in this Amendment and for other good and valuable consideration, the receipt and sufficiency of which the parties acknowledge, the parties agree as follows:

 

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1.         Assignment of Partner Interest . ServiceMaster Consumer Services L.P. assigns its .09% partner interest to ServiceMaster Residential/Commercial Services Management Corporation.

 

2.         Partners after Withdrawal . As a result of the transaction contemplated by this Amendment, ServiceMaster Residential/Commercial Services Management Corporation is the sole general partner of ServiceMaster Residential/Commercial Services L.P., and ServiceMaster Consumer Services L.P. is the sole limited partner of ServiceMaster Residential/Commercial Services L.P.

 

3.         No Other Changes . The Parties make no changes to the LP Agreement other than the changes described in this Amendment.

 

IN WITNESS WHEREOF, the parties have executed this Amendment on the date first mentioned above.

 

ServiceMaster Residential/Commercial Services Management Corporation			ServiceMaster Consumer Services Limited Partnership
			By:	ServiceMaster Consumer Services, Inc., general partner
By:	/s/ Michael M. Isakson		By:	/s/ Ernest J. Mrozek
	Michael M. Isakson			Ernest J. Mrozek
	President			President

 

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Amendment No. 1

 

Agreement of Limited Partnership
of
ServiceMaster Residential/Commercial Services Limited Partnership
dated December 4, 1990

 

THIS AMENDMENT is made on August 5, 1998 by and among TSSGP Limited Partnership, a Delaware limited partnership (“TSSGP”), and ServiceMaster Residential/Commercial Services Limited Partnership, a Delaware limited partnership (“ServiceMaster Residential/Commercial Services L.P.”).

 

Recitals

 

A.       The current partners of ServiceMaster Residential/Commercial Services L.P. are as follows:

 

Company		State of  Organization		Partner Type
ServiceMaster Consumer Services L.P.		Delaware		Limited Partner—99%
ServiceMaster Residential/Commercial Services Management Corporation		Delaware		General Partner—.01%
TSSGP Limited Partnership		Delaware		Special General Partner—.09%

 

B.        TSSGP desires to withdraw as the Special General Partner of ServiceMaster Residential/Commercial Services L.P.

 

C.        ServiceMaster Consumer Services L.P. and ServiceMaster Residential/Commercial Services Management Corporation desire to approve the withdrawal of TSSGP as the Special General Partner under the Agreement of Limited Partnership of ServiceMaster Residential/Commercial Services L.P., dated December 4, 1990 (“LP Agreement”).

 

D.        As a result of the transaction contemplated by this Amendment, the partners of ServiceMaster Residential/Commercial Services L.P. will be as follows:

 

Company		State of  Organization		Partner Type
ServiceMaster Consumer Services L.P.		Delaware		Limited Partner—99.09%
ServiceMaster Residential/Commercial Services Management Corporation		Delaware		General Partner—.01%

 

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Provisions

 

NOW THEREFORE, in consideration of the commitments contained in this Amendment and for other good and valuable consideration, the receipt and sufficiency of which the parties acknowledge, the parties agree as follows:

 

1.         Withdrawal of TSSGP . TSSGP withdraws as the Special General Partner from ServiceMaster Residential/Commercial Services L.P.

 

2.         Approval of Withdrawal . ServiceMaster Consumer Services L.P. and ServiceMaster Residential/Commercial Services Management Corporation approve of the withdrawal by TSSGP as the Special General Partner under the LP Agreement.

 

3.         Partners after Withdrawal . As a result of the withdrawal of TSSGP, ServiceMaster Residential/Commercial Services Management Corporation is the sole general partner of ServiceMaster Residential/Commercial Services L.P., and ServiceMaster Consumer Services L.P. is the sole limited partner of ServiceMaster Residential/Commercial Services L.P.

 

4.         No Other Changes . The Parties make no changes to the LP Agreement other than the changes described in this Amendment.

 

IN WITNESS WHEREOF, the parties have executed this Amendment on the date first mentioned above.

 

ServiceMaster Residential/Commercial Services Management Corporation			TSSGP Limited Partnership (withdrawing limited partner)
			By:	TSSGP Management Corporation, general partner
By:	/s/ Michael M. Isakson		By:	/s/ Robert F. Keith
	Michael M. Isakson			Robert F. Keith
	President			Vice President

 

 

ServiceMaster Consumer Services Limited Partnership

 

By:	ServiceMaster Consumer Services,  Inc., general partner
By:	/s/ Ernest J. Mrozek
	Ernest J. Mrozek
	President

 

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State of Illinois	)
	)  SS
County of DuPage	)

 

On August 5, 1998, before me personally came Robert F. Keith, to me known, who, being duly sworn, said that he is Vice President of TSSGP Management Corporation, the general partner of TSSGP Limited Partnership, the limited partnership described in and which executed the foregoing assignment instrument, and that he signed his name thereto on behalf of the limited partnership pursuant to all requisite authority.

 

My commission expires: 3/6/2004

 

	“OFFICIAL SEAL”			/s/ Jean D. Koenig
	JEAN D. KOENIG			Notary Public
	NOTARY PUBLIC, STATE OF ILLINOIS
	MY COMMISSION EXPIRES 3/6/2004

 

Acknowledgment

 

ServiceMaster Consumer Services L.P. acknowledges receipt of the foregoing assignment instrument and receipt of the Partner Interest.

 

	ServiceMaster Consumer Services Limited
	Partnership
	By:	ServiceMaster Consumer Services, Inc., general partner
	By:	/s/ Ernest J. Mrozek
		Ernest J. Mrozek
		President

 

 

Consent of Limited Partner

 

ServiceMaster Consumer Services L.P., a Delaware limited partnership and the limited partner of ServiceMaster Residential/Commercial Services L.P., a Delaware limited partnership, consents to the assignment and transfer of the Partner Interest by TSSGP to ServiceMaster Consumer Services L.P. pursuant to the foregoing assignment instrument.

 

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TABLE OF CONTENTS

 

	ARTICLE I Organizational Matters
1.1	Formation	1
1.2	Name	1
1.3	Registered Office; Principal Office	1
1.4	Power of Attorney	1
1.5	Term	3
	ARTICLE II Definitions
2.1	Defined Terms	3
	ARTICLE III Purpose
3.1	Purpose	8
	ARTICLE IV Capital Contributions
4.1	General Partner	9
4.2	Limited Partner	9
4.3	Capital Accounts	9
4.4	Computation Rules	10
4.5	Effect of Transfer of Percentage Interest	11
4.6	Issuance of Additional Percentage Interests	12
4.7	Redemptions	12
4.8	Interest	12
4.9	No Withdrawal	12
4.10	Loans From Partners	12

 

 

	ARTICLE V Allocations
5.1	Allocations for Capital Account Purposes	13
5.2	Allocations for Tax Purposes	15
	ARTICLE VI Distributions of Net Cash Flow
6.1	Distributions of Net Cash Flow Not Within the Context of a Dissolution and Termination of the Partnership	17
6.2	Distributions of Net Cash Flow in the Context of a Dissolution and Termination of the Partnership	17
	ARTICLE VII Management and Operation of the Business
7.1	Management	17
7.2	Certificate of Limited Partnership	19
7.3	Reliance by Third Parties	19
7.4	Compensation and Reimbursement of the General Partner	20
7.5	Outside Activities	20
7.6	Partnership Funds	21
7.7	Loans to or From the General Partner: Contracts with Affiliates	21
7.8	Indemnification of the General Partner	22
7.9	Liabilities of the General Partner and Affiliates	24
7.10	Resolution of Conflicts of Interest	24
7.11	Other Matters Concerning the General Partner	25
7.12	Title to Partnership Assets	25

 

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7.13	General Partner’s Representations, Warranties and Covenants	25
	ARTICLE VIII Rights and Obligations of the Limited Partner
8.1	Limitation of Liability	25
8.2	Management of Business	25
8.3	Outside Activities	26
8.4	Return of Capital	26
8.5	Right of Limited Partner Relating to the Partnership	26
	ARTICLE IX Books, Records, Accounting and Reports
9.1	Records of the Partnership	27
9.2	Accounting Matters	27
9.3	Reports	27
9.4	Other Information	27
	ARTICLE X Tax Matters
10.1	Preparation of Tax Returns	28
10.2	Taxable Year	28
10.3	Tax Elections	28
10.4	Tax Controversies	28
10.5	Organization Expense	28
10.6	Taxation as a Partnership	28
10.7	Tax Shelter Investor List	28

 

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	ARTICLE XI Transfer of Interests
11.1	Transfer	29
11.2	Transfer of Interest of General Partner	29
11.3	Transfer of Interest of Limited Partner	29
	ARTICLE XII Admission of substituted Partners
12.1	Admission of Successor Limited Partner	29
12.2	Amendment of Agreement and of Certificate of Limited Partnership	29
	ARTICLE XIII Dissolution and Liquidation
13.1	Dissolution	30
13.2	Continuation of the Business of the Partnership After Dissolution	30
13.3	Liquidation	31
13.4	Distribution in Kind	32
13.5	Cancellation of Certificate of Limited Partnership	33
13.6	Reasonable Time for Winding Up	33
13.7	Return of Capital	33
13.8	Waiver of Partition	33
	ARTICLE XIV Amendment of Partnership Agreement
14.1	Amendment to be Adopted Solely by the General Partner	33
14.2	Amendment Procedures	34

 

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	ARTICLE XV General Provisions
15.1	Address	34
15.2	Notices	34
15,3	Titles and Captions	35
15.4	Pronouns and Plurals	35
15.5	Binding Effect	35
15.6	Integration	35
15.7	Creditors	35
15.8	Waiver	35
15.9	Counterparts	35
15.10	Applicable Law	35
15.11	Invalidity of Provisions	35
15.12	Enforcement Costs	35

 

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AGREEMENT OF LIMITED PARTNERSHIP

OF

SERVICEMASTER RESIDENTIAL/COMMERCIAL SERVICES

LIMITED PARTNERSHIP

 

This Agreement of Limited Partnership is entered into on the 4th day of December, 1990 by and between ServiceMaster Residential/Commercial Services Management Corporation, a Delaware corporation, as the general partner (the “General Partner”) and ServiceMaster Consumer Services Limited Partnership, a Delaware limited partnership, as the limited partner (the “Limited Partner”) (collectively, the “Partners”).

 

ARTICLE I
Organizational Matters

 

1.1        Formation . The Partners form a limited partnership (the “Partnership”) pursuant to the provisions of the Delaware Act. Except as expressly provided herein to the contrary, the rights and obligations of the Partners and the administration and termination of the Partnership shall be governed by the Delaware Act. The partnership interest of any Partner shall be personal property for all purposes.

 

1.2        Name . The name of the Partnership shall be, and the business of the Partnership shall be conducted under the name of, “ServiceMaster Residential/Commercial Services”. The Partnership’s business may be conducted under any other name or names deemed advisable by the General Partner, including the name of the General Partner or any Affiliate and including the name “Res/Com”. The words “Limited Partnership” or the abbreviation “L.P.” shall be included in the Partnership’s name where necessary for the purposes of complying with the laws of any jurisdiction that so requires. The General Partner in its sole discretion may change the name of the Partnership at any time and from time to time.

 

1.3        Registered Office: Principal Office . (a) The address of the registered office of the Partnership in the State of Delaware shall be Corporation Trust Center, 1229 Orange Street, Wilmington, New Castle County, Delaware 19801. The registered agent for service of process on the Partnership in the State of Delaware at such registered office shall be The Corporation Trust Company.

 

(b)        The principal office of the Partnership shall be 855 Ridge Lake Boulevard, Memphis, Tennessee 38120, or such other place as the General Partner may from time to time designate. The Partnership may maintain offices at such other place or places as the General Partner deems advisable.

 

1.4        Power of Attorney . (a) Each Partner constitutes and appoints the General Partner and the Liquidator (as hereinafter defined), and any successor to either by merger, assignment,

 

 

election or otherwise, with full power of substitution, as his true and lawful agent and attorney-in-fact, with full power and authority in his name, place and stead, to:

 

(i)                      execute, swear to, acknowledge, deliver, file and record in the appropriate office:

 

(A)                  this Agreement, all certificates and other instruments and all amendments thereof which the General Partner or the Liquidator deems reasonable and appropriate or necessary to form, qualify or continue the qualification of the Partnership as a limited partnership (or a partnership in which limited partners have limited liability) in the State of Delaware and in all other jurisdictions in which the Partnership may conduct business or own property;

 

(B)                    all instruments which the General Partner or the Liquidator deems appropriate or necessary to reflect any amendment, change, modification or restatement of this Agreement made in accordance with its terms;

 

(C)                    conveyances and other instruments or documents which the General Partner or the Liquidator deems appropriate or necessary to reflect the dissolution and liquidation of the Partnership pursuant to the terms of this Agreement, including a certificate of cancellation; and

 

(D)                   all instruments relating to the admission, withdrawal or substitution of a partner pursuant to Article XI;

 

(ii)                     execute, swear to and acknowledge all ballots, consents, approvals, waivers, certificates and other instruments appropriate or necessary in the sole discretion of the General Partner or the Liquidator, to make, evidence, give, confirm or ratify any vote, consent, approval, agreement or other action which is made or given by the Partners hereunder or is consistent with the terms of this Agreement

 

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and/or appropriate or necessary in the sole discretion of the General Partner or the Liquidator, to effectuate the terms or intent of this Agreement.

 

Nothing herein contained shall be construed as authorizing the General Partner to amend this Agreement except in accordance with Article XIV or as otherwise expressly provided for in this Agreement.

 

The foregoing power of attorney is irrevocable and a power coupled with an interest, and it shall survive and not be affected by the subsequent dissolution, bankruptcy or termination of any Partner or the transfer of all or any portion of its Percentage Interest and shall extend to the Partner’s successors, assigns and representatives. Each Partner, in its capacity as such, agrees to be bound by any representations made by the General Partner or the Liquidator, acting in good faith pursuant to such power of attorney; and each Partner waives any and all defenses which may be available to contest, negate or disaffirm the action of the General Partner or the Liquidator, taken in good faith under such power of attorney. Each Partner shall execute and deliver to the General Partner or the Liquidator, within 15 days after receipt of the General Partner’s or the Liquidator’s request therefor, such further designations, powers of attorney and other instruments as the General Partner or the Liquidator deem necessary to effectuate this Agreement and the purposes of the Partnership.

 

1.5        Term . The Partnership commenced upon the filing of the Certificate of Limited Partnership in accordance with the Delaware Act and the Partnership shall continue in existence until the close of the Partnership business on December 31, 2040, or until the earlier termination of the Partnership in accordance with the provisions of Article XIII.

 

ARTICLE II

Definitions

 

2.1        Defined Terms . Unless clearly indicated to the contrary, the following definitions shall, for all purposes, be applied to the terms used in this Agreement:

 

“ Adjusted Capital Account Deficit ” means, with respect to each Partner, the deficit balance, if any, in a Partner’s Capital Account as of the end of the relevant fiscal year, after giving effect to the following adjustments:

 

 (1)                   Credit to such Capital Account any amounts which such Partner is obligated to restore pursuant to any provision of this Agreement or is

 

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deemed to be obligated to restore pursuant to the penultimate sentence of Treasury Regulation sec. 1.704-1(b) (4) (iv) (f);

 

(2)                      Debit to such Capital Account the items described in Treasury Regulation sec. 1. 704-1(b) (2) (ii) (d) (4), (5) and (6).

 

The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Treasury Regulation sec. 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

 

“ Adjusted Property ” means any property for which the Carrying Value has been adjusted pursuant to Section 4.4, 4.5 or 4.6. Once an Adjusted Property is deemed distributed by, and recontributed to, the Partnership for federal income tax purposes upon a termination thereof pursuant to Section 708 of the Code, such property shall thereafter constitute a Contributed Property until the Carrying Value of such property is further adjusted pursuant to Section 4.4, 4.5 or 4.6.

 

“ Affiliate ” means any Person that directly or indirectly controls, is controlled by, or is under common control with, the Person in question. As used in the definition of “Affiliate”, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

 

“ Agreed Value ” of any Contributed Property means the fair market value of such property or other consideration as determined by the General Partner using such reasonable method of valuation as it may adopt; provided, the Agreed Value of any property deemed contributed to the Partnership for federal income tax purposes upon termination thereof pursuant to Section 708 of the Code shall be determined in accordance with Section 4.4. Subject to Section 4.4, the General Partner shall, in its discretion, use such method as it deems reasonable and appropriate to allocate the aggregate Agreed Value of Contributed Properties transferred to the Partnership in a single or integrated transaction among each separate property on a basis proportional to their fair market values, taking into account Code Section 1060 principles where applicable.

 

“ Book-Tax Disparity ” means, with respect to a Contributed Property or Adjusted Property, as of any date of determination, the difference between the Carrying Value of such Contributed Property or Adjusted Property and the

 

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adjusted basis thereof for federal income tax purposes. A Partner’s or Assignee’s share of the Partnership’s Book-Tax Disparities in all of its Contributed Property and Adjusted Property will be reflected by the difference between such Partner’s or Assignee’s Capital Account balance, as maintained pursuant to Article 5, and such balance had the Capital Account been maintained strictly in accordance with tax accounting principles.

 

“ Capital Account ” means the capital account maintained for a Partner pursuant to Section 4.3.

 

“ Capital Contribution ” means any cash and cash equivalent which a Partner contributes to the Partnership pursuant to Article IV.

 

“ Carrying Value ” means (a) with respect to a Contributed Property, the Agreed Value of such property reduced (but not below zero) by all depreciation, cost recovery deductions and amortization deductions with respect to such property charged to the Capital Accounts of the Partners and adjusted to reflect any other changes to such Carrying Value for sales, retirements and other dispositions of assets included in a Contributed Property, as of the time of determination; and (b) with respect to any other property, the adjusted basis thereof for federal income tax purposes, as of the time of determination. The Carrying Value of any property shall be adjusted from time to time in accordance with Section 4.4, 4.5 or 4.6.

 

“ Certificate of Limited Partnership ” means the Certificate of Limited Partnership filed with the Secretary of State of the State of Delaware pursuant to Section 1.4, as it may be amended and restated from time to time.

 

“ Code ” means the Internal Revenue Code of 1986, as amended and in effect from time to time, and applicable regulations thereunder. Any reference herein to a specific section or sections of the Code shall be deemed to include a reference to any corresponding provision of future law.

 

“ Commencement Date ” means December 4, 1990.

 

“ Contributed Property ” means each Partner’s interest in each property or other consideration, in such form as may be permitted by the Delaware Act (but excluding cash and cash equivalents), which is contributed to the Partnership by such Partner (or deemed contributed to the Partnership upon termination thereof pursuant to Section 708 of the Code). Once the Carrying Value of a Contributed Property is adjusted pursuant to Section 4.5 or 4.6, such property shall no longer constitute a Contributed Property, but shall thereafter

 

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gain for the period over (b) the total amount of such items of deduction and loss for the period.

 

“ Net Loss ” means, for any period with respect to which the Partnership has any item of income, gain, deduction or loss (as determined under Sections 4.4, 4.6, 4.7 and 5.1 (f)) which is to be reflected in the Capital Accounts, the excess (if and) of (a) the total amount of such items of deduction and loss for the period over (b) the total amount of such items of income and gain for the period.

 

“ Nonrecourse Deductions ” has the meaning set forth in Treasury Regulation section 11.704-lT(b)(4)(iv).

 

“ Opinion of Counsel ” means a written opinion of counsel acceptable to the General Partner. Such counsel may be the regular counsel to the Partnership or the General Partner.

 

“ Participation Agreement ” means the agreement having that name and dated as of November 8, 1990 by and among The ServiceMaster Company Limited Partnership and Waste Management, Inc. et al.

 

“ Partners ” means the General Partner and the Limited Partner.

 

“ Partnership ” means the limited partnership organized pursuant to this Agreement.

 

“ Percentage Interest ” means the ownership interest of a Partner in the Partnership expressed as a percentage. At the Commencement Date, the Percentage Interests of the Partners are: the General Partner: 1%; the Limited Partner: 99%.

 

“ Person ” means an individual or a corporation, partnership, trust, or unincorporated organization, association or other entity.

 

“ Recapture Income ” means any gain recognized by the Partnership (computed without regard to any adjustment required by Section 734 or 743 of the Code) upon the disposition of any property or asset of the Partnership that does not constitute capital gain or Section 1231 gain for federal income tax purposes because such gain represents the recapture of deductions previously taken with respect to such property or assets.

 

“ Residual Gain ” or “ Residual Loss ” means any net gain or net loss, as the case may be, of the Partnership recognized for federal income tax purposes resulting from a sale, exchange or other disposition of a Contributed Property or an Adjusted Property, to the extent such net gain or net loss is

 

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not allocated pursuant to Section 6.2 (b) (1) or (2) to eliminate Book-Tax Disparities.

 

“ ServiceMaster Consumer Services Affiliate ” means any Affiliate of ServiceMaster Consumer Services Limited Partnership.

 

“ Treasury Regulations ” means regulations promulgated pursuant to the Code. Any reference to a specific regulation or regulations of the Code shall be deemed to include a reference to any corresponding provision of future Treasury Regulations.

 

“ Unrealized Gain ” attributable to a Partnership property means, as of any date of determination, the excess, if any, of the fair market value of such property (as determined pursuant to Section 4.6 or 4.7) as of such date of determination over the Carrying Value of such property as of such date of determination (prior to any adjustment to be made pursuant to Section 4.6 or 4.7 as of such date).

 

“ Unrealized Loss ” attributable to a Partnership property means, as of any date of determination, the excess, if any, of the Carrying Value of such property as of such date of determination (prior to any adjustment to be made pursuant to Section 4.6 or 4.7 as of such date) over the fair market value of such property (as determined pursuant to Section 4.6 or 4.7) as of such date of determination.

 

ARTICLE III
Purpose

 

3.1        Purpose . The purpose and business of the Partnership shall be the granting of franchises which authorize the franchisees to furnish home cleaning services, commercial cleaning services, carpet and upholstery cleaning services, disaster restoration services, lawn care services, and window washing services in designated locations in the United States and Canada, all under the name “ServiceMaster”, except that in the case of the window washing services, the franchise authorizes the use of the name “Classic Care”; the granting of distributor arrangements which authorize the distributor to provide supporting services and products to franchisees (and, in the case of Canada only, to grant franchises under the ServiceMaster trade name); and providing directly in certain parts of the United States the franchisee support services which are provided by independent distributors in the rest of the country, with such direct supporting services being provided through ServiceMaster Direct Distributor Company Limited Partnership, a Delaware limited partnership. Such businesses shall include, without limitation, the acquisition, management, operation and disposition of the properties acquired by the Partnership as

 

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part of the transactions contemplated by the Participation Agreement, the carrying on of any businesses relating thereto or arising therefrom, the entering into any partnership, joint venture or other similar arrangement, to engage in any of the foregoing or the ownership of interests in any entity engaged in any of the foregoing, and anything incidental or necessary to the foregoing, all for the production of income and profit.

 

ARTICLE IV
Capital Contributions

 

4.1        General Partner . (a) The General Partner shall not be required to contribute to the capital of the Partnership except (i) as may be necessary to pay liabilities of the Partnership for which provision cannot otherwise be made through cash flow generated from operations of the Partnership or debt incurred in accordance with this Agreement or (ii) as otherwise expressly required pursuant to the provisions of this Agreement.

 

(b)        The General Partner will at all times while serving in such capacity retain its Percentage Interest which entitles the General Partner to a one percent (1%) participation in the Partnership’s income, gains, losses, deductions and credits, but only for so long as it continues to serve in such capacity.

 

4.2        Limited Partner . (a) On the Commencement Date, the Limited Partner shall contribute to the Partnership the Initial Properties and the Partnership shall assume (or take the Initial Properties subject to) all liabilities and other indebtedness which is directly related to the Initial Properties.

 

(b)        The contributions made by the Limited Partner pursuant to this Section 4.2 and the Agreed Value of such contributions for purposes of the Delaware Act shall be described and recorded in the books and records of the Partnership.

 

4.3        Capital Accounts . Separate Capital Accounts shall be maintained for each Partner in accordance with federal income tax accounting principles, maintained in accordance with Treasury Regulation Section 1.704-1(b). The Capital Account of each Partner shall be increased by: (i) the amount of any cash and the fair market value of any property contributed to the Partnership by such Partner (net of liabilities secured by such contributed property that the Partnership is considered to assume or take subject to); (ii) the amount of Partnership income and gain or items thereof allocated to such Partner; (iii) such Partner’s prorata share (determined in the same manner as such Partner’s share of income, gains, losses, deductions and credits) of any other amount received by the Partnership during such year which is exempt from federal income tax; and (iv) other items to the extent mandated by Treasury Regulation Section 1.704-1(b). The Capital Account of each Partner

 

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shall be reduced by: (i) the amount of money distributed to the Partner by the Partnership; (ii) the fair market value of property distributed by the Partnership to the Partner (net of liabilities secured by such distributed property that the Partner is considered to assume or take subject to) ; (iii) the amount of Partnership losses and deductions or items thereof allocated to the Partner; (iv) such Partner’s prorata share (determined in the same manner as such Partner’s prorata share of income, gains, losses, deductions or credits) of any other expenditures of the Partnership which are not deductible in computing the Partnership’s taxable income and which are not properly capitalized; and (v) other items to the extent mandated by Treasury Regulation Section 1.704(b).

 

4.4        Computation Rules . For purposes of computing the amount of any item of income, gain, deduction or loss to be reflected in the Capital Accounts, the determination, recognition and classification of any such item shall be the same as its determination, recognition and classification for federal income tax purposes (including any method of depreciation, cost recovery or amortization used for this purpose); provided that:

 

(i)         Solely for purposes of the application of the provisions hereof, the Partnership shall be treated as owning directly its proportionate share of all property owned by any partnership, joint venture or similar entity in which the Partnership has an ownership interest (as determined by the General Partner based upon the provisions of the governing documents of such entity);

 

(ii)        In accordance with the requirements of Section 704(b) of the Code, any deductions for depreciation, cost recovery or amortization attributable to a Contributed Property shall be determined as if the adjusted basis of such property on the date it was acquired by the Partnership were equal to the Agreed Value of such property. Upon an adjustment pursuant to Section 4.6 or 4.7 to the Carrying Value of any Partnership property subject to depreciation, cost recovery or amortization, any further deductions for such depreciation, cost recovery or amortization attributable to such property shall be determined (A) as if the adjusted basis of such property were equal to the Carrying Value of such property immediately following such adjustment and (B) using a rate of depreciation, cost recovery or amortization derived under the same method and useful life as is applied for federal income tax purposes; provided, however, that if the asset has a zero adjusted basis, depreciation, cost recovery or amortization deductions shall be determined using any reasonable method that the General Partner may adopt.

 

(iii)       Any income, gain or loss attributable to the taxable disposition of any property shall be determined by the Partnership as if the adjusted basis of such property as of

 

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the date of such disposition were equal in amount to the Partnership’s Carrying Value with respect to such property as of such date.

 

(iv)       If the Partnership’s adjusted basis in a depreciable or cost recovery property is reduced for federal income tax purposes pursuant to Section 48(q)(1) or 48(q)(3) of the Code (or any analogous provisions), the amount of such reduction shall, solely for purposes hereof, be deemed to be an additional depreciation or cost recovery deduction in the year such property is placed in service and shall be allocated among the Partners pursuant to Article V. Any restoration of such basis pursuant to Section 48(q)(2) (or any analogous provision) of the Code shall be allocated in the same manner to the Percentage Interests to which such deemed deduction was allocated.

 

(v)        All fees and other expenses incurred by the Partnership to promote the sale of (or to sell) an interest in the Partnership that can neither be deducted nor amortized under Section 709 of the Code shall be treated as an item of deduction and shall be allocated among the Partners pursuant to Article V.

 

(vi)       Except as otherwise provided in Treasury Regulation Section 1.704-1(b)