PARTNERSHIP AGREEMENT OF TRUGREEN LANDCARE

TABLE OF CONTENTS

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PARTNERSHIP AGREEMENT
OF
TRUGREEN LANDCARE PARTNERSHIP

This Partnership Agreement is entered into on September 1, 1999, by and between the Persons executing the “Schedule A Partner Signature Page” as general partners (all partners collectively referred to as “Partners”).

1.                     Organizational Matters

1.1                                  Formation. The Partners form a general partnership (“Partnership”) pursuant to the provisions of the California Act. The California Act shall govern the rights and obligations of the Partners and the administration and termination of the Partnership. 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, “TruGreen LandCare”. The Partnership’s business may be conducted under any other name or names deemed advisable by the unanimous consent of the Partners, including the name of any Partner or Partners.

1.3                                  Principal Office. The principal office of the Partnership shall be 860 Ridge Lake Boulevard, Memphis, Tennessee 38120, or such other place as the Partners may from time to time unanimously designate. The Partnership may maintain offices at such other place or places as the Partners unanimously deem advisable.

1.4                                  Term. The Partnership shall commence on the Commencement Date and shall continue until terminated according to Section 11 of this Agreement.

2.                     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:

“California Act” means the California Uniform Partnership Act, Cal. Corp. Code §§ 15001 et seq., as it may be amended from time to time, and any successor to such California Act.

“Capital Account” means the capital account maintained for a Partner pursuant to Section 4.2.

“Capital Contribution” means any cash and cash equivalent which a Partner contributes to the Partnership pursuant to Section 4.1.1.

“CFO” means the Vice President and Controller of TruGreen LawnCare.

“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 the date first mentioned above.

“Consumer Services” means ServiceMaster Consumer Services Limited Partnership, a Delaware limited partnership.

“Event of Dissolution” means an event described in Section 11.3.

“Fiscal Year” means the calendar year.

“Income Account” means the income account maintained for a Partner pursuant to Section 5.2.

“Net Income” means, for any period with respect to which the Partnership has any item of income, gain, deduction, or loss, the excess (if any) of (a) the total amount of such items of income and gain for the period over (b) the total amount of such items of deduction and loss for the period as determined for federal income tax purposes by the CFO.

“Net Loss” means, for any period with respect to which the Partnership has any item of income, gain, deduction or loss, the excess (if any) 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 as determined for federal income tax purposes by the CFO.

“Partners” means any Persons executing the “Schedule A Partner Signature Page” as general partners of the Partnership.

“Partnership” means the general 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 shown respectively in the Schedule A Partner Signature Pages.

“Permitted Person” means an affiliate of Consumer Services.

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

“ 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.

3.                     Purpose

3.1                                  Purpose . The purpose of the Partnership shall be to render landscaping and nursery services in the State of California and to conduct any business which lawfully may be conducted by a partnership organized pursuant to the California Act, including, but not limited to, the acquisition, management, operation, and disposition of properties, the carrying on of any business relating thereto or arising therefrom, and anything incidental or necessary to the foregoing.

4.                     Capital Contributions

4.1                                  Contributions .

4.1.1                         Timing . On the Commencement Date, each Partner shall contribute to the Partnership an amount equal to the initial capital contribution indicated on each Partner’s respective Schedule A Partner Signature Page. The Partners shall make additional capital contributions from time to time as the Partners unanimously shall agree. No Partner shall be entitled to make additional capital contributions without the consent of all other Partners.

4.1.2                         Records . The capital contributions made by the Partners pursuant to Section 4.1.1 shall be recorded in the books and records of the Partnership.

4.2                                  Capital Accounts . Separate Capital Accounts shall be established and maintained for each Partner according to Section 704 (b) of the Code and Treasury Regulation Section 1.704-1.

4.3                                  Interest . No interest shall be paid by the Partnership on Capital Contributions or on balances in Partners’ Capital Accounts.

4.4                                  Loans From Partners . Loans by Partners to the Partnership shall not be considered Capital Contributions. If any Partner shall advance funds to the Partnership in excess of the amounts required hereunder to be contributed by the Partner to the capital of the Partnership, such advances shall not result in any increase in the amount of the Capital Account of such Partner. The amounts of any such advances shall be a debt of the Partnership to such

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Partner and shall be payable or collectible only out of the Partnership assets in accordance with the terms and conditions upon which such advances are made.

5.                     Allocations

5.1                                  Net Income and Net Loss Allocation . With respect to any allocation period of the Partnership, each item of income, gain, loss, and deduction shall be allocated in accordance with the Partners’ respective Percentage Interests. No additional share of income, gain, loss, and deduction shall inure to a Partner by virtue of the Partner’s Capital Account or Income Account being larger than another Partner’s Capital Account or Income Account.

5.2                                  Income Accounts. Separate Income Accounts shall be maintained for each Partner. Net Income and Net Loss shall be credited or charged to the separate Income Account of each Partner. If a Partner’s Income Ac