Exhibit 10.3


EXECUTION
COPY




 





GUARANTEE AND COLLATERAL
AGREEMENT



made by



THE SERVICEMASTER COMPANY,



CDRSVM HOLDING, INC.,



and the Subsidiary Guarantors,



in favor of



CITIBANK, N.A., 

as Administrative Agent and as Collateral Agent




Dated as of July 24, 2007




 





















TABLE OF CONTENTS


 


	
  

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1

  	
    DEFINED TERMS

  	
   

  	
  2

  
	
  1.1

  	
  Definitions

  	
   

  	
  2

  
	
  1.2

  	
  Other Definitional Provisions

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2

  	
    GUARANTEE

  	
   

  	
  12

  
	
  2.1

  	
  Guarantee

  	
   

  	
  12

  
	
  2.2

  	
  Right of Contribution

  	
   

  	
  13

  
	
  2.3

  	
  No Subrogation

  	
   

  	
  13

  
	
  2.4

  	
  Amendments, etc. with respect to the Obligations

  	
   

  	
  14

  
	
  2.5

  	
  Guarantee Absolute and Unconditional

  	
   

  	
  14

  
	
  2.6

  	
  Reinstatement

  	
   

  	
  15

  
	
  2.7

  	
  Payments

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3

  	
    GRANT OF SECURITY INTEREST

  	
   

  	
  16

  
	
  3.1

  	
  Grant

  	
   

  	
  16

  
	
  3.2

  	
  Pledged Collateral

  	
   

  	
  17

  
	
  3.3

  	
  Certain Exceptions

  	
   

  	
  17

  
	
  3.4

  	
  Intercreditor Relations

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4

  	
    REPRESENTATIONS AND WARRANTIES

  	
   

  	
  19

  
	
  4.1

  	
  Representations and Warranties of Each Guarantor

  	
   

  	
  19

  
	
  4.2

  	
  Representations and Warranties of Each Grantor

  	
   

  	
  19

  
	
  4.3

  	
  Representations and Warranties of Each Pledgor

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5

  	
    COVENANTS

  	
   

  	
  24

  
	
  5.1

  	
  Covenants of Each Guarantor

  	
   

  	
  24

  
	
  5.2

  	
  Covenants of Each Grantor

  	
   

  	
  24

  
	
  5.3

  	
  Covenants of Each Pledgor

  	
   

  	
  27

  
	
  5.4

  	
  Covenants of Holding

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6

  	
    REMEDIAL PROVISIONS

  	
   

  	
  31

  
	
  6.1

  	
  Certain Matters Relating to Accounts

  	
   

  	
  31

  
	
  6.2

  	
  Communications with Obligors; Grantors Remain Liable

  	
   

  	
  32

  
	
  6.3

  	
  Pledged Stock

  	
   

  	
  33

  
	
  6.4

  	
  Proceeds to be Turned Over to the Collateral Agent

  	
   

  	
  34

  
	
  6.5

  	
  Application of Proceeds

  	
   

  	
  35

  
	
  6.6

  	
  Code and Other Remedies

  	
   

  	
  36

  
	
  6.7

  	
  Registration Rights

  	
   

  	
  36

  
	
  6.8

  	
  Waiver; Deficiency

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7

  	
    THE COLLATERAL AGENT

  	
   

  	
  37

  
	
  7.1

  	
  Collateral Agent’s Appointment as Attorney-in-Fact,
  etc

  	
   

  	
  37

  
	
  7.2

  	
  Duty of Collateral Agent

  	
   

  	
  39

  
	
  7.3

  	
  Financing Statements

  	
   

  	
  39

  
								



 













 


 


	
  7.4

  	
  Authority of Collateral Agent

  	
   

  	
  40

  
	
  7.5

  	
  Right of Inspection

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8

  	
  NON-LENDER SECURED PARTIES

  	
   

  	
  40

  
	
  8.1

  	
  Rights to Collateral

  	
   

  	
  40

  
	
  8.2

  	
  Appointment of Agent

  	
   

  	
  41

  
	
  8.3

  	
  Waiver of Claims

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9

  	
  MISCELLANEOUS

  	
   

  	
  42

  
	
  9.1

  	
  Amendments in Writing

  	
   

  	
  42

  
	
  9.2

  	
  Notices

  	
   

  	
  42

  
	
  9.3

  	
  No Waiver by Course of Conduct; Cumulative Remedies

  	
   

  	
  43

  
	
  9.4

  	
  Enforcement Expenses; Indemnification

  	
   

  	
  43

  
	
  9.5

  	
  Successors and Assigns

  	
   

  	
  43

  
	
  9.6

  	
  Set-Off

  	
   

  	
  44

  
	
  9.7

  	
  Counterparts

  	
   

  	
  44

  
	
  9.8

  	
  Severability

  	
   

  	
  44

  
	
  9.9

  	
  Section Headings

  	
   

  	
  44

  
	
  9.10

  	
  Integration

  	
   

  	
  44

  
	
  9.11

  	
  GOVERNING LAW

  	
   

  	
  45

  
	
  9.12

  	
  Submission to Jurisdiction; Waivers

  	
   

  	
  45

  
	
  9.13

  	
  Acknowledgments

  	
   

  	
  45

  
	
  9.14

  	
  WAIVER OF JURY TRIAL

  	
   

  	
  46

  
	
  9.15

  	
  Additional Granting Parties

  	
   

  	
  46

  
	
  9.16

  	
  Releases

  	
   

  	
  46

  
	
  9.17

  	
  Judgment

  	
   

  	
  47

  
						



 


	
  SCHEDULES

  
	
  1

  	
  Notice Addresses of Guarantors

  
	
  2

  	
  Pledged Securities

  
	
  3

  	
  Perfection Matters

  
	
  4

  	
  Location of Jurisdiction of Organization

  
	
  5

  	
  Intellectual Property

  
	
  6

  	
  Contracts

  
	
  7

  	
  Commercial Tort Claims

  
	
   

  
	
  ANNEXES

  
	
   

  
	
  1.

  	
  Acknowledgment and Consent of Issuers who are not
  Granting Parties

  
	
  2.

  	
  Assumption Agreement

  
	
  3.

  	
  Supplemental Agreement

  



 



 2















GUARANTEE AND COLLATERAL
AGREEMENT


GUARANTEE AND COLLATERAL AGREEMENT, dated as of July
24, 2007, made by The ServiceMaster Company, a Delaware corporation (the “Borrower”),
CDRSVM HOLDING, INC., a Delaware corporation (“Holding”) and certain
Subsidiaries of the Borrower that are signatories hereto, in favor of CITIBANK,
N.A., as collateral agent (in such capacity, the “Collateral Agent”) and
administrative agent (in such capacity, the “Administrative Agent”) for
the banks and other financial institutions (collectively, the “Lenders”;
individually, a “Lender”) from time to time parties to the Credit
Agreement described below.


W I T N E S S E T
H:


WHEREAS, pursuant to that certain Credit Agreement,
dated as of the date hereof (as amended, amended and restated, waived,
supplemented or otherwise modified from time to time, together with any
agreement extending the maturity of, or restructuring, refunding, refinancing
or increasing the Indebtedness under such agreement or any successor
agreements, the “Credit Agreement”), among the Borrower (as successor by
merger to CDRSVM Acquisition Co., a Delaware corporation), Citibank, N.A., as
Collateral Agent and Administrative Agent, and the other parties party thereto,
the Lenders have severally agreed to make extensions of credit to the Borrower
upon the terms and subject to the conditions set forth therein;


WHEREAS, pursuant to that certain Revolving Credit
Agreement, dated as of the date hereof (as amended, amended and restated,
waived, supplemented or otherwise modified from time to time, together with any
agreement extending the maturity of, or restructuring, refunding, refinancing
or increasing the Indebtedness under such agreement or any successor
agreements, the “Revolving Credit Agreement”), among the Borrower, certain
subsidiaries of the Borrower that are or may become parties thereto, the
several banks and other financial institutions from time to time parties
thereto (as further defined in the Revolving Credit Agreement, the “Revolving
Lenders”), Citibank, N.A., as administrative agent (in its specific
capacity as Administrative Agent, the “Revolving Credit Administrative Agent”)
and collateral agent (in its specific capacity as Collateral Agent, the “Revolving
Collateral Agent”) for the Revolving Lenders thereunder, and the other
parties party thereto, the Revolving Lenders have severally agreed to make
extensions of credit to the Borrower upon the terms and subject to the conditions
set forth therein;


WHEREAS, pursuant to that certain Guarantee and
Collateral Agreement, dated as of the date hereof (as amended, amended and
restated, waived, supplemented or otherwise modified from time to time, the “Revolving
Credit Guarantee and Collateral Agreement”), among the Borrower, certain of
its subsidiaries, the Revolving Credit Administrative Agent and the Revolving
Collateral Agent, the Borrower and such subsidiaries have granted a Lien to the
Revolving Collateral Agent for the benefit of the Secured Parties (as defined
therein) on the Revolving Credit Collateral (as defined herein);


WHEREAS, the Borrower is a member of an affiliated
group of companies that includes Holding, the Borrower, the Borrower’s Domestic
Subsidiaries that are party hereto and any other Domestic Subsidiary of the Borrower
(other than any Excluded Subsidiary) that becomes a party hereto from time to
time after the date hereof (the 
Borrower, Holding and such Domestic Subsidiaries (other than any
Excluded Subsidiary), collectively, the “Granting Parties”);













WHEREAS, the Collateral Agent, the Administrative
Agent, the Revolving Collateral Agent and the Revolving Credit Administrative
Agent have entered into an Intercreditor Agreement, acknowledged by the
Borrower and the Granting Parties, dated as of the date hereof (as amended,
amended and restated, waived, supplemented or otherwise modified from time to
time (subject to Section 9.1 hereof), the “Intercreditor Agreement”);


WHEREAS, the Borrower and the other Granting Parties
are engaged in related businesses, and each such Granting Party will derive substantial
direct and indirect benefit from the making of the extensions of credit under
the Credit Agreement; and


WHEREAS, it is a condition to the obligation of the
Lenders to make their respective extensions of credit under the Credit
Agreement that the Granting Parties shall execute and deliver this Agreement to
the Collateral Agent for the benefit of the Secured Parties.


NOW, THEREFORE, in consideration of the premises and
to induce the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrower thereunder, and in consideration of the receipt of other
valuable consideration (which receipt is hereby acknowledged), each Granting
Party hereby agrees with the Administrative Agent and the Collateral Agent, for
the ratable benefit of the Secured Parties (as defined below), as follows:


SECTION 1      DEFINED
TERMS


1.1                                 Definitions.


(a)                                  Unless
otherwise defined herein, terms defined in the Credit Agreement and used herein
shall have the meanings given to them in the Credit Agreement, and the
following terms that are defined in the Code (as in effect on the date hereof)
are used herein as so defined: Chattel Paper, Commercial Tort Claims, Deposit
Accounts, Documents, Electronic Chattel Paper, Equipment, Farm Products, and
Letter of Credit Rights.


(b)                                 The
following terms shall have the following meanings:


“Accounts”: 
all accounts (as defined in the Code) of each Grantor, including,
without limitation, all Accounts (as defined in the Credit Agreement) and
Accounts Receivable of such Grantor, but excluding in any event (i) all
Accounts that have been sold or otherwise transferred (and not transferred back
to a Grantor) in connection with a Special Purpose Financing and (ii) all Accounts
constituting Restricted Assets.


“Accounts Receivable”:  any right to payment for goods sold or leased
or for services rendered, which is not evidenced by an instrument (as defined
in the Code) or Chattel Paper.


“Additional Agent”:  as defined in the Intercreditor Agreement.


“Additional Collateral Documents”:  as defined in the Intercreditor Agreement.


“Additional Obligations”:  as defined in the Intercreditor Agreement.



 2
 









“Adjusted Net Worth”:  of any Guarantor at any time, shall mean the
greater of (x) $0 and (y) the amount by which the fair saleable value of such
Guarantor’s assets on the date of the respective payment hereunder exceeds its
debts and other liabilities (including contingent liabilities, but without
giving effect to any of its obligations under this Agreement or any other Loan
Document, under the Revolving Credit Agreement or any “Loan Document” as
defined therein, or pursuant to its guarantee with respect to any Indebtedness
then outstanding under the Senior Interim Facility or (if applicable) the Existing
Notes Indenture) on such date.


“Administrative Agent”:  as defined in the preamble hereto.


“Agreement”: 
this Guarantee and Collateral Agreement, as the same may be amended,
restated, supplemented, waived or otherwise modified from time to time.


“Applicable Law”:  as defined in Section 9.8 hereof.


“Bank Products Agreement”:  any agreement pursuant to which a bank or
other financial institution agrees to provide treasury or cash management
services (including, without limitation, controlled disbursements, automated
clearinghouse transactions, return items, netting, overdrafts and interstate
depository network services).


“Bankruptcy Case”:  (i) Holding or any of its Subsidiaries
commencing any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, conservatorship or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to adjudicate
it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with
respect to it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or any substantial
part of its assets, or Holding, Borrower or any of Borrower’s Subsidiaries
making a general assignment for the benefit of its creditors; or (ii) there
being commenced against Holding, Borrower or any of Borrower’s Subsidiaries any
case, proceeding or other action of a nature referred to in clause (i) above
which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days.


“Borrower”: 
as defined in the preamble hereto.


“Borrower Obligations”:  the collective reference to: all obligations
and liabilities of the Borrower in respect of the unpaid principal of and
interest on (including, without limitation, interest accruing after the
maturity of the Loans and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) the Loans, and all other
obligations and liabilities of the Borrower to the Secured Parties, whether
direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with, the Credit Agreement, the Loans, the other Loan Documents, any Interest
Rate Agreement, Currency Agreement or Commodities Agreement designated by the
Borrower or entered into with any Peron who was at the time of entry into such
agreement a Lender or an affiliate of any Lender,



 3
 









any Bank Products Agreement entered into with any
Person who was at the time of entry into such agreement a Lender or an
affiliate of any Lender, any Guarantee of Holding or any of its Subsidiaries as
to which any Secured Party is a beneficiary, the provision of cash management
services by any Lender or an Affiliate thereof to Holding or any Subsidiary
thereof, or any other document made, delivered or given in connection
therewith, in each case whether on account of principal, interest,
reimbursement obligations, amounts payable in connection with the provision of
such cash management services or a termination of any transaction entered into
pursuant to any such Interest Rate Agreement, Currency Agreement or Commodities
Agreement, fees, indemnities, costs, expenses or otherwise (including, without
limitation, all reasonable fees, expenses and disbursements of counsel to the
Administrative Agent or any other Secured Party that are required to be paid by
the Borrower pursuant to the terms of the Credit Agreement or any other Loan
Document).


“Code”: 
the Uniform Commercial Code as from time to time in effect in the State
of New York.


“Collateral”: 
as defined in Section 3 hereof; provided that, for purposes of
subsection 6.5 and Section 8, “Collateral” shall have the meaning assigned to
such term in the Credit Agreement.


“Collateral Account Bank”:  Citibank, N.A., an Affiliate thereof or
another bank which at all times is a Lender as selected by the relevant Grantor
and consented to in writing by the Collateral Agent (such consent not to be
unreasonably withheld or delayed).


“Collateral Agent”:  as defined in the preamble hereto.


“Collateral Proceeds Account”:  shall mean a non-interest bearing cash
collateral account established and maintained by the relevant Grantor at an
office of the Collateral Account Bank in the name, and in the sole dominion and
control of, the Collateral Agent for the benefit of the Secured Parties.


“Commercial Tort Action”:  any action, other than an action primarily
seeking declaratory or injunctive relief with respect to claims asserted or
expected to be asserted by Persons other than the Grantors, that is commenced
by a Grantor in the courts of the United States of America, any state or
territory thereof or any political subdivision of any such state or territory,
in which any Grantor seeks damages arising out of torts committed against it
that would reasonably be expected to result in a damage award to it exceeding
$3,000,000.


“Contracts”: 
with respect to any Grantor, all contracts, agreements, instruments and
indentures in any form and portions thereof (except for contracts listed on Schedule
6 hereto), to which such Grantor is a party or under which such Grantor or
any property of such Grantor is subject, as the same may from time to time be
amended, supplemented, waived or otherwise modified, including, without
limitation, (i) all rights of such Grantor to receive moneys due and to become
due to it thereunder or in connection therewith, (ii) all rights of such
Grantor to damages arising thereunder and (iii) all rights of such Grantor to
perform and to exercise all remedies thereunder, but excluding in any event all
Restricted Assets.



 4
 









“Copyright Licenses”:  with respect to any Grantor, all United
States written license agreements of such Grantor providing for the grant by or
to such Grantor of any right under any United States Copyright of such Grantor,
other than agreements with any Person that is an Affiliate or a Subsidiary of
the Borrower or such Grantor, including, without limitation, any license
agreements listed on Schedule 5 hereto, subject, in each case, to the
terms of such license agreements, and the right to prepare for sale, sell and advertise
for sale, all Inventory now or hereafter covered by such licenses.


“Copyrights”: 
with respect to any Grantor, all of such Grantor’s right, title and
interest in and to all United States copyrights, whether or not the underlying
works of authorship have been published or registered, all United States
copyright registrations and copyright applications, including, without
limitation, any copyright registrations and copyright applications listed on Schedule
5 hereto, and (i) all renewals thereof, (ii) all income, royalties, damages
and payments now and hereafter due and/or payable with respect thereto,
including, without limitation, payments under all licenses entered into in
connection therewith, and damages and payments for past or future infringements
thereof and (iii) the right to sue or otherwise recover for past, present and
future infringements and misappropriations thereof.


“Credit Agreement”:  as defined in the recitals hereto.


“Excluded Assets”:  as defined in subsection 3.3.


“Existing Notes Indenture”:  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 same
parties, dated as of August 15, 1997, the Second Supplemental Indenture
thereto, between the Borrower, 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 Borrower and the Existing Notes Trustee, dated as of March
2, 1998 and the Fourth Supplemental Indenture, between the Borrower and the Existing
Notes Trustee, dated as of August 10, 1999, as in effect on the Closing Date.


“first priority”:  with respect to any Lien purported to be
created by this Agreement, that such Lien is the most senior Lien to which such
Collateral is subject (subject to Permitted Liens).


“Fixtures”: as defined in the Code (as in
effect on the date hereof), but excluding in any event all fixtures (as so
defined) constituting Restricted Assets.


“General Fund Account”:  the general fund account of the relevant
Grantor established at the same office of the Collateral Account Bank as the
Collateral Proceeds Account.


“General Intangibles”:
all “general intangibles”, as that term is defined in Section 9-102(a)(42)
of the Uniform Commercial Code in effect in the State of New York on the date
hereof, but excluding in any event all general intangibles (as so defined)
constituting Restricted Assets.



 5
 









“Granting Parties”:  as defined in the recitals hereto.


“Grantor”:  the Borrower and each Domestic Subsidiary of
the Borrower that from time to time is a party hereto (it being understood that
no Excluded Subsidiary shall be required to be or become a party hereto).


“Guarantor Obligations”:  with respect to any Guarantor, the collective
reference to (i) the Obligations guaranteed by such Guarantor pursuant to
Section 2 and (ii) all obligations and liabilities of such Guarantor that may
arise under or in connection with this Agreement or any other Loan Document to
which such Guarantor is a party, any Interest Rate Agreement, Currency
Agreement or Commodities Agreement designated by such Guarantor or entered into
with any Person who was at the time of entry into such agreement a Lender or an
affiliate of any Lender, any Bank Products Agreement entered into with any
Person who was at the time of entry into such agreement a Lender or an
affiliate of any Lender, any Guarantee of Holding or any of its Subsidiaries as
to which any Secured Party is a beneficiary, the provision of cash management
services by any Lender or an Affiliate thereof to the Borrower or any
Subsidiary thereof, or any other document made, delivered or given in
connection therewith of such Guarantor, in each case whether on account of
guarantee obligations, reimbursement obligations, fees, indemnities, costs, expenses
or otherwise (including, without limitation, all fees and disbursements of
counsel to the Administrative Agent, to the Other Representatives or to the
Lenders that are required to be paid by such Guarantor pursuant to the terms of
this Agreement or any other Loan Document).


“Guarantors”: 
the collective reference to each Granting Party other than the Borrower.


“Holding”: 
as defined in the preamble hereto.


“Instar Entity”:  any of InStar Services Group, Inc. or any of
its Subsidiaries.


“Instar Group Pledge Agreement”:  Pledge Agreement, dated February 27, 2006 between
ServiceMaster Holding Corporation, a Delaware corporation, InStar Services
Group, Inc., a Delaware corporation, InStar Services Group, L.P., a Delaware
limited partnership, InStar Services Holdings, LLC, a Delaware limited
liability company, Instar Services Management, LLC, a limited liability company
and Steward, as amended, restated, amended and restated, supplemented or
otherwise modified or replaced from time to time.


“Instar Pledged Stock”:  as of the date referred to in subsection
5.3.6, the Capital Stock of any Instar Entity, other than any Capital Stock (a)
that is being sold or otherwise disposed of in a transaction permitted under
the Credit Agreement pursuant to binding agreements, (b) of the type described
in the proviso to the definition of “Pledged Stock” (other than clause (vii)
thereof), including but not limited to any Capital Stock constituting a
Restricted Asset or (c) of any Excluded Subsidiary.


“Instruments”: 
has the meaning specified in Article 9 of the Code, but excluding in any
event (i) the Pledged Securities and (ii) all Restricted Assets.



 6
 









“Intellectual Property”:  with respect to any Grantor, the collective
reference to such Grantor’s Copyrights, Copyright Licenses, Patents, Patent
Licenses, Trade Secrets, Trade Secret Licenses, Trademarks and Trademark
Licenses.


“Intercompany Note”:  with respect to any Grantor, any promissory
note in a principal amount in excess of $3,000,000 evidencing loans made by
such Grantor to Holding or any of its Restricted Subsidiaries, but excluding in
any event all Restricted Assets (including but not limited to any promissory
notes evidencing loans made by any Grantor to any Significant Subsidiary).


“Intercreditor Agreement”:  as defined in the recitals hereto.


“Inventory”: 
with respect to any Grantor, all inventory (as defined in the Code) of
such Grantor, including, without limitation, all Inventory (as defined in the
Credit Agreement) of such Grantor.


“Investment Property”:  the collective reference to all “investment
property” as such term is defined in Section 9-102(a)(49) of the Uniform
Commercial Code in effect in the State of New York on the date hereof (other
than (a) Capital Stock of any Foreign Subsidiary in excess of 65% of any series
of such stock, (b) any Capital Stock excluded from the definition of “Pledged
Stock” (other than pursuant to clause (vii) of the proviso thereto) and (c) any
Restricted Asset (including but not limited to any Capital Stock of any
Significant Subsidiary)) and (ii) whether or not constituting “investment
property” as so defined, all Pledged Securities.


“Issuers”: 
the collective reference to the Persons identified on Schedule 2 as the
issuers of Pledged Stock, together with any successors to such companies
(including, without limitation, any successors contemplated by subsection 7.3
of the Credit Agreement), provided that, notwithstanding that any Significant
Subsidiary may be identified on Schedule 2, no such Significant Subsidiary is
or shall be deemed an “Issuer” under this Agreement unless (x) the Existing
Notes Indenture ceases to be in full force and effect as a result of the
satisfaction and discharge thereof in accordance with its terms or (y) the
Pledgor that owns the Capital Stock of such Significant Subsidiary grants a Lien
to any Person on the Capital Stock of such Significant Subsidiary resulting in
the Existing Notes becoming equally and ratably secured by such Capital Stock
pursuant to Section 5.03 of the Existing Notes Indenture, for so long as the
Existing Notes are so secured.


“Lender”: 
as defined in the preamble hereto.


“Management Loans”:  Indebtedness (including any extension,
renewal or refinancing thereof) outstanding at any time incurred by any
Management Investors in connection with any purchases by them of Management
Stock, which Indebtedness is entitled to the benefit of any Management
Guarantee of the Parent or any of its Subsidiaries.


“New Pledged Stock”:  the Capital Stock of any Captive Insurance
Subsidiary or Home Warranty Subsidiary that is no longer subject to regulation (and
that has no Subsidiary that is subject to regulation) as an insurance, home
warranty, service contract or similar company, as the case may be, other than
any Capital Stock (a) that is being sold or otherwise disposed of in a transaction
permitted under the Credit Agreement pursuant to binding agreements, (b) of the
type



 7
 









described in the proviso to the definition of “Pledged
Stock” (other than clause (v) thereof), including but not limited to any
Capital Stock constituting a Restricted Asset or (c) of any Excluded Subsidiary
(other than a Subsidiary described in clauses (f) (in the case of Capital Stock
of a Captive Insurance Subsidiary) or (h) (in the case of Capital Stock of a
Home Warranty Subsidiary) thereof).


“Non-Lender Secured Parties”:  the collective reference to the Secured
Parties referred to in clause (iii), (iv) and (v) of the definition thereof,
and their respective successors and assigns and their permitted transferees and
endorsees.


“Obligations”: 
(i) in the case of the Borrower, its Borrower Obligations and (ii) in
the case of each Guarantor, the Guarantor Obligations of such Guarantor.


“Patent Licenses”:  with respect to any Grantor, all United
States written license  agreements of
such Grantor  providing for the grant by
or to such Grantor of any right under any United States patent, patent
application or patentable invention, other than agreements with any Person that
is an Affiliate or a Subsidiary of the Borrower or such Grantor, including,
without limitation, the license agreements listed on Schedule 5 hereto,
subject, in each case, to the terms of such license agreements, and the right
to prepare for sale, sell and advertise for sale, all Inventory now or
hereafter covered by such licenses.


“Patents”: 
with respect to any Grantor, all of such Grantor’s right, title and
interest in and to all United States patents, patent applications and
patentable inventions and all reissues and extensions thereof, including,
without limitation, all patents and patent applications identified in Schedule
5 hereto, and including, without limitation, (i) all inventions and
improvements described and claimed therein, (ii) the right to sue or otherwise
recover for any and all past, present and future infringements and
misappropriations thereof, (iii) all income, royalties, damages and other
payments now and hereafter due and/or payable with respect thereto (including,
without limitation, payments under all licenses entered into in connection
therewith, and damages and payments for past, present or future infringements
thereof), and (iv) all other rights corresponding thereto in the United States
and all reissues, divisions, continuations, continuations-in-part, substitutes,
renewals, and extensions thereof, all improvements thereon, and all other
rights of any kind whatsoever of such Grantor accruing thereunder or pertaining
thereto.


“Pledged Collateral”:   as to
any Pledgor, the Pledged Securities now owned or at any time hereafter acquired
by such Pledgor, and any Proceeds thereof.


“Pledged Notes”:  with respect to any Pledgor, all Intercompany
Notes at any time issued to, or held or owned by, such Pledgor.


“Pledged Securities”:  the collective reference to the Pledged Notes
and the Pledged Stock.


“Pledged Stock”:  with respect to any Pledgor, the shares of
Capital Stock of any Issuer listed on Schedule 2 as held by such Pledgor,
together with any other shares of Capital Stock required to be pledged
hereunder by such Pledgor pursuant to subsection 6.9 of the Credit Agreement, as
well as any other shares, stock certificates, options or rights of any nature
whatsoever in



 8
 









respect of the Capital Stock of any Issuer that may be
issued or granted to, or held by, such Pledgor while this Agreement is in
effect (provided that in no event shall there be pledged, nor shall any
Pledgor be required to pledge, directly or indirectly, (i) more than 65% of any
series of the outstanding Capital Stock of any Foreign Subsidiary, (ii) any of
the Capital Stock of a Subsidiary of a Foreign Subsidiary, (iii) de minimis shares of a Foreign Subsidiary held by any
Pledgor as a nominee or in a similar capacity, (iv) any of the Capital Stock of
any Unrestricted Subsidiary, (v) subject to subsection 5.3.5(a), any Capital
Stock of any Home Warranty Subsidiary or Captive Insurance Subsidiary (or any
Subsidiary thereof) (other than
(subject to the following clause (vi) of this definition) the Capital Stock of
Steward), (vi) any Restricted Asset, including but not limited to any
Capital Stock of any Significant Subsidiary and (vii) subject to subsection 5.3.5(b),
any Capital Stock of any Instar Entity).


“Pledgor”: 
Holding (with respect to the Pledged Stock of the Borrower and all other
Pledged Collateral of Holding) and each other Granting Party (with respect to
Pledged Securities held by such Granting Party and all other Pledged Collateral
of such Granting Party).


“Proceeds”: 
all “proceeds” as such term is defined in Section 9-102(a)(64) of the Uniform
Commercial Code in effect in the State of New York on the date hereof and, in
any event, Proceeds of Pledged Securities shall include, without limitation,
all dividends or other income from the Pledged Securities, collections thereon
or distributions or payments with respect thereto, but excluding in any event
all Restricted Assets.


“Restricted Assets”:  any Equity Interests, indebtedness or other
obligations of a Significant Subsidiary held by any Grantor or any Principal
Property of the Borrower or a Significant Subsidiary.  For purposes of the foregoing definition, the
terms “Equity Interests,” “Principal Property” and “Significant Subsidiary” are
used as defined in the Existing Notes Indenture, and the terms “indebtedness”
and “obligations” are used with the same meaning as such terms are used in
Section 5.03(b) of the Existing Notes Indenture.   It is
understood and agreed that an asset of a Grantor that would constitute
Collateral but for the fact that it is a Restricted Asset will cease to be a
Restricted Asset (and will constitute “Collateral” and be subject to the Lien
created hereby as and to the extent otherwise provided herein) (x) if the
Existing Notes Indenture ceases to be in full force and effect as a result of
the satisfaction and discharge thereof in accordance with its terms or (y) if
such Grantor grants a Lien (other than any Lien arising pursuant to or by
reason of any Loan Document) to any Person on such asset resulting in the
Existing Notes becoming equally and ratably secured by such asset pursuant to
Section 5.03 of the Existing Notes Indenture, for so long as the Existing Notes
are so secured (and when such Lien is no longer outstanding, such asset
thereafter shall constitute a Restricted Asset, and shall not constitute “Collateral”
or be subject to the Lien created hereby, and the Collateral Agent shall take
such action to evidence the absence of the Lien created hereby on such asset as
the Borrower or such Grantor may reasonably request).


“Restrictive Agreements”:  as defined in subsection 3.3(a).


“Revolving Collateral Agent”:  as defined in the recitals hereto.


“Revolving Credit Administrative Agent”:  as defined in the recitals hereto.



 9
 









“Revolving Credit Agreement”:  as defined in the recitals hereto.


“Revolving Credit Collateral”:  all “Security Collateral” as defined in the
Revolving Credit Guarantee and Collateral Agreement.


“Revolving Credit Guarantee and Collateral
Agreement”:  as defined in the
recitals hereto.


“Revolving Credit Obligations”:  as defined in the Intercreditor Agreement.


“Revolving Lenders”:  as defined in the recitals hereto.


“Secured Parties”:  the collective reference to (i) the
Administrative Agent, the Collateral Agent and each Other Representative, (ii)
the Lenders, (iii) with respect to any Interest Rate Agreement, Currency
Agreement or Commodities Agreement with Holdings or any of its Subsidiaries,
any counterparty thereto designated by the Borrower or that, at the time such
agreement or arrangement was entered into, was a Lender or an Affiliate of any
Lender, (iv) with respect to any Bank Products Agreement with Holding or any of
its Subsidiaries, any counterparty thereto that, at the time such agreement or
arrangement was entered into, was a Lender or an Affiliate of any Lender, (iv)
with respect to any Management Loans, any lender thereof that, at the time such
Indebtedness was extended (or agreement to extend such Indebtedness was entered
into), was a Lender or an Affiliate of any Lender and (v) their respective
successors and assigns and their permitted transferees and endorsees.


“Security Collateral”:  with respect to any Granting Party, means,
collectively, the Collateral (if any) and the Pledged Collateral (if any) of
such Granting Party.


“Significant Subsidiary”:  as defined in the Existing Notes Indenture.


“Specified Asset”:  as defined in subsection 4.2.2 hereof.


“Steward”: 
Steward Insurance Company, a Vermont corporation.


“Trade Secret Licenses”:  with respect to any Grantor, all United
States written license agreements of such Grantor providing for the grant by or
to such Grantor of any right under any trade secrets, including, without
limitation, know how, processes, formulae, compositions, designs, and
confidential business and technical information, and all rights of any kind
whatsoever accruing thereunder or pertaining thereto, other than agreements
with any Person that is an Affiliate or a Subsidiary of the Borrower or such
Grantor, subject, in each case, to the terms of such license agreements, and
the right to prepare for sale, sell and advertise for sale, all Inventory now
or hereafter covered by such licenses.


“Trade Secrets”:  with respect to any Grantor, all of such
Grantor’s right, title and interest in and to all United States trade secrets,
including, without limitation, know-how, processes, formulae,
compositions, designs, and confidential business and technical information, and
all rights of any kind whatsoever accruing thereunder or pertaining thereto,
including, without limitation, (i) all income, royalties, damages and payments
now and hereafter due and/or payable



 10
 









with respect thereto, including, without limitation,
payments under all licenses, non-disclosure agreements and memoranda of
understanding entered into in connection therewith, and damages and payments
for past or future misappropriations thereof, and (ii) the right to sue or
otherwise recover for past, present or future misappropriations thereof.


“Trademark Licenses”:  with respect to any Grantor, all United
States written license agreements of such Grantor providing for the grant by or
to such Grantor of any right under any United States trademarks, service marks,
trade names, trade dress or other indicia of trade origin or business
identifiers, other than agreements with any Person that is an Affiliate or a
Subsidiary of the Borrower or such Grantor, including, without limitation, the
license agreements listed on Schedule 5 hereto, subject, in each case,
to the terms of such license agreements, and the right to prepare for sale,
sell and advertise for sale, all Inventory now or hereafter covered by such licenses.


“Trademarks”: 
with respect to any Grantor, all of such Grantor’s right, title and
interest in and to all United States trademarks, service marks, trade names,
trade dress or other indicia of trade origin or business identifiers, trademark
and service mark registrations, and applications for trademark or service mark
registrations (except for “intent to use” applications for trademark or service
mark registrations filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C.
§ 1051, unless and until an Amendment to Allege Use or a Statement of Use
under Sections 1(c) and 1(d) of said Act has been filed), and any renewals
thereof, including, without limitation, each registration and application identified
in Schedule 5 hereto, and including, without limitation, (i) the right
to sue or otherwise recover for any and all past, present and future
infringements or dilutions thereof, (ii) all income, royalties, damages and
other payments now and hereafter due and/or payable with respect thereto
(including, without limitation, payments under all licenses entered into in
connection therewith, and damages and payments for past or future infringements
thereof), and (iii) all other rights corresponding thereto in the United
States and all other rights of any kind whatsoever of such Grantor accruing thereunder
or pertaining thereto in the United States, together in each case with the
goodwill of the business connected with the use of, and symbolized by, each
such trademark, service mark, trade name, trade dress or other indicia of trade
origin or business identifiers.


“Vehicles”: 
all cars, trucks, trailers, construction and earth moving equipment and
other vehicles covered by a certificate of title law of any state and all tires
and other appurtenances to any of the foregoing.


1.2                                 Other
Definitional Provisions.


(a)                                  The
words “hereof”, “herein”, “hereto” and “hereunder” and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and Section, Schedule and Annex
references are to this Agreement unless otherwise specified.


(b)                                 The
meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.



 11
 









(c)                                  Where
the context requires, terms relating to the Collateral, Pledged Collateral or
Security Collateral, or any part thereof, when used in relation to a Granting
Party shall refer to such Granting Party’s Collateral, Pledged Collateral or
Security Collateral or the relevant part thereof.


(d)                                 All
references in this Agreement to any of the property described in the definition
of the term “Collateral” or “Pledged Collateral”, or to any Proceeds thereof,
shall be deemed to be references thereto only to the extent the same constitute
Collateral or Pledged Collateral, respectively.


SECTION 2      GUARANTEE


2.1                                 Guarantee.


(a)                                  Each
of the Guarantors hereby, jointly and severally, unconditionally and irrevocably,
guarantees to the Administrative Agent, for the ratable benefit of the Secured
Parties, the prompt and complete payment and performance by the Borrower when
due and payable (whether at the stated maturity, by acceleration or otherwise)
of the Borrower Obligations of the Borrower.


(b)                                 Anything
herein or in any other Loan Document to the contrary notwithstanding, the
maximum liability of each Guarantor hereunder and under the other Loan
Documents shall in no event exceed the amount that can be guaranteed by such
Guarantor under applicable law, including applicable federal and state laws
relating to the insolvency of debtors; provided that, to the maximum
extent permitted under applicable law, it is the intent of the parties hereto
that (x) the amount of the liability of any of the Guarantors or any guarantee
in respect of Indebtedness represented by the Senior Interim Loan Facility shall
be reduced before the amount of the liability of the respective Guarantor is
reduced hereunder and (y) the rights of contribution of each Guarantor provided
in following subsection 2.2 be included as an asset of the respective Guarantor
in determining the maximum liability of such Guarantor hereunder.


(c)                                  Each
Guarantor agrees that the Borrower Obligations guaranteed by it hereunder may
at any time and from time to time exceed the amount of the liability of such
Guarantor hereunder without impairing the guarantee contained in this Section 2
or affecting the rights and remedies of the Administrative Agent or any other
Secured Party hereunder.


(d)                                 The
guarantee contained in this Section 2 shall remain in full force and effect
until the earliest to occur of (i) the first date on which all the Loans, all
other Borrower Obligations then due and owing, and the obligations of each
Guarantor under the guarantee contained in this Section 2 then due and owing
shall have been satisfied by payment in full in cash and the Term Loan Commitments
shall be terminated, notwithstanding that from time to time during the term of
the Credit Agreement the Borrower may be free from any Borrower Obligations,
(ii) as to any Guarantor, the sale or other disposition of all of the Capital
Stock of such Guarantor (to a Person other than the Borrower or a Restricted
Subsidiary) as permitted under the Credit Agreement or (iii) as to any
Guarantor, the designation of such Guarantor as an Unrestricted Subsidiary.


(e)                                  No
payment made by the Borrower, any of the Guarantors, any other guarantor or any
other Person or received or collected by the Administrative Agent or any other
Secured Party



 12
 









from the
Borrower, any of the Guarantors, any other guarantor or any other Person by virtue
of any action or proceeding or any set-off or appropriation or application at
any time or from time to time in reduction of or in payment of any of the
Borrower Obligations shall be deemed to modify, reduce, release or otherwise
affect the liability of any Guarantor hereunder which shall, notwithstanding
any such payment (other than any payment made by such Guarantor in respect of
the Borrower Obligations or any payment received or collected from such
Guarantor in respect of any of the Borrower Obligations), remain liable for the
Borrower Obligations of the Borrower guaranteed by it hereunder up to the
maximum liability of such Guarantor hereunder until the earliest to occur of
(i) the first date on which all the Loans, and all other Borrower Obligations
then due and owing, are paid in full in cash and the Term Loan Commitments are
terminated, (ii) the sale or other disposition of all of the Capital Stock of
such Guarantor (to a Person other than the Borrower or a Restricted Subsidiary)
as permitted under the Credit Agreement or (iii) the designation of such
Guarantor as an Unrestricted Subsidiary.


2.2                                 Right
of Contribution.  Each Guarantor
hereby agrees that to the extent that a Guarantor shall have paid more than its
proportionate share (based, to the maximum extent permitted by law, on the
respective Adjusted Net Worths of the Guarantors on the date the respective
payment is made) of any payment made hereunder, such Guarantor shall be
entitled to seek and receive contribution from and against any other Guarantor
hereunder that has not paid its proportionate share of such payment.  Each Guarantor’s right of contribution shall
be subject to the terms and conditions of subsection 2.3.  The provisions of this subsection 2.2 shall
in no respect limit the obligations and liabilities of any Guarantor to the
Administrative Agent and the other Secured Parties, and each Guarantor shall
remain liable to the Administrative Agent and the other Secured Parties for the
full amount guaranteed by such Guarantor hereunder.


2.3                                 No
Subrogation.  Notwithstanding any
payment made by any Guarantor hereunder or any set-off or application of funds
of any Guarantor by the Collateral Agent or any other Secured Party, no Guarantor
shall be entitled to be subrogated to any of the rights of the Collateral Agent
or any other Secured Party against the Borrower or any other Guarantor or any
collateral security or guarantee or right of offset held by the Collateral
Agent or any other Secured Party for the payment of the Borrower Obligations,
nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement
from the Borrower or any other Guarantor in respect of payments made by such
Guarantor hereunder, until all amounts owing to the Collateral Agent and the
other Secured Parties by the Borrower on account of the Borrower Obligations
are paid in full in cash and the Term Loan Commitments are terminated.  If any amount shall be paid to any Guarantor
on account of such subrogation rights at any time when all of the Borrower Obligations
shall not have been paid in full in cash or Term Loan Commitments shall remain
in effect, such amount shall be held by such Guarantor in trust for the
Collateral Agent and the other Secured Parties, segregated from other funds of
such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned
over to the Collateral Agent in the exact form received by such Guarantor (duly
indorsed by such Guarantor to the Collateral Agent, if required), to be held as
collateral security for all of the Borrower Obligations (whether matured or
unmatured) guaranteed by such Guarantor and/or then or at any time thereafter
may be applied against any Borrower Obligations, whether matured or unmatured,
in such order as the Collateral Agent may determine.



 13
 









2.4                                 Amendments,
etc. with respect to the Obligations. 
To the maximum extent permitted by law, each Guarantor shall remain
obligated hereunder notwithstanding that, without any reservation of rights
against any Guarantor and without notice to or further assent by any Guarantor,
any demand for payment of any of the Borrower Obligations made by the
Collateral Agent, the Administrative Agent or any other Secured Party may be rescinded
by the Collateral Agent, the Administrative Agent or such other Secured Party
and any of the Borrower Obligations continued, and the Borrower Obligations, or
the liability of any other Person upon or for any part thereof, or any
collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, waived, modified, accelerated, compromised, subordinated, waived,
surrendered or released by the Collateral Agent, the Administrative Agent or
any other Secured Party, and the Credit Agreement and the other Loan Documents
and any other documents executed and delivered in connection therewith may be
amended, waived, modified, supplemented or terminated, in whole or in part, as
the Collateral Agent or the Administrative Agent (or the Required Lenders or
the applicable Lenders(s), as the case may be) may deem advisable from time to
time, and any collateral security, guarantee or right of offset at any time
held by the Collateral Agent, the Administrative Agent or any other Secured
Party for the payment of any of the Borrower Obligations may be sold,
exchanged, waived, surrendered or released. 
None of the Collateral Agent, the Administrative Agent nor any other
Secured Party shall have any obligation to protect, secure, perfect or insure
any Lien at any time held by it as security for any of the Borrower Obligations
or for the guarantee contained in this Section 2 or any property subject
thereto, except to the extent required by applicable law.


2.5                                 Guarantee
Absolute and Unconditional.  Each
Guarantor waives, to the maximum extent permitted by applicable law, any and
all notice of the creation, renewal, extension or accrual of any of the
Borrower Obligations and notice of or proof of reliance by the Collateral
Agent, the Administrative Agent or any other Secured Party upon the guarantee
contained in this Section 2 or acceptance of the guarantee contained in this
Section 2; each of the Borrower Obligations, and any obligation contained
therein, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon the
guarantee contained in this Section 2; and all dealings between the Borrower
and any of the Guarantors, on the one hand, and the Collateral Agent, the
Administrative Agent and the other Secured Parties, on the other hand, likewise
shall be conclusively presumed to have been had or consummated in reliance upon
the guarantee contained in this Section 2. 
Each Guarantor waives, to the maximum extent permitted by applicable
law, diligence, presentment, protest, demand for payment and notice of default
or nonpayment to or upon the Borrower or any of the other Guarantors with
respect to any of the Borrower Obligations. 
Each Guarantor understands and agrees, to the extent permitted by law,
that the guarantee contained in this Section 2 shall be construed as a
continuing, absolute and unconditional guarantee of payment and not of
collection.  Each Guarantor hereby
waives, to the maximum extent permitted by applicable law, any and all defenses
(other than any suit for breach of a contractual provision of any of the Loan
Documents) that it may have arising out of or in connection with any and all of
the following:  (a) the validity or enforceability
of the Credit Agreement or any other Loan Document, any of the Borrower Obligations
or any other collateral security therefor or guarantee or right of offset with
respect thereto at any time or from time to time held by the Collateral Agent,
the Administrative Agent or any other Secured Party, (b) any defense, set-off
or counterclaim (other than a defense of payment or



 14
 









performance)
that may at any time be available to or be asserted by the Borrower against the
Collateral Agent, the Administrative Agent or any other Secured Party, (c) any
change in the time, place, manner or place of payment, amendment, or waiver or
increase in any of the Obligations, (d) any exchange, taking, or release of Security
Collateral, (e) any change in the structure or existence of the Borrower, (f)
any application of Security Collateral to any of the Obligations, (g) any law,
regulation or order of any jurisdiction, or any other event, affecting any term
of any Obligation or the rights of the Collateral Agent, the Administrative
Agent or any other Secured Party with respect thereto, including, without
limitation:  (i) the application of any
such law, regulation, decree or order, including any prior approval, which
would prevent the exchange of any currency (other than Dollars) for Dollars or
the remittance of funds outside of such jurisdiction or the unavailability of
Dollars in any legal exchange market in such jurisdiction in accordance with
normal commercial practice, (ii) a declaration of banking moratorium or any
suspension of payments by banks in such jurisdiction or the imposition by such
jurisdiction or any Governmental Authority thereof of any moratorium on, the
required rescheduling or restructuring of, or required  approval of payments on, any indebtedness in
such jurisdiction, (iii) any expropriation, confiscation, nationalization or
requisition by such country or any Governmental Authority that directly or
indirectly deprives the Borrower of any assets or their use, or of the ability
to operate its business or a material part thereof, or (iv) any war (whether or
not declared), insurrection, revolution, hostile act, civil strife or similar
events occurring in such jurisdiction which has the same effect as the events
described in clause (i), (ii) or (iii) above (in each of the cases contemplated
in clauses (i) through (iv) above, to the extent occurring or existing on or at
any time after the date of this Agreement), or (h) any other circumstance
whatsoever (other than payment in full in cash of the Borrower Obligations
guaranteed by it hereunder) (with or without notice to or knowledge of the
Borrower or such Guarantor) that constitutes, or might be construed to constitute,
an equitable or legal discharge of the Borrower for the Borrower Obligations,
or of such Guarantor under the guarantee contained in this Section 2, in
bankruptcy or in any other instance. 
When making any demand hereunder or otherwise pursuing its rights and
remedies hereunder against any Guarantor, the Collateral Agent, the
Administrative Agent and any other Secured Party may, but shall be under no
obligation to, make a similar demand on or otherwise pursue such rights and
remedies as it may have against the Borrower, any other Guarantor or any other
Person or against any collateral security or guarantee for the Borrower Obligations
guaranteed by such Guarantor hereunder or any right of offset with respect
thereto, and any failure by the Collateral Agent, the Administrative Agent or
any other Secured Party to make any such demand, to pursue such other rights or
remedies or to collect any payments from the Borrower, any other Guarantor or
any other Person or to realize upon any such collateral security or guarantee
or to exercise any such right of offset, or any release of the Borrower, any
other Guarantor or any other Person or any such collateral security, guarantee
or right of offset, shall not relieve any Guarantor of any obligation or
liability hereunder, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of the Collateral
Agent, the Administrative Agent or any other Secured Party against any
Guarantor.  For the purposes hereof “demand”
shall include the commencement and continuance of any legal proceedings.


2.6                                 Reinstatement.  The guarantee of any Guarantor contained in
this Section 2 shall continue to be effective, or be reinstated, as the case
may be, if at any time payment, or any part thereof, of any of the Borrower
Obligations guaranteed by such Guarantor hereunder is rescinded or must otherwise
be restored or returned by the Collateral Agent, the Administrative Agent or



 15
 









any other Secured
Party upon the insolvency, bankruptcy, dissolution, liquidation or reorganization
of the Borrower or any Guarantor, or upon or as a result of the appointment of
a receiver, intervenor or conservator of, or trustee or similar officer for,
the Borrower or any Guarantor or any substantial part of its property, or
otherwise, all as though such payments had not been made.


2.7                                 Payments.  Each Guarantor hereby guarantees that
payments hereunder will be paid to the Administrative Agent without set-off or
counterclaim, in Dollars (or in the case of any amount required to be paid in
any other currency pursuant to the requirements of the Credit Agreement or
other agreement relating to the respective Obligations, such other currency),
at the Administrative Agent’s office specified in subsection 10.2 of the Credit
Agreement or such other address as may be designated in writing by the
Administrative Agent to such Guarantor from time to time in accordance with
subsection 10.2 of the Credit Agreement.


SECTION 3      GRANT
OF SECURITY INTEREST


3.1                                 Grant.  Each Grantor hereby grants, subject to
existing licenses to use the Copyrights, Patents, Trademarks and Trade Secrets
granted by such Grantor in the ordinary course of business, to the Collateral
Agent, for the ratable benefit of the Secured Parties, a security interest in
all of the Collateral of such Grantor, as collateral security for the prompt
and complete payment and performance when due (whether at the stated maturity,
by acceleration or otherwise) of the Obligations of such Grantor, except as
provided in subsection 3.3.  The term “Collateral”,
as to any Grantor, means the following property (wherever located) now owned or
at any time hereafter acquired by such Grantor or in which such Grantor now has
or at any time in the future may acquire any right, title or interest, except
as provided in subsection 3.3:


(a)                                  all Accounts;


(b)                                 all Chattel Paper;


(c)                                  all Contracts;


(d)                                 all Documents;


(e)                                  all Equipment (other
than Vehicles);


(f)                                    all General
Intangibles;


(g)                                 all Instruments;


(h)                                 all Intellectual
Property;


(i)                                     all Inventory;


(j)                                     all Investment
Property;


(k)                                  all Letter of Credit
Rights;


(l)                                     all Fixtures;



 16
 









(m)                               all Commercial Tort
Claims constituting Commercial Tort Actions described in Schedule 7 (together
with any Commercial Tort Actions subject to a further writing provided in
accordance with subsection 5.2.12);


(n)                                 all books and records
pertaining to any of the foregoing;


(o)                                 the Collateral
Proceeds Account; and


(p)                                 to the extent not
otherwise included, all Proceeds and products of any and all of the foregoing
and all collateral security and guarantees given by any Person with respect to
any of the foregoing;


provided that, in the case of each
Grantor, Collateral shall not include (i) any Pledged Collateral, or any
property or assets specifically excluded from Pledged Collateral (including any
Capital Stock of any Foreign Subsidiary in excess of 65% of any series of such
stock) or (ii) any Restricted Asset.


3.2                                 Pledged
Collateral.  Each Granting Party that
is a Pledgor, hereby grants to the Collateral Agent, for the ratable benefit of
the Secured Parties, a security interest in all of the Pledged Collateral of
such Pledgor now owned or at any time hereafter acquired by such Pledgor, and
any Proceeds thereof, as collateral security for the prompt and complete performance
when due (whether at the stated maturity, by acceleration or otherwise) of the
Obligations of such Pledgor, except as provided in subsection 3.3; provided,
that, Pledged Collateral shall not include any Restricted Asset.


3.3                                 Certain
Exceptions.  No security interest is
or will be granted pursuant hereto in any right, title or interest of any
Granting Party under or in (collectively, the “Excluded Assets”):


(a)                                  any Instruments,
Contracts, Chattel Paper, General Intangibles, Copyright Licenses, Patent
Licenses, Trademark Licenses, Trade Secret Licenses or other contracts or
agreements with or issued by Persons other than Holding, the Borrower, a
Restricted Subsidiary or an Affiliate thereof, (collectively, “Restrictive
Agreements”) that would otherwise be included in the Security Collateral
(and such Restrictive Agreements shall not be deemed to constitute a part of
the Security Collateral) for so long as, and to the extent that, the granting
of such a security interest pursuant hereto would result in a breach, default
or termination of such Restrictive Agreements (in each case, except to the
extent that, pursuant to the Code or other applicable law, the granting of
security interests therein can be made without resulting in a breach, default
or termination of such Restrictive Agreements);


(b)                                 any Equipment or other
property that would otherwise be included in the Security Collateral (and such
Equipment or other property shall not be deemed to constitute a part of the
Security Collateral) if such Equipment or other property (x) is subject to a
Lien described in subsection 7.2(h) of the Credit Agreement in respect of Purchase
Money Obligations or Capitalized Lease Obligations, or a Lien described in
subsection 7.2.(o) (with respect to such a Lien described in subsection 7.2(h))
of the Credit Agreement; and consists of Equipment or other property financed
or refinanced thereby (including through any financing or refinancing of the acquisition,
leasing, construction or improvement of any such assets) and/or any improvements,



 17
 









accessions, proceeds, dividends or distributions in respect of any such
assets, and/or any other assets relating to any such assets (including to any
such acquisition, leasing, construction or improvement thereof) or any such
improvements, accessions, proceeds, dividends or distributions, or (y) is
subject to a Lien described in subsection 7.2(h) of the Credit Agreement in
respect of  Hedging Obligations, or a
Lien described in subsection 7.2.(o) (with respect to such a Lien described in
subsection 7.2(h)) of the Credit Agreement; and consists of (i) cash, Cash
Equivalents, Investment Grade Securities and Temporary Cash Investments,
together with proceeds, dividends and distributions in respect thereof, (ii)
any assets relating to such assets, proceeds, dividends or distributions or to
any Hedging Obligations, and/or (iii) any other assets consisting of, relating
to or arising under or in connection with (A) any Interest Rate Agreements,
Currency Agreements or Commodities Agreements or (B) any other agreements,
instruments or documents related to any Hedging Obligations or to any of the
assets referred to in any of subclauses (i) through (iii) of this clause (y);


(c)                                  any property that
would otherwise be included in the Security Collateral (and such property shall
not be deemed to constitute a part of the Security Collateral) if such property
(x) has been sold or otherwise transferred in connection with (i) a Special
Purpose Financing, (ii) a Sale and Leaseback Transaction the proceeds of which
are applied pursuant to subsection 3.4 of the Credit Agreement if and to the
extent required thereby or (iii) an Exempt Sale and Leaseback Transaction, or
(y) constitutes the Proceeds or products of any property that has been sold or
otherwise transferred pursuant to such Special Purpose Financing, Sale and
Leaseback Transaction or Exempt Sale and Leaseback Transaction (other than any
payments received by such Granting Party in payment for the sale and transfer
of such property in such Special Purpose Financing, Sale and Leaseback
Transaction or Exempt Sale and Leaseback Transaction) or (z) is subject to any
Liens securing Indebtedness incurred in compliance with subsection 7.1(b)(ix)
of the Credit Agreement, or Liens permitted under subsection 7.2(k)(iv) or
7.2(p)(xii) of the Credit Agreement;


(d)                                 Capital Stock which is
specifically excluded from the definition of Pledged Stock by virtue of the proviso
contained in the parenthetical to such definition.


3.4                                 Intercreditor
Relations.  Notwithstanding anything
herein to the contrary, it is the understanding of the parties that the Liens
granted pursuant to subsections 3.1 and 3.2 hereof shall (x) prior to the
Discharge of Revolving Credit Obligations (as defined in the Intercreditor
Agreement), be pari passu and
equal in priority to the Liens granted to the Revolving Collateral Agent for
the benefit of the holders of the Revolving Credit Obligations to secure the Revolving
Credit Obligations pursuant to the applicable Revolving Credit Document (as
defined in the Intercreditor Agreement) and (y) prior to the Discharge of
Additional Obligations (as defined in the Intercreditor Agreement), be pari passu and equal in priority to the
Liens granted to any Additional Agent for the benefit of the holders of the
applicable Additional Obligations to secure such Additional Obligations pursuant
to the applicable Additional Collateral Documents (as defined in the
Intercreditor Agreement).  The Collateral
Agent acknowledges and agrees that the relative priority of such Liens granted
to the Collateral Agent, the Revolving Collateral Agent and any Additional
Agent may be determined solely pursuant to the Intercreditor Agreement, and not
by



 18
 









priority as a
matter of law or otherwise. 
Notwithstanding anything herein to the contrary, the Liens and security
interest granted to the Collateral Agent pursuant to this Agreement and the
exercise of any right or remedy by the Collateral Agent hereunder are subject
to the provisions of the Intercreditor Agreement.  In the event of any conflict between the
terms of the Intercreditor Agreement and this Agreement, the terms of the
Intercreditor Agreement shall govern and control as among the Collateral Agent,
the Revolving Collateral Agent and any Additional Agent.  Notwithstanding any other provision hereof,
subject to the terms of the Intercreditor Agreement, (x) for so long as any
Revolving Credit Obligations remain outstanding, any obligation hereunder to
physically deliver to the Collateral Agent any Security Collateral may be satisfied
by causing such Security Collateral to be physically delivered to the Revolving
Collateral Agent to be held in accordance with the Intercreditor Agreement and
(y) for so long as any Additional Obligations remain outstanding, any
obligation hereunder to physically deliver to the Collateral Agent any Security
Collateral may be satisfied by causing such Security Collateral to be
physically delivered to any Additional Agent to be held in accordance with the
Intercreditor Agreement.


SECTION 4      REPRESENTATIONS
AND WARRANTIES


4.1                                 Representations
and Warranties of Each Guarantor.  To
induce the Collateral Agent and the Lenders to enter into the Credit Agreement
and to induce the Lenders to make their respective extensions of credit to the
Borrower thereunder, each Guarantor hereby represents and warrants to the
Collateral Agent and each other Secured Party that the representations and
warranties set forth in Section 4 of the Credit Agreement as they relate to
such Guarantor or to the Loan Documents to which such Guarantor is a party, each
of which representations and warranties is hereby incorporated herein by
reference, are true and correct in all material respects, and the Collateral
Agent and each other Secured Party shall be entitled to rely on each of such
representations and warranties as if fully set forth herein; provided
that each reference in each such representation and warranty to the Borrower’s
knowledge shall, for the purposes of this subsection 4.1, be deemed to be a
reference to such Guarantor’s knowledge.


4.2                                 Representations
and Warranties of Each Grantor.  To
induce the Collateral Agent and the Lenders to enter into the Credit Agreement
and to induce the Lenders to make their respective extensions of credit to the
Borrower thereunder, each Grantor hereby represents and warrants to the
Collateral Agent and each other Secured Party that, in each case after giving effect
to the Transactions:


4.2.1                        Title;
No Other Liens.  Except for the
security interests granted to the Collateral Agent for the ratable benefit of
the Secured Parties pursuant to this Agreement and the other Liens permitted to
exist on such Grantor’s Collateral by the Credit Agreement (including, without
limitation, subsection 7.2 thereof), such Grantor owns each item of such
Grantor’s Collateral free and clear of any and all Liens.  Except as set forth on Schedule 3, no
currently effective financing statement or other similar public notice with
respect to any Lien on all or any part of such Grantor’s Collateral is on file
or of record in any public office in the United States of America, any state,
territory or dependency thereof or the District of Columbia, except such as
have been filed in favor of the Collateral



 19
 









Agent for the ratable benefit of the Secured
Parties pursuant to this Agreement or as are in respect of Liens permitted by
the Credit Agreement (including, without limitation, subsection 7.2
thereof) or any other Loan Document or for which termination statements will be
delivered on the Closing Date.


4.2.2                        Perfected
Liens.


(a)                                  This Agreement is
effective to create, as collateral security for the Obligations of such
Grantor, valid and enforceable Liens on such Grantor’s Security Collateral in
favor of the Collateral Agent for the benefit of the Secured Parties, except as
enforceability may be affected by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditor’s rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.


(b)                                 Except with regard to
(i) Liens (if any) on Specified Assets and (ii) any rights reserved in favor of
the United States government as required by law (if any), upon the completion
of the Filings and the delivery to and continuing possession by the Collateral
Agent or the Revolving Collateral Agent acting as agent of the Collateral Agent
for purposes of perfection, as applicable, in accordance with the Intercreditor
Agreement, of all Instruments, Chattel Paper and Documents a security interest
in which is perfected by possession, and the obtaining and maintenance of “control”
(as described in the Code) by the Collateral Agent or the Revolving Collateral
Agent acting as agent of the Collateral Agent for purposes of perfection, as
applicable (or their respective agents appointed for purposes of perfection),
in accordance with the Intercreditor Agreement of the Collateral Proceeds
Account, Electronic Chattel Paper and Letter of Credit Rights a security
interest in which is perfected by “control” and in the case of Commercial Tort
Actions (other than such Commercial Tort Actions listed on Schedule 7 on the
date of this Agreement), the taking of the actions required by subsection
5.2.12 herein, the Liens created pursuant to this Agreement will constitute
valid Liens on and (to the extent provided herein) perfected security interests
in such Grantor’s Security Collateral in favor of the Collateral Agent for the
benefit of the Secured Parties, and will be prior to all other Liens of all
other Persons other than Permitted Liens, and enforceable as such as against
all other Persons other than Ordinary Course Transferees, except to the extent
that the recording of an assignment or other transfer of title to the
Collateral Agent or the Revolving Collateral Agent or the recording of other
applicable documents in the United States Patent and Trademark Office or United
States Copyright Office may be necessary for perfection or enforceability, and
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of creditors’
rights generally and by general equitable principles (whether enforcement is
sought by proceedings in equity or at law) or by an implied covenant of good
faith and fair dealing. As used in this subsection 4.2.2(b), the following
terms shall have the following meanings:


“Filings”:  the filing or recording of (i) the Financing
Statements as set forth in Schedule 3, (ii) this Agreement or a notice
thereof with respect to Intellectual Property as set forth in Schedule 3,  and (iii) any filings after the Closing



 20















Date in any other jurisdiction as may be necessary
under any Requirement of Law.


“Financing
Statements”:  the financing
statements delivered to the Collateral Agent by such Grantor on the Closing
Date for filing in the jurisdictions listed in Schedule 4.


“Ordinary
Course Transferees”:  (i) with
respect to goods only, buyers in the ordinary course of business and lessees in
the ordinary course of business to the extent provided in Section 9-320(a) and
9-321 of the Uniform Commercial Code as in effect from time to time in the
relevant jurisdiction, (ii) with respect to general intangibles only, licensees
in the ordinary course of busiEness to the extent provided in Section 9-321 of
the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction
and (iii) any other Person who is entitled to take free of the Lien pursuant to
the Uniform Commercial Code as in effect from time to time in the relevant
jurisdiction.


“Permitted
Liens”:  Liens permitted pursuant to
the Loan Documents, including, without limitation, those permitted to exist
pursuant to subsection 7.2 of the Credit Agreement.


“Specified
Assets”:  the following property and
assets of such Grantor:


(1)                                  Patents,
Patent Licenses, Trademarks and Trademark Licenses to the extent that (a) Liens
thereon cannot be perfected by the filing of financing statements under the
Uniform Commercial Code or by the filing and acceptance thereof in the United
States Patent and Trademark Office or (b) such Patents, Patent Licenses,
Trademarks and Trademark Licenses are not, individually or in the aggregate,
material to the business of the Borrower and its Subsidiaries taken as a whole;


(2)                                  Copyrights
and Copyright Licenses and Accounts or receivables arising therefrom to the
extent that the Uniform Commercial Code as in effect from time to time in the
relevant jurisdiction is not applicable to the creation or perfection of Liens
thereon;


(3)                                  Collateral
for which the perfection of Liens thereon requires filings in or other actions
under the laws of jurisdictions outside of the United States of America, any
State, territory or dependency thereof or the District of Columbia;


(4)                                  goods
included in Collateral received by any Person for “sale or return” within the
meaning of Section 2-326 of the Uniform Commercial Code of the applicable
jurisdiction, to the extent of claims of creditors of such Person;


(5)                                  Proceeds
of Accounts, receivables or Inventory which do not themselves constitute
Collateral or which have not been transferred to or deposited



 21
 









in the Collateral Proceeds Account (if any)
or a Deposit Account of a Grantor subject to the Collateral Agent’s control;


(6)                                  Contracts,
Accounts or receivables subject to the Assignment of Claims Act;


(7)                                  Fixtures;
and


(8)                                  uncertificated
securities (to the extent a security interest is not perfected by the filing of
a financing statement).


4.2.3                        Jurisdiction
of Organization.


(a)                                  On the date hereof,
such Grantor’s jurisdiction of organization is specified on Schedule 4.


4.2.4                        Farm
Products.  None of such Grantor’s
Collateral constitutes, or is the Proceeds of, Farm Products.


4.2.5                        Accounts
Receivable.  The amounts represented
by such Grantor to the Administrative Agent or the other Secured Parties from
time to time as owing by each account debtor or by all account debtors in
respect of such Grantor’s Accounts Receivable constituting Security Collateral
will at such time be the correct amount, in all material respects, actually
owing by such account debtor or debtors thereunder, except to the extent that
appropriate reserves therefor have been established on the books of such
Grantor in accordance with GAAP.  Unless
otherwise indicated in writing to the Administrative Agent, each Account
Receivable of such Grantor arises out of a bona fide sale and delivery of goods
or rendition of services by such Grantor. 
Such Grantor has not given any account debtor any deduction in respect
of the amount due under any such Account, except in the ordinary course of
business or as such Grantor may otherwise advise the Administrative Agent in writing.


4.2.6                        Patents,
Copyrights and Trademarks.  Schedule
5 lists all material Trademarks, material Copyrights and material Patents,
in each case, registered in the United States Patent and Trademark Office or
the United States Copyright Office, as applicable, and owned by such Grantor in
its own name as of the date hereof, and all material Trademark Licenses, all
material Copyright Licenses and all material Patent Licenses (including,
without limitation, material Trademark Licenses for registered Trademarks, material
Copyright Licenses for registered Copyrights and material Patent Licenses for
registered Patents) owned by such Grantor in its own name as of the date
hereof, in each case, that is solely United States Intellectual Property.


4.3                                 Representations
and Warranties of Each Pledgor.   To
induce the Collateral Agent, the Administrative Agent and the Lenders to enter
into the Credit Agreement and to induce the Lenders to make their respective
extensions of credit to the Borrower thereunder, each  Pledgor hereby represents and warrants to the
Collateral Agent and each other Secured Party that:



 22
 









4.3.1                        Except as
provided in subsection 3.3, the shares of Pledged Stock pledged by such Pledgor
hereunder constitute (i) in the case of shares of a Domestic Subsidiary, all
the issued and outstanding shares of all classes of the Capital Stock of such
Domestic Subsidiary owned by such Pledgor and (ii) in the case of any Pledged
Stock constituting Capital Stock of any Foreign Subsidiary, such percentage
(not more than 65%) as is specified on Schedule 2 of all the issued and
outstanding shares of all classes of the Capital Stock of each such Foreign
Subsidiary owned by such Pledgor.


4.3.2                        All the
shares of the Pledged Stock pledged by such Pledgor hereunder have been duly
and validly issued and are fully paid and nonassessable (or the equivalent, if
any, under applicable foreign law).


4.3.3                        Such
Pledgor is the record and beneficial owner of, and has good title to, the
Pledged Securities pledged by it hereunder, free of any and all Liens or
options in favor of, or claims of, any other Person, except the security
interest created by this Agreement and Liens arising by operation of law or
permitted by the Credit Agreement (or described in the definition of “Permitted
Lien” in the Credit Agreement).


4.3.4                        Except
with respect to security interests in Pledged Securities (if any) constituting
Specified Assets, upon delivery to the Collateral Agent, or the Revolving Collateral
Agent acting as agent of the Collateral Agent for purposes of perfection, or
any Additional Agent acting as agent of the Collateral Agent for purposes of
perfection, as applicable, in accordance with the Intercreditor Agreement, of
the certificates evidencing the Pledged Securities held by such Pledgor together
with executed undated stock powers or other instruments of transfer, the
security interest created in such Pledged Securities constituting certificated
securities by this Agreement, assuming the continuing possession of such
Pledged Securities by the Collateral Agent, or the Revolving Collateral Agent
so acting as agent, or such Additional Agent so acting as agent, as applicable,
in accordance with the Intercreditor Agreement, will constitute a valid,
perfected first priority (subject, in terms of priority only, to the priority
of the Liens of the Revolving Collateral Agent or any Additional Agent)
security interest in such Pledged Securities to the extent provided in and
governed by the Code, enforceable in accordance with its terms against all creditors
of such Pledgor and any Persons purporting to purchase such Pledged Securities
from such Pledgor, except as enforceability may be affected by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors’ rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.


4.3.5                        Except
with respect to security interests in Pledged Securities (if any) constituting
Specified Assets, upon the obtaining and maintenance of “control” (as
described in the Code) by the Collateral Agent, the Revolving Collateral Agent
acting as agent of the Collateral Agent for purposes of perfection, or any
Additional Agent acting as agent of the Collateral Agent for purposes of
perfection (or their respective agents appointed for purposes of perfection),
as applicable, in accordance with the Intercreditor Agreement of all Pledged
Securities that constitute uncertificated securities, the security interest created
by this Agreement in such Pledged Securities that constitute uncertificated
securities, will constitute a valid, perfected first priority (subject, in
terms of priority only, to the



 23
 









priority of the Liens of the Revolving
Collateral Agent or any Additional Agent) 
security interest in such Pledged Securities constituting uncertificated
securities, enforceable in accordance with its terms against all creditors of
such Pledgor and any persons purporting to purchase such Pledged Securities
from such Pledgor, to the extent provided in and governed by the Code, except
as enforceability may be affected by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors’ rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.


SECTION 5      COVENANTS


5.1                                 Covenants
of Each Guarantor.  Each Guarantor
covenants and agrees with the Collateral Agent and the other Secured Parties
that, from and after the date of this Agreement until the earliest to occur of
(i) the date upon which the Loans, and all other Obligations then due and
owing, shall have been paid in full in cash and the Term Loan Commitments shall
have terminated, (ii) as to any Guarantor, the date upon which all the Capital
Stock of such Guarantor shall have been sold or otherwise disposed of (to a
Person other than the Borrower or a Restricted Subsidiary) in accordance with
the terms of the Credit Agreement or (iii) as to any Guarantor, the designation
of such Guarantor as an Unrestricted Subsidiary, such Guarantor shall take, or
shall refrain from taking, as the case may be, each action that is necessary to
be taken or not taken, as the case may be, so that no Default or Event of
Default is caused by the failure to take such action or to refrain from taking
such action by such Guarantor or any of its Restricted Subsidiaries.


5.2                                 Covenants
of Each Grantor.  Each Grantor
covenants and agrees with the Collateral Agent and the other Secured Parties
that, from and after the date of this Agreement until the earlier to occur of
(i) the date upon which the Loans, and all other Obligations then due and owing
shall have been paid in full in cash and the Term Loan Commitments shall have
terminated, (ii) as to any Grantor, the date upon which all the Capital Stock
of such Grantor shall have been sold or otherwise disposed of (to a Person
other than the Borrower or a Restricted Subsidiary) in accordance with the
terms of the Credit Agreement or (iii) as to any Grantor, the designation of
such Grantor as an Unrestricted Subsidiary:


5.2.1                        Delivery
of Instruments and Chattel Paper.  If
any amount payable under or in connection with any of such Grantor’s Collateral
shall be or become evidenced by any Instrument or Chattel Paper, such Grantor
shall (except as provided in the following sentence) be entitled to retain
possession of all Collateral of such Grantor evidenced by any Instrument or
Chattel Paper, and shall hold all such Collateral in trust for the Collateral
Agent, for the ratable benefit of the Secured Parties.  In the event that an Event of Default shall
have occurred and be continuing, upon the request of the Collateral Agent, or
the Revolving Collateral Agent, or any Additional Agent, as applicable, in accordance
with the Intercreditor Agreement, such Instrument or Chattel Paper shall be
promptly delivered to the Collateral Agent, or the Revolving Collateral Agent,
or any Additional Agent, as applicable, in accordance with the Intercreditor
Agreement, duly indorsed in a manner satisfactory to the Collateral Agent, or
the Revolving Collateral Agent, or any Additional Agent, as applicable, in
accordance with the Intercreditor Agreement, to be



 24
 









held as Collateral pursuant to this
Agreement.  Such Grantor shall not permit
any other Person to possess any such Collateral at any time other than in
connection with any sale or other disposition of such Collateral in a transaction
permitted by the Credit Agreement.


5.2.2                        Maintenance
of Insurance.  Such Grantor will
maintain with financially sound and reputable insurance companies insurance on,
or self insure, all property material to the business of the Borrower and its
Subsidiaries, taken as a whole, in at least such amounts and against at least
such risks (but including in any event public liability, product liability and
business interruption) as are consistent with the past practices of the Borrower
and its Subsidiaries and otherwise as are usually insured against in the same
general area by companies engaged in the same or a similar business; furnish to
the Collateral Agent, upon written request, information in reasonable detail as
to the insurance carried.


5.2.3                        Payment
of Obligations.  Such Grantor will
pay and discharge or otherwise satisfy at or before maturity or before they
become delinquent, as the case may be, all material taxes, assessments and
governmental charges or levies imposed upon such Grantor’s Collateral or in
respect of income or profits therefrom, as well as all material claims of any
kind (including, without limitation, material claims for labor, materials and
supplies) against or with respect to such Grantor’s Collateral, except where
the amount or validity thereof is currently being contested in good faith by
appropriate proceedings and reserves in conformity with GAAP with respect
thereto have been provided on the books of such Grantor and except to the
extent that failure to do so, in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.


5.2.4                        Maintenance
of Perfected Security Interest; Further Documentation.


(a)                                  Such Grantor shall
maintain the security interest created by this Agreement in such Grantor’s
Collateral as a security interest having at least the perfection and priority
described in subsection 4.2.2 of this Agreement and shall defend such security
interest against the claims and demands of all Persons whomsoever.


(b)                                 Such Grantor will
furnish to the Collateral Agent from time to time statements and schedules
further identifying and describing such Grantor’s Collateral and such other
reports in connection with such Grantor’s Collateral as the Collateral Agent
may reasonably request in writing, all in reasonable detail.


(c)                                  At any time and from
time to time, upon the written request of the Collateral Agent, and at the sole
expense of such Grantor, such Grantor will promptly and duly execute and
deliver such further instruments and documents and take such further actions as
the Collateral Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted by such Grantor, including, without limitation, the filing of
any financing or continuation statements under the Uniform Commercial Code (or
other similar laws) in effect in any jurisdiction with respect to the security
interests created hereby.



 25
 









5.2.5                        Changes
in Name, Jurisdiction of Organization, etc. 
Such Grantor will not, except upon not less than 30 days’ prior written
notice to the Collateral Agent, change its name or jurisdiction of organization
(whether by merger of otherwise); provided that, promptly after
receiving a written request therefor from the Collateral Agent, such Grantor
shall deliver to the Collateral Agent all additional financing statements and
other documents reasonably requested by the Collateral Agent to maintain the
validity, perfection and priority of the security interests as and to the
extent provided for herein.


5.2.6                        Notices.  Such Grantor will advise the Collateral Agent
promptly, in reasonable detail, of:


(a)                                  any Lien (other than
security interests created hereby or Liens permitted under the Credit Agreement
or Liens described in the definition of “Permitted Lien” in the Credit
Agreement) on any of such Grantor’s Collateral which would materially adversely
affect the ability of the Collateral Agent to exercise any of its remedies hereunder;
and


(b)                                 the occurrence of any
other event which would reasonably be expected to have a material adverse
effect on the security interests created hereby.


5.2.7                        Pledged
Stock.  In the case of each Grantor
that is an Issuer, such Issuer  agrees
that (i) it will be bound by the terms of this Agreement relating to the
Pledged Stock issued by it and will comply with such terms insofar as such
terms are applicable to it, (ii) it will notify the Collateral Agent promptly
in writing of the occurrence of any of the events described in subsection 5.3.1
with respect to the Pledged Stock issued by it and (iii) the terms of subsections
6.3(c) and 6.7 shall apply to it, mutatis  mutandis, with respect
to all actions that may be required of it pursuant to subsection 6.3(c) or 6.7
with respect to the Pledged Stock issued by it.


5.2.8                        Accounts
Receivable.


(a)                                  With respect to
Accounts Receivable constituting Collateral, other than in the ordinary course
of business or as permitted by the Loan Documents, such Grantor will not (i)
grant any extension of the time of payment of any of such Grantor’s Accounts
Receivable, (ii) compromise or settle any such Account Receivable for less than
the full amount thereof, (iii) release, wholly or partially, any Person liable
for the payment of any Account Receivable, (iv) allow any credit or discount
whatsoever on any such Account Receivable or (v) amend, supplement or modify
any Account Receivable unless such extensions, compromises, settlements,
releases, credits or discounts would not reasonably be expected to materially
adversely affect the value of the Accounts Receivable constituting Collateral
taken as a whole.


(b)                                 Such Grantor will
deliver to the Collateral Agent a copy of each material demand, notice or
document received by it that questions or calls into doubt the validity or
enforceability of more than 10% of the aggregate amount of the then outstanding
Accounts Receivable.



 26
 









5.2.9                        Maintenance
of Records.  Such Grantor will keep
and maintain at its own cost and expense reasonably satisfactory and complete
records of its Collateral, including, without limitation, a record of all
payments received and all credits granted with respect to such Collateral, and
shall mark such records to evidence this Agreement and the Liens and the
security interests created hereby.


5.2.10                  Acquisition
of Intellectual Property.  Within 90
days after the end of each calendar year, such Grantor will notify the
Collateral Agent of any acquisition by such Grantor of (i) any registration of
any material Copyright, Patent or Trademark or (ii) any exclusive rights under
a material Copyright License, Patent License or Trademark License constituting
Collateral, and shall take such actions as may be reasonably requested by the
Collateral Agent (but only to the extent such actions are within such Grantor’s
control) to perfect the security interest granted to the Collateral Agent and
the other Secured Parties therein, to the extent provided herein in respect of
any Copyright, Patent or Trademark constituting Collateral on the date hereof,
by (x) the execution and delivery of an amendment or supplement to this Agreement
(or amendments to any such agreement previously executed or delivered by such
Grantor) and/or (y) the making of appropriate filings (I) of financing
statements under the Uniform Commercial Code of any applicable jurisdiction and/or
(II) in the United States Patent and Trademark Office, or with respect to
Copyrights and Copyright Licenses, another applicable office).


5.2.11                  Protection of
Trade Secrets.  Such Grantor shall
take all steps which it deems commercially reasonable to preserve and protect
the secrecy of all material Trade Secrets of such Grantor.


5.2.12                  Commercial
Tort Actions.  All Commercial Tort
Actions of each Grantor in existence on the date of this Agreement, known to
such Grantor after reasonable inquiry, are described in Schedule 7 hereto.  If any Grantor shall at any time after the
date of this Agreement acquire a Commercial Tort Action in an amount (taking
the greater of the aggregate claimed damages thereunder or the reasonably
estimated value thereof) of $3,000,000, such Grantor shall promptly notify the
Collateral Agent thereof in a writing signed by such Grantor and describing the
details thereof and shall grant to the Collateral Agent in such writing a security
interest therein and in the proceeds thereof, all upon the terms of this
Agreement, with such writing to be in form and substance reasonably
satisfactory to the Collateral Agent.


5.3                                 Covenants
of Each Pledgor.  Each Pledgor
covenants and agrees with the Collateral Agent and the other Secured Parties that,
from and after the date of this Agreement until the earliest to occur of (i)
the Term Loans, and all other Obligations then due and owing shall have been
paid in full in cash and the Term Loan Commitments shall have terminated, (ii)
as to any Pledgor, all the Capital Stock of such Pledgor shall have been sold
or otherwise disposed of (to a Person other than the Borrower or a Restricted
Subsidiary) as permitted under the terms of the Credit Agreement or (iii) the
designation of such Pledgor as an Unrestricted Subsidiary:


5.3.1                        Additional
Shares.  If such Pledgor shall, as a
result of its ownership of its Pledged Stock, become entitled to receive or
shall receive any stock certificate (including, without limitation, any stock
certificate representing a stock dividend or a distribution



 27
 









in connection with any reclassification,
increase or reduction of capital or any certificate issued in connection with
any reorganization), stock option or similar rights in respect of the Capital
Stock of any Issuer, whether in addition to, in substitution of, as a
conversion of, or in exchange for, any shares of the Pledged Stock, or
otherwise in respect thereof, such Pledgor shall accept the same as the agent
of the Collateral Agent and the other Secured Parties, hold the same in trust
for the Collateral Agent and the other Secured Parties and deliver the same
forthwith to the Collateral Agent (who will hold the same on behalf of the
Secured Parties), or the Revolving Collateral Agent or any Additional Agent, as
applicable, in accordance with the Intercreditor Agreement, in the exact form
received, duly indorsed by such Pledgor to the Collateral Agent, or the Revolving
Collateral Agent or any Additional Agent, as applicable, in accordance with the
Intercreditor Agreement, if required, or accompanied by an undated stock power
covering such certificate duly executed in blank by such Pledgor, to be held by
the Collateral Agent, or the Revolving Collateral Agent or any Additional
Agent, as applicable, in accordance with the Intercreditor Agreement, subject
to the terms hereof, as additional collateral security for the Obligations
(subject to subsection 3.3 and provided that in no event shall there be
pledged, nor shall any Pledgor be required to pledge, (i)  more than 65% of any series of the outstanding
Capital Stock of any Foreign Subsidiary pursuant to this Agreement or (ii) any
Restricted Assets).  Any sums paid upon
or in respect of the Pledged Stock upon the liquidation or dissolution of any
Issuer (except any liquidation or dissolution of any Subsidiary of the Borrower
permitted by the Credit Agreement) shall be paid over to the Collateral Agent,
or the Revolving Collateral Agent or any Additional Agent, as applicable, in
accordance with the Intercreditor Agreement, to be held by the Collateral
Agent, or the Revolving Collateral Agent or any Additional Agent, as applicable,
in accordance with the Intercreditor Agreement, subject to the terms hereof as
additional collateral security for the Obligations, and in case any distribution
of capital shall be made on or in respect of the Pledged Stock or any property
shall be distributed upon or with respect to the Pledged Stock pursuant to the
recapitalization or reclassification of the capital of any Issuer or pursuant
to the reorganization thereof, the property so distributed shall, unless
otherwise subject to a perfected security interest in favor of the Collateral
Agent, be delivered to the Collateral Agent, or the Revolving Collateral Agent
or any Additional Agent, as applicable, in accordance with the Intercreditor
Agreement, to be held by the Collateral Agent, or the Revolving Collateral
Agent or any Additional Agent, as applicable, in accordance with the
Intercreditor Agreement subject to the terms hereof as additional collateral security
for the Obligations, in each case except as otherwise provided by the
Intercreditor Agreement.  If any sums of
money or property so paid or distributed in respect of the Pledged Stock shall
be received by such Pledgor, such Pledgor shall, until such money or property
is paid or delivered to the Collateral Agent, or the Revolving Collateral Agent
or any Additional Agent, as applicable, in accordance with the Intercreditor
Agreement, hold such money or property in trust for the Secured Parties, segregated
from other funds of such Pledgor, as additional collateral security for the
Obligations.


5.3.2                        Maintenance
of Pledged Stock.  Without the prior
written consent of the Collateral Agent, such Pledgor will not (except as
permitted by the Credit Agreement) (i) vote to enable, or take any other action
to permit, any Issuer to issue any stock or other



 28
 









equity securities of any nature or to issue
any other securities convertible into, or granting the right to purchase or
exchange for, any stock or other equity securities of any nature of any Issuer,
(ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any
option with respect to, the Pledged Securities or Proceeds thereof, (iii)
create, incur or permit to exist any Lien or option in favor of, or any
material adverse claim of any Person with respect to, any of the Pledged Securities
or Proceeds thereof, or any interest therein, except for the security interests
created by this Agreement or Liens arising by operation of law or (iv) enter
into any agreement or undertaking restricting the right or ability of such
Pledgor or the Collateral Agent to sell, assign or transfer any of the Pledged
Securities or Proceeds thereof.


5.3.3                        Pledged
Notes.  Such Pledgor shall, on the
date of this Agreement (or on such later date upon which it becomes a party
hereto pursuant to subsection 9.15), deliver to the Collateral Agent, or the Revolving
Collateral Agent or any Additional Agent, as applicable, in accordance with the
Intercreditor Agreement, all Pledged Notes then held by such Pledgor (excluding
any Pledged Note the principal amount of which does not exceed $3,000,000),
endorsed in blank or, at the request of the Collateral Agent, or the Revolving
Collateral Agent or any Additional Agent, as applicable, in accordance with the
Intercreditor Agreement, endorsed to the Collateral Agent, or the Revolving
Collateral Agent or any Additional Agent, as applicable, in accordance with the
Intercreditor Agreement.  Furthermore,
within ten Business Days after any Pledgor obtains a Pledged Note with a principal
amount in excess of $3,000,000, such Pledgor shall cause such Pledged Note to
be delivered to the Collateral Agent, or the Revolving Collateral Agent or any
Additional Agent, as applicable, in accordance with the Intercreditor
Agreement, endorsed in blank or, at the request of the Collateral Agent, or the
Revolving Collateral Agent or any Additional Agent, as applicable, in
accordance with the Intercreditor Agreement, endorsed to the Collateral Agent,
or the Revolving Collateral Agent or any Additional Agent, as applicable, in
accordance with the Intercreditor Agreement.


5.3.4                        Maintenance
of Security Interest.  Such Pledgor
shall maintain the security interest created by this Agreement in such Pledgor’s
Pledged Collateral as a security interest having at least the perfection and
priority described in subsection 4.3.4 or 4.3.5, as applicable, and shall
defend such security interest against the claims and demands of all Persons
whomsoever.  At any time and from time to
time, upon the written request of the Collateral Agent and at the sole expense
of such Pledgor, such Pledgor will promptly and duly execute and deliver such
further instruments and documents and take such further actions as the
Collateral Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted by such Pledgor.


5.3.5                        Additional
Pledged Stock.  (a)    At
such time as any Home Warranty Subsidiary or Captive Insurance Subsidiary
is no longer subject to regulation (and that has no Subsidiary that is
subject to regulation) as an insurance, home warranty, service contract or
similar company, as the case may be, (1) within 60 days of such time, the
relevant Pledgors shall deliver the certificates, if any, constituting the New
Pledged Stock, if any, issued by such Home Warranty Subsidiary or Captive
Insurance Subsidiary to the Collateral



 29
 









Agent (who will hold the same on behalf of
the Secured Parties), or the Revolving Collateral Agent or any Additional
Agent, as applicable, in accordance with the Intercreditor Agreement, in the
exact form received, duly indorsed by such Pledgor to the Collateral Agent, or
the Revolving Collateral Agent or any Additional Agent, as applicable, in
accordance with the Intercreditor Agreement, if required, or accompanied by an
undated stock power covering such certificate duly executed in blank by such
Pledgor, to be held by the Collateral Agent, or the Revolving Collateral Agent
or any Additional Agent, as applicable, in accordance with the Intercreditor
Agreement, subject to the terms hereof, as additional collateral security for
the Obligations (subject to subsection 3.3 and provided that in no event
shall there be pledged, nor shall any Pledgor be required to pledge, (i)  more than 65% of any series of the
outstanding Capital Stock of any Foreign Subsidiary pursuant to this Agreement
or (ii) any Restricted Assets) and (2) on the date that is 60 days after such
time, such New Pledged Stock shall be deemed “Pledged Stock” for all purposes under
this Agreement, and Schedule 2 shall be deemed amended to include the issuers
of such New Pledged Stock as “Issuers” hereunder.


(b)                                 At
such time as (i) the Instar Group Pledge Agreement is terminated (provided it
is not replaced by any new agreement granting a Lien on the Capital Stock of
any Instar Entity in favor of Steward or any of its Subsidiaries)  and (ii) the Liens on all Capital Stock of the
Instar Entities created thereunder are permanently released, (1) within 60 days
of such termination and release, the relevant Pledgors shall deliver the
certificates, if any, constituting the Instar Pledged Stock to the Collateral
Agent (who will hold the same on behalf of the Secured Parties), or the Revolving
Collateral Agent or any Additional Agent, as applicable, in accordance with the
Intercreditor Agreement, in the exact form received, duly indorsed by such
Pledgor to the Collateral Agent, or the Revolving Collateral Agent or any
Additional Agent, as applicable, in accordance with the Intercreditor
Agreement, if required, or accompanied by an undated stock power covering such
certificate duly executed in blank by such Pledgor, to be held by the Collateral
Agent, or the Revolving Collateral Agent or any Additional Agent, as
applicable, in accordance with the Intercreditor Agreement, subject to the
terms hereof, as additional collateral security for the Obligations (subject to
subsection 3.3 and provided that in no event shall there be pledged, nor
shall any Pledgor be required to pledge, (i) 
more than 65% of any series of the outstanding Capital Stock of any
Foreign Subsidiary pursuant to this Agreement or (ii) any Restricted Assets)
and (2) on the date that is 60 days after such termination and release, the Instar
Pledged Stock shall be deemed “Pledged Stock” for all purposes under this
Agreement, and Schedule 2 shall be deemed amended to include the issuers of the
Instar Pledged Stock as “Issuers” hereunder.


5.4                                 Covenants
of Holding.  Holding covenants and
agrees with the Collateral Agent and the other Secured Parties that, from and
after the date of this Agreement until the Loans, and all other Obligations
then due and owing, shall have been paid in full in cash and the Term Loan Commitments
shall have terminated, Holding: shall not conduct, transact or otherwise engage,
or commit to conduct, transact or otherwise engage, in any business or
operations other than (i) transactions contemplated by the Loan Documents or
the provision of administrative, legal, accounting and management services to,
or on behalf of, any of its Subsidiaries, (ii) the acquisition and ownership of
the Capital Stock of any of its Subsidiaries and the exercise of rights and 



 30
 









performance of
obligations in connection therewith, (iii) the entry into, and exercise of
rights and performance of obligations in respect of (A) the Transaction
Documents, this Agreement and any other Loan Documents to which it is a party;
any other agreement to which it is a party on the date hereof; and any guarantee
of Indebtedness or other obligations of any of its Subsidiaries permitted pursuant
to the Loan Documents; in each case as amended, supplemented waived or
otherwise modified from time to time, and any refinancings, refundings,
renewals or extensions thereof, (B) contracts and agreements with officers,
directors and employees of it or any Subsidiary thereof relating to their employment
or directorships, (C) insurance policies and related contracts and agreements,
and (D) subscription agreements, registration rights agreements, voting and
other stockholder agreements, engagement letters, underwriting agreements and
other agreements in respect of its securities or any offering, issuance or sale
thereof, including but not limited to in respect of the Management Subscription
Agreements, (iv) the offering, issuance, sale and repurchase or redemption of,
and dividends or distributions on its securities, (v) the filing of
registration statements, and compliance with applicable reporting and other
obligations, under federal, state or other securities laws, (vi) the listing of
its securities and compliance with applicable reporting and other obligations
in connection therewith, (vii) the retention of (and the entry into, and
exercise of rights and performance of obligations in respect of, contracts and
agreements with) transfer agents, private placement agents, underwriters,
counsel, accountants and other advisors and consultants, (viii) the performance
of obligations under and compliance with its certificate of incorporation and
by-laws, or any applicable law, ordinance, regulation, rule, order, judgment,
decree or permit, including, without limitation, as a result of or in
connection with the activities of its Subsidiaries, (ix) the incurrence and
payment of its operating and business expenses and any taxes for which it may
be liable, (x) making loans to or other Investments in, or incurrence of
Indebtedness from, its Subsidiaries, as and to the extent not prohibited by the
Credit Agreement and (xi) other activities incidental or related to the
foregoing.  This subsection 5.4 shall not
be construed to limit the incurrence of Indebtedness by Holding to any Person
(subject to the preceding clause (x)).


SECTION 6      REMEDIAL
PROVISIONS


6.1                                 Certain
Matters Relating to Accounts.  (a)  At any time and from
time to time after the occurrence and during the continuance of an Event of Default,
the Collateral Agent shall have the right to make test verifications of the
Accounts Receivable in any reasonable manner and through any reasonable medium
that it reasonably considers advisable, and the relevant Grantor shall furnish
all such assistance and information as the Collateral Agent may reasonably
require in connection with such test verifications.  At any time and from time to time after the
occurrence and during the continuance of an Event of Default, upon the
Collateral Agent’s reasonable request and at the expense of the relevant Grantor,
such Grantor shall cause independent public accountants or others reasonably
satisfactory to the Collateral Agent to furnish to the Collateral Agent reports
showing reconciliations, aging and test verifications of, and trial balances
for, the Accounts Receivable constituting Collateral.


(b)                                 The
Collateral Agent hereby authorizes each Grantor to collect such Grantor’s
Accounts Receivable and the Collateral Agent may curtail or terminate said
authority at any time after the occurrence



 31
 









and during the
continuance of an Event of Default specified in subsection 8(a) of the Credit
Agreement.  If required by the Collateral
Agent at any time after the occurrence and during the continuance of an Event
of Default specified in subsection 8(a) of the Credit Agreement, any Proceeds
constituting payments or other cash proceeds of Accounts Receivable constituting
Collateral, when collected by such Grantor, (i) shall be forthwith (and, in any
event, within two Business Days of receipt by such Grantor) deposited in, or
otherwise transferred by such Grantor to, the Collateral Proceeds Account,
subject to withdrawal by the Collateral Agent for the account of the Secured
Parties only as provided in subsection 6.5, and (ii) until so turned over,
shall be held by such Grantor in trust for the Collateral Agent and the other
Secured Parties, segregated from other funds of such Grantor.  All Proceeds constituting collections or
other cash proceeds of Accounts Receivable constituting Collateral while held
by the Collateral Account Bank (or by any Grantor in trust for the benefit of
the Collateral Agent and the other Secured Parties) shall continue to be
collateral security for all of the Obligations and shall not constitute payment
thereof until applied as hereinafter provided. 
At any time when an Event of Default specified in subsection 8(a) of the
Credit Agreement has occurred and is continuing, at the Collateral Agent’s
election, each of the Collateral Agent and the Administrative Agent may apply
all or any part of the funds on deposit in the Collateral Proceeds Account
established by the relevant Grantor to the payment of the Obligations of such
Grantor then due and owing, such application to be made as set forth in
subsection 6.5 hereof.  So long as
no Event of Default has occurred and is continuing, the funds on deposit in the
Collateral Proceeds Account shall be remitted as provided in subsection 6.1(d)
hereof.


(c)                                  At
any time and from time to time after the occurrence and during the continuance
of an Event of Default specified in subsection 8(a) of the Credit Agreement, at
the Collateral Agent’s request, each Grantor shall deliver to the Collateral
Agent copies or, if required by the Collateral Agent for the enforcement
thereof or foreclosure thereon, originals of all documents held by such Grantor
evidencing, and relating to, the agreements and transactions which gave rise to
such Grantor’s Accounts Receivable constituting Collateral, including, without
limitation, all statements relating to such Grantor’s Accounts Receivable
constituting Collateral and all orders, invoices and shipping receipts.


(d)                                 So
long as no Event of Default has occurred and is continuing, the Collateral
Agent shall instruct the Collateral Account Bank to promptly remit any funds on
deposit in each Grantor’s Collateral Proceeds Account to such Grantor’s General
Fund Account or any other account designated by such Grantor.  In the event that an Event of Default has
occurred and is continuing, the Collateral Agent and the Grantors agree that
the Collateral Agent, at its option, may require that each Collateral Proceeds
Account and the General Fund Account of each Grantor be established at the
Collateral Agent.  Each Grantor shall
have the right, at any time and from time to time, to withdraw such of its own
funds from its own General Fund Account, and to maintain such balances in its
General Fund Account, as it shall deem to be necessary or desirable.


6.2                         Communications
with Obligors; Grantors Remain Liable.


(a)                                  The
Collateral Agent in its own name or in the name of others, may at any time and
from time to time after the occurrence and during the continuance of an Event
of Default specified in subsection 8(a) of the Credit Agreement, communicate
with obligors under the Accounts Receivable and parties to the Contracts (in
each case, to the extent constituting Collateral) to verify with them to the
Collateral Agent’s satisfaction the existence, amount and terms of any Accounts
Receivable or Contracts.



 32
 









(b)                                 Upon
the request of the Collateral Agent at any time after the occurrence and during
the continuance of an Event of Default specified in subsection 8(a) of the
Credit Agreement, each Grantor shall notify obligors on such Grantor’s Accounts
Receivable and parties to such Grantor’s Contracts (in each case, to the extent
constituting Collateral) that such Accounts Receivable and such Contracts have
been assigned to the Collateral Agent, for the ratable benefit of the Secured
Parties, and that payments in respect thereof shall be made directly to the
Collateral Agent.


(c)                                  Anything
herein to the contrary notwithstanding, each Grantor shall remain liable under
each of such Grantor’s Accounts Receivable to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all
in accordance with the terms of any agreement giving rise thereto.  None of the Collateral Agent, the Administrative
Agent or any other Secured Party shall have any obligation or liability under
any Account Receivable (or any agreement giving rise thereto) by reason of or
arising out of this Agreement or the receipt by the Collateral Agent or any
other Secured Party of any payment relating thereto, nor shall the Collateral
Agent or any other Secured Party be obligated in any manner to perform any of
the obligations of any Grantor under or pursuant to any Account Receivable (or
any agreement giving rise thereto) to make any payment, to make any inquiry as
to the nature or the sufficiency of any payment received by it or as to the
sufficiency of any performance by any party thereunder, to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts that may have been assigned to it or to which it may be entitled
at any time or times.


6.3                                 Pledged
Stock.


(a)                                  Unless
an Event of Default shall have occurred and be continuing and the Collateral
Agent shall have given notice to the relevant Pledgor of the Collateral Agent’s
intent to exercise its corresponding rights pursuant to subsection 6.3(b), each
Pledgor shall be permitted to receive all cash dividends and distributions paid
in respect of the Pledged Stock (subject to the last two sentences of
subsection 5.3.1 of this Agreement) and all payments made in respect of the
Pledged Notes, to the extent permitted in the Credit Agreement, and to exercise
all voting and corporate rights with respect to the Pledged Stock; provided,
however, that no vote shall be cast or corporate right exercised or such
other action taken (other than in connection with a transaction expressly
permitted by the Credit Agreement) which, in the Collateral Agent’s reasonable
judgment, would materially impair the Pledged Stock or the related rights or
remedies of the Secured Parties or which would be inconsistent with or result
in any violation of any provision of the Credit Agreement, this Agreement or
any other Loan Document.


(b)                                 If
an Event of Default shall occur and be continuing and the Collateral Agent
shall give notice of its intent to exercise such rights to the relevant Pledgor
or Pledgors, (i) the Collateral Agent, or the Revolving Collateral Agent
or any Additional Agent, as applicable, in accordance with the terms of the
Intercreditor Agreement, shall have the right to receive any and all cash
dividends, payments or other Proceeds paid in respect of the Pledged Stock and
make application thereof to the Obligations of the relevant Pledgor in such
order as is provided in subsection 6.5, and (ii) any or all of the Pledged
Stock shall be registered in the name of the Collateral Agent or its nominee or
the Revolving Collateral Agent or any Additional Agent or the respective
nominee thereof, and the Collateral Agent or its nominee or the Revolving
Collateral Agent



 33
 









or any
Additional Agent or the respective nominee thereof, as applicable, in accordance
with the terms of the Intercreditor Agreement, may thereafter exercise (x) all
voting, corporate and other rights pertaining to such Pledged Stock at any
meeting of shareholders of the relevant Issuer or Issuers or otherwise and
(y) any and all rights of conversion, exchange, subscription and any other
rights, privileges or options pertaining to such Pledged Stock as if it were
the absolute owner thereof (including, without limitation, the right to
exchange at its discretion any and all of the Pledged Stock upon the merger,
consolidation, reorganization, recapitalization or other fundamental change in
the corporate structure of any Issuer, or upon the exercise by the relevant
Pledgor or the Collateral Agent, or the Revolving Collateral Agent or any Additional
Agent, as applicable, in accordance with the terms of the Intercreditor
Agreement, of any right, privilege or option pertaining to such Pledged Stock,
and in connection therewith, the right to deposit and deliver any and all of
the Pledged Stock with any committee, depositary, transfer agent, registrar or
other designated agency upon such terms and conditions as the Collateral Agent,
or the Revolving Collateral Agent or any Additional Agent, as applicable, in accordance
with the terms of the Intercreditor Agreement, may reasonably determine), all
without liability (other than for its gross negligence or willful misconduct)
except to account for property actually received by it, but the Collateral
Agent, or the Revolving Collateral Agent or any Additional Agent, as applicable
shall have no duty to any Pledgor to exercise any such right, privilege or
option and shall not be responsible for any failure to do so or delay in so
doing, provided that the Collateral Agent, or the Revolving Collateral
Agent or any Additional Agent, as applicable, shall not exercise any voting or
other consensual rights pertaining to the Pledged Stock in any way that would
constitute an exercise of the remedies described in subsection 6.6 other than
in accordance with subsection 6.6.


(c)                                  Each
Pledgor hereby authorizes and instructs each Issuer or maker of any Pledged
Securities pledged by such Pledgor hereunder to (i) comply with any instruction
received by it from the Collateral Agent in writing that (x) states that an
Event of Default has occurred and is continuing and (y) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from such Pledgor, and each Pledgor agrees that each Issuer or
maker shall be fully protected in so complying, and (ii) unless otherwise
expressly permitted hereby, pay any dividends or other payments with respect to
the Pledged Securities directly to the Collateral Agent.


6.4                                 Proceeds
to be Turned Over to the Collateral Agent. 
In addition to the rights of the Collateral Agent and the other Secured
Parties specified in subsection 6.1 with respect to payments of Accounts
Receivable constituting Collateral, if an Event of Default shall occur and be
continuing, and the Collateral Agent shall have instructed any Grantor to do
so, all Proceeds of Collateral received by such Grantor consisting of cash,
checks and other Cash Equivalent items shall be held by such Grantor in trust
for the Collateral Agent and the other Secured Parties hereto, or the Revolving
Collateral Agent and the other Secured Parties (as defined in the Revolving
Credit Guarantee and Collateral Agreement) or any Additional Agent and the
other applicable Additional Secured Parties (as defined in the Intercreditor
Agreement), as applicable, in accordance with the terms of the Intercreditor
Agreement, segregated from other funds of such Grantor, and shall, forthwith
upon receipt by such Grantor, be turned over to the Collateral Agent, or the Revolving
Collateral Agent or any Additional Agent, as applicable, in accordance with the
terms of the Intercreditor Agreement (or their respective agents appointed for
purposes



 34
 









of
perfection), in the exact form received by such Grantor (duly indorsed by such
Grantor to the Collateral Agent, or Revolving Collateral Agent or any
Additional Agent, as applicable, in accordance with the terms of the
Intercreditor Agreement, if required). 
All Proceeds of Collateral received by the Collateral Agent hereunder
shall be held by the Collateral Agent in the relevant Collateral Proceeds
Account maintained under its sole dominion and control.  All Proceeds of Collateral while held by the
Collateral Agent in such Collateral Proceeds Account (or by the relevant
Grantor in trust for the Collateral Agent and the other Secured Parties) shall
continue to be held as collateral security for all the Obligations of such
Grantor and shall not constitute payment thereof until applied as provided in
subsection 6.5


6.5                                 Application
of Proceeds.  It is agreed that if an
Event of Default shall occur and be continuing, any and all Proceeds of the
relevant Granting Party’s Collateral (as defined in the Credit Agreement)
received by the Collateral Agent (whether from the relevant Granting Party or
otherwise) shall be held by the Collateral Agent for the benefit of the Secured
Parties as collateral security for the Obligations of the relevant Granting
Party (whether matured or unmatured), and/or then or at any time thereafter
may, in the sole discretion of the Collateral Agent, be applied by the
Collateral Agent against the Obligations of the relevant Granting Party then
due and owing in the order of priority set forth in the Intercreditor
Agreement.


6.6                                 Code
and Other Remedies.  If an Event of
Default shall occur and be continuing, the Collateral Agent, on behalf of the
Secured Parties, may exercise, in addition to all other rights and remedies
granted to them in this Agreement and in any other instrument or agreement
securing, evidencing or relating to the Obligations to the extent permitted by
applicable law, all rights and remedies of a secured party under the Code or
any other applicable law.  Without limiting
the generality of the foregoing, to the extent permitted by applicable law, the
Collateral Agent, without demand of performance or other demand, presentment,
protest, advertisement or notice of any kind (except any notice required by law
referred to below) to or upon any Granting Party or any other Person (all and
each of which demands, defenses, advertisements and notices are hereby waived),
may in such circumstances, forthwith (subject to the terms of any documentation
governing any Special Purpose Financing) collect, receive, appropriate and
realize upon the Security Collateral, or any part thereof, and/or may
forthwith, subject to any existing reserved rights or licenses, sell, lease, assign,
give option or options to purchase, or otherwise dispose of and deliver the
Security Collateral or any part thereof (or contract to do any of the foregoing),
in one or more parcels at public or private sale or sales, at any exchange,
broker’s board or office of the Collateral Agent or any other Secured Party or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery
without assumption of any credit risk. 
The Collateral Agent or any other Secured Party shall have the right, to
the extent permitted by law, upon any such sale or sales, to purchase the whole
or any part of the Security Collateral so sold, free of any right or equity of
redemption in such Granting Party, which right or equity is hereby waived and
released.  Each Granting Party further
agrees, at the Collateral Agent’s request (subject to the terms of any
documentation governing any Special Purpose Financing), to assemble the
Security Collateral and make it available to the Collateral Agent at places
which the Collateral Agent shall reasonably select, whether at such Granting
Party’s premises or elsewhere.  The Collateral
Agent shall apply the net proceeds of any action taken by it pursuant to this
subsection 6.6, after deducting all reasonable costs and expenses of every kind
incurred in connection therewith or incidental to



 35
 









the care or
safekeeping of any of the Security Collateral or in any way relating to the
Security Collateral or the rights of the Collateral Agent and the other Secured
Parties hereunder, including, without limitation, reasonable attorneys’ fees
and disbursements, to the payment in whole or in part of the Obligations of the
relevant Granting Party then due and owing, in the order of priority specified
in subsection 6.5 above, and only after such application and after the payment
by the Collateral Agent of any other amount required by any provision of law, including,
without limitation, Section 9-615(a)(3) of the Code, need the Collateral Agent
account for the surplus, if any, to such Granting Party.  To the extent permitted by applicable law,
(i) such Granting Party waives all claims, damages and demands it may acquire
against the Collateral Agent or any other Secured Party arising out of the
repossession, retention or sale of the Security Collateral, other than any such
claims, damages and demands that may arise from the gross negligence or willful
misconduct of any of the Collateral Agent or such other Secured Party, and (ii)
if any notice of a proposed sale or other disposition of Security Collateral
shall be required by law, such notice shall be deemed reasonable and proper if
given at least 10 days before such sale or other disposition.


6.7                                 Registration
Rights.


(a)                                  If
the Collateral Agent shall determine to exercise its right to sell any or all
of the Pledged Stock pursuant to subsection 6.6, and if in the reasonable
opinion of the Collateral Agent it is necessary or reasonably advisable to have
the Pledged Stock, or that portion thereof to be sold, registered under the
provisions of the Securities Act, the relevant Pledgor will use its reasonable
best efforts to cause the Issuer thereof to (i) execute and deliver, and use
its best efforts to cause the directors and officers of such Issuer to execute
and deliver, all such instruments and documents, and do or cause to be done all
such other acts as may be, in the reasonable opinion of the Collateral Agent,
necessary or advisable to register such Pledged Stock, or that portion thereof
to be sold, under the provisions of the Securities Act, (ii) use its reasonable
best efforts to cause the registration statement relating thereto to become
effective and to remain effective for a period of not more than one year from
the date of the first public offering of such Pledged Stock, or that portion
thereof to be sold, and (iii) make all amendments thereto and/or to the related
prospectus which, in the reasonable opinion of the Collateral Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto.  Such
Pledgor agrees to use its reasonable best efforts to cause such Issuer to
comply with the provisions of the securities or “Blue Sky” laws of any and all
states and the District of Columbia that the Collateral Agent shall reasonably
designate and to make available to its security holders, as soon as
practicable, an earnings statement (which need not be audited) that will
satisfy the provisions of Section 11(a) of the Securities Act.


(b)                                 Such
Pledgor recognizes that the Collateral Agent may be unable to effect a public
sale of any or all such Pledged Stock, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof.  Such Pledgor acknowledges and agrees that any
such private sale may result in prices and other terms less favorable than if
such sale were a public



 36
 









sale and,
notwithstanding such circumstances, to the extent permitted by applicable law,
agrees that any such private sale shall be deemed to have been made in a
commercially reasonable manner.  The Collateral
Agent shall not be under any obligation to delay a sale of any of the Pledged
Stock for the period of time necessary to permit the Issuer thereof to register
such securities for public sale under the Securities Act, or under applicable
state securities laws, even if such Issuer would agree to do so.


(c)                                  Such
Pledgor agrees to use its reasonable best efforts to do or cause to be done all
such other acts as may be necessary to make such sale or sales of all or any portion
of such Pledged Stock pursuant to this subsection 6.7 valid and binding and in
compliance with any and all other applicable Requirements of Law.  Such Pledgor further agrees that a breach of
any of the covenants contained in this subsection 6.7 will cause irreparable
injury to the Collateral Agent and the Lenders, that the Collateral Agent and
the Lenders have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this subsection 6.7
shall be specifically enforceable against such Pledgor, and, to the extent permitted
by applicable law, such Pledgor hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants except
for a defense that no Event of Default has occurred or is continuing under the
Credit Agreement.


6.8                                 Waiver;
Deficiency.  Each Granting Party
shall remain liable for any deficiency if the proceeds of any sale or other
disposition of the Security Collateral are insufficient to pay in full the
Loans and, to the extent then due and owing, all other Obligations of such
Granting Party and the reasonable fees and disbursements of any attorneys
employed by the Collateral Agent or any other Secured Party to collect such
deficiency.


SECTION 7      THE
COLLATERAL AGENT


7.1                                 Collateral
Agent’s Appointment as Attorney-in-Fact, etc.


(a)                                  Each
Granting Party hereby irrevocably constitutes and appoints the Collateral Agent
and any authorized officer or agent thereof, with full power of substitution,
as its true and lawful attorney-in-fact with full irrevocable power and
authority in the place and stead of such Granting Party and in the name of such
Granting Party or in its own name, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to execute any and
all documents and instruments that may be reasonably necessary or desirable to
accomplish the purposes of this Agreement to the extent permitted by applicable
law, provided that the Collateral Agent agrees not to exercise such
power except upon the occurrence and during the continuance of any Event of
Default.  Without limiting the generality
of the foregoing, at any time when an Event of Default has occurred and is
continuing (in each case to the extent permitted by applicable law), (x) each
Pledgor hereby gives the Collateral Agent the power and right, on behalf of
such Pledgor, without notice or assent by such Pledgor, to execute, in
connection with any sale provided for in subsection 6.6(a) or 6.7, any
indorsements, assessments or other instruments of conveyance or transfer with
respect to such Pledgor’s Pledged Collateral, and (y) each Grantor hereby gives
the Collateral Agent the power and right, on behalf of such Grantor, without
notice to or assent by such Grantor, to do any or all of the following:



 37
 









(i)                                     subject
to the terms of any documentation governing any Special Purpose Financing, in
the name of such Grantor or its own name, or otherwise, take possession of and
indorse and collect any checks, drafts, notes, acceptances or other instruments
for the payment of moneys due under any Account Receivable of such Grantor that
constitutes Collateral or with respect to any other Collateral of such Grantor
and file any claim or take any other action or institute any proceeding in any
court of law or equity or otherwise deemed appropriate by the Collateral Agent
for the purpose of collecting any and all such moneys due under any Account
Receivable of such Grantor that constitutes Collateral or with respect to any
other Collateral of such Grantor whenever payable;


(ii)                                  in
the case of any Copyright, Patent, or Trademark constituting Collateral of such
Grantor, execute and deliver any and all agreements, instruments, documents and
papers as the Collateral Agent may reasonably request to such Grantor to
evidence the Collateral Agent’s and the Lenders’ security interest in such
Copyright, Patent, or Trademark and the goodwill and general intangibles of
such Grantor relating thereto or represented thereby;


(iii)                               pay
or discharge taxes and Liens, other than Liens permitted under this Agreement
or the other Loan Documents, levied or placed on the Collateral of such
Grantor, effect any repairs or any insurance called for by the terms of this
Agreement and pay all or any part of the premiums therefor and the costs
thereof; and


(iv)                              subject
to the terms of any documentation governing any Special Purpose Financing, (A)
direct any party liable for any payment under any of the Collateral of such Grantor
to make payment of any and all moneys due or to become due thereunder directly
to the Collateral Agent or as the Collateral Agent shall direct; (B) ask or
demand for, collect, receive payment of and receipt for, any and all moneys,
claims and other amounts due or to become due at any time in respect of or
arising out of any Collateral of such Grantor; (C) sign and indorse any invoices,
freight or express bills, bills of lading, storage or warehouse receipts,
drafts against debtors, assignments, verifications, notices and other documents
in connection with any of the Collateral of such Grantor; (D) commence and prosecute
any suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral of such Grantor or any portion thereof
and to enforce any other right in respect of any Collateral of such Grantor;
(E) defend any suit, action or proceeding brought against such Grantor with
respect to any Collateral of such Grantor; (F) settle, compromise or adjust any
such suit, action or proceeding described in clause (E) above and, in
connection therewith, to give such discharges or releases as the Collateral
Agent may deem appropriate; (G) subject to any existing reserved rights or
licenses, assign any Copyright, Patent or Trademark constituting Collateral of
such Grantor (along with the goodwill of the business to which any such Copyright,
Patent or Trademark pertains), for such term or terms, on such conditions, and
in such manner, as the Collateral Agent shall in its sole discretion determine;
and (H) generally, sell, transfer, pledge and



 38
 









make any agreement with respect to or
otherwise deal with any of the Collateral of such Grantor as fully and
completely as though the Collateral Agent were the absolute owner thereof for
all purposes, and do, at the Collateral Agent’s option and such Grantor’s
expense, at any time, or from time to time, all acts and things which the
Collateral Agent deems necessary to protect, preserve or realize upon the
Collateral of such Grantor and the Collateral Agent’s and the other Secured
Parties’ security interests therein and to effect the intent of this Agreement,
all as fully and effectively as such Grantor might do.


(b)                                 The
reasonable expenses of the Collateral Agent incurred in connection with actions
undertaken as provided in this subsection 7.1, together with interest thereon
at a rate per annum equal to the rate per annum at which interest would then be
payable on past due ABR Loans, from the date of payment by the Collateral Agent
to the date reimbursed by the relevant Granting Party, shall be payable by such
Granting Party to the Collateral Agent on demand.


(c)                                  Each
Granting Party hereby ratifies all that said attorney shall lawfully do or
cause to be done by virtue hereof.  All
powers, authorizations and agencies contained in this Agreement are coupled
with an interest and are irrevocable as to the relevant Granting Party until
this Agreement is terminated as to such Granting Party, and the security
interests in the Security Collateral of such Granting Party created hereby are
released.


7.2                                 Duty
of Collateral Agent.  The Collateral
Agent’s sole duty with respect to the custody, safekeeping and physical
preservation of the Security Collateral in its possession, under Section 9-207
of the Code or otherwise, shall be to deal with it in the same manner as the
Collateral Agent deals with similar property for its own account.  None of the Collateral Agent, any other
Secured Party nor any of their respective officers, directors, employees or
agents shall be liable for failure to demand, collect or realize upon any of
the Security Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Security Collateral upon the
request of any Granting Party or any other Person or, except as otherwise
provided herein, to take any other action whatsoever with regard to the Security
Collateral or any part thereof.  The
powers conferred on the Collateral Agent and the other Secured Parties
hereunder are solely to protect the Collateral Agent’s and the other Secured
Parties’ interests in the Security Collateral and shall not impose any duty
upon the Collateral Agent or any other Secured Party to exercise any such powers.  The Collateral Agent and the other Secured
Parties shall be accountable only for amounts that they actually receive as a
result of the exercise of such powers, and neither they nor any of their
officers, directors, employees or agents shall be responsible to any Granting
Party for any act or failure to act hereunder, except as otherwise provided
herein or for their own gross negligence or willful misconduct.


7.3                                 Financing
Statements.  Pursuant to any
applicable law, each Granting Party authorizes the Collateral Agent to file or
record financing statements and other filing or recording documents or
instruments with respect to such Granting Party’s Security Collateral without
the signature of such Granting Party in such form and in such filing offices as
the Collateral Agent reasonably determines appropriate to perfect the security
interests of the Collateral Agent under this Agreement.  Each Granting Party authorizes the Collateral
Agent to use the collateral description “all personal property” or “all assets”
in any such financing statements.  The
Collateral Agent agrees to notify the relevant Granting Party of any financing
or continuation statement



 39
 









filed by it;
provided that any failure to give such notice shall not affect the validity or
effectiveness of any such filing.


7.4                                 Authority
of Collateral Agent.  Each Granting
Party acknowledges that the rights and responsibilities of the Collateral Agent
under this Agreement with respect to any action taken by the Collateral Agent
or the exercise or non-exercise by the Collateral Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement or any amendment, supplement or
other modification of this Agreement shall, as between the Collateral Agent and
the Secured Parties, be governed by the Credit Agreement and by such other agreements
with respect thereto as may exist from time to time among them, but, as between
the Collateral Agent and the Granting Parties, the Collateral Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and no Granting Party
shall be under any obligation, or entitlement, to make any inquiry respecting
such authority.


7.5                                 Right
of Inspection.  Upon reasonable
written advance notice to any Grantor and as often as may reasonably be
desired, or at any time and from time to time after the occurrence and during
the continuation of an Event of Default, the Collateral Agent shall have
reasonable access during normal business hours to all the books, correspondence
and records of such Grantor, and the Collateral Agent and its representatives
may examine the same, and to the extent reasonable take extracts therefrom and
make photocopies thereof, and such Grantor agrees to render to the Collateral
Agent, at such Grantor’s reasonable cost and expense, such clerical and other
assistance as may be reasonably requested with regard thereto.  The Collateral Agent and its representatives
shall also have the right, upon reasonable advance written notice to such
Grantor subject to any lease restrictions, to enter during normal business
hours into and upon any premises owned, leased or operated by such Grantor
where any of such Grantor’s Inventory or Equipment is located for the purpose
of inspecting the same, observing its use or otherwise protecting its interests
therein.


SECTION 8      NON-LENDER
SECURED PARTIES


8.1                                 Rights
to Collateral.


(a)                                  The
Non-Lender Secured Parties shall not have any right whatsoever to do any of the
following:  (i) exercise any rights or
remedies with respect to the Collateral (such term, as used in this Section 8,
having the meaning assigned to it in the Credit Agreement), including, without
limitation, the right to (A) enforce any Liens or sell or otherwise foreclose
on any portion of the Collateral, (B) request any action, institute any
proceedings, exercise any voting rights, give any instructions, make any election,
notice account debtors or make collections with respect to all or any portion
of the Collateral or (C) release any Guarantor under this Agreement or release
any Collateral from the Liens of any Security Document or consent to or
otherwise approve any such release; (ii) demand, accept or obtain any Lien on
any Collateral (except for Liens arising under, and subject to the terms of,
this Agreement); (iii) vote in any Bankruptcy Case or similar proceeding in
respect of Holding  or any of its
Subsidiaries (any such proceeding, for purposes of this clause (a), a “Bankruptcy”)
with respect to, or take any other actions concerning, the Collateral; (iv)
receive any proceeds from any sale, transfer or other disposition of any of the
Collateral (except in accordance with this Agreement); (v) oppose any sale, transfer
or



 40















other
disposition of the Collateral; (vi) object to any debtor-in-possession
financing in any Bankruptcy which is provided by one or more Lenders among
others (including on a priming basis under Section 364(d) of the Bankruptcy
Code); (vii) object to the use of cash collateral in respect of the Collateral
in any Bankruptcy; or (viii) seek, or object to the Lenders seeking on an equal
and ratable basis, any adequate protection or relief from the automatic stay
with respect to the Collateral in any Bankruptcy.


(b)                                 Each
Non-Lender Secured Party, by its acceptance of the benefits of this Agreement
and the other Security Documents, agrees that in exercising rights and remedies
with respect to the Collateral, the Collateral Agent and the Lenders, with the
consent of the Collateral Agent, may enforce the provisions of the Security
Documents and exercise remedies thereunder and under any other Loan Documents
(or refrain from enforcing rights and exercising remedies), all in such order
and in such manner as they may determine in the exercise of their sole business
judgment.  Such exercise and enforcement
shall include, without limitation, the rights to collect, sell, dispose of or
otherwise realize upon all or any part of the Collateral, to incur expenses in
connection with such collection, sale, disposition or other realization and to
exercise all the rights and remedies of a secured lender under the Uniform
Commercial Code of any applicable jurisdiction. 
The Non-Lender Secured Parties by their acceptance of the benefits of
this Agreement and the other Security Documents hereby agree not to contest or
otherwise challenge any such collection, sale, disposition or other realization
of or upon all or any of the Collateral. 
Whether or not a Bankruptcy Case has been commenced, the Non-Lender
Secured Parties shall be deemed to have consented to any sale or other
disposition of any property, business or assets of Holding or any of its
Subsidiaries and the release of any or all of the Collateral from the Liens of
any Security Document in connection therewith.


(c)                                  Notwithstanding
any provision of this subsection 8.1, the Non-Lender Secured Parties shall be
entitled to file any necessary responsive or defensive pleadings in opposition
to any motion, claim, adversary proceeding or other pleadings (A) in order to
prevent any Person from seeking to foreclose on the Collateral or supersede the
Non-Lender Secured Parties’ claim thereto or (B) in opposition to any motion,
claim, adversary proceeding or other pleading made by any Person objecting to
or otherwise seeking the disallowance of the claims of the Non-Lender Secured
Parties.


(d)                                 Each
Non-Lender Secured Party, by its acceptance of the benefit of this Agreement,
agrees that the Collateral Agent and the Lenders may deal with the Collateral,
including any exchange, taking or release of Collateral, may change or increase
the amount of the Borrower Obligations and/or the Guarantor Obligations, and
may release any Guarantor from its Obligations hereunder, all without any
liability or obligation (except as may be otherwise expressly provided herein)
to the Non-Lender Secured Parties.


8.2                                 Appointment
of Agent.  Each Non-Lender Secured
Party, by its acceptance of the benefits of this Agreement and the other
Security Documents, shall be deemed irrevocably to make, constitute and appoint
the Collateral Agent, as agent under the Credit Agreement (and all officers,
employees or agents designated by the Collateral Agent) as such Person’s true
and lawful agent and attorney-in-fact, and in such capacity, the Collateral
Agent shall have the right, with power of substitution for the Non-Lender
Secured Parties and in each such Person’s name or otherwise, to effectuate any
sale, transfer or other disposition of the Collateral.  It is understood



 41
 









and agreed
that the appointment of the Collateral Agent as the agent and attorney-in-fact
of the Non-Lender Secured Parties for the purposes set forth herein is coupled
with an interest and is irrevocable.  It
is understood and agreed that the Collateral Agent has appointed the Administrative
Agent as its agent for purposes of perfecting certain of the security interests
created hereunder and for otherwise carrying out certain of its obligations
hereunder.


8.3                                 Waiver
of Claims.  To the maximum extent
permitted by law, each Non-Lender Secured Party waives any claim it might have
against the Collateral Agent or the Lenders with respect to, or arising out of,
any action or failure to act or any error of judgment, negligence, or mistake
or oversight whatsoever on the part of the Collateral Agent or the Lenders or
their respective directors, officers, employees or agents with respect to any
exercise of rights or remedies under the Loan Documents or any transaction
relating to the Collateral (including, without limitation, any such exercise described
in subsection 8.1(b) above), except for any such action or failure to act which
constitutes willful misconduct or gross negligence of such Person.  None of the Collateral Agent or any Lender or
any of their respective directors, officers, employees or agents shall be
liable for failure to demand, collect or realize upon any of the Collateral or
for any delay in doing so or shall be under any obligation to sell or otherwise
dispose of any Collateral upon the request of Holding, any Subsidiary of
Holding, any Non-Lender Secured Party or any other Person or to take any other
action or forbear from doing so whatsoever with regard to the Collateral or any
part thereof, except for any such action or failure to act which constitutes willful
misconduct or gross negligence of such Person.


SECTION 9      MISCELLANEOUS


9.1                                 Amendments
in Writing.  None of the terms or
provisions of this Agreement may be waived, amended, supplemented or otherwise
modified except by a written instrument executed by each affected Granting
Party and the Collateral Agent; provided that (a) any provision of this
Agreement imposing obligations on any Granting Party may be waived by the
Collateral Agent in a written instrument executed by the Collateral Agent and
(b) notwithstanding anything to the contrary in subsection 10.1 of the Credit
Agreement, no such waiver and no such amendment or modification shall amend,
modify or waive the definition of “Secured Party” or subsection 6.5 if such
waiver, amendment, or modification would adversely affect a Secured Party
without the written consent of each such affected Secured Party.  For the avoidance of doubt, it is understood
and agreed that any amendment, amendment and restatement, waiver, supplement or
other modification of or to the Intercreditor Agreement that would have the
effect, directly or indirectly, through any reference herein to the
Intercreditor Agreement or otherwise, of waiving, amending, supplementing or
otherwise modifying this Agreement, or any term or provision hereof, or any
right or obligation of any Granting Party hereunder or in respect hereof, shall
not be given such effect except pursuant to a written instrument executed by
each affected Granting Party and the Collateral Agent in accordance with this
subsection 9.1.


9.2                                 Notices.  All notices, requests and demands to or upon
the Collateral Agent or any Granting Party hereunder shall be effected in the
manner provided for in subsection 10.2 of the Credit Agreement; provided that
any such notice, request or demand to or upon any Guarantor shall be addressed
to such Guarantor at its notice address set forth on Schedule 1, unless
and until such Guarantor shall change such address by notice to the Collateral
Agent and the Administrative Agent given in accordance with subsection 10.2 of
the Credit Agreement.



 42
 









9.3                                 No
Waiver by Course of Conduct; Cumulative Remedies.  None of the Collateral Agent or any other
Secured Party shall by any act (except by a written instrument pursuant to
subsection 9.1), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any Default or
Event of Default.  No failure to
exercise, nor any delay in exercising, on the part of the Collateral Agent or
any other Secured Party, any right, power or privilege hereunder shall operate
as a waiver thereof.  No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege.  A waiver by the Collateral
Agent or any other Secured Party of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the
Collateral Agent or such other Secured Party would otherwise have on any future
occasion.  The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.


9.4                                 Enforcement
Expenses; Indemnification.


(a)                                  Each
Guarantor jointly and severally agrees to pay or reimburse each Secured Party
and the Collateral Agent for all their respective reasonable costs and expenses
incurred in collecting against any Guarantor under the guarantee contained in
Section 2 or otherwise enforcing or preserving any rights under this Agreement
against such Guarantor and the other Loan Documents to which such Guarantor is
a party, including, without limitation, the reasonable fees and disbursements
of counsel to the Secured Parties, the Collateral Agent and the Administrative
Agent.


(b)                                 Each
Grantor jointly and severally agrees to pay, and to save the Collateral Agent,
the Administrative Agent and the other Secured Parties harmless from, (x) any
and all liabilities with respect to, or resulting from any delay in paying, any
and all stamp, excise, sales or other similar taxes which may be payable or
determined to be payable with respect to any of the Security Collateral or in
connection with any of the transactions contemplated by this Agreement and (y)
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance
and administration of this Agreement (collectively, the “indemnified
liabilities”), in each case to the extent the Borrower would be required to
do so pursuant to subsection 10.5 of the Credit Agreement, and in any event
excluding any taxes or other indemnified liabilities arising from gross
negligence or willful misconduct of the Collateral Agent, the Administrative
Agent or any other Secured Party.


(c)                                  The
agreements in this subsection 9.4 shall survive repayment of the Obligations
and all other amounts payable under the Credit Agreement and the other Loan
Documents.


9.5                                 Successors
and Assigns.  This Agreement shall be
binding upon and shall inure to the benefit of the Granting Parties, the
Collateral Agent and the Secured Parties and their respective successors and
assigns; provided that no Granting Party may assign, transfer or delegate any
of its rights or obligations under this Agreement without the prior written
consent of the Collateral Agent.



 43
 









9.6                                 Set-Off.  Each Guarantor hereby irrevocably authorizes
each of the Administrative Agent and the Collateral Agent and each other
Secured Party at any time and from time to time without notice to such
Guarantor, any other Guarantor or the Borrower, any such notice being expressly
waived by each Guarantor and by the Borrower, to the extent permitted by
applicable law, upon the occurrence and during the continuance of an Event of
Default under subsection 8(a) of the Credit Agreement so long as any amount
remains unpaid after it becomes due and payable by such Guarantor hereunder, to
set-off and appropriate and apply against any such amount any and all deposits
(general or special, time or demand, provisional or final) (other than the
Collateral Proceeds Account), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Collateral Agent, the Administrative Agent or such other Secured
Party to or for the credit or the account of such Guarantor, or any part thereof
in such amounts as the Collateral Agent, the Administrative Agent or such other
Secured Party may elect.  The Collateral
Agent, the Administrative Agent and each other Secured Party shall notify such
Guarantor promptly of any such set-off and the application made by the
Collateral Agent, the Administrative Agent or such other Secured Party of the
proceeds thereof; provided that the failure to give such notice shall
not affect the validity of such set-off and application.  The rights of the Collateral Agent, the
Administrative Agent and each other Secured Party under this subsection 9.6 are
in addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Collateral Agent, the Administrative Agent or such
other Secured Party may have.


9.7                                 Counterparts.  This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts, and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument.


9.8                                 Severability.  Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction; provided that, with respect to any Pledged Stock issued
by a Foreign Subsidiary, all rights, powers and remedies provided in this
Agreement may be exercised only to the extent that they do not violate any
provision of any law, rule or regulation of any Governmental Authority
applicable to any such Pledged Stock or affecting the legality, validity or
enforceability of any of the provisions of this Agreement against the Pledgor (such
laws, rules or regulations, “Applicable Law”) and are intended to be limited to
the extent necessary so that they will not render this Agreement invalid,
unenforceable or not entitled to be recorded, registered or filed under the
provisions of any Applicable Law.


9.9                                 Section
Headings.  The Section headings used
in this Agreement are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the interpretation
hereof.


9.10                           Integration.  This Agreement and the other Loan Documents
represent the entire agreement of the Granting Parties, the Collateral Agent,
the Administrative Agent and the other Secured Parties with respect to the
subject matter hereof, and there are no promises, undertakings, representations
or warranties by the Granting Parties, the Collateral Agent or any other
Secured



 44
 









Party relative
to subject matter hereof not expressly set forth or referred to herein or in
the other Loan Documents.


9.11                           GOVERNING
LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK.


9.12                           Submission
to Jurisdiction; Waivers.  Each party
hereto hereby irrevocably and unconditionally:


(a)                                  submits
for itself and its property in any legal action or proceeding relating to this
Agreement and the other Loan Documents to which it is a party, or for
recognition and enforcement of any judgment in respect thereof, to the non-exclusive
general jurisdiction of the courts of the State of New York, the courts of the
United States of America for the Southern District of New York, and
appellate courts from any thereof;


(b)                                 consents
that any such action or proceeding may be brought in such courts and waives any
objection that it may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding was brought in
an inconvenient court and agrees not to plead or claim the same;


(c)                                  agrees
that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to such party at its address referred
to in subsection 9.2 or at such other address of which the Collateral Agent and
the Administrative Agent (in the case of any other party hereto) or the
Borrower (in the case of the Collateral Agent and the Administrative Agent)
shall have been notified pursuant thereto;


(d)                                 agrees
that nothing herein shall affect the right to effect service of process in any
other manner permitted by law or shall limit the right to sue in any other
jurisdiction; and


(e)                                  waives,
to the maximum extent not prohibited by law, any right it may have to claim or
recover in any legal action or proceeding referred to in this Section any
punitive damages.


9.13                           Acknowledgments.  Each Granting Party hereby acknowledges that:


(a)                                  it
has been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Loan Documents to which it is a party;


(b)                                 none
of the Collateral Agent, the Administrative Agent or any other Secured Party
has any fiduciary relationship with or duty to any Guarantor arising out of or
in connection with this Agreement or any of the other Loan Documents, and the
relationship between the Guarantors, on the one hand, and the Collateral Agent,
the Administrative Agent and the other Secured Parties, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and



 45
 









(c)                                  no
joint venture is created hereby or by the other Loan Documents or otherwise
exists by virtue of the transactions contemplated hereby among the Secured Parties
or among the Guarantors and the Secured Parties.


9.14                           WAIVER
OF JURY TRIAL.  EACH PARTY HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.


9.15                           Additional
Granting Parties.  Each new
Subsidiary of the Borrower that is required to become a party to this Agreement
pursuant to subsection 6.9(b) of the Credit Agreement shall become a Granting
Party for all purposes of this Agreement upon execution and delivery by such
Subsidiary of an Assumption Agreement in substantially the form of Annex 2
hereto.  Each existing Granting Party
that is required to become a Pledgor with respect to Capital Stock of any new
Subsidiary of the Borrower that is not a Significant Subsidiary pursuant to subsection
6.9(b) of the Credit Agreement shall become a Pledgor with respect thereto upon
execution and delivery by such Granting Party of a Supplemental Agreement in
substantially the form of Annex 3 hereto.


9.16                           Releases.


(a)                                  At
such time as the Loans and the other Obligations (other than any Obligations
owing to a Non-Lender Secured Party) then due and owing shall have been paid in
full and the Term Loan Commitments have been terminated, all Security
Collateral shall be automatically released from the Liens created hereby, and
this Agreement and all obligations (other than those expressly stated to
survive such termination) of the Collateral Agent and each Granting Party
hereunder shall terminate, all without delivery of any instrument or performance
of any act by any party, and all rights to the Security Collateral shall revert
to the Granting Parties.  At the request
and sole expense of any Granting Party following any such termination, the Collateral
Agent shall deliver to such Granting Party any Security Collateral held by the
Collateral Agent hereunder, and the Collateral Agent and the Administrative
Agent shall execute and deliver to such Granting Party such documents
(including without limitation UCC termination statements) as such Granting
Party shall reasonably request to evidence such termination.


(b)                                 In
connection with any sale or other disposition of Security Collateral permitted
by the Credit Agreement (other than any sale or disposition to another
Grantor), the Lien pursuant to this Agreement on such sold or disposed of
Security Collateral shall be automatically released.  In connection with the sale or other
disposition of all of the Capital Stock of any Guarantor (other than to the Borrower
or a Restricted Subsidiary) or the sale or other disposition of Security
Collateral (other than a sale or disposition to another Grantor) permitted
under the Credit Agreement, the Collateral Agent shall, upon receipt from the
Borrower of a written request for the release of such Guarantor from its
Guarantee or the release of the Security Collateral subject to such sale or
other disposition, identifying such Guarantor or the relevant Security
Collateral and the terms of the sale or other disposition in reasonable detail,
including the price thereof and any expenses in connection therewith, together
with a certification by the Borrower stating that such transaction is in
compliance with the Credit Agreement and the other Loan Documents, deliver to
the Borrower or the relevant Granting Party any of the relevant Security
Collateral held



 46
 









by the
Collateral Agent hereunder and the Collateral Agent and the Administrative
Agent shall execute and deliver to the relevant Granting Party (at the sole
cost and expense of such Granting Party) all releases or other documents
(including without limitation UCC termination statements) necessary or
reasonably desirable for the release of such Guarantee or the Liens created
hereby on such Security Collateral, as applicable, as such Granting Party may
reasonably request.


(c)                                  Upon
the designation of any Granting Party as an Unrestricted Subsidiary in accordance
with the provisions of the Credit Agreement, the Lien pursuant to this
Agreement on all Security Collateral of such Granting Party (if any) shall be
automatically released, and the Guarantee (if any) of such Granting Party, and
all obligations of such Granting Party hereunder, shall terminate, all without
delivery of any instrument or performance of any act by any party and the
Collateral Agent shall, upon the request of the Borrower, deliver to such
Granting Party any Security Collateral of such Granting Party held by the
Collateral Agent hereunder and the Collateral Agent and the Administrative
Agent shall execute and deliver to such Granting Party (at the sole cost and
expense of such Granting Party) all releases or other documents (including
without limitation UCC termination statements) necessary or reasonably
desirable for the release of such Granting Party from its Guarantee (if any) or
the Liens created hereby (if any) on such Granting Party’s Security Collateral,
as applicable, as such Granting Party may reasonably request.


(d)                                 Upon
the designation of any Issuer that is a Subsidiary of any Granting Party as an
Unrestricted Subsidiary in accordance with the provisions of the Credit
Agreement, the Lien pursuant to this Agreement on all Pledged Stock issued by
such Issuer shall be automatically released, all without delivery of any
instrument or performance of any act by any party and the Collateral Agent
shall, upon the request of the Borrower, deliver to such Granting Party any
such Pledged Stock held by the Collateral Agent hereunder and the Collateral
Agent and the Administrative Agent shall execute and deliver to the relevant
Granting Party (at the sole cost and expense of such Granting Party) all
releases or other documents (including without limitation UCC termination
statements) necessary or reasonably desirable for the release of the Liens
created hereby on such Pledged Stock, as applicable, as such Granting Party may
reasonably request.


9.17                           Judgment.  (a)  If for the purpose of
obtaining judgment in any court it is necessary to convert a sum due hereunder
in one currency into another currency, the parties hereto agree, to the fullest
extent that they may effectively do so, that the rate of exchange used shall be
that at which in accordance with normal banking procedures the Collateral Agent
could purchase the first currency with such other currency on the Business Day
preceding the day on which final judgment is given.


(b)                                 The
obligations of any Guarantor in respect of this Agreement to the Collateral
Agent, for the benefit of each holder of Secured Obligations, shall,
notwithstanding any judgment in a currency (the “judgment currency”)
other than the currency in which the sum originally due to such holder is
denominated (the “original currency”), be discharged only to the extent
that on the Business Day following receipt by the Collateral Agent of any sum
adjudged to be so due in the judgment currency, the Collateral Agent may in
accordance with normal banking procedures purchase the original currency with
the judgment currency; if the amount of the original currency so purchased is
less than the sum originally due to such holder in the original currency, such
Guarantor agrees, as a separate obligation and notwithstanding any such judgment,
to indemnify the Collateral Agent for the benefit of such holder, against such
loss, and if



 47
 









the amount of
the original currency so purchased exceeds the sum originally due to the Collateral
Agent, the Collateral Agent agrees to remit to the Borrower, such excess.  This covenant shall survive the termination
of this Agreement and payment of the Obligations and all other amounts payable
hereunder.


[Remainder
of page left blank intentionally; Signature pages follow.]



 48















IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed, all as of the
date first written above.


 


	
  

  	
  CDRSVM HOLDING, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Theresa A. Gore

  
	
   

  	
   

  	
  Name:

  	
  Theresa A. Gore

  
	
   

  	
   

  	
  Title: 

  	
  Vice President and Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  THE SERVICEMASTER COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ernest J. Mrozek

  
	
   

  	
   

  	
  Name:

  	
  Ernest J. Mrozek

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric Zarnikow

  
	
   

  	
   

  	
  Name:

  	
  Eric Zarnikow

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President & Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  INSTAR SERVICES GROUP, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Demos

  
	
   

  	
   

  	
  Name:

  	
  David J. Demos

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer, President & Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard J. Augustine

  
	
   

  	
   

  	
  Name:

  	
  Richard J. Augustine

  
	
   

  	
   

  	
  Title:

  	
  Treasurer

  
					



 


 



   
 









 


	
  

  	
  INSTAR SERVICES GROUP, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  INSTAR SERVICES MANAGEMENT, LLC, its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
  By:

  	
  /s/ Ernest J. Mrozek

  
	
   

  	
   

  	
  Name:

  	
  Ernest J. Mrozek

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric Zarnikow

  
	
   

  	
   

  	
  Name:

  	
  Eric Zarnikow

  
	
   

  	
   

  	
  Title:

  	
  Assistant Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
  INSTAR SERVICES HOLDINGS, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ernest J. Mrozek

  
	
   

  	
   

  	
  Name:

  	
  Ernest J. Mrozek

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric Zarnikow

  
	
   

  	
   

  	
  Name:

  	
  Eric Zarnikow

  
	
   

  	
   

  	
  Title:

  	
  Assistant Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  INSTAR SERVICES MANAGEMENT, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ernest J. Mrozek

  
	
   

  	
   

  	
  Name:

  	
  Ernest J. Mrozek

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric Zarnikow

  
	
   

  	
   

  	
  Name:

  	
  Eric Zarnikow

  
	
   

  	
   

  	
  Title:

  	
  Assistant Treasurer

  
	
   

  	
   

  	
   

  	
   

  
					



 



 2
 









 


	
  

  	
  MERRY MAIDS LIMITED PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  MM MAIDS L.L.C., its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ernest J. Mrozek

  
	
   

  	
   

  	
  Name:

  	
  Ernest J. Mrozek

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
  By:

  	
  /s/ Eric Zarnikow

  
	
   

  	
   

  	
  Name:

  	
  Eric Zarnikow

  
	
   

  	
   

  	
  Title:

  	
  Vice President & Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
  MM MAIDS L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ernest J. Mrozek

  
	
   

  	
   

  	
  Name:

  	
  Ernest J. Mrozek

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric Zarnikow

  
	
   

  	
   

  	
  Name:

  	
  Eric Zarnikow

  
	
   

  	
   

  	
  Title:

  	
  Vice President & Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SERVICEMASTER CONSUMER SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ernest J. Mrozek

  
	
   

  	
   

  	
  Name:

  	
  Ernest J. Mrozek

  
	
   

  	
   

  	
  Title:

  	
  President & Chief Operating Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric Zarnikow

  
	
   

  	
   

  	
  Name:

  	
  Eric Zarnikow

  
	
   

  	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
					



 



 3
 









 


	
  

  	
  SERVICEMASTER CONSUMER SERVICES LIMITED PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  SERVICEMASTER CONSUMER SERVICES, INC., its general
  partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ernest J. Mrozek

  
	
   

  	
   

  	
  Name:

  	
  Ernest J. Mrozek

  
	
  

  	
   

  	
  Title:

  	
  President & Chief Operating Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric Zarnikow

  
	
   

  	
   

  	
  Name:

  	
  Eric Zarnikow

  
	
   

  	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
  SERVICEMASTER HOLDING CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ernest J. Mrozek

  
	
   

  	
   

  	
  Name:

  	
  Ernest J. Mrozek

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric Zarnikow

  
	
   

  	
   

  	
  Name:

  	
  Eric Zarnikow

  
	
   

  	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SERVICEMASTER MANAGEMENT CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ernest J. Mrozek

  
	
   

  	
   

  	
  Name:

  	
  Ernest J. Mrozek

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric Zarnikow

  
	
   

  	
   

  	
  Name:

  	
  Eric Zarnikow

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President and Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


 



 4
 









 


	
  

  	
  SERVICEMASTER RESIDENTIAL/COMMERCIAL SERVICES
  LIMITED PARTNERSHIP

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  SM CLEAN L.L.C., its general partner

  
	
   

  	
   

  	
   

  
	
  

  	
  By:

  	
  /s/ Ernest J. Mrozek

  
	
   

  	
   

  	
  Name:

  	
  Ernest J. Mrozek

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric Zarnikow

  
	
   

  	
   

  	
  Name:

  	
  Eric Zarnikow

  
	
   

  	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
  SM CLEAN L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ernest J. Mrozek

  
	
   

  	
   

  	
  Name:

  	
  Ernest J. Mrozek

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric Zarnikow

  
	
   

  	
   

  	
  Name:

  	
  Eric Zarnikow

  
	
   

  	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TERMINIX INTERNATIONAL, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ernest J. Mrozek

  
	
   

  	
   

  	
  Name:

  	
  Ernest J. Mrozek

  
	
   

  	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric Zarnikow

  
	
   

  	
   

  	
  Name:

  	
  Eric Zarnikow

  
	
   

  	
   

  	
  Title:

  	
  Assistant Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
					



 


 



 5
 









 


	
  

  	
  THE TERMINIX INTERNATIONAL COMPANY LIMITED
  PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  TERMINIX INTERNATIONAL, INC., its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
  By:

  	
  /s/ Ernest J. Mrozek

  
	
   

  	
   

  	
  Name:

  	
  Ernest J. Mrozek

  
	
   

  	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric Zarnikow

  
	
   

  	
   

  	
  Name:

  	
  Eric Zarnikow

  
	
   

  	
   

  	
  Title:

  	
  Assistant Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
  TRUGREEN COMPANIES L.L.C.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ernest J. Mrozek

  
	
   

  	
   

  	
  Name:

  	
  Ernest J. Mrozek

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric Zarnikow

  
	
   

  	
   

  	
  Name:

  	
  Eric Zarnikow

  
	
   

  	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TRUGREEN, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jim L. Kaput

  
	
   

  	
   

  	
  Name:

  	
  Jim L. Kaput

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric Zarnikow

  
	
   

  	
   

  	
  Name:

  	
  Eric Zarnikow

  
	
   

  	
   

  	
  Title:

  	
  Assistant Treasurer

  
					



 



 6
 









 


	
  

  	
  TRUGREEN LANDCARE L.L.C.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ernest J. Mrozek

  
	
  

  	
   

  	
  Name:

  	
  Ernest J. Mrozek

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric Zarnikow

  
	
   

  	
   

  	
  Name:

  	
  Eric Zarnikow

  
	
   

  	
   

  	
  Title:

  	
  Vice President & Assistant Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TRUGREEN LIMITED PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  TRUGREEN, INC., its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jim Kaput

  
	
   

  	
   

  	
  Name:

  	
  Jim Kaput

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric Zarnikow

  
	
   

  	
   

  	
  Name:

  	
  Eric Zarnikow

  
	
   

  	
   

  	
  Title:

  	
  Assistant Treasurer

  
					



 



 7
 









 


 


	
  Acknowledged and Agreed to
  as of

  
	
  the date hereof
  by:

  
	
   

  
	
  CITIBANK,
  N.A.,

  
	
  as
  Administrative Agent and Collateral Agent

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Edward T.
  Crook

  	
   

  
	
   

  	
  Name: Edward T.
  Crook

  
	
   

  	
  Title: Managing
  Director

  



 



 8















Annex 3 to

Guarantee and Collateral Agreement