Document:

Exhibit 4.2

 

The ServiceMaster Company

 

$1,150,000,000 10.75%/11.50% Senior Toggle Notes due 2015

 

Exchange
and Registration Rights Agreement

 

July 24, 2008

 

JPMorgan Chase Bank, N.A.

As
Administrative Agent for the Lenders

referred to below

c/o
JPMorgan Chase Bank, N.A.

270 Park Avenue 

New York, New York  10017

 

Ladies and Gentlemen:

 

The ServiceMaster
Company, a Delaware corporation (the “Company”), proposes to issue upon
the terms set forth in the Credit Agreement (as defined herein) to the Lenders
(as defined in the Credit Agreement), an aggregate of $1,150,000,000 principal
amount of 10.75%/11.50% Senior Toggle Notes due 2015 of the Company (the “Notes”)
upon conversion of a like aggregate principal amount of Loans (as defined in
the Credit Agreement) into such Notes pursuant to Section 2.5(a) of
the Credit Agreement. In satisfaction of a condition to the conversion of Loans
into the Notes, the Company agrees with the Administrative Agent (as defined
herein) for the benefit of the Lenders and the other holders (as defined
herein) from time to time of the Registrable Securities (as defined herein) as
follows:

 

1.             Certain Definitions. For purposes of this Exchange and
Registration Rights Agreement, the following terms shall have the following
respective meanings:

 

“Administrative
Agent” means JPMorgan Chase Bank, N.A., as administrative agent for
the Lenders under the Credit Agreement.

 

“Base
Interest” shall mean the interest that would otherwise accrue on the
Securities under the terms thereof and the Indenture, without giving effect to
the provisions of this Agreement.

 

 

“broker-dealer”
shall mean any broker or dealer registered with the Commission under the
Exchange Act.

 

“Commission”
shall mean the United States Securities and Exchange Commission, or any other
federal agency at the time administering the Exchange Act or the Securities
Act, whichever is the relevant statute for the particular purpose.

 

“Closing Date”
shall mean the date on which the Securities are initially issued.

 

“Credit
Agreement” shall mean the Senior Interim Loan Credit Agreement,
dated as of July 24, 2007, among the Company, the several banks and other
financial institutions party thereto, and the Administrative Agent.

 

“Effective
Time,” in the case of (i) an Exchange Registration, shall mean
the time and date as of which the Commission declares the Exchange Registration
Statement effective or as of which the Exchange Registration Statement
otherwise becomes effective and (ii) a Shelf Registration, shall mean the
time and date as of which the Commission declares the Shelf Registration
Statement effective or as of which the Shelf Registration Statement otherwise
becomes effective.

 

“Electing
Holder” shall mean any holder of Registrable Securities that has
returned a completed and signed Notice and Questionnaire to the Company in
accordance with Section 3(d)(ii) or 3(d)(iii) hereof.

 

“Exchange Act”
shall mean the Securities Exchange Act of 1934, or any successor thereto, as
the same shall be amended from time to time.

 

“Exchange
Offer” shall have the meaning assigned thereto in Section 2(b) hereof.

 

“Exchange
Registration” shall have the meaning assigned thereto in Section 3(c) hereof.

 

“Exchange
Registration Statement” shall have the meaning assigned thereto in Section 2(b) hereof

 

“Exchange
Securities” shall have the meaning assigned thereto in Section 2(b) hereof.

 

“Guarantees” shall mean the Guarantees
issued by each Guarantor with respect to the Notes.

 

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“holder”
shall mean each of the Lenders and other persons who acquire Registrable
Securities from time to time (including any successors or assigns), in each
case for so long as such person owns any Registrable Securities.

 

“Indenture”
shall mean the Indenture, dated as of the date hereof, among the Company, the
subsidiary guarantors parties thereto (the “Guarantors”) and Wilmington Trust
FSB, as Trustee, governing the Company’s $1,150,000,000 principal amount of
10.75%/11.50% Senior Toggle Notes due 2015, as the same shall be amended or
supplemented from time to time.

 

“Issuer Free
Writing Prospectus” shall mean any issuer free writing prospectus
(as such term is defined in Rule 433(h)(1) under the Securities Act)
that has been prepared by the Company.

 

“Majority
Electing Holder” shall have the meaning assigned thereto in Section 3(d)(vi).

 

“Lenders”
means the Lenders (as defined in the Credit Agreement) that are acquiring
Registrable Securities upon conversion of their Loans (as defined in the Credit
Agreement) as described in the initial paragraph hereof.

 

“Notice and
Questionnaire” means a Notice of Registration Statement and Selling
Securityholder Questionnaire substantially in the form of Exhibit A
hereto, with such changes thereto as the Company may reasonably determine.

 

“person”
shall mean a corporation, association, partnership, organization, business,
individual, government or political subdivision thereof or governmental agency.

 

“Registrable
Securities” shall mean the Securities; provided, however, that a
Security shall cease to be a Registrable Security when (i) the Security
has been exchanged for an Exchange Security in an Exchange Offer as
contemplated in Section 2(b) hereof (provided that any Exchange
Security that, pursuant to the last sentence of the first paragraph of Section 2(b),
is included in a prospectus for use in connection with resales by
broker-dealers shall be deemed to be a Registrable Security with respect to
Sections 5 and 8(h) until resale of such Registrable Security has been
effected within the 90-day period referred to in Section 2(b)); (ii) a
Shelf Registration Statement registering such Security under the Securities Act
becomes effective and such Security has been sold or otherwise transferred by
the holder thereof pursuant to and in a manner contemplated by such effective
Shelf Registration Statement; (iii) such Security is sold pursuant to Rule 144
under circumstances in which any legend borne by such Security relating to
restrictions on transferability thereof, under the Securities Act or otherwise,
is removed by the Company or pursuant to the Indenture; (iv) such Security
is eligible to be sold by a person that is not an “affiliate” (as defined in Rule 144)

 

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without
restriction or limitation pursuant to Rule 144; or (v) such Security
shall cease to be outstanding.

 

“Registration
Default” shall have the meaning assigned thereto in Section 2(d) hereof.

 

“Registration Default Period” shall have
the meaning assigned thereto in Section 2(d) hereof.

 

“Registration
Expenses” shall have the meaning assigned thereto in Section 4
hereof.

 

“Resale
Period” shall have the meaning assigned thereto in Section 2(b) hereof.

 

“Restricted
Holder” shall mean (i) a holder that is an affiliate of the
Company within the meaning of Rule 405, (ii) a holder that acquires
Exchange Securities outside the ordinary course of such holder’s business, (iii) a
holder that has arrangements or understandings with any person to participate
in the Exchange Offer for the purpose of distributing Exchange Securities and (iv) a
holder that is a broker-dealer, but only with respect to Exchange Securities
received by such broker-dealer pursuant to an Exchange Offer in exchange for
Registrable Securities acquired by the broker-dealer directly from the Company.

 

“Rule 144,”
“Rule 405” and “Rule 415”
shall mean, in each case, such rule promulgated under the Securities Act
(or any successor provision), as the same shall be amended from time to time.

 

“Securities”
shall mean the Notes to be issued pursuant to Section 2.5(a) of the
Credit Agreement, and securities issued in exchange therefor or in lieu thereof
pursuant to the Indenture. Each Security is entitled to the benefit of the
Guarantees, if any, provided for in the Indenture and, unless the context
otherwise requires, any reference herein to a “Security,” an “Exchange Security”
or a “Registrable Security” shall include a reference to the related
Guarantees, if any.

 

“Securities
Act” shall mean the Securities Act of 1933, or any successor
thereto, as the same shall be amended from time to time.

 

“Shelf
Registration” shall have the meaning assigned thereto in Section 2(a) hereof.

 

“Shelf
Registration Statement” shall have the meaning assigned thereto in Section 2(a) hereof.

 

“Special
Interest” shall have the meaning assigned thereto in Section 2(d) hereof.

 

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“Trust
Indenture Act” shall mean the Trust Indenture Act of 1939, or any
successor thereto, and the rules, regulations and forms promulgated thereunder,
all as the same shall be amended from time to time.

 

Unless the context
otherwise requires, any reference herein to a “Section” or “clause” refers to a
Section or clause, as the case may be, of this Exchange and Registration
Rights Agreement, and the words “herein,” “hereof’ and “hereunder” and other
words of similar import refer to this Exchange and Registration Rights
Agreement as a whole and not to any particular Section or other
subdivision.

 

2.             Registration  Under  the  Securities  Act.

 

(a)           Except as set forth
in Section 2(b) below, the Company agrees to use its commercially
reasonable efforts (i) to file under the Securities Act as promptly as
practicable, but not later than October 22, 2008, a “shelf” registration
statement providing for the registration of, and the sale on a continuous or
delayed basis by the holders of, all of the Registrable Securities pursuant to Rule 415
or any similar rule that may be adopted by the Commission (such filing,
the “Shelf Registration” and such registration statement, the “Shelf
Registration Statement”), (ii) to cause the Shelf Registration
Statement to become effective on or prior to April 20, 2009 and to use its
commercially reasonable efforts to cause such Shelf Registration Statement to
remain effective for a period ending on the earlier of the second anniversary
of the Closing Date and such shorter period that will terminate when all the
Registrable Securities covered by the Shelf Registration Statement have been
sold pursuant to the Shelf Registration Statement or are distributed to the
public pursuant to Rule 144 or become eligible for resale pursuant to Rule 144
without volume restriction, if any, or are no longer Registrable Securities;
provided, however, that no holder shall be entitled to be named as a selling
securityholder in the Shelf Registration Statement or to use the prospectus
forming a part thereof for resales of Registrable Securities unless such holder
is an Electing Holder, (iii) after the Effective Time of the Shelf
Registration Statement, promptly upon the request of any holder of Registrable
Securities that is not then an Electing Holder, to take any action reasonably
necessary to identify such holder as a selling securityholder in the Shelf
Registration Statement and include any disclosure necessary or advisable in
order to comply with the Securities Act or rules and regulations
thereunder; provided, however, that (x) nothing in this clause (iii) shall
relieve any such holder of the obligation to return a completed and signed
Notice and Questionnaire to the Company in accordance with Section 3(d)(iii) hereof
and (y) the Company shall not be required to take any such action with
respect to any such holders more than once every quarter, and (iv) to
supplement or make amendments to the Shelf Registration Statement, as and when
required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Shelf Registration Statement or
by the Securities Act or rules and regulations thereunder for shelf
registration, and to furnish to each Electing Holder copies of any such
supplement or amendment promptly following its filing with the Commission.

 

Notwithstanding the
foregoing, the Company may suspend the availability of any Shelf Registration
Statement for up to an aggregate of 60 days in any consecutive

 

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twelve-month
period if (i) such action is required by applicable law or (ii) such
action is taken by the Company in good faith and for valid business reasons (not
including avoidance of the Company’s obligations hereunder), including the
acquisition or divestiture of assets.

 

(b)           In lieu of filing or
causing to become effective a Shelf Registration Statement pursuant to Section 2(a) above,
the Company may elect to file under the Securities Act a registration statement
relating to an offer to exchange (such registration statement, the “Exchange
Registration Statement”, and such offer, the “Exchange Offer”) any
and all of the Securities for a like aggregate principal amount of debt
securities issued by the Company and guaranteed by the Guarantors, which debt
securities and Guarantees are substantially identical to the Securities (and
are entitled to the benefits of a trust indenture which is substantially
identical to the Indenture or is the Indenture and which has been qualified
under the Trust Indenture Act), except that they have been registered pursuant
to an effective registration statement under the Securities Act and do not
contain restrictions on transfer or provisions for the additional interest
contemplated in Section 2(d) below or the liquidated damages provided
in Section 2(e) below (such new debt securities hereinafter called “Exchange
Securities”). If the Company makes such election, the Company agrees to use
its commercially reasonable efforts to cause the Exchange Registration
Statement to become effective under the Securities Act on or prior to April 20,
2009. The Exchange Offer will be registered under the Securities Act on the
appropriate form and will comply with all applicable tender offer rules and
regulations under the Exchange Act. If the Company makes such election, the
Company further agrees to use its commercially reasonable efforts to commence
the Exchange Offer promptly after the Exchange Registration Statement becomes
effective, hold the Exchange Offer open for the period required by applicable
law (including pursuant to any applicable interpretation by the staff of the
Commission), but in any event for at least 10 business days, and exchange the
Exchange Securities for all Registrable Securities that have been validly
tendered and not withdrawn on or prior to the expiration of the Exchange Offer.
If the Company commences the Exchange Offer, the Company will be entitled to
close the Exchange Offer 30 days after the commencement thereof (or at the end
of such shorter period permitted by applicable law), provided that the Company
has accepted all the Registrable Securities validly tendered in accordance with
the terms of the Exchange Offer. The Company agrees (x) to include in the
Exchange Registration Statement a prospectus for use in any resales by any
holder of Exchange Securities that is a broker-dealer and (y) to keep such
Exchange Registration Statement effective for a period (the “Resale Period”)
beginning when Exchange Securities are first issued in the Exchange Offer and
ending upon the earlier of the expiration of the 90th day after the Exchange
Offer has been completed and such time as such broker-dealers no longer own any
Registrable Securities.

 

Each holder participating
in the Exchange Offer shall be required to represent to the Company that (i) any
Exchange Securities received by such holder will be acquired in the ordinary
course of business, (ii) at the time of the commencement of the Exchange
Offer such holder has no arrangements or understanding with any person to

 

6

 

participate in the
distribution of the Securities or the Exchange Securities within the meaning of
the Securities Act, (iii) such holder is not an “affiliate,” as defined in
Rule 405 of the Securities Act, of the Company, (iv) if such holder
is not a broker-dealer, that it is not engaged in, and does not intend to
engage in, the distribution of the Exchange Securities, (v) if such holder
is a broker-dealer, that it will receive Exchange Securities for its own
account in exchange for Securities that were acquired as a result of
market-making activities or other trading activities and that it will deliver a
prospectus in connection with any resale of such Exchange Securities and (vi) such
holder is not acting on behalf of any person who could not truthfully make the
foregoing representations.

 

(c)           If the Company
elects to file and cause to become effective an Exchange Registration Statement
pursuant to Section 2(b) above and (i) on or prior to the time
the Exchange Offer is consummated existing Commission interpretations are
changed such that the Exchange Securities received by holders other than
Restricted Holders in the Exchange Offer for Registrable Securities are not or
would not be, upon receipt, transferable by each such holder without
restriction under the Securities Act, (ii) the Exchange Offer has not been
completed on or prior to May 20, 2009, (iii) any Lender so requests
with respect to Registrable Securities not eligible to be exchanged for
Exchange Securities in the Exchange Offer and held by it following consummation
of the Exchange Offer or (iv) any holder (other than a Lender) shall be,
and shall notify the Company that such holder is, prohibited by law or
Commission policy from participating in the Exchange Offer or such holder may
not resell the Exchange Securities acquired in the Exchange Offer to the public
without delivering a prospectus and the prospectus contained in the Exchange
Registration Statement is not available for such resales by such holder (other
than in either case (x) due solely to the status of such holder as an
affiliate of the Company within the meaning of the Securities Act or (y) due
to such holder’s inability to make the representations set forth in the second
paragraph of Section 2(b) hereof) and any such holder so requests,
the Company shall, in lieu of (or, in the case of clauses (iii) and (iv),
in addition to) conducting the Exchange Offer contemplated by Section 2(b),
use its commercially reasonable efforts to file under the Securities Act and
cause to become effective as promptly as reasonably practicable, a Shelf
Registration Statement providing for the registration of, and the sale on a
continuous or delayed basis by the holders of, all of the Registrable
Securities (or in the case of clause (iii), the Registrable Securities held by
the Lenders). The Company agrees to use its commercially reasonable efforts to (i) cause
the Shelf Registration Statement to become effective on or prior to April 20,
2009 and to use its commercially reasonable efforts to cause such Shelf
Registration Statement to remain effective for a period ending on the earlier
of the second anniversary of the Closing Date and such shorter period that will
terminate when all the Registrable Securities covered by such Shelf
Registration Statement have been sold pursuant to such Shelf Registration
Statement or are distributed to the public pursuant to Rule 144 or become
eligible for resale pursuant to Rule 144 without volume restriction, if
any; provided, however, that no holder shall be entitled to be named as a
selling securityholder in the Shelf Registration Statement or to use the
prospectus forming a part thereof for resales of Registrable Securities unless
such holder is an Electing Holder, (ii) after the Effective Time of the
Shelf Registration Statement,

 

7

 

promptly
upon the request of any holder of Registrable Securities that is not then an
Electing Holder, to take any action reasonably necessary to identify such
holder as a selling securityholder in such Shelf Registration Statement and
include any disclosure necessary or advisable in order to comply with the Securities
Act or rules and regulations thereunder; provided, however, that (x) nothing
in this clause (ii) shall relieve any such holder of the obligation to
return a completed and signed Notice and Questionnaire to the Company in
accordance with Section 3(d)(iii) hereof and (y) the Company
shall not be required to take any such action with respect to any such holder
more than once every quarter and (iii) to supplement or make amendments to
such Shelf Registration Statement, as and when required by the rules, regulations
or instructions applicable to the registration form used by the Company for
such Shelf Registration Statement or by the Securities Act or rules and
regulations thereunder for shelf registration, and to furnish to each Electing
Holder copies of any such supplement or amendment promptly following its filing
with the Commission.

 

Notwithstanding the
foregoing, the Company may suspend the availability of any Shelf Registration
Statement (x) for up to an aggregate of 60 days in any consecutive
twelve-month period if (i) such action is required by applicable law or (ii) such
action is taken by the Company in good faith and for valid business reasons
(not including avoidance of the Company’s obligations hereunder), including the
acquisition or divestiture of assets, or (y) with respect to a Shelf
Registration Statement required to be filed due to a failure to consummate the
Exchange Offer within the required time period, if such action occurs following
the consummation of the Exchange Offer.

 

(d)           In the event that (i) neither
a Shelf Registration Statement or an Exchange Registration Statement has become
effective on or prior to April 20, 2009, or (ii) the Company elects
to file and cause to become effective an Exchange Registration Statement
pursuant to Section 2(b) above and the Exchange Offer has not been
consummated on or prior to May 20, 2009, or (iii) if a Shelf
Registration Statement required to be filed under Section 2(c) hereof
has not become effective on or prior to April 20, 2009, or (iv) if
any Shelf Registration Statement filed pursuant to Section 2(a) or Section 2(c) is
filed and has become effective, and during the period the Company is required
to use its commercially reasonable efforts to cause such Shelf Registration
Statement to remain effective, (x) the Company shall have suspended the
Shelf Registration Statement pursuant to Section 2(a) or Section 2(c) hereof
for more than 60 days in the aggregate in any consecutive twelve-month period
and be continuing to suspend the availability of such Shelf Registration
Statement or (y) the Shelf Registration Statement shall cease to be
effective (other than by action of the Company pursuant to the second paragraph
of Section 2(a) or Section 2(c)  hereof) without being
replaced within 90 days by a shelf registration statement that is filed and
becomes effective (each such event referred to in clauses (i) through
(iv), a “Registration Default” and each period during which a
Registration Default has occurred and is continuing, a “Registration Default
Period”), then, as liquidated damages for such Registration Default,
subject to the provisions of Section 8(b), special interest (“Special
Interest”), in addition to the Base Interest, shall accrue on Registrable
Securities for the Registration Default Period (but

 

8

 

only
with respect to one Registration Default at any particular time) until such
time as all Registration Defaults have been cured at a per annum rate of 0.25%
for the first 90 days of the Registration Default Period, which rate shall
increase by an additional 0.25% during each subsequent 90-day period, up to a
maximum of 0.50% regardless of the number of Registration Defaults that shall
have occurred and be continuing. Following the cure of all Registration
Defaults, the accrual of Special Interest will cease. A Registration Default
under clause (iii) or (iv) will be deemed cured upon consummation of
the Exchange Offer in the case of a Shelf Registration Statement required to be
filed due to a failure to consummate the Exchange Offer within the required
time period.

 

(e)           If during the 90 day
period referenced in the final sentence of the first paragraph of Section 2(b) hereof
any Exchange Offer Registration Statement is suspended by the Company or ceases
to be effective such that any broker-dealer that (i) receives Exchange
Securities in the Exchange Offer and (ii) is subject to prospectus
delivery requirements cannot fulfill such requirements, the Company shall pay
liquidated damages to such broker-dealers in an amount calculated in a manner
consistent with that specified above with respect to Registration Defaults.

 

(f)            The Company shall
take all actions reasonably necessary or advisable to be taken by it to ensure
that the transactions contemplated herein are effected as so contemplated,
including all actions necessary or desirable to register the Guarantees (if
any) under the registration statement contemplated in Section 2(a), 2(b) or
2(c) hereof, as applicable.

 

(g)           Any reference herein
to a registration statement as of any time shall be deemed to include any
document incorporated, or deemed to be incorporated, therein by reference as of
such time and any reference herein to any post-effective amendment to a
registration statement as of any time shall be deemed to include any document
incorporated, or deemed to be incorporated, therein by reference as of such
time.

 

3.             Registration Procedures.

 

If the Company files a
registration statement pursuant to Section 2(a), 2(b) or 2(c), the
following provisions shall apply:

 

(a)           At or before the
Effective Time of the Exchange Offer or the Shelf Registration, as the case may
be, the Company shall qualify the Indenture under the Trust Indenture Act.

 

(b)           In the event that
such qualification would require the appointment of a new trustee under the
Indenture, the Company shall appoint a new trustee thereunder pursuant to the
applicable provisions of the Indenture.

 

(c)           If the Company
elects to file an Exchange Registration Statement pursuant to Section 2(b) above,
in connection with the Company’s obligations with

 

9

 

respect
to the registration of Exchange Securities as contemplated by Section 2(b) (the
“Exchange Registration”), the Company shall:

 

(i)            use its commercially reasonable
efforts to prepare and file with the Commission an Exchange Registration
Statement on any form which may be utilized by the Company and which shall
permit the Exchange Offer and resales of Exchange Securities by broker-dealers
during the Resale Period to be effected as contemplated by Section 2(b),
and use its commercially reasonable efforts to cause such Exchange Registration
Statement to become effective on or prior to April 20, 2009;

 

(ii)           prepare and file with the Commission
such amendments and supplements to such Exchange Registration Statement and the
prospectus included therein as may be necessary to effect and maintain the
effectiveness of such Exchange Registration Statement for the periods and
purposes contemplated in Section 2(b) hereof and as may be required
by the applicable rules and regulations of the Commission and the
instructions applicable to the form of such Exchange Registration Statement,
and promptly provide each broker-dealer holding Exchange Securities with such
number of copies of the prospectus included therein (as then amended or
supplemented), in conformity in all material respects with the requirements of
the Securities Act and the rules and regulations of the Commission
thereunder, as such broker-dealer reasonably may request prior to the
expiration of the Resale Period, for use in connection with resales of Exchange
Securities;

 

(iii)          promptly notify each broker-dealer
that has requested or received copies of the prospectus included in such
registration statement, and confirm such advice in writing, (A) when such
Exchange Registration Statement or the prospectus included therein or any
prospectus amendment or supplement or post-effective amendment has been filed,
and, with respect to such Exchange Registration Statement or any post-effective
amendment, when the same has become effective, (B) of any request by the
Commission for amendments or supplements to such Exchange Registration
Statement or prospectus or for additional information, (C) of the issuance
by the Commission of any stop order suspending the effectiveness of such
Exchange Registration Statement or the initiation of any proceedings for that
purpose, (D) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Exchange Securities for
sale in any jurisdiction or the initiation of any proceeding for such purpose,
or (E) at any time during the Resale Period when a prospectus is required
to be delivered under the Securities Act, that such Exchange Registration
Statement, prospectus, prospectus amendment or supplement or post-effective
amendment does not conform in all material respects to the applicable
requirements of the Securities Act and the rules and regulations of the
Commission thereunder or contains an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances then
existing;

 

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(iv)          in the event that the Company would be
required, pursuant to Section 3(c)(iii)(E) above, to notify any
broker-dealers holding Exchange Securities, use its commercially reasonable
efforts to prepare and furnish as soon as practicable to each such broker-dealer
a reasonable number of copies of a prospectus supplemented or amended so that,
as thereafter delivered to purchasers of such Exchange Securities during the
Resale Period, such prospectus shall conform in all material respects to the
applicable requirements of the Securities Act and the rules and
regulations of the Commission thereunder and shall not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing;

 

(v)           use its commercially reasonable
efforts to obtain the withdrawal of any order suspending the effectiveness of
such Exchange Registration Statement or any post-effective amendment thereto at
the earliest practicable date;

 

(vi)          use its commercially reasonable
efforts to (A) register or qualify the Exchange Securities under the state
securities laws or blue sky laws of such U.S. jurisdictions as any
participating holder of the Registrable Securities reasonably requests in
writing no later than the commencement of the Exchange Offer, (B) keep
such registrations or qualifications in effect and comply with such laws so as
to permit the continuance of offers, sales and dealings therein in such jurisdictions
until the expiration of the Resale Period and (C) take any and all other
actions as may be reasonably necessary to enable each broker-dealer holding
Exchange Securities to consummate the disposition thereof in such
jurisdictions; provided, however, that the Company shall not be required for
any such purpose to (1) qualify as a foreign corporation in any
jurisdiction wherein it would not otherwise be required to qualify but for the
requirements of this Section 3(c)(vi), (2) consent to general service
of process in any such jurisdiction or (3) make any changes to its
certificate of incorporation, by-laws or other organizational document, or any
agreement between it and any of its equityholders;

 

(vii)         provide a CUSIP number for all Exchange
Securities, not later than the consummation of the Exchange Offer; and

 

(viii)        comply in all material respects with all
applicable rules and regulations of the Commission, and make generally
available to its securityholders as soon as practicable but no later than
eighteen months after the effective date of such Exchange Registration
Statement, an earning statement of the Company and its subsidiaries complying
with Section 11(a) of the Securities Act (including, at the option of
the Company, Rule 158 thereunder).

 

(d)           In connection with
the Company’s obligations with respect to any Shelf Registration, the Company
shall:

 

11

 

(i)            use its commercially reasonable
efforts to prepare and file with the Commission, as promptly as reasonably
practicable, a Shelf Registration Statement on any form which may be utilized
by the Company and which shall register all of the Registrable Securities (or
in the case of a Shelf Registration Statement filed pursuant to Section 2(c)(iii),
the Registrable Securities held by the Lenders) for resale by the holders
thereof in accordance with such method or methods of disposition as may be
specified in the applicable Notice and Questionnaire by such of the holders as,
from time to time, may be Electing Holders and use its commercially reasonable
efforts to cause such Shelf Registration Statement to become effective within
the time periods specified in Section 2(a) or (c), as applicable;

 

(ii)           not less than 15 calendar days prior
to the Effective Time of the Shelf Registration Statement, mail the Notice and
Questionnaire to the holders of Registrable Securities; no holder shall be
entitled to be named as a selling securityholder in the Shelf Registration
Statement as of the Effective Time, and no holder shall be entitled to use the
prospectus forming a part thereof for resales of Registrable Securities at any
time, unless such holder has returned a completed and signed Notice and
Questionnaire to the Company by the deadline for response set forth therein;
provided, however, holders of Registrable Securities shall have at least 13
calendar days from the date on which the Notice and Questionnaire is first
mailed to such holders to return a completed and signed Notice and
Questionnaire to the Company;

 

(iii)          after the Effective Time of the Shelf
Registration Statement, upon the request of any holder of Registrable
Securities that is not then an Electing Holder, promptly send a Notice and
Questionnaire to such holder; provided that the Company shall not be required
to take any action to name such holder as a selling securityholder in the Shelf
Registration Statement or to enable such holder to use the prospectus forming a
part thereof for resales of Registrable Securities until such holder has returned
a completed and signed Notice and Questionnaire to the Company;

 

(iv)          as soon as practicable prepare and
file with the Commission such amendments and supplements to such Shelf
Registration Statement and the prospectus included therein as may be necessary to
effect and maintain the effectiveness of such Shelf Registration Statement for
the period specified in Section 2(a) or 2(c) hereof and as may
be required by the applicable rules and regulations of the Commission and
the instructions applicable to the form of such Shelf Registration Statement,
and furnish to the Electing Holders copies of any such supplement or amendment
as soon as practicable following its filing with the Commission; provided that,
notwithstanding the foregoing, the Company may suspend the availability of any
Shelf Registration Statement (x) for up to an aggregate of 60 days in any
consecutive twelve-month period if (i) such action is required by
applicable law or (ii) such action is taken by the Company in good faith
and for valid business reasons (not including avoidance of the Company’s 

 

12

 

obligations hereunder),
including the acquisition or divestiture of assets, or (y) with respect to
a Shelf Registration Statement required to be filed due to a failure to
consummate an Exchange Offer within the required time period, if such action
occurs following the consummation of the Exchange Offer;

 

(v)           comply in all material respects with
the provisions of the Securities Act with respect to the disposition of all of
the Registrable Securities covered by such Shelf Registration Statement in
accordance with the intended methods of disposition by the Electing Holders
provided for in such Shelf Registration Statement;

 

(vi)          for a reasonable period prior to the
filing of such Shelf Registration Statement, and throughout the period
specified in Section 2(a) or 2(c), as applicable, make reasonably
available at reasonable times at the Company’s principal place of business or
such other reasonable place for inspection by a representative of, and not more
than one counsel acting for, Electing Holders holding at least a majority in
aggregate principal amount of the Registrable Securities at the time
outstanding (the “Majority Electing Holders”) and any underwriter
participating in the distribution of the Registrable Securities being sold
(including any person who may be deemed an underwriter within the meaning of Section 2(a)(ii) of
the Securities Act) such relevant financial and other pertinent information and
books and records of the Company, and use its commercially reasonable efforts
to cause the officers, employees, counsel and independent certified public
accountants of the Company to respond to such inquiries, as shall be reasonably
necessary to conduct a reasonable investigation within the meaning of Section 11
of the Securities Act; provided, however, that the foregoing investigation and
information gathering shall be coordinated on behalf of all such parties by one
counsel designated by and on behalf of all such parties and provided, further,
that each such party shall be required (pursuant to an agreement in form and
substance reasonably satisfactory to the Company) to maintain in confidence and
not to disclose to any other person any information or records reasonably
designated by the Company as being confidential, until such time as (A) such
information becomes a matter of public record (whether by virtue of its
inclusion in such registration statement or otherwise except as a result of a
breach of this or any other obligation of confidentiality to the Company known
to such party), or (B) such person shall be required so to disclose such
information pursuant to a subpoena or order of any court or other governmental
agency or body having jurisdiction over the matter or any such court, agency or
body requests such information from such person in connection with any
examination, review or investigation (subject to the requirements of such
order, subpoena or request, and only after such person shall have given the
Company prompt prior written notice of such requirement so that the Company, at
its expense, may undertake appropriate action to prevent disclosure of such
information or records) or such disclosure is necessary in the opinion of
counsel to establish a reasonable investigation within the meaning of Section 11
of the 

 

13

 

Securities Act in
connection with any such subpoena, order, examination, review or investigation,
or (C) such information is required to be set forth in such Shelf
Registration Statement or the prospectus included therein or in an amendment to
such Shelf Registration Statement or an amendment or supplement to such
prospectus in order that such Shelf Registration Statement, prospectus, amendment
or supplement, as the case may be, complies with applicable requirements of the
federal securities laws and the rules and regulations of the Commission
and does not contain an untrue statement of a material fact or omit to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing;

 

(vii)         promptly notify each of the Electing
Holders and any managing underwriter thereof and confirm such advice in writing,
(A) when such Shelf Registration Statement or the prospectus included
therein or any prospectus amendment or supplement or post-effective amendment
or related Issuer Free Writing Prospectus, has been filed, and, with respect to
such Shelf Registration Statement or any post-effective amendment, when the
same has become effective, (B) of any request by the Commission for
amendments or supplements to such Shelf Registration Statement or prospectus or
related Issuer Free Writing Prospectus, or for additional information, (C) of
the issuance by the Commission of any stop order suspending the effectiveness
of such Shelf Registration Statement or the initiation of any proceedings for
that purpose, (D) of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Registrable Securities for sale
in any jurisdiction or the initiation of any proceeding for such purpose or (E) if
at any time when a prospectus is required to be delivered under the Securities
Act, that such Shelf Registration Statement, prospectus, prospectus amendment
or supplement or post-effective amendment does not conform in all material
respects to the applicable requirements of the Securities Act and the rules and
regulations of the Commission thereunder or contains an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances then existing;

 

(viii)        use its commercially reasonable efforts
to obtain the withdrawal of any order suspending the effectiveness of such
registration statement or any post-effective amendment thereto at the earliest
practicable date;

 

(ix)           if requested by any managing
underwriter or the Majority Electing Holders, promptly incorporate in a
prospectus supplement or post-effective amendment such information as is
required by the applicable rules and regulations of the Commission and as
such managing underwriter or such Majority Electing Holders shall specify
should be included therein relating to the terms of the sale of such
Registrable Securities, including information with respect to the principal
amount of Registrable Securities being sold by such Majority Electing Holders
or to any underwriters, the names and descriptions of such Majority Electing
Holders or underwriters, the offering price of such Registrable Securities and
any 

 

14

 

discount, commission or
other compensation payable in respect thereof, the purchase price being paid
therefor by such underwriters and with respect to any other terms of the
offering of the Registrable Securities to be sold by such Majority Electing
Holders or to such underwriters; and make all required filings of such
prospectus supplement or post-effective amendment as soon as practicable after
notification of the matters to be incorporated in such prospectus supplement or
post-effective amendment;

 

(x)            furnish to each Electing Holder, and
each underwriter, if any, thereof such number of copies of such Shelf
Registration Statement (excluding exhibits thereto and documents incorporated
by reference therein) and of the prospectus included in such Shelf Registration
Statement (including each preliminary prospectus), and any related Issuer Free
Writing Prospectus, in conformity in all material respects with the applicable
requirements of the Securities Act and the rules and regulations of the
Commission thereunder, as such Electing Holder and underwriter, if any, may
reasonably request in order to facilitate the offering and disposition of the
Registrable Securities owned by such Electing Holder or underwritten by such
underwriter and to permit such Electing Holder and underwriter, if any, to
satisfy the prospectus delivery requirements of the Securities Act; and the
Company hereby consents to the use of such prospectus (including such
preliminary prospectus) and any amendment or supplement thereto and any related
Issuer Free Writing Prospectus, by each such Electing Holder and by any such
underwriter, in each case in the form most recently provided to such person by
the Company, in connection with the offering and sale of the Registrable
Securities covered by the prospectus (including such preliminary prospectus) or
any supplement or amendment thereto;

 

(xi)           use its commercially reasonable
efforts to (A) register or qualify the Registrable Securities to be
included in such Shelf Registration Statement under such state securities laws
or blue sky laws of such U.S. jurisdictions as any Electing Holder and managing
underwriter, if any, thereof shall reasonably request, (B) keep such
registrations or qualifications in effect and comply with such laws so as to
permit the continuance of offers, sales and dealings therein in such jurisdictions
during the period the Shelf Registration is required to remain effective under Section 2(a) or
2(c) above and for so long as may be necessary to enable any such Electing
Holder or underwriter to complete its distribution of Securities pursuant to
such Shelf Registration Statement and (C) take any and all other actions
as may be reasonably necessary to enable each such Electing Holder and
underwriter, if any, to consummate the disposition in such jurisdictions of
such Registrable Securities; provided, however, that the Company shall not be
required for any such purpose to (1) qualify as a foreign corporation in
any jurisdiction wherein it would not otherwise be required to qualify but for
the requirements of this Section 3(d)(xi), (2) consent to general
service of process in any such jurisdiction or (3) make any changes to its
certificate of incorporation, 

 

15

 

by-laws or other
organizational document, or any agreement between it and any of its equityholders;

 

(xii)          unless any Registrable Securities
shall be in book-entry only form, cooperate with the Electing Holders and the
managing underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold, which
certificates shall not bear any restrictive legends; and, in the case of an
underwritten offering, enable such Registrable Securities to be in such
denominations and registered in such names as the managing underwriter may
request a reasonable amount of time prior to any sale of the Registrable
Securities;

 

(xiii)         provide a CUSIP number for all
Registrable Securities, not later than the applicable Effective Time;

 

(xiv)        enter into one or more underwriting
agreements in customary form, including customary provisions relating to
indemnification and contribution, and use its commercially reasonable efforts
to take such other actions, if any, in connection therewith as any Electing
Holders aggregating at least 20% in aggregate principal amount of the
Registrable Securities at the time outstanding shall reasonably request in
order to expedite or facilitate the disposition of such Registrable Securities;

 

(xv)         if requested by the Majority Electing
Holders or if the offering contemplated by the Shelf Registration is an
underwritten offering, use its commercially reasonable efforts to (A) make
such representations and warranties to the Electing Holders and the
underwriters, if any, thereof in form, substance and scope as are customarily
made in connection with an offering of debt securities pursuant to any
underwriting agreement; (B) obtain an opinion of counsel to the Company in
customary form subject to customary limitations, assumptions and exclusions and
covering such matters, of the type customarily covered by such an opinion, as
the managing underwriters, if any, or as any Electing Holders of at least 20%
in aggregate principal amount of the Registrable Securities at the time
outstanding may reasonably request, addressed to the Electing Holders and the
underwriters, if any, thereof and dated the effective date of such Shelf
Registration Statement (and if such Shelf Registration Statement contemplates
an underwritten offering of a part or all of the Registrable Securities, dated
the date of the closing under the underwriting agreement relating thereto); (C) obtain
a “cold comfort” letter or letters from the independent certified public
accountants of the Company addressed to the selling Electing Holders or the
underwriters, if any, thereof, dated (i) the effective date of such Shelf
Registration Statement and (ii) if such Shelf Registration Statement
contemplates an underwritten offering, dated the date of the closing under the
underwriting agreement relating thereto, such letter or letters to be in
customary form and covering such matters of the type customarily covered by
letters of such type, subject to receipt of appropriate documentation as
contemplated, and only if 

 

16

 

permitted, by Statement
of Auditing Standards No. 72; and (D) deliver such customary
documents and certificates, including officers’ certificates, as may be
reasonably requested by the Majority Electing Holders and the managing
underwriters, if any, thereof;

 

(xvi)        notify in writing each holder of
Registrable Securities of any proposal by the Company to amend or waive any
provision of this Exchange and Registration Rights Agreement pursuant to Section 8(h) hereof
and of any amendment or waiver effected pursuant thereto, each of which notices
shall contain the text of the amendment or waiver proposed or effected, as the
case may be;

 

(xvii)       in the event that any broker-dealer
registered under the Exchange Act shall underwrite any Registrable Securities
or participate as a member of an underwriting syndicate (within the meaning of
the Conduct Rules (the “Conduct Rules”) of the National Association
of Securities Dealers, Inc. (“NASD”) or any successor thereto, as
amended from time to time) thereof as an underwriter, use commercially reasonable
efforts to provide information to assist such broker-dealer in complying with
the requirements of such Conduct Rules;

 

(xviii)      comply in all material respects with all
applicable rules and regulations of the Commission, and make generally
available to its securityholders as soon as practicable but in any event not
later than eighteen months after the effective date of such Shelf Registration
Statement, an earning statement of the Company and its subsidiaries complying
with Section 11(a) of the Securities Act (including, at the option of
the Company, Rule 158 thereunder);

 

(xix)         take all reasonable action to ensure
that any Issuer Free Writing Prospectus utilized in connection with any
registration covered by Section 3(d) is filed in accordance with the
Securities Act to the extent required thereby and, when taken together with the
related prospectus, prospectus supplement and related documents, will not
contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statement therein, in light of the circumstances
under which they were made, not misleading; and

 

(xx)          so long as any Registrable Securities
remain outstanding, cause each additional Guarantor to execute a counterpart to
this Agreement in the form attached hereto as Annex A and to deliver such
counterpart to the Lenders no later than five business days following the
execution thereof.

 

(e)           In the event that
the Company would be required, pursuant to Section 3(d)(vii)(E) above,
to notify the Electing Holders and the managing underwriters, if any, thereof,
the Company shall as soon as practicable prepare and furnish to each of the
Electing Holders and to each such underwriter, if any, a reasonable number of
copies of a prospectus supplemented or amended so that, as thereafter delivered
to purchasers of Registrable Securities, such prospectus shall conform in all
material respects to the 

 

17

 

applicable
requirements of the Securities Act and the rules and regulations of the
Commission thereunder and shall not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing. Each broker-dealer and Electing Holder agrees that
upon receipt of any notice from the Company pursuant to Section 3(c)(iii)(E) or
Section 3(d)(vii)(E) hereof, such broker-dealer or Electing Holder
shall forthwith discontinue the disposition of Registrable Securities pursuant
to the Exchange Registration Statement or Shelf Registration Statement
applicable to such Registrable Securities until such broker-dealer or Electing
Holder shall have received copies of such amended or supplemented prospectus,
and if so directed by the Company, such broker-dealer or Electing Holder shall
deliver to the Company (at the Company’s expense) all copies, other than
permanent file copies, then in such broker-dealer’s or Electing Holder’s
possession of the prospectus covering such Registrable Securities at the time
of receipt of such notice.

 

(f)            In the event of a
Shelf Registration, in addition to the information required to be provided by
each Electing Holder in its Notice and Questionnaire, the Company may require
such Electing Holder to furnish to the Company such additional information
regarding such Electing Holder and such Electing Holder’s intended method of
distribution of Registrable Securities as may be required in order to comply
with the Securities Act. Each such Electing Holder agrees to notify the Company
as promptly as practicable of any inaccuracy or change in information
previously furnished by such Electing Holder to the Company or of the
occurrence of any event in either case as a result of which any prospectus
relating to such Shelf Registration contains or would contain an untrue
statement of a material fact regarding such Electing Holder or such Electing
Holder’s intended method of disposition of such Registrable Securities or omits
to state any material fact regarding such Electing Holder or such Electing
Holder’s intended method of disposition of such Registrable Securities required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances then existing, and promptly to furnish to the
Company any additional information required to correct and update any
previously furnished information or required so that such prospectus shall not
contain, with respect to such Electing Holder or the disposition of such
Registrable Securities, an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing.

 

4.             Registration Expenses.

 

The Company agrees to
bear and to pay or cause to be paid promptly all expenses incident to the
Company’s performance of or compliance with this Exchange and Registration
Rights Agreement, including (a) all Commission and any NASD registration,
filing and review fees and expenses including the reasonable fees and
disbursements of counsel for the underwriters, if any, in connection with such
registration, filing and review, (b) all fees and expenses in connection
with the qualification of the Securities for offering and sale under the State
securities and blue sky laws referred to in Sections 3(c)(vi) and 3(d)(xi)
hereof and determination of their 

 

18

 

eligibility for
investment under the laws of such jurisdictions as any managing underwriters or
the Electing Holders may reasonably designate, including the reasonable fees
and disbursements of counsel for the Electing Holders or underwriters in
connection with such qualification and determination, (c) all expenses
relating to the preparation, printing, production, distribution and
reproduction of each registration statement required to be filed hereunder,
each prospectus included therein or prepared for distribution pursuant hereto,
each amendment or supplement to the foregoing, any related Issuer Free Writing
Prospectus, the expenses of preparing the Securities for delivery and the
expenses of printing or producing any underwriting agreements, agreements among
underwriters, selling agreements and blue sky or legal investment memoranda and
all other documents in connection with the offering, sale or delivery of
Securities to be disposed of (including certificates representing the
Securities), (d) messenger, telephone and delivery expenses relating to
the offering, sale or delivery of Securities and the preparation of documents
referred in clause (c) above, (e) reasonable fees and expenses of the
Trustee under the Indenture, any agent of the Trustee and any counsel for the
Trustee and of any collateral agent or custodian, (f) internal expenses
(including all salaries and expenses of the Company’s officers and employees
performing legal or accounting duties), (g) fees, disbursements and
expenses of counsel of the Company and independent certified public accountants
of the Company (including the expenses of any opinions or “cold comfort”
letters required by or incident to such performance and compliance), (h) reasonable
fees, disbursements and expenses of any “qualified independent underwriter”
engaged pursuant to Section 3(d)(xvii) hereof, (i) the reasonable
fees, disbursements and expenses of one counsel for the Electing Holders
retained in connection with a Shelf Registration, as selected by the Electing
Holders of at least a majority in aggregate principal amount of the Registrable
Securities held by Electing Holders (which counsel shall be reasonably
satisfactory to the Company), (j) any fees charged by securities rating
services for rating the Securities, and (k) fees, expenses and
disbursements of any other persons, including special experts, retained by the
Company in connection with such registration (collectively, the “Registration
Expenses”). To the extent that any Registration Expenses are incurred,
assumed or paid by any holder of Registrable Securities or any placement or
sales agent therefor or underwriter thereof, the Company shall reimburse such
person for the full amount of the Registration Expenses so incurred, assumed or
paid promptly after receipt of a request therefor. Notwithstanding the foregoing,
the holders of the Registrable Securities being registered shall pay all agency
fees and commissions and underwriting discounts and commissions attributable to
the sale of such Registrable Securities and the fees and disbursements of any
counsel or other advisors or experts retained by such holders (severally or
jointly), other than the counsel and experts specifically referred to above.

 

5.             Indemnification, Contribution.

 

(a)           The Company and each
Guarantor, jointly and severally, agree to indemnify and hold harmless each of
the broker-dealers whose Registrable Securities are included in an Exchange
Registration Statement (including each of the broker-dealers who delivers a
prospectus contained in an Exchange Registration Statement during the 

 

19

 

Resale
Period), each Electing Holder whose Registrable Securities are included in a
Shelf Registration Statement, the respective affiliates, directors and officers
of each such broker-dealer and Electing Holder and each person, if any, who
controls any such Electing Holder, or such broker-dealer within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act as follows:

 

(i)            against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
Exchange Registration Statement or Shelf Registration Statement, as the case
may be, or any amendment or supplement thereto, pursuant to which Exchange
Securities or Registrable Securities were registered under the Securities Act,
including all documents incorporated therein by reference, or the omission or
alleged omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading, or arising out of any
untrue statement or alleged untrue statement of a material fact contained in
any prospectus contained in any such Exchange Registration Statement or Shelf
Registration Statement, as the case may be, or any amendment or supplement
thereto, or in any Issuer Free Writing Prospectus (when taken together with the
related prospectus, prospectus supplement and related documents) related
thereto, or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;

 

(ii)           against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or of
any claim whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission; provided that any such
settlement is effected with the prior written consent of the Company; and

 

(iii)          against any and all expense
whatsoever, as incurred (including the reasonable fees and disbursements of
counsel chosen by any indemnified party), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense is
not paid under subparagraph (i) or (ii) above;

 

provided,
however, that the Company shall not be liable to any such person to the
extent such loss, liability, claim, damage or expense arises out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of such person expressly for use in an Exchange Registration
Statement or Shelf Registration

 

20

 

Statement (or any amendment thereto), any related
prospectus (or any amendment or supplement thereto), or any Issuer Free Writing
Prospectus related thereto.

 

(b)           Each Electing Holder, severally, but
not jointly, agrees to (i) indemnify and hold harmless the Company, the
Guarantors and the other Electing Holders, and each of their respective
directors and officers, and each person, if any, who controls the Company, the
Guarantors or any other Electing Holder within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, against any and
all loss, liability, claim, damage and expense described in the indemnity
contained in Section 5(a) hereof, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions,
made in any Shelf Registration Statement (or any amendment thereto), or any
prospectus included therein (or any amendment or supplement thereto) or any
related Issuer Free Writing Prospectus in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Electing Holder
expressly for use in the Shelf Registration Statement (or any amendment
thereto) or such prospectus (or any amendment or supplement thereto) or any
related Issuer Free Writing Prospectus, and (ii) reimburse the Company for
any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim as such expenses are
incurred; provided, however, that no such holder shall be liable
for any claims hereunder in excess of the amount of net proceeds received by
such Electing Holder from the sale of Registrable Securities pursuant to such
Shelf Registration Statement.

 

(c)           Each indemnified party shall give
written notice promptly to each indemnifying party of any action or proceeding
commenced against it in respect of which indemnity may be sought hereunder, but
failure to so notify an indemnifying party shall not relieve such indemnifying
party from any liability hereunder to the extent it is not materially
prejudiced as a result thereof and in any event shall not relieve it from any
liability which it may have otherwise than on account of this indemnity
agreement.  In case any such action shall
be brought against any indemnified party and it shall notify an indemnifying
party of the commencement thereof, such indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party) and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, such
indemnifying party shall not be liable to such indemnified party for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof
other than reasonable costs of investigation). 
To the extent that an indemnifying party does not assume the defense of
any such action, in no event shall such indemnifying party be liable for the
fees and expenses of more than one counsel (in addition to any local counsel)
separate from its own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.  No indemnifying party shall, without the
prior 

 

21

 

 

written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 5 (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i) includes
an unconditional release of each indemnified party from all liability arising
out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party.

 

(d)           If the indemnification provided for
in this Section 5 is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and the indemnified party in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as
well as any other relevant equitable considerations.

 

The relative fault of the indemnifying party and the
indemnified party shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by such indemnifying party or by such indemnified party and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.

 

The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5(d) were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
Section 5(d).  The aggregate amount
of losses, liabilities, claims, damages and expenses incurred by an indemnified
party and referred to above in this Section 5(d)  shall be deemed to
include any reasonable out-of-pocket legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue or alleged untrue statement or omission or alleged omission.

 

Notwithstanding the provisions of this Section 5(d),
no Electing Holder shall be required to contribute any amount in excess of the
amount by which the dollar amount of the proceeds received by such holder from
the sale of any Registrable Securities exceeds the amount of any damages which
the Electing Holder has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission.

 

22

 

No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.

 

For purposes of this Section 5(d), each person,
if any, who controls any Electing Holder within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act shall have the
same rights to contribution as such Electing Holder, and each director of the
Company, and each person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act
shall have the same rights to contribution as the Company.  The Electing Holders’ obligation in this Section 5(d) to
contribute shall be several in proportion to the principal amount of
Registrable Securities registered by them and not joint.

 

6.             Underwritten Offerings.

 

(a)           Selection of Underwriters.  If any of the Registrable Securities covered
by the Shelf Registration are to be sold pursuant to an underwritten offering,
the managing underwriter or underwriters thereof shall be designated by
Electing Holders holding at least a majority in aggregate principal amount of
the Registrable Securities to be included in such offering, subject to the
consent of the Company (which shall not be unreasonably withheld or delayed)
and such Electing Holders shall be responsible for all underwriting discounts
and commissions in connection therewith.

 

(b)           Participation by Holders.  Each holder of Registrable Securities hereby
agrees with each other such holder that no such holder may participate in any
underwritten offering hereunder unless such holder (i) agrees to sell such
holder’s Registrable Securities on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.

 

7.             Rule 144; 144A.

 

The Company covenants to the holders of Registrable
Securities that to the extent it shall be required to do so under the Exchange
Act, the Company shall timely file the reports required to be filed by it under
the Exchange Act or the Securities Act (including the reports under Section 13
and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144
adopted by the Commission under the Securities Act) and the rules and
regulations adopted by the Commission thereunder, and shall take such further
action as any holder of Registrable Securities may reasonably request, all to
the extent required from time to time to enable such holder to sell Registrable
Securities without registration under the Securities Act within the limitations
of the exemption provided by Rule 144 under the Securities Act, as such Rule may
be amended from time to time, or any similar or successor rule or
regulation hereafter adopted by the Commission. 
Upon the request of any holder of Registrable Securities in connection
with 

 

23

 

that holder’s sale
pursuant to Rule 144, the Company shall deliver to such holder a written
statement as to whether it has complied with such requirements.  The Company will be deemed to have satisfied
the foregoing requirements if any Parent (as defined in the Indenture) of the
Company files such reports and takes such actions of the types otherwise so
required, in each case within the applicable time periods.

 

The Company agrees, at any time when the Company is
not subject to Section 13 or 15(d) of the Exchange Act, for the
benefit of holders from time to time of the Notes, to furnish at its expense,
upon request, to holders of Notes and prospective purchasers of Notes
information satisfying the requirements of subsection (d)(4)(i) of Rule 144A
under the Securities Act.

 

8.             Miscellaneous.

 

(a)           No Inconsistent Agreements.  The Company represents warrants, covenants
and agrees that neither it nor any of its subsidiaries has granted, or shall
grant, registration rights with respect to Registrable Securities or any other
securities which would be inconsistent with the terms contained in this Exchange
and Registration Rights Agreement.

 

(b)           Specific Performance.  The parties hereto acknowledge that there
would be no adequate remedy at law if the Company fails to perform any of its
obligations hereunder and that the Lenders and the holders from time to time of
the Registrable Securities may be irreparably harmed by any such failure, and
accordingly agree that the Lenders and such holders, in addition to any other
remedy to which they may be entitled at law or in equity, shall be entitled to
compel specific performance of the obligations of the Company under this
Exchange and Registration Rights Agreement in accordance with the terms and
conditions of this Exchange and Registration Rights Agreement, in any court of
the United States or any State thereof having jurisdiction.

 

(c)           Notices.  All notices, requests, claims, demands,
waivers and other communications hereunder shall be in writing and shall be
deemed to have been duly given when delivered by hand, if delivered personally
or by courier, or three days after being deposited in the mail (registered or
certified mail, postage prepaid, return receipt requested) as follows: (i) if
to the Company, to it at 860 Ridge Lake Boulevard, Memphis, TN 28120,
Attention: General Counsel, with a copy to David A. Brittenham, Esq. and
Peter J. Loughran, Esq., Debevoise & Plimpton LLP, 919 Third
Avenue, New York, NY 10022, (ii) if to a holder, to the address of such
holder set forth in the security register or other records of the Company or to
such other address as the Company or any such holder may have furnished to the
other in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt, and (iii) if to the
Administrative Agent, any of the Lenders or the Trustee under the Indenture, to
it c/o Wilmington Trust FSB, Normandale Lake Center, 8400 Normandale Lake
Blvd., Suite 925, Bloomington, MN 55437, Attn: Corporate Client Services.

 

24

 

(d)           Parties in Interest.  All the terms and provisions of this Exchange
and Registration Rights Agreement shall be binding upon, shall inure to the
benefit of and shall be enforceable by the parties hereto and the holders from
time to time of the Registrable Securities and the respective successors and
assigns of the parties hereto and such holders. 
In the event that any transferee of any holder of Registrable Securities
shall acquire Registrable Securities, in any manner, whether by gift, bequest,
purchase, operation of law or otherwise, such transferee shall, without any
further writing or action of any kind, be deemed a beneficiary hereof for all
purposes and such Registrable Securities shall be held subject to all of the
terms of this Exchange and Registration Rights Agreement, and by taking and
holding such Registrable Securities such transferee shall be entitled to
receive the benefits of, and be conclusively deemed to have agreed to be bound
by all of the applicable terms and provisions of this Exchange and Registration
Rights Agreement.  If the Company shall
so request, any such successor, assign or transferee shall agree in writing to
acquire and hold the Registrable Securities subject to all of the applicable
terms hereof.

 

(e)           Survival.  The respective indemnities, agreements, representations,
warranties and each other provision set forth in this Exchange and Registration
Rights Agreement or made pursuant hereto shall remain in full force and effect
regardless of any investigation (or statement as to the results thereof) made
by or on behalf of any holder of Registrable Securities, any director, officer
or partner of such holder, any agent or underwriter or any director, officer or
partner thereof, or any controlling person of any of the foregoing, and shall
survive delivery of and payment for the Registrable Securities pursuant to Section 2.5
of the Credit Agreement and the transfer and registration of Registrable
Securities by such holder and the consummation of an Exchange Offer.

 

(f)            Governing Law.  This Exchange and Registration Rights
Agreement shall be governed by and construed in accordance with the laws of the
State of New York.

 

(g)           Headings.  The descriptive headings of the several
Sections and paragraphs of this Exchange and Registration Rights Agreement are
inserted for convenience only, do not constitute a part of this Exchange and
Registration Rights Agreement and shall not affect in any way the meaning or
interpretation of this Exchange and Registration Rights Agreement.

 

(h)           Entire Agreement;
Amendments.  This Exchange and
Registration Rights Agreement and the other writings referred to herein
(including the Indenture and the form of Securities) or delivered pursuant
hereto which form a part hereof contain the entire understanding of the parties
with respect to its subject matter.  This
Exchange and Registration Rights Agreement supersedes all prior agreements and
understandings between the parties with respect to its subject matter.  This Exchange and Registration Rights
Agreement may be amended and the observance of any term of this Exchange and
Registration Rights Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively) only by a
written instrument duly executed by the Company and the holders of at least a
majority in aggregate principal amount of the 

 

25

 

Registrable Securities at
the time outstanding.  Each holder of any
Registrable Securities at the time or thereafter outstanding shall be bound by
any amendment or waiver effected pursuant to this Section 8(h), whether or
not any notice, writing or marking indicating such amendment or waiver appears
on such Registrable Securities or is delivered to such holder.

 

(i)            Counterparts.  This Exchange and Registration Rights
Agreement may be executed by the parties in counterparts, each of which shall
be deemed to be an original, but all such respective counterparts shall
together constitute one and the same instrument.

 

(j)            Guarantors.
Each Guarantor who has signed a signature page hereto agrees to be bound
by the provisions of Sections 4 and 5 hereof as if such Guarantor were the
Company for purposes of such Sections.

 

If the foregoing is in accordance with your
understanding, please sign and return to us six counterparts hereof, and upon
the acceptance hereof by you, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Lenders, the Company and, to
the extent set forth in Section 8(j), the Guarantors.

 

[Signature
Pages Follow]

 

26

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE SERVICEMASTER
  COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven J. Martin

  
	
   

  	
   

  	
  Name: Steven J.
  Martin

  
	
   

  	
   

  	
  Title: Senior Vice
  President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  INSTAR SERVICES GROUP,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven J. Martin

  
	
   

  	
   

  	
  Name: Steven J. Martin

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Greerson G.
  McMullen

  
	
   

  	
   

  	
  Name: Greerson G.
  McMullen

  
	
   

  	
   

  	
  Title: Senior Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  INSTAR SERVICES GROUP,
  L.P.

  
	
   

  	
  By:

  	
  INSTARSERVICES

  
	
   

  	
  MANAGEMENT, LLC, its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark W.
  Peterson

  
	
   

  	
   

  	
  Name: Mark W.
  Peterson

  
	
   

  	
   

  	
  Title: Senior Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Greerson G. McMullen

  
	
   

  	
   

  	
  Name: Greerson G. McMullen

  
	
   

  	
   

  	
  Title: Senior Vice President

  

 

 

	
   

  	
  INSTAR SERVICES HOLDINGS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark W. Peterson

  
	
   

  	
   

  	
  Name: Mark W. Peterson

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Greerson G. McMullen

  
	
   

  	
   

  	
  Name: Greerson G. McMullen

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  INSTAR SERVICES MANAGEMENT, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark W. Peterson

  
	
   

  	
   

  	
  Name: Mark W. Peterson

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Greerson G. McMullen

  
	
   

  	
   

  	
  Name: Greerson G. McMullen

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MERRY MAIDS LIMITED PARTNERSHIP

  
	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven J. Martin

  
	
   

  	
   

  	
  Name: Steven J. Martin

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark W. Peterson

  
	
   

  	
   

  	
  Name: Mark W. Peterson

  
	
   

  	
   

  	
  Title: Senior Vice President

  

 

 

	
   

  	
  MM MAIDS L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven J. Martin

  
	
   

  	
   

  	
  Name: Steven J. Martin

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark W. Peterson

  
	
   

  	
   

  	
  Name: Mark W. Peterson

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SERVICEMASTER CONSUMER SERVICES,

  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven J. Martin

  
	
   

  	
   

  	
  Name: Steven J. Martin

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark W. Peterson

  
	
   

  	
   

  	
  Name: Mark W. Peterson

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SERVICEMASTER CONSUMER SERVICES

  
	
   

  	
  LIMITED PARTNERSHIP

  
	
   

  	
  By: SERVICEMASTER CONSUMER

  SERVICES, INC., its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Steven J. Martin

  
	
   

  	
   

  	
  Name: Steven J. Martin

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark W. Peterson

  
	
   

  	
   

  	
  Name: Mark W. Peterson

  
	
   

  	
   

  	
  Title: Senior Vice President

  

 

 

	
   

  	
  SERVICEMASTER HOLDING

  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Steven J. Martin

  
	
   

  	
   

  	
  Name: Steven J. Martin

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark W. Peterson

  
	
   

  	
   

  	
  Name: Mark W. Peterson

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SERVICEMASTER MANAGEMENT

  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Steven J. Martin

  
	
   

  	
   

  	
  Name: Steven J. Martin

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark W. Peterson

  
	
   

  	
   

  	
  Name: Mark W. Peterson

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SERVICEMASTER

  RESIDENTIAL/COMMERCIAL SERVICES

  LIMITED PARTNERSHIP

  
	
   

  	
  By:

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Steven J. Martin

  
	
   

  	
   

  	
  Name: Steven J. Martin

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark W. Peterson

  
	
   

  	
   

  	
  Name: Mark W. Peterson

  
	
   

  	
   

  	
  Title: Senior Vice President

  

 

 

	
   

  	
  SM CLEAN L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven J. Martin

  
	
   

  	
   

  	
  Name: Steven J. Martin

  
	
   

  	
   

  	
  Title: Senior Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark W. Peterson

  
	
   

  	
   

  	
  Name: Mark W. Peterson

  
	
   

  	
   

  	
  Title: Senior Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TERMINIX INTERNATIONAL,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven J. Martin

  
	
   

  	
   

  	
  Name: Steven J. Martin

  
	
   

  	
   

  	
  Title: Senior Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark W. Peterson

  
	
   

  	
   

  	
  Name: Mark W. Peterson

  
	
   

  	
   

  	
  Title: Senior Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE TERMINIX
  INTERNATIONAL

  COMPANY LIMITED PARTNERSHIP

  
	
   

  	
  By: TERMINIX INTERNATIONAL,
  INC.,

  
	
   

  	
  its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven J. Martin

  
	
   

  	
   

  	
  Name: Steven J. Martin

  
	
   

  	
   

  	
  Title: Senior Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark W. Peterson

  
	
   

  	
   

  	
  Name: Mark W. Peterson

  
	
   

  	
   

  	
  Title: Senior Vice
  President

  

 

 

	
   

  	
  TRUGREEN COMPANIES
  L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven J. Martin

  
	
   

  	
   

  	
  Name: Steven J. Martin

  
	
   

  	
   

  	
  Title: Senior Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark W. Peterson

  
	
   

  	
   

  	
  Name: Mark W. Peterson

  
	
   

  	
   

  	
  Title: Senior Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TRUGREEN, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven J. Martin

  
	
   

  	
   

  	
  Name: Steven J. Martin

  
	
   

  	
   

  	
  Title: Senior Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark W. Peterson

  
	
   

  	
   

  	
  Name: Mark W. Peterson

  
	
   

  	
   

  	
  Title: Senior Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TRUGREEN LANDCARE
  L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven J. Martin

  
	
   

  	
   

  	
  Name: Steven J. Martin

  
	
   

  	
   

  	
  Title: Senior Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark W. Peterson

  
	
   

  	
   

  	
  Name: Mark W. Peterson

  
	
   

  	
   

  	
  Title: Senior Vice
  President

  

 

 

	
   

  	
  TRUGREEN LIMITED
  PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
  By: TRUGREEN, INC., its
  general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven J. Martin

  
	
   

  	
   

  	
  Name: Steven J. Martin

  
	
   

  	
   

  	
  Title: Senior Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Greerson G.
  McMullen

  
	
   

  	
   

  	
  Name: Greerson G.
  McMullen

  
	
   

  	
   

  	
  Title: Senior Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  JPMORGAN CHASE BANK,
  N.A.

  	
   

  	
   

  
	
  As Administrative Agent
  for the Lenders

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Neil R. Boylan

  	
   

  	
   

  	
   

  
	
   

  	
  Name: Neil R. Boylan

  	
   

  	
   

  	
   

  
	
   

  	
  Title: Managing
  Director

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  On behalf of each of
  the Lenders

  	
   

  	
   

  	
   

  

 

 

Exhibit A

 

The ServiceMaster
Company

 

INSTRUCTION TO DTC
PARTICIPANTS

 

(Date of Mailing)

 

URGENT - IMMEDIATE
ATTENTION REQUESTED

 

DEADLINE FOR
RESPONSE:  [DATE](1)

 

The Depository Trust Company (“DTC”) has
identified you as a DTC Participant through which beneficial interests in The
ServiceMaster Company (the “Company”) 10.75%/11.50% Senior Toggle Notes
due 2015 (the “Securities”) are held.

 

The Company is in the process of registering the
Securities under the Securities Act of 1933 for resale by the beneficial owners
thereof.  In order to have their
Securities included in the registration statement, beneficial owners must
complete and return the enclosed Notice of Registration Statement and Selling
Securityholder Questionnaire.

 

It is important that beneficial owners of the
Securities receive a copy of the enclosed materials as soon as possible
as their rights to have the Securities included in the registration statement
depend upon their returning the Notice and Questionnaire by [Deadline For
Response].  Please forward a copy of the
enclosed documents to each beneficial owner that holds interests in the
Securities through you.  If you require
more copies of the enclosed materials or have any questions pertaining to this
matter, please contact The ServiceMaster Company, 860 Ridge Lake Boulevard,
Memphis, TN 28120.

 

(1)           Not less than 28 calendar days from
date of mailing.

 

A-1

 

The ServiceMaster Company

 

Notice of Registration Statement

and

Selling, Securityholder Questionnaire

 

(Date)

 

Reference is hereby made to the Exchange and
Registration Rights Agreement (the “Exchange and Registration Rights
Agreement”) among The ServiceMaster Company, a Delaware corporation (the “Company”),
and the Guarantors and Administration Agent named therein.  Pursuant to the Exchange and Registration
Rights Agreement, the Company has filed with the United States Securities and
Exchange Commission (the “Commission”) a registration statement on Form S-1
(the “Shelf Registration Statement”) for the registration and resale
under Rule 415 of the Securities Act of 1933, as amended (the “Securities
Act”), of the Company’s 10.75%/11.50% Senior Toggle Notes due 2015 (the “Securities”).  A copy of the Exchange and Registration
Rights Agreement is attached hereto.  All
capitalized terms not otherwise defined herein shall have the meanings ascribed
thereto in the Exchange and Registration Rights Agreement.

 

Each beneficial owner of Registrable Securities (as
defined below) is entitled to have the Registrable Securities beneficially
owned by it included in the Shelf Registration Statement.  In order to have Registrable Securities
included in the Shelf Registration Statement, this Notice of Registration
Statement and Selling Securityholder Questionnaire (“Notice and
Questionnaire”) must be completed, executed and delivered to the Company’s
counsel at the address set forth herein for receipt ON OR BEFORE [Deadline for
Response].  Beneficial owners of
Registrable Securities who do not complete, execute and return this Notice and
Questionnaire by such date (i) will not be named as selling
securityholders in the Shelf Registration Statement and (ii) may not use
the Prospectus forming a part thereof for resales of Registrable Securities.

 

Certain legal consequences arise from being named as a
selling securityholder in the Shelf Registration Statement and related
Prospectus.  Accordingly, holders and
beneficial owners of Registrable Securities are advised to consult their own
securities law counsel regarding the consequences of being named or not being
named as a selling securityholder in the Shelf Registration Statement and
related Prospectus.

 

The term “Registrable Securities” is defined in
the Exchange and Registration Rights Agreement.

 

A-2

 

ELECTION

 

The undersigned holder (the “Selling Securityholder”)
of Registrable Securities hereby elects to include in the Shelf Registration
Statement the Registrable Securities beneficially owned by it and listed below
in Item (3).  The undersigned, by signing
and returning this Notice and Questionnaire, agrees to be bound with respect to
such Registrable Securities by the terms and conditions of this Notice and
Questionnaire and the Exchange and Registration Rights Agreement, including,
without limitation, Section 6 of the Exchange and Registration Rights
Agreement, as if the undersigned Selling Securityholder were an original party
thereto.

 

Upon any sale of Registrable Securities pursuant to
the Shelf Registration Statement, the Selling Securityholder will be required
to deliver to the Company and Trustee the Notice of Transfer set forth in
Appendix A to the Prospectus and as Exhibit B to the Exchange and
Registration Rights Agreement.

 

The Selling Securityholder hereby provides the
following information to the Company and represents and warrants that such
information is accurate and complete:

 

A-3

 

QUESTIONNAIRE

 

1.             (a)           Full Legal Name of Selling
Securityholder:

 

(b)                                 Full
Legal Name of Registered Holder (if not the same as in (a) above) of
Registrable Securities Listed in Item (3) below:

 

(c)                                  Full
Legal Name of DTC Participant (if applicable and if not the same as (b) above)
Through Which Registrable Securities Listed in Item (3) below are Held:

 

2.             Address
for Notices to Selling Securityholder:

 

 

 

Telephone:

 

Fax:

 

Contact Person:

 

3.             Beneficial
Ownership of Securities:

 

Except as set forth below in this Item (3), the undersigned does not
beneficially own any Securities.

 

(a)                                  Principal
amount of Registrable Securities beneficially owned:            

CUSIP No(s). of such Registrable Securities:

 

 

(b)                                 Principal
amount of Securities other than Registrable Securities beneficially owned:

CUSIP No(s). of such other Securities:

 

 

(c)                                  Principal
amount of Registrable Securities which the undersigned wishes to be included in
the Shelf Registration Statement:

CUSIP No(s). of such Registrable Securities to be
included in the Shelf Registration Statement:

 

A-4

 

4.             Beneficial
Ownership of Other Securities of the Company:

 

Except
as set forth below in this Item (4), the undersigned Selling Securityholder is not
the beneficial or registered owner of any other securities of the Company,
other than the Securities listed above in Item (3).

State any exceptions here:

 

5.             Relationships
with the Company:

 

Except as set forth below, neither the Selling Securityholder nor any
of its affiliates, officers, directors or principal equity holders (5% or more)
has held any position or office or has had any other material relationship with
the Company (or its predecessors or affiliates) during the past three years.

 

State any exceptions here:

 

6.             Plan
of Distribution:

 

Except as set forth below, the undersigned Selling Securityholder
intends to distribute the Registrable Securities listed above in Item (3) only
as follows (if at all):  Such Registrable
Securities may be sold from time to time directly by the undersigned Selling
Securityholder or, alternatively, through underwriters, broker-dealers or
agents.  Such Registrable Securities may
be sold in one or more transactions at fixed prices, at prevailing market
prices at the time of sale, at varying prices determined at the time of sale,
or at negotiated prices.  Such sales may
be effected in transactions (which may involve crosses or block transactions) (i) on
any national securities exchange or quotation service on which the Registered
Securities may be listed or quoted at the time of sale, (ii) in the
over-the-counter market, (iii) in transactions otherwise than on such
exchanges or services or in the over-the-counter market, or (iv) through
the writing of options.  In connection
with sales of the Registrable Securities or otherwise, the Selling
Securityholder may enter into hedging transactions with broker-dealers, which
may in turn engage in short sales of the Registrable Securities in the course
of hedging the positions they assume. 
The Selling Securityholder may also sell Registrable Securities short
and deliver Registrable Securities to close out such short positions, or loan
or pledge Registrable Securities to broker-dealers that in turn may sell such
securities.

 

State any exceptions here:

 

By signing below, the Selling Securityholder
acknowledges that it understands its obligation to comply, and agrees that it
will comply, with the provisions of the Exchange Act and the rules and
regulations thereunder, particularly Regulation M.

 

A-5

 

In the event that the Selling Securityholder transfers
all or any portion of the Registrable Securities listed in Item (3) above
after the date on which such information is provided to the Company, the
Selling Securityholder agrees to notify the transferee(s) at the time of
the transfer of its rights and obligations under this Notice and Questionnaire
and the Exchange and Registration Rights Agreement.

 

By signing below, the Selling Securityholder consents
to the disclosure of the information contained herein in its answers to Items (1) through
(6) above and the inclusion of such information in the Shelf Registration
Statement and related Prospectus.  The
Selling Securityholder understands that such information will be relied upon by
the Company in connection with the preparation of the Shelf Registration
Statement and related Prospectus.

 

In accordance with the Selling Securityholder’s
obligation under Section 3(d) of the Exchange and Registration Rights
Agreement to provide such information as may be required by law for inclusion
in the Shelf Registration Statement, the Selling Securityholder agrees to
promptly notify the Company of any inaccuracies or changes in the information
provided herein which may occur subsequent to the date hereof at any time while
the Shelf Registration Statement remains in effect.  All notices hereunder and pursuant to the
Exchange and Registration Rights Agreement shall be made in writing, by hand
delivery, first-class mail, or air courier guaranteeing overnight delivery as
follows:

 

(i)                                   To
the Company:

 

The ServiceMaster Company

860 Ridge Lake Boulevard

Memphis, TN 38120

Attention:  General Counsel

 

(ii)                                With
a copy to:

 

David A. Brittenham, Esq. and

Peter J. Loughran, Esq.

Debevoise & Plimpton LLP

919 Third Avenue

New York, New York 10022

 

Once this Notice and Questionnaire is executed by the
Selling Securityholder and received by the Company’s counsel, the terms of this
Notice and Questionnaire, and the representations and warranties contained
herein, shall be binding on, shall inure to the benefit of and shall be
enforceable by the respective successors, heirs, personal representatives, and
assigns of the Company and the Selling Securityholder (with respect to the Registrable
Securities beneficially owned by such Selling Securityholder and listed in Item
(3) above).  This Agreement shall be
governed in all respects by the laws of the State of New York.

 

A-6

 

IN WITNESS WHEREOF, the undersigned, by authority duly
given, has caused this Notice and Questionnaire to be executed and delivered
either in person or by its duly authorized agent.

 

Dated:

 

 

	
   

  	
   

  
	
   

  	
  Selling
  Securityholder

  
	
   

  	
  (Print/type
  full legal name of beneficial owner of Registrable Securities)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

A-7

 

PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND
QUESTIONNAIRE FOR RECEIPT ON OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY’S
COUNSEL AT:

 

David A. Brittenham, Esq. and

Peter J. Loughran, Esq.

Debevoise & Plimpton LLP

919 Third Avenue

New York, New York 10022

 

A-8

 

Exhibit B

 

NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT

 

Wilmington Trust FSB

The ServiceMaster Company

c/o Wilmington Trust FSB

Normandale Lake Center

8400 Normandale Lake Blvd., Suite 925

Bloomington, MN 55437

Attn: Corporate Client Services

 

Attention:  Trust Officer

 

	
   

  	
  Re:

  	
  The ServiceMaster
  Company (the “Company”)

  
	
   

  	
   

  	
  10.75%/11.50% Senior
  Toggle Notes due 2015

  

 

Dear Sirs:

 

Please be advised that                           
has transferred $           
aggregate principal amount of the above-referenced Notes pursuant to an
effective Registration Statement on Form S-1 (File No. 333-             )
filed by the Company.

 

We hereby certify that the prospectus delivery
requirements, if any, of the Securities Act of 1933, as amended, have been
satisfied and that the above-named beneficial owner of the Notes is named as a “Selling
Holder” in the Prospectus dated         or
in supplements thereto, and that the aggregate principal amount of the Notes
transferred are the Notes listed in such Prospectus opposite such owner’s name.

 

Dated:

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Name)

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  (Authorized
  Signature)

  

 

B-1

 

Annex A

 

Counterpart to Exchange and Registration
Rights Agreement

 

The
undersigned hereby absolutely, unconditionally and irrevocably agrees as a
Guarantor (as defined in the Exchange and Registration Rights Agreement, dated
as of July 24, 2008 by and among the Company, a Delaware corporation, the
guarantors party thereto and JPMorgan Chase Bank, N.A., on behalf of itself and
the other Lenders and other holders of Registrable Securities) to be bound by
the terms and provisions of such Exchange and Registration Rights Agreement.

 

 

IN WITNESS
WHEREOF, the undersigned has executed this counterpart as of                              .

 

	
   

  	
  [NAME]

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:EMPLOYMENT AGREEMENT

EXHIBIT 10.1

AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT

This Amendment No. 1 to Employment Agreement (the “Agreement”), effective as of July 1st, 2008, is made and entered into by and between Myriad Entertainment and Resorts, Inc. (“Myriad”), a Delaware corporation, and Robert M. Leahy (“Executive”).

WHEREAS, on or about November 1, 2006, Myriad and Executive entered into that certain Agreement, providing for the terms and conditions of Executive’s employment by Myriad (the “2006 Agreement”); and

WHEREAS, Myriad and Executive wish to amendment certain provisions of the 2006 Agreement.

In consideration of the mutual promises contained herein, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Myriad and the Executive intend to be legally bound and agree as follows.

1.

Employment and Agreement Term.

Myriad will employ the Executive under the terms and conditions set forth in this Agreement for an initial term beginning July 1st, 2008 (the “Effective Date”) and ending on July 1st, 2011 (the “Initial Term”). The Agreement shall automatically renew for successive terms of one (1) year (each a “Renewal Term”) unless notice not to renew is furnished by either party at least ninety (90) days prior to expiration of the Initial Term or then current Renewal Term. For purposes hereof, the Initial Term and each Renewal Term are collectively referred to as the “Term.” Notwithstanding anything in this paragraph 1, the Executive’s employment may be terminated at any time in accordance with paragraph 10.

2.

Position.

During the Term, Executive shall serve as Myriad’s Executive Vice President of Finance. The parties acknowledge that Executive presently serves as Executive Vice President of Finance during the Term and for so long as Executive is willing to serve in such capacity. In such capacity, Executive shall perform such duties and responsibilities as are normally related to such position in accordance with Myriad’s by-laws and applicable law, including those services described below (“Services”), and Executive hereby agrees to use his best efforts to provide the Services.  Executive shall comply with the statutes, rules, regulations, and orders of any governmental or quasi-governmental authority, which are applicable to the performance of the Services, and Myriad’s rules, regulations, and practices as they may from time-to-time be adopted or modified.

3.

Services.

Executive shall have all of the responsibilities of a Executive Vice President of Finance as imposed by Delaware or other applicable law, the certificate of incorporation, as amended,

and the by-laws, as amended, of Myriad. These responsibilities shall include, but shall not be limited to, the following.

3.1

Executive shall be employed as the Myriad’s Executive Vice President of Finance.

3.2

Executive shall report directly to Myriad’s Chief Financial Officer and Chief Executive Officer and Chairman, and shall give his best efforts to Myriad.

3.3

The Executive shall perform all the powers and duties of the office of the Executive Vice President of Finance and in general have overall supervision of the financial operations of the Corporation, including but not limited to the following areas:

3.3.1

Stewardship - through protecting and preserving the assets of Myriad; Accounting, control, risk management and asset preservation is the province of the Executive. The Executive must ensure Myriad complies with financial reporting and control requirements. 

3.3.2

Compliance – ensuring organizational compliance with the Sarbanes-Oxley Act and with Generally Accepted Accounting Principles;

3.3.3

Operations – through balancing the capabilities, costs and service levels to fulfill the Finance organization’s responsibilities.

3.3.4

Strategic support – through providing the financial leadership in determining strategic business direction and align financial strategies of Myriad to ensure that the CEO and the Board of Directors provide the best value to Myriad’s shareholders. 

3.4

Executive Vice President of Finance shall, when requested, counsel with and advise the other officers of the Corporation and shall perform such other duties as he may agree with the Chief Executive Officer or as the Board may from time to time determine. 

4.

Executive’s Status.

4.1

Hours of Employment. The Executive will be employed on a full-time basis and shall devote such time, efforts, and energy to the performance of his duties under this Agreement as is reasonable and necessary under the circumstances. It shall not be a violation of this agreement to engage in activities for, or serve, such civic, community, charitable, educational, or religious organizations as he may reasonably select, or (b) to serve on other corporate boards of directors or the advisory boards of other businesses, so long as any such engagement or service does not substantially interfere with the Executive’s performance of his duties hereunder.

5.

Conflicts.

Executive represents that, to the best of his knowledge, Executive has no outstanding agreement or obligation that is in conflict with any of his obligations under the Agreement, and Executive agrees to use his best efforts to avoid or minimize any such conflict. Executive agrees not to enter into any agreement or obligation that would create such a conflict, without the approval of Myriad’s Chief Executive Officer. Without limiting the generality of the foregoing, Executive will not, during the Term, engage in any activity that creates an actual conflict of interest with Myriad, regardless of whether such activity is prohibited by Myriad’s conflict of interest guidelines or the Agreement, and Executive agrees to notify Chief Executive Officer before engaging in any activity that creates a potential conflict of interest with Myriad. Specifically, Executive shall not, during the Term, engage in any activity that is in direct 

2

competition with Myriad or serve in any capacity (including, but not limited to, as an employee, consultant, advisor or director) in any entity that competes directly with Myriad, as reasonably determined by a majority of Myriad’s disinterested Board members, without the approval of the Chief Executive Officer or a majority of Myriad’s Board. 

6.

Myriad’s Obligations,

Myriad shall make such efforts as are necessary to cooperate with Executive so that Executive can fulfill his obligations under paragraph 3 above. Myriad shall provide Executive with reasonable access to all books and records of Myriad. 

7.

Compensation.

As compensation for the Executive’s services, Myriad hereby agrees to pay the Executive, and the Executive hereby agrees to accept, compensation as follows.

7.1

Base Salary. Myriad will pay to the Executive an initial base salary equal to $225,000 per annum, less applicable withholdings and deductions, payable Bi-weekly. The first payment hereunder shall be due on     . The Executive’s Base Salary may be increased on an annual basis, according to Myriad’s usual merit process, and also may be increased from time to time (but not decreased, other than in connection with a reduction that is part of a general cost reduction affecting at least ninety percent (90%) of the executive officers of Myriad and which does not exceed ten percent (10%) of the Executive’s then current Base Salary in the aggregate when combined with any prior reductions), with the approval of the Board based on relevant circumstances, including an increase in the value in Myriad’s stock or an increase in Myriad’s earnings or profits. Myriad’s obligations to pay Executive his base salary pursuant to this Section 7.1, is contingent upon Myriad securing adequate financing; provided, however, that Executive’s base salary shall accrue until such time as Myriad secures any such adequate financing and such accrual shall be deemed to have commenced starting on July 1, 2008.

7.2

Bonuses. 

7.2.1

Annual Bonus Performance Plan. Myriad shall also pay Executive any bonuses earned under Myriad’s Annual Bonus Performance Plan for Directors and Officers (“Annual Bonus Performance Plan”). The Annual Bonus Performance Plan, together with any successor plans of Myriad is intended to comply with Section 162(m) of the Internal Revenue Code of 1986, as amended (“IRC Code”).

7.2.2

Timing of Bonus Payments. The bonuses owed Executive under paragraphs 7.2.2 and 7.2.3 shall be paid no later than March 15 following the year in which the bonus is earned. The bonus described in paragraph 7.2.3 shall be paid no later than March 15, 2008. 

7.3

Stock Option Award. 

7.3.1

Stock Option Award. On the date of the signing of this Agreement, the Corporation hereby grants to the executive, an option (the "Option") to purchase from the Corporation 1,750,000 Shares of common stock, at a purchase price of $.15 per Share (the "Exercise Price").  The "Option Period" shall commence on the date hereof and terminate on June 30, 2018.

3

7.3.2

Right of First Refusal – Sale by Executive. In the event Executive chooses to sell or otherwise liquidate or dispose of all of any part of the common stock issued upon exercise of the option granted under paragraph 7.3.1 at any time prior to that date which is two years after the date the stock was granted (and such sale or disposition is to be made in accordance with applicable securities laws), the following conditions shall apply:

7.3.2.1

Written notice of the Executive’s intent to sell his stock and the number of shares he intends to sell shall be given to the Chief Executive Officer (“Notice of Intent”); and

7.3.2.2

For a period of thirty (30) days following the date of the Notice of Intent, Myriad shall have the right to repurchase the stock at its closing price on the actual date of purchase.

7.3.2.3

The obligations created under this paragraph 7.3.2 shall survive termination of this Agreement.  

7.3.3

Right of First Refusal – Termination of Executive. In the event Myriad terminates Executive’s employment for Cause (as defined in paragraph 10.2.2 hereof), and/or in the event Executive voluntarily terminates his employment, Myriad shall have the right, for a period of thirty (30) days following the date of such termination, to repurchase all of the restricted shares granted to Executive under paragraph 7.3.1 on the following conditions:    

7.3.3.1

Written notice of Myriad’s intention to repurchase the stock shall be given to Executive within thirty (30) days following the date of Executive’s termination (“Notice to Purchase”);

7.3.3.2

Myriad shall repurchase the shares within thirty (30) days following the Notice to Purchase at their closing price on the date of Executive’s termination; and

7.3.3.3

For purposes of this paragraph 7.3.3, the date of Executive’s termination shall be Executive’s last day of active employment by Myriad. 

7.3.3.4

The obligations created under this section 7.3.3 shall survive termination of this Agreement.

7.4

Intentionally Deleted.

7.5

Benefits: During the Term, Executive shall be entitled to benefits as follows.

7.5.1

Medical/Dental/Vision/Disability. Executive shall receive family plan medical, dental, and vision insurance and short-term and long-term disability insurance in accordance with the benefit plans established by Myriad for its senior executives (as may be amended from time to time in Myriad’s sole discretion) to the extent allowed under the terms of such plans and Myriad shall pay all premiums for coverage of Executive and his family under said plans.

4

7.5.2

Senior Executive Benefits. Executive shall also be eligible to participate in any additional benefit plans generally available to Myriad’s senior executives to the extent allowed by the benefit plans established by Myriad, which may be amended or terminated at any time in Myriad’s sole discretion. 

7.5.3

Life Insurance. Myriad shall maintain and pay all premiums on life insurance policies on Executive’s life in the aggregate amount of $500,000. Myriad shall designate the Executive’s estate (or such other individual(s) or entities as may be directed by Executive) as beneficiary with respect to fifty percent (50%) of the death benefits, and Myriad as beneficiary with respect to the remaining fifty percent (50%) of the death benefits.

7.5.4

Automobile. Myriad will pay to Executive on the first day of each month during the Term, a monthly automobile allowance of $800 to help defray the costs associated with Executive’s acquisition (by lease or otherwise) of an automobile and the insurance and maintenance thereof.

7.5.5

Reimbursement of Expenses. Executive is authorized to incur various business expenses customarily incurred by persons holding like positions in connection with the promotion of Myriad’s business and the performance of Executive’s Services. Myriad shall reimburse Executive for all allowable expenses from time-to-time, at Executive’s request, and Executive shall account to Myriad for such expenses. In the event that Executive mistakenly submits and Myriad pays for expenses that are properly classified as a personal expense, Executive agrees to reimburse Myriad for such personal expenses paid on Executive’s behalf.

7.5.6

Relocation Expenses. Myriad agrees to assist the Executive in relocation by paying all reasonable expenses incurred in such relocation inclusive of closing costs.

7.5.7

Housing Expense. Myriad agrees to pay a housing allowance of $2,500 on the first (1st) of each month to the Executive. Myriad agrees to pay all Lessor deposits required upon execution of the housing agreement 

8.

Confidential Information.

Except in the performance of his Services hereunder, at no time shall Executive divulge, furnish, or make accessible to any person any information of a confidential or propriety nature, outside of information normally made available to the public (brochures, web-site literature, SEC reports, etc.) obtained by him while serving as Executive Vice President of Finance. Upon the termination of the Agreement, Executive shall return to Myriad all confidential information which exists in written or other physical form and all copies thereof in his possession or under his control, and shall otherwise continue to protect all confidential or proprietary information of Myriad.

9.

Indemnification.

Myriad shall indemnify and defend Executive to the fullest extent authorized in Myriad’s certificate of incorporation, as amended, its by-laws, as amended, and applicable law and shall 

5

advance expenses to Executive as provided therein and shall not alter, modify, or amend any provisions of Myriad’s certificate of incorporation or by-laws related to indemnification of officers and directors or the advancement of expenses so as to materially or adversely affect Executive’s rights hereunder without Executive’s prior written consent. Myriad confirms that its certificate of incorporation, as amended, provides for the advancement of expenses to directors and officers with respect to claims covered by section 145 of the General Corporation Law of the State of Delaware, as amended. Myriad will have purchased and shall maintain in full force and effect during the Term, Director’s and Officer’s liability insurance, and Executive shall be entitled to the protection of any insurance policies that Myriad maintains for the benefit of its Directors and Officers against all costs, charges and expenses in connection with any action, suit or proceeding to which he may be made a party by reason of his affiliation with Myriad, its subsidiaries, or affiliates. The provisions of this paragraph shall survive the termination of the Agreement.

10.

Termination.

The Executive’s employment with Myriad may terminate as follows:

10.1

Termination By Executive. 

10.1.1

Voluntary Termination. During the Term, the Executive may voluntarily terminate his employment upon not less than thirty (30) days written notice to Myriad; provided, that Myriad may accelerate the Executive’s employment termination date to the date on which the Executive gives Myriad notice of termination or on any date between the date of such notice and the termination date stated in such notice. Notwithstanding any such acceleration, Executive shall continue to be paid his Base Salary pursuant to the terms of the Agreement for the full thirty (30) day period following such written notice. 

10.1.2

Good Reason Termination. Notwithstanding paragraph 10.1.1, the Executive may terminate his employment for “Good Reason” at any time upon not less than thirty (30) days written notice to Myriad. For this purpose, “Good Reason” shall be deemed to exist if there is a material negative change to Executive in his relationship with Myriad, including (i) a material diminution in the duties, and/or responsibilities, and/ or authority of the Executive, or (i) there is a willful failure or refusal by Myriad to perform any material obligation under the Agreement; or (ii) there is a reduction in the Executive’s Base Salary other than a reduction that is part of a general cost reduction affecting at least ninety percent (90%) of the executive officers of Myriad and which does not exceed ten percent (10%) of the Executive’s then current Base Salary in the aggregate when combined with any such prior reductions. In the case of any alleged event under subsections (i), (ii) hereof, Executive shall provide Myriad with written notice of the grounds for a Good Reason termination, as set forth above, within ninety (90) days of the initial existence of the condition, and Myriad shall have a period of thirty (30) days to cure after receipt of the written notice. In the absence of timely cure, Executive’s employment shall be deemed to terminate at the conclusion of the thirty (30) day cure period. Resignation by Executive following Myriad’s cure or before the expiration of the thirty (30) day cure period shall constitute a voluntary termination and not a termination for Good Reason.

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10.2

Termination by Myriad.

10.2.1

Without Cause Termination. Myriad may terminate the Executive’s employment without cause upon not less than thirty (30) days prior written notice to the Executive (other than for Cause as defined in paragraph 10.2.2 below), Executive’s employment under this Agreement shall be deemed terminated by Myriad without Cause under this paragraph 10.2.1.

10.2.2

For Cause Termination. Notwithstanding paragraph 10.2.1, Myriad may terminate the Executive’s employment for “Cause” at any time upon written notice to the Executive. For this purpose, “Cause” shall be deemed to exist if (i) Myriad determines in good faith and following a reasonable investigation that the Executive has committed fraud, theft, or embezzlement from Myriad or any of its affiliates; (ii) the Executive pleads guilty or nolo contendere to or is convicted of any felony or other crime involving moral turpitude, fraud, theft, or embezzlement; or (iii) the Executive willfully fails or refuses to perform any material obligation under the Agreement or to carry out the reasonable directives of the Chief Executive Officer consistent with his duties under paragraph 3, and the Executive fails to cure the same within a period of thirty (30) days after written notice of such failure is provided the Executive by Myriad.

10.2.3

Death/Permanent Disability. The Executive’s employment under this Agreement shall terminate upon the Executive’s death. In addition, the Executive’s employment under this Agreement shall terminate in the event of the Executive’s permanent disability. Permanent disability shall occur if the Executive is unable to perform his duties for a period of three (3) months in any six (6) month period, as determined by a doctor or doctors selected by the Board and Executive, supported by the completion of a medical certification form by such doctor or doctors that outlines the disability and treatment. 

11.

Compensation and Benefits Upon Termination. 

11.1

Payment Obligations. Upon voluntary termination of the Executive’s employment or termination of the Executive’s employment by Myriad for Cause, not later than thirty (30) days after the date of such termination, Myriad will pay to the Executive the following (collectively, the “Accrued Obligations”): (i) all Base Salary, at the rate then in effect, through the date of the Executive’s termination of active employment; (ii) all bonuses owed under paragraphs 7.2.1, and 7.2.2; (iii) unpaid or unreimbursed expenses owed under paragraphs 7.5.4, 7.5.5, 7.5.6 and 7.5.7; and (iv) all other accrued and vested benefits under any applicable Myriad employee benefit plans in which the Executive participates (which benefits shall be paid at such time or times as set forth in the governing plan or arrangement and any election by the Executive permitted under such governing plan or arrangement, to the extent permitted without penalty under applicable tax law), including any other accrued and unpaid or unreimbursed benefits provided under paragraphs 7.5.1, 7.5.2, or 7.5.3.

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11.2

Adjusted Payments – Good Reason Termination by Executive or Termination by Myriad Without Cause. Upon the termination of the Executive’s employment by the Executive for Good Reason or by Myriad without Cause, Myriad will continue to pay Executive his Base Salary through the greater of (i) the balance of the Term and (ii) one (1) year following the date of termination. Said Base Salary will accrue from and after termination and be paid on the next Bi-weekly period established for payment of Executive’s Base Salary, but in all events not prior to the date that is three months after termination. In addition, Myriad will pay to the Executive, not later than thirty (30) days following termination, all Accrued Obligations as well as a pro rata portion of any bonus due under paragraph 7.2.1, based upon the proportionate number of full weeks actually worked during the year in which Executive’s employment was terminated. 

11.3

Additional Payments – Termination for Death or Disability. In the event of a termination by Myriad due to the Executive’s death or disability, the Executive or his designated beneficiary or estate, if applicable, shall receive all amounts due pursuant to paragraph 11.1. 

11.4

Termination – Medical Benefits – COBRA Rights. Upon the termination of the Executive’s employment for any reason, to the extent that the Executive qualifies at the time and to the extent that such coverage is available to any qualified beneficiary at the time, the Executive will be allowed to elect individual and dependent continuation group health and dental coverage, as provided under Section 4980B(f) of the Internal Revenue Code (“COBRA”), for the maximum COBRA coverage period available, subject to all conditions and limitations (including payment of premiums and cancellation of coverage upon obtaining duplicate coverage or Medicare entitlement). The Executive (or dependents, as applicable) shall be responsible for paying the full cost of the COBRA coverage. 

11.5

Miscellaneous. The Agreement shall not be deemed to abridge the pertinent requirements of Delaware law or Myriad’s corporate governing documents. Accordingly, Executive may be removed as Executive Vice President of Finance as provided in Myriad’s certificate of incorporation, as amended, its by-laws, as amended, or applicable law. Similarly, Executive may resign as Executive Vice President of Finance, as provided in Myriad’s Certificate of Incorporation, as amended, its by-laws, as amended, and applicable law. Notwithstanding anything to the contrary contained in or arising from the Agreement or any statements, policies, or practices of Myriad, neither Executive nor Myriad shall be required to provide any advance notice or any reason or cause for termination of Executive’s status as Executive Vice President of Finance, except as provided in Myriad’s certificate of incorporation, as amended, its by-laws, as amended, or applicable law. The removal or resignation of Executive as Executive Vice President of Finance, however, shall not abridge any rights of the parties under this Agreement as a consequence of any such action.

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12.

Executive’s Obligations Upon Termination.

12.1

Return of Property. Executive agrees that all property, including, without limitation, all equipment, tangible proprietary information, documents, records, notes, contracts, and computer generated materials provided to or prepared by Executive incident to his services belong to Myriad and shall be promptly returned at the request of Myriad.

12.2

Resignation from Office. Upon termination of this Agreement, Executive shall be deemed to have resigned from all offices then held with Myriad. Executive agrees that following any termination of this Agreement, he shall cooperate with Myriad in the winding up or transferring to other directors of any pending work and shall also cooperate with Myriad (to the extent allowed by law, and at Myriad’s expense) in the defense of any action brought by any third party against Myriad that relates to Executive’s Services.

13.

Change in Control Benefits. 

13.1

Definition of Change of Control. A “Change of Control” shall mean any of the following events: (i) the dissolution or liquidation of Myriad, (ii) any merger or consolidation of Myriad with one or more corporations where immediately following the close of such transaction, the stockholders of Myriad immediately prior to such transaction do not own at least fifty percent (50%) of Myriad’s (or the surviving or resulting entity’s) outstanding capital stock immediately after such transaction, (iii) a sale of substantially all of the assets of Myriad or fifty percent (50%) or more of the then outstanding shares of capital stock of Myriad to another corporation or entity, or (iv) the election of a Board of Directors, the majority of which is not supported by the management of Myriad.

13.2

Acceleration of Options upon a Change in Control. In the event that (i) Executive’s employment is terminated without Cause at any time following a Change in Control or (ii) Executive resigns for Good Reason at any time following a Change of Control, then all Options issued to Executive in connection with the Agreement and any other options, or shares of restricted stock, or other equity incentives then held by Executive that have not yet vested shall immediately vest. All other terms and conditions set forth in the Options, the Plan, and applicable notices of stock option grant, stock option agreements, and restricted stock agreements, if applicable, shall remain in full force and effect.

14.

Myriad’s Representations.

Myriad represents to Executive that as of the date of execution of the Agreement, and during all times prior to the execution of the Agreement, it has acted, and its business operations have been undertaken, in full compliance with Myriad’s certificate of incorporation, as amended, and its by-laws, as amended, and with the statutes, both state and federal, rules, regulations, and orders of any governmental or quasi governmental authority, that are applicable to Myriad’s business operations. 

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15.

Binding Agreement.

This Agreement shall be binding upon and inure to the benefit of Executive, his heirs, and assigns, and to Myriad, its successors and assigns. This Agreement contains the entire agreement of the parties with respect to Executive’s service as Executive Vice President of Finance, and this Agreement supersedes all prior agreements or understandings among the parties related to said services. In furtherance of the foregoing, the parties affirm that the agreement dated as of November 1st, 2006 between them is hereby terminated, and that its terms, to the extent they had any prospective application beyond the date of this Agreement, are null and void.

16.

Entire Agreement; Amendment; Waiver

No amendment or modification of this Agreement shall be valid unless evidenced by a written instrument executed by the parties hereto. No waiver by either party of any breach by the other party of any provision or condition of this Agreement shall be deemed a waiver of any similar or dissimilar provision or condition at the same or any prior or subsequent time.

17.

Governing Law.

This Agreement shall be governed by and construed under and in accordance with the laws of the State of Delaware without regard to principles of conflicts of laws; and the laws of that state shall govern all of the rights remedies, liabilities, powers, and duties of the parties hereunder. Any legal action or proceeding with respect to the Agreement shall be brought exclusively in the federal or state courts of the State of Delaware, and by execution and delivery of this Agreement, Executive and Myriad irrevocably consent to the jurisdiction of those courts. Executive and Myriad irrevocably waive any objection, including any objection to the venue or based on the grounds of forum non conveniens, that either may now or hereafter have to the bringing of any action or proceeding in such jurisdiction in respect of this Agreement or any transaction related hereto. 

18.

 Notices.

All notices and other communications hereunder shall be in writing and shall be deemed to have been given if delivered personally, by registered or certified mail (return receipt requested), postage prepaid, or by overnight courier to the parties to this Agreement at the following addresses or at such other address for a party as shall be specified by like notice:

If to Executive:

Robert M. Leahy

6862 Blue Bay Circle

Lake Worth, Fl 33467

If to Myriad:

Myriad Entertainment and Resorts, Inc.

987 Harris Street

Tunica, Mississippi  38676

Attn: CEO

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With a copy to:

Peter Gennuso, Esq.

Gersten Savage LLP

600 Lexington Avenue, 9th Floor

New York, NY 10022

All such notices and communications shall be deemed to been received on the date of personal delivery or delivery by overnight courier, as the case may be.

19.

Miscellaneous.

19.1

Withholdings. All amounts payable hereunder shall be subject to the withholding of all applicable taxes and deductions required by any applicable law.

19.2

Headings. The descriptive headings in the Agreement are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of the Agreement. The use of the word “including” shall be by way of example rather than by limitation.

19.3

Counterparts. The Agreement may be executed in two or more counterparts, all of which taken together shall constitute one instrument.

19.4

Severability. If any portion of the Agreement is held unenforceable or inoperative for any reason, such portion will not affect any other portion of the Agreement, and the remainder will be as effective as though the ineffective portion had not been contained in the Agreement.

.

19.5

Golden Parachute Excise Tax Gross-Up. If it shall be determined that any payment to the Executive pursuant to the Agreement or any other payment or benefit from Myriad, any affiliate, any shareholder of Myriad, or any other person would require the Executive to pay the excise tax imposed by Section 4999 (the “Excise Tax”) of the Internal Revenue Code of 1986, as amended (the “Code”) on such payment or benefit, Myriad will pay the Executive a Tax Gross-Up Payment (as defined below) with respect to such Excise Tax. “Tax Gross-Up Payment” means an amount payable to the Executive such that, after payment of Taxes (as defined below) on such amount, there remains as balance sufficient to pay the Excise Tax being reimbursed. “Taxes” means the incremental United States federal, state, and local income, excise and other taxes payable by the Executive as a result of the Executive’s receipt of the Tax Gross-Up Payment. All legal and accounting fees (including, without limitation, such reasonable fees incurred by the Executive in retaining counsel and/or other advisors for this purpose) for the determination of the imposition of the Excise Tax, enforcement, the calculation of the Tax Gross-Up Payment, review of such calculations, or related matters shall be paid by Myriad.

19.6

Code Section 409A. It is intended that this Agreement, any amounts payable under the Agreement, and Myriad’s and the Executive’s exercise of authority or discretion under the Agreement shall comply with Section 409A of the Code (including the Treasury regulations and other published guidance relating thereto) so as not to subject the Executive to the payment of any penalty, interest, or additional tax imposed under Section 409A of the Code. To the extent 

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the Agreement, any operations under the Agreement or any amount payable under the Agreement would trigger any obligation imposed by Code Section 409A and notwithstanding anything in this Agreement to the contrary, this Agreement shall be modified first to avoid such obligation and second, to the extent permitted by the first objective, in such a manner as to preserve the economic benefit of the Agreement for Executive.

19.7

Executive Acknowledgment. Executive acknowledges that Executive has had the opportunity to consult legal counsel concerning the Agreement, that he has read and understands the Agreement, that Executive is fully aware of its legal effect, and that he has entered into it freely based on his own judgment and not on any representations or promises other than those contained in the Agreement.  

IN WITNESS WHEREOF, the parties have executed the Agreement as of the date first written above.

				
	Myriad Entertainment and Resorts, Inc.

	 
	Robert M. Leahy

	 
	 
	     

	 

	 
	 
	 
	 

	By:

	                   

	 
	                   

	Name:

	 
	 
	 

	Title:

	 
	 
	 

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