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SERVICEMASTER CO

10-K

Annual report pursuant to section 13 and 15(d)

Filed on 03/28/2011

Filed Period 12/31/2010

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SERVICEMASTER CO 10-K Annual report pursuant to section 13 and 15(d) Filed on 03/28/2011 Filed Period 12/31/2010

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... 10-K Ã½ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2010 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-14762 THE SERVICEMASTER COMPANY (Exact...

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... is a privately held corporation and its equity shares are not publicly traded. At March 28, 2011, 1,000 shares of the registrant's common stock were outstanding, all of which were owned by CDRSVM Holding, Inc. The ServiceMaster Company is not required to file this Annual Report on Form 10-K with...

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... 115 Item 9A. Controls and Procedures 115 Item 9B. Other Information 115 PART III Item 10. Directors, Executive Officers and Corporate Governance 116 Item 11. Executive Compensation 119 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 138 Item...

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...company serving both residential and commercial customers. Its services include lawn care, landscape maintenance, termite and pest control, home service contracts, cleaning and disaster restoration, house cleaning, furniture repair and home inspection. As of December 31, 2010, ServiceMaster provided...

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...not fit within the long-term strategic plans of the Company and finalized development of a plan to sell the business. The Company expects this sale to occur in 2011. Terminix Segment The Terminix segment provides termite and pest control services and distributes pest control products primarily under...

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... lead to an increase in service requests related to household systems and appliances, resulting in higher claim costs and lower profitability thereby adversely impacting results of operations and cash flows. American Home Shield is a leading provider of home service contracts for household systems...

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...a customer fails to make payments under a retail installment sales contract for 120 days after the due date, Terminix purchases the installment contract from SMAC. Headquarters Functions. The Business Support Center, headquartered in Memphis, Tennessee, administers payroll, benefits, risk management...

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... in the commercial pest control segment. Home Service Contracts for Systems and Appliances. Competition in the market segment for home service contracts for household systems and appliances comes mainly from regional providers of home service contracts. Home Inspection Services. Competition in the...

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... LandCare and Terminix businesses must also meet certain Department of Transportation and Federal Motor Carrier Safety Administration requirements with respect to some types of vehicles in their fleets. American Home Shield is regulated in certain states by the applicable state insurance regulatory...

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... addition, we provide various insurance coverages, including deductible reimbursement policies, to our business units through our wholly owned captive insurance company, which is domiciled in Vermont. EMPLOYEES The average number of persons employed by ServiceMaster during 2010 was approximately 27...

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... elsewhere in this Annual Report on Form 10-K. Risks Related to Our Business and Our Industry Adverse credit and financial market events and conditions could, among other things, impede access to or increase the cost of financing or cause our commercial customers to incur liquidity issues that could...

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... our home cleaning business if we cannot travel to service locations due to hazardous road conditions. In addition, extreme temperatures can lead to an increase in service requests related to household systems and appliances in our home service contract business, resulting in higher claim costs and...

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...compared to 2010. Fuel price increases can also result in increases in the cost of fertilizer, chemicals and other materials used in our business. We cannot predict the extent to which we may experience future increases in costs of fuel, fertilizer, chemicals, raw materials, wages, employee benefits...

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... and regulations include laws relating to consumer protection, wage and hour requirements, franchising, the employment of immigrants, labor relations, permit and licensing requirements, workers' safety, the environment, insurance and home service contracts, employee benefits, marketing (including...

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...employers to provide employees with insurance coverage that meets minimum eligibility and coverage requirements. The legislation imposes implementation effective dates that began in 2010. Due to the breadth and complexity of the health reform legislation, the current lack of implementing regulations...

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... brands, customer relationships, financial position, results of operations and cash flows. Also, if a third party outsourcing provider relationship is terminated, there is a risk that we may not be able to enter into a similar agreement with an alternate provider in a timely manner or on terms that...

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... by limiting our capacity to monitor, operate and control our operations effectively. Failures of our information technology systems could also lead to violations of privacy laws related to our customers and employees. If our disaster recovery plans do not work as anticipated, or if the third party...

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... businesses, technologies, products, personnel or systems; the inability to retain employees, customers and suppliers; the assumption of actual or contingent liabilities; failure to effectively and timely adopt and adhere to our internal control processes; write-offs or impairment charges relating...

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...in rules applicable to our business, including proposed revisions to the rules related to accounting for leases and reserves for and disclosures relating to legal contingencies, could (i) affect our reported results of operations and financial position, (ii) potentially decrease the comparability of...

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... less debt or with comparable debt on more favorable terms and, as a result, they may be better positioned to withstand economic downturns; our ability to refinance debt may be limited or the associated costs may increase; and our flexibility to adjust to changing market conditions and ability to...

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...case of the Term Facilities, enter into agreements restricting dividends or... or make other distributions; make investments; create liens; transfer or ...business and may make it difficult for us to execute our business strategy successfully or effectively compete with companies that are not similarly...

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... to fund general corporate expenses or service our debt obligations. Our insurance subsidiaries and home services and similar subsidiaries (through which we conduct our American Home Shield business) are subject to significant regulatory restrictions under the laws and regulations of the states...

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..., Terminix and TruGreen LandCare, along with the corporate headquarters, are located in leased premises at 860 Ridge Lake Boulevard, Memphis, Tennessee. The headquarters for American Home Shield are located in leased premises at 889 Ridge Lake Boulevard, Memphis, Tennessee. The headquarters for...

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... headquarters, call center facility, offices, training facilities and warehouse described above, are suitable and adequate to support the current needs of its business. Operating Company Owned Facilities Leased Facilities ITEM 3. TruGreen LawnCare TruGreen LandCare Terminix American Home Shield...

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... see "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Annual Report on Form 10-K. ITEM 6. SELECTED FINANCIAL DATA Five-Year Financial Summary Successor(1) Predecessor(1) Year Ended Dec. 31, (In thousands, except per share data) 2010 2009 2008...

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... its decision to consolidate its corporate headquarters in Memphis, Tennessee. In accordance with applicable accounting standards, goodwill and intangible assets that are not amortized are subject to assessment for impairment by applying a fair-value based test on an annual basis or more frequently...

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.... There were no open market or other purchases of Permanent Notes by the Company in the year ended December 31, 2010. Represents an increase in residual value guarantee charges related to a synthetic lease for operating properties that did not result in additional cash payments to exit the facility...

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... prices will increase our fuel costs by $15.0 million to $20.0 million for 2011 compared to 2010. The Company experienced a reduction in its health care costs in 2010. After adjusting for the impact of year over year changes in the number of covered employees, health care and related costs decreased...

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...contract claims costs at American Home Shield. These increased costs were offset, in part, by reduced fertilizer costs at TruGreen LawnCare and reduced fuel and health care costs. The Company reported selling and administrative expenses of $918.7 million for the year ended December 31, 2010 compared...

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... an agreement with International Business Machines Corporation ("IBM") pursuant to which IBM provides information technology operations and applications development services to the Company. These services were phased in during the first half of 2009. For the year ended December 31, 2009, these costs...

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... Pest Control Customer Retention Rate 0.3% (1.5)% Growth (Reduction) in Termite Customers 86.0% 85.7% Termite Customer Retention Rate American Home Shield- 0.1% 0.1% Growth (Reduction) in Home Service Contracts 66.1% 63.8% Customer Retention Rate Segment Review (Year ended December 31, 2010 compared...

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... accounting and non-cash stock-based compensation expense may provide an additional means for comparing the Company's performance to the performance of other companies by eliminating the impact of differently structured equity-based, long-term incentive plans (although care must be taken in making...

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... Revenue Comparable Operating Performance: TruGreen LawnCare TruGreen LandCare Terminix American Home Shield ServiceMaster Clean Other Operations and Headquarters Total Comparable Operating Performance Memo: Items included in Comparable Operating Performance Restructuring and Merger related charges...

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... to purchase accounting(5) Comparable Operating Performance Memo: Items included in Comparable Operating Performance Restructuring and Merger related charges (credits) (6) Other American Operations TruGreen TruGreen Home ServiceMaster and LawnCare LandCare Terminix Shield Clean Headquarters Total...

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... value guarantee charge(3) Non-cash trade name impairment(4) Adjusted EBITDA Non-cash stockbased compensation expense Non-cash credits attributable to purchase accounting(5) Comparable Operating Performance Memo: Items included in Comparable Operating Performance Restructuring and Merger related...

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... included in Comparable Operating Performance Restructuring and Merger related charges(6) $ 194,883 $ 20,468 $ 228,082 $ 95,138 $ 56,479 $ (89,151)$505,899 $ 315 $ - $ 337 $ - $ 57 $ - $ 729 - $ $ 1,545 - $ $ 9,512 $ 12,495 2,000 $ 2,000 Management and consulting fees(7) $ Memo: Items...

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... which provides lawn, tree and shrub care services, reported a 4.6 percent increase in revenue, a 73.1 percent increase in operating income and a 5.0 percent increase in Comparable Operating Performance for the year ended December 31, 2010 compared to 2009. The revenue results reflect improved price...

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... in sales and marketing and increased provisions for incentive compensation. American Home Shield Segment The American Home Shield segment, which provides home service contracts to consumers that cover heating, ventilation, air conditioning, plumbing and other systems and appliances, reported...

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...rate. American Home Shield's sales in the real estate channel were negatively impacted by softness in the home resale market, offset, in part, by growth in consumer sales and renewals. American Home Shield's Comparable Operating Performance increased $3.0 million for the year ended December 31, 2010...

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... value estimate of InStar's net assets based on changing market conditions and the ongoing sales process. Upon the sale of InStar the Company recorded a loss on sale, net of tax, of $0.5 million. Year ended December 31, 2009 compared with the year ended December 31, 2008 The Company reported revenue...

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... Statements for further information on management and consulting fees. Represents residual value guarantee charges related to a synthetic lease for operating properties that did not result in additional cash payments to exit the facility at the end of the lease term in July 2010. In the third...

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..., restructuring and Merger related charges, non-cash trade name impairment, gain on extinguishment of debt, management and consulting fees, residual value guarantee charge and long-term incentive plan adjustments supported by the improved results at Terminix, American Home Shield, TruGreen LandCare...

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... portfolio. Represents other than temporary declines in the value of certain investments in the American Home Shield investment portfolio. Represents investment income (loss) resulting from a change in the market value of investments within an employee deferred compensation trust (for which there is...

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... into an agreement with IBM pursuant to which IBM provides information technology operations and applications development services to the Company. These services were phased in during the first half of 2009. For the years ended December 31, 2009 and 2008, these costs included transition fees paid to...

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... of restructuring charges related to a reorganization of field leadership and a restructuring of branch operations. TruGreen LawnCare's Comparable Operating Performance also reflects increased sales and marketing expenses, unfavorable trending in health care costs, and increased overhead expenses...

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...American Home Shield's Comparable Operating Performance also reflects a decline in sales and marketing costs, offset, in part, by unfavorable trending in health care costs. ServiceMaster Clean Segment The ServiceMaster Clean segment reported a 3.2 percent decrease in revenue, an 8.9 percent increase...

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... for the year ended December 31, 2009 compared to 2008, which includes the impacts of a $4.9 million increase in restructuring and Merger related charges, a $5.5 million increase in management fees related to the consulting agreements executed in 2009 and unfavorable health care costs, offset, in...

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... $57.9 million, compared with $32.6 million for the year ended December 31, 2009. Consideration paid for tuck-in acquisitions consisted of cash payments and debt payable to sellers. In August 2010, Terminix acquired the assets of Antimite Termite and Pest Control, a company with annual revenues of...

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... long-term marketable securities balance as of December 31, 2010 and 2009, respectively, are associated with regulatory requirements at American Home Shield and for other purposes and is identified as being potentially unavailable to be paid to the Company by its subsidiaries. American Home Shield...

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..., 2010, Holdings completed open market purchases totaling $65.0 million in face value of the Permanent Notes for a cost of $21.4 million. The debt acquired by Holdings has not been retired, and the Company has continued to pay interest in accordance with the terms of the debt. During the years ended...

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... requirements and financial condition and general business conditions. Our insurance subsidiaries and home services and similar subsidiaries (through which we conduct our American Home Shield business) are subject to significant regulatory restrictions under the laws and regulations of the states...

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... Principal repayments* Capital leases Estimated interest payments(1) Non-cancelable operating leases(2) Purchase obligations: Supply agreements and other(3) Outsourcing agreements(4) Other long-term liabilities:* Insurance claims Discontinued Operations Other, including deferred compensation trust...

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...American Home Shield and unfavorable collection trends partially attributable to increases in revenue in service lines with longer than average collection terms. There is seasonality in the lawn care operations. In the winter and spring, this business sells a series of lawn applications to customers...

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... of our self-insurance programs, offset, in part, by an increase in accruals for home service contract claims in the American Home Shield business. Long-term debt decreased from prior year levels, reflecting the scheduled principal payments of long-term debt. Non-current deferred tax liabilities...

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... but not reported claims. The Company adjusts its estimate of accrued self-insured claims when required to reflect changes based on factors such as changes in health care costs, accident frequency and claim severity. Accruals for home service contract claims in the American Home Shield business are...

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Table of Contents value provided to the customer (proportional performance method). The Company regularly reviews its estimates of direct costs for its termite bait and home service contracts and adjusts the estimates when appropriate. Revenues from trade name licensing arrangements are recognized ...

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... growth rates. The discount rates used in the DCF analyses are intended to reflect the risks inherent in the future cash flows of the respective reporting units. In addition, the market-based comparable and transaction approaches utilize comparable company public trading values, comparable company...

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... charges by business segment, as well as the remaining value of the trade names not subject to amortization by business segment as of December 31, 2010 and 2009, are as follows: (In thousands) TruGreen TruGreen LawnCare LandCare Terminix American Other Home ServiceMaster Operations & Shield...

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... Company does not hold or issue derivative financial instruments for trading or speculative purposes. The Company has entered into specific financial arrangements in the normal course of business to manage certain market risks, with a policy of matching positions and limiting the terms of contracts...

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... fair value. Further, this ASU amends guidance on employers' disclosures about postretirement benefit plan assets under ASC 715 to require that disclosures be provided by classes of assets instead of by major categories of assets. This standard is effective for the first reporting period (including...

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... to provide our services and the profitability of our brands; increases in operating costs, such as higher insurance premiums, self-insurance costs and compensation and benefits costs, including costs related to the comprehensive health care reform law enacted in the first quarter of 2010; employee...

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... products or services and/or increasing taxes or other fees on businesses to generate more tax revenues, which could adversely impact our business, financial position, results of operations and cash flows; regulations imposed by several states related to our home service and insurance subsidiaries...

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... of 2.50% as of December 31, 2010. In April 2009, the Company entered into a two-year interest rate swap agreement effective August 2, 2010. The notional amount of the agreement was $530.0 million. Under the terms of the agreement, the Company will pay a fixed rate of interest of 2.55% on the $530...

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... debt as of December 31, 2010 (after considering the effect of the interest rate swap agreements), including the principal cash payments and related weighted-average interest rates by expected maturity dates based on applicable rates at December 31, 2010. Expected Year of Maturity As of December 31...

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... DATA REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors of The ServiceMaster Company Memphis, Tennessee We have audited the accompanying consolidated statements of financial position of The ServiceMaster Company and subsidiaries (the "Company") as of December 31, 2010...

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... (In thousands) Year Ended December 31, 2010 2009 2008 Operating Revenue Operating Costs and Expenses: Cost of services rendered and products sold Selling and administrative expenses Amortization expense Goodwill and trade name impairment Restructuring and Merger related charges Total operating...

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... Notes receivable Long-term marketable securities Other assets Debt issuance costs Total Assets Liabilities and Shareholder's Equity: Current Liabilities: Accounts payable Accrued liabilities: Payroll and related expenses Self-insured claims and related expenses Other Deferred revenue Liabilities of...

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... Net unrealized gain on derivative instruments Foreign currency translation Total comprehensive (loss) income Stock-based employee compensation-contribution from Holdings Balance December 31, 2010 $ 9,352 - $ 1,455,881 $ (250,983) $ $ 8,097 - $ 1,446,529 $ (236,424) (14,559) 1,583 2,634 2,186...

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... and Merger related charges Cash payments related to restructuring charges Change in working capital, net of acquisitions: Current income taxes Receivables Inventories and other current assets Accounts payable Deferred revenue Accrued liabilities Other, net Net Cash Provided from Operating...

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... but not reported claims. The Company adjusts its estimate of accrued self-insured claims when required to reflect changes based on factors such as changes in health care costs, accident frequency and claim severity. Accruals for home service contract claims in the American Home Shield business are...

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... 2009, respectively. Deferred revenue consists primarily of payments received for annual contracts relating to home service contracts, termite baiting, termite inspection, pest control and lawn care services. Deferred Customer Acquisition Costs: Customer acquisition costs, which are incremental and...

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... costs and annual repairs and maintenance procedures that are performed primarily in the first quarter. These costs are deferred and recognized in proportion to the contract revenue over the production season and are not deferred beyond the calendar year-end. Other business segments of the Company...

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... growth rates. The discount rates used in the DCF analyses are intended to reflect the risks inherent in the future cash flows of the respective reporting units. In addition, the market-based comparable and transaction approaches utilize comparable company public trading values, comparable company...

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... for the remainder of 2010 at that time, the Company concluded there was an impairment indicator requiring the performance of an interim goodwill impairment test for the TruGreen LandCare reporting unit as of June 30, 2010. The Company determined that the implied fair value of goodwill was less...

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... to the Consolidated Financial Statements (Continued) Note 1. Significant Accounting Policies (Continued) in 2009 and 2008, respectively. The impairment charges by business segment for the years ended December 31, 2010, 2009 and 2008, as well as the remaining value of the trade names not subject to...

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... beginning on or after June 15, 2010 (calendar year 2011). The Company does not expect the adoption of this standard to have a material effect on its Consolidated Financial Statements. In December 2009, the FASB issued ASU 2009-17, "Accounting by Enterprises Involved with Variable Interest Entities...

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... fair value. Further, this ASU amends guidance on employers' disclosures about postretirement benefit plan assets under ASC 715 to require that disclosures be provided by classes of assets instead of by major categories of assets. This standard is effective for the first reporting period (including...

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... provides landscaping services primarily to commercial customers. The Terminix segment provides termite and pest control services to residential and commercial customers. The American Home Shield segment provides home service contracts to consumers that cover heating, ventilation, air conditioning...

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... Statements (Continued) Note 3. Business Segment Reporting (Continued) Segment information for continuing operations is presented below. Year Ended Dec. 31, (In thousands) 2010 2009 2008 Operating Revenue: TruGreen LawnCare TruGreen LandCare Terminix American Home Shield ServiceMaster Clean Other...

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...below is a summary of restructuring and Merger related charges (credits) by segment: (3) Year Ended Dec. 31, (In thousands) 2010 2009 2008 Restructuring and Merger related charges (credits): TruGreen LawnCare TruGreen LandCare Terminix American Home Shield ServiceMaster Clean Other Operations and...

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...In thousands) TruGreen TruGreen LawnCare LandCare Terminix American Other Home ServiceMaster Operations & Shield Clean Headquarters Total Balance at Dec. 31, 2008 Acquisitions Other(1) Balance at Dec. 31, 2009 Impairment charge Acquisitions Other(1) Balance at Dec. 31, 2010 $1,161,507 $ 45,782...

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... reporting purposes ("unrecognized tax benefits"). Under accounting standards for business combinations, the reversal of pre-acquisition liabilities for uncertain tax benefits will no longer be recorded as an adjustment to goodwill effective in fiscal years beginning in 2009. At December 31, 2010...

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... at the U.S. federal statutory tax rate to the Company's effective income tax rate for continuing operations is as follows: Year Ended Dec. 31, 2010 2009 2008 Tax at U.S. federal statutory rate State and local income taxes, net of U.S. federal benefit Tax credits Change in valuation allowance...

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... tax balances reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting and income tax purposes. The deferred tax asset primarily reflects the impact of future tax deductions related to the Company's accruals and certain net...

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.... The assets and liabilities of these businesses were recorded in the financial statements at their estimated fair values as of the acquisition dates. Current Year During the year ended December 31, 2010, the Company completed several lawn care and pest control acquisitions, along with several Merry...

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... The Company announced in November 2010 that it was exploring strategic options relating to TruGreen LandCare, including the potential sale of the business. In the first quarter of 2011, the Company concluded that TruGreen LandCare did not fit within the long-term strategic plans of the Company and...

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... a change in our fair value estimate of InStar's net assets based on changing market conditions and the ongoing sales process. Upon the sale of InStar the Company recorded a loss on sale, net of tax, of $0.5 million. Financial Information for Discontinued Operations Reported "loss from discontinued...

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... that were discontinued in years prior to 2010. The remaining obligations primarily relate to long-term self-insurance claims. The Company believes that the remaining reserves continue to be adequate and reasonable. (In thousands) Balance at Dec. 31, 2009 Cash Payments or Other Expense/ (Income...

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... property leases provide that the Company pay taxes, insurance and maintenance applicable to the leased premises. As leases for existing locations expire, the Company expects to renew the leases or substitute another location and lease. Rental expense for the years ended December 31, 2010, 2009 and...

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...are included in Accrued Liabilities-Self-insured claims and related expenses and Other long-term obligations on the Consolidated Statements of Financial Position. During the years ended December 31, 2010, 2009 and 2008, the Company recorded provisions for uninsured claims totaling $31.5 million, $32...

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... for home service contract claims in the American Home Shield business are made based on the Company's claims experience and actuarial projections. Termite damage claim accruals are recorded based on both the historical rates of claims incurred within a contract year and the cost per claim. Current...

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... were no cash payments made by the Company to Holdings in 2008. Interest accrued by the Company and payable to Holdings as of December 31, 2010 and 2009 amounted to $3.2 million. Note 11. Employee Benefit Plans Effective January 2, 2007, the Company approved a long-term incentive plan (the "LTIP...

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...,412) (64,395) $ 3,899,075 $ 3,910,549 The increase in the balance from 2009 to 2010 reflects the amortization of fair value adjustments related to purchase accounting, which effectively increases the stated coupon interest rates. The Company had $69.6 million and $70.2 million of accrued interest...

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... of 2.50% as of December 31, 2010. In April 2009, the Company entered into a two-year interest rate swap agreement effective August 2, 2010. The notional amount of the agreement was $530.0 million. Under the terms of the agreement, the Company will pay a fixed rate of interest of 2.55% on the $530...

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... amount. Therefore, during the term of the swap agreements, the effective interest rate for $200.0 million of the term loans will be fixed at a rate of 2.22% plus the incremental borrowing margin of 2.50% as of December 31, 2010. In accordance with accounting standards for derivative instruments and...

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... indebtedness, liens, sales of assets, certain payments (including dividends) and transactions with affiliates, subject to certain exceptions. The Company was in compliance with the covenants under these agreements at December 31, 2010. Future scheduled long-term debt payments are $49.3 million...

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.... As of December 31, 2010 and 2009, $240.1 million and $256.5 million, respectively, of the cash and short- and long-term marketable securities balance are associated with regulatory requirements at American Home Shield and for other purposes. American Home Shield's investment portfolio has been...

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..., which it may do in the third quarter of each year, the amount of cash available to the Company under this agreement may be reduced or eliminated. As part of the annual renewal of the facility, which occurred on July 20, 2010, this Purchaser agreed to continue its participation in the arrangement...

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... the Amended and Restated ServiceMaster Global Holdings, Inc. Stock Incentive Plan (the "MSIP"). The MSIP provides for the sale of shares and deferred share units ("DSUs") of Holdings stock to ServiceMaster's executive officers, other key employees and directors as well as the grant of options...

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...with a per-share exercise price no less than the fair market value of one share of Holdings stock on the grant date. Any stock options granted will generally have a term of ten years and vesting will be subject to an employee's continued employment. The board of directors of Holdings, or a committee...

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..., the compensation committee of the Holdings board of directors approved an employee restricted stock unit agreement to be used when awards of RSUs are made under the MSIP and granted 735,000 RSU awards to certain senior executives of ServiceMaster. The RSUs had a grant-date fair value of $10.00 per...

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... asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The fair value estimates presented in this report are based on information available to the Company as of December 31, 2010 and 2009. The Company has estimated the fair...

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... 2010 December 31, 2009 Estimated Fair Value Measurements Quoted Significant Prices In Other Significant Balance Active Observable Unobservable Estimated Sheet Carrying Markets Inputs Inputs Carrying Fair Locations Value (Level 1) (Level 2) (Level 3) Value Value Financial Assets: Deferred Long-term...

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... (losses) included in earnings are reported in cost of services rendered and products sold. The Company uses derivative financial instruments to manage risks associated with changes in fuel prices and interest rates. The Company does not hold or issue derivative financial instruments for trading or...

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...of which were posted under the Company's Revolving Credit Facility. As of December 31, 2010, the Company had interest rate swap contracts to pay fixed rates for interest on long-term debt with an aggregate notional amount of $1.430 billion, maturing through 2013. The effective portion of the gain or...

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... its subsidiaries have been prepared pursuant to Rule 3-10 of Regulation S-X. These condensed consolidating financial statements have been prepared from the Company's financial information on the same basis of accounting as the Consolidated Financial Statements. Goodwill and other intangible assets...

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...Revenue Operating Costs and Expenses: Cost of services rendered and products sold Selling and administrative expenses Amortization expense Goodwill and tradename Impairment Restructuring and Merger related charges (credits) Total operating costs... before Income Taxes (Benefit) provision for income ...

Page 109
... Statement of Operations For the Year Ended December 31, 2009 (In thousands) The ServiceMaster NonCompany Guarantors Guarantors Eliminations Consolidated $ - $2,546,819 $ 765,609 $ (72,349)$3,240,079 Operating Revenue Operating Costs and Expenses: Cost of services rendered and - 1,642,667 343...

Page 110
... Statement of Operations For the Year Ended December 31, 2008 (In thousands) The ServiceMaster NonCompany Guarantors Guarantors Eliminations Consolidated $ - $2,653,326 $ 730,115 $ (72,009)$3,311,432 Operating Revenue Operating Costs and Expenses: Cost of services rendered and - 1,753,042 343...

Page 111
... costs Total Assets Liabilities and Shareholder's Equity Current Liabilities: Accounts payable Accrued liabilities: Payroll and related expenses Self-insured claims and related expenses Other Deferred revenue Liabilities of discontinued operations Current portion of long-term debt Total Current...

Page 112
... costs Total Assets Liabilities and Shareholder's Equity Current Liabilities: Accounts payable Accrued liabilities: Payroll and related expenses Self-insured claims and related expenses Other Deferred revenue Liabilities of discontinued operations Current portion of long-term debt Total Current...

Page 113
...Continuing Operations: - (93,778) (51,640) - (145,418) Property additions - 1,710 352 - 2,062 Sale of equipment and other assets Acquisition of The ServiceMaster (2,245) - - - (2,245) Company Other business acquisitions, net of - (57,724) (217) - (57,941) cash acquired - (2,500) - - (2,500) Purchase...

Page 114
...071 118 - 3,189 Sale of equipment and other assets Acquisition of The ServiceMaster (1,695) - - - (1,695) Company Other business acquisitions, net of - ...(2,498) (252,885) Payments of debt - (426,359) (99,100) 525,459 - Shareholders' dividends (426) - - - (426) Debt issuance costs paid (193,234) 111,...

Page 115
... (used for) investing activities Proceeds from sale of - - 19,523 - 19,523 businesses - - (208) - (208) Other investing activities - - (167) - (167) Cash used for financing activities Net Cash Provided from - - 21,869 - 21,869 Discontinued Operations Cash Increase (Decrease) During 199,933 (2,894...

Page 116
... internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide...

Page 117
... Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended December 31, 2010 of the Company and our report dated March 28, 2011 expressed an unqualified opinion on those financial statements. /s/ Deloitte & Touche LLP Memphis, Tennessee...

Page 118
...discussed in the "Interim Reporting" section in the Significant Accounting Policies, for interim accounting purposes, TruGreen LawnCare and other business segments of the Company incur pre-season advertising costs. In addition, TruGreen LawnCare incurs costs related to annual repairs and maintenance...

Page 119
...participation of ServiceMaster's Chief Executive Officer, J. Patrick Spainhour, and ServiceMaster's Senior Vice President and Chief Financial Officer, Steven J. Martin, the effectiveness of the Company's internal control over financial reporting as of December 31, 2010. In making this assessment, it...

Page 120
... of the capital markets, experience as a management consultant and experience as a director of other consumer-oriented service businesses with nationwide locations that are similar to ServiceMaster's business structure give him beneficial insight into the Company's capital and liquidity needs, in...

Page 121
...& Chief Operating Officer, American Home Shield 2005 59 President & Chief Operating Officer, TruGreen 2009 57 President & Chief Operating Officer, ServiceMaster Clean, Furniture Medic and AmeriSpec; President, 1992 Merry Maids James J. Kunihiro 44 Senior Vice President-Corporate Strategy & Marketing...

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...worked at Culligan International Company, a water treatment company, where he served as Executive Vice President, Strategy and Marketing. Steven J. Martin has served as Senior Vice President & Chief Financial Officer since November 2007. He served as Senior Vice President and Chief Financial Officer...

Page 123
..., vesting over three years, to promote continuity of leadership in the senior management team after the announced retirement of Mr. Spainhour in September 2010 and to further align the long-term interests of senior management with Holdings' primary ownership group. The Company hired Harry J. Mullany...

Page 124
..., where applicable, business unit) performance goals; Stock, RSUs and stock options to motivate executives to achieve long-term performance goals and to provide equity ownership of Holdings to our executives to ensure goal alignment with Holdings' primary ownership group; and Employee benefits and...

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.... Base Salary Base salaries for executive officers are reviewed annually by the Board during the Company's merit review process in February. To determine base salaries for executive officers, the Company first reviews market data and targets base salaries at the market median of the Peer Group. Base...

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...as approved by the Board, including adding back expenses related to increases in American Home Shield customer claims above historical levels and legal settlements at the business unit level, both of which were considered to be outside of current management's control for 2010; Revenue; and Cash Flow...

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... when we exceed our performance goals. The weightings of the performance measures are reviewed and determined annually to reflect Company strategy. The tables below provide information regarding the 2010 Annual Bonus Plan for our NEOs, including the performance goals and the weight assigned to each...

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... Corporate Corporate N/A N/A N/A N/A N/A N/A N/A N/A 100.2% N/A N/A N/A N/A 97.1% 67.7% 67.7% 67.7% 67.7% 77.0% TruGreen LawnCare 92.4% 2010 Annual Bonus Plan Payments The following table sets forth information regarding the Annual Bonus Plan payments to the NEOs. Named Executive Officer...

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..., the executive officers are encouraged to focus on sustained increases in stockholder value. Specifically, we believe the granting of stock options and RSUs assists the Company to Enhance the link between the creation of stockholder value and long-term executive incentive compensation; Provide an...

Page 130
... and welfare benefit programs on the same basis as the rest of the Company's employees, including medical and dental care coverage, life insurance coverage and shortand long-term disability. The Company limits the use of perquisites as a method of compensation and provides executive officers with...

Page 131
... exercise price equal to the fair market value of a share of common stock at the time of the option grant ("Superperformance Option"). These Superperformance Options will vest before a public offering if the fair market value of the common stock as determined by the Board of Directors of Holdings is...

Page 132
...by Holdings to renew the agreement will constitute a termination of Mr. Mullany's employment without cause for purposes of his severance benefits. REPORT OF THE BOARD OF DIRECTORS The Company's Board of Directors has reviewed the Compensation Discussion and Analysis and discussed it with management...

Page 133
... in the audited financial statements for the fiscal year ended December 31, 2010 included in Item 8 of this Annual Report on Form 10-K. The amounts in this column reflect the aggregate grant date fair value of stock options granted during the specified years. The assumptions used in the valuation of...

Page 134
...'s tax-qualified retirement savings plan. Mr. Spainhour's perquisites include personal use of the corporate aircraft ($80,315), Company-provided membership fees ($1,599) for one business and social dining club, and personal use of corporate event tickets ($1,638). The incremental cost of the use of...

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...fiscal year ended December 31, 2010 included in Item 8 of this Annual Report on Form 10-K. (3) Employment Agreements Employment Agreement with Mr. Spainhour ServiceMaster entered into an employment agreement with Mr. Spainhour to serve as our CEO effective as of June 30, 2006. The original term of...

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the satisfaction of performance targets established by the Board. Mr. Spainhour's base salary, target annual bonus and all other compensation are subject to approval each year by the Board. 131

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... of Contents Holdings entered into a retirement agreement with Mr. Spainhour on September 8, 2010. Mr. Spainhour's retirement agreement provides for severance benefits equal to two times his highest annual base salary and highest annual target bonus upon his retirement. The agreement also extended...

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Table of Contents Outstanding Equity Awards at Fiscal Year-End (2010) Option Awards(1) Stock Awards(2) Named Executive Officer Grant Date Number of Securities Underlying Unexercised Options Exercisable (#) Number of Securities Number of Market Value Underlying Units of of Units of Unexercised ...

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(1) Amounts shown in this column for Messrs. McMullen and Norden are included in the Summary Compensation Table as 2010 Salary and Non-Equity Incentive Plan Compensation. Matching contributions to the DCP were not made in 2010. 133 (2)

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... intentional misconduct by the executive that materially and adversely affects the business affairs or reputation of the Company. Mr. Spainhour's retirement agreement provides for severance benefits equal to two times his highest annual base salary and highest annual target bonus upon his retirement...

Page 141
... right to purchase shares owned by the executive at the lower of fair market value or the original cost of the shares to the executive. If an executive's employment is terminated by the Company without cause before there is a public offering of Holdings' common shares, all unvested options and RSUs...

Page 142
...The Holdings' Board of Directors also has the discretion to accelerate the vesting of options or RSUs at any time and from time to time. Payment Upon Death, Disability, Qualifying Termination, or Change in Control as of December 31, 2010 The following table sets forth information regarding the value...

Page 143
...qualifying termination. (3) (4) Other than the employment agreements with Messrs. Spainhour and Mullany, the Company does not currently offer employment agreements or change in control agreements to newly hired executive officers. The Board periodically reassesses the need to offer these types of...

Page 144
...management consulting services in exchange for a fee. For a discussion of this agreement and other agreements between the Company, Holdings and the Equity Sponsors, see Item 13 of this Annual Report on Form 10-K. The Company does not separately compensate our directors for their service on our Board...

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... of each executive officer's individual responsibility, individual and business unit performance, overall contribution, the competitive market data provided by Aon Hewitt (as presented to the Board by our Senior Vice President of Human Resources) and prevailing economic conditions. Our directors are...

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...Capital Funding Corporation and related funds(3) JPMorgan Chase Funding Inc.(4) StepStone Group LLC managed funds (5) Kenneth A. Giuriceo(6) David H. Wasserman(6) J. Patrick Spainhour Steven J. Martin Greerson G. McMullen Jed L. Norden Stephen M. Donly All current directors and executive officers as...

Page 147
... officers as a group have the right to acquire 2,361,250 shares prior to May 27, 2011 through the exercise of stock options. All employees of the Company as a group held 2,205,754 shares of common stock and DSUs as of December 31, 2010, constituting 1.52 percent of the total ownership of Holdings...

Page 148
... had, has or will have a direct or indirect interest. A "Related Person" as defined in the Related Person Transaction Policy, means any person who is, or at any time since the beginning of ServiceMaster's last fiscal year was, a director or executive officer of ServiceMaster or a nominee to become...

Page 149
...and the annual management fee payable under the consulting agreement with CD&R was increased from $2.0 million to $6.25 million in order to align the fee structure with market rates. Under this agreement, the Company recorded management fees of $6.25 million for the years ended December 31, 2010 and...

Page 150
... to Holdings as of December 31, 2010 and 2009 amounted to $3.2 million. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The Board selected Deloitte & Touche LLP as our independent auditors for 2010. The Board pre-approves all audit, audit-related and non-audit related services to be provided by...

Page 151
...review of ServiceMaster's financial statements; "tax fees" are fees for tax compliance, tax advice and tax planning; and "all other fees" are fees for any products and services provided by Deloitte & Touche LLP not included in the first three categories. 2010 2009 (1) Audit Fees (2) Audit-Related...

Page 152
...Registered Public Accounting Firm contained in Item 8 of this Annual Report on Form 10-K. Consolidated Statements of Financial Position as of December 31, 2010 and 2009 contained in Item 8 of this Annual Report on Form 10-K. Consolidated Statements of Operations for the years ended December 31, 2010...

Page 153
... Officer (Principal Executive Officer) J. Patrick Spainhour /s/ STEVEN J. MARTIN Steven J. Martin /s/ DAVID W. MARTIN David W. Martin /s/ KENNETH A. GIURICEO Director Kenneth A. Giuriceo /s/ DAVID H. WASSERMAN Director David H. Wasserman 146 Senior Vice President, Controller and Chief Accounting...

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...of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors The ServiceMaster Company Memphis, Tennessee We have audited the consolidated statements of financial position of The ServiceMaster Company and subsidiaries (the "Company") as of December 31, 2010 and 2009...

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... of Contents SCHEDULE II THE SERVICEMASTER COMPANY VALUATION AND QUALIFYING ACCOUNTS (In thousands) Balance at Additions Beginning Charged to of Costs and Period Expenses Deductions(1) Balance at End of Period AS OF AND FOR THE YEAR ENDING DECEMBER 31, 2010 Continuing Operations- Allowance for...

Page 156
... the Company, the Subsidiary Guarantors from time to time parties thereto and Wilmington Trust FSB, as trustee, is incorporated by reference to Exhibit 4.1 to the registrant's Current Report on Form 8-K dated July 24, 2008 (File No. 001-14762). Exchange and Registration Rights Agreement, dated July...

Page 157
... by reference to Exhibit 10.3 to the 2007 8-K. Security Agreement, dated as of July 24, 2007, made by the Company and ServiceMaster Consumer Services Limited Partnership, in favor of the Term Loan Collateral Agent and Term Loan Administrative Agent is incorporated by reference to Exhibit 10...

Page 158
...'s Annual Report on Form 10-K for the year ended December 31, 2009 (File No 001-14762 (the "2009 10-K")). Form of Consulting Agreement entered into among the Company; Holdings; Citigroup Alternative Investments LLC (assigned to StepStone Group LLC in 2010); BAS Capital Funding Corporation; and...

Page 159
... Plan, as amended and restated effective January 1, 2005, is incorporated by reference to Exhibit 10.1 to the registrant's Current Report on Form 8-K filed December 14, 2005 (File No. 001-14762). Employment Agreement dated August 16, 2006, effective as of June 30, 2006, between the Company...

Page 160
... First Amended and Restated Master Services Agreement, dated November 1, 2010, by and between ServiceMaster Consumer Services, L.P., and International Business Machines Corporation including the First Amended and Restated Transaction Document No. 1 thereunder and all related exhibits and schedules...

Page 161

Page 162
... from time to time; WHEREAS, the Borrowers, the Administrative Agent, the Revolving Collateral Agent, the Issuing Bank, the Swing Line Lender and the Lenders party hereto are willing to amend the Revolving Credit Agreement as and to the extent, and on the terms and subject to the conditions, set...

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... (in each case as such amount may be adjusted from time to time as provided herein): collectively, as to all the Lenders, the "Tranche A Revolving Commitments". The amount of the aggregate Tranche A Revolving Commitments of the Lenders as of the Amendment No 1. Effective Date is $212,878,787.84. 2

Page 164
... as such amount may be adjusted from time to time as provided herein): collectively, as to all the Lenders, the "Tranche B Revolving Commitments". The amount of the aggregate Tranche B Revolving Commitments of the Lenders as of the Amendment No 1. Effective Date is $229,696,969.72. (xxv) "Tranche...

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... of each of subsections 2.6(a), 2.6(b) and 2.7(a) shall be the Tranche B Revolving Maturity Date), or such earlier date as the Revolving Commitments shall terminate as provided herein. (iv) "Tranche": as applicable, each Tranche of Loans available hereunder, namely Tranche A Revolving Loans, Tranche...

Page 166
... Amendment No. 1 on or prior to the Amendment No. 1 Effective Date" immediately following the term "Closing Date" in the first place such term appears in such subsection, (ii) inserting the words " provided that in the case of any such request made in connection with Amendment No. 1 or any Extension...

Page 167
... the Lenders of the applicable Tranche and otherwise subject to subsection 3.8(a); provided that no such termination or reduction shall be permitted if, after giving effect thereto and to any prepayments of the Revolving Loans and Swing Line Loans made on the effective date thereof, the aggregate...

Page 168
...The Parent Borrower may at any time and from time to time request that all or a portion, ...fees may be payable to the Lenders providing such Extended Revolving Commitments in addition to or in lieu of any increased margins contemplated by the preceding clause (A) and (z) the Applicable Commitment Fee...

Page 169
... the applicable Extension Amendment may provide that the maturity date for Swing Line Loans and/or Letters of Credit may be extended and the related obligations to make Swing Line Loans and issue Letters of Credit may be continued so long as the Swing Line Lender and/or the applicable Issuing Bank...

Page 170
participations) shall be deemed to be allocated as Extended Revolving Loans (and related participations) and Existing Revolving Loans (and related participations) in the same proportion as such Extending Lender's Specified Revolving Commitments to Extended Revolving Commitments so converted by such ...

Page 171
...purchase of goods or services by Parent or any of its Subsidiaries in the ordinary course of business (a "Commercial Letter of Credit"), and (ii) unless otherwise agreed by the Issuing Bank, mature not more than twelve months after the date of issuance (automatically renewable annually thereafter or...

Page 172
...be issued for the account of the applicable Borrower." (p) Subsection 2.6(b)(i) is hereby amended by inserting the words "Tranche B" immediately prior to the term "Revolving Commitment Period" and inserting the words "Tranche B Revolving" immediately prior to the term "Maturity Date". (q) Subsection...

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... with Amendment No. 1 on or prior to the Amendment No. 1 Effective Date" immediately following the term "Closing Date" in the first place such term appears in such subsection, (ii) inserting the words " provided that, in the case of any request made in connection with Amendment No. 1, the Swing Line...

Page 174
... Lender or joining Additional Commitment Lender, as applicable, shall make appropriate payments representing principal, with the Parent Borrower making any necessary payments of accrued interest) so that after giving effect thereto the increasing Lender or the joining Additional Commitment Lender...

Page 175
... payable on the date specified therein, together with (if a Eurocurrency Loan is prepaid other than at the end of the Interest Period applicable thereto) any amounts payable pursuant to subsection 3.12, provided that, notwithstanding anything to the contrary contained in this Agreement, the Borrower...

Page 176
... in full of any Extended Revolving Loans on the applicable Extended Maturity Date, (iv) the payment of the commitment or other fee or interest applicable to any Tranche, (v) the reduction of Tranche B Revolving Commitments on the Amendment No.1 Effective Date as set forth in Amendment No.1 or (vi...

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...Agreement...date on which each of the following conditions is satisfied (the "Amendment No. 1 Effective Date"): (i) The Administrative Agent shall have received (a) a counterpart of this Amendment No. 1 executed by each of the Borrowers and (b) a counterpart of this Amendment No. 1 executed by a number...

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...Borrower of the occurrence of the Amendment No.1 Effective Date. SECTION FOUR Representations and Warranties. In order to induce the Lenders party hereto... 1 Effective Date: (a) the execution, delivery and performance by such Loan Party of this Amendment No. 1 are within such Loan Party's corporate or...

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... and warranties in Section 4 of the Revolving Credit Agreement are, except to the extent that they relate to a particular date, true...reviewed the terms and provisions of the Revolving Credit Agreement and this Amendment No. 1 and consents to the amendments of the Revolving Credit Agreement effected...

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...are hereby in all respects ratified and confirmed. The execution, delivery and effectiveness of this Amendment No. 1 shall not, except as expressly provided herein, operate as an amendment of any provision of any of the Loan Documents. SECTION SEVEN Costs and Expenses. The Borrowers agree to pay all...

Page 181
... No. 1 to be executed by their respective officers hereunder duly authorized as of the date and year first above written. PARENT BORROWER: THE SERVICEMASTER COMPANY By: /s/ STEVEN J. MARTIN Name: Steven J. Martin Title: Senior Vice President & Chief Financial Officer By: /s/ MARK W. PETERSON...

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AGENT: CITIBANK, N.A., as Administrative Agent, Revolving Collateral Agent, Issuing Bank and Swing Line Lender By: /s/ DAVID LELAND Name: David Leland Title: Vice President

Page 183
..., agrees, by executing this signature page, to the terms of Amendment No. 1 to Revolving Credit Agreement and the Revolving Credit Agreement (as amended by Amendment No. 1): BANK OF TOKYO-MITSUBISHI UFJ TRUST COMPANY By: /s/ DAVID NODA Name: David Noda Title: Senior Vice President and Manager

Page 184
...an existing Lender under the Revolving Credit Agreement, agrees, by executing this signature page, to the terms of Amendment No. 1 to Revolving Credit Agreement and the Revolving Credit Agreement (as amended by Amendment No. 1): General Electric Capital Corporation By: /s/ REBECCA FORD Name: Rebecca...

Page 185
...: Andrew Deinton Title: Associate Director By: /s/ MELANIE LINCOLN Name: Melanie Lincoln Title: Senior Manager Signature Page to Amendment No. 1 The undersigned, an existing Lender under the Revolving Credit Agreement, (i) agrees, by executing this signature page, to the terms of Amendment No. 1 to...

Page 186
... Amendment No. 1 The undersigned, an existing Lender under the Revolving Credit Agreement, (i) agrees, by executing this signature page, to the terms of Amendment No. 1 to Revolving Credit Agreement and the Revolving Credit Agreement (as amended by Amendment No. 1) and (ii) (A) elects to extend the...

Page 187
... Amendment No. 1 The undersigned, an existing Lender under the Revolving Credit Agreement, (i) agrees, by executing this signature page, to the terms of Amendment No. 1 to Revolving Credit Agreement and the Revolving Credit Agreement (as amended by Amendment No. 1) and (ii) (A) elects to extend the...

Page 188
... Amendment No. 1 The undersigned, an existing Lender under the Revolving Credit Agreement, (i) agrees, by executing this signature page, to the terms of Amendment No. 1 to Revolving Credit Agreement and the Revolving Credit Agreement (as amended by Amendment No. 1) and (ii) (A) elects to extend the...

Page 189
... Date and (B) if and only if it checks the box below, elects to reduce its newly converted Tranche B Revolving Loans as provided in Section Two (b) of Amendment No. 1: NATIXIS By: /s/ GERARDO CANET Name: Gerardo Canet Title: Director By: /s/ HAROLD BIRK Name: Harold Birk Title: Managing Director...

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... BRANCH By: /s/ BRETT DELFINO Name: Brett Delfino Title: Executive Director By: /s/ IVAN RODRIGUEZ Name: Ivan Rodriguez Title: Executive Director x Check this box only if you elect to reduce your Tranche B Revolving Commitment as provided in Section Two (b) of Amendment No. 1. SCHEDULE A Revolving...

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"Rabobank Nederland", New York Branch 245 Park Avenue New York, New York 10167 Total: $ 212,878,787.84 $ 229,696,969.72

Page 192
... agreed, subject to the terms hereof, to increase its Commitment as follows: [Trance A] [Tranche B] Revolving Commitment(1) (after giving effect hereto) Name of Lender $ $ $ 3. Pursuant to Section 2.8 of the Revolving Credit Agreement, by execution and delivery of this Increase Supplement, each of...

Page 193
...the parties hereto have caused this INCREASE SUPPLEMENT to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written. The Increasing Lender: [INCREASING LENDER] By: Name: Title: THE SERVICEMASTER COMPANY, as Parent Borrower By: Name: Title...

Page 194
... JOINDER AGREEMENT, dated as of [ ] (this "Lender Joinder Agreement"), by and among the bank or financial institution party hereto (the "Additional Commitment Lender"), THE SERVICEMASTER COMPANY, a Delaware corporation (the "Parent Borrower") and CITIBANK, N.A., as administrative agent, issuing bank...

Page 195
...Agreement. 2. The Additional Commitment Lender hereby agrees to make its Commitment on the following terms and conditions on the Effective Date...agrees that upon its execution of this Lender Joinder Agreement that such Additional Commitment Lender shall on and as of the Effective Date set forth on ...

Page 196
5. 6. Recordation of the New Loans. Upon execution, delivery and effectiveness hereof, the Administrative Agent will record the Commitments made by such Additional Commitment Lender in the Register. Amendment, Modification and Waiver. This Lender Joinder Agreement may not be amended, modified or ...

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IN WITNESS WHEREOF, each of the undersigned has caused its duly authorized officer to execute and deliver this Lender Joinder Agreement as of the date first above written. [NAME OF ADDITIONAL COMMITMENT LENDER] By: Name: Title: Notice Address: Attention: Telephone: Facsimile: CITIBANK, N.A. ...

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SCHEDULE A COMMITMENTS Additional Commitment Lender [Tranche A] [Tranche B](2) Commitment Principal Amount Committed Aggregate Amount of All Commitments Maturity Date $ Effective Date of Lender Joinder Agreement: (2) Relevant Extended Revolving Commitment to be added if applicable. $

Page 199
... 1, 2010 (the "Effective Date"), between 1. AND 2. International Business Machines Corporation, a New York corporation ("Service Provider"). ServiceMaster Consumer Services, L.P., a Delaware limited partnership ("Customer") The Parties agree to the terms and conditions set forth in this Master...

Page 200
... Services New Services Service Provider to Provide and Manage Necessary Resources Reports Locations 4. CHARGES; NEW SERVICES; INVOICES; AND PAYMENTS 4.1. 4.2. 4.3. 4.4. 4.5. 4.6. 4.7. 4.8. 4.9. Charges Taxes Tariffs, Duties and Import/Export Compliance and Fees Invoices and Invoice Payment Market...

Page 201
... With Service Agreements Required Consents Change Control Procedures Inspections and Audits 10. TECHNOLOGY; INTELLECTUAL PROPERTY RIGHTS 10.1. 10.2. 10.3. 10.4. 10.5. 10.6. 10.7. 10.8. 10.9. 10.10. 10.11. Customer Software Service Provider Software Service Provider Materials Customer Group...

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... 63 63 63 64 64 65 65 65 TERMINATION 12.1. 12.2. 12.3. 12.4. 12.5. 12.6. Termination by Customer Termination by Service Provider Termination Charges Termination Assistance Services Other Rights Upon Termination Survival of Selected Provisions 13. LIABILITY 13.1. 13.2. 13.3. 13.4. 13.5. Liability...

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17.7. 17.8. 17.9. 17.10. 17.11. 17.12. 17.13. 17.14. 17.15. 17.16. 17.17. 17.18. Binding Nature and Assignment Notices No Third Party Beneficiaries Rules of Construction Further Assurances Expenses Savings Clause Jury Trial Waiver Currency Consents and Approvals Professional Advice Resale iv 65 66...

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...] Form of Business Associate Agreement Customer Competitors [portions omitted] i 1. PURPOSE AND STRUCTURE OF AGREEMENT 1.1. Purpose of Agreement (a) Generally. (i) Customer and Service Provider are Parties to a Master Services Agreement and a related Transaction Document No. 1, dated as of December...

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(i) the provisions set forth in this Master Agreement and the Exhibits herein; (ii) the initial Transaction Document(s) for procurement of Services executed simultaneously with this Master Agreement and the Schedules referenced herein; and 1

Page 206
... written notice to Service Provider delivered at least ninety (90) days prior to the then-scheduled expiration date, may renew the Term of the Agreement for up to an additional twelve (12) months on the terms, conditions and pricing then in effect (the "Extension Period"). Customer may exercise its...

Page 207
... be on the terms, conditions and pricing in effect at the time of the commencement of such Services. After the transfer of the Services to Customer or to Customer's designee, Service Provider shall continue to provide the Termination Assistance Services as requested by Customer for the remainder...

Page 208
... Agreement, including the Procedures Manuals; (ii) all Laws applicable to Service Provider as a provider of information technology and personnel to perform information technology and business process outsourcing, including those Laws which regulate the transport of Customer Data by Service Provider...

Page 209
...or "PIM"). Service Provider will incorporate all reasonable comments of Customer; provided, that in the case of procedures that are related to Customer Compliance Directives or Customer Compliance Requirements, or will likely have the effect of increasing the Charges or Customer's retained costs, as...

Page 210
..., from time to time, request updates or amendments to the Procedures Manuals. Service Provider will perform its obligations under this Section 3.2(c), at no additional cost to Customer. (d) Security Requirements. Customer's requirements for logical security applicable to Service Provider's delivery...

Page 211
... Service Provider creates an immediate and material threat either to the business and/or to the operational effectiveness of the Customer Group; and, in each case, Customer believes in good faith that there are no other alternative methods to assure the proper performance of the Services in the time...

Page 212
...) Business Days of the meeting) and will devote sufficient resources to implement the plan. On the cessation date indicated in the Step-out Notice, Service Provider will recommence performance of the Services in accordance with the Agreement. (m) Customer's Step-In Rights shall not be applicable to...

Page 213
... related systems, Service Provider will perform testing of the Disaster Recovery Plan at least once per Contract Year and promptly provide Customer with the results of such tests. Customer will be permitted, in its discretion, to participate in such tests. Service Provider will select the test times...

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... of any such charges (which shall be quoted as a fixed fee and/or on a "time and materials" basis reflecting Service Provider's Hourly Rates, as requested by Customer); (iv) to the extent applicable, an estimate of Service Provider's skills necessary to provide such Additional Services, including...

Page 215
... the Change Control Procedure that Service Provider will provide New Services to the Customer Group. New Services may be activities that are performed on an on-going basis for the remainder of the Term or activities that are performed on a one-time or a project basis. Further, Customer's request for...

Page 216
... in this Agreement, the Transaction Documents and in the "Reports" Schedule to a Transaction Document, and such additional reports as agreed by the Customer Contract Manager and the Service Provider Contract Manager during the Transition period and from time to time during the Term ("Reports"), in...

Page 217
... and other rules, regulations, policies and procedures, including the Security Requirements, applicable to Customer's own employees and communicated to Service Provider. Customer will make such policies and procedures available to Service Provider and will notify Service Provider of any subsequent...

Page 218
... in any such shared environment to Customer's Company Information and shall implement such process during the Term. 4. CHARGES; NEW SERVICES; INVOICES; AND PAYMENTS 4.1. Charges Customer agrees to pay to Service Provider the Charges as specified in the "Charges" Schedule to a Transaction Document...

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...issue any payment to itself or any of its Affiliates without the express prior approval of Customer. 4.5. Market Currency Procedures Customer may require and Service Provider will perform annual reviews of technology and best practices and a benchmarking assessment and related adjustment of Charges...

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...to this Agreement, Customer may deduct the entire undisputed amount owed to Customer against the Charges otherwise payable or expenses owed to Service Provider under this Agreement. 4.8. Disputed Charges/Credits In the event that Customer disputes the accuracy or applicability of a charge or credit...

Page 221
... have been determined [***]. (c) Upon acceptance by Customer, Service Provider will make any applicable adjustments to the Charges and the related Baselines and other terms to reflect the foregoing and distribute an amended "Charges" Schedule and executed Change Order to the affected Transaction...

Page 222
... Change Control Procedures. From time to time, Customer may request that Service Provider work together with Customer and/or Third Parties to identify ways to achieve reductions in the cost of delivering the Services and corresponding reductions in the Charges. If so requested, Service Provider will...

Page 223
... under this Agreement, at law or in equity (including the right to recover damages). 6. REPRESENTATIONS AND WARRANTIES 6.1. Representations and Warranties of Customer Customer represents and warrants to Service Provider as follows as of the Effective Date and as of the Execution Date of each...

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... and Warranties of Service Provider Service Provider represents and warrants to Customer as follows as of the Effective Date and as of the Execution of each Transaction Document: Organization; Power. Service Provider (i) is a corporation, duly organized, validly existing and in good (a) standing...

Page 225
... Document and to general industry standards for the Services provided by Service Provider pursuant to this Agreement. (g) Data Processing and Transfers. With respect to each transfer of Personally Identifiable Information, Service Provider (i) has full legal authority in each jurisdiction where...

Page 226
... all applicable Laws which may regulate the transfer of Customer Data by Service Provider and its subcontractors between the United States and Service Provider Locations outside the United States and among any such Locations; provided, that Service Provider makes no representation or warranty with...

Page 227
... has satisfied all applicable acceptance criteria. 7.3. Affected Employees Customer may agree in any Transaction Document to provide Service Provider with the opportunity to offer employment to certain of the employees of the Customer Group in connection with the execution of the Agreement and one...

Page 228
... Service Provider Contract Manager and (B) a certain number of Service Provider employees serving in operational positions whose knowledge of the elements of Customer account are critical to the everyday operations of the business of Customer (collectively, "Key Service Provider Positions"). Service...

Page 229
...' comparable background screening policies of all Service Provider subcontractors' personnel who will perform any of the Services and who will have access to any of Customer's Company Information, provided, that with respect to [***], any expanded or additional screening requested by Customer shall...

Page 230
... such information from Service Provider. If Customer timely notifies Service Provider of its objection in accordance with this Section, Service Provider shall not effect the proposed delegation change or subcontract. Service Provider shall not disclose any Company Information of the Customer Group...

Page 231
... satisfaction, Service Provider shall promptly remove such subcontractor from providing any Services under the Agreement upon request by Customer; [***], Service Provider shall submit a reasonable replacement plan to Customer within ten (10) business days of Customer's request. Service Provider will...

Page 232
...Procedures"), are set forth in the "Change Control Process" Exhibit. 9.7. Inspections and Audits (a) Service Provider Records. Service Provider shall maintain, at all times during the Term and at no additional charge to Customer, complete and accurate records and supporting documentation pertaining...

Page 233
... (iii) Service Provider's internal controls relating to the Services and those controls provided for in any Transaction Document or in the Procedures Manual to be executed by Service Provider and relating to Customer's control over the activities of Service Provider (collectively, "Service Provider...

Page 234
... Controls Audit as described herein, such audit covering Service Provider common processes applicable to multiple customers at the Service Provider Shared Services Center Location and does not cover transaction processing services to Customer. In the year in which transition of Services to Service...

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... such interference. Customer's access to the Service Provider Records shall include the right to inspect and photocopy same, the right to retain copies of such Service Provider Records outside of the Service Provider Locations and/or other Service Provider or Service Provider subcontractor premises...

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... obtaining goods and services or providing the Services except to the extent such costs are the basis upon which Customer is charged (e.g., reimbursable expenses, out-of-pocket costs, pass-through expenses, or cost-plus fees), or (D) information about other Service Provider clients. (f) Action Plan...

Page 237
... developed by Service Provider after the Original Effective Date, including such Materials jointly developed by Service Provider and/or its subcontractors with the Customer Group under this Agreement; and (4) all Derivative Works prepared by Service Provider after the Original Effective Date based...

Page 238
... Affiliates of the Customer Group, at no charge, to do any of the foregoing as necessary and/or appropriate for the members of the Customer Group to receive and use the Services in the Customer Business; provided, that any such Third Party and Affiliate has first executed agreements as required by...

Page 239
... or other written agreement under the Agreement, or (ii),which are an enhancement to or modification or derivative work of any of the Customer Software or Customer Business Applications (collectively, the "Deliverables"). Deliverables do not include Service Provider Materials. Customer shall own all...

Page 240
... after the date on which Service Provider is obligated to provide Termination Assistance Services, in each case solely in connection with the Customer Business in connection with the continued receipt and use by the Customer Group of services which are the same as or similar to the Services, and (ii...

Page 241
... subcontractors for the information technology systems and other services employed by Service Provider and/or the members of the Customer Group to perform, provide, deliver, receive and/or use the Services; (ii) the business and operating policies, and procedures employed by Service Provider and/or...

Page 242
... marketing, developing or using for itself or others, services or products that are the same as or similar to those provided to the Customer Group by Service Provider pursuant to this Agreement, as long as such services or products do not include any Customer Software, Customer Company Information...

Page 243
... and entities to which each makes disclosures of the Company Information of the other Party no less than if the acts or omissions were those of Service Provider and Customer respectively. If requested by Customer, Service Provider shall enter into a Business Associate Agreement in the "Form of...

Page 244
... disclosure and/or use (i) shall infringe any of the patent rights, copyrights or mask works rights or Trade Secrets which are a part of the other Party's Company Information, (ii) shall constitute a violation of any applicable Law or (iii) shall involve the use, disclosure or reproduction of any...

Page 245
... the offering or sale of any securities pursuant to any such registration statement to accommodate such opportunity. The receipt of Company Information under the Agreement will not limit or restrict assignment or reassignment of employees of Service Provider and the Customer Group within or between...

Page 246
...terms of this Agreement, Service Provider shall promptly (and in any event, within no less than [***]) notify Customer of such Security Breach, and the Parties shall reasonably cooperate with Customer and, at Customer's request, any law enforcement or regulatory officials, credit reporting companies...

Page 247
... right to apply to any court of competent jurisdiction for an injunction compelling specific performance by Service Provider of its obligations under the Agreement and/or the applicable Transaction Document. If Customer is not in default of its payment obligations under the Agreement, Customer shall...

Page 248
... or businesses of Customer, then Customer may terminate this Agreement, at Customer's election by providing notice to Service Provider given within ninety (90) days after the date of the event giving rise to Customer's right to terminate specified in Customer's election to so terminate, effective as...

Page 249
... Services. Customer's right to terminate the Agreement or any Transaction Document under this Section 12.1 shall be subject to Customer's payment of the applicable Termination Charges as specified in Section 12.3. 12.2. Termination by Service Provider Service Provider may terminate this Agreement...

Page 250
... the work of the Customer Group to the members of the Customer Group or a Successor Service Provider commencing up to one (1) year prior to expiration, or upon and after any notice of termination of or non-renewal of the Agreement or any Transaction Document. In no event will Customer's holding of...

Page 251
... transfer and/or delivery to Customer. (c) Service Provider Employees. Upon the date of expiration or termination of the Agreement or any Transaction Document for any reason, the Customer Group or its designee shall have the right to make offers of employment to any or all Service Provider employees...

Page 252
... (a) all claims arising under or relating to this Agreement, regardless of the form of action, whether based on contract, warranty, tort (including negligence), statute or otherwise, including liability arising out of or resulting from the performance or non-performance by Service Provider and its...

Page 253
... the Agreement and/or actions for damages. 14. INDEMNITIES 14.1. Indemnity by Service Provider Service Provider will indemnify and hold harmless Customer, the other members of the Customer Group, its and their Affiliates, and the respective current, future and former officers, directors, employees...

Page 254
...Claims (i) by Governmental Authorities for fines and penalties arising from a violation by Service Provider, its Affiliates or subcontractors of the Laws applicable to Service Provider, as set forth in Section 3.2(a)(ii), (excluding any such violation to the extent caused by a member of the Customer...

Page 255
... Provider's breach of its representations, warranties or covenants set forth in Sections 6.2(a), 6.2(b) and 6.2(i). 14.2. Indemnity by Customer Customer will indemnify and hold harmless Service Provider and its Affiliates, and the respective current, future and former officers, directors, employees...

Page 256
... that would not have any adverse impact on Service Provider; (b) all Claims by employees of Customer, its Affiliates or subcontractors (excluding Service Provider and its Affiliates and their subcontractors) arising out of or relating to this Agreement, except to the extent of any indemnification...

Page 257
...the Agreement or Customer's direction are determined to have created an employer-employee or agency relationship with such personnel, including, (i) the cost of any employee benefits Service Provider is required to provide to or pay for on behalf of any Customer personnel, and (ii) any Claim brought...

Page 258
...to do business in the states where the Services are performed: (a) workers' compensation insurance, with statutory limits as required by the various Laws applicable to the employees of Service Provider and any Service Provider subcontractor that provides or performs any of the Services; (b) employer...

Page 259
... than the policy effective date. IBM will continue such insurance coverages for the Term of the Agreement and for a period of two (2) years following the termination of the Agreement, as long as such coverage remains commercially available and financially viable in the market place; and (g) Employee...

Page 260
... claims made basis. Customer shall be named as loss payee as its interest may appear on the property and crime insurance policies of Service Provider. Service Provider shall be responsible for payment of any and all deductibles, self-insured retentions, and self-insurance carried by Service Provider...

Page 261
... or use such advertising, sales promotion, press releases, or publicity matters without prior written approval of the other Party. 17.2. Entire Agreement, Updates, Amendments and Modifications This Master Agreement, and the related Transaction Document No. 1 of even date, amends and restates in...

Page 262
... if requested) as to the status of its efforts to recommence performance and written notice upon conclusion of the Force Majeure Event. (b) Implementation of Disaster Recovery Plan. Notwithstanding any other provision of this Section, a Force Majeure Event shall obligate and require Service Provider...

Page 263
... (3) Business Days, then Customer may procure replacement services from an alternate source[***], Customer shall not be obligated to pay Service Provider the Charges for the portion of the applicable Services that are the subject of a termination notice pursuant to Section 12.1(i)(2) beyond the date...

Page 264
... the Agreement need not be provided to the VP, Assistant General Counsel, but shall be provided to the Service Provider Audit Focal at the address designated by Service Provider. In the case of Customer: Customer Contract Manager ServiceMaster Consumer Services, L.P. 860 Ridge Lake Boulevard Memphis...

Page 265
..., the provisions of Section 1.2(d) shall control. 17.11. Further Assurances During the Term and at all times thereafter, each Party shall provide to the other Party, at its request, reasonable cooperation and assistance (including the execution and delivery of affidavits, declarations, oaths...

Page 266
...anything to the contrary in this Agreement, Service Provider will not be required to provide, and nothing in this Agreement will be construed as provision by Service Provider of, any legal, audit, attest, tax or other similar professional advice. 17.18. Resale Neither Customer nor any member of the...

Page 267
... Amended and Restated Master Services Agreement, dated as of November 1, 2010, between ServiceMaster Consumer Services, L.P. and International Business Machines corporation. The following terms used in the Agreement shall have the meanings indicated: 1.01 1.02 1.03 [***]. Action Plan has the meaning...

Page 268
... of the Master Agreement. Approved Subcontractors has the meaning set forth in Section 9.3(a) of the Master Agreement. Audits means collectively and individually, Customer Audits, Service Provider Audits, Operational Audits and Financial Baselines has the meaning set forth in the "Charges" Schedule...

Page 269
...of the Service Provider Assets used to provide the Services, (ii) manner in which the Services are provided, (iii) composition of the Services or (iv) cost to Customer or Service Provider of the Services; (2) any change to (a) the Locations or (b) the Security Requirements, Disaster Recovery Plan or...

Page 270
... by Service Provider expressly for Customer. 1.24 Contract Change Control has the meaning set forth in Section 9.6 of the Master Agreement. 1.25 Contract Yearmeans each twelve-month period commencing on the Original Effective Date or any anniversary of the Original Effective Date during the Term...

Page 271
... internal data of Service Provider generated in connection with the performance of Services and not reasonably related to its obligations under this Agreement (e.g., Service Provider personnel or cost data, internal reviews, or similar information or data). 1.38 Customer Group means individually...

Page 272
...forth in the "Dispute Resolution Procedures" Exhibit. 1.57 1.58 Disputed Charges has the meaning set forth in Section 4.8 of the Master Services Agreement. [***] 1.59 Effective Date means the date of the execution of the Master Agreement by the Parties thereto as set forth in the first paragraph of...

Page 273
..., compatible and/or interoperable, and/or to remediate and/or provide work-arounds for any failure of the Customer Systems to operate as necessary to perform and provide the Services in accordance with this Agreement, but does not include software tools used to generate computer programming...

Page 274
...a Transaction Document. 1.72 Key Service Provider Positions has the meaning set forth in Section 9.2(a)(i) of the Master Agreement. 1.73 Law means all applicable laws (including those arising under common law), statutes, codes, rules, regulations, reporting or licensing requirements, ordinances and...

Page 275
... Control has the meaning set forth in Section 9.6 of the Master Agreement. 1.84 Original Agreement means the Master Services Agreement and the related Transaction Document No. 1, both dated as of December 11, 2008, by and between Customer and Service Provider. 1.85 1.86 1.87 1.88 Original Effective...

Page 276
... may be used to track, locate or identify such individuals (or which is otherwise protected by Law), which is generated by or disclosed to Service Provider or its subcontractors in connection with the Services, and includes such information of Customer Group employees and of individuals who seek to...

Page 277
...at any Location housing systems maintained by Service Provider or its agents or subcontractors in connection with the Services and in the course of physical transportation of assets used by Service Provider in performing the Services and physical media including Customer Company Information. Systems...

Page 278
...responsibilities, tasks and/or project are identified by Customer to Service Provider in writing not later than eighteen (18) months after the applicable Execution Date in order to be performed for the remainder of the term of the applicable Transaction Document. 1.116 Software or software means any...

Page 279
... that provides services to Customer similar to the Services following the termination or expiration of the Agreement. Tax or Taxesmeans federal, state and local sales, use, excise, telecommunications, and other similar types of transfer taxes, 1.118 fees or charges (including any related penalties...

Page 280
... Definitions Services Description Statement of Work Customer Business Applications Key Personnel Provisions Knowledge Worker Provisions Consolidated Skills List List of Key Personnel Service Level Agreement Service Level Methodology Service Level Matrix Critical Services Charges Pricing Methodology...

Page 281
F-5 F-5-1 F-5-2 Re-Solution Milestones [***] [***] 1

Page 282
... ("Service Provider"). This "Transaction Document" and its Schedules are incorporated into that certain First Amended and Restated Master Services Agreement dated November 1, 2010, between ServiceMaster Consumer Services, L.P. and International Business Machines Corporation. The terms and conditions...

Page 283
...hereto. 3.2 Charges The "Charges" Schedule to this Transaction Document sets forth the pricing and charging methodologies for the Services. Further, the "Service Level Agreement" Schedule to this Transaction Document sets forth certain credits which may be payable to Customer to Service Provider. 1

Page 284
..., or such earlier date requested by Customer, Service Provider will deliver to Customer a proposal for the extension of the Transaction Document Term (the "Renewal Proposal"). The Renewal Proposal will provide Customer with sufficient detail to allow Customer to make an informed decision as to...

Page 285
... of Work Customer Business Applications Key Personnel Provisions Knowledge Worker Provisions List of Key Personnel Service Level Agreement Service Level Methodology Service Level Matrix Critical Services Charges Pricing Methodology Critical Transition and Transformation Milestone Payment and...

Page 286
... Architecture and Product Standards Disaster Recovery Requirements Termination Assistance Services Projects Affected Employees Terms for Affected Employees List of Affected Employees Service Locations Commercially Unavailable Service Provider Tools Customer Facilities Approved Subcontractors 4

Page 287
... 4, Governance and Change Control, to that certain First Amended and Restated Master Services Agreement, dated as of November 1, 2010, between ServiceMaster Consumer Services, L.P. and International Business Machines Corporation. Unless otherwise defined herein, capitalized terms have the meanings...

Page 288
..., management and interface processes among the Customer Governance Organization, Customer corporate, Customer business units, Service Provider and any Third Parties within the terms of the Agreement. 2.2.3 [***] Service Provider Responsible Executive shall provide information requested by Customer...

Page 289
... solely by Customer. In the event that Customer employs Third Parties within the Customer Governance Organization, such Third Parties shall not be Service Provider Competitors and shall adhere to the confidentiality and security provisions of the Agreement. 2.2.8 The Parties shall work together to...

Page 290
... 4-B hereto lists certain governance processes that are required to be in place to effectively govern the Agreement. Customer will work with Service Provider to review and complete the High Priority Governance Processes. Customer will implement the agreed-upon High Priority Governance Processes with...

Page 291
... ensuring that the information [***]is presented accurately on reports consistent with Service Provider's data provided to the Customer. (iii) Work with the Customer to use the [***] tool jointly to manage various governance processes (issue management, service level management, etc.) and decisions...

Page 292
...Organization in the execution of their responsibilities as such responsibilities relate to the Services. 3.4 Projects and Additional Services or New Services. Projects and/or Additional Services or New Services may be requested by Customer in accordance with the Agreement. Operationally, the Parties...

Page 293
... Date or other due date set forth in the applicable Transition and Transformation Plan, Project or other schedule, including as such periods may be extended in accordance with the provisions of this Exhibit 4. [***] (c) If Service Provider submits a particular Deliverable to Customer for review...

Page 294
... (ii) (iii) 4.1.3 No Change shall be implemented without Customer's approval [***]. Change Control Procedures (a) Either Service Provider or Customer may initiate a Change Request by delivering to the other's Responsible Executive or his/her nominated representative a Change Order that describes...

Page 295
...and approval. 4.1.7 4.1.8 [***] Effectiveness of a Change [***] submit such Preliminary Specification Report and other appropriate information for review Detailed Specification Report Review (a) Once submitted by Service Provider, Customer shall review the Detailed Specification Report (a) Upon the...

Page 296
... Service Provider shall add the agreed upon tools, forms and documented processes (including any changes made by Customer) to the Procedures Manual. (d) Management Process. 4.3 Customer Satisfaction Management [***] The Parties will work together in good faith to resolve any issues using the Issues...

Page 297
... This is Exhibit 6, Form of Auditor Confidentiality Agreement, to that certain First Amended and Restated Master Services Agreement, dated as of November 1, 2010, between ServiceMaster Consumer Services, L.P. and International Business Machines Corporation. Attachments. The following attachments are...

Page 298
... AGREEMENT This Confidentiality Agreement (the "Agreement"), effective as of November 1, 2010, is entered into between (the "Company") and Deloitte & Touche LLP ("Deloitte & Touche"). WHEREAS, Deloitte & Touche has been engaged to perform certain audit services (the "Services") for the Company...

Page 299
... Information shall continue in full force and effect for a period of three (3) years from the effective date of this Agreement. 5. Neither the Company nor Deloitte & Touche may assign, transfer or delegate any of its rights hereunder (including, without limitation, interests or claims relating...

Page 300
...later of: the consummation of a business relationship between the Parties in the form of a written agreement relating to the Confidential Information exchanged under this Agreement or three (3) years from the Effective Date. 5. Publicity. Neither Party will issue or release any articles, advertising...

Page 301
...upon and inure to the benefit of the Parties and their respective heirs, successors and assigns. The Parties have executed this Agreement, effective as of the Effective Date, by their duly authorized representatives. Effective Date: ServiceMaster Consumer Services Limited Partnership, By its General...

Page 302
..., to that certain First Amended and Restated Master Services Agreement, dated as of November 1, 2010, between ServiceMaster Consumer Services, L.P. and International Business Machines Corporation. 1.0 Defined Terms Unless defined in this Exhibit, capitalized terms have the meanings set forth in the...

Page 303
...First Amended and Restated Master Services Agreement, dated as of November 1, 2010, between ServiceMaster Consumer Services, L.P. and International Business Machines Corporation. Unless defined in this Exhibit, capitalized terms have the meanings set forth in the Master Agreement or the "Definitions...

Page 304
... is Exhibit 9, Customer Security Requirements, to that certain First Amended and Restated Master Services Agreement, dated as of November 1, 2010, between ServiceMaster Consumer Services, L.P. and International Business Machines Corporation. Unless defined in this Exhibit, capitalized terms have the...

Page 305
... delivered by or on behalf of Service Provider to the Customer Group, the customers of the Customer Group and/or the Third Party Providers. [***] 4. Massachusetts Information Security Regulation. Prior to the effective date of the Massachusetts Information Security Regulation, and as required by the...

Page 306
... have been intentionally omitted. The omitted portions subject to the confidential treatment request are designated by three asterisks ([***]). A complete version of this agreement has been separately filed with the Securities and Exchange Commission. Exhibit 9 Attachment 9-1 [***] [21 pages...

Page 307
...omitted. The omitted portions subject to the confidential treatment request are designated by three asterisks ([***]). A complete version of this agreement has been separately filed with the Securities and Exchange Commission. ATTACHMENT 9-5 CUSTOMER PCI & SOX REQUIREMENTS [***] [14 pages omitted] 1

Page 308
... and, as applicable, the Additional Services or New Services requirements set forth in Sections 3.6 and 3.7 of the Master Agreement. 4. Annual Best Practices Reviews. Within thirty (30) days of each anniversary of the Original Effective Date, Service Provider shall identify for Customer any best...

Page 309
... current, i.e., based on services provided to Customer and the Comparators no more than twelve (12) months prior to the start of the Benchmarking Process. (d) The Benchmarker shall compare each Comparator's contracted charges, service levels and scope with Service Provider's contracted Charges...

Page 310
... and Service Provider shall have the opportunity to participate in all discussions either Party may have with the Benchmarker relating to the Benchmarking Process. (h) Customer will be permitted to disclose price and cost information under this Agreement to the Benchmarker, subject to execution of...

Page 311
...Amended and Restated Master Services Agreement, dated as of November 1, 2010, between ServiceMaster Consumer Services, L.P. and International Business Machines Corporation. This Benchmarking Services Agreement (the "Agreement") is entered into as of [insert date] (the "Effective Date"), by and among...

Page 312
... to, the Services provided that in rendering any services to third parties, Consultant may not use any Work Product (excluding any portions of Consultant Work Product that comprise Consultant's Preexisting Elements as defined below), confidential information of Principals or information, reports or...

Page 313
... [***] Except as otherwise expressly set forth in Exhibit A, all costs and expenses relating to Consultant's performance of the Services are included in the Fees. Subject to Section 3(d) above, the Fees shall also cover each Principal's rights granted in Section 3(e) with respect to the Deliverables...

Page 314
... during the provision of the Services, as provided for in this Agreement, and (iii) [***] shall pay Consultant any amounts otherwise owed for work-in-progress, services and expenses incurred prior to the effective date of termination. 9) REPRESENTATIONS, WARRANTIES, COVENANTS AND LIMITATION OF...

Page 315
... ANY PARTY ARISING OUT OF THIS AGREEMENT AND THE PROVISION OF THE SERVICES SHALL BE LIMITED TO THE FEES PAID OR PAYABLE UNDER THIS AGREEMENT. 10) DISCLAIMER. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER THE PRINCIPALS NOR CONSULTANT MAKE ANY OTHER WARRANTY, EXPRESS OR IMPLIED, INCLUDING...

Page 316
... Work Product in breach of Section 4 above. d) Insurance requirements a) Consultant, at its sole cost and expense, shall maintain in effect at all times during the rendering of services, insurance specified below with insurers having a Best's rating of at least [***], under forms of policy...

Page 317
..., marketing or selling services and/or products, without the prior written consent of ServiceMaster. (ii) Consultant is similarly prohibited from using the IBM logo or IBM Corporation's name or the name of any of its affiliates, subsidiaries or divisions solely in relation to this specific Agreement...

Page 318
... applies for hire without having been initially personally solicited or recruited by the hiring Party. IN WITNESS WHEREOF, the Parties have caused this Benchmarking Services Agreement to be executed by their duly authorized employees. CONSULTANT By: Name: Title: Date: SERVICEMASTER CONSUMER SERVICES...

Page 319
... date], by and among International Business Machines Corporation, ServiceMaster Consumer Services, L.P., and [insert benchmarker]. Capitalized terms have the meaning set forth in the Benchmark Services Agreement. I. Benckmarking Deliverables This Statement of Work includes a detailed price benchmark...

Page 320
... available on a time and materials basis at the following rates (exclusive of related travel expenses): Consultant Name Hourly Rate $ $ $ $ [ [ [ [ ] ] ] ] [***] shall not be responsible for any additional charges not authorized by it in advance and in writing. IV. Payment Terms: [***] will pay...

Page 321
... is Exhibit B, Benchmark Methodology, to that certain Benchmarking Services Agreement, dated as of [insert date], by and among International Business Machines Corporation, ServiceMaster Consumer Services, L.P., and [insert benchmarker]. Capitalized terms have the meaning set forth in the Benchmark...

Page 322
EXHIBIT C IBM'S PROCUREMENT AGREEMENT FOR THE EXCHANGE OF CONFIDENTIAL INFORMATION Exhibit C begins on the next page. 13

Page 323
... terms and conditions. The Supplement must be signed by the Supplier and the Recipient. 2.0 Protection For two (2) years after the date of disclosure, the Recipient will: i) use the same care and discretion to avoid disclosure of the Discloser's Information as the Recipient uses with its own similar...

Page 324
... such technical information or software to nationals, wherever they may be located, of any prohibited country) as specified in applicable export, embargo, and sanctions regulations. This Section will survive after termination or expiration of this Agreement and will remain in effect until fulfilled...

Page 325
...later of: the consummation of a business relationship between the Parties in the form of a written agreement relating to the Confidential Information exchanged under this Agreement or three (3) years from the Effective Date. 5. Publicity. Neither Party will issue or release any articles, advertising...

Page 326
...First Amended and Restated Master Services Agreement, dated as of November 1, 2010, between ServiceMaster Consumer Services, L.P. and International Business Machines Corporation. Unless defined in this Exhibit, capitalized terms have the meanings set forth in the Master Agreement or the "Definitions...

Page 327
1

Page 328
... subject to the confidential treatment request are designated by three asterisks ([***]). A complete version of this agreement has been separately filed with the Securities and Exchange Commission. Exhibit 11 Attachment 11-1 Attachment 11-1, ServiceMaster Handbook dated May 1, 2007, begins on the...

Page 329
... the confidential treatment request are designated by three asterisks ([***]). A complete version of this agreement has been separately filed with the Securities and Exchange Commission. Exhibit 11 Attachment 11-2 Attachment 11-2, ServiceMaster BSC IT Change Management Policy revision 5.1, begins on...

Page 330
....com corporate.servicemaster.com www.Terminix.com www.TruGreen.com www.ServiceMasterClean.com What information do we collect? How do we use it? At ServiceMaster when you request information about a product or service or register with one of our sites, we may need to know specific information about...

Page 331
...mailing address, credit card number, and expiration date. This allows us to process and fulfill your order and to notify you of your order status. To learn more about our encryption policies, please review the section on "How does ServiceMaster protect customer information?" This site contains links...

Page 332
... than one email address to shop with us, send this message from each email account you use.) Also, ServiceMaster may provide aggregate statistics about our customers, sales, traffic patterns, and related site information to reputable third-party vendors, but these statistics will include no personal...

Page 333
ServiceMaster Corporate Communications 3250 Lacey Road, Suite 600 Downers Grove, IL 60515 [email protected] Phone: (630) 663-2155 Fax: (630) 663-2159 2

Page 334
...or installation, and information about your home (e.g., number of rooms, size and age of house, and lawn size). We may require additional information for specific promotions or contests run on our site. We use the customer contact information we collect to connect you with a service provider, and to...

Page 335
... at the time of purchase to process your order, to enable the provider to fulfill your order, and to notify you of your order status. A customer care representative or service provider may contact you in order to fulfill a service you purchased or to provide information you requested. Non-personally...

Page 336
... privacy policy has been changed. Tell us what you think Still have questions about our privacy practices? Let us know. We welcome your questions and comments. Last updated June 28, 2006 2 Privacy Information Terminix Ultimate Protection 1-800-233-5917 Termite Control Pest Control Customer Service...

Page 337
..., mailing address, credit card number, and expiration date. This allows us to process and fulfill your order and to notify you of your order status. To learn more about our encryption policies, please review the section on How does ServiceMaster protect customer information. This site contains links...

Page 338
...request that we do not by emailing us at [email protected] (If you use more than one e-mail address to shop with us, send this message from each e-mail account you use). Also, ServiceMaster may provide aggregate statistics about our customers, sales, traffic patterns, and related site information...

Page 339
... can contact: ServiceMaster Consumer Services, A4-1831 860 Ridge Lake Boulevard Memphis, TN 38120 [email protected] 1-800 WE SERVE ext. 1000 Careers Media Area Pest Control Companies Account Login Contact Us Site Map Â© 2007 The Terminix International Company Limited Partnership. All rights...

Page 340
... at the time of purchase to process your order, to enable the provider to fulfill your order, and to notify you of your order status. A customer care representative or service provider may contact you in order to fulfill a service you purchased or to provide information you requested. Non-personally...

Page 341
... order, subpoena, or a law enforcement agency's request. Finally, The TruGreen Companies may provide aggregate statistics about our customers, sales, traffic patterns, and related site information to reputable third-party vendors, partners, service providers, or to the press. Aggregate statistics...

Page 342
... address, credit card number and expiration date. This allows us to process and fulfill your order and to notify you of your order status. To learn more about our encryption policies, please review the section "How does American Home Shield protect customer information?" This site contains links...

Page 343
...Residents American Home Shield customers residing in California who have submitted personal information to us may request information about our disclosures of certain categories of personal information to third parties for their direct marketing purposes. All requests for disclosure information must...

Page 344
... the Master Service Agreement (the "Agreement"), dated as of December 11, 2008, by and between ServiceMaster Consumer Services, L.P. ("Customer") and International Business Machines Corporation ("IBM"). Recitals A. Customer and IBM are Parties to the Agreement pursuant to which IBM provides certain...

Page 345
... that apply to Business Associate under the Agreement and this Addendum. Business Associate shall provide Customer with copies of such written agreements. Authorized Access to and Amendment of Protected Health Information. Within twenty (20) days of any request by 7. Customer, Business Associate...

Page 346
... provide the Disclosure Accounting to Customer within forty-five (45) days of receiving a written request therefor from Customer. 9. Health and Human Services. Business Associate shall make its internal practices, books and records related to the use and disclosure of Protected Health Information...

Page 347
... is Exhibit 13, Customer Competitors, to that certain First Amended and Restated Master Services Agreement, dated as of November 1, 2010, between ServiceMaster Consumer Services, L.P. and International Business Machines Corporation. Unless defined in this Exhibit, capitalized terms have the meanings...

Page 348
... the pricing and charging methodologies for the Services. Further, the "Service Level Agreement" Schedule to this Transaction Document sets forth certain credits which may be payable by Service Provider to Customer. 4. TERM/COMMENCEMENT DATE/SURVIVAL/RENEWAL 4.1 Term and Commencement Date The term...

Page 349
... pricing, or as otherwise agreed between the Parties. 4.2 Quality Programs The Service Provider operations engaged in performing the Services, not later than the due date [***] as described in Schedule F-5, will be, and shall at all times during the Term remain, with respect to Customer's account...

Page 350
... forth in the Agreement; provided, however, the "Service Level Agreement" Schedule will govern the determination of a Service Level Default. Service Provider will designate a network focal to be the single point of contact for Customer with respect to network-related performance issues. [***] TASK...

Page 351
... Definitions Services Description Statement of Work Customer Business Applications Key Personnel Provisions Knowledge Worker Provisions Consolidated Skills List List of Key Personnel Service Level Agreement Service Level Methodology Service Level Matrix Critical Services Charges Pricing Methodology...

Page 352
... Software Service Provider Software [RESERVED] Reports Reports: IBM Sample Standard Reports List of Approved Benchmarkers Technical Architecture and Product Standards Disaster Recovery Requirements Disaster Recovery Requirements - General Disaster Declaration Event Fee Common BCRS Shared Services...

Page 353
... in the "List of Affected Employees" Schedule, who are employed by a member of the Customer Group prior to the Effective Date and to whom Service Provider or Network Services Provider shallconsider for offers of employment pursuant to the "Terms for Affected Employees" Schedule. A.07 "Allocation of...

Page 354
1

Page 355
... Resource Unit consumption must exceed before an ARC will be applied. [***] A.15 "ARC Rate" means the monetary rate per unit to be charged by Service Provider to Customer for any Resource Unit consumption for each applicable Resource Unit [***] according to the formulas defined in Section 2.4(b) of...

Page 356
... Charges payable by Customer to Service Provider with respect to the Services that Service Provider shall deliver to Customer pursuant to the Master Agreement. A.32 "COBRA" means continuation coverage required under Section 4980 of the Internal Revenue Code, Part 6 of Title I of ERISA or applicable...

Page 357
... organization described in Section 2.2 of the "Governance and Change Control" Exhibit. A.43 "PMOs" mean the Customer PMO and the Service Provider PMO. A.44 "Customer PMO" means Customer's program management office that oversees all Service delivery in accordance with the "Governance and Change...

Page 358
A.59 "Employee Service" means the duration of employment with Customer, its Affiliates or predecessors from an employee's date of hire with Customer (or its Affiliate or predecessor) until the Hire Date as service with Service Provider. A.60 "End User Satisfaction Survey" means end-user satisfaction...

Page 359
... impact to its systems or business, and (b) there is insufficient time to prepare a Change Order for such Change in accordance with normal Change Control Procedures or if the applicable charges (if any) are not agreed to prior to Customer's requirement to commence work related to such Change. A.77...

Page 360
... for short term disability and/or the Family Medical Leave Act pursuant to the Customer Group's applicable policies. A.89 A.90 "LOA Offer Date" means a date within [***] after any employee on an LOA is removed from leave status. [***] A.91 "Massachusetts Information Security Regulation" means the...

Page 361
... of the unit by Service Provider have occurred and the unit user has expressly acknowledged in writing that the unit has been successfully installed and configured. A.104 "Patch Management" means the process of receiving, reviewing, installing and tracking software updates issued by a software or...

Page 362
... lead Customer SME. A.118 "Productive Hours" means the number of productive hours actually worked by a Service Provider employee or Service Provider subcontractor employee, excluding non-productive time (which includes travel, vacation, holiday, training, education, marketing, administrative...

Page 363
... Service Provider's schedule and pricing commitment for a particular Project (such commitment is referred to as "baselined" in the Service Levels). A Project Work Order is also referred to operationally as a statement of work for a Project. A.127 "Proposed Transferred Agreements" means those Managed...

Page 364
...be reduced below the Resource Baseline before a RRC will be applied. [***] A.142 "RRC Rate" means the monetary rate per unit to be credited by Service Provider to Customer for any Resource Unit consumption for each applicable Resource Unit [***] according to the formulas defined in Section 2.4(b) of...

Page 365
... Hire Date, the Transitioned Employees shall be immediately eligible to participate in all employee benefit savings and defined contribution programs, plans or policies generally maintained for similarly situated employees of Service Provider (as the same may be modified from time to time, "Service...

Page 366
... Document No. 1 to that certain First Amended and Restated Master Services Agreement, dated as of November 1, 2010, between ServiceMaster Consumer Services, L.P. and International Business Machines Corporation. Unless otherwise defined herein, capitalized terms have the meanings set forth in the...

Page 367
... Document No. 1 to that certain First Amended and Restated Master Services Agreement, dated as of November 1, 2010, between ServiceMaster Consumer Services, L.P. and International Business Machines Corporation. Unless otherwise defined herein, capitalized terms have the meanings set forth in the...

Page 368
... B-2 CUSTOMER BUSINESS APPLICATIONS This is Schedule B-2, Customer Business Applications, to the First Amended and Restated Transaction Document No. 1 to that certain First Amended and Restated Master Services Agreement, dated as of November 1, 2010, between ServiceMaster Consumer Services, L.P. and...

Page 369
... Document No. 1 to that certain First Amended and Restated Master Services Agreement, dated as of November 1, 2010, between ServiceMaster Consumer Services, L.P. and International Business Machines Corporation. Unless otherwise defined herein, capitalized terms have the meanings set forth in the...

Page 370
... Document No. 1 to that certain First Amended and Restated Master Services Agreement, dated as of November 1, 2010, between ServiceMaster Consumer Services, L.P. and International Business Machines Corporation. Unless otherwise defined herein, capitalized terms have the meanings set forth in the...

Page 371
... information shall be deemed to be Customer Confidential Information, and Customer may access such information on-line at any time during the Term; provided, that IBM may retain a copy of such data solely for its accounting records, subject to the provisions of Section 11 of the Master Agreement...

Page 372
... the above, Service Provider shall only be required to report on GPIs upon the request of Customer, and upon such request, Service Provider shall produce the monthly performance report within ten (10) days. Service Provider shall only be required to provide within ten (10) Business Days Performance...

Page 373
... cost, such approved plan. (iv) Service Level Termination Events. A Service Level Termination Event shall be deemed to exist if Service Provider fails to meet the [***] in any Service Level Reporting Period. [***]. Customer shall have available to it all of the remedies set forth in the Agreement...

Page 374
... pursuant to the Agreement. Service Provider shall provide Customer with information about and access to such procedures upon request for purposes of verification. (b) Notwithstanding the foregoing, any new tools required for new Service Levels added after the Execution Date shall be identified...

Page 375
... of the events giving rise to a Service Level Credit, Service Provider shall owe a debt to Customer for the applicable Service Level Credit amount. [***]. Service Provider shall credit to Customer against the next monthly invoice: (A) (B) all accrued Service Level Credits [***], and all accrued...

Page 376
... paid by Service Provider to Customer shall be offset against any damages awarded to Customer for claims arising from the corresponding failure to perform. 7. Annual Review. Within twelve (12) months after each applicable Service Level Commencement Date, and at least annually thereafter (after...

Page 377
... Amended and Restated Master Services Agreement, dated as November 1, 2010, between ServiceMaster Consumer Services, L.P. and International Business Machines Corporation. Unless otherwise defined herein, capitalized terms have the meanings set forth in the Master Agreement, the "Definitions" Exhibit...

Page 378
... any Change Order executed in accordance with the Change Control Procedures, in connection with the Services. In determining the Charges, Service Provider has taken into account all of its capital, operational, one-time start-up and all other incidental costs of providing all of the Services and the...

Page 379
... Contract Year as set forth in Schedule E-3. 2.2. Calculation and Payment of Base Charges Service Provider shall invoice Customer as set forth in Section 6 below. The Base Charges set forth in Schedule E-3, shall be prorated for any initial partial month (e.g., if the applicable Commencement Date...

Page 380
...) Ã- applicable ARC/RRC Rate. (C) For example, if [***] Then: [***] 2.5. ARCs/RRCs Forecast Upon Customer's reasonable request, Service Provider shall provide reasonable forecast estimates of Customer's consumption of Resource Units and applicable forecasted ARC/RRC impacts. 2.6. 3. [***] PRICE...

Page 381
..., then upon Customer's request and within a reasonable time after the trigger date not to exceed [***], the Parties shall negotiate in good faith and agree upon equitable adjustments to the Resource Baseline, and the resulting Base Charge for such Resource Baseline and ARC and RRC Rates, to reflect...

Page 382
... Permitted Chargeable Project Work. Only Services associated with the following projects, as reviewed and approved by Customer and evidenced by a signed Project Work Order, shall be invoiced to Customer: (i) Application Development Projects: Application Development Projects are charged via the Base...

Page 383
... be pro-rated to reflect the volume of applicable Pass-Through Charges attributable to Customer relative to the volumes of such similar expenses attributable to other Service Provider customers. 6. INVOICE FORMAT AND PROCESS 6.1. Sections 4.4(a) through (c) of Master Agreement Superseded Sections...

Page 384
... which such Charges correspond. (d) Payment by Wire Transfer. Customer's payment of any Service Provider invoice may be made by wire transfer to an account designated by Service Provider. (e) 7. [***] FINANCIAL RESPONSIBILITIES MATRIX Except as otherwise set forth in the Master Agreement, Schedule...

Page 385
... Document No. 1 to that certain First Amended and Restated Master Services Agreement, dated as of November 1, 2010, between ServiceMaster Consumer Services, L.P. and International Business Machines Corporation. Unless otherwise defined herein, capitalized terms have the meanings set forth in the...

Page 386
... Document No. 1 to that certain First Amended and Restated Master Services Agreement, dated as of November 1, 2010, between ServiceMaster Consumer Services, L.P. and International Business Machines Corporation. Unless otherwise defined herein, capitalized terms have the meanings set forth in the...

Page 387
... ninety (90) days of the Execution Date, Customer shall provide Service Provider the necessary details, including any formulaic allocation models, to enable Service Provider to invoice the Charges to various Customer business units as requested by Customer. 5. SAMPLE INVOICE The following samples...

Page 388
...Restated Master Services Agreement, dated as of November 1, 2010, between ServiceMaster Consumer Services, L.P. and International Business Machines Corporation. 1. 1.1 INTRODUCTION Objective This Schedule F-1 sets out the Parties' responsibilities for: (i) commencing with the Original Effective Date...

Page 389
... as set forth in Schedule F-5. Due dates assume timely performance by Customer of its responsibilities in the Transformation and Transition Plan (or the Re-Solution Plan, as applicable), including transition of regions (as applicable) to Service Provider's responsibility Failure to Achieve Critical...

Page 390
... Milestone Credits [***] 5. 5.1 RE-SOLUTION PLAN Overview As of the Execution Date, Service Provider has undertaken the Re-Solution Project to restructure certain Services and transition other Services to Successor Service Providers, if any, or Customer. 5.2 Objectives The primary objectives of...

Page 391
... Document No. 1 to that certain First Amended and Restated Master Services Agreement, dated as of November 1, 2010, between ServiceMaster Consumer Services, L.P. and International Business Machines Corporation. Unless otherwise defined herein, capitalized terms have the meanings set forth in the...

Page 392
... Document No. 1 to that certain First Amended and Restated Master Services Agreement, dated as of November 1, 2010, between ServiceMaster Consumer Services, L.P. and International Business Machines Corporation. Service Provider shall perform the tasks necessary to deliver the Deliverables and...

Page 393
... to update any information listed as "to be provided" in accordance with the Change Control Procedures. From time to time during the Term, but not less than annually, Service Provider shall update this Schedule G to reflect the actual Customer Software products and number of licenses/seats required...

Page 394
... Until such acceptance, Service Provider shall continue to provide TEM-related reports that Service Provider provided to Customer as of the Execution Date. [***] [9 pages omitted] 1 Subject to a request for confidential treatment, certain portions of this agreement have been intentionally omitted...

Page 395
... Document No. 1 to that certain First Amended and Restated Master Services Agreement, dated as of November 1, 2010, between ServiceMaster Consumer Services, L.P. and International Business Machines Corporation. Unless otherwise defined herein, capitalized terms have the meanings set forth in the...

Page 396
...to the confidential treatment request are designated by three asterisks ([***]). A complete version of this agreement has been separately filed with the Securities and Exchange Commission. The terms of the Master Service Agreement and its Schedules and Transaction Documents apply to this transaction...

Page 397
... Restated Schedule M-6 The terms of the IBM Customer Agreement and its Attachment for Multivendor Information Technology Recovery Services (or an equivalent agreement signed by both parties) apply to this transaction. [***] [3 pages omitted] Subject to a request for confidential treatment, certain...

Page 398
... Document No. 1 to that certain First Amended and Restated Master Services Agreement, dated as of November 1, 2010, between ServiceMaster Consumer Services, L.P. and International Business Machines Corporation. Unless otherwise defined herein, capitalized terms have the meanings set forth in the...

Page 399
... Provider shall provide reasonable assistance to Customer with respect to conducting a bid process for performance of the Services. Without limiting Service Provider's obligation to provide Customer Data or any other obligation under the Agreement, Service Provider shall, to the extent information...

Page 400
... Service Provider in accordance with the Agreement; and enable effective and lawful transfer of identified staff from Service Provider to Customer or any Successor Service Provider in accordance with the Agreement. (iii) (iv) (b) Service Provider shall prepare the Termination Assistance Plan...

Page 401
... Document No. 1 to that certain the First Amended and Restated Master Services Agreement, dated as of November 1, 2010, between ServiceMaster Consumer Services, L.P. and International Business Machines Corporation. Unless otherwise defined herein, capitalized terms have the meanings set forth in the...

Page 402
... Document No. 1 to that certain First Amended and Restated Master Services Agreement, dated as of November 1, 2010, between ServiceMaster Consumer Services, L.P. and International Business Machines Corporation. Unless otherwise defined herein, capitalized terms have the meanings set forth in the...

Page 403
... and Successor, which relate to the period preceding the Merger and the period succeeding the Merger, respectively. For purposes of the ratio calculation, the deficiency in our earnings to achieve a one-to-one ratio of earnings to fixed charges for the year ended December 31, 2010 was $20.5 million...

Page 404
QuickLinks Exhibit 12 RATIOS OF EARNINGS TO FIXED CHARGES

Page 405
..., Inc. American Home Shield of Virginia, Inc. American Home Shield of Washington, Inc. American Residential Services Holding L.L.C. AmeriSpec, Inc. Certified Systems, Inc. D. R. Church Landscape Co., Inc. FM Medic LLC Furniture Medic Limited Partnership GreenLawn, Ltd. Home Shield Insurance Agency...

Page 406
...Steward Insurance Company Terminix International, Inc. Terminix International, S.A. The ServiceMaster Acceptance Company Limited Partnership The ServiceMaster Foundation The Terminix International Company Limited Partnership TruGreen Companies L.L.C. TruGreen Home Landscape Services, L.L.C. TruGreen...

Page 407
QuickLinks Exhibit 21 SUBSIDIARIES OF THE SERVICEMASTER COMPANY

Page 408
... financial information; and Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. (b) Date: March 28, 2011 /s/ J. PATRICK SPAINHOUR J. Patrick Spainhour Chief Executive Officer

Page 409
QuickLinks Exhibit 31.1 CERTIFICATIONS

Page 410
...and report financial information; and Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. (b) Date: March 28, 2011 /s/ STEVEN J. MARTIN Steven J. Martin Senior Vice President and...

Page 411
QuickLinks Exhibit 31.2 CERTIFICATIONS

Page 412
... Chief Executive Officer of The ServiceMaster Company, certify that (i) the Annual Report on Form 10-K for the year ended December 31, 2010, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in such Annual Report...

Page 413
QuickLinks Exhibit 32.1 Certification of Chief Executive Officer Pursuant to Section 1350 of Chapter 63 of Title 18 of The United States Code

Page 414
...63 of Title 18 of The United States Code I, Steven J. Martin, the Senior Vice President and Chief Financial Officer of The ServiceMaster Company, certify that (i) the Annual Report on Form 10K for the year ended December 31, 2010, fully complies with the requirements of Section 13(a) or 15(d) of the...

Page 415
QuickLinks Exhibit 32.2 Certification of Chief Financial Officer Pursuant to Section 1350 of Chapter 63 of Title 18 of The United States Code

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