Exhibit 4.2


 


EXECUTION VERSION


 


HANGER ORTHOPEDIC GROUP, INC.


 


71/8% SENIOR NOTES DUE 2018


 


REGISTRATION RIGHTS AGREEMENT


 


November 2, 2010


 


Merrill Lynch, Pierce, Fenner & Smith Incorporated


Jefferies &
Company, Inc.


As
Representatives of the several


Initial
Purchasers under the Purchase


Agreement


c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated


One
Bryant Park


New
York, New York 10036


 


Ladies
and Gentlemen:


 


Hanger Orthopedic Group, Inc., a Delaware corporation (the “Company”), proposes to issue and
sell (the “Initial Placement”) to the
several initial purchasers named in the Purchase Agreement (as defined below)
(the “Initial Purchasers”), upon terms set
forth in a purchase agreement dated as of October 20, 2010 (the “Purchase Agreement”) among the
Company, the subsidiary guarantors named therein (the “Guarantors”)
and the Initial Purchasers, $200,000,000 of its 71/2% Senior Notes due 2018 (the “Initial Notes”).  As an inducement to the Initial Purchasers to
enter into the Purchase Agreement and purchase the Initial Notes and in
satisfaction of a condition to the Initial Purchasers’ obligations under the
Purchase Agreement, the Company and the Guarantors agree with each of Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Jefferies &
Company, Inc. (collectively, the “Representatives”)
and the other Initial Purchasers for the benefit of the holders from time to
time of the Initial Notes (including the Initial Purchasers) (each of the
foregoing a “Holder” and together the “Holders”), as follows:


 


 


1.                                      Definitions.  Capitalized terms used herein without
definition shall have their respective meanings set forth in the Purchase
Agreement.  As used in this Agreement,
the following capitalized defined terms shall have the following meanings:


 


“Affiliate” of any specified person
means any other person, directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified person.  For purposes of this definition, “control”
(including, with correlative meanings, the terms “controlling,” “controlled by”
and “under common control with”), as used with respect to any person, shall
mean the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of such person, whether through the
ownership of voting securities, by agreement or otherwise.


 


“Business Day” shall have the meaning
ascribed to such terms in Rule 14d-l under the Exchange Act.


 


“Closing Date” has the meaning set
forth in the Purchase Agreement.


 

















 


“Commission” means the Securities and
Exchange Commission.


 


“Company” has the meaning set forth
in the preamble hereto.


 


“Damages Payment Date” means, with
respect to the Initial Notes, each date on which interest is paid in accordance
with the Indenture.


 


“Delay Period” has the meaning set
forth in Section 4(i) hereof


 


“Exchange Act” means the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission promulgated thereunder.


 


“Exchange Guarantees” means
guarantees issued by the Guarantors with respect to the Exchange Notes,
identical in all material respects to the Guarantees issued with respect to the
Initial Notes.


 


“Exchange Notes” means securities
issued by the Company, identical in all material respects to the Notes to be issued
under the Indenture.


 


“Exchange Offer” means the proposed
offer to the Holders to issue and deliver to such Holders, in exchange for the
Initial Notes and the Guarantees, a like aggregate principal amount of Exchange
Notes and the Exchange Guarantees.


 


“Exchange Offer Consummation Deadline”
has the meaning set forth in Section 2(a) hereof.


 


“Exchange Offer Effectiveness Deadline”
has the meaning set forth in Section 2(a) hereof.


 


“Exchange Offer Filing Deadline” has
the meaning set forth in Section 2(a) hereof.


 


“Exchange Offer Registration Period”
means the longer of (A) the period until the expiration of the Exchange
Offer and (B) two years after effectiveness of the Exchange Offer
Registration Statement, exclusive of any period during which any stop order
shall be in effect suspending the effectiveness of the Exchange Offer
Registration Statement; provided, however, that in the event that
all resales of Exchange Notes (including, subject to the time periods set forth
herein, any resales by Exchanging Dealers) covered by such Exchange Offer
Registration Statement have been made, the Exchange Offer Registration
Statement need not remain continuously effective for the period set forth in
clause (B) above.


 


“Exchange Offer Registration Statement”
means a registration statement of the Company and the Guarantors on an
appropriate form under the Securities Act with respect to the Exchange Offer,
all amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.


 


“Exchanging Dealer” means any Holder
(which may include the Initial Purchasers) that is a broker-dealer, electing to
exchange Notes acquired for its own account as a result of market-making
activities or other trading activities for Exchange Notes.


 


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“Guarantee” means the guarantee by
any Guarantor of the Company’s obligations under the Indenture.


 


“Guarantors” has the meaning set
forth in the preamble hereto.


 


“Holder” has the meaning set forth in
the preamble hereto.


 


“Indenture” means the Indenture,
dated as of November 2, 2010, between the Company, the Guarantors and
Wilmington Trust Company, as trustee, pursuant to which the Notes are to be
issued, as such Indenture is amended or supplemented from time to time in
accordance with the terms thereof.


 


“Initial Notes” has the meaning set
forth in the preamble hereto, for so long as such securities constitute
Transfer Restricted Securities.


 


“Initial Placement” has the meaning
set forth in the preamble hereto.


 


“Initial Purchasers” has the meaning
set forth in the preamble hereto.


 


“Losses” has the meaning set forth in
Section 6(d) hereto.


 


“Majority Holders” means the Holders
of a majority of the aggregate principal amount of Notes registered under a
Registration Statement.


 


“Managing Underwriters” means the
investment banker or investment bankers and manager or managers that shall
administer an underwritten offering under a Shelf Registration Statement.


 


“Notes” means the Initial Notes and
Exchange Notes.


 


“Offering Memorandum” has the meaning
set forth in the Purchase Agreement.


 


“Prospectus” means the prospectus
included in any Registration Statement (including, without limitation, a
prospectus that discloses information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
under the Securities Act), as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any portion of the
Notes covered by such Registration Statement, and all amendments and
supplements to the Prospectus, including post-effective amendments.


 


“Purchase Agreement” has the meaning
set forth in the preamble hereto.


 


“Registration Default” has the
meaning set forth in Section 5(b) hereof.


 


“Registration Statement” means any
Exchange Offer Registration Statement or Shelf Registration Statement pursuant
to the provisions of this Agreement, amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto, and all
material incorporated by reference therein.


 


“Securities Act” means the Securities
Act of 1933, as amended, and the rules and regulations of the Commission
promulgated thereunder.


 


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“Shelf Effectiveness Deadline” has
the meaning set forth in Section 3(b) hereof.


 


“Shelf Filing Deadline” has the
meaning set forth in Section 3(a) hereof.


 


“Shelf Registration” means a
registration effected pursuant to Section 3 hereof.


 


“Shelf Registration Period” has the
meaning set forth in Section 3(b) hereof.


 


“Shelf Registration Statement” means
a “shelf” registration statement of the Company and the Guarantors pursuant to
the provisions of Section 3 hereof, which covers some or all of the
Initial Notes or Exchange Notes, as applicable, and the related Guarantees or
Exchange Guarantees on an appropriate form under Rule 415 under the
Securities Act, or any similar rule that may be adopted by the Commission,
amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.


 


“Transfer Restricted Securities”
means each Initial Note, until the earliest to occur of (i) the date on
which such Initial Note is exchanged in the Exchange Offer for an Exchange Note
entitled to be resold to the public by the Holder thereof without complying
with the prospectus delivery requirements of the Securities Act, (ii) the
date on which such Initial Note has been effectively registered under the
Securities Act and disposed of in accordance with a Shelf Registration
Statement and (iii) the later of (x) the date which is two years
after the date the Initial Notes were originally issued and (y) date on
which such Initial Note is distributed to the public by a broker-dealer
pursuant to the “Plan of Distribution” contemplated by the Exchange Offer
Registration Statement (including delivery of the Prospectus contained
therein).


 


“Trust Indenture Act” means the Trust
Indenture Act of 1939, as amended.


 


“Trustee” means Wilmington Trust
Company and any successors thereto.


 


“Underwriter” means any underwriter
of Notes and Guarantees in connection with an offering thereof under a Shelf
Registration Statement.


 


“Underwritten Registration” or “Underwritten Offering” means a
registration in which the Notes of the Company are sold to an underwriter for
reoffering to the public.


 


2.                                      Exchange Offer;
Resales of Exchange Notes by Exchanging Dealers; Private Exchange.


 


(a)                                 The Company and
the Guarantors shall prepare and file with the Commission the Exchange Offer
Registration Statement with respect to the Exchange Offer on or prior to the
90th calendar day after the Closing Date (the “Exchange
Offer Filing Deadline”). 
The Company and the Guarantors shall use their respective commercially
reasonable efforts (i) to cause the Exchange Offer Registration Statement
to be declared effective under the Securities Act on or prior to the 180th
calendar day following the Closing Date (the “Exchange
Offer Effectiveness Deadline”) and remain effective until the
closing of the Exchange Offer and (ii) to consummate the Exchange Offer on
or prior to the 30th Business Day following the date on which the Exchange
Offer Registration Statement was declared effective by the Commission (the “Exchange Offer Consummation Deadline”).


 


(b)                                 Upon the
effectiveness of the Exchange Offer Registration Statement, the Company and the
Guarantors shall promptly commence the Exchange Offer, it being the 


 


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objective of such Exchange
Offer to enable each Holder electing to exchange Initial Notes for Exchange
Notes (assuming that such Holder (x) is not an “affiliate” of the Company
within the meaning of the Securities Act, (y) is not a broker-dealer that
acquired the Initial Notes in a transaction other than as a part of its
market-making or other trading activities and (z) if such Holder is not a
broker-dealer, acquires the Exchange Notes in the ordinary course of such
Holder’s business, is not participating in the distribution of the Exchange
Notes and has no arrangements or understandings with any person to participate
in the distribution of the Exchange Notes) to resell such Exchange Notes from
and after their receipt without any limitations or restrictions under the
Securities Act and without material restrictions under the securities laws of a
substantial proportion of the several states of the United States.


 


(c)                                  In connection
with the Exchange Offer, the Company shall mail to each Holder a copy of the
Prospectus forming part of the Exchange Offer Registration Statement, together
with an appropriate letter of transmittal and related documents, stating, in
addition to such other disclosures as are required by applicable law:


 


(i)                                     that the
Exchange Offer is being made pursuant to this Agreement and that all Initial
Notes validly tendered will be accepted for exchange;


 


(ii)                                  the dates of
acceptance for exchange;


 


(iii)                               that any
Initial Notes not tendered will remain outstanding and continue to accrue
interest, but will not retain any rights under this Agreement;


 


(iv)                              that Holders
electing to have Initial Notes exchanged pursuant to the Exchange Offer will be
required to surrender such Initial Notes, together with the enclosed letters of
transmittal, to the institution and at the address (located in the Borough of
Manhattan, The City of New York) specified in the notice prior to the close of
business on the last day of acceptance for exchange; and


 


(v)                                 that Holders
will be entitled to withdraw their election, not later than the close of
business on the last day of acceptance for exchange, by sending to the
institution and at the address (located in the Borough of Manhattan, The City
of New York) specified in the notice a telegram, telex, facsimile transmission
or letter setting forth the name of such Holder, the aggregate principal amount
of Initial Notes delivered for exchange and a statement that such Holder is
withdrawing his election to have such Initial Notes exchanged; and shall keep
the Exchange Offer open for acceptance for not less than 20 days (or longer if
required by applicable law) after the date notice thereof is mailed to the
Holders; utilize the services of a depositary for the Exchange Offer with an
address in the Borough of Manhattan, The City of New York; and comply in all
respects with all applicable laws relating to the Exchange Offer.


 


(d)                                 As soon as
practicable after the close of the Exchange Offer, the Company shall:


 


(i)                                     accept for
exchange all Initial Notes duly tendered and not validly withdrawn pursuant to
the Exchange Offer;


 


(ii)                                  deliver to the
Trustee for cancellation all Initial Notes so accepted for exchange; and


 


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(iii)                               cause the
Trustee promptly to authenticate and deliver to each Holder Exchange Notes
equal in principal amount to the Initial Notes of such Holder so accepted for
exchange.


 


(e)                                  The Initial
Purchasers, the Company and the Guarantors acknowledge that, pursuant to
interpretations by the staff of the Commission of Section 5 of the
Securities Act, and in the absence of an applicable exemption therefrom, each
Exchanging Dealer is required to deliver a Prospectus in connection with a sale
of any Exchange Notes received by such Exchanging Dealer pursuant to the
Exchange Offer in exchange for Initial Notes acquired for its own account as a
result of market-making activities or other trading activities.  Accordingly, the Company and the Guarantors
shall:


 


(i)                                     include the
information set forth in Annex A hereto on the cover of the Exchange Offer
Registration Statement, in Annex B hereto in the forepart of the Exchange Offer
Registration Statement in a section setting forth details of the Exchange
Offer, in Annex C hereto in the underwriting or plan of distribution section of
the Prospectus forming a part of the Exchange Offer Registration Statement, and
in Annex D hereto in the letter of transmittal delivered pursuant to the
Exchange Offer; and


 


(ii)                                  use their
respective commercially reasonable efforts to keep the Exchange Offer
Registration Statement continuously effective under the Securities Act during
the Exchange Offer Registration Period for delivery of the Prospectus included
therein by Exchanging Dealers in connection with sales of Exchange Notes
received pursuant to the Exchange Offer, as contemplated by Section 4(h) below;
provided, however, that the Company and the Guarantors shall not
be required to maintain the effectiveness of the Exchange Offer Registration
Statement for more than 30 days following the expiration of the Exchange Offer
unless the Company and the Guarantors have been notified in writing on or prior
to the 30th day following the expiration of the Exchange Offer by one or more
Exchanging Dealers that such Holder has received Exchange Notes as to which it
will be required to deliver a Prospectus upon resale.


 


(f)                                   In the event
that an Initial Purchaser determines that it is not eligible to participate in
the Exchange Offer with respect to the exchange of Initial Notes constituting
any portion of an unsold allotment, upon the effectiveness of the Shelf
Registration Statement as contemplated by Section 3 hereof and at the
request of the Initial Purchasers, the Company and the Guarantors shall issue
and deliver to the Initial Purchasers, or to the party purchasing Initial Notes
registered under the Shelf Registration Statement from the Initial Purchasers,
in exchange for such Initial Notes, a like principal amount of Exchange
Notes.  The Company and the Guarantors
shall use their respective commercially reasonable efforts to cause the CUSIP
Service Bureau to issue the same CUSIP number for such Exchange Notes as for
Exchange Notes issued pursuant to the Exchange Offer.


 


(g)                                  The Company and
the Guarantors shall use their respective commercially reasonable efforts to
complete the Exchange Offer as provided above and shall comply with the
applicable requirements of the Securities Act, the Exchange Act and other
applicable laws and regulations in connection with the Exchange Offer.  The Exchange Offer shall not be subject to
any conditions, other than that (i) the Exchange Offer does not violate
applicable law or any applicable interpretation of the staff of the Commission,
(ii) no action or proceeding shall have been instituted or threatened in
any court or by any governmental agency which might materially impair the
ability of the Company or any of the Guarantors to proceed with the Exchange
Offer, and no material adverse development shall have occurred in any existing
action or proceeding 


 


6

















 


with respect to the Company
or any of the Guarantors, and (iii) all governmental approvals shall have
been obtained, which approvals the Company and the Guarantors deem necessary
for the expiration of the Exchange Offer. 
The Company and the Guarantors shall inform the Initial Purchasers, upon
their request, of the names and addresses of the Holders to whom the Exchange
Offer is made, and the Initial Purchasers shall have the right, subject to
applicable law, to contact such Holders and otherwise facilitate the tender of
Initial Notes in the Exchange Offer.


 


(h)                                 As a condition
to its participation in the Exchange Offer pursuant to the terms of this
Agreement, each Holder of Initial Notes shall furnish, upon the request of the
Company and the Guarantors, prior to the expiration thereof, a written
representation to the Company and the Guarantors (which may be contained in the
letter of transmittal contemplated by the Exchange Offer Registration
Statement) to the effect that (A) it is not an Affiliate of the Company or
any of the Guarantors, (B) it is not engaged in, and does not intend to
engage in, and has no arrangement or understanding with any person to
participate in, a distribution of the Exchange Notes to be issued in the
Exchange Offer and (C) it is acquiring the Exchange Notes in its ordinary
course of business.  In addition, all
such Holders of Initial Notes shall otherwise cooperate in the Company’s and
the Guarantors’ preparations for the Exchange Offer.  Each Holder hereby acknowledges and agrees
that any broker-dealer and any such Holder using the Exchange Offer to
participate in a distribution of the securities to be acquired in the Exchange
Offer (1) could not under Commission policy as in effect on the date of
this Agreement rely on the position of the Commission enunciated in Morgan
Stanley and Co., Inc. (available June 5, 1991) and Exxon
Capital Holdings Corporation (available May 13, 1988), as interpreted
in the Commission’s letter to Shearman & Sterling dated July 2,
1993, and similar no-action letters, and (2) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with a secondary resale transaction and that such a secondary resale
transaction should be covered by an effective registration statement containing
the selling security holder information required by Item 507 or 508, as
applicable, of Regulation S-K if the resales are of Exchange Notes obtained by
such Holder in exchange for Initial Notes acquired by such Holder directly from
the Company and the Guarantors.


 


3.                                      Shelf
Registration.  If (i) the
Company and the Guarantors are not required to file the Exchange Offer
Registration Statement, (ii) because of any change in law or applicable
interpretations thereof by the Commission’s staff, the Company and the
Guarantors determine upon advice of their outside counsel that they are not
permitted to effect the Exchange Offer as contemplated by Section 2 hereof
or (iii) any Holder of Transfer Restricted Securities notifies the Company
and the Guarantors prior to the 20th day following the expiration of the
Exchange Offer that:  (A) such
Holder is prohibited by applicable law or Commission policy from participating
in the Exchange Offer, (B) such Holder may not resell the Exchange Notes
acquired by it in the Exchange Offer to the public without delivering a
Prospectus and that the Prospectus contained in the Exchange Offer Registration
Statement is not appropriate or available for such resales by  such Holder or (C) such Holder is an Exchanging
Dealer and holds Initial Notes acquired directly from the Company and the
Guarantors or one of their Affiliates (it being understood that, for purposes
of this Section 3, (x) the requirement that the Initial Purchasers
deliver a Prospectus containing the information required by Items 507 and/or
508 of Regulation S-K under the Securities Act in connection with sales of
Exchange Notes acquired in exchange for such Initial Notes shall result in such
Exchange Notes being not “freely tradeable” and (y) the requirement that
an Exchanging Dealer deliver a Prospectus in connection with sales of Exchange
Notes acquired in the Exchange Offer in exchange for Initial Notes acquired as
a result of market-making activities or other trading activities shall not result
in such Exchange Notes being not “freely tradeable”), the following provisions
shall apply:


 


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(a)                                 The Company and
the Guarantors shall prepare and file with the Commission, on or prior to the
30th calendar day after such filing obligation arises (the “Shelf Filing Deadline”), a Shelf
Registration Statement relating to the offer and sale of the Initial Notes and
Guarantees or the Exchange Notes and Exchange Guarantees, as applicable, by the
Holders from time to time in accordance with the methods of distribution
elected by such Holders and set forth in such Shelf Registration Statement and Rule 415
under the Securities Act; provided that, with respect to Exchange Notes
and Exchange Guarantees received by the Initial Purchasers in exchange for
Initial Notes and the Guarantees constituting any portion of an unsold
allotment, the Company and the Guarantors may, if permitted by current
interpretations by the Commission’s staff, file a post-effective amendment to
the Exchange Offer Registration Statement containing the information required
by Regulation S-K Items 507 and/or 508, as applicable, in satisfaction of their
obligations under this paragraph (a) with respect thereto, and any such
Exchange Offer Registration Statement, as so amended, shall be referred to
herein as, and governed by the provisions herein applicable to, a Shelf
Registration Statement.


 


(b)                                 The Company and
the Guarantors shall use their respective commercially reasonable efforts to
cause the Shelf Registration Statement to be declared effective under the
Securities Act on or prior to the 90th calendar day after the Shelf
Registration Statement is required to be filed under this Section 3 (the “Shelf Effectiveness Deadline”) and
to keep such Shelf Registration Statement continuously effective in order to
permit the Prospectus contained therein to be usable by Holders until the
earliest of (i) one year after the original issue date of the Notes
covered thereby; provided that this clause (i) shall not be
considered in determining the date until which the Shelf Registration Statement
remains effective for any Holder that is an Affiliate of the Investors (as
defined in the Indentures), (ii) such time as all of the Notes have been
sold thereunder or (iii) the date upon which all Notes covered by such
Shelf Registration Statement become eligible for resale, without regard to
volume, manner of sale or other restrictions contained in Rule 144 (in any
such case, such period being called the “Shelf Registration Period”).  The Company and the Guarantors shall be
deemed not to have used their respective commercially reasonable efforts
to  keep the Shelf Registration Statement
effective during the requisite period if the Company or any of the Guarantors
voluntarily takes any action that would result in Holders of Notes covered
thereby not being able to offer and sell such Notes during that period, unless (i) such
action is required by applicable law, (ii) the Company and the Guarantors
comply with this Agreement or (iii) such action is taken by the Company or
any of the Guarantors in good faith and for valid business reasons (not
including avoidance of the Company’s and the Guarantors’ obligations
hereunder), including the acquisition or divestiture of assets, so long as the
Company and the Guarantors promptly thereafter comply with the requirements of Section 4(m) hereof,
if applicable.


 


4.                                      Registration
Procedures.  In
connection with any Exchange Offer Registration Statement and any Shelf
Registration Statement, the following provisions shall apply:


 


(a)                                 The Company and
the Guarantors shall, within a reasonable time prior to the filing of any
Registration Statement, any Prospectus, any amendment to a Registration
Statement or amendment or supplement to a Prospectus or any document which is
to be incorporated by reference into a Registration Statement or a Prospectus
after initial filing of a Registration Statement, provide copies of such
document to the Initial Purchasers and their counsel (and, in the case of a Shelf
Registration Statement, the Majority Holders and their counsel, upon their
request) and make such representatives of the Company and the Guarantors as
shall be reasonably requested by the Initial Purchasers or their counsel (and,
in the case of a Shelf Registration Statement, the Majority Holders or their
counsel) available for discussion of such document, and shall not at any time
file or make any amendment to the Registration Statement, any Prospectus 


 


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or any amendment of or
supplement to a Registration Statement or a Prospectus or any document which is
to be incorporated by reference into a Registration Statement or a Prospectus,
of which the Initial Purchasers and their counsel (and, in the case of a Shelf
Registration Statement, the Majority Holders and their counsel) shall not have
previously been advised and furnished a copy or to which the Initial Purchasers
or their counsel (and, in the case of a Shelf Registration Statement, the
Majority Holders or their counsel) shall object, except for any amendment or
supplement or document (a copy of which has been previously furnished to the
Initial Purchasers and their counsel (and, in the case of a Shelf Registration
Statement, the Majority Holders and their counsel, upon their request)) which
counsel to the Company and the Guarantors shall advise the Company and the
Guarantors, in the form of a written opinion, is required in order to comply
with applicable law; the Initial Purchasers agree that if they receive timely
notice and drafts under this clause (a), they will not take actions or make
objections pursuant to this clause (a) such that the Company and the
Guarantors are unable to comply with its obligations under Section 2.


 


(b)                                 The Company and
the Guarantors shall ensure that:


 


(i)                                     any
Registration Statement and any amendment thereto and any Prospectus contained
therein and any amendment or supplement thereto complies in all material
respects with the Securities Act and the rules and regulations thereunder;


 


(ii)                                  any
Registration Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and


 


(iii)                               any Prospectus
forming part of any Registration Statement, including any amendment or
supplement to such Prospectus, does not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.


 


(c)                                  (1) The
Company and the Guarantors shall advise the Initial Purchasers and, in the case
of a Shelf Registration Statement, the Holders of Initial Notes covered
thereby, and, if requested by the Initial Purchasers or any such Holder,
confirm such advice in writing:


 


(i)                                     when a
Registration Statement and any amendment thereto has been filed with the
Commission and when the Registration Statement or any post-effective amendment
thereto has become effective; and


 


(ii)                                  of any request
by the Commission for amendments or supplements to the Registration Statement
or the Prospectus included therein or for additional information.


 


(2)                                 During the
Shelf Registration Period or the Exchange Offer Registration Period, as
applicable, the Company and the Guarantors shall advise the Initial Purchasers
and, in the case of a Shelf Registration Statement, the Holders of Initial
Notes or Exchange Notes covered thereby, and, in the case of an Exchange Offer
Registration Statement, any Exchanging Dealer that has provided in writing to
the Company and the Guarantors a telephone or facsimile number and address for
notices, and, if requested by the Initial Purchasers or any such Holder or
Exchanging Dealer, confirm such advice in writing:


 


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(i)                                     of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose;


 


(ii)                                  of the receipt by the
Company and the Guarantors of any notification with respect to the suspension
of the qualification of the Initial Notes or Exchange Notes included therein
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose; and


 


(iii)                               of the happening of any
event that requires the making of any changes in the Registration Statement or
the Prospectus so that, as of such date, the Registration Statement or the
Prospectus does not include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein (in the case of
the Prospectus, in light of the circumstances under which they were made) not
misleading (which advice shall be accompanied by an instruction to suspend the
use of the Prospectus until the requisite changes have been made).


 


(d)                                 The Company and
the Guarantors shall use their respective commercially reasonable efforts to
obtain the withdrawal of any order suspending the effectiveness of any
Registration Statement at the earliest possible time.


 


(e)                                  The Company and
the Guarantors shall furnish to each Holder of Notes covered by any Shelf
Registration Statement that so requests, without charge, at least one copy of
such Shelf Registration Statement and any post-effective amendment thereto,
including financial statements and schedules, and, if the Holder so requests in
writing, all exhibits thereto.


 


(f)                                   The Company and
the Guarantors shall, during the Shelf Registration Period, deliver to each
Holder of Notes covered by any Shelf Registration Statement, without charge, as
many copies of the Prospectus (including each preliminary Prospectus) included
in such Shelf Registration Statement and any amendment or supplement thereto as
such Holder may reasonably request; and the Company and the Guarantors consent
to the use of the Prospectus or any amendment or supplement thereto by each of
the selling Holders of Notes in connection with the offering and sale of the
Notes covered by the Prospectus or any amendment or supplement thereto.


 


(g)                                  The Company and
the Guarantors shall furnish to each Exchanging Dealer that so requests,
without charge, at least one copy of the Exchange Offer Registration Statement
and any post-effective amendment thereto, including financial statements and
schedules, any documents incorporated by reference therein and, if the
Exchanging Dealer so requests in writing, all exhibits thereto.


 


(h)                                 The Company and
the Guarantors shall, during the Exchange Offer Registration Period, promptly
deliver to each Exchanging Dealer, without charge, as many copies of the
Prospectus included in such Exchange Offer Registration Statement and any
amendment or supplement thereto as such Exchanging Dealer may reasonably
request for delivery by such Exchanging Dealer in connection with a sale of
Exchange Notes received by it pursuant to the Exchange Offer; and the Company
and the Guarantors consent to the use of the Prospectus or any amendment or
supplement thereto by any such Exchanging Dealer, as provided in Section 2(e) above.


 


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(i)            Each Holder of Notes and each Exchange Dealer agrees by
its acquisition of such Notes by a Holder or Exchange Notes to be sold by such
Exchange Dealer, as the case may be, that upon actual receipt of any notice
from the Company (x) of the happening of any event of the kind described
in paragraph (c)(2)(i), (c)(2)(ii), or (c)(2)(iii) of this Section 4,
or (y) that the Board of Directors of the Company has resolved that the
Company has a bona fide business purpose for doing so, then the Company may
delay the filing or the effectiveness of the Exchange Offer Registration
Statement or the Shelf Registration Statement (if not then filed or effective,
as applicable) and shall not be required to maintain the effectiveness thereof
or amend or supplement the Exchange Offer Registration Statement or the Shelf
Registration Statement, in all cases, for a period (a “Delay
Period”) expiring upon the earlier to occur of (i) in the
case of the immediately preceding clause (x), such Holder’s or Exchange Dealer’s
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 4(m) hereof, or until it is advised in writing by the Company
that the use of the applicable Prospectus may be resumed, and has received
copies of any amendments or supplements thereto, or (ii) in the case of
the immediately preceding clause (y), the date which is the earlier of (A) the
date on which such business purpose ceases to interfere with the Company’s
obligations to file or maintain the effectiveness of any such Registration
Statement pursuant to this Agreement or (B) 60 days after the Company
notifies the Holders of such good faith determination.  There shall not be more than 60 days of Delay
Periods during any 12-month period.  Each
of the Exchange Offer Registration Period or the Shelf Registration Period, if
applicable, shall be extended by the number of days during any Delay
Period.  Any Delay Period will not alter
the obligations of the Company and the Guarantors to pay Additional Interest
under the circumstances set forth in Section 6 hereof.


 


(j)            Prior to the Exchange Offer or any other offering of
Initial Notes or Exchange Notes pursuant to any Registration Statement, the
Company and the Guarantors shall register or qualify or cooperate with the
Holders of Notes included therein and their respective counsel in connection
with the registration or qualification of such Initial Notes or Exchange Notes
for offer and sale under the securities or blue sky laws of such states as any
such Holders reasonably request in writing and do any and all other acts or
things necessary or advisable to enable the offer and sale in such states of
the Notes covered by such Registration Statement; provided, however,
that none of the Company or any of the Guarantors will be required to qualify
as a foreign corporation or as a dealer in securities in any jurisdiction in
which it is not then so qualified, to file any general consent to service of
process or to take any action that would subject it to general service of
process in any such jurisdiction where it is not then so subject or to subject
itself to taxation in respect of doing business in any jurisdiction in which it
is not otherwise so subject.


 


(k)           The Company and the Guarantors shall issue, upon the
request of any Holder of Initial Notes covered by the Shelf Registration
Statement, Exchange Notes, having an aggregate principal amount equal to the
aggregate principal amount of Initial Notes surrendered to the Company and the
Guarantors by such Holder in exchange therefor or being sold by such Holder;
such Exchange Notes to be registered in the name of such Holder or in the name
of the purchaser(s) of such Exchange Notes, as the case may be; in return,
the Initial Notes held by such Holder shall be surrendered to the Company for
cancellation.


 


(l)            The Company and the Guarantors shall cooperate with the
Holders to facilitate the timely preparation and delivery of certificates
representing Initial Notes or Exchange Notes to be sold pursuant to any
Registration Statement free of any restrictive legends and in denominations of
$2,000 or an integral multiples of $1,000 in excess thereof and registered in
such names as Holders may request prior to sales of Initial Notes or Exchange
Notes pursuant to such Registration Statement.


 


11

















 


(m)          Upon the occurrence of any event contemplated by paragraph
(c)(2)(iii) of this Section 4, the Company and the Guarantors shall
promptly prepare and file a post-effective amendment to any Registration
Statement or an amendment or supplement to the related Prospectus or any other
required document so that, as thereafter delivered to purchasers of the Initial
Notes or Exchange Notes included therein, the Prospectus will not include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading and, in the case of a Shelf Registration
Statement, notify the Holders to suspend use of the Prospectus as promptly as
practicable after the occurrence of such an event.  Notwithstanding the foregoing, the Company
and the Guarantors shall not be required to amend or supplement a Shelf
Registration Statement, any related Prospectus or any document incorporated
therein by reference, for a period not to exceed an aggregate of 30 days in any
calendar year, if the Company determines in its good faith judgment that the
disclosure of such event at such time would have a material adverse effect on
the business, operations, or prospects of the Company and the Guarantors or the
disclosure otherwise related to a pending material business transaction that
has not yet been publicly disclosed.


 


(n)           Not later than the effective date of any such Registration
Statement hereunder, the Company and the Guarantors shall provide a CUSIP
number for the Initial Notes or Exchange Notes, as the case may be, registered
under such Registration Statement, and provide the Trustee with certificates
for such Initial Notes or Exchange Notes, in a form eligible for deposit with
The Depository Trust Company.


 


(o)           The Company and the Guarantors shall use their respective
commercially reasonable efforts to comply with all applicable rules and
regulations of the Commission and shall make generally available to its
security holders as soon as practicable after the effective date of the
applicable Registration Statement an earnings statement meeting the
requirements of Rule 158 under the Securities Act.


 


(p)           The Company and the Guarantors shall cause the Indenture
to be qualified under the Trust Indenture Act not later than the effective date
of the first Registration Statement required by this Agreement, and, in
connection therewith, cooperate with the Trustee and the Holders of Initial
Notes or Exchange Notes to effect such changes to the Indenture as may be
required for such Indenture to be so qualified in accordance with the terms of
the Trust Indenture Act; and to execute, and use its commercially reasonable
efforts to cause the Trustee to execute, all documents that may be required to
effect such changes and all other forms and documents required to be filed with
the Commission to enable such Indenture to be so qualified in a timely manner.


 


(q)           The Company and the Guarantors may require each Holder of
Initial Notes to be sold pursuant to any Shelf Registration Statement to
furnish to the Company and the Guarantors such information regarding the Holder
and the distribution of such Initial Notes as the Company and the Guarantors
may from time to time reasonably require for inclusion in such Registration
Statement.


 


(r)            The Company and the Guarantors shall, if requested,
promptly incorporate in a Prospectus supplement or post-effective amendment to
a Shelf Registration Statement, such information as the Managing Underwriters,
if any, and Majority Holders reasonably agree should be included therein, and
shall make all required filings of such Prospectus supplement or post-effective
amendment promptly upon notification of the matters to be incorporated in such
Prospectus supplement or post-effective amendment.


 


12

















 


(s)            In the case of any Shelf Registration Statement, the
Company and the Guarantors shall enter into such agreements (including
underwriting agreements) and take all other appropriate actions in order to
expedite or to facilitate the registration or the disposition of any Initial
Notes included therein, and in connection therewith, if an underwriting
agreement is entered into, cause the same to contain indemnification provisions
and procedures no less favorable than those set forth in Section 6 (or
such other provisions and procedures acceptable to the Majority Holders and the
Managing Underwriters, if any) with respect to all parties to be indemnified
pursuant to Section 6.


 


(t)            In the case of any Shelf Registration Statement, the
Company and the Guarantors shall:


 


(i)            make reasonably available for inspection by the Holders
of Notes to be registered thereunder, any underwriter participating in any disposition
pursuant to such Shelf Registration Statement, and any attorney, accountant or
other agent retained by the Holders or any such underwriter all relevant
financial and other records, pertinent corporate documents and properties of
the Company and any of its subsidiaries;


 


(ii)           cause the Company’s officers, directors and employees to
supply all relevant information reasonably requested by the Holders or any such
underwriter, attorney, accountant or agent in connection with any such
Registration Statement as is customary for similar due diligence examinations
and make such representatives of the Company as shall be reasonably requested
by the Initial Purchasers or Managing Underwriters, if any, available for
discussion of any such Registration Statement; provided, however,
that any non-public information that is designated in writing by the Company,
in good faith, as confidential at the time of delivery of such information
shall be kept confidential by the Holders or any such underwriter, attorney, accountant
or agent, unless such disclosure is made in connection with a court proceeding
or required by law, or such information becomes available to the public
generally or through a third party without an accompanying obligation of
confidentiality other than as a result of a disclosure of such information by
any such Holder, underwriter, attorney, accountant or agent;


 


(iii)          make such representations and warranties to the Holders of
Notes registered thereunder and the underwriters, if any, in form, substance
and scope as are customarily made by issuers to underwriters in similar
underwritten offerings as may be reasonably requested by them;


 


(iv)          obtain opinions of counsel to the Company and the
Guarantors and updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the Managing Underwriters, if
any) addressed to each selling Holder and the underwriters, if any, covering
such matters as are customarily covered in opinions requested in similar
underwritten offerings and such other matters as may be reasonably requested by
such Holders and underwriters;


 


(v)           obtain “cold comfort” letters and updates thereof from the
independent certified public accountants of the Company (and, if necessary, any
other independent certified public accountants of any subsidiary of the Company
or of any business acquired by the Company for which financial statements and
financial data are, or are required to be, included in the Registration
Statement), addressed to the underwriters, if any, and use reasonable efforts
to have such letter addressed to the selling Holders of 


 


13

















 


Notes registered thereunder
(to the extent consistent with Statement on Auditing Standards No. 72 (“SAS 72”) of the American Institute
of Certified Public Accountants (AICPA)), in customary form and covering
matters of the type customarily covered in “cold comfort” letters in connection
with similar underwritten offerings, or if the provision of such “cold comfort”
letters is not permitted by SAS 72 or if requested by the Initial Purchasers or
their counsel in lieu of a “cold comfort” letter, an agreed-upon procedures
letter under Statement on Auditing Standards No. 75 of the AICPA, covering
matters requested by the Initial Purchasers or their counsel; and


 


(vi)          deliver such documents and certificates as may be
reasonably requested by the Majority Holders and the Managing Underwriters, if
any, and customarily delivered in similar offerings, including those to evidence
compliance with Section 4(m) and with any conditions contained in the
underwriting agreement or other agreement entered into by the Company and the
Guarantors.


 


The foregoing actions set forth in clauses (iii),
(iv), (v) and (vi) of this Section 4(t) shall be performed
at (A) the effectiveness of such Shelf Registration Statement and each
post-effective amendment thereto and (B) each closing under any
underwriting or similar agreement as and to the extent required thereunder.


 


(u)           The Company and the Guarantors shall, in the case of a
Shelf Registration, use its commercially reasonable efforts to cause all Notes
to be listed on any securities exchange or any automated quotation system on
which similar securities issued by the Company and the Guarantors are then
listed if requested by the Majority Holders, to the extent such Notes satisfy
applicable listing requirements.


 


5.             Registration Expenses; Remedies.


 


(a)           The Company and the Guarantors shall bear all expenses
incurred in connection with the performance of their obligations under Sections
2, 3 and 4 hereof, including without limitation:  (i) all Commission, stock exchange or
Financial Industry Regulatory Authority, Inc. registration and filing
fees, (ii) all fees and expenses incurred in connection with compliance
with state securities or blue sky laws (including reasonable fees and
disbursements of counsel for any underwriters or Holders in connection with
blue sky qualification of any of the Initial Notes and Guarantees or Exchange
Notes and Exchange Guarantees), (iii) all expenses of any persons in
preparing or assisting in preparing, word processing, printing and distributing
any Registration Statement, any Prospectus, any amendments or supplements
thereto, any underwriting agreements, securities sales agreements and other
documents relating to the performance of and compliance with this Agreement, (iv) the
fees and disbursements of the Trustee and its counsel, (v) the fees and
disbursements of counsel for the Company and the Guarantors and, in the case of
a Shelf Registration Statement, the fees and disbursements of one counsel for
the Holders (which counsel shall be selected by the Majority Holders and which
counsel may also be counsel for the Initial Purchasers) and, in the case of an
Exchange Offer Registration Statement, the fees and expenses of counsel to the
Initial Purchasers acting in connection therewith and (vii) the fees and
disbursements of the independent public accountants of the Company, including
the expenses of any special audits or “cold comfort” letters required by or
incident to such performance and compliance, but excluding fees and expenses of
counsel to the underwriters or the Holders (other than fees and expenses set
forth in clauses (ii) and (v) above) and underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
Notes by a Holder.


 


(b)           If any of the following occurs:


 


14

















 


(i)            the Company and the Guarantors fail to file the Exchange
Offer Registration Statement on or prior to the Exchange Offer Filing Deadline
or the Shelf Registration Statement on or prior to the Shelf Filing Deadline,
as the case may be, or, if that day is not a Business Day, then the next day
that is a Business Day;


 


(ii)           the Exchange Offer Registration Statement or the Shelf
Registration Statement, as the case may be, is not declared effective by the
Commission on or prior to the Exchange Offer Effectiveness Deadline or the
Shelf Effectiveness Deadline, respectively, or, if that day is not a Business
Day, then the next day that is a Business Day;


 


(iii)          the Company and the Guarantors fail to consummate the
Exchange Offer by the Exchange Offer Consummation Deadline; or


 


(iv)          the Exchange Offer Registration Statement or the Shelf
Registration Statement, as the case may be, is declared effective but
thereafter ceases to be effective or usable in connection with resales of
Transfer Restricted Securities during the periods specified in this Agreement
(each such event referred to in clauses (i) through (iv) above, a “Registration Default”),


 


then
the Company and the Guarantors will pay additional interest (“Additional Interest”) to each Holder
of Notes, with respect to the first 90-day period immediately following the
occurrence of the first Registration Default in an amount equal to 0.25% per annum on the principal amount of Notes held by such
Holder.  The amount of the Additional
Interest will increase by an additional 0.25% per annum on
the principal amount of Notes with respect to each subsequent 90-day period
until all Registration Defaults have been cured, up to a maximum amount of
Additional Interest for all Registration Defaults of 1.00% per annum.


 


(c)           The Company and the Guarantors shall pay all accrued
Additional Interest on each Damages Payment Date to the Global Note Holder by
wire transfer of immediately available funds or by federal funds check and to
Holders of Certificated Notes by wire transfer to the accounts specified by
them or by mailing checks to their registered addresses if no such accounts
have been specified.


 


(d)           Following the cure of all Registration Defaults, the
accrual of Additional Interest will cease.


 


(e)           Without limiting the remedies available to the Initial
Purchasers and the Holders, the Company and the Guarantors acknowledge that any
failure by them to comply with their obligations under Sections 2 and 3 hereof
may result in material irreparable injury to the Initial Purchasers or the
Holders for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of any such failure, the Initial Purchasers or any Holder may obtain such
relief as may be required to specifically enforce the Company’s and the
Guarantors’ obligations under Sections 2 and 3 hereof.


 


(f)            Upon the occurrence of a Registration Default, the
Company shall promptly notify the Trustee in writing of the occurrence thereof
and, prior to the relevant Damages Payment Date, shall notify the Trustee in writing
of the Additional Interest that shall be due and payable on the Notes.


 


15

















 


6.             Indemnification and Contribution.


 


(a)           In connection with any Registration Statement, the Company
and the Guarantors agree to indemnify and hold harmless each Holder of Notes
covered thereby (including the Initial Purchasers, the Market Maker and, with
respect to any Prospectus delivery as contemplated by Sections 2(e) and 4(h) hereof,
each Exchanging Dealer) the directors, officers, employees and Affiliates of
such Holder and each person who controls such Holder within the meaning of
either the Securities Act or the Exchange Act, against any and all losses,
claims, damages, liabilities, and expenses (including, without limitation, and
as incurred, all reasonable costs of investigating, preparing, pursuing,
settling, compromising, paying or defending any claim or action or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, including the reasonable fees and expenses of counsel to such
Holder), joint or several, to which they or any of them may become subject
under the Securities Act, the Exchange Act or other U.S. federal or state
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities, judgments, actions and expenses arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in such Registration Statement as originally filed or
in any amendment thereof, or in any preliminary Prospectus or Prospectus, or in
any amendment thereof or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein (in the case of
any Prospectus, in light of the circumstances under which they were made) not
misleading, and agrees to reimburse each such indemnified party, as incurred,
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or expenses;
provided, however, that the Company and the Guarantors will not
be liable in any case to the extent that any such loss, claim, damage,
liability or expense arises out of or is based upon any such untrue statement
or alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company and the Guarantors by or on behalf of any such indemnified party
specifically for inclusion therein; provided  further, however,
that the Company and the Guarantors will not be liable in any case with respect
to any untrue statement or omission or alleged untrue statement or omission made
in any preliminary Prospectus or Prospectus, or in any amendment thereof or
supplement thereto to the extent that any such loss, claim, damage, liability
or expense (or action in respect thereof) resulted from the fact that any
indemnified party sold Notes to a person to whom there was not sent or given,
at or prior to the written confirmation of such sale, a copy of the Prospectus
as then amended or supplemented, if the Company and the Guarantors had
previously complied with the provisions of Section 4(c)(2) and 4(f) or
4(h) hereof and if the untrue statement contained in or omission from such
preliminary Prospectus or Prospectus was corrected in the Prospectus as then
amended or supplemented.  This indemnity
agreement will be in addition to any liability that the Company and the
Guarantors may otherwise have.


 


The Company and the Guarantors also agree to indemnify or contribute to
Losses of, as provided in Section 6(d) hereof, any underwriters of
Notes registered under a Shelf Registration Statement, their employees,
officers, directors and Affiliates and each person who controls such
underwriters on the same basis as that of the indemnification of the Initial
Purchasers and the selling Holders provided in this Section 6(a) and
shall, if requested by any Holder, enter into an underwriting agreement
reflecting such agreement, as provided in Section 4(s) hereof


 


(b)           Each Holder of Notes covered by a Registration Statement
(including the Initial Purchasers and, with respect to any Prospectus delivery
as contemplated by Sections 2(e) and 4(h) hereof, each Exchanging
Dealer) severally agrees to indemnify and hold harmless (i) the Company
and the Guarantors, (ii) each of the directors of the Company or any of
the Guarantors, 


 


16

















 


(iii) each of the
officers of the Company or any of the Guarantors who signs such Registration
Statement and (iv) each Person who controls the Company or any of the
Guarantors within the meaning of either the Securities Act or the Exchange Act
to the same extent as the foregoing indemnity from the Company and the
Guarantors to each such Holder, but only with respect to written information
furnished to the Company and the Guarantors by or on behalf of such Holder
specifically for inclusion in the documents referred to in the foregoing
indemnity.  This indemnity agreement will
be in addition to any liability that any such Holder may otherwise have.


 


(c)           Promptly after receipt by an indemnified party under this Section 6
of notice of any claim or the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 6, notify the indemnifying party in
writing of the claim or commencement of that action; but the failure so to
notify the indemnifying party (i) will not relieve the indemnifying party
from liability under paragraph (a) or (b) above unless and to the
extent it has been materially prejudiced by such failure and (ii) will
not, in any event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation provided in
paragraph (a) or (b) above. 
The indemnifying party shall be entitled to appoint counsel (including
local counsel) of the indemnifying party’s choice at the indemnifying party’s
expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel retained
by the indemnified party or parties except as set forth below); provided,
however, that such counsel shall be reasonably satisfactory to the
indemnified party.  After receipt of
notice from the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying party shall not be
liable to the indemnified party under this Section 6 for any legal or
other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation; provided,
however, that any indemnified party shall have the right to employ
separate counsel in any such action and to participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of the
indemnified party unless (i) the employment of such counsel has been
specifically authorized by the indemnifying party in writing, or (ii) such
indemnified party shall have been advised by such counsel that there may one or
more legal defenses available to it that are different from or additional to
those available to the indemnifying party and in the reasonable judgment of
such counsel it is advisable for such indemnified party to employ separate
counsel or (iii) the indemnifying party has failed to assume the defense
of such action and employ counsel reasonably satisfactory to the indemnified
party, in which case, if such indemnified party notifies the indemnifying party
in writing that it elects to employ separate counsel at the expense of the
indemnifying party.  It is understood
that the indemnifying party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm (in addition to any local counsel) at any time for
all such indemnified parties and that all such fees and expenses shall be
reimbursed as they are incurred.  An
indemnifying party will not, (i) without the prior written consent of the
indemnified parties (which consent shall not be unnecessarily withheld) settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party or if
there be a final and non-appealable judgment of the plaintiff in any such
action, the indemnifying party agrees to indemnify and hold 


 


17

















 


harmless any indemnified
party from and against any loss or liability by reason of such settlement or
judgment.


 


(d)           In the event that the indemnity provided in paragraph (a) or
(b) of this Section 6 is unavailable to or insufficient to hold
harmless an indemnified party for any reason, then each applicable indemnifying
party, in lieu of indemnifying such indemnified party, shall have a joint and
several obligation to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending the same) (collectively “Losses”) to which such indemnified
party may be subject in such proportion as is appropriate to reflect the
relative benefits received by such indemnifying party, on the one hand, and
such indemnified party, on the other hand, from the Initial Placement and the
Registration Statement that resulted in such Losses; provided, however,
that in no case shall the Initial Purchasers or any subsequent Holder of any
Note be responsible, in the aggregate, for any amount in excess of the purchase
discount or commission applicable to such Note, or in the case of an Exchange
Note, applicable to the Initial Note that was exchangeable into such Exchange
Note, as set forth on the cover page of the Offering Memorandum, nor shall
any underwriter be responsible for any amount in excess of the underwriting
discount or commission applicable to the Notes purchased by such underwriter
under the Registration Statement that resulted in such Losses.  If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the indemnifying party and
the indemnified party shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of such
indemnifying party, on the one hand, and such indemnified party, on the other
hand, in connection with the statements or omissions that resulted in such
Losses as well as any other relevant equitable considerations.  Benefits received by the Company and the
Guarantors shall be deemed to be equal to the total net proceeds from the
Initial Placement (before deducting expenses) as set forth on the cover page of
the Offering Memorandum.  Benefits
received by the Initial Purchasers shall be deemed to be equal to the total
purchase discounts and commissions, as set forth on the cover page of the
Offering Memorandum, and benefits received by any other Holders shall be deemed
to be equal to the value of receiving Initial Notes or Exchange Notes, as
applicable, registered under the Securities Act.  Benefits received by any underwriter shall be
deemed to be equal to the total underwriting discounts and commissions, as set
forth on the cover page of the Prospectus forming a part of the
Registration Statement that resulted in such Losses.  Relative fault shall be determined by
reference to whether any alleged untrue statement or omission relates to
information provided by the indemnifying party, on the one hand, or by the indemnified
party, on the other hand.  The parties
agree that it would not be just and equitable if contribution were determined
by pro rata allocation or any other method of allocation that did not take
account of the equitable considerations referred to above.  Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.  For purposes of this Section 6,
each person who controls a Holder within the meaning of either the Securities
Act or the Exchange Act and each director, officer, employee and Affiliate of
such Holder shall have the same rights to contribution as such Holder, and each
person who controls the Company or any of the Guarantors within the meaning of
either the Securities Act or the Exchange Act, each officer of the Company or
any of the Guarantors who shall have signed the Registration Statement and each
director of the Company or any of the Guarantors shall have the same rights to
contribution as the Company and the Guarantors, subject in each case to the
applicable terms and conditions of this paragraph (d).


 


(e)           The provisions of this Section 6 will remain in full
force and effect, regardless of any investigation made by or on behalf of any
Holder, the Company or any of the Guarantors or 


 


18

















 


any of their respective
officers, directors or controlling persons referred to in Section 6
hereof, and will survive the sale by a Holder of Notes covered by a
Registration Statement.


 


7.             Rule 144A.


 


The
Company and the Guarantors hereby agree with each Holder, for so long as any
Transfer Restricted Securities remain outstanding, to make available to any
Holder or beneficial owner of Transfer Restricted Securities in connection with
any sale thereof and any prospective purchaser of such Transfer Restricted
Securities from such Holder or beneficial owner, the information required by Rule 144A(d)(4) under
the Securities Act, if applicable, in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144A.


 


8.             Participation In Underwritten Registrations.


 


No
Holder may participate in any Underwritten Registration hereunder unless such
Holder (a) agrees to sell such Holder’s Transfer Restricted Securities on
the basis provided in any underwriting arrangements approved by the persons
entitled hereunder to approve such arrangements and (b) completes and
executes all reasonable questionnaires, powers of attorney, indemnities,
underwriting agreements, lock-up letters and other documents required under the
terms of such underwriting arrangements.


 


9.             Selection Of Underwriters.


 


The
Holders of Transfer Restricted Securities covered by the Shelf Registration
Statement who desire to do so may sell such Transfer Restricted Securities in
an Underwritten Offering.  In any such
Underwritten Offering, the investment banker or investment bankers and manager
or managers that will administer the offering will be selected by the Holders
of a majority in aggregate principal amount of the Transfer Restricted
Securities included in such offering; provided, that such investment
bankers and managers must be reasonably satisfactory to the Company and the
Guarantors.


 


10.          Miscellaneous.


 


(a)           No Inconsistent Agreement.  Neither the Company nor any of the Guarantors
has, as of the date hereof, entered into, nor shall any of them, on or after
the date hereof, enter into, any agreement that conflicts with the rights
granted to the Holders herein or otherwise conflicts with the provisions
hereof.


 


(b)           Amendments and Waivers.  The provisions of this Agreement including
the provisions of this sentence, may not be amended, qualified, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company and the Guarantors have obtained the
written consent of the Holders of at least a majority of the then outstanding
aggregate principal amount of Notes (or, after the expiration of any Exchange
Offer in accordance with Section 2 hereof, of Exchange Notes); provided
that, with respect to any matter that directly or indirectly affects the rights
of the Initial Purchasers hereunder, the Company and the Guarantors shall
obtain the written consent of the Initial Purchasers.  Notwithstanding the foregoing (except the
foregoing proviso), a waiver or consent to departure from the provisions hereof
with respect to a matter that relates exclusively to the rights of Holders
whose Initial Notes or Exchange Notes are being sold pursuant to a Registration
Statement and that does not directly or indirectly affect the rights of other
Holders may be given by the Majority Holders, determined on the basis of Notes
being sold rather than registered under such Registration Statement.


 


19

















 


(c)           Notices.  All
notices and other communications provided for or permitted hereunder shall be
made in writing by hand-delivery, first-class mail, telex, telecopier, or air
courier guaranteeing overnight delivery:


 


(i)            if to a Holder, at the most current address given by such
Holder to the Company in accordance with the provisions of this Section 10(c),
which address initially is, with respect to each Holder, the address of such
Holder maintained by the Trustee;


 


(ii)           if to the Initial Purchasers, shall be delivered or sent
by mail, telex or facsimile transmission to the care of Merrill Lynch, Pierce,
Fenner & Smith Incorporated, One Bryant Park, New York, NY 10036,
Attention: General Counsel and Jefferies & Company, Inc., 520
Madison Avenue, New York, NY 10022, Attention: General Counsel, with a copy to
Cahill Gordon & Reindel LLP, 80 Pine Street, New York, New York 10005,
Attention: William Miller, Esq. (Fax: 212-378-2500) and, in the case of
any notice pursuant to Section 8(c), to Merrill Lynch, Pierce, Fenner &
Smith Incorporated, One Bryant Park, New York, NY 10036, Attention: General
Counsel and Jefferies & Company, Inc., 520 Madison Avenue, New
York, NY 10022, Attention: General Counsel;


 


(iii)          if to the Company and the Guarantors, shall be delivered or
sent by mail, telex or facsimile transmission to the Company, 10910 Domain
Drive, Suite 300, Austin, TX 78758, Attention: Chief Executive Officer,
(Fax: (512) 777-3779), with a copy to Foley & Lardner LLP, 777 East
Wisconsin Avenue, Milwaukee, WI 53202, Attention: Mark T. Plichta (Fax: (414)
297-4900);


 


All such notices and communications shall be deemed
to have been duly given when received. 
The Initial Purchasers, on the one hand, or the Company and the
Guarantors, on the other, by notice to the other party or parties may designate
additional or different addresses for subsequent notices or communications.


 


(d)           Successors and Assigns.  This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties,
including, without the need for an express assignment or any consent by the
Company and the Guarantors thereto, subsequent Holders of Initial Notes and/or Exchange
Notes.  The Company and the Guarantors
hereby agree to extend the benefits of this Agreement to any Holder of Initial
Notes and/or Exchange Notes and any such Holder may specifically enforce the
provisions of this Agreement as if an original party hereto.


 


(e)           Counterparts. 
This Agreement may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute one
and the same Agreement.


 


(f)            Headings. 
The headings in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.


 


(g)           Governing Law. 
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.


 


(h)           Severability. 
In the event that any one or more of the provisions contained herein, or
the application thereof in any circumstances, is held invalid, illegal or
unenforceable in


 


20
















 


any respect for any reason,
the validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.


 


(i)            Initial Notes Held by the Company, Etc.  Whenever the consent or approval of Holders
of a specified percentage of the aggregate principal amount of Initial Notes or
Exchange Notes is required hereunder, Initial Notes or Exchange Notes, as
applicable, held by the Company and the Guarantors or their Affiliates (other
than subsequent Holders of Initial Notes or Exchange Notes if such subsequent
Holders are deemed to be Affiliates solely by reason of their holdings of such
Initial Notes or Exchange Notes) shall not be counted in determining whether
such consent or approval was given by the Holders of such required percentage.


 


(j)            Authority of the Representatives.  Any action by the Initial Purchasers
hereunder may be taken by the Representatives on behalf of the Initial
Purchasers, and any such action taken by the Representatives shall be binding
upon the Initial Purchasers.


 


[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]


 


21

















 


Please
confirm that the foregoing correctly sets forth the agreements under the
Registration Rights Agreement among the Company, the Guarantors and the Initial
Purchasers.


 


	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  Hanger
  Orthopedic Group, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  George E. McHenry

  
	
   

  	
   

  	
   

  	
  Name:

  	
  George
  E. McHenry

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Executive
  Vice President,

  
	
   

  	
   

  	
   

  	
   

  	
  Chief
  Financial Officer and

  
	
   

  	
   

  	
   

  	
   

  	
  Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Hanger
  Prosthetics & Orthotics, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  George E. McHenry

  
	
   

  	
   

  	
   

  	
  Name:

  	
  George
  E. McHenry

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Executive
  Vice President,

  
	
   

  	
   

  	
   

  	
   

  	
  Chief
  Financial Officer and

  
	
   

  	
   

  	
   

  	
   

  	
  Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ABi
  Orthotic/Prosthetic Laboratories, Ltd.

  
	
   

  	
   

  	
  Advanced
  Prosthetics of America, Inc.

  
	
   

  	
   

  	
  The
  Brace Shop Prosthetic Orthotic Centers, Inc.

  
	
   

  	
   

  	
  Colorado
  Professional Medical, Inc.

  
	
   

  	
   

  	
  Creative
  Orthotics & Prosthetics, Inc.

  
	
   

  	
   

  	
  DDOPP
  Holding LLC

  
	
   

  	
   

  	
  DiBello’s
  Dynamic Orthotics and Prosthetics

  
	
   

  	
   

  	
    Partnership
  Ltd.

  
	
   

  	
   

  	
  Dosteon
  Solutions, LLC

  
	
   

  	
   

  	
  Elite
  Care, Inc.

  
	
   

  	
   

  	
  Eugene
  Teufel & Son Orthotics & Prosthetics, Inc.

  
	
   

  	
   

  	
  Hanger
  Prosthetics & Orthotics East, Inc.

  
	
   

  	
   

  	
  Hanger
  Prosthetics & Orthotics West, Inc.

  
	
   

  	
   

  	
  Hattingh
  Holdings, Incorporated

  
	
   

  	
   

  	
  Innovative
  Neurotronics, Inc.

  
	
   

  	
   

  	
  Inline
  Orthotic and Prosthetic Systems

  
	
   

  	
   

  	
  Linkia,
  LLC

  
	
   

  	
   

  	
  Nebraska
  Orthotic & Prosthetic Services, Inc.

  
	
   

  	
   

  	
  OPNET, Inc.

  
	
   

  	
   

  	
  Orthopedic
  Rehabilitation Products, Ltd.

  
	
   

  	
   

  	
  Southern
  Prosthetic Supply, Inc.

  
	
   

  	
   

  	
  Wasatch
  Orthotics & Pedorthics, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  George E. McHenry

  
	
   

  	
   

  	
   

  	
  Name:

  	
  George
  E. McHenry

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Treasurer

  



 


A-1

















 


The
foregoing Agreement is hereby

accepted as of the date first above written.


 


MERRILL
LYNCH, PIERCE, FENNER & SMITH INCORPORATED


 


 


	
  By:

  	
  /s/
  Sarang Gadkari

  	
   

  
	
   

  	
  Name:
  Sarang Gadkari

  	
   

  
	
   

  	
  Title:
  Managing Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  JEFFERIES & COMPANY, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Daniel Decelles

  	
   

  
	
   

  	
  Name:
  Daniel Decelles

  	
   

  
	
   

  	
  Title:
  Managing Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  As Representatives of the

  	
   

  
	
  Initial Purchasers

  	
   

  



 


2

















 


ANNEX A


 


Each
broker-dealer that receives Exchange Notes for its own account pursuant to the
Exchange Offer must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Notes. 
The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an “underwriter” within the meaning of the Securities Act.  This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Notes received in exchange for Notes where such Notes
were acquired by such broker-dealer as a result of market-making activities or
other trading activities.  The Company
has agreed that, starting on the Expiration Date (as defined herein) and ending
on the close of business one year after the Expiration Date, it will make this
Prospectus available to any broker-dealer for use in connection with any such
resale.  See “Plan of Distribution.”


 


3

















 


ANNEX B


 


Each
broker-dealer that receives Exchange Notes for its own account in exchange for
Notes, where such Notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities, must acknowledge that it
will deliver a prospectus in connection with any resale of such Exchange
Notes.  See “Plan of Distribution.”


 


B-1

















 


ANNEX C


 


Each
broker-dealer that receives Exchange Notes for its own account pursuant to the
Exchange Offer must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Notes. 
This Prospectus, as it may be amended or supplemented from time to time,
may be used by a broker-dealer in connection with resales of Exchange Notes
received in exchange for Notes where such Notes were acquired as a result of
market-making activities or other trading activities.  The Company has agreed that, starting on the
Expiration Date and ending on the close of business one year after the
Expiration Date, it will make this Prospectus, as amended or supplemented,
available to any broker-dealer for use in connection with any such resale.  In addition, until such date all dealers
effecting transactions in the Exchange Notes may be required to deliver a
prospectus.


 


C-1

















 


ANNEX D


 


If the undersigned is a broker-dealer that will receive Exchange Notes
for its own account in exchange for Notes, it represents that the Notes to be
exchanged for the Exchange Notes were acquired by it as a result of
market-making activities or other trading activities and acknowledges that it
will deliver a prospectus in connection with any resale of such Exchange Notes;
however, by so acknowledging and by delivering a prospectus, the undersigned
will not be deemed to admit that it is an “underwriter” within the meaning of
the Securities Act.


 


D-1