Exhibit 10.1


 


INDEMNIFICATION AGREEMENT


 


THIS
INDEMNIFICATION AGREEMENT (this “Agreement”)
is made and entered into as of December             , 2008 between NMH Holdings, Inc.,
a Delaware corporation (the “Company”),
and [name] (“Indemnitee”). The
obligations of the Company hereunder are guaranteed by National Mentor Holdings, Inc.,
a Delaware corporation, on the terms and conditions set forth on the signature page hereto.


 


WITNESSETH
THAT:


 


WHEREAS,
highly competent persons have become more reluctant to serve corporations as
directors, officers or in other capacities unless they are provided with
adequate protection through insurance or adequate indemnification against
inordinate risks of claims and actions against them arising out of their
service to and activities on behalf of the corporation;


 


WHEREAS, the
Board of Directors of the Company (the “Board”)
has determined that, in order to attract and retain qualified individuals, the
Company will attempt to maintain on an ongoing basis, at its sole expense,
liability insurance to protect persons serving the Company and its subsidiaries
from certain liabilities. Although the furnishing of such insurance has been a
customary and widespread practice among United States-based corporations and
other business enterprises, the Company believes that, given current market
conditions and trends, such insurance may be available to it in the future only
at higher premiums and with more exclusions. At the same time, directors,
officers, and other persons in service to corporations or business enterprises
are being increasingly subjected to expensive and time-consuming litigation
relating to, among other things, matters that traditionally would have been
brought only against the Company or business enterprise itself. The By-laws
and/or Certificate of Incorporation of the Company may require indemnification
of the officers and directors of the Company. Indemnitee may also be entitled
to indemnification pursuant to the General Corporation Law of the State of
Delaware (“DGCL”). The By-laws and
Certificate of Incorporation may expressly provide and the DGCL does expressly
provide that the indemnification provisions set forth therein are not
exclusive, and thereby contemplate that contracts may be entered into between
the Company and members of the board of directors, officers and other persons
with respect to indemnification;


 


WHEREAS, the
uncertainties relating to such insurance and to indemnification have increased
the difficulty of attracting and retaining such persons;


 


WHEREAS, the
Board has determined that the increased difficulty in attracting and retaining
such persons is detrimental to the best interests of the Company’s stockholders
and that the Company should act to assure such persons that there will be
increased certainty of such protection in the future;


 


WHEREAS, it is
reasonable, prudent and necessary for the Company contractually to obligate
itself to indemnify, and to advance expenses on behalf of, such persons to the
fullest extent permitted by applicable law so that they will serve or continue
to serve the Company free from undue concern that they will not be so
indemnified;


 


WHEREAS, this
Agreement is a supplement to and in furtherance of the By-laws and Certificate
of Incorporation of the Company and any resolutions adopted pursuant thereto,
and shall not be deemed a substitute therefor, nor to diminish or abrogate any
rights of Indemnitee thereunder; and


 


WHEREAS,
Indemnitee does not regard the protection available under the Company’s By-laws
and Certificate of Incorporation and insurance as adequate in the present
circumstances, and may not be willing to serve as an officer or director
without adequate protection, and the Company desires Indemnitee to serve in
such capacity. Indemnitee is willing to serve, continue to serve and to take on
additional service for or on behalf of the Company on the condition that he be
so indemnified; and


 


[WHEREAS,
Indemnitee has certain rights to indemnification and/or insurance provided by
Vestar Capital Partners V, L.P., Vestar Capital Partners V-A, L.P.,
and/or Vestar Capital Partners V-B, L.P.


 

















 


(collectively, “Vestar”), which Indemnitee and Vestar
intend to be secondary to the primary obligation of the Company to indemnify
Indemnitee as provided herein, with the Company’s acknowledgement and agreement
to the foregoing being a material condition to Indemnitee’s willingness to
serve on the Board.](1)


 






(1)                        To
be included in agreements with Vestar directors.


 


NOW,
THEREFORE, in consideration of Indemnitee’s agreement to serve as an officer
and/or director from and after the date hereof, the parties hereto agree as
follows:


 


1.                             Indemnity
of Indemnitee.  The Company hereby
agrees to hold harmless and indemnify Indemnitee to the fullest extent
permitted by law, as such may be amended from time to time. In furtherance of
the foregoing indemnification, and without limiting the generality thereof:


 


(a)                        Proceedings
Other Than Proceedings by or in the Right of the Company.  Indemnitee shall be entitled to the rights of
indemnification provided in this Section l(a) if,
by reason of his Corporate Status (as hereinafter defined), the Indemnitee is,
or is threatened to be made, a party to or participant in any Proceeding (as
hereinafter defined) other than a Proceeding by or in the right of the Company.
Pursuant to this Section 1(a),
Indemnitee shall be indemnified against all Expenses (as hereinafter defined),
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred by him, or on his behalf, in connection with such
Proceeding or any claim, issue or matter therein, if the Indemnitee acted in
good faith and in a manner the Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company, and with respect to any criminal
Proceeding, had no reasonable cause to believe the Indemnitee’s conduct was
unlawful.


 


(b)                       Proceedings
by or in the Right of the Company. 
Indemnitee shall be entitled to the rights of indemnification provided
in this Section 1(b) if,
by reason of his Corporate Status, the Indemnitee is, or is threatened to be
made, a party to or participant in any Proceeding brought by or in the right of
the Company. Pursuant to this Section 1(b),
Indemnitee shall be indemnified against all Expenses actually and reasonably
incurred by the Indemnitee, or on the Indemnitee’s behalf, in connection with
such Proceeding if the Indemnitee acted in good faith and in a manner the
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company; provided, however, if applicable law so provides, no
indemnification against such Expenses shall be made in respect of any claim,
issue or matter in such Proceeding as to which Indemnitee shall have been
adjudged to be liable to the Company unless and to the extent that the Court of
Chancery of the State of Delaware shall determine that such indemnification may
be made.


 


(c)                        Indemnification
for Expenses of a Party Who is Wholly or Partly Successful.  Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is, by reason of his Corporate Status,
a party to and is successful, on the merits or otherwise, in any Proceeding, he
shall be indemnified to the maximum extent permitted by law, as such may be
amended from time to time, against all Expenses actually and reasonably
incurred by him or on his behalf in connection therewith. If Indemnitee is not
wholly successful in such Proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in
such Proceeding, the Company shall indemnify Indemnitee against all Expenses
actually and reasonably incurred by him or on his behalf in connection with
each successfully resolved claim, issue or matter. For purposes of this Section and
without limitation, the termination of any claim, issue or matter in such a
Proceeding by dismissal, with or without prejudice, shall be deemed to be a
successful result as to such claim, issue or matter.


 


2.                             Additional
Indemnity.  In addition to, and
without regard to any limitations on, the indemnification provided for in Section 1 of this Agreement, the
Company shall and hereby does indemnify and hold harmless Indemnitee against
all Expenses, judgments, penalties, fines and amounts paid in


 


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settlement
actually and reasonably incurred by him or on his behalf if, by reason of his
Corporate Status, he is, or is threatened to be made, a party to or participant
in any Proceeding (including a Proceeding by or in the right of the Company), including,
without limitation, all liability arising out of the negligence or active or
passive wrongdoing of Indemnitee. The only limitation that shall exist upon the
Company’s obligations pursuant to this Agreement shall be that the Company
shall not be obligated to make any payment to Indemnitee that is finally
determined (under the procedures, and subject to the presumptions, set forth in
Sections 6 and 7 hereof) to be unlawful.


 


3.                             Contribution.


 


(a)                        Whether
or not the indemnification provided in Sections 1
and 2 hereof is available, in
respect of any threatened, pending or completed action, suit or proceeding in
which the Company is jointly liable with Indemnitee (or would be if joined in
such action, suit or proceeding), the Company shall pay, in the first instance,
the entire amount of any judgment or settlement of such action, suit or
proceeding without requiring Indemnitee to contribute to such payment and the
Company hereby waives and relinquishes any right of contribution it may have
against Indemnitee. The Company shall not enter into any settlement of any
action, suit or proceeding in which the Company is jointly liable with
Indemnitee (or would be if joined in such action, suit or proceeding) unless
such settlement provides for a full and final release of all claims asserted
against Indemnitee.


 


(b)                       Without
diminishing or impairing the obligations of the Company set forth in the
preceding subparagraph, if, for any reason, Indemnitee shall elect or be
required to pay all or any portion of any judgment or settlement in any
threatened, pending or completed action, suit or proceeding in which the
Company is jointly liable with Indemnitee (or would be if joined in such
action, suit or proceeding), the Company shall contribute to the amount of
Expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred and paid or payable by Indemnitee in proportion to the
relative benefits received by the Company and all officers, directors or
employees of the Company, other than Indemnitee, who are jointly liable with
Indemnitee (or would be if joined in such action, suit or proceeding), on the
one hand, and Indemnitee, on the other hand, from the transaction from which
such action, suit or proceeding arose; provided, however, that the proportion
determined on the basis of relative benefit may, to the extent necessary to
conform to law, be further adjusted by reference to the relative fault of the
Company and all officers, directors or employees of the Company other than
Indemnitee who are jointly liable with Indemnitee (or would be if joined in
such action, suit or proceeding), on the one hand, and Indemnitee, on the other
hand, in connection with the events that resulted in such expenses, judgments,
fines or settlement amounts, as well as any other equitable considerations
which the Law may require to be considered. The relative fault of the Company
and all officers, directors or employees of the Company, other than Indemnitee,
who are jointly liable with Indemnitee (or would be if joined in such action,
suit or proceeding), on the one hand, and Indemnitee, on the other hand, shall
be determined by reference to, among other things, the degree to which their
actions were motivated by intent to gain personal profit or advantage, the
degree to which their liability is primary or secondary and the degree to which
their conduct is active or passive.


 


(c)                        The
Company hereby agrees to fully indemnify and hold Indemnitee harmless from any
claims of contribution which may be brought by officers, directors or employees
of the Company, other than Indemnitee, who may be jointly liable with
Indemnitee.


 


(d)                       To
the fullest extent permissible under applicable law, if the indemnification
provided for in this Agreement is unavailable to Indemnitee for any reason
whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute
to the amount incurred by Indemnitee, whether for judgments, fines, penalties,
excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in
connection with any claim relating to an indemnifiable event under this
Agreement,


 


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in such
proportion as is deemed fair and reasonable in light of all of the
circumstances of such Proceeding in order to reflect (i) the relative
benefits received by the Company and Indemnitee as a result of the event(s) and/or
transaction(s) giving cause to such Proceeding; and/or (ii) the
relative fault of the Company (and its directors, officers, employees and
agents) and Indemnitee in connection with such event(s) and/or
transaction(s).


 


4.                             Indemnification
for Expenses of a Witness. 
Notwithstanding any other provision of this Agreement, to the extent
that Indemnitee is, by reason of his Corporate Status, a witness, or is made
(or asked to) respond to discovery requests, in any Proceeding to which
Indemnitee is not a party, he shall be indemnified against all Expenses
actually and reasonably incurred by him or on his behalf in connection
therewith.


 


5.                             Advancement
of Expenses.  Notwithstanding any
other provision of this Agreement, the Company shall advance all Expenses
incurred by or on behalf of Indemnitee in connection with any Proceeding by
reason of Indemnitee’s Corporate Status within thirty (30) days after the
receipt by the Company of a statement or statements from Indemnitee requesting
such advance or advances from time to time, whether prior to or after final
disposition of such Proceeding. Such statement or statements shall reasonably
evidence the Expenses incurred by Indemnitee and shall include or be preceded
or accompanied by a written undertaking by or on behalf of Indemnitee to repay
any Expenses advanced if it shall ultimately be determined that Indemnitee is
not entitled to be indemnified against such Expenses. Any advances and
undertakings to repay pursuant to this Section 5
shall be unsecured and interest free.


 


6.                             Procedures
and Presumptions for Determination of Entitlement to Indemnification.  It is the intent of this Agreement to secure
for Indemnitee rights of indemnity that are as favorable as may be permitted
under the DGCL and public policy of the State of Delaware. Accordingly, the
parties agree that the following procedures and presumptions shall apply in the
event of any question as to whether Indemnitee is entitled to indemnification
under this Agreement:


 


(a)                        To
obtain indemnification under this Agreement, Indemnitee shall submit to the
Company a written request, including therein or therewith such documentation
and information as is reasonably available to Indemnitee and is reasonably
necessary to determine whether and to what extent Indemnitee is entitled to
indemnification. The Secretary of the Company shall, promptly upon receipt of
such a request for indemnification, advise the Board of Directors in writing that
Indemnitee has requested indemnification. Notwithstanding the foregoing, any
failure of Indemnitee to provide such a request to the Company, or to provide
such a request in a timely fashion, shall not relieve the Company of any
liability that it may have to Indemnitee unless, and to the extent that, such
failure actually and materially prejudices the interests of the Company.


 


(b)                       Upon
written request by Indemnitee for indemnification pursuant to the first
sentence of Section 6(a) hereof,
a determination with respect to Indemnitee’s entitlement thereto shall be made
in the specific case by one of the following four methods, which shall be at
the election of the board: (1) by a majority vote of the disinterested
directors, even though less than a quorum, (2) by a committee of
disinterested directors designated by a majority vote of the disinterested
directors, even though less than a quorum, (3) if there are no
disinterested directors or if the disinterested directors so direct, by
Independent Counsel in a written opinion to the Board of Directors, a copy of
which shall be delivered to the Indemnitee, or (4) if so directed by the
Board of Directors, by the stockholders of the Company; provided that from and
after the date that a Change in Control occurs, a determination with respect to
Indemnitee’s entitlement thereto shall be made in the specific case by
Independent Counsel in a written opinion to the Board of Directors, a copy of
which shall be delivered to the Indemnitee. For purposes hereof, disinterested
directors are those members of the board of directors of the Company who are
not parties to the action, suit or proceeding in respect of which
indemnification is sought by Indemnitee.


 


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(c)                        If
the determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 6(b) hereof,
the Independent Counsel shall be selected as provided in this Section 6(c). The Independent Counsel
shall be selected by the Board of Directors. Indemnitee may, within
10 days after such written notice of selection shall have been given,
deliver to the Company a written objection to such selection; provided,
however, that such objection may be asserted only on the ground that the
Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 13 of this Agreement, and the
objection shall set forth with particularity the factual basis of such
assertion. Absent a proper and timely objection, the person so selected shall
act as Independent Counsel. If a written objection is made and substantiated,
the Independent Counsel selected may not serve as Independent Counsel unless
and until such objection is withdrawn or a court has determined that such
objection is without merit. If, within 20 days after submission by
Indemnitee of a written request for indemnification pursuant to Section 6(a) hereof, no
Independent Counsel shall have been selected and not objected to, either the
Company or Indemnitee may petition the Court of Chancery of the State of
Delaware or other court of competent jurisdiction for resolution of any
objection which shall have been made by the Indemnitee to the Company’s
selection of Independent Counsel and/or for the appointment as Independent Counsel
of a person selected by the court or by such other person as the court shall
designate, and the person with respect to whom all objections are so resolved
or the person so appointed shall act as Independent Counsel under Section 6(b) hereof. The Company
shall pay any and all reasonable fees and expenses of Independent Counsel
incurred by such Independent Counsel in connection with acting pursuant to Section 6(b) hereof, and the Company
shall pay all reasonable fees and expenses incident to the procedures of this Section 6(c), regardless of the
manner in which such Independent Counsel was selected or appointed.


 


(d)                       In
making a determination with respect to entitlement to indemnification
hereunder, the person or persons or entity making such determination shall
presume that Indemnitee is entitled to indemnification under this Agreement.
Anyone seeking to overcome this presumption shall have the burden of proof and
the burden of persuasion by clear and convincing evidence. Neither the failure
of the Company (including by its directors or independent legal counsel) to
have made a determination prior to the commencement of any action pursuant to
this Agreement that indemnification is proper in the circumstances because
Indemnitee has met the applicable standard of conduct, nor an actual
determination by the Company (including by its directors or independent legal
counsel) that Indemnitee has not met such applicable standard of conduct, shall
be a defense to the action or create a presumption that Indemnitee has not met
the applicable standard of conduct.


 


(e)                        Indemnitee
shall be deemed to have acted in good faith if Indemnitee’s action is based on
the records or books of account of the Enterprise, including financial
statements, or on information supplied to Indemnitee by the officers of the
Enterprise (as hereinafter defined) in the course of their duties, or on the
advice of legal counsel for the Enterprise or on information or records given
or reports made to the Enterprise by an independent certified public accountant
or by an appraiser or other expert selected with reasonable care by the
Enterprise. In addition, the knowledge and/or actions, or failure to act, of
any director, officer, agent or employee of the Enterprise shall not be imputed
to Indemnitee for purposes of determining the right to indemnification under
this Agreement. Whether or not the foregoing provisions of this Section 6(e) are satisfied, it
shall in any event be presumed that Indemnitee has at all times acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Company. Anyone seeking to overcome this presumption
shall have the burden of proof and the burden of persuasion by clear and
convincing evidence.


 


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(f)                          If
the person, persons or entity empowered or selected under Section 6 to determine whether
Indemnitee is entitled to indemnification shall not have made a determination
within sixty (60) days after receipt by the Company of the request
therefor, the requisite determination of entitlement to indemnification shall
be deemed to have been made and Indemnitee shall be entitled to such
indemnification absent (i) a misstatement by Indemnitee of a material
fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for
indemnification, or (ii) a prohibition of such indemnification under
applicable law; provided, however, that such 60-day period may be extended for
a reasonable time, not to exceed an additional thirty (30) days, if the
person, persons or entity making such determination with respect to entitlement
to indemnification in good faith requires such additional time to obtain or
evaluate documentation and/or information relating thereto; and provided,
further, that the foregoing provisions of this Section 6(f) shall
not apply if the determination of entitlement to indemnification is to be made
by the stockholders pursuant to Section 6(b) of
this Agreement and if (A) within fifteen (15) days after receipt by
the Company of the request for such determination, the Board of Directors or
the Disinterested Directors, if appropriate, resolve to submit such
determination to the stockholders for their consideration at an annual meeting
thereof to be held within seventy-five (75) days after such receipt and
such determination is made thereat, or (B) a special meeting of
stockholders is called within fifteen (15) days after such receipt for the
purpose of making such determination, such meeting is held for such purpose
within sixty (60) days after having been so called and such determination
is made thereat.


 


(g)                       Indemnitee
shall cooperate with the person, persons or entity making such determination
with respect to Indemnitee’s entitlement to indemnification, including
providing to such person, persons or entity upon reasonable advance request any
documentation or information which is not privileged or otherwise protected
from disclosure and which is reasonably available to Indemnitee and reasonably
necessary to such determination. Any Independent Counsel, member of the Board
of Directors or stockholder of the Company shall act reasonably and in good
faith in making a determination regarding the Indemnitee’s entitlement to
indemnification under this Agreement. Any costs or expenses (including
attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating
with the person, persons or entity making such determination shall be borne by
the Company (irrespective of the determination as to Indemnitee’s entitlement
to indemnification) and the Company hereby indemnifies and agrees to hold
Indemnitee harmless therefrom.


 


(h)                       The
Company acknowledges that a settlement or other disposition short of final
judgment may be successful if it permits a party to avoid expense, delay,
distraction, disruption and uncertainty. In the event that any action, claim or
proceeding to which Indemnitee is a party is resolved in any manner other than
by adverse judgment against Indemnitee (including, without limitation,
settlement of such action, claim or proceeding with or without payment of money
or other consideration) it shall be presumed that Indemnitee has been
successful on the merits or otherwise in such action, suit or proceeding. Anyone
seeking to overcome this presumption shall have the burden of proof and the
burden of persuasion by clear and convincing evidence.


 


(i)                           The
termination of any Proceeding or of any claim, issue or matter therein, by
judgment, order, settlement or conviction, or upon a plea of nolo contendere or
its equivalent, shall not (except as otherwise expressly provided in this
Agreement) of itself adversely affect the right of Indemnitee to
indemnification or create a presumption that Indemnitee did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Company or, with respect to any criminal Proceeding,
that Indemnitee had reasonable cause to believe that his conduct was unlawful.


 


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7.                             Remedies
of Indemnitee.


 


(a)                        In
the event that (i) a determination is made pursuant to Section 6 of this Agreement that
Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement
of Expenses is not timely made pursuant to Section 5
of this Agreement, (iii) no determination of entitlement to
indemnification is made pursuant to Section 6(b) of
this Agreement within 90 days after receipt by the Company of the request
for indemnification, (iv) payment of indemnification is not made pursuant
to this Agreement within ten (10) days after receipt by the Company of a
written request therefor or (v) payment of indemnification is not made
within ten (10) days after a determination has been made that Indemnitee
is entitled to indemnification or such determination is deemed to have been
made pursuant to Section 6
of this Agreement, Indemnitee shall be entitled to an adjudication in an
appropriate court of the State of Delaware, or in any other court of competent
jurisdiction, of Indemnitee’s entitlement to such indemnification. Indemnitee
shall commence such proceeding seeking an adjudication within 180 days
following the date on which Indemnitee first has the right to commence such
proceeding pursuant to this Section 7(a).
The Company shall not oppose Indemnitee’s right to seek any such adjudication.


 


(b)                       In
the event that a determination shall have been made pursuant to Section 6(b) of this Agreement
that Indemnitee is not entitled to indemnification, any judicial proceeding
commenced pursuant to this Section 7
shall be conducted in all respects as a de novo trial on the merits, and
Indemnitee shall not be prejudiced by reason of the adverse determination under
Section 6(b).


 


(c)                        If
a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is
entitled to indemnification, the Company shall be bound by such determination
in any judicial proceeding commenced pursuant to this Section 7, absent (i) a
misstatement by Indemnitee of a material fact, or an omission of a material
fact necessary to make Indemnitee’s misstatement not materially misleading in
connection with the application for indemnification, or (ii) a prohibition
of such indemnification under applicable law.


 


(d)                       In
the event that Indemnitee, pursuant to this Section 7,
seeks a judicial adjudication of his rights under, or to recover damages for
breach of, this Agreement, or to recover under any directors’ and officers’
liability insurance policies maintained by the Company, the Company shall pay
on his behalf, in advance, any and all expenses (of the types described in the
definition of Expenses in Section 13
of this Agreement) actually and reasonably incurred by him in such judicial
adjudication, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advancement of expenses or insurance
recovery.


 


(e)                        The
Company shall be precluded from asserting in any judicial proceeding commenced
pursuant to this Section 7
that the procedures and presumptions of this Agreement are not valid, binding
and enforceable and shall stipulate in any such court that the Company is bound
by all the provisions of this Agreement. The Company shall indemnify Indemnitee
against any and all Expenses and, if requested by Indemnitee, shall (within ten
(10) days after receipt by the Company of a written request therefore)
advance, to the extent not prohibited by law, such expenses to Indemnitee,
which are incurred by Indemnitee in connection with any action brought by
Indemnitee for indemnification or advance of Expenses from the Company under
this Agreement or under any directors’ and officers’ liability insurance
policies maintained by the Company, regardless of whether Indemnitee ultimately
is determined to be entitled to such indemnification, advancement of Expenses
or insurance recovery, as the case may be.


 


(f)                          Notwithstanding
anything in this Agreement to the contrary, no determination as to entitlement
to indemnification under this Agreement shall be required to be made prior to
the final disposition of the Proceeding.


 


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8.          Non-Exclusivity; Survival of Rights;
Insurance; Primacy of Indemnification; Subrogation.


 


(a)        The rights of
indemnification as provided by this Agreement shall not be deemed exclusive of
any other rights to which Indemnitee may at any time be entitled under
applicable law, the Certificate of Incorporation, the By-laws, any agreement, a
vote of stockholders, a resolution of directors or otherwise, of the Company.
No amendment, alteration or repeal of this Agreement or of any provision hereof
shall limit or restrict any right of Indemnitee under this Agreement in respect
of any action taken or omitted by such Indemnitee in his Corporate Status prior
to such amendment, alteration or repeal. To the extent that a change in the
DGCL, whether by statute or judicial decision, permits greater indemnification
than would be afforded currently under the Certificate of Incorporation,
By-laws and this Agreement, it is the intent of the parties hereto that
Indemnitee shall enjoy by this Agreement the greater benefits so afforded by
such change. No right or remedy herein conferred is intended to be exclusive of
any other right or remedy, and every other right and remedy shall be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other right or remedy.


 


(b)        To the extent that the
Company maintains an insurance policy or policies providing liability insurance
for directors, officers, employees, or agents or fiduciaries of the Company or
of any other corporation, limited liability company, partnership, joint
venture, trust, employee benefit plan or other enterprise that such person
serves at the request of the Company, Indemnitee shall be covered by such
policy or policies in accordance with its or their terms to the maximum extent
of the coverage available for any director, officer, employee, agent or fiduciary
under such policy or policies. If, at the time of the receipt of a notice of a
claim pursuant to the terms hereof, the Company has director and officer
liability insurance in effect, the Company shall give prompt notice of the
commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf
of the Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies.


 


(c)        [The Company hereby
acknowledges that Indemnitee has certain rights to indemnification, advancement
of expenses and/or insurance provided by Vestar and/or certain of their
affiliates (collectively, the “Fund
Indemnitors”). The Company hereby agrees (i) that it is the
indemnitor of first resort (i.e., its obligations to Indemnitee are
primary and any obligation of the Fund Indemnitors to advance expenses or to
provide indemnification for the same expenses or liabilities incurred by
Indemnitee are secondary), (ii) that it shall be required to advance the
full amount of expenses incurred by Indemnitee and shall be liable for the full
amount of all Expenses, judgments, penalties, fines and amounts paid in
settlement to the extent legally permitted and as required by the terms of this
Agreement and the Certificate of Incorporation or Bylaws of the Company (or any
other agreement between the Company and Indemnitee), without regard to any rights
Indemnitee may have against the Fund Indemnitors, and, (iii) that it
irrevocably waives, relinquishes and releases the Fund Indemnitors from any and
all claims against the Fund Indemnitors for contribution, subrogation or any
other recovery of any kind in respect thereof. The Company further agrees that
no advancement or payment by the Fund Indemnitors on behalf of Indemnitee with
respect to any claim for which Indemnitee has sought indemnification from the
Company shall affect the foregoing and the Fund Indemnitors shall have a right
of contribution and/or be subrogated to the extent of such advancement or
payment to all of the rights of recovery of Indemnitee against the Company. The
Company and Indemnitee agree that the Fund Indemnitors are express third party
beneficiaries of the terms of this Section 8(c).](2)


 






(2)        To be included in
agreements with Vestar directors.


 


8

















 


(d)        [Except as provided in
paragraph (c) above, i]n the event of any payment under this
Agreement, the Company shall be subrogated to the extent of such payment to all
of the rights of recovery of Indemnitee [(other than against the Fund
Indemnitors)], who shall execute all papers required and take all action
necessary to secure such rights, including execution of such documents as are
necessary to enable the Company to bring suit to enforce such rights.


 


(e)        [Except as provided in
paragraph (c) above, t]he Company shall not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable hereunder if
and to the extent that Indemnitee has otherwise actually received such payment
under any insurance policy, contract, agreement or otherwise.


 


(f)         [Except as provided in
paragraph (c) above, t]he Company’s obligation to indemnify or
advance Expenses hereunder to Indemnitee who is or was serving at the request
of the Company as a director, officer, employee or agent of any other
corporation, limited liability company, partnership, joint venture, trust,
employee benefit plan or other enterprise shall be reduced by any amount
Indemnitee has actually received as indemnification or advancement of expenses
from such other corporation, limited liability company, partnership, joint
venture, trust, employee benefit plan or other enterprise.


 


9.          Exception to Right of
Indemnification.  Notwithstanding any
provision in this Agreement, the Company shall not be obligated under this
Agreement to make any indemnity in connection with any claim made against
Indemnitee:


 


(a)        for which payment has
actually been made to or on behalf of Indemnitee under any insurance policy or
other indemnity provision, except with respect to any excess beyond the amount
paid under any insurance policy or other indemnity provision, [provided, that
the foregoing shall not affect the rights of Indemnitee or the Fund Indemnitors
set forth in Section 8(c) above]; or


 


9

















 


(b)        for an accounting of
profits made from the purchase and sale (or sale and purchase) by Indemnitee of
securities of the Company within the meaning of Section 16(b) of the Securities Exchange Act of
1934, as amended, or similar provisions of state statutory law or common law;
or


 


(c)        in connection with any
Proceeding (or any part of any Proceeding) initiated by Indemnitee, including
any Proceeding (or any part of any Proceeding) initiated by Indemnitee against
the Company or its directors, officers, employees or other indemnitees, unless (i) the
Board of Directors of the Company authorized the Proceeding (or any part of any
Proceeding) prior to its initiation or (ii) the Company provides the
indemnification, in its sole discretion, pursuant to the powers vested in the
Company under applicable law.


 


10.        Duration of Agreement.  All agreements and obligations of the Company
contained herein shall continue during the period Indemnitee is an officer or
director of the Company (or is or was serving at the request of the Company as
a director, officer, employee or agent of another corporation, limited liability
company, partnership, joint venture, trust or other enterprise) and for a
period of six (6) years thereafter and shall continue thereafter so long
as Indemnitee shall be subject to any Proceeding (or any proceeding commenced
under Section 7 hereof) by
reason of his Corporate Status, whether or not he is acting or serving in any
such capacity at the time any liability or expense is incurred for which
indemnification can be provided under this Agreement. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors (including any direct or indirect
successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business or assets of the Company), assigns, spouses,
heirs, executors and personal and legal representatives.


 


11.        Security.  To the extent requested by Indemnitee and
approved by the Board of Directors of the Company, the Company may at any time
and from time to time provide security to Indemnitee for the Company’s
obligations hereunder through an irrevocable bank line of credit, funded trust
or other collateral. Any such security, once provided to Indemnitee, may not be
revoked or released without the prior written consent of the Indemnitee.


 


12.        Enforcement.


 


(a)        The Company expressly
confirms and agrees that it has entered into this Agreement and assumes the
obligations imposed on it hereby in order to induce Indemnitee to serve as an
officer or director of the Company, and the Company acknowledges that
Indemnitee is relying upon this Agreement in serving as an officer or director
of the Company.


 


(b)        This Agreement constitutes
the entire agreement between the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and understandings, oral,
written and implied, between the parties hereto with respect to the subject
matter hereof.


 


13.        Definitions.  For purposes of this Agreement:


 


(a)        “Change in Control” shall be deemed to occur
at such time after the date of this Agreement that the following event occurs:
Vestar Capital Partners V, L.P. and its affiliates cease to own, directly
or indirectly, securities of the Company or any successor thereto representing
50% or more of the combined voting power of the Company’s or such successor’s
then outstanding securities.


 


(b)        “Corporate Status” describes the status of a
person who is or was a director, officer, employee, agent or fiduciary of the
Company or of any other corporation, limited liability company, partnership,
joint venture, trust, employee benefit plan or other enterprise that such
person is or was serving at the express written request of the Company.


 


(c)        “Disinterested Director” means a director of
the Company who is not and was not a party to the Proceeding in respect of
which indemnification is sought by Indemnitee.


 


10

















 


(d)        “Enterprise” shall mean the Company and any
other corporation, limited liability company, partnership, joint venture,
trust, employee benefit plan or other enterprise that Indemnitee is or was
serving at the express written request of the Company as a director, officer,
employee, agent or fiduciary.


 


(e)        “Expenses” shall include all reasonable
attorneys’ fees, retainers, court costs, transcript costs, fees of experts,
witness fees, travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service fees and all other disbursements
or expenses of the types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, participating, or
being or preparing to be a witness in a Proceeding, or responding to, or
objecting to, a request to provide discovery in any Proceeding. Expenses also
shall include Expenses incurred in connection with any appeal resulting from
any Proceeding and any federal, state, local or foreign taxes imposed on the
Indemnitee as a result of the actual or deemed receipt of any payments under
this Agreement, including without limitation the premium, security for, and
other costs relating to any cost bond, supersede as bond, or other appeal bond
or its equivalent. Expenses, however, shall not include amounts paid in
settlement by Indemnitee or the amount of judgments or fines against Indemnitee.


 


(f)         “Independent Counsel” means a law firm, or a
member of a law firm, that is experienced in matters of corporation law and
neither presently is, nor in the past five years has been, retained to
represent: (i) the Company or Indemnitee in any matter material to either
such party (other than with respect to matters concerning Indemnitee under this
Agreement, or of other indemnitees under similar indemnification agreements),
or (ii) any other party to the Proceeding giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the term “Independent
Counsel” shall not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement. The Company agrees to pay the
reasonable fees of the Independent Counsel referred to above and to fully
indemnify such counsel against any and all Expenses, claims, liabilities and
damages arising out of or relating to this Agreement or its engagement pursuant
hereto.


 


(g)        “Proceeding” includes any threatened,
pending or completed action, suit, arbitration, alternate dispute resolution
mechanism, investigation, inquiry, administrative hearing or any other actual,
threatened or completed proceeding, whether brought by or in the right of the
Company or otherwise and whether civil, criminal, administrative or
investigative, in which Indemnitee was, is or will be involved as a party or
otherwise, by reason of the fact that Indemnitee is or was an officer or
director of the Company, by reason of any action taken by him or of any
inaction on his part while acting as an officer or director of the Company, or
by reason of the fact that he is or was serving at the request of the Company
as a director, officer, employee, agent or fiduciary of another corporation,
limited liability company, partnership, joint venture, trust or other
Enterprise; in each case whether or not he is acting or serving in any such
capacity at the time any liability or expense is incurred for which
indemnification can be provided under this Agreement; including one pending on
or before the date of this Agreement, but excluding one initiated by an
Indemnitee pursuant to Section 7
of this Agreement to enforce his rights under this Agreement.


 


14.        Severability.  The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision. Without limiting the generality of the foregoing, this
Agreement is intended to confer upon Indemnitee indemnification rights to the
fullest extent permitted by applicable laws. In the event any provision hereof
conflicts with any applicable law, such provision shall be deemed modified,
consistent with the aforementioned intent, to the extent necessary to resolve
such conflict.


 


11

















 


15.        Modification and Waiver.  No supplement, modification, termination or
amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.


 


16.        Notice By Indemnitee.  Indemnitee agrees promptly to notify the
Company in writing upon being served with or otherwise receiving any summons,
citation, subpoena, complaint, indictment, information or other document
relating to any Proceeding or matter which may be subject to indemnification
covered hereunder. The failure to so notify the Company shall not relieve the
Company of any obligation which it may have to Indemnitee under this Agreement
or otherwise unless and only to the extent that such failure or delay
materially prejudices the Company.


 


17.        Notices.  All notices and other communications given or
made pursuant to this Agreement shall be in writing and shall be deemed
effectively given: (a) upon personal delivery to the party to be notified,
(b) when sent by confirmed electronic mail or facsimile if sent during
normal business hours of the recipient, and if not so confirmed, then on the
next business day, (c) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or (d) one
(1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All
communications shall be sent:


 


(a)        To Indemnitee at the
address set forth below Indemnitee signature hereto.


 


(b)     To the Company at:


 


NMH Holdings, Inc.


313 Congress Street 6th Floor


Boston, MA 02210


Attention: General Counsel


Telecopy:


 


with a copy to (which shall not constitute
notice to):


 


Vestar Capital Partners


245 Park Avenue, 41st Floor


New York, NY 10167


Attention: General Counsel


Telecopy: (212) 808-4922


 


or to such other address as may
have been furnished to Indemnitee by the Company or to the Company by
Indemnitee, as the case may be.


 


18.        Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement. This Agreement may also
be executed and delivered by facsimile signature and in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.


 


19.        Headings.  The headings of the paragraphs of this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction thereof.


 


20.        Governing Law and Consent
to Jurisdiction.  This Agreement and
the legal relations among the parties shall be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware, without regard
to its conflict of laws rules. The Company and Indemnitee hereby irrevocably
and unconditionally (i) agree that any action or proceeding arising out of
or in connection with this Agreement shall be brought only in the Chancery
Court of the State of Delaware (the “Delaware
Court”), and not in any other state or federal court in the United
States


 


12

















 


of America or any court in any other country,
(ii) consent to submit to the exclusive jurisdiction of the Delaware Court
for purposes of any action or proceeding arising out of or in connection with
this Agreement, (iii) waive any objection to the laying of venue of any
such action or proceeding in the Delaware Court, and (iv) waive, and agree
not to plead or to make, any claim that any such action or proceeding brought
in the Delaware Court has been brought in an improper or inconvenient forum.


 


SIGNATURE PAGE TO FOLLOW


 


13

















 


IN WITNESS
WHEREOF, the parties hereto have executed this Agreement on and as of the day
and year first above written.


 


 


	
   

  	
  COMPANY

  
	
   

  	
   

  
	
   

  	
  NMH HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INDEMNITEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
					



 


Guarantee by National Mentor Holdings, Inc.


 


By its
signature below, National Mentor Holdings, Inc., a Delaware corporation (“Mentor”), which is a subsidiary of the
Company as of the date hereof, hereby agrees to guarantee the full and prompt
performance by the Company of its obligations under this Agreement; provided
that at such time, if any, as Mentor is no longer a direct or indirect
subsidiary of the Company, this guarantee shall terminate with respect to the
Company’s obligations in respect of any claims first arising after such time
(except for claims by the Indemnitee by reason of his or her Corporate Status
with Mentor or its subsidiaries prior to such time).


 


Solely for
purposes of agreeing to the guarantee set forth in the paragraph immediately
above (and not for the purpose of becoming a party to this Agreement):


 


 


	
  NATIONAL MENTOR HOLDINGS, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  



 


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