Exhibit 4.1


 


EXECUTION COPY


 


 


 


NATIONAL MENTOR, INC.


 


9-5/8%
SENIOR SUBORDINATED NOTES DUE 2012


 


 


INDENTURE


 


 


Dated
as of November 4, 2004


 


 


U.S. BANK NATIONAL ASSOCIATION


 


Trustee


 





















 


CROSS-REFERENCE
TABLE*


 


	
  Trust Indenture Act

  Section

  	
   

  	
  Indenture

  Section

  
	
  310(a)(1)

  	
   

  	
  7.10

  
	
  (a)(2)

  	
   

  	
  7.10

  
	
  (a)(5)

  	
   

  	
  7.10

  
	
  (b)

  	
   

  	
  7.10

  
	
  (c)

  	
   

  	
  N.A.

  
	
  311(a)

  	
   

  	
  7.11

  
	
  (b)

  	
   

  	
  7.11

  
	
  312(a)

  	
   

  	
  2.06

  
	
  (b)

  	
   

  	
  13.03

  
	
  (c)

  	
   

  	
  13.03

  
	
  313(a)

  	
   

  	
  7.06

  
	
  (b)(2)

  	
   

  	
  7.06

  
	
  (c)

  	
   

  	
  7.06

  
	
   

  	
   

  	
  13.02

  
	
  (d)

  	
   

  	
  7.06

  
	
  314(a)

  	
   

  	
  4.03

  
	
   

  	
   

  	
  13.05

  
	
  (c)(1)

  	
   

  	
  13.04

  
	
  (c)(2)

  	
   

  	
  13.04

  
	
  (e)

  	
   

  	
  13.05

  
	
  316(a)(last
  sentence)

  	
   

  	
  2.10

  
	
  (a)(1)(A)

  	
   

  	
  6.05

  
	
  (a)(1)(B)

  	
   

  	
  6.04

  
	
  317(a)(1)

  	
   

  	
  6.08

  



 










*                 This
Cross-Reference Table is not part of this Indenture.


 


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TABLE
OF CONTENTS


 


	
  ARTICLE 1

  DEFINITIONS AND INCORPORATION BY REFERENCE

  	
   

  
	
   

  	
   

  
	
  SECTION 1.01. Definitions

  	
   

  
	
   

  	
   

  
	
  SECTION 1.02.
  Other Definitions

  	
   

  
	
   

  	
   

  
	
  SECTION 1.03. Incorporation by
  Reference of Trust Indenture Act

  	
   

  
	
   

  	
   

  
	
  SECTION 1.04. Rules of
  Construction

  	
   

  
	
   

  	
   

  
	
  ARTICLE 2

  THE NOTES

  	
   

  
	
   

  	
   

  
	
  SECTION 2.01. Form and
  Dating

  	
   

  
	
   

  	
   

  
	
  SECTION 2.02. Execution and
  Authentication

  	
   

  
	
   

  	
   

  
	
  SECTION 2.03. Methods of
  Receiving Payments on the Notes

  	
   

  
	
   

  	
   

  
	
  SECTION 2.04. Registrar and
  Paying Agent

  	
   

  
	
   

  	
   

  
	
  SECTION 2.05. Paying Agent to
  Hold Money in Trust

  	
   

  
	
   

  	
   

  
	
  SECTION 2.06. Holder Lists

  	
   

  
	
   

  	
   

  
	
  SECTION 2.07. Transfer and
  Exchange

  	
   

  
	
   

  	
   

  
	
  SECTION 2.08. Replacement Notes

  	
   

  
	
   

  	
   

  
	
  SECTION 2.09. Outstanding Notes

  	
   

  
	
   

  	
   

  
	
  SECTION 2.10. Treasury Notes

  	
   

  
	
   

  	
   

  
	
  SECTION 2.11. Temporary Notes

  	
   

  
	
   

  	
   

  
	
  SECTION 2.12. Cancellation

  	
   

  
	
   

  	
   

  
	
  SECTION 2.13. Defaulted Interest

  	
   

  
	
   

  	
   

  
	
  SECTION 2.14. CUSIP Numbers

  	
   

  
	
   

  	
   

  
	
  SECTION 2.15. Issuance of
  Additional Notes

  	
   

  



 


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  ARTICLE 3

  REDEMPTION AND PREPAYMENT

  	
   

  
	
   

  	
   

  
	
  SECTION 3.01. Notices to Trustee

  	
   

  
	
   

  	
   

  
	
  SECTION 3.02. Selection of Notes
  to Be Redeemed

  	
   

  
	
   

  	
   

  
	
  SECTION 3.03. Notice of
  Redemption

  	
   

  
	
   

  	
   

  
	
  SECTION 3.04. Effect of Notice
  of Redemption

  	
   

  
	
   

  	
   

  
	
  SECTION 3.05. Deposit of
  Redemption Price

  	
   

  
	
   

  	
   

  
	
  SECTION 3.06. Notes Redeemed in
  Part

  	
   

  
	
   

  	
   

  
	
  SECTION 3.07. Optional
  Redemption

  	
   

  
	
   

  	
   

  
	
  SECTION 3.08. Mandatory
  Redemption

  	
   

  
	
   

  	
   

  
	
  SECTION 3.09. Offer to Purchase

  	
   

  
	
   

  	
   

  
	
  ARTICLE 4

  COVENANTS

  	
   

  
	
   

  	
   

  
	
  SECTION 4.01. Payment of Notes

  	
   

  
	
   

  	
   

  
	
  SECTION 4.02. Maintenance of
  Office or Agency

  	
   

  
	
   

  	
   

  
	
  SECTION 4.03. Reports

  	
   

  
	
   

  	
   

  
	
  SECTION 4.04. Compliance
  Certificate

  	
   

  
	
   

  	
   

  
	
  SECTION 4.05. Taxes

  	
   

  
	
   

  	
   

  
	
  SECTION 4.06. Stay, Extension
  and Usury Laws

  	
   

  
	
   

  	
   

  
	
  SECTION 4.07. Restricted
  Payments

  	
   

  
	
   

  	
   

  
	
  SECTION 4.08. Dividend and Other
  Payment Restrictions Affecting Restricted Subsidiaries

  	
   

  
	
   

  	
   

  
	
  SECTION 4.09. Incurrence of
  Indebtedness and Issuance of Preferred Stock

  	
   

  
	
   

  	
   

  
	
  SECTION 4.10. Asset Sales

  	
   

  
	
   

  	
   

  
	
  SECTION 4.11. Transactions with
  Affiliates

  	
   

  
	
   

  	
   

  
	
  SECTION 4.12. Liens

  	
   

  



 


iii





















 


	
  SECTION 4.13. Corporate
  Existence

  	
   

  
	
   

  	
   

  
	
  SECTION 4.14. Offer to
  Repurchase upon Change of Control

  	
   

  
	
   

  	
   

  
	
  SECTION 4.15. Limitation on
  Senior Subordinated Debt

  	
   

  
	
   

  	
   

  
	
  SECTION 4.16. Limitation on
  Issuances of Guarantees of Indebtedness

  	
   

  
	
   

  	
   

  
	
  SECTION 4.17. Additional Note
  Guarantees

  	
   

  
	
   

  	
   

  
	
  SECTION 4.18. Business
  Activities

  	
   

  
	
   

  	
   

  
	
  SECTION 4.19. Designation of
  Restricted and Unrestricted Subsidiaries

  	
   

  
	
   

  	
   

  
	
  ARTICLE 5

  SUCCESSORS

  	
   

  
	
   

  	
   

  
	
  SECTION 5.01. Merger
  Consolidation, or Sale of Assets

  	
   

  
	
   

  	
   

  
	
  SECTION 5.02. Successor
  Corporation Substituted

  	
   

  
	
   

  	
   

  
	
  ARTICLE 6

  DEFAULTS AND REMEDIES

  	
   

  
	
   

  	
   

  
	
  SECTION 6.01.
  Events of Default

  	
   

  
	
   

  	
   

  
	
  SECTION 6.02. Acceleration

  	
   

  
	
   

  	
   

  
	
  SECTION 6.03. Other Remedies

  	
   

  
	
   

  	
   

  
	
  SECTION 6.04. Waiver of Past
  Defaults

  	
   

  
	
   

  	
   

  
	
  SECTION 6.05. Control by
  Majority

  	
   

  
	
   

  	
   

  
	
  SECTION 6.06. Limitation
  on Suits

  	
   

  
	
   

  	
   

  
	
  SECTION 6.07. Rights of Holders
  of Notes to Receive Payment

  	
   

  
	
   

  	
   

  
	
  SECTION 6.08. Collection Suit by
  Trustee

  	
   

  
	
   

  	
   

  
	
  SECTION 6.09. Trustee May File
  Proofs of Claim

  	
   

  
	
   

  	
   

  
	
  SECTION 6.10. Priorities

  	
   

  
	
   

  	
   

  
	
  SECTION 6.11. Undertaking for
  Costs

  	
   

  



 


iv





















 


	
  ARTICLE 7

  TRUSTEE

  	
   

  
	
   

  	
   

  
	
  SECTION 7.01. Duties of Trustee

  	
   

  
	
   

  	
   

  
	
  SECTION 7.02. Rights of Trustee

  	
   

  
	
   

  	
   

  
	
  SECTION 7.03. Individual Rights
  of Trustee

  	
   

  
	
   

  	
   

  
	
  SECTION 7.04. Trustee’s
  Disclaimer

  	
   

  
	
   

  	
   

  
	
  SECTION 7.05. Notice of Defaults

  	
   

  
	
   

  	
   

  
	
  SECTION 7.06. Reports by Trustee
  to the Holders of the Notes

  	
   

  
	
   

  	
   

  
	
  SECTION 7.07. Compensation and
  Indemnity

  	
   

  
	
   

  	
   

  
	
  SECTION 7.08. Replacement of
  Trustee

  	
   

  
	
   

  	
   

  
	
  SECTION 7.09. Successor Trustee
  by Merger, etc.

  	
   

  
	
   

  	
   

  
	
  SECTION 7.10. Eligibility;
  Disqualification

  	
   

  
	
   

  	
   

  
	
  SECTION 7.11. Preferential
  Collection of Claims Against Company

  	
   

  
	
   

  	
   

  
	
  ARTICLE 8

  LEGAL DEFEASANCE AND COVENANT
  DEFEASANCE

  	
   

  
	
   

  	
   

  
	
  SECTION 8.01. Option to Effect
  Legal Defeasance or Covenant Defeasance

  	
   

  
	
   

  	
   

  
	
  SECTION 8.02. Legal Defeasance
  and Discharge

  	
   

  
	
   

  	
   

  
	
  SECTION 8.03. Covenant
  Defeasance

  	
   

  
	
   

  	
   

  
	
  SECTION 8.04. Conditions to
  Legal Defeasance or Covenant Defeasance

  	
   

  
	
   

  	
   

  
	
  SECTION 8.05. Deposited Money
  and Cash Equivalents to Be Held in Trust; Other Miscellaneous Provisions

  	
   

  
	
   

  	
   

  
	
  SECTION 8.06. Repayment to
  Company

  	
   

  
	
   

  	
   

  
	
  SECTION 8.07. Reinstatement

  	
   

  
	
   

  	
   

  
	
  ARTICLE 9

  AMENDMENT, SUPPLEMENT AND WAIVER

  	
   

  
	
   

  	
   

  
	
  SECTION 9.01. Without Consent of
  Holders of Notes

  	
   

  
	
   

  	
   

  
	
  SECTION 9.02. With Consent of
  Holders of Notes

  	
   

  



 


v





















 


	
  SECTION 9.03. Compliance with
  Trust Indenture Act

  	
   

  
	
   

  	
   

  
	
  SECTION 9.04. Revocation and
  Effect of Consents

  	
   

  
	
   

  	
   

  
	
  SECTION 9.05. Notation on or
  Exchange of Notes

  	
   

  
	
   

  	
   

  
	
  SECTION 9.06. Trustee to Sign
  Amendments, etc.

  	
   

  
	
   

  	
   

  
	
  SECTION 9.07. Payments for
  Consent

  	
   

  
	
   

  	
   

  
	
  ARTICLE 10

  SUBORDINATION

  	
   

  
	
   

  	
   

  
	
  SECTION 10.01. Agreement to
  Subordinate

  	
   

  
	
   

  	
   

  
	
  SECTION 10.02.
  Liquidation; Dissolution; Bankruptcy

  	
   

  
	
   

  	
   

  
	
  SECTION 10.03. Default on Designated
  Senior Debt

  	
   

  
	
   

  	
   

  
	
  SECTION 10.04. Acceleration of
  Securities

  	
   

  
	
   

  	
   

  
	
  SECTION 10.05. When
  Distribution Must Be Paid Over

  	
   

  
	
   

  	
   

  
	
  SECTION 10.06. Notice by the
  Company

  	
   

  
	
   

  	
   

  
	
  SECTION 10.07. Subrogation

  	
   

  
	
   

  	
   

  
	
  SECTION 10.08. Relative Rights

  	
   

  
	
   

  	
   

  
	
  SECTION 10.09. Subordination May Not
  Be Impaired by the Company

  	
   

  
	
   

  	
   

  
	
  SECTION 10.10. Distribution or
  Notice to Representative

  	
   

  
	
   

  	
   

  
	
  SECTION 10.11. Rights of
  Trustee and Paying Agent

  	
   

  
	
   

  	
   

  
	
  SECTION 10.12. Authorization to
  Effect Subordination

  	
   

  
	
   

  	
   

  
	
  ARTICLE 11

  NOTE GUARANTEES

  	
   

  
	
   

  	
   

  
	
  SECTION 11.01. Guarantee

  	
   

  
	
   

  	
   

  
	
  SECTION 11.02. Subordination of
  Note Guarantee

  	
   

  
	
   

  	
   

  
	
  SECTION 11.03. Limitation on
  Guarantor Liability

  	
   

  
	
   

  	
   

  
	
  SECTION 11.04. Execution and
  Delivery of Note Guarantee

  	
   

  
	
   

  	
   

  
	
  SECTION 11.05. Guarantors May Consolidate,
  etc., on Certain Terms

  	
   

  



 


vi





















 


	
  SECTION 11.06. Releases of
  Guarantees

  	
   

  
	
   

  	
   

  
	
  SECTION 11.07. Severability

  	
   

  
	
   

  	
   

  
	
  ARTICLE 12

  SATISFACTION AND DISCHARGE

  	
   

  
	
   

  	
   

  
	
  SECTION 12.01. Satisfaction and
  Discharge

  	
   

  
	
   

  	
   

  
	
  SECTION 12.02. Deposited Money
  and Government Securities to Be Held in Trust

  	
   

  
	
   

  	
   

  
	
  SECTION 12.03. Repayment to the
  Company

  	
   

  
	
   

  	
   

  
	
  SECTION 12.04. Survival

  	
   

  
	
   

  	
   

  
	
  SECTION 12.05. Reinstatement

  	
   

  
	
   

  	
   

  
	
  ARTICLE 13

  MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  SECTION 13.01. Trust Indenture
  Act Controls

  	
   

  
	
   

  	
   

  
	
  SECTION 13.02. Notices

  	
   

  
	
   

  	
   

  
	
  SECTION 13.03. Communication by
  Holders of Notes with Other Holders of Notes

  	
   

  
	
   

  	
   

  
	
  SECTION 13.04. Certificate and
  Opinion as to Conditions Precedent

  	
   

  
	
   

  	
   

  
	
  SECTION 13.05. Statements
  Required in Certificate or Opinion

  	
   

  
	
   

  	
   

  
	
  SECTION 13.06. Rules by
  Trustee and Agents

  	
   

  
	
   

  	
   

  
	
  SECTION 13.07. No Personal
  Liability of Directors, Officers, Employees and Stockholders

  	
   

  
	
   

  	
   

  
	
  SECTION 13.08. Governing Law

  	
   

  
	
   

  	
   

  
	
  SECTION 13.09. No Adverse
  Interpretation of Other Agreements

  	
   

  
	
   

  	
   

  
	
  SECTION 13.10. Successors

  	
   

  
	
   

  	
   

  
	
  SECTION 13.11. Severability

  	
   

  
	
   

  	
   

  
	
  SECTION 13.12. Counterpart
  Originals

  	
   

  
	
   

  	
   

  
	
  SECTION 13.13. Table of
  Contents, Headings, etc.

  	
   

  



 


vii





















 


EXHIBITS


 


	
  Exhibit A

  	
  FORM OF
  NOTE

  
	
  Exhibit B

  	
  FORM OF
  CERTIFICATE OF TRANSFER

  
	
  Exhibit C

  	
  FORM OF
  CERTIFICATE OF EXCHANGE

  
	
  Exhibit D

  	
  FORM OF
  IAI CERTIFICATE

  
	
  Exhibit E

  	
  FORM OF
  SUPPLEMENTAL INDENTURE

  



 


viii





















 


INDENTURE dated as
of November 4, 2004 among National MENTOR, Inc., a Delaware
corporation (the “Company”), and
U.S. Bank National Association, a national banking association, as trustee (the
“Trustee”).


 


WHEREAS the
Company is a wholly owned subsidiary of National MENTOR Holdings, Inc., a
Delaware corporation (“Holdings”),
owned by affiliates of Madison Dearborn Partners, LLC;


 


WHEREAS the
Company has duly authorized the execution and delivery of this Indenture to
provide for the issuance from time to time of its 9-5/8% Senior Subordinated
Notes due 2012 (the “Notes”) to
be issued in one or more series as provided in this Indenture;


 


WHEREAS the
Guarantors have duly authorized the execution and delivery of this Indenture to
provide for a guarantee of the Notes and of certain of the Company’s
obligations hereunder; and


 


WHEREAS all things
necessary to make this Indenture a valid agreement of the Company and the
initial Guarantors, in accordance with its terms, have been done;


 


The Company and
the Trustee agree as follows for the benefit of each other and for the equal
and ratable benefit of the Notes:


 


ARTICLE 1


 


DEFINITIONS AND INCORPORATION BY REFERENCE


 


SECTION 1.01.  Definitions.


 


“144A Global Note” means a Global Note in
the form of Exhibit A hereto bearing the Global Note Legend and the
Private Placement Legend and deposited with or on behalf of, and registered in
the name of, the Depositary or its nominee that will be issued in a denomination
equal to the outstanding principal amount of the Notes sold in reliance on Rule 144A.


 


“Acquired Debt” means, with respect to any
specified Person:


 


(1)                                  Indebtedness
of any other Person existing at the time such other Person is merged with or into
or became a Subsidiary of such specified Person, whether or not such
Indebtedness is incurred in connection with, or in contemplation of, such other
Person merging with or into, or becoming a Subsidiary of, such specified
Person; and


 


(2)                                  Indebtedness
secured by a Lien encumbering any asset acquired by such specified Person.


 


“Additional Notes” means Notes (other than
the Initial Notes) issued under this Indenture in accordance with Sections 2.02
and 4.09 hereof.


 





















 


“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,” 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; provided that
beneficial ownership of 10% or more of the Voting Stock of a Person shall be
deemed to be control. For purposes of this definition, the terms “controlling,”
“controlled by” and “under common control with” shall have correlative
meanings.


 


“Agent” means any Registrar, Paying Agent
or co-registrar.


 


“Applicable Procedures” means, with respect
to any transfer or exchange of or for beneficial interests in any Global Note,
the rules and procedures of the Depositary, Euroclear and Clearstream that
apply to such transfer or exchange.


 


“Asset
Acquisition” means (a) an Investment by the Company or
any of its Restricted Subsidiaries in any other Person if, as a result of such
Investment, such Person shall become a Restricted Subsidiary of the Company, or
shall be merged with or into the Company or any Restricted Subsidiary of the
Company, or (b) the acquisition by the Company or any Restricted
Subsidiary of the Company of all or substantially all of the assets of any
other Person or any division or line of business of any other Person.


 


“Asset Sale” means:


 


(1)                                  the
sale, lease, conveyance or other disposition of any assets or rights; provided that the sale, conveyance or
other disposition of all or substantially all of the assets of the Company and
its Restricted Subsidiaries taken as a whole will be governed by Sections 4.14
and/or 5.01 hereof and not by Section 4.10 hereof; and


 


(2)                                  the
issuance or sale of Equity Interests by any of the Company’s Restricted
Subsidiaries or the sale of Equity Interests in any of its Restricted
Subsidiaries (other than in each case, director qualifying shares or shares
required by applicable law to be held by a Person other than the Company or a
Restricted Subsidiary).


 


Notwithstanding the
preceding, the following items shall not be deemed to be Asset Sales:


 


(1)                                  any
single transaction or series of related transactions that involves assets
having a fair market value of less than $3.0 million;


 


(2)                                  a
transfer of assets or cancellation of Indebtedness between or among the Company
and its Restricted Subsidiaries;


 


(3)                                  an
issuance of Equity Interests by a Restricted Subsidiary to the Company or to
another Restricted Subsidiary;


 


2





















 


(4)                                  the
sale, lease, sub-lease, license, sub-license or consignment of equipment,
inventory, intellectual property, products, services, accounts receivable or
other assets in the ordinary course of business;


 


(5)                                  the
sale or other disposition of cash or Cash Equivalents;


 


(6)                                  a
Restricted Payment or Permitted Investment that is permitted by Section 4.07
hereof;


 


(7)                                  the
licensing of intellectual property to third Persons on customary terms as
determined by the Board of Directors in good faith;


 


(8)                                  any
sale or disposition of any property or equipment that has become damaged,
worn-out, obsolete, condemned, given over in lieu of deed or otherwise
unsuitable or not required for the ordinary course of the business of the
Company and its Restricted Subsidiaries;


 


(9)                                  foreclosure
of assets;


 


(10)                            the
creation or realization of any Lien permitted under this Indenture; and


 


(11)                            the
settlement or write-off of accounts receivable or the sale of overdue accounts
receivable for collection in the ordinary course of business.


 


“Attributable Debt” in respect of a sale
and leaseback transaction means, at the time of determination, the present
value of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale and leaseback transaction,
including any period for which such lease has been extended or may, at the
option of the lessor, be extended. Such present value shall be calculated using
a discount rate equal to the rate of interest implicit in such transaction,
determined in accordance with GAAP.


 


“Bankruptcy Law” means Title 11, U.S. Code
or any similar federal or state law for the relief of debtors.


 


“Beneficial
Owner” has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of
the Exchange Act), such “person” shall be deemed to have beneficial ownership
of all securities that such “person” has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms “Beneficially
Owns” and “Beneficially Owned” shall have a corresponding meaning.


 


“Board of Directors” means:


 


(1)                                  with
respect to a corporation, the board of directors of the corporation or a
committee thereof authorized to exercise the power of the board of directors of
such corporation;


 


3





















 


(2)                                  with
respect to a partnership, the Board of Directors of the general partner of the
partnership; and


 


(3)                                  with
respect to any other Person, the board or committee of such Person serving a
similar function.


 


“Broker-Dealer” has the meaning set forth
in the Registration Rights Agreement.


 


“Business Day” means any day other than a
Legal Holiday.


 


“Capital Lease Obligation” means, at the
time any determination thereof is to be made, the amount of the liability in
respect of a capital lease that would at that time be required to be
capitalized on a balance sheet in accordance with GAAP.


 


“Capital Stock” means:


 


(1)                                  in
the case of a corporation, corporate stock;


 


(2)                                  in
the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock;


 


(3)                                  in
the case of a partnership or limited liability company, partnership or
membership interests (whether general or limited); and


 


(4)                                  any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.


 


“Cash Equivalents” means:


 


(1)                                  United
States dollars;


 


(2)                                  securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof (provided that the full faith and credit of the United States
is pledged in support thereof) having maturities of not more than 360 days
from the date of acquisition, unless such securities are deposited to defease
any Indebtedness;


 


(3)                                  certificates
of deposit, time deposits and eurodollar time deposits with maturities of not
more than 360 days from the date of acquisition, bankers’ acceptances with
maturities of not more than 360 days and overnight bank deposits, in each
case, with any domestic commercial bank having capital and surplus in excess of
$500.0 million and a rating of P-2 or better from Moody’s Investor Service, Inc.
or A-2 or better from Standard & Poor’s Rating Services (or an
equivalent rating from a nationally recognized rating agency);


 


4





















 


(4)                                  repurchase
obligations for underlying securities of the types described in clauses (2) and
(3) above entered into with any financial institution meeting the
qualifications specified in clause (3) above;


 


(5)                                  commercial
paper having a rating of P-2 or better from Moody’s Investor Service, Inc.
or A-2 or better from Standard & Poor’s Rating Services (or an
equivalent rating from a nationally recognized rating agency) and in each case
maturing not more than 360 days after the date of acquisition;


 


(6)                                  money
market funds at least substantially all of the assets of which constitute Cash
Equivalents of the kinds described in clauses (1) through (5) of
this definition;


 


(7)                                  securities
with maturities of one year or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the United States, by any
political subdivision or taxing authority of any such state, commonwealth or
territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least A by Standard &
Poor’s Rating Services or A by Moody’s Investor Service, Inc.;


 


(8)                                  securities
with maturities of one year or less from the date of acquisition backed by
standby letters of credit issued by any of the lenders under the Credit
Agreement or any commercial bank satisfying the requirements of clause (3) of
this definition; and


 


(9)                                  money
market funds that (i) comply with the criteria set forth in SEC Rule 2a-7
under the Investment Company Act of 1940, as amended, (ii) are rated AAA
by Standard & Poor’s Rating Services and Aaa by Moody’s Investor
Service, Inc., and (iii) have portfolio assets of at least $5
billion.


 


“Change of Control” means the occurrence
of any of the following:


 


(1)                                  the
direct or indirect sale, transfer, conveyance or other disposition (other than
by way of merger or consolidation), in one or a series of related transactions,
of all or substantially all of the properties or assets of the Parent and its
Restricted Subsidiaries or the Company and its Restricted Subsidiaries, in each
case, taken as a whole, to any “person” (as that term is used in Section 13(d)(3) of
the Exchange Act) other than the Principals or Related Parties of the
Principals;


 


(2)                                  the
adoption of a plan relating to the liquidation or dissolution of the Company;


 


(3)                                  the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any “person” or “group” (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act),
other than the Principals and their Related Parties, becomes the Beneficial
Owner, directly or indirectly, of more than


 


5





















 


50% of
the voting power of the Voting Stock of the Company or the Parent, as the case
may be;


 


(4)                                  the
first day on which a majority of the members of the Board of Directors of the
Parent or the Company are not Continuing Directors; or


 


(5)                                  the
Parent or the Company consolidates with, or merges with or into, any Person, or
any Person consolidates with, or merges with or into, the Parent or the Company,
in any such event pursuant to a transaction in which any of the outstanding Voting
Stock of the Parent, the Company or such other Person is converted into or exchanged
for cash, securities or other property, other than any such transaction where (A) the
Voting Stock of the Parent or the Company outstanding immediately prior to such
transaction is converted into or exchanged for Voting Stock (other than
Disqualified Stock) of the surviving or transferee Person constituting a
majority of the outstanding shares of such Voting Stock of such surviving or
transferee Person (immediately after giving effect to such issuance) and (B) immediately
after such transaction, no “person” or “group” (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act), other than the Principals
and their Related Parties, becomes the Beneficial Owner, directly or
indirectly, of more than 50% of the voting power of the Voting Stock of the
surviving or transferee person.


 


“Company” means National MENTOR, Inc.,
a Delaware corporation, until a successor replaces it under this Indenture
pursuant to Article 5 and thereafter means such successor.


 


“Consolidated Cash Flow” means, with
respect to any specified Person for any period, the Consolidated Net Income of
such Person for such period and, without duplication, plus:


 


(1)                                  provision
for taxes based on income or profits of such Person and its Restricted
Subsidiaries for such period, to the extent that such provision for taxes was
deducted in computing such Consolidated Net Income; plus


 


(2)                                  Fixed
Charges of such Person and its Restricted Subsidiaries for such period, to the
extent that any such Fixed Charges were deducted in computing such Consolidated
Net Income; plus


 


(3)                                  depreciation,
amortization (including amortization of intangibles but excluding amortization
of prepaid cash expenses that were paid in a prior period) and other non-cash
expenses (excluding any such non-cash expense to the extent that it represents
an accrual of or reserve for cash expenses in any future period or amortization
of a prepaid cash expense that was paid in a prior period) of such Person and
its Restricted Subsidiaries for such period to the extent that such
depreciation, amortization and other non-cash expense was deducted in computing
such Consolidated Net Income; plus


 


(4)                                  any
management fees paid to the Principals by the Company in such period, to the
extent that any such management fees were deducted in computing such
Consolidated Net Income; provided
that the maximum aggregate amount of such


 


6





















 


management
fees in any 12-month period shall not exceed the greater of $2.0 million
and an amount equal to 1.0% of the consolidated earnings before interest,
taxes, depreciation and amortization of the Company and its Subsidiaries for
such period; minus


 


(5)                                  non-cash
items increasing such Consolidated Net Income for such period, excluding any
items which represent the reversal of any accrual of, or cash reserve for,
anticipated cash charges in any prior period;


 


in each case, on a
consolidated basis and determined in accordance with GAAP.


 


Notwithstanding
the preceding, the provision for taxes based on the income or profits of, the
Fixed Charges of and the depreciation and amortization and other non-cash
expenses of, a Restricted Subsidiary of the Company shall be added to
Consolidated Net Income to compute Consolidated Cash Flow of the Company (A) in
the same proportion that the Net Income of such Restricted Subsidiary was added
to compute such Consolidated Net Income of the Company and (B) only to the
extent that a corresponding amount would be permitted at the date of determination
to be dividended or distributed to the Company by such Restricted Subsidiary
without prior governmental approval (that has not been obtained), and without
direct or indirect restriction pursuant to the terms of its charter and all
agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to that Restricted Subsidiary or its
stockholders.


 


“Consolidated Net Income” means, with
respect to any specified Person for any period, the aggregate of the Net Income
of such Person and its Subsidiaries for such period, on a consolidated basis,
determined in accordance with GAAP; provided
that:


 


(1)                                  the
Net Income of any Person that is not a Restricted Subsidiary or that is
accounted for by the equity method of accounting shall be included only to the
extent of the amount of dividends or distributions paid in cash to the
specified Person or a Restricted Subsidiary thereof;


 


(2)                                  the
Net Income of any Restricted Subsidiary shall be excluded to the extent that
the declaration or payment of dividends or similar distributions by that
Restricted Subsidiary of that Net Income is not at the date of determination
permitted without any prior governmental approval (that has not been obtained)
or, directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or its
stockholders (except, for purposes of calculating Consolidated Net Income for
the covenant described under “Restricted Payments,” in each case to the extent
of the amount of dividends or distributions that have been paid to the Company
or to any Restricted Subsidiary not subject to any such restrictions);


 


(3)                                  the
Net Income (or loss) of any Person acquired during the specified period for any
period prior to the date of such acquisition shall be excluded;


 


(4)                                  the
cumulative effect of a change in accounting principles shall be excluded;


 


7





















 


(5)                                  notwithstanding
clause (1) above, the Net Income of any Unrestricted Subsidiary shall
be excluded, whether or not distributed to the specified Person or one of its
Subsidiaries;


 


(6)                                  any
non-cash goodwill or other intangible asset impairment charges incurred
subsequent to the date of this Indenture resulting from the application of
SFAS 142 shall be excluded;


 


(7)                                  the
net loss of any Person other than a Restricted Subsidiary shall be excluded;


 


(8)                                  non-cash
compensation charges resulting from stock options, restricted stock grants or
other equity-incentive programs, or resulting from the accretion or accrual of
dividends on preferred stock held by the Company’s deferred compensation plan
(to the extent not paid in cash by the Company or any of its Restricted
Subsidiaries), shall be excluded; and


 


(9)                                  any
increase in cost of goods sold as a result of the step-up in inventory
valuation arising from applying the purchase method of accounting in accordance
with GAAP in connection with any acquisition consummated after the date of this
Indenture, net of taxes, shall be excluded.


 


“Continuing Directors” means, as of any
date of determination, any member of the Board of Directors of the Company or
the Parent, as the case may be, who:


 


(1)                                  was
a member of such Board of Directors on the date of this Indenture; or


 


(2)                                  was
nominated for election or elected to such Board of Directors with the approval
of a majority of the Continuing Directors who were members of such Board at the
time of such nomination or election.


 


“Corporate Trust Office of the Trustee”
shall be at the address of the Trustee specified in Section 13.02 hereof
or such other address as to which the Trustee may give notice to the Company.


 


“Credit
Agreement” means that certain Credit Agreement, to be dated
as of the date of this Indenture, by and among the Company, JPMorgan Chase
Bank, as Administrative Agent, Bank of America, N.A., as Syndication Agent, and
the other Lenders named therein providing for up to $170.0 million in term
loan borrowings and $80.0 million of revolving credit borrowings,
including any related notes, guarantees, collateral documents, instruments and
agreements executed in connection therewith, and in each case as amended,
modified, renewed, refunded, replaced, restated, substituted or refinanced in
whole or in part from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including
increasing the amount of available borrowings thereunder or adding Subsidiaries
of the Company as additional borrowers or such Subsidiaries or other Persons as
guarantors thereunder) all or any


 


8





















 


portion
of the Indebtedness under such agreement or any successor or replacement
agreement and whether by the same or any other agent, lender or group of
lenders.


 


“Credit
Facilities” means one or more debt facilities (including,
without limitation, the Credit Agreement), commercial paper facilities or
indentures, in each case with banks or other institutional lenders or a trustee
providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special
purpose entities formed to borrow from such lenders against such receivables),
letters of credit or issuances of notes, in each case as amended, modified,
renewed, refunded, replaced, restated, substituted or refinanced in whole or in
part from time to time.


 


“Custodian” means the Trustee, as custodian
with respect to the Notes in global form, or any successor entity thereto.


 


“Default”
means any event that is, or with the passage of time or the giving of notice or
both would be, an Event of Default.


 


“Definitive Note” means a certificated Note
registered in the name of the Holder thereof and issued in accordance with Section 2.07
hereof, in the form of Exhibit A hereto, except that such Note shall not
bear the Global Note Legend and shall not have the “Schedule of Exchanges
of Interests in the Global Note” attached thereto.


 


“Depositary” means, with respect to the
Notes issuable or issued in whole or in part in global form, the Person
specified in Section 2.04 hereof as the Depositary with respect to the
Notes, and any and all successors thereto appointed as depositary hereunder and
having become such pursuant to the applicable provision of this Indenture.


 


“Designated
Non-cash Consideration” means the fair market value of
non-cash consideration received by the Company or any of its Restricted
Subsidiaries in connection with an Asset Sale that is so designated as
Designated Non-cash Consideration pursuant to an Officers’ Certificate setting
forth the basis of such valuation, less the amount of cash or Cash Equivalents
received in connection with a subsequent sale of such Designated Non-cash
Consideration.


 


“Designated Senior Debt” means (1) any
Indebtedness outstanding under the Credit Agreement; and (2) after the
Credit Agreement has been paid in full (or, prior to such time, with the
consent of the lenders under the Credit Agreement), any other Senior Debt
permitted under this Indenture the principal amount of which is
$25.0 million or more and that has been designated by the Company as “Designated
Senior Debt.”


 


“Disqualified Stock” means any Capital
Stock that, by its terms (or by the terms of any security into which it is
convertible, or for which it is exchangeable, in each case at the option of the
holder thereof), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
date that is 91 days after the date on which the Notes mature; provided that if such Capital Stock is
issued to any employee or to any plan for the benefit of employees of the
Company or any of its Subsidiaries or by any such plan to such employees, such
Capital Stock shall not constitute Disqualified Stock solely because it may be
required to be


 


9





















 


repurchased by the
Company or such Subsidiary in order to satisfy applicable statutory or
regulatory obligations; and provided further
that any Capital Stock that would constitute Disqualified Stock solely because
the holders thereof have the right to require the Company to repurchase such
Capital Stock upon the occurrence of a change of control or an asset sale shall
not constitute Disqualified Stock if the terms of such Capital Stock provide
that the Company may not repurchase or redeem any such Capital Stock pursuant
to such provisions unless such repurchase or redemption complies with Section 4.07.
The term “Disqualified Stock” shall also include any options, warrants or other
rights that are convertible into Disqualified Stock or that are redeemable at
the option of the holder, or required to be redeemed, prior to the date that is
91 days after the date on which the Notes mature.


 


“Domestic Subsidiary” means any Restricted
Subsidiary that was formed under the laws of the United States or any state
thereof or the District of Columbia


 


“Earn-out Obligation” means any contingent
consideration based on future operating performance of the acquired entity or
assets or other purchase price adjustment or indemnification obligation,
payable following the consummation of an acquisition based on criteria set
forth in the documentation governing or relating to such acquisition.


 


“Equity Interests” means Capital Stock and
all warrants, options or other rights to acquire Capital Stock (but excluding
any debt security that is convertible into, or exchangeable for, Capital
Stock).


 


“Equity Offering” means an offering
(including in a private placement) of the Equity Interests (other than
Disqualified Stock) of the Company or the Parent, other than public offerings
with respect to the Equity Interests registered on Form S-8.


 


“Equity Sponsor” means Madison Dearborn
Partners, LLC, a Delaware limited liability company.


 


“Exchange Act” means the Securities
Exchange Act of 1934, as amended.


 


“Exchange Notes” means the Notes issued in
the Exchange Offer in accordance with Section 2.07(f) hereof.


 


“Exchange Offer” has the meaning set forth
in the Registration Rights Agreement.


 


“Exchange Offer Registration Statement” has
the meaning set forth in the Registration Rights Agreement.


 


“Excluded Contribution” means the net cash
proceeds or Cash Equivalents received by the Company from:


 


(1)                                  contributions
to its common equity capital; and


 


(2)                                  the
sale (other than to a Subsidiary or to any management equity plan or stock
option plan or any other management or employee benefit plan or agreement of
the


 


10





















 


Company
or any Subsidiary) of Equity Interests (other than Disqualified Stock) of the
Company,


 


in
each case designated within 60 days of receipt of such net cash proceeds
as Excluded Contributions pursuant to an Officers’ Certificate, so long as the
net cash proceeds therefrom are excluded from clause (3)(b) of Section 4.07.


 


“Excluded Subsidiaries” means the Insurance Subsidiaries and
the Non-Profit Subsidiaries, as well as all Unrestricted Subsidiaries.


 


“Existing
Indebtedness” means Indebtedness outstanding on the date of
this Indenture, other than under the Credit Agreement and this Indenture.


 


“Fixed Charge Coverage Ratio” means with
respect to any specified Person for any period, the ratio of the Consolidated
Cash Flow of such Person for such period to the Fixed Charges of such Person
for such period. In the event that the specified Person or any of its
Restricted Subsidiaries incurs, assumes, Guarantees, repays, repurchases or
redeems any Indebtedness or issues, repurchases or redeems Disqualified Stock
or preferred stock subsequent to the commencement of the period for which the
Fixed Charge Coverage Ratio is being calculated and on or prior to the date on
which the event for which the calculation of the Fixed Charge Coverage Ratio is
made (the “Calculation Date”), then the Fixed Charge Coverage Ratio shall be
calculated giving pro forma effect to such incurrence, assumption, Guarantee,
repayment, repurchase or redemption of Indebtedness, or such issuance,
repurchase or redemption of Disqualified Stock or preferred stock, and the use
of the proceeds therefrom as if the same had occurred at the beginning of the
applicable four-quarter reference period.


 


In
addition, for purposes of calculating the Fixed Charge Coverage Ratio:


 


(1)                                  acquisitions, dispositions,
mergers, consolidations and discontinued operations (as determined in
accordance with GAAP) that have been made by the Company or any Restricted
Subsidiary of the Company during the four-quarter reference period or
subsequent to such reference period and on or prior to or simultaneously with
the Calculation Date shall be calculated on a pro forma basis including Pro
Forma Cost Savings assuming that all such acquisitions, dispositions, mergers,
consolidations and discontinued operations (and the change in any associated
fixed charge obligations and the change in Consolidated Cash Flow resulting
therefrom) had occurred on the first day of the four-quarter reference period.
If since the beginning of such period any Person (that subsequently became a
Restricted Subsidiary of the Company or was merged with or into the Company or
any Restricted Subsidiary of the Company since the beginning of such period)
shall have made any acquisition, disposition, merger, consolidation or
discontinued operation that would have required adjustment pursuant to this
definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro
forma effect thereto for such period as if such acquisition, disposition,
merger, consolidation or discontinued operation had occurred at the beginning
of the applicable four-quarter period;


 


11





















 


(2)                                  in
calculating Fixed Charges attributable to interest on any Indebtedness computed
on a pro forma basis, (a) interest on outstanding Indebtedness determined
on a fluctuating basis as of the Calculation Date and which will continue to be
so determined thereafter shall be deemed to have accrued at a fixed rate per
annum equal to the rate of interest on such Indebtedness in effect on the
Calculation Date; (b) if interest on any Indebtedness actually incurred on
the Calculation Date may optionally be determined at an interest rate based
upon a factor of a prime or similar rate, a eurocurrency interbank offered
rate, or other rates, then the interest rate in effect on the Calculation Date
will be deemed to have been in effect during the four-quarter period; and (c) notwithstanding
clause (a) above, interest on Indebtedness determined on a
fluctuating basis, to the extent such interest is covered by agreements
relating to interest rate swaps, caps or collars, shall be deemed to accrue at
the rate per annum resulting after giving effect to the operation of such
agreement; and


 


(3)                                  for
any applicable four-quarter reference period that includes any period of time
prior to the date of this Indenture, pro forma effect shall be given to the
Refinancing and the other adjustments that were added to calculate “Adjusted
EBITDA” as set forth in “Offering Memorandum Summary—Summary Historical and Pro
Forma Consolidated Financial Data” all as calculated in good faith by a
responsible financial or accounting officer of the Company, as if they had
occurred on the first day of such four-quarter reference period.


 


“Fixed Charges” means, with respect to any
specified Person for any period, the sum, without duplication, of:


 


(1)                                  the
consolidated interest expense of such Person and its Restricted Subsidiaries
for such period, whether paid or accrued, including, without limitation,
amortization of debt issuance costs (excluding amortization of or write-off of
debt issuance costs with respect to the Refinancing) and original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers’ acceptance financings, and net of the effect of all
payments made or received pursuant to Hedging Obligations; plus


 


(2)                                  the
consolidated interest of such Person and its Restricted Subsidiaries that was
capitalized during such period; plus


 


(3)                                  any
interest expense on Indebtedness of another Person that is Guaranteed by such
Person or one of its Restricted Subsidiaries or secured by a Lien on assets of
such Person or one of its Restricted Subsidiaries, whether or not such Guarantee
or Lien is called upon; plus


 


(4)                                  the
product of (a) all dividends and distributions, whether paid or accrued
and whether or not in cash, on any series of Disqualified Stock of such Person
or any Disqualified Stock or preferred stock of any of its Restricted
Subsidiaries, other than


 


12





















 


dividends
on Equity Interests payable solely in Equity Interests of the Company (other
than Disqualified Stock) or to the Company or a Restricted Subsidiary of the Company,
times (b) a fraction, the numerator of which is one and the denominator of
which is one minus the then current combined federal, state and local statutory
tax rate of such Person, expressed as a decimal, in each case, on a
consolidated basis and in accordance with GAAP.


 


“Foreign Restricted Subsidiary” means any
Restricted Subsidiary of the Company incorporated in any jurisdiction outside
the United States; provided that
substantially all of such Restricted Subsidiary’s assets are located outside
the United States.


 


“GAAP” means generally accepted accounting
principles set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as have been approved by a
significant segment of the accounting profession, which are in effect on the
date of this Indenture.


 


“Global Notes” means, individually and
collectively, each of the Restricted Global Notes and the Unrestricted Global
Notes, issued in accordance with certain sections of this Indenture.


 


“Global Note Legend” means the legend set
forth in Section 2.07(g)(ii), which is required to be placed on all Global
Notes issued under this Indenture.


 


“Government Securities” means direct
obligations of, or obligations guaranteed by, the United States of America for
the payment of which guarantee or obligations the full faith and credit of the
United States is pledged.


 


“Guarantee”
means a guarantee other than by endorsement of negotiable instruments for
collection in the ordinary course of business, direct or indirect, in any
manner including, without limitation, by way of a pledge of assets or through
letters of credit or reimbursement agreements in respect thereof, of all or any
part of any Indebtedness.


 


“Guarantors” means:


 


(1)                                  Holdings;


 


(2)                                  each
direct or indirect Domestic Subsidiary of the Company on the date of this
Indenture, other than Excluded Subsidiaries; and


 


(3)                                  any
other Subsidiary that executes a Note Guarantee in accordance with the
provisions of this Indenture,


 


and
their respective successors and assigns until released from their obligations
under their Note Guarantees and this Indenture in accordance with the terms of
this Indenture.


 


13





















 


“Hedging Obligations” means, with respect
to any specified Person, the obligations of such Person under:


 


(1)                                  interest
rate swap agreements, interest rate cap agreements, interest rate collar
agreements and other agreements or arrangements designed for the purpose of
fixing, hedging, swapping or otherwise managing interest rate risk;


 


(2)                                  commodity
swap agreements, commodity option agreements, forward contracts and other
agreements or arrangements designed for the purpose of fixing, hedging,
swapping or otherwise managing commodity price risk; and


 


(3)                                  foreign
exchange contracts, currency swap agreements and other agreements or
arrangements designed for the purpose of fixing, hedging, swapping or otherwise
managing foreign currency exchange rate risk.


 


“Holder” means a Person in whose name a
Note is registered.


 


“Holdings”
means National MENTOR Holdings, Inc., a Delaware corporation.


 


“Indebtedness” means, with respect to any
specified Person, any indebtedness of such Person, whether or not contingent,
in respect of:


 


(1)                                  borrowed
money;


 


(2)                                  evidenced
by bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof);


 


(3)                                  banker’s
acceptances;


 


(4)                                  representing
Capital Lease Obligations;


 


(5)                                  the
balance deferred and unpaid of the purchase price of any property, except any
such balance that constitutes an accrued expense or trade payable; or


 


(6)                                  representing
any Hedging Obligations,


 


if and
to the extent any of the preceding items (other than letters of credit and
Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term “Indebtedness”
includes all Indebtedness of others secured by a Lien on any asset of the
specified Person (whether or not such Indebtedness is assumed by the specified
Person) and, to the extent not otherwise included, the Guarantee by the
specified Person of any indebtedness of any other Person; provided that Indebtedness shall not
include any Earn-out Obligation, except to the extent that the contingent
consideration relating thereto is not paid within 10 Business Days after the
contingency relating thereto is resolved.


 


The
amount of any Indebtedness outstanding as of any date shall be:


 


14





















 


(1)                                  the
accreted value thereof, in the case of any Indebtedness issued with original
issue discount;


 


(2)                                  the
principal amount thereof, together with any interest thereon that is more than
30 days past due, in the case of any other Indebtedness; and


 


(3)                                  with
respect to Indebtedness of another Person secured by a Lien on the assets of
the Company or any of its Restricted Subsidiaries, the lesser of the fair
market value of the property secured or the amount of the secured Indebtedness.


 


“Indenture” means this Indenture, as
amended or supplemented from time to time.


 


“Indirect Participant” means a Person who
holds a beneficial interest in a Global Note through a Participant.


 


“Initial Notes” means $150,000,000
aggregate principal amount of Notes originally issued under this Indenture on
the date hereof.


 


“Institutional Accredited Investor” means
an institution that is an “accredited investor” as defined in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act, who is not also a QIB.


 


“Insurance Subsidiaries” means any Subsidiary of the Company
engaged solely in one or more of the general liability, professional liability,
health and benefits and workers compensation and such other insurance
businesses, for the underwriting of insurance policies for Holdings and its
Subsidiaries and the respective employees, officers or directors thereof.


 


“Investments”
means, with respect to any Person, all direct or indirect investments by such
Person in other Persons (including Affiliates) in the forms of loans (including
Guarantees or other obligations), advances or capital contributions (excluding
commission, travel and similar advances to officers and employees made
consistent with past practices), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities, together
with all items that are or would be classified as investments on a balance
sheet prepared in accordance with GAAP. If the Company or any Restricted
Subsidiary of the Company sells or otherwise disposes of any Equity Interests
of any direct or indirect Restricted Subsidiary of the Company such that, after
giving effect to any such sale or disposition, such Person is no longer a
Restricted Subsidiary of the Company, the Company shall be deemed to have made
a Restricted Investment on the date of any such sale or disposition equal to
the fair market value of the Equity Interests of such Restricted Subsidiary not
sold or disposed of in an amount determined as provided in the final paragraph
of Section 4.07 hereof. The acquisition by the Company or any Restricted
Subsidiary of the Company of a Person that holds an Investment in a third
Person shall be deemed to be an Investment by the Company or such Restricted
Subsidiary in such third Person in an amount equal to the fair market value of
the Investment held by the acquired Person in such third Person in an amount
determined as provided in the final paragraph of Section 4.07 hereof.


 


 “Issue Date”
means the date on which $150,000,000 in aggregate principal amount of the Notes
were originally issued under this Indenture.


 


15





















 


“Legal Holiday” means a Saturday, a Sunday
or a day on which commercial banks in The City of New York or at a place of
payment are authorized or required by law, regulation or executive order to
remain closed.  If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.


 


“Legended
Regulation S Global Note” means a global Note in the
form of Exhibit A hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of and registered in the name
of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount at maturity of the Notes initially sold in
reliance on Rule 903 of Regulation S.


 


“Letter of Transmittal” means the letter of
transmittal to be prepared by the Company and sent to all Holders of the Notes
for use by such Holders in connection with the Exchange Offer.


 


“Lien”
means, with respect to any asset, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect of such asset, whether or not
filed, recorded or otherwise perfected under applicable law, including any
conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give a security interest in
and any filing of or agreement to give any financing statement under the
Uniform Commercial Code (or equivalent statutes) of any jurisdiction.


 


“Liquidated Damages” means the additional
amounts (if any) payable by the Company in the event of a Registration Default
under, and as defined in, the Registration Rights Agreement.  The Trustee is not a party to the
Registration Rights Agreement and is not responsible for determining whether
Liquidated Damages are due and payable. 
Until the Trustee receives an Officers’ Certificate informing it of the
amount of, and the date such Liquidated Damages are due, the Trustee may assume
without inquiry that no Liquidated Damages are due and payable by the Company,


 


“Magellan Seller Notes” means the notes in an aggregate
principal amount of $10.0 million issued by Holdings to Magellan Health
Services, Inc.


 


“MDP Subordinated Notes” means the junior subordinated notes
in an aggregate principal amount of $15.0 million issued by Holdings to
Madison Dearborn Partners, LLC, or its affiliates.


 


“Net Income” means, with respect to any
specified Person, the net income (loss) of such Person, determined in
accordance with GAAP and before any reduction in respect of preferred stock
dividends, excluding, however:


 


(1)                                  any
gain (or loss), together with any related provision for taxes on such gain (or
loss), realized in connection with: (a) any Asset Sale (without reference
to the $3.0 million limitation); or (b) the disposition of any other
assets by such Person or any of its Restricted Subsidiaries (other than in the
ordinary course of business) or the


 


16





















 


extinguishment
of any Indebtedness of such Person or any of its Restricted Subsidiaries; and


 


(2)                                  any
extraordinary or nonrecurring gain (or loss) (including nonrecurring gains or
losses of the Company and its Subsidiaries incurred in connection with the
Stock Purchase Agreement and the related refinancing), together with any
related provision for taxes on such extraordinary or nonrecurring gain (or
loss).


 


“Net Proceeds” means the aggregate cash
proceeds received by the Company or any of its Restricted Subsidiaries in
respect of any Asset Sale (including, without limitation, any cash received
upon the sale or other disposition of any non-cash consideration received in
any Asset Sale), net of the costs relating to such Asset Sale or disposition of
such non-cash consideration, including, without limitation, legal, accounting
and investment banking fees, and sales commissions, and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof, in
each case, after taking into account any available tax credits or deductions and
any tax sharing arrangements, and amounts required to be applied to the
repayment of Indebtedness (other than revolving credit Indebtedness, unless
there is a required reduction in commitments) secured by a Lien on the asset or
assets that were the subject of such Asset Sale and any (1) reserve for
adjustment in respect of the sale price of such asset or assets established in
accordance with GAAP and (2) any reserve or payment with respect to any
liabilities associated with such asset or assets and retained by the Company
after such sale or other disposition thereof, including, without limitation,
severance costs, pension and other post-employment benefit liabilities and
liabilities related to environmental matters or against any indemnification
obligations associated with such transaction.


 


“Non-Profit Entities” means each of REM New Jersey Properties, Inc.,
a New Jersey not-for-profit corporation, and any entity duly acquired or formed
and organized by Holdings or any subsidiary of Holdings as a not-for-profit
entity under applicable state law in furtherance of the business needs of
Holdings and its Subsidiaries.


 


“Non-Recourse Debt” means Indebtedness:


 


(1)                                  as
to which neither the Company nor any of its Restricted Subsidiaries (a) provides
credit support of any kind (including any undertaking, agreement or instrument
that would constitute Indebtedness), (b) is directly or indirectly liable
as a guarantor or otherwise, or (c) constitutes the lender; and


 


(2)                                  no
default with respect to which (including any rights that the holders thereof
may have to take enforcement action against an Unrestricted Subsidiary) would
permit upon notice, lapse of time or both any holder of any other Indebtedness
(other than the Notes) of the Company or any of its Restricted Subsidiaries to
declare a default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its Stated Maturity.


 


“Non-U.S.
Person” means a Person who is not a U.S. Person.


 


“Note
Guarantee” means a Guarantee of the Notes pursuant to this
Indenture.


 


17





















 


“Notes” means the 9-5/8% Senior
Subordinated Notes due 2012 of the Company issued on the date hereof and any
Additional Notes.  The Initial Notes and
the Additional Notes, if any are issued, shall be treated as a single class for
all purposes under this Indenture.


 


“Obligations”
means any principal, interest, penalties, fees, indemnifications,
reimbursements, damages, costs, expenses and other liabilities payable under
the documentation governing any Indebtedness.


 


“Offering Memorandum” means the offering
memorandum, dated October 27, 2004, relating to the offering of the Notes.


 


“Officer” means, with respect to any
Person, the Chairman of the Board, the Chief Executive Officer, the President,
the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any
Assistant Treasurer, the Controller, the Secretary or any Vice-President of
such Person.


 


“Officers’ Certificate” means a certificate
signed on behalf of the Company by two Officers of the Company, one of whom
must be the principal executive officer, the principal financial officer, the
treasurer, or the principal accounting officer of the Company, that meets the
requirements of Section 13.05 hereof.


 


“Opinion of Counsel” means an opinion from
legal counsel that meets the requirements of Section 13.05 hereof.  The counsel may be an employee of or counsel
to the Company, but such counsel shall be admitted to practice law in the State
of New York.


 


“Parent”
means any direct or indirect parent company of the Company.


 


“Parent Preferred Stock” means the preferred stock of
Holdings outstanding on the date of this Indenture.


 


“Participant” means, with respect to the
Depositary, Euroclear or Clearstream, a Person who has an account with the
Depositary, Euroclear or Clearstream, respectively (and, with respect to The
Depository Trust Company, shall include Euroclear and Clearstream).


 


“Permitted
Business” means any business conducted or proposed to be
conducted (as described in the Offering Memorandum) by the Company and its
Restricted Subsidiaries on the date of this Indenture and other businesses
reasonably related or ancillary thereto.


 


“Permitted Investments” means:


 


(1)                                  any
Investment in the Company or in a Restricted Subsidiary of the Company;


 


(2)                                  any
Investment in Cash Equivalents;


 


(3)                                  any
Investment by the Company or any Restricted Subsidiary of the Company in a
Person, if as a result of such Investment:


 


18





















 


(a)                                  such
Person becomes a Restricted Subsidiary of the Company; or


 


(b)                                 such
Person is merged, consolidated or amalgamated with or into, or transfers or
conveys substantially all of its assets to, or is liquidated into, the Company
or a Restricted Subsidiary of the Company;


 


(4)                                  any
Investment made as a result of the receipt of non-cash consideration from an
Asset Sale or other sale of assets that was made pursuant to and in compliance
with Section 4.10 of this Indenture;


 


(5)                                  any
Investment the payment for which consists of Equity interests (other than
Disqualified Stock) of the Company; provided
that the fair market value of such Investment shall be excluded from clause (3)(b) of
Section 4.07 hereof;


 


(6)                                  Hedging
Obligations;


 


(7)                                  other
Investments in any Person having an aggregate fair market value (measured on
the date each such Investment was made and without giving effect to subsequent
changes in value), when taken together with all other Investments made pursuant
to this clause (7) since the date of this Indenture, not to exceed
$10.0 million, plus, if an Investment pursuant to this clause (7) is
made in any Person that is not a Restricted Subsidiary of the Company at the
date of the making of the Investment and such Person becomes a Restricted
Subsidiary after such date, the lesser of (x) the amount of such
Investment (valued at the date of the making of such Investment) made pursuant
to this clause (7) by the Company and its Restricted Subsidiaries in
the Person so designated and (y) the aggregate fair market value of such
Investment owned by the Company and its Restricted Subsidiaries in the Person
so designated immediately prior to such designation, plus an amount equal to
any other net reduction in Investments made pursuant to this clause (7), not to
exceed in the case of any such Investment, the amount of the Investment
previously made and only if and to the extent such amounts are not included in
the calculation of Consolidated Net Income;


 


(8)                                  any
Investment of the Company or any of its Restricted Subsidiaries existing on the
date of this Indenture;


 


(9)                                  loans
to employees that are approved in good faith by a majority of the Board of
Directors of the Company in an amount not to exceed $2.5 million
outstanding at any time;


 


(10)                            any
Investment acquired by the Company or any of its Restricted Subsidiaries:


 


(a)                                  in
exchange for any other Investment or accounts receivable held by the Company or
any such Restricted Subsidiary in connection with or as a result of a
bankruptcy, workout, reorganization or recapitalization of a Person, or


 


19





















 


(b)                                 as
a result of a foreclosure by the Company or any of its Restricted Subsidiaries
with respect to any secured Investment or other transfer of title with respect
to any secured Investment in default;


 


(11)                            Investments
consisting of the licensing or contribution of intellectual property pursuant
to joint marketing arrangements with other Persons;


 


(12)                            advances
to customers or suppliers in the ordinary course of business that are recorded
in accordance with GAAP as accounts receivable or prepaid expenses or lease,
utility and other similar deposits in the ordinary course of business; and


 


(13)                            Investments
in joint ventures engaged in a Permitted Business not in excess of
$15.0 million in the aggregate outstanding at any one time, plus, if an
Investment pursuant to this clause (13) is made in any Person that is not
a Restricted Subsidiary of the Company at the date of the making of the
Investment and such Person becomes a Restricted Subsidiary after such date, the
lesser of (x) the amount of such Investment (valued at the date of the
making of such Investment) made pursuant to this clause (13) by the
Company and its Restricted Subsidiaries in the Person so designated and (y) the
aggregate fair market value of such Investment owned by the Company and its
Restricted Subsidiaries in the Person so designated immediately prior to such
designation, plus an amount equal to any other net reduction in Investments
made pursuant to this clause (13), not to exceed in the case of any such
Investment, the amount of the Investment previously made and only if and to the
extent such amounts are not included in the calculation of Consolidated Net
Income.


 


“Permitted Junior Securities” means (1) Equity
Interests in the Company or any other business entity provided for by a plan of
reorganization as a successor thereto; or (2) debt securities that are
subordinated to all Senior Debt and any debt securities issued in exchange for
Senior Debt at least to the same extent as, or to a greater extent than, the
Notes and the Note Guarantees are subordinated to Senior Debt under this
Indenture.


 


“Permitted Liens” means:


 


(1)                                  Liens
on the assets of the Company and any Guarantor securing Senior Debt (including
Hedging Obligations with respect to Senior Debt) that was permitted by the
terms of this Indenture to be incurred;


 


(2)                                  Liens
in favor of the Company or any Restricted Subsidiary of the Company;


 


(3)                                  Liens
on property of a Person existing at the time such Person is merged with or into
or consolidated with the Company or any Restricted Subsidiary of the Company; provided that such Liens were in existence
prior to the contemplation of such merger or consolidation and do not extend to
any assets other than those of the Person merged into or consolidated with the
Company or the Restricted Subsidiary;


 


20





















 


(4)                                  Liens
on property existing at the time of acquisition thereof by the Company or any
Restricted Subsidiary of the Company; provided
that such Liens were in existence prior to the contemplation of such
acquisition and do not extend to any property other than the property so
acquired by the Company or the Restricted Subsidiary;


 


(5)                                  Liens
to secure Indebtedness (including Capital Lease Obligations) permitted by
clause (4) of Section 4.09 covering only the assets acquired
with such Indebtedness;


 


(6)                                  Liens
of the Company and its Restricted Subsidiaries existing on the date of this
Indenture and any renewals or extensions thereof, in each case on terms no more
restrictive than, and not extending to any property or assets other than those
covered by such Liens, on the date of this Indenture;


 


(7)                                  Liens
incurred in the ordinary course of business of the Company or any Restricted
Subsidiary of the Company with respect to obligations that do not exceed
$15.0 million at any one time outstanding;


 


(8)                                  Liens
to secure the performance of statutory obligations, surety or appeal bonds,
performance bonds or other similar obligations (exclusive of obligations for
the payment of borrowed money) incurred in the ordinary course of business;


 


(9)                                  Liens
upon specific items of inventory or other goods and proceeds of any Person
securing such Person’s obligations in respect of bankers’ acceptances issued or
created for the account of such Person to facilitate the purchase, shipment or
storage of such inventory or other goods;


 


(10)                            Liens
incurred or deposits made in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other types of social
security, including any Lien securing letters of credit issued in the ordinary
course of business consistent with past practice in connection therewith;


 


(11)                            Liens
to secure Indebtedness of any Foreign Restricted Subsidiary permitted to be
incurred under Section 4.09 covering only the assets of such Foreign
Restricted Subsidiary;


 


(12)                            Liens
imposed by governmental authorities for taxes, assessments or other charges not
yet subject to penalty or which are being contested in good faith and by
appropriate proceedings, if adequate reserves with respect thereto are
maintained on the books and records of the Company in accordance with GAAP;


 


(13)                            statutory
Liens of landlords and Liens of carriers, warehousemen, mechanics, suppliers,
materialmen, repairmen and other Liens imposed by law incurred in the ordinary
course of business;


 


(14)                            easements,
rights-of-way, municipal and zoning restrictions and other similar charges,
title defects, encumbrances or irregularities in respect of real property not


 


21





















 


interfering
in any material respect with the ordinary course of the business of the Company
or any of its Restricted Subsidiaries;


 


(15)                            judgment
or attachment Liens not giving rise to an Event of Default;


 


(16)                            leases,
subleases, licenses or sublicenses granted to other Persons in the ordinary
course of business not materially interfering with the conduct of the business
of the Company or any of its Restricted Subsidiaries or materially detracting
from the value of the relative assets of the Company or any of its Restricted
Subsidiaries;


 


(17)                            banker’s
Liens, rights of set-off and other similar Liens existing solely with respect
to cash and cash equivalents on deposit in one or more accounts maintained by
the Company or any Restricted Subsidiary;


 


(18)                            Liens
on insurance policies and the proceeds thereof securing the financing of the
premiums with respect thereto;


 


(19)                            Liens
which arise under Article 4 of the UCC on items in collection and
documents and proceeds related thereto; and


 


(20)                            financing
statements filed in connection with operating leases or consignments.


 


“Permitted Refinancing Indebtedness” means
any Indebtedness of the Company or any of its Restricted Subsidiaries issued in
exchange for, or the net proceeds of which are used to extend, refinance,
renew, replace, defease or refund other Indebtedness of the Company or any of
its Restricted Subsidiaries (other than intercompany Indebtedness); provided that:


 


(1)                                  the
principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount (or accreted
value, if applicable) of the Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded (plus all accrued interest thereon and the
amount of any reasonably determined premium and other amounts necessary to
accomplish such refinancing and such reasonable fees and expenses incurred in
connection therewith);


 


(2)                                  such
Permitted Refinancing Indebtedness has a final maturity date equal to or later
than the final maturity date of, and has a Weighted Average Life to Maturity
equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded;


 


(3)                                  if
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded is subordinated in right of payment to the Notes or any Note
Guarantee, such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and is subordinated in right of payment
to, the Notes or such Note Guarantee on terms at least as favorable to the
Holders of Notes as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; and


 


22





















 


(4)                                  such
Indebtedness is incurred either by the Company or by the Restricted Subsidiary
who is the obligor on the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded.


 


“Person”
means any individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, limited liability
company or government or other entity.


 


“Principals”
means the Equity Sponsor and its Affiliates.


 


“Private Placement Legend” means the legend
set forth in Section 2.07(g)(i) to be placed on all Notes issued
hereunder except where otherwise permitted by the provisions of this Indenture.


 


“Pro
Forma Cost Savings” means, with respect to any period, the
reduction in net costs and related adjustments that (i) were directly
attributable to an Asset Acquisition that occurred during the four-quarter
period or after the end of the four-quarter period and on or prior to the
Calculation Date and calculated on a basis that is consistent with
Regulation S-X under the Securities Act as in effect and applied as of the
date of this Indenture, (ii) were actually implemented by the business
that was the subject of any such Asset Acquisition within six months after the
date of the Asset Acquisition and prior to the Calculation Date that are
supportable and quantifiable by the underlying accounting records of such
business or (iii) relate to the business that is the subject of any such
Asset Acquisition and that the Company reasonably determines are probable based
upon specifically identifiable actions to be taken within six months of the
date of the Asset Acquisition and, in the case of each of (i), (ii) and
(iii), are described, as provided below, in an Officer’s Certificate, as if all
such reductions in costs had been effected as of the beginning of such period.
Pro Forma Cost Savings described above shall be accompanied by a certificate
delivered to the Trustee from the Company’s Chief Financial Officer that
outlines the specific actions taken or to be taken, the net cost savings
achieved or to be achieved from each such action and that, in the case of
clause (iii) above, such savings have been determined to be probable.


 


“QIB” means a “qualified institutional
buyer” as defined in Rule 144A.


 


“Refinancing” has the meaning set forth in the Offering
Memorandum.


 


“Registration Rights Agreement” means the
Registration Rights Agreement, dated as of November 4, 2004, by and among
the Company and the other parties named on the signature pages thereof, as
such agreement may be amended, modified or supplemented from time to time and,
with respect to any Additional Notes, one or more registration rights
agreements between the Company and the other parties thereto, as such
agreement(s) may be amended, modified or supplemented from time to time,
relating to rights given by the Company to the purchasers of Additional Notes
to register such Additional Notes under the Securities Act.


 


“Regulation S” means Regulation S
promulgated under the Securities Act.


 


“Regulation S Global Note” means a Global
Note bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of and registered in the name


 


23





















 


of the
Depositary or its nominee, issued in a denomination equal to the outstanding
principal amount of the Notes resold in reliance on Rule 904 of Regulation
S.


 


“Related Party” means:


 


(1)                                  any
controlling stockholder, partner, member, 80% (or more) owned Subsidiary, or
immediate family member (in the case of an individual) of any Principal; or


 


(2)                                  any
trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding an 80% or more
controlling interest of which consist of any one or more Principals and/or such
other Persons referred to in the immediately preceding clause.


 


“REM Seller Notes” means the notes in an aggregate principal
amount of $28.0 million issued by Holdings to the former stockholders of REM, Inc.
in connection with the acquisition of REM, Inc. in May 2003.


 


“Replacement Assets” means (1) non-current
assets that will be used or useful in a Permitted Business or (2) all or
substantially all of the assets of a Permitted Business or (3) a majority
of the Voting Stock of any Person engaged in a Permitted Business that will
become on the date of acquisition thereof a Restricted Subsidiary.


 


“Representative” means the Trustee,
administrative agent, agent or representative for any Senior Debt.


 


“Responsible Officer” when used with
respect to the Trustee, means any officer within the Corporate Trust Services
division of the Trustee (or any successor group of the Trustee) or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter
is referred because of his knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Indenture.


 


“Restricted Definitive Note” means a
Definitive Note bearing the Private Placement Legend.


 


“Restricted Global Note” means a Global
Note bearing the Private Placement Legend.


 


“Restricted
Investment” means an Investment other than a Permitted
Investment.


 


“Restricted
Subsidiary” of a Person means any Subsidiary of such Person
that is not an Unrestricted Subsidiary.


 


“Rule 144” means Rule 144 promulgated
under the Securities Act.


 


“Rule 144A” means Rule 144A
promulgated under the Securities Act.


 


24





















 


“Rule 903” means Rule 903
promulgated under the Securities Act.


 


“Rule 904” means Rule 904
promulgated the Securities Act.


 


“SEC” means the Securities and Exchange
Commission.


 


“Securities Act” means the Securities Act
of 1933, as amended.


 


“Shelf Registration Statement” means the
Shelf Registration Statement as defined in the Registration Rights Agreement.


 


“Senior Debt” means:


 


(1)                                  all
Indebtedness of the Company or any Guarantor outstanding under the Credit
Agreement and all Hedging Obligations with respect thereto, whether outstanding
on the date of this Indenture or incurred thereafter;


 


(2)                                  any
other Indebtedness of the Company or any Guarantor permitted to be incurred
under the terms of this Indenture, unless the instrument under which such
Indebtedness is incurred expressly provides that it is on a parity with or
subordinated in right of payment to the Notes or any Note Guarantee; and


 


(3)                                  all
Obligations with respect to the items listed in the preceding clauses (1) and
(2) (including any interest accruing subsequent to the filing of a
petition of bankruptcy at the rate provided for in the documentation with
respect thereto, whether or not such interest is an allowed claim under
applicable law).


 


Notwithstanding
anything to the contrary in the preceding paragraph, Senior Debt will not
include:


 


(1)                                  any
Indebtedness that is, by its express terms, subordinated in right of payment to
any other Indebtedness of the Company or any Guarantor;


 


(2)                                  any
liability for federal, state, local or other taxes owed or owing by the
Company;


 


(3)                                  any
Indebtedness of the Company to any of its Subsidiaries or other Affiliates
(except to the extent such Affiliate is a lender under the Credit Agreement);


 


(4)                                  any
trade payables; or


 


(5)                                  the
portion of any Indebtedness that is incurred in violation of this Indenture.


 


“Significant Subsidiary” means any
Subsidiary that would be a “significant subsidiary” as defined in Article I,
Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities
Act, as such Regulation is in effect on the date of this Indenture.


 


25





















 


“Stated Maturity” means, with respect to
any installment of interest or principal on any series of Indebtedness, the
date on which such payment of interest or principal was scheduled to be paid in
the original documentation governing such Indebtedness, and shall not include
any contingent obligations to repay, redeem or repurchase any such interest or
principal prior to the date originally scheduled for the payment thereof.


 


“Subsidiary” means, with respect to any
specified Person:


 


(1)                                  any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees thereof is at the time owned or controlled, directly or indirectly,
by such Person or one or more of the other Subsidiaries of that Person (or a
combination thereof); and


 


(2)                                  any
partnership (a) the sole general partner or the managing general partner
of which is such Person or a Subsidiary of such Person or (b) the only
general partners of which are such Person or one or more Subsidiaries of such
Person (or any combination thereof).


 


“TIA” means the Trust Indenture Act of
1939, as amended (15 U.S.C. §§ 77aaa 77bbbb) as in effect on the date on
which this Indenture is qualified under the TIA.


 


“Total Tangible Assets” means the total
consolidated assets, less applicable depreciation, amortization and other
valuation reserves and less all goodwill, trade names, trademarks, patents,
unamortized debt discount and other intangibles, of the Company and its
Restricted Subsidiaries, as shown on the most recent balance sheet of the
Company prepared in conformity with GAAP


 


“Trustee” means the party named as such in
the preamble to this Indenture until a successor replaces it in accordance with
the applicable provisions of this Indenture and thereafter means the successor
serving hereunder.


 


“Unlegended
Regulation S Global Note” means a permanent Global Note
in the form of Exhibit A hereto bearing the Global Note Legend, deposited
with or on behalf of and registered in the name of the Depositary or its
nominee and issued upon expiration of the Restricted Period.


 


“Unrestricted Definitive Note” means one or
more Definitive Notes that do not bear and are not required to bear the Private
Placement Legend.


 


“Unrestricted Global Note” means a
permanent Global Note in the form of Exhibit A attached hereto that bears
the Global Note Legend and that has the “Schedule of Exchanges of
Interests in the Global Note” attached thereto, and that is deposited with or
on behalf of and registered in the name of the Depositary, representing a
series of Notes that do not bear the Private Placement Legend.


 


26


















 


“Unrestricted Subsidiary” means any
Subsidiary of the Company that is designated by the Board of Directors as an
Unrestricted Subsidiary pursuant to a Board Resolution, but only to the extent
that such Subsidiary: 


 


(1)                                  has
no Indebtedness other than Non-Recourse Debt; 


 


(2)                                  is
not party to any agreement, contract, arrangement or understanding with the
Company or any Restricted Subsidiary of the Company unless the terms of any
such agreement, contract, arrangement or understanding are no less favorable to
the Company or such Restricted Subsidiary than those that might be obtained at
the time from Persons who are not Affiliates of the Company; 


 


(3)                                  is
a Person with respect to which neither the Company nor any of its Restricted
Subsidiaries has any direct or indirect obligation (a) to subscribe for
additional Equity Interests or (b) to maintain or preserve such Person’s
financial condition or to cause such Person to achieve any specified levels of
operating results; 


 


(4)                                  is
not a guarantor or does not otherwise directly or indirectly provide credit
support for any Indebtedness of the Company or any of its Restricted
Subsidiaries at the time of such designation unless such guarantee or credit
support is released upon such designation; and 


 


(5)                                  has
at least one director on its Board of Directors that is not a director or
executive officer of the Company or any of its Restricted Subsidiaries and has
at least one executive officer that is not a director or executive officer of
the Company or any of its Restricted Subsidiaries. 


 


Any
designation of a Restricted Subsidiary of the Company as an Unrestricted
Subsidiary shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an
Officers’ Certificate certifying that such designation complied with the
preceding conditions and was permitted by Section 4.07. If, at any time,
any Unrestricted Subsidiary would fail to meet the preceding requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date and, if such Indebtedness is not permitted to be incurred
as of such date under Section 4.09, the Company shall be in default
hereunder. 


 


“U.S. Person” means a U.S. person as
defined in Rule 902(o) under the Securities Act.


 


“Voting Stock” of any Person as of any
date means the Capital Stock of such Person that is at the time entitled to
vote in the election of the Board of Directors of such Person. 


 


“Weighted Average Life to Maturity” means,
when applied to any Indebtedness at any date, the number of years obtained by
dividing: 


 


27





















 


(1)                                  the
sum of the products obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity or other required payments
of principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment; by 


 


(2)                                  the
then outstanding principal amount of such Indebtedness. 


 


SECTION 1.02.  Other Definitions.


 


	
  Term

  	
   

  	
  Defined in

  Section

  
	
  “Affiliate
  Transaction”

  	
   

  	
  4.11

  
	
  “Asset Sale
  Offer”

  	
   

  	
  4.10

  
	
  “Authentication
  Order”

  	
   

  	
  2.02

  
	
  “Change of
  Control Offer”

  	
   

  	
  4.14

  
	
  “Change of
  Control Payment”

  	
   

  	
  4.14

  
	
  “Change of
  Control Payment Date”

  	
   

  	
  4.14

  
	
  “Covenant Defeasance”

  	
   

  	
  8.03

  
	
  “DTC”

  	
   

  	
  2.04

  
	
  “Event of
  Default”

  	
   

  	
  6.01

  
	
  “Excess Proceeds”

  	
   

  	
  4.10

  
	
  “incur”

  	
   

  	
  4.09

  
	
  “Legal
  Defeasance”

  	
   

  	
  8.02

  
	
  “Note Guarantee”

  	
   

  	
  11.01

  
	
  “Offer Amount”

  	
   

  	
  3.09

  
	
  “Offer Period”

  	
   

  	
  3.09

  
	
  “Paying Agent”

  	
   

  	
  2.04

  
	
  “Payment
  Blockage Notice”

  	
   

  	
  10.03

  
	
  “Payment
  Blockage Period”

  	
   

  	
  10.03

  
	
  “Permitted Debt”

  	
   

  	
  4.09

  
	
  “Purchase Date”

  	
   

  	
  3.09

  
	
  “Registrar”

  	
   

  	
  2.04

  
	
  “Repurchase
  Offer”

  	
   

  	
  3.09

  
	
  “Restricted
  Payments”

  	
   

  	
  4.07

  



 


SECTION 1.03.  Incorporation by Reference of Trust
Indenture Act.  Whenever this
Indenture refers to a provision of the TIA, the provision is incorporated by
reference in and made a part of this Indenture.


 


The following TIA
terms used in this Indenture have the following meanings:


 


“indenture securities” means the Notes;


 


“indenture security Holder” means a Holder
of a Note;


 


28





















 


“indenture to be qualified” means this
Indenture;


 


“indenture trustee” or “institutional trustee” means the Trustee;
and


 


“obligor” on the Notes means the Company
and any successor obligor upon the Notes.


 


All other terms
used in this Indenture that are defined by the TIA, defined by TIA reference to
another statute or defined by SEC rule under the TIA have the meanings so
assigned to them.


 


SECTION 1.04.  Rules of Construction.  Unless the context otherwise requires:


 


(a)                                  a
term has the meaning assigned to it;


 


(b)                                 an
accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;


 


(c)                                  “or”
is not exclusive;


 


(d)                                 words
in the singular include the plural, and in the plural include the singular;


 


(e)                                  provisions
apply to successive events and transactions; and


 


(f)                                    references
to sections of or rules under the Securities Act shall be deemed to
include substitute, replacement of successor sections or rules adopted by
the SEC from time to time.


 


ARTICLE 2


 


THE NOTES


 


SECTION 2.01.  Form and Dating.  (a)  General.  The Notes and the Trustee’s certificate of
authentication shall be substantially in the form of Exhibit A
hereto.  The Notes may have notations,
legends or endorsements required by law, stock exchange rule or
usage.  Each Note shall be dated the date
of its authentication.  The Notes shall
be in denominations of $1,000 and integral multiples thereof.


 


The terms and
provisions contained in the Notes shall constitute, and are hereby expressly made,
a part of this Indenture and the Company and the Trustee, by their execution
and delivery of this Indenture, expressly agree to such terms and provisions
and to be bound thereby.  However, to the
extent any provision of any Note conflicts with the express provisions of this
Indenture, the provisions of this Indenture shall govern and be controlling.


 


(b)                                 Global Notes.  Notes issued in global form shall be
substantially in the form of Exhibit A attached hereto (including the
Global Note Legend thereon and the “Schedule


 


29





















 


of Exchanges of Interests in the Global Note” attached thereto).  Notes issued in definitive form shall be
substantially in the form of Exhibit A attached hereto (but without the
Global Note Legend thereon and without the “Schedule of Exchanges of
Interests in the Global Note” attached thereto).  Each Global Note shall represent such amount
of the outstanding Notes as shall be specified therein and each shall provide
that it shall represent the aggregate principal amount of outstanding Notes
from time to time endorsed thereon and that the aggregate principal amount of
outstanding Notes represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions.  Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby shall be made by the Trustee, in accordance
with instructions given by the Holder thereof as required by Section 2.07
hereof.


 


(c)                                  Regulation S
Global Notes.  Notes offered and sold in reliance on
Regulation S shall be issued initially in the form of the Legended
Regulation S Global Note, which shall be deposited on behalf of the purchasers
of the Notes represented thereby with the Trustee, as custodian for The
Depository Trust Company (“DTC”)
in New York, New York, and registered in the name of the Depositary or the
nominee of the Depositary for the accounts of designated agents holding on
behalf of Euroclear or Clearstream, duly executed by the Company and
authenticated by the Trustee as hereinafter provided.  Following the termination of the Restricted
Period, beneficial interests in the Legended Regulation S Global Note shall be
exchanged for beneficial interests in Unlegended Regulation S Global Notes
pursuant to the Applicable Procedures. 
Simultaneously with the authentication of the Unlegended
Regulation S Global Notes, the Trustee shall cancel the Legended
Regulation S Global Note.  The
aggregate principal amount of the Regulation S Global Notes may from time
to time be increased or decreased by adjustments made on the records of the
Trustee and the Depositary or its nominee, as the case may be, in connection
with transfers of interest as hereinafter provided.


 


(d)                                 Euroclear and
Clearstream Procedures Applicable.  The provisions of
the “Operating Procedures of the Euroclear System” and “Terms and Conditions
Governing Use of Euroclear” and the “General Terms and Conditions of Clearstream
Banking” and “Customer Handbook” of Clearstream shall be applicable to
transfers of beneficial interests in the Regulation S Global Notes that are
held by Participants through Euroclear or Clearstream.


 


SECTION 2.02.  Execution and Authentication.  One Officer shall sign the Notes for the
Company by manual or facsimile signature.


 


If the Officer
whose signature is on a Note no longer holds that office at the time a Note is
authenticated, the Note shall nevertheless be valid.


 


A Note shall not
be valid until authenticated by the manual signature of the Trustee.  The signature shall be conclusive evidence
that the Note has been authenticated in accordance with the terms of this
Indenture.


 


The aggregate
principal amount of Notes that may be authenticated and delivered under this
Indenture is unlimited.  The Trustee
shall, upon a written order of the Company signed by one Officer (an “Authentication Order”), authenticate and
deliver Notes for original issue on the date hereof in the aggregate principal
amount of $150 million.  At any time and
from time to


 


30





















 


time
after execution of this Indenture, the Trustee shall, upon receipt of an
Authentication Order, authenticate Notes for original issue in an aggregate
principal amount specified in such Authentication Order.  Such Authentication Order shall specify the
amount of the Notes to be authenticated and the date on which the original
issue of Notes is to be authenticated.


 


The Trustee may
appoint an authenticating agent acceptable to the Company to authenticate
Notes.  An authenticating agent may
authenticate Notes whenever the Trustee may do so.  Each reference in this Indenture to authentication
by the Trustee includes authentication by such agent.  An authenticating agent has the same rights
as an Agent to deal with Holders or an Affiliate of the Company.


 


SECTION 2.03.  Methods of Receiving Payments on the Notes.


 


If a Holder of
Notes has given wire transfer instructions to the Company, the Company shall pay
all principal, interest and premium and Liquidated Damages, if any, on that
Holder’s Notes in accordance with those instructions.  All other payments on Notes shall be made at
the office or agency of the Paying Agent and Registrar within the City and State
of New York unless the Company elects to make interest payments by check mailed
to the Holders at their addresses set forth in the register of Holders.


 


SECTION 2.04.  Registrar and Paying Agent.  The Company shall maintain an office or
agency where Notes may be presented for registration of transfer or for
exchange (“Registrar”) and an
office or agency where Notes may be presented for payment (“Paying Agent”).  The Registrar shall keep a register of the
Notes and of their transfer and exchange. 
The Company may appoint one or more co-registrars and one or more
additional paying agents.  The term “Registrar”
includes any co-registrar and the term “Paying Agent” includes any additional
paying agent.  The Company may change any
Paying Agent or Registrar without notice to any Holder.  The Company shall promptly notify the Trustee
in writing of the name and address of any Agent who is not a party to this
Indenture.  If the Company fails to
appoint or maintain another entity as Registrar or Paying Agent, the Trustee
shall act as such.  The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.


 


The Company
initially appoints DTC to act as Depositary with respect to the Global Notes.


 


The Company
initially appoints the Trustee to act as the Registrar and Paying Agent and to
act as Custodian with respect to the Global Notes.


 


SECTION 2.05.  Paying Agent to Hold Money in Trust.  The Company shall require each Paying Agent
other than the Trustee to agree in writing that the Paying Agent shall hold in
trust for the benefit of Holders or the Trustee all money held by the Paying
Agent for the payment of principal, premium or Liquidated Damages, if any, or
interest on the Notes, and shall notify the Trustee of any default by the
Company in making any such payment. 
While any such default continues, the Trustee may require a Paying Agent
to pay all money held by it to the Trustee. 
The Company at any time may require a Paying Agent to pay all money held
by it to the Trustee.  Upon payment over
to the Trustee, the Paying Agent (if other than the Company or a Subsidiary)
shall have no further liability for the money. 
If the Company or a Restricted


 


31





















 


Subsidiary acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit of
the Holders all money held by it as Paying Agent.  Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee shall serve as Paying Agent
for the Notes.


 


SECTION 2.06.  Holder Lists.  The Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of all Holders and shall otherwise comply with TIA § 312(a).  If the Trustee is not the Registrar, the
Company shall furnish to the Trustee at least seven Business Days before each
interest payment date and at such other times as the Trustee may request in
writing, a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of the Holders of Notes and the Company
shall otherwise comply with TIA § 312(a).


 


SECTION 2.07.  Transfer and Exchange.  (a)  Transfer
and Exchange of Global Notes. 
A Global Note may not be transferred as a whole except by the Depositary
to a nominee of the Depositary, by a nominee of the Depositary to the
Depositary or to another nominee of the Depositary, or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary.  All Global Notes shall be
exchanged by the Company for Definitive Notes if (i) the Depositary (x)
notifies the Company that it is unwilling or unable to continue to act as
Depositary or (y) that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by
the Company within 120 days after the date of such notice from the Depositary; (ii) the
Company in its sole discretion determines that the Global Notes (in whole but
not in part) should be exchanged for Definitive Notes and delivers a written
notice to such effect to the Trustee; provided that
in no event shall the Legended Regulation S Global Note be exchanged by
the Company for Definitive Notes prior to the expiration of the Restricted
Period; or (iii) there shall have occurred and be continuing a Default or
Event of Default with respect to the Notes. 
Upon the occurrence of either of the preceding events in (i), (ii) or
(iii) above, Definitive Notes shall be issued in such names as the
Depositary shall instruct the Trustee. 
Global Notes also may be exchanged or replaced, in whole or in part, as
provided in Sections 2.08 and 2.11 hereof. 
Every Note authenticated and delivered in exchange for, or in lieu of, a
Global Note or any portion thereof, pursuant to this Section 2.07 or Section 2.08
or 2.11 hereof, shall be authenticated and delivered in the form of, and shall
be, a Global Note.  A Global Note may not
be exchanged for another Note other than as provided in this Section 2.07(a),
however, beneficial interests in a Global Note may be transferred and exchanged
as provided in Section 2.07(b), (d) or (f) hereof.


 


(b)                                 Transfer and
Exchange of Beneficial Interests in the Global Notes.  The transfer and exchange of beneficial
interests in the Global Notes shall be effected through the Depositary, in
accordance with the provisions of this Indenture and the Applicable
Procedures.  Beneficial interests in the
Restricted Global Notes shall be subject to restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.  Transfers of beneficial interests in the
Global Notes also shall require compliance with either subparagraph (i) or
(ii) below, as applicable, as well as one or more of the other following
subparagraphs, as applicable:


 


(i)                                     Transfer of Beneficial Interests in the Same Global Note.  Beneficial interests in any Restricted Global
Note may be transferred to Persons who take delivery


 


32





















 


thereof in the form of a beneficial interest in the same Restricted
Global Note in accordance with the transfer restrictions set forth in the
Private Placement Legend.  Beneficial
interests in any Unrestricted Global Note may be transferred to Persons who
take delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note.  No written orders or
instructions shall be required to be delivered to the Registrar to effect the
transfers described in this Section 2.07(b)(i).


 


(ii)                                  All Other
Transfers and Exchanges of Beneficial Interests in Global Notes.  In connection with all transfers and
exchanges of beneficial interests that are not subject to Section 2.07(b)(i) above,
the transferor of such beneficial interest must deliver to the Registrar either
(A) (1) a written order from a Participant or an Indirect Participant
given to the Depositary in accordance with the Applicable Procedures directing
the Depositary to credit or cause to be credited a beneficial interest in
another Global Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given in accordance with the
Applicable Procedures containing information regarding the Participant account
to be credited with such increase or (B) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in accordance
with the Applicable Procedures directing the Depositary to cause to be issued a
Definitive Note in an amount equal to the beneficial interest to be transferred
or exchanged and (2) instructions given by the Depositary to the Registrar
containing information regarding the Person in whose name such Definitive Note
shall be registered to effect the transfer or exchange referred to in (1) above;
provided that in no event shall
Definitive Notes be issued upon the transfer or exchange of beneficial
interests in the Legended Regulation S Global Note prior to the expiration
of the Restricted Period.  Upon
consummation of an Exchange Offer by the Company in accordance with Section 2.07(f) hereof,
the requirements of this Section 2.07(b)(ii) shall be deemed to have
been satisfied upon receipt by the Registrar of the instructions contained in
the Letter of Transmittal delivered by the Holder of such beneficial interests
in the Restricted Global Notes.  Upon
satisfaction of all of the requirements for transfer or exchange of beneficial
interests in Global Notes contained in this Indenture and the Notes or
otherwise applicable under the Securities Act, the Trustee shall adjust the
principal amount at maturity of the relevant Global Notes pursuant to Section 2.07(h) hereof


 


(iii)                               Transfer of
Beneficial Interests to Another Restricted Global Note.  A beneficial interest in any Restricted
Global Note may be transferred to a Person who takes delivery thereof in the
form of a beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.07(b)(ii) above and the
Registrar receives the following:


 


(A)                              if
the transferee shall take delivery in the form of a beneficial interest in the
144A Global Note, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (1) thereof;
and


 


(B)                                if
the transferee shall take delivery in the form of a beneficial interest in
a Legended Regulation S Global Note, then the


 


33





















 


transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof.


 


(iv)                              Transfer and
Exchange of Beneficial Interests in a Restricted Global Note for Beneficial
Interests in the Unrestricted Global Note.  A beneficial interest in any Restricted
Global Note may be exchanged by any Holder thereof for a beneficial interest in
an Unrestricted Global Note or transferred to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Note if
the exchange or transfer complies with the requirements of Section 2.07(b)(ii) above
and:


 


(A)                              such
exchange or transfer is effected pursuant to the Exchange Offer in accordance
with the Registration Rights Agreement and the Holder of the beneficial
interest to be transferred, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of Transmittal that
it is not (1) a Person participating in the distribution of the Exchange
Notes or (2) a Person who is an affiliate (as defined in Rule 144) of
the Company; 


 


(B)                                such
transfer is effected pursuant to the Shelf Registration Statement in accordance
with the Registration Rights Agreement;


 


(C)                                such
transfer is effected by a Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the Registration Rights Agreement; or


 


(D)                               the
Registrar receives the following: 


 


(1)                                  if the Holder of such beneficial
interest in a Restricted Global Note proposes to exchange such beneficial
interest for a beneficial interest in an Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit C hereto, including
the certifications in item (1)(a) thereof; or


 


(2)                                  if the Holder of such beneficial
interest in a Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note, a certificate from such
Holder in the form of Exhibit B hereto, including the certifications in
item (4) thereof;


 


and, in each such case set forth in this
subparagraph (D), if the Registrar so requests or if the Applicable
Procedures so require, an Opinion of Counsel in form reasonably acceptable to
the Registrar to the effect that such exchange or transfer is in compliance
with the Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to maintain
compliance with the Securities Act.


 


34





















 


If any such transfer is effected pursuant to subparagraph (B) or
(D) above at a time when an Unrestricted Global Note has not yet been
issued, the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or
more Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.


 


Beneficial
interests in an Unrestricted Global Note cannot be exchanged for, or
transferred to Persons who take delivery thereof in the form of, a beneficial
interest in a Restricted Global Note.


 


(c)                                  Transfer or
Exchange of Beneficial Interests for Definitive Notes. 
(i)  Beneficial Interests in
Restricted Global Notes to Restricted Definitive Notes.  If any Holder of a beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note or to transfer such beneficial interest to a Person
who takes delivery thereof in the form of a Restricted Definitive Note, then,
upon receipt by the Registrar of the following documentation:


 


(A)                              if
the Holder of such beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Restricted Definitive Note, a
certificate from such Holder in the form of Exhibit C hereto, including
the certifications in item (2)(a) thereof;


 


(B)                                if
such beneficial interest is being transferred to a QIB in accordance with Rule 144A
under the Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (1) thereof;


 


(C)                                if
such beneficial interest is being transferred to an Institutional Accredited
Investor in reliance on an exemption from the registration requirements of the
Securities Act other than that listed in subparagraph (B) above, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item (3)(b) thereof,
if applicable; or


 


(D)                               if
such beneficial interest is being transferred to the Company or any of its
Subsidiaries, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(a) thereof;


 


the Trustee shall cause the aggregate principal amount
of the applicable Global Note to be reduced accordingly pursuant to Section 2.07(h) hereof,
and the Company shall execute and the Trustee shall authenticate and deliver to
the Person designated in the instructions a Definitive Note in the appropriate
principal amount.  Any Definitive Note
issued in exchange for a beneficial interest in a Restricted Global Note
pursuant to this Section 2.07(c) shall be registered in such name or
names and in such authorized denomination or denominations as the Holder of
such beneficial interest shall instruct the Registrar through instructions from
the Depositary and the Participant or Indirect Participant.  The Trustee shall deliver such Definitive
Notes to the Persons in whose names such Notes are so registered.  Any Definitive Note issued in exchange for a


 


35





















 


beneficial interest in a Restricted Global Note
pursuant to this Section 2.07(c)(i) shall bear the Private Placement
Legend and shall be subject to all restrictions on transfer contained therein.


 


(ii)                                  Beneficial Interests in Legended Regulation S Global
Note to Definitive Notes.  A
beneficial interest in the Legended Regulation S Global Note may not be
exchanged for a Definitive Note or transferred to a Person who takes delivery
thereof in the form of a Definitive Note prior to the expiration of the
Restricted Period, except in the case of a transfer pursuant to an exemption
from the registration requirements of the Securities Act other than Rule 903
or Rule 904.


 


(iii)                               Beneficial Interests in Restricted Global Notes to
Unrestricted Definitive Notes. 
A Holder of a beneficial interest in a Restricted Global Note may
exchange such beneficial interest for an Unrestricted Definitive Note or may
transfer such beneficial interest to a Person who takes delivery thereof in the
form of an Unrestricted Definitive Note only if:


 


(A)                              such
exchange or transfer is effected pursuant to the Exchange Offer in accordance
with the Registration Rights Agreement and the Holder of such beneficial
interest, in the case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal that it is not (1) a
Person participating in the distribution of the Exchange Notes or (2) a
Person who is an affiliate (as defined in Rule 144) of the Company;


 


(B)                                such
transfer is effected pursuant to the Shelf Registration Statement in accordance
with the Registration Rights Agreement;


 


(C)                                such
transfer is effected by a Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the Registration Rights Agreement; or


 


(D)                               the
Registrar receives the following:


 


(1)                                  if the Holder of such beneficial
interest in a Restricted Global Note proposes to exchange such beneficial
interest for a Definitive Note that does not bear the Private Placement Legend,
a certificate from such Holder in the form of Exhibit C hereto, including
the certifications in item (1)(b) thereof; or


 


(2)                                  if the Holder of such beneficial
interest in a Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form of a
Definitive Note that does not bear the Private Placement Legend, a certificate
from such Holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;


 


and,
in each such case set forth in this subparagraph (D), if the Registrar so
requests or if the Applicable Procedures so require, an Opinion of Counsel in
form reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the


 


36





















 


Private
Placement Legend are no longer required in order to maintain compliance with
the Securities Act.


 


(iv)                              Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. 
If any Holder of a beneficial interest in an Unrestricted Global Note
proposes to exchange such beneficial interest for a Definitive Note or to
transfer such beneficial interest to a Person who takes delivery thereof in the
form of a Definitive Note, then, upon satisfaction of the conditions set forth
in Section 2.07(b)(ii) hereof, the Trustee shall cause the aggregate
principal amount of the applicable Global Note to be reduced accordingly
pursuant to Section 2.07(h) hereof, and the Company shall execute and
the Trustee shall authenticate and deliver to the Person designated in the
instructions a Definitive Note in the appropriate principal amount.  Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.07(c)(iv) shall be registered
in such name or names and in such authorized denomination or denominations as
the Holder of such beneficial interest shall instruct the Registrar through
instructions from the Depositary and the Participant or Indirect Participant.  The Trustee shall deliver such Definitive
Notes to the Persons in whose names such Notes are so registered.  Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.07(c)(iv) shall not
bear the Private Placement Legend.


 


(d)                                 Transfer and
Exchange of Definitive Notes for Beneficial Interests. 
(i)  Restricted Definitive Notes
to Beneficial Interests in Restricted Global Notes.  If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a Restricted Global
Note or to transfer such Restricted Definitive Notes to a Person who takes
delivery thereof in the form of a beneficial interest in a Restricted Global
Note, then, upon receipt by the Registrar of the following documentation:


 


(A)                              if
the Holder of such Restricted Definitive Note proposes to exchange such Note
for a beneficial interest in a Restricted Global Note, a certificate from such
Holder in the form of Exhibit C hereto, including the certifications in
item (2)(b) thereof;


 


(B)                                if
such Restricted Definitive Note is being transferred to a QIB in accordance
with Rule 144A under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (1) thereof;
or


 


(C)                                if
such Restricted Definitive Note is being transferred to a Non-U.S. Person in an
offshore transaction in accordance with Rule 903 or Rule 904 under
the Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (2) thereof;


 


the
Trustee shall cancel the Restricted Definitive Note, increase or cause to be
increased the aggregate principal amount of, in the case of clause (A) above,
the appropriate Restricted Global Note, in the case of clause (B) above,
the 144A Global Note, and in the case of clause (C) above, the
Regulation S Global Note.


 


(ii)                                  Restricted Definitive Notes to Beneficial Interests in Unrestricted
Global Notes.  A Holder of a
Restricted Definitive Note may exchange such Note for a beneficial


 


37





















 


interest in an Unrestricted
Global Note or transfer such Restricted Definitive Note to a Person who takes
delivery thereof in the form of a beneficial interest in an Unrestricted Global
Note only if:


 


(A)                              such
exchange or transfer is effected pursuant to the Exchange Offer in accordance
with the Registration Rights Agreement and the Holder, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a Person participating
in the distribution of the Exchange Notes or (2) a Person who is an
affiliate (as defined in Rule 144) of the Company;


 


(B)                                such
transfer is effected pursuant to the Shelf Registration Statement in accordance
with the Registration Rights Agreement;


 


(C)                                such
transfer is effected by a Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the Registration Rights Agreement; or


 


(D)                               the
Registrar receives the following:


 


(1)                                  if the Holder of such Definitive
Notes proposes to exchange such Notes for a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(c) thereof; or


 


(2)                                  if the Holder of such Definitive
Notes proposes to transfer such Notes to a Person who shall take delivery
thereof in the form of a beneficial interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit B hereto, including
the certifications in item (4) thereof;


 


and, in each such case set forth in this
subparagraph (D), if the Registrar so requests or if the Applicable
Procedures so require, an Opinion of Counsel in form reasonably acceptable to
the Registrar to the effect that such exchange or transfer is in compliance
with the Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to maintain
compliance with the Securities Act.


 


Upon satisfaction
of the conditions of any of the subparagraphs in this Section 2.07(d)(ii),
the Trustee shall cancel the Definitive Notes and increase or cause to be
increased the aggregate principal amount of the Unrestricted Global Note.


 


(iii)                               Unrestricted Definitive Notes to Beneficial Interests in Unrestricted
Global Notes.  A Holder of an
Unrestricted Definitive Note may exchange such Note for a beneficial interest
in an Unrestricted Global Note or transfer such Definitive Notes to a Person
who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note at any time. 
Upon receipt of a request for such an exchange or transfer, the Trustee
shall cancel the applicable Unrestricted Definitive Note and increase or cause
to be increased the aggregate principal amount of one of the Unrestricted
Global Notes.


 


38





















 


If any such
exchange or transfer from a Definitive Note to a beneficial interest is
effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above at
a time when an Unrestricted Global Note has not yet been issued, the Company
shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02
hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in
an aggregate principal amount equal to the principal amount of Definitive Notes
so transferred.


 


(e)                                  Transfer and
Exchange of Definitive Notes for Definitive Notes.  Upon request by a Holder of Definitive Notes and such Holder’s
compliance with the provisions of this Section 2.07(e), the Registrar
shall register the transfer or exchange of Definitive Notes.  Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section 2.07(e).


 


(i)                                     Transfer of Restricted Definitive Notes to Restricted Definitive Notes.  Any Restricted Definitive Note may be
transferred to and registered in the name of Persons who take delivery thereof
in the form of a Restricted Definitive Note if the Registrar receives the
following:


 


(A)                              if
the transfer shall be made pursuant to Rule 144A under the Securities Act,
then the transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1) thereof;


 


(B)                                [INTENTIONALLY
OMITTED]; and


 


(C)                                if
the transfer shall be made pursuant to any other exemption from the
registration requirements of the Securities Act, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item (3) thereof,
if applicable.


 


(ii)                                  Restricted
Definitive Notes to Unrestricted Definitive Notes.  Any Restricted Definitive Note may be
exchanged by the Holder thereof for an Unrestricted Definitive Note or
transferred to a Person or Persons who take delivery thereof in the form of an
Unrestricted Definitive Note if:


 


(A)                              such
exchange or transfer is effected pursuant to the Exchange Offer in accordance
with the Registration Rights Agreement and the Holder, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a Person participating
in the distribution of the Exchange Notes or (2) a Person who is an
affiliate (as defined in Rule 144) of the Company;


 


(B)                                any
such transfer is effected pursuant to the Shelf Registration Statement in
accordance with the Registration Rights Agreement;


 


39





















 


(C)                                any
such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the Registration Rights Agreement; or


 


(D)                               the
Registrar receives the following:


 


(1)                                  if the Holder of such Restricted
Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(d) thereof; or


 


(2)                                  if the Holder of such Restricted
Definitive Notes proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive Note, a certificate
from such Holder in the form of Exhibit B hereto, including the certifications
in item (4) thereof,


 


and, in
each such case set forth in this subparagraph (D), if the Registrar so
requests, an Opinion of Counsel in form reasonably acceptable to the Company to
the effect that such exchange or transfer is in compliance with the Securities
Act and that the restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain compliance with
the Securities Act.


 


(iii)                               Unrestricted
Definitive Notes to Unrestricted Definitive Notes.  A Holder of Unrestricted Definitive Notes may
transfer such Notes to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note.  Upon
receipt of a request to register such a transfer, the Registrar shall register
the Unrestricted Definitive Notes pursuant to the instructions from the Holder
thereof.


 


(f)                                    Exchange
Offer.  Upon the occurrence of the
Exchange Offer in accordance with the Registration Rights Agreement, the
Company shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.02, the Trustee shall authenticate (i) one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of the beneficial interests in the Restricted Global Notes
tendered for acceptance by Persons that certify in the applicable Letters of
Transmittal that (x) they are not participating in a distribution of the
Exchange Notes and (y) they are not affiliates (as defined in Rule 144)
of the Company, and (ii) Definitive Notes in an aggregate principal amount
equal to the principal amount of the Restricted Definitive Notes accepted for
exchange in the Exchange Offer. 
Concurrently with the issuance of such Notes, the Trustee shall cause
the aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company shall execute and the Trustee shall
authenticate and deliver to the Persons designated by the Holders of Restricted
Global Notes so accepted Unrestricted Global Notes in the appropriate principal
amount.


 


40





















 


(g)                                 Legends. 
The following legends shall appear on the face of all Global Notes and
Definitive Notes issued under this Indenture unless specifically stated
otherwise in the applicable provisions of this Indenture.


 


(i)                                     Private Placement Legend. 
(A)  Except as permitted below, each Global Note and each
Definitive Note (and all Notes issued in exchange therefor or substitution
thereof) shall bear the legend in substantially the following form:


 


“THIS NOTE
AND THE GUARANTEES ENDORSED HEREON HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS.  NEITHER THIS NOTE NOR
THE GUARANTEES ENDORSED HEREON NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED
OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.  THE HOLDER OF THIS NOTE AND THE GUARANTEES
ENDORSED HEREON BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF
THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE AND THE GUARANTEES ENDORSED
HEREON (OR ANY PREDECESSOR OF THIS NOTE AND ANY THE GUARANTEES ENDORSED HEREON)
(THE “RESALE RESTRICTION TERMINATION DATE”) ONLY (A) TO THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A
PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED
IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE COMPANY’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
(i) PURSUANT TO CLAUSE (D) PRIOR TO THE END OF THE 40-DAY
DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT OR PURSUANT TO CLAUSE (E) PRIOR TO THE RESALE RESTRICTION
TERMINATION DATE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (ii) IN
EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING
ON THIS NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE.  THIS LEGEND WILL


 


41





















 


BE REMOVED
UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.”


 


Notwithstanding
the foregoing, any Global Note or Definitive Note issued pursuant to
subparagraphs (b)(iv), (c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or
(f) to this Section 2.07 (and all Notes issued in exchange therefor
or substitution thereof) shall not bear the Private Placement Legend.


 


(ii)                                  Global Note
Legend.  Each Global Note
shall bear a legend in substantially the following form:


 


THIS
GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING
THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS
HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT
THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE
REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL
NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.07(a) OF
THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE
FOR CANCELLATION PURSUANT TO SECTION 2.12 OF THE INDENTURE AND
(IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY
WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY


 


(h)                                 Cancellation
and/or Adjustment of Global Notes.  At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
cancelled in whole and not in part, each such Global Note shall be returned to
or retained and cancelled by the Trustee in accordance with Section 2.12
hereof.  At any time prior to such
cancellation, if any beneficial interest in a Global Note is exchanged for or
transferred to a Person who shall take delivery thereof in the form of a
beneficial interest in another Global Note or for Definitive Notes, the
principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note by the Trustee
or by the Depositary at the direction of the Trustee to reflect such reduction;
and if the beneficial interest is being exchanged for or transferred to a
Person who shall take delivery thereof in the form of a beneficial interest in
another Global Note, such other Global Note shall be increased accordingly and
an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.


 


(i)                                     General
Provisions Relating to Transfers and Exchanges. 
(i)  To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon the Company’s order or at the Registrar’s request.


 


42





















 


(ii)                                  No
service charge shall be made to a Holder of a beneficial interest in a Global
Note or to a Holder of a Definitive Note for any registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 2.11, 3.06, 3.09, 4.10, 4.14 and 9.05
hereof).


 


(iii)                               The
Registrar shall not be required to register the transfer of or exchange any
Note selected for redemption in whole or in part, except the unredeemed portion
of any Note being redeemed in part.


 


(iv)                              All
Global Notes and Definitive Notes issued upon any registration of transfer or
exchange of Global Notes or Definitive Notes shall be the valid and legally
binding obligations of the Company, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the Global Notes or Definitive Notes
surrendered upon such registration of transfer or exchange.


 


(v)                                 The
Company shall not be required (A) to issue, to register the transfer of or
to exchange any Notes during a period beginning at the opening of business 15
days before the day of any selection of Notes for redemption under Section 3.02
hereof and ending at the close of business on the day of selection, (B) to
register the transfer of or to exchange any Note so selected for redemption in
whole or in part, except the unredeemed portion of any Note being redeemed in
part or (C) to register the transfer of or to exchange a Note between a
record date and the next succeeding interest payment date.


 


(vi)                              Prior
to due presentment for the registration of a transfer of any Note, the Trustee,
any Agent and the Company may deem and treat the Person in whose name any Note
is registered as the absolute owner of such Note for the purpose of receiving
payment of principal of and interest on such Notes and for all other purposes,
and none of the Trustee, any Agent or the Company shall be affected by notice
to the contrary.


 


(vii)                           The
Trustee shall authenticate Global Notes and Definitive Notes in accordance with
the provisions of Section 2.02 hereof.


 


(viii)                        All
certifications, certificates and Opinions of Counsel required to be submitted
to the Registrar pursuant to this Section 2.07 to effect a registration of
transfer or exchange may be submitted by facsimile with the original to follow
by first class mail.


 


SECTION 2.08.  Replacement Notes.  If any mutilated Note is surrendered to the
Trustee or the Company and the Trustee receives evidence to its satisfaction of
the destruction, loss or theft of any Note, the Company shall issue and the
Trustee, upon receipt of an Authentication Order, shall authenticate a
replacement Note if the Trustee’s requirements are met.  If required by the Trustee or the Company, an
indemnity bond must be supplied by the Holder that is sufficient in the
judgment of the Trustee and the Company to protect the Company, the Trustee,
any Agent and any authenticating agent from any loss that any of them may
suffer if a Note is replaced.  The
Company may charge for its expenses in replacing a Note.


 


43





















 


Every replacement
Note issued pursuant to this Section 2.08 is an additional obligation of
the Company and shall be entitled to all of the benefits of this Indenture
equally and proportionately with all other Notes duly issued hereunder.


 


SECTION 2.09.  Outstanding Notes.  The Notes outstanding at any time are all the
Notes authenticated by the Trustee except for those cancelled by it, those
delivered to it for cancellation, those reductions in the interest in a Global
Note effected by the Trustee in accordance with the provisions hereof, and
those described in this Section as not outstanding.  Except as set forth in Section 2.10
hereof, a Note does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Note; however, Notes held by the Company or
a Subsidiary of the Company shall not be deemed to be outstanding for purposes
of Section 3.07(b) hereof.


 


If a Note is
replaced pursuant to Section 2.08 hereof, it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Note is
held by a bona fide purchaser.


 


If the principal
amount of any Note is considered paid under Section 4.01 hereof, it ceases
to be outstanding and interest on it ceases to accrue.


 


If the Paying
Agent (other than the Company, a Subsidiary or an Affiliate of any thereof)
holds, on a redemption date or maturity date, money sufficient to pay Notes
payable on that date, then on and after that date such Notes shall be deemed to
be no longer outstanding and shall cease to accrue interest.


 


SECTION 2.10.  Treasury Notes.  In determining whether the Holders of the
required principal amount of Notes have concurred in any direction, waiver or
consent, Notes owned by the Company, or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Company, shall be considered as though not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on
any such direction, waiver or consent, only Notes that the Trustee knows are so
owned shall be so disregarded.


 


SECTION 2.11.  Temporary Notes.  Until certificates representing Notes are
ready for delivery, the Company may prepare and the Trustee, upon receipt of an
Authentication Order, shall authenticate temporary Notes.  Temporary Notes shall be substantially in the
form of certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee.  Without unreasonable delay, the
Company shall prepare and the Trustee shall authenticate definitive Notes in
exchange for temporary Notes.


 


Holders of
temporary Notes shall be entitled to all of the benefits of this Indenture.


 


SECTION 2.12.  Cancellation.  The Company at any time may deliver Notes to
the Trustee for cancellation.  The
Registrar and Paying Agent shall forward to the Trustee any Notes surrendered
to them for registration of transfer, exchange or payment.  The Trustee and no one else shall cancel all
Notes surrendered for registration of transfer, exchange, payment,


 


44





















 


replacement or
cancellation and shall dispose of such cancelled Notes in its customary
manner.  Subject to Section 2.08,
the Company may not issue new Notes to replace Notes that it has paid or that
have been delivered to the Trustee for cancellation.


 


SECTION 2.13.  Defaulted Interest.  If the Company defaults in a payment of
interest on the Notes, it shall pay the defaulted interest in any lawful manner
plus, to the extent lawful, interest payable on the defaulted interest, to the
Persons who are Holders on a subsequent special record date, in each case at
the rate provided in the Notes and in Section 4.01 hereof.  The Company shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note
and the date of the proposed payment. 
The Company shall fix or cause to be fixed each such special record date
and payment date, provided that
no such special record date shall be less than 10 days prior to the related
payment date for such defaulted interest. 
At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) shall mail or cause to be mailed to Holders a notice that
states the special record date, the related payment date and the amount of such
interest to be paid.


 


SECTION 2.14.  CUSIP Numbers.  The Company in issuing the Notes may use “CUSIP”
numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP”
numbers in notices of redemption as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness of such numbers either as
printed on the Notes or as contained in any notice of redemption and that
reliance may be placed only on the other identification numbers printed on the
Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers.  The Company
shall promptly notify the Trustee of any change in the “CUSIP” numbers.


 


SECTION 2.15.  Issuance of Additional Notes.  The Company may, subject to Article 4 of
this Indenture and applicable law, issue Additional Notes.  The Initial Notes and any Additional Notes
subsequently issued shall be treated as a single class for all purposes under
this Indenture.


 


ARTICLE 3


 


REDEMPTION AND PREPAYMENT


 


SECTION 3.01.  Notices to Trustee.  If the Company elects to redeem Notes
pursuant to the optional redemption provisions of Section 3.07 hereof, it
shall furnish to the Trustee, at least 35 but not more than 60 days before the
redemption date (unless a shorter notice period shall be satisfactory to the
Trustee in its reasonable discretion), an Officers’ Certificate setting forth (i) the
clause of this Indenture pursuant to which the redemption shall occur, (ii) the
redemption date, (iii) the principal amount of Notes to be redeemed and (iv) the
redemption price.


 


SECTION 3.02.  Selection of Notes to Be Redeemed.  If less than all of the Notes are to be
redeemed at any time, selection of Notes for redemption shall be made by the
Trustee in compliance with the requirements of the principal national
securities exchange, if any, on which


 


45





















 


the Notes are listed, or,
if the Notes are not so listed, on a pro
rata basis, by lot or by such method as the Trustee shall deem fair
and appropriate.  In the event of partial
redemption by lot, the particular Notes to be redeemed shall be selected,
unless otherwise provided herein, not less than 30 days nor more than 60 days
prior to the redemption date by the Trustee (unless a shorter time period shall
be satisfactory to the Trustee) from the outstanding Notes not previously
called for redemption.


 


The Trustee shall
promptly notify the Company in writing of the Notes selected for redemption
and, in the case of any Note selected for partial redemption, the principal
amount thereof to be redeemed.  Notes and
portions of Notes selected shall be in amounts of $1,000 or whole multiples of
$1,000; except that if all of the Notes of a Holder are to be redeemed, the
entire outstanding amount of Notes held by such Holder, even if not a multiple
of $1,000, shall be redeemed.  Except as
provided in the preceding sentence, provisions of this Indenture that apply to
Notes called for redemption also apply to portions of Notes called for
redemption.


 


SECTION 3.03.  Notice of Redemption.  Subject to the provisions of Section 3.09
hereof, at least 30 days but not more than 60 days before a redemption date,
the Company shall mail or cause to be mailed, by first class mail, a notice of
redemption to each Holder whose Notes are to be redeemed at its registered
address, except that redemption notices may be mailed more than 60 days prior
to a redemption date if the notice is issued in connection with a defeasance of
the Notes in accordance with Article 8 hereof or a satisfaction and
discharge of the Indenture in accordance with Article 12 hereof.  Notices of redemption may not be conditional.


 


The notice shall
identify the Notes to be redeemed and shall state:


 


(a)                                  the redemption date;


 


(b)                                 the redemption price;


 


(c)                                  if any Note is being
redeemed in part, the portion of the principal amount of such Note to be
redeemed and that, after the redemption date upon surrender of such Note, a new
Note or Notes in principal amount equal to the unredeemed portion shall be
issued upon cancellation of the original Note;


 


(d)                                 the name and address
of the Paying Agent;


 


(e)                                  that Notes called for
redemption must be surrendered to the Paying Agent to collect the redemption
price and become due on the date fixed for redemption;


 


(f)                                    that, unless the
Company defaults in making such redemption payment, interest on Notes called
for redemption ceases to accrue on and after the redemption date;


 


(g)                                 the paragraph of the
Notes and/or Section of this Indenture pursuant to which the Notes called
for redemption are being redeemed; and


 


(h)                                 that no representation
is made as to the correctness or accuracy of the CUSIP number, if any, listed
in such notice or printed on the Notes.


 


46





















 


At the Company’s
request, the Trustee shall give the notice of redemption in the Company’s name
and at its expense.


 


SECTION 3.04.  Effect of Notice of Redemption.  Once notice of redemption is mailed in
accordance with Section 3.03 hereof, Notes called for redemption become
irrevocably due and payable on the redemption date at the redemption
price.  A notice of redemption may not be
conditional.


 


SECTION 3.05.  Deposit of Redemption Price.  On or before the redemption date, the Company
shall deposit with the Trustee or with the Paying Agent money sufficient to pay
the redemption price of and accrued interest on all Notes to be redeemed on
that date.  The Trustee or the Paying
Agent shall promptly return to the Company any money deposited with the Trustee
or the Paying Agent by the Company in excess of the amounts necessary to pay
the redemption price of, and accrued interest on, all Notes to be redeemed.


 


If the Company
complies with the provisions of the preceding paragraph, on and after the
redemption date, interest shall cease to accrue on the Notes or the portions of
Notes called for redemption.  If a Note
is redeemed on or after an interest record date but on or prior to the related
interest payment date, then any accrued and unpaid interest shall be paid to
the Person in whose name such Note was registered at the close of business on
such record date.  If any Note called for
redemption shall not be so paid upon surrender for redemption because of the
failure of the Company to comply with the preceding paragraph, interest shall
be paid on the unpaid principal, from the redemption date until such principal is
paid, and to the extent lawful on any interest not paid on such unpaid
principal, in each case at the rate provided in the Notes and in Section 4.01
hereof.


 


SECTION 3.06.  Notes Redeemed in Part.  Upon surrender of a Note that is redeemed in
part, the Company shall issue and, upon the Company’s written request, the
Trustee shall authenticate for the Holder at the expense of the Company a new
Note equal in principal amount to the unredeemed portion of the Note
surrendered.


 


SECTION 3.07.  Optional Redemption.  (a)  Except as set forth in clause (b) of
this Section 3.07, the Notes shall not be redeemable at the Company’s
option prior to December 1, 2008. 
On or after December 1, 2008, the Company may redeem all or a
portion of the Notes upon not less than 30 days nor more than 60 days’ notice,
at the redemption prices (expressed as percentages of principal amount) set
forth below plus accrued and unpaid interest and Liquidated Damages, if any,
thereon, to the applicable redemption date, if redeemed during the twelve-month
period beginning on December 1 of the years indicated below:


 


	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2008

  	
   

  	
  104.813

  	
  %

  
	
  2009

  	
   

  	
  102.406

  	
  %

  
	
  2010 and
  thereafter

  	
   

  	
  100.000

  	
  %

  



 


(b)                                 At any time prior to December 1,
2007, the Company may on any one or more occasions redeem up to 35% of the
aggregate principal amount of the Notes issued under


 


47





















 


this Indenture at a redemption price of 109.625% of the principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages, if
any, to the redemption date, with the net cash proceeds of one or more Equity
Offerings of the Company (or of the Parent to the extent such proceeds are
contributed to the common equity of the Company); provided that (1) at least 65% of the aggregate
principal amount of the Initial Notes issued remains outstanding immediately
after the occurrence of such redemption, excluding Notes held by the Company
and its Subsidiaries; and (2) the redemption must occur within 90 days of
the date of the closing of such Equity Offering (or, in the case of any Equity
Offering by the Parent, the contribution to the Company).


 


(c)                                  Any redemption pursuant to this Section 3.07
shall be made pursuant to the provisions of Section 3.01 through 3.06
hereof.


 


SECTION 3.08.  Mandatory Redemption.  Except as set forth in Section 4.10 or
4.14 hereof, the Company is not required to make mandatory redemption or
sinking fund payments with respect to the Notes.


 


SECTION 3.09.  Offer to Purchase.  In the event that, pursuant to Section 4.10
or 4.14 hereof, the Company shall be required to commence an offer to all
Holders to purchase Notes (a “Repurchase
Offer”), it shall follow the procedures specified in such Sections
and, to the extent not inconsistent therewith, the procedures specified below.


 


The Repurchase
Offer shall remain open for a period of no less than 30 days and no more than
60 days following its commencement, except to the extent that a longer period
is required by applicable law (the “Offer
Period”).  No later than three
Business Days after the termination of the Offer Period (the “Purchase Date”), the Company shall
purchase the principal amount of Notes required to be purchased pursuant to Section 4.10
or 4.14 hereof (the “Offer Amount”)
or, if less than the Offer Amount has been tendered, all Notes tendered in
response to the Repurchase Offer. 
Payment for any Notes so purchased shall be made in the same manner as
interest payments are made.


 


If the Purchase
Date is on or after an interest record date and on or before the related
interest payment date, any accrued and unpaid interest shall be paid to the
Person in whose name a Note is registered at the close of business on such
record date, and no additional interest shall be payable to Holders who tender
Notes pursuant to the Repurchase Offer.


 


Upon the
commencement of a Repurchase Offer, the Company shall send, by first class
mail, a notice to the Trustee and each of the Holders, with a copy to the
Trustee.  The notice shall contain all
instructions and materials necessary to enable such Holders to tender Notes
pursuant to the Repurchase Offer.  The
Repurchase Offer shall be made to all Holders. The notice, which shall govern
the terms of the Repurchase Offer, shall state:


 


(a)                                  that the Repurchase
Offer is being made pursuant to this Section 3.09 and Sections 4.10 or
4.14 hereof and the length of time the Repurchase Offer shall remain open;


 


(b)                                 the Offer Amount, the
purchase price and the Purchase Date;


 


48





















 


(c)                                  that any Note not
tendered or accepted for payment shall continue to accrete or accrue interest;


 


(d)                                 that, unless the
Company defaults in making such payment, any Note accepted for payment pursuant
to the Repurchase Offer shall cease to accrete or accrue interest after the
Purchase Date;


 


(e)                                  that Holders electing
to have a Note purchased pursuant to a Repurchase Offer may only elect to have
all of such Note purchased or a portion of such Note in denominations of $1,000
or integral multiples thereof;


 


(f)                                    that Holders
electing to have a Note purchased pursuant to any Repurchase Offer shall be
required to surrender the Note, with the form entitled “Option of Holder to
Elect Purchase” on the reverse of the Note completed, or transfer by book-entry
transfer, to the Company, the Depositary, if appointed by the Company, or a
Paying Agent at the address specified in the notice at least three days before
the Purchase Date;


 


(g)                                 that Holders shall be
entitled to withdraw their election if the Company, the Depositary or the
Paying Agent, as the case may be, receives, not later than the expiration of
the Offer Period, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Note the Holder
delivered for purchase and a statement that such Holder is withdrawing his
election to have such Note purchased;


 


(h)                                 that, if the aggregate
principal amount of Notes surrendered by Holders exceeds the Offer Amount, the
Company shall select the Notes to be purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased); and


 


(i)                                     that Holders whose
Notes were purchased only in part shall be issued new Notes equal in principal
amount to the unpurchased portion of the Notes surrendered (or transferred by
book-entry transfer).


 


On or before the
Purchase Date, the Company shall, to the extent lawful, accept for payment, on
a pro rata basis to the extent
necessary, the Offer Amount of Notes or portions thereof tendered pursuant to
the Repurchase Offer, or if less than the Offer Amount has been tendered, all
Notes tendered, and shall deliver to the Trustee an Officers’ Certificate
stating that such Notes or portions thereof were accepted for payment by the
Company in accordance with the terms of this Section 3.09.  The Company, the Depositary or the Paying
Agent, as the case may be, shall promptly (but in any case not later than five
days after the Purchase Date) mail or deliver to each tendering Holder an
amount equal to the purchase price of the Notes tendered by such Holder and
accepted by the Company for purchase, and the Company shall promptly issue a
new Note, and the Trustee, upon written request from the Company shall
authenticate and mail or deliver such new Note to such Holder, in a principal
amount equal to any unpurchased portion of the Note surrendered. Any Note not
so accepted shall be promptly mailed or delivered by the


 


49





















 


Company
to the Holder thereof.  The Company shall
publicly announce the results of the Repurchase Offer on the Purchase Date.


 


ARTICLE 4


 


COVENANTS


 


SECTION 4.01.  Payment of Notes.  The Company shall pay or cause to be paid the
principal of, premium, if any, and interest on the Notes on the dates and in
the manner provided in the Notes. 
Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if a Person other than the Company or a Subsidiary
thereof, holds as of 12:00 p.m. (noon) Eastern Time on the due date money
deposited by the Company in immediately available funds and designated for and
sufficient to pay all principal, premium, if any, and interest then due.  The Company shall pay all Liquidated Damages,
if any, in the same manner on the dates and in the amounts set forth in the
Registration Rights Agreement.


 


The Company shall
pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal at the rate equal to the then applicable
interest rate on the Notes; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest and Liquidated Damages (without regard to any applicable grace period)
at the same rate to the extent lawful.


 


SECTION 4.02.  Maintenance of Office or Agency.  The Company shall maintain in the Borough of
Manhattan, The City of New York, an office or agency (which may be an office of
the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where
Notes may be surrendered for registration of transfer or for exchange and where
notices and demands to, or upon the Company in respect of, the Notes and this
Indenture may be served.  The Company shall
give prompt written notice to the Trustee of the location, and any change in
the location, of such office or agency. 
If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at
the Corporate Trust Office of the Trustee.


 


The Company may
also from time to time designate one or more other offices or agencies where
the Notes may be presented or surrendered for any or all such purposes and may
from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York for such purposes.  The Company shall give prompt written notice
to the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.


 


The Company hereby
designates the Corporate Trust Office of the Trustee as one such office or
agency of the Company in accordance with Section 2.04.


 


SECTION 4.03.  Reports.  (a) Whether or not required by the SEC,
so long as any Notes are outstanding, the Company will furnish to the Trustee,
and will furnish upon request to


 


50





















 


the Trustee on behalf of
the Holders of Notes, in each case within five days after the time periods
specified in the SEC’s rules and regulations:


 


(1)                                  all
quarterly and annual financial information that would be required to be
contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were
required to file such Forms, including a “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” and, with respect to the
annual information only, a report on the annual financial statements by the
Company’s certified independent accountants; and


 


(2)                                  all
current reports that would be required to be filed with the SEC on Form 8-K
if the Company were required to file such reports;


 


provided that the first such report shall
be furnished upon the later of five business days after (i) the 45th
day following the date of this Indenture and (ii) the time period
specified in the SEC’s rules and regulations.


 


In addition,
following the date by which the Company is required to consummate the exchange
offer contemplated by the Registration Rights Agreement, whether or not
required by the SEC, the Company will file a copy of all of the
information and reports referred to in clauses (1) and (2) above
with the SEC for public availability within the time periods specified in the
SEC’s rules and regulations (unless the SEC will not accept such a filing)
and make such information available to securities analysts and prospective
investors upon request. In addition, the Company and the Guarantors have agreed
that, for so long as any Notes (but not the Exchange Notes) remain outstanding,
they will furnish to the Holders and to securities analysts and prospective
investors, upon their request, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act.


 


(b)                                 If
the Company has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
paragraph (a) above shall include a reasonably detailed presentation,
either on the face of the financial statements or in the footnotes thereto, and
in “Management’s Discussion and Analysis of Financial Condition and Results of
Operations,” of the financial condition and results of operations of the
Company and its Restricted Subsidiaries separate from the financial condition
and results of operations of the Unrestricted Subsidiaries of the Company.


 


SECTION 4.04.  Compliance Certificate.  (a)  The Company and each Guarantor (to
the extent that such Guarantor is so required under the TIA) shall deliver to
the Trustee, within 120 days after the end of each fiscal year, an Officers’
Certificate stating that a review of the activities of the Company and its
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company has kept,
observed, performed and fulfilled each and every covenant contained in this
Indenture and is not in default in the performance or observance of any of the
terms, provisions and conditions of this Indenture (or, if a Default or Event
of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have


 


51





















 


knowledge and what action
the Company is taking or proposes to take with respect thereto) and that to the
best of his or her knowledge no event has occurred and remains in existence by
reason of which payments on account of the principal of or interest, if any, on
the Notes is prohibited or if such event has occurred, a description of the
event and what action the Company is taking or proposes to take with respect
thereto.


 


(b)                                 So long as not contrary to the
then current recommendations of the American Institute of Certified Public
Accountants, the year-end financial statements delivered pursuant to Section 4.03(a) above
shall be accompanied by a written statement of the Company’s independent public
accountants (who shall be a firm of established national reputation) that in
making the examination necessary for certification of such financial
statements, nothing has come to their attention that would lead them to believe
that the Company has violated any provisions of Article 4 or Article 5
hereof or, if any such violation has occurred, specifying the nature and period
of existence thereof, it being understood that such accountants shall not be
liable directly or indirectly to any Person for any failure to obtain knowledge
of any such violation.


 


(c)                                  The Company shall, so long as
any of the Notes are outstanding, deliver to the Trustee, forthwith, but in no
event later than three Business Days, upon any Officer becoming aware of any
Default or Event of Default, an Officers’ Certificate specifying such Default
or Event of Default and what action the Company is taking or proposes to take
with respect thereto.


 


SECTION 4.05.  Taxes. 
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.


 


SECTION 4.06.  Stay, Extension and Usury Laws.  The Company and each of the Guarantors
covenant (to the extent that it may lawfully do so) that it shall not at any
time insist upon, plead, or in any manner whatsoever claim or take the benefit
or advantage of, any stay, extension or usury law wherever enacted, now or at
any time hereafter in force, that may affect the covenants or the performance
of this Indenture; and the Company and each of the Guarantors (to the extent
that it may lawfully do so) hereby expressly waive all benefit or advantage of
any such law, and covenant that it shall not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as
though no such law has been enacted.


 


SECTION 4.07.  Restricted Payments.  The Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly:


 


(1)                                  declare
or pay any dividend or make any other payment or distribution on account of the
Company’s or any of its Restricted Subsidiaries’ Equity Interests (including,
without limitation, any payment in connection with any merger or consolidation
involving the Company or any of its Restricted Subsidiaries) or to the direct
or indirect holders of the Company’s or any of its Restricted Subsidiaries’
Equity Interests in their capacity as such, other than dividends, payments or
distributions


 


52





















 


(a) payable
in Equity Interests (other than Disqualified Stock) of the Company or (b) to
the Company or a Restricted Subsidiary of the Company;


 


(2)                                  purchase,
redeem or otherwise acquire or retire for value (including, without limitation,
in connection with any merger or consolidation) any Equity Interests of the Company
or the Parent;


 


(3)                                  make
any payment of principal or premium on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value, any Indebtedness that is
subordinated to the Notes or the Note Guarantees, except a payment of principal
at the Stated Maturity thereof; or


 


(4)                                  make
any Restricted Investment (all such payments and other actions set forth in
clauses (1) through (4) above being collectively referred to as “Restricted Payments”),


 


unless, at the time of and after giving effect to such
Restricted Payment:


 


(1)                                  no
Default or Event of Default shall have occurred and be continuing or would
occur as a consequence thereof; and


 


(2)                                  the
Company would, at the time of such Restricted Payment and after giving pro
forma effect thereto as if such Restricted Payment had been made at the
beginning of the applicable four-quarter period, have been permitted to incur
at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage
Ratio test set forth in the first paragraph of Section 4.09; and


 


(3)                                  such
Restricted Payment, together with the aggregate amount of all other Restricted Payments
made by the Company and its Restricted Subsidiaries after the date of this
Indenture (excluding Restricted Payments permitted by clauses (2), (3),
(6), (7), (8), (12) and (15) of the next succeeding paragraph), is less than
the sum, without duplication, of:


 


(a)                                  50%
of the Consolidated Net Income of the Company for the period (taken as one
accounting period) from June 30, 2004 to the end of the Company’s most
recently ended fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment (or, if such Consolidated Net
Income for such period is a deficit, less 100% of such deficit), plus


 


(b)                                 100%
of the amount received in cash plus the fair market value, as determined in
good faith by the Board of Directors of the Company, of property and marketable
securities received by the Company subsequent to the date of this Indenture as
a contribution to its common equity capital or from the issue or sale of Equity
Interests (other than Disqualified Stock) of the Company (other than Excluded
Contributions) or net cash proceeds


 


53





















 


received
by the Company subsequent to the date of this Indenture from the issue or sale
of Disqualified Stock or debt securities of the Company that have been
converted into or exchanged for such Equity Interests (other than Equity
Interests (or Disqualified Stock or debt securities) sold to a Restricted
Subsidiary of the Company); plus


 


(c)                                  an
amount equal to the net reduction in Restricted Investments made by the Company
and its Restricted Subsidiaries subsequent to the date of this Indenture,
resulting from payments of interest on Indebtedness, dividends, repayments of
loans or advances or other transfers of assets, in each case to the Company or
any such Restricted Subsidiary from any such Investment, or from the net cash
proceeds from the sale of any such Investment, or from a redesignation of an
Unrestricted Subsidiary to a Restricted Subsidiary, but only if and to the
extent such amounts are not included in the calculation of Consolidated Net
Income and not to exceed in the case of any Investment the amount of the
Investment previously made by the Company or any Restricted Subsidiary in such
Person or Unrestricted Subsidiary; provided
that any amounts in excess of the amount of the Investment previously made may
be added to the amounts otherwise available under this clause (c) to
make Restricted Investments pursuant to this clause (3) but not for
other Restricted Payments.


 


The
preceding provisions will not prohibit:


 


(1)                                  the
payment of any dividend within 60 days after the date of declaration
thereof, if at said date of declaration such payment would have complied with
the provisions of this Indenture;


 


(2)                                  the
repurchase, redemption, retirement, defeasance or other acquisition of any
subordinated Indebtedness of the Company or any Restricted Subsidiary
subordinated to the Notes or any Note Guarantee or of any Equity Interests of
the Company or any Parent in exchange for, or out of the net cash proceeds of
the substantially concurrent sale (other than to a Restricted Subsidiary of the
Company) of, Equity Interests of the Company (or the Parent to the extent the
net cash proceeds are contributed to the common equity of the Company) other
than Disqualified Stock; provided
that the amount of any such net proceeds that are utilized for any such
redemption, repurchase, retirement, defeasance or other acquisition shall be
excluded from clause (3)(b) of the preceding paragraph;


 


(3)                                  the
repayment, defeasance, redemption, repurchase or other acquisition of any
Indebtedness of the Company or any Restricted Subsidiary subordinated to the
Notes or any Note Guarantee with the net cash proceeds from an incurrence of
Permitted Refinancing Indebtedness;


 


(4)                                  the
payment of any dividend by a Restricted Subsidiary of the Company to the
holders of its common Equity Interests on a pro rata basis;


 


54





















 


(5)                                  the
repurchase, redemption or other acquisition or retirement for value of any
Equity Interests of the Company and any distribution, loan or advance to the
Parent for the repurchase, redemption or other acquisition or retirement for
value of any Equity Interests of the Parent, in each case held by any former or
current employees, officers, directors or consultants of the Company or any of
its Restricted Subsidiaries or their respective estates, spouses, former
spouses or family members under any management equity plan or stock option or
other management or employee benefit plan or compensatory arrangement upon the
death, disability or termination of employment of such Persons, in an amount
not to exceed $3.0 million in any calendar year; provided that the Company may carry over
and make in subsequent calendar years, in addition to the amounts permitted for
such calendar year, the amount of such purchases, redemptions or other
acquisitions or retirements for value permitted to have been made but not made
in any preceding calendar year up to a maximum of $10.0 million in any
calendar year; and provided further
that such amount in any calendar year may be increased by an amount not to
exceed (i) the net cash proceeds from the sale of Equity Interests (other
than Disqualified Stock) of the Company (or the Parent to the extent such net
cash proceeds are contributed to the common equity of the Company) to
employees, officers, directors or consultants of the Company and its Restricted
Subsidiaries that occurs after the date of this Indenture (to the extent the
cash proceeds from the sale of such Equity Interests have not otherwise been
applied to the payment of Restricted Payments) plus (ii) the cash proceeds
of key man life insurance policies received by the Company and its Restricted
Subsidiaries after the date of this Indenture less any amounts previously
applied to the payment of Restricted Payments pursuant to this clause (5);
provided further that
cancellation of Indebtedness owing to the Company or the Parent from employees,
officers, directors and consultants of the Company or any of its Restricted
Subsidiaries in connection with a repurchase of Equity Interests of the Company
from such Persons will not be deemed to constitute a Restricted Payment for
purposes of this covenant or any other provisions of this Indenture; provided further that the net cash
proceeds from such sales of Equity Interests described in clause (i) of
this clause (5) shall be excluded from clause (3)(b) of the
preceding paragraph to the extent such proceeds have been or are applied to the
payment of Restricted Payments pursuant to this clause (5);


 


(6)                                  (i) the
payment of dividends or other distributions or the making of loans or advances
to the Parent in amounts required for the Parent to pay franchise taxes and
other fees required to maintain its existence and provide for all other
operating costs of the Parent to the extent attributable to the ownership or
operation of the Company and its Restricted Subsidiaries, including, without
limitation, in respect of director fees and expenses, administrative, legal and
accounting services provided by third parties and other costs and expenses,
including all costs and expenses with respect to filings with the SEC, and (ii) fees
and expenses incurred in connection with any acquisition permitted by the terms
of this Indenture, up to an aggregate amount under this clause (6) of
$2.0 million per fiscal year ($4.0 million following


 


55





















 


any
underwritten public offering of Equity Interests of the Company or the Parent)
plus any indemnification or expense reimbursement claims made by directors or
officers of the Parent attributable to the ownership or operation of the
Company and its Restricted Subsidiaries;


 


(7)                                  the
payment of dividends or other distributions by the Company to the Parent in
amounts required to pay the tax obligations of the Parent attributable to the
Company and its Subsidiaries determined as if the Company and its Subsidiaries
had filed a separate consolidated, combined or unitary return for the relevant
taxing jurisdiction; provided
that any refunds received by the Parent attributable to the Company or any of
its Subsidiaries shall promptly be returned by the Parent to the Company
through a contribution to the common equity of, or the purchase of common stock
(other than Disqualified Stock) of the Company from, the Company; and provided further that the amount of any
such contribution or purchase shall be excluded from clause (3)(b) of
the preceding paragraph;


 


(8)                                  repurchases
of Capital Stock deemed to occur upon the cashless exercise of stock options
and warrants;


 


(9)                                  other
Restricted Payments not otherwise permitted pursuant to this covenant in an
aggregate amount not to exceed $20.0 million;


 


(10)                            the
declaration and payment of dividends and distributions to holders of any class
or series of Disqualified Stock of the Company or any of its Restricted
Subsidiaries or preferred stock of any such Restricted Subsidiaries, in each
case issued or incurred in accordance with Section 4.09 hereof;


 


(11)                            upon
the occurrence of a Change of Control and within 60 days after completion
of the offer to repurchase Notes pursuant to Section 4.14 hereof
(including the purchase of all Notes tendered), any purchase or redemption of
Indebtedness of the Company subordinated to the Notes that is required to be
repurchased or redeemed pursuant to the terms thereof as a result of such
Change of Control, at a purchase price not greater than 101% of the outstanding
principal amount thereof (plus accrued and unpaid interest);


 


(12)                            the
redemption, repurchase, defeasance or other acquisition or retirement for value
of the Magellan Seller Notes, the REM Seller Notes, the MDP Subordinated Notes
and the Parent Preferred Stock, including the payment of any accrued interest,
dividends or premiums thereon and any related costs and expenses (including any
payments or distributions made by the Company to the Parent to finance any of the
foregoing);


 


(13)                            Investments
that are made with Excluded Contributions;


 


(14)                            after
completion of an offer to repurchase Notes under Section 4.10, the
repurchase, redemption or other acquisition or retirement for value of
Indebtedness of the


 


56





















 


Company
that is subordinated to the Notes with Excess Proceeds remaining after such
offer to the extent such Excess Proceeds are permitted to be used for general
corporate purposes under Section 4.10; and


 


(15)                            the
repurchase, redemption or other acquisition for value of Equity Interests of
the Company or the Parent representing fractional shares of such Equity
Interests in connection with a merger, consolidation, amalgamation or other
combination involving the Company or the Parent; provided that the aggregate amount of such repurchase,
redemption or other acquisition for value pursuant to this clause (15)
does not to exceed $1,000,000;


 


provided, however,
that in the case of clauses (5), (9), (10) and (14) above, no Default
or Event of Default has occurred and is continuing.


 


For
purposes of determining compliance with this covenant, in the event that a
Restricted Payment meets the criteria of more than one of the exceptions
described in (1) through (15) above or is entitled to be made
pursuant to the first paragraph of this covenant, the Company shall, in its
sole discretion, classify the Restricted Payment in any manner that complies
with the covenant. The amount of all Restricted Payments (other than cash)
shall be the fair market value on the date of the Restricted Payment of the
asset(s) or securities proposed to be transferred or issued to or by the
Company or such Restricted Subsidiary, as the case may be, pursuant to the
Restricted Payment. The fair market value of any assets or securities that are
required to be valued by this covenant shall, if the fair market value thereof
exceeds $15.0 million, be determined by the Board of Directors whose
resolution with respect thereto shall be delivered to the Trustee. The Board of
Directors’ determination must be based upon an opinion or appraisal issued by
an accounting, appraisal or investment banking firm of national standing if the
fair market value exceeds $10.0 million. Not later than the date of making
any Restricted Payment, the Company shall deliver to the Trustee an Officers’
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this Section 4.07 were
computed, together with a copy of any fairness opinion or appraisal required by
this Indenture.


 


SECTION 4.08.  Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries. 
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:


 


(1)                                  pay
dividends or make any other distributions on its Capital Stock to the Company
or any of its Restricted Subsidiaries or pay any indebtedness owed to the
Company or any of its Restricted Subsidiaries;


 


(2)                                  make
loans or advances to the Company or any of its Restricted Subsidiaries; or


 


(3)                                  transfer
any of its properties or assets to the Company or any of its Restricted
Subsidiaries.


 


57





















 


However,
the preceding restrictions will not apply to encumbrances or restrictions
existing under or by reason of:


 


(1)                                  Existing
Indebtedness and the Credit Agreement as in effect on the date of this
Indenture and any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings thereof, provided that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings are no more restrictive, taken as a whole, with
respect to such encumbrances than those contained in such Existing Indebtedness
and the Credit Agreement, as in effect on the date of this Indenture;


 


(2)                                  this
Indenture, the Notes and the Note Guarantees or by other Indebtedness of the
Company or of a Guarantor which is pari
passu in right of payment with the Notes or Note Guarantees, as
applicable, incurred under an indenture pursuant to Section 4.09 hereof; provided that the encumbrances and
restrictions are no more restrictive, taken as a whole, than those contained in
this Indenture;


 


(3)                                  applicable
law or regulation;


 


(4)                                  any
agreements or instrument governing Indebtedness or Capital Stock of a Person
acquired by the Company or any of its Restricted Subsidiaries as in effect at
the time of such acquisition (except to the extent such Indebtedness was
incurred or Capital Stock was issued in connection with or in contemplation of
such acquisition), which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person, or
the property or assets of the Person, so acquired; provided that, in the case of Indebtedness, such
Indebtedness was permitted by the terms of this Indenture to be incurred;


 


(5)                                  customary
non-assignment provisions in leases entered into in the ordinary course of
business;


 


(6)                                  purchase
money obligations for property acquired in the ordinary course of business that
impose restrictions on the property so acquired of the nature described in clause (3) of
the preceding paragraph;


 


(7)                                  an
agreement entered into for the sale or disposition of Capital Stock or assets
of a Restricted Subsidiary or an agreement entered into for the sale of
specified assets (in either case, so long as such encumbrance or restriction,
by its terms, terminates on the earlier of the termination of such agreement or
the consummation of such agreement and so long as such restriction applies only
to the Capital Stock or assets to be sold);


 


(8)                                  Permitted
Refinancing Indebtedness, provided
that the encumbrances and restrictions contained in the agreements governing
such Permitted Refinancing Indebtedness are no more restrictive, taken as a
whole, than those contained in the agreements governing the Indebtedness being
refinanced;


 


58


















 


(9)                                  Permitted
Liens securing Indebtedness that limit the right of the debtor to dispose of
the assets subject to such Lien; 


 


(10)                            customary
limitations on the disposition or distribution of assets or property in joint
venture agreements and other similar agreements entered into in the ordinary
course of business; 


 


(11)                            with
respect to clause (3) of the first paragraph of this covenant,
restrictions under licensing, contractual or other arrangements with any
federal, state, county or municipal government or any agency thereof entered
into in the ordinary course of business which restrict the assignment or other
transfer of the rights granted thereunder;


 


(12)                            cash
or other deposits or net worth requirements imposed by customers or agreements
entered into in the ordinary course of business; and


 


(13)                            Indebtedness
of any Foreign Restricted Subsidiary incurred pursuant to clause (16) of
the second paragraph of Section 4.09; provided
that the Board of Directors of the Company determines in good faith at the time
such dividend or other payment restrictions are created that they will not
materially adversely affect the Company’s ability to fulfill its obligations
under the Notes and this Indenture.


 


SECTION 4.09.  Incurrence of Indebtedness and Issuance of
Preferred Stock.  The Company will
not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, create, incur, issue, assume, guarantee or otherwise become
directly or indirectly liable, contingently or otherwise, with respect to
(collectively, “incur”) any Indebtedness (including Acquired Debt), and the
Company will not issue any Disqualified Stock and the Company will not permit
any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred
stock; provided, however, that the Company and the
Guarantors may incur Indebtedness (including Acquired Debt) or issue
Disqualified Stock, the Guarantors may issue preferred stock and any Foreign
Restricted Subsidiary may incur Acquired Debt, if the Fixed Charge Coverage
Ratio for the Company’s most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the date on
which such additional Indebtedness is incurred or such Disqualified Stock or
preferred stock is issued would have been at least 2.00 to 1, determined on a
pro forma basis (including a pro forma application of the net proceeds
therefrom), as if the additional Indebtedness had been incurred or Disqualified
Stock or preferred stock had been issued, as the case may be, at the beginning
of such four-quarter period. 


 


The
first paragraph of this covenant will not prohibit the incurrence of any of the
following items of Indebtedness (collectively, “Permitted Debt”): 


 


(1)                                  (a) the
incurrence by the Company or any Restricted Subsidiary of Indebtedness under
Credit Facilities in an aggregate principal amount at any one time outstanding
(with letters of credit being deemed to have a principal amount equal to the


 


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maximum
potential liability of the Company and the Restricted Subsidiaries thereunder)
not to exceed $255.0 million, less the aggregate amount of all Net
Proceeds of Asset Sales applied by the Company or any Restricted Subsidiary to
permanently repay any Indebtedness under Credit Facilities (and, in the case of
any revolving credit Indebtedness under a Credit Facility, to effect a
corresponding commitment reduction thereunder) pursuant to Section 4.10; 


 


(2)                                  the
incurrence of the Existing Indebtedness; 


 


(3)                                  the
incurrence by the Company and the Guarantors of Indebtedness represented by the
Notes to be issued on the date of this Indenture and the related Note
Guarantees and the Exchange Notes and the related Note Guarantees to be issued
therefor pursuant to the Registration Rights Agreement; 


 


(4)                                  the
incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness
represented by Capital Lease Obligations, mortgage financings or purchase money
obligations, in each case, incurred for the purpose of financing all or any
part of the purchase price, or cost of construction or improvement, of property
(real or personal), plant or equipment used in the business of the Company or
any of its Restricted Subsidiaries (whether through the direct acquisition of such
assets or the acquisition of Equity Interests of any Person owning such assets)
in an aggregate principal amount, including all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace any Indebtedness incurred
pursuant to this clause (4), not to exceed the greater of
(x) $20.0 million and (y) 10% of Total Tangible Assets; 


 


(5)                                  the
incurrence by the Company or any of its Restricted Subsidiaries of Permitted
Refinancing Indebtedness in exchange for, or the net proceeds of which are used
to refund, refinance or replace Indebtedness (other than intercompany
Indebtedness) that was permitted by this Indenture to be incurred under the
first paragraph of this covenant or clauses (2), (3), (4), (5), (14) or
(16) of this paragraph; 


 


(6)                                  the
incurrence by the Company or any of its Restricted Subsidiaries of intercompany
Indebtedness between or among the Company and any of its Restricted
Subsidiaries; provided, however, that: 


 


(a)                                  if
the Company or any Guarantor is the obligor on such Indebtedness, such
Indebtedness must be expressly subordinated to the prior payment in full in
cash of all Obligations with respect to the Notes, in the case of the Company,
or the Note Guarantee, in the case of a Guarantor; and 


 


(b)                                 (i) any
subsequent issuance or transfer of Equity Interests that results in any such
Indebtedness being held by a Person other than the Company or a Restricted
Subsidiary thereof and (ii) any sale or other transfer of any such
Indebtedness to a Person that is not either the Company or a Restricted
Subsidiary thereof, shall be deemed, in each case, to constitute an


 


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incurrence
of such Indebtedness by the Company or such Restricted Subsidiary, as the case
may be, that was not permitted by this clause (6); 


 


(7)                                  the
incurrence by the Company or any of its Restricted Subsidiaries of Hedging
Obligations that are incurred in the ordinary course of business for the
purpose of fixing, hedging or swapping interest rate, commodity price or
foreign currency exchange rate risk (or to reverse or amend any such agreements
previously made for such purposes), and not for speculative purposes, and that
do not increase the Indebtedness of the obligor outstanding at any time other
than as a result of fluctuations in interest rates, commodity prices or foreign
currency exchange rates or by reason of fees, indemnities and compensation
payable thereunder; 


 


(8)                                  the
guarantee by the Company or any Restricted Subsidiary of Indebtedness of the
Company or a Restricted Subsidiary of the Company that was permitted to be
incurred by another provision of this covenant; 


 


(9)                                  the
accrual of interest, the accretion or amortization of original issue discount,
the payment of interest on any Indebtedness in the form of additional
Indebtedness with the same terms, and the payment of dividends on Disqualified
Stock or preferred stock in the form of additional shares of the same class of
Disqualified Stock or preferred stock will not be deemed to be an incurrence of
Indebtedness or an issuance of Disqualified Stock or preferred stock for
purposes of this covenant; provided,
in each such case, that the amount thereof is included in Fixed Charges of the
Company as accrued, accreted or amortized to the extent required by the definition
thereof; 


 


(10)                            the
incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness
constituting reimbursement obligations with respect to letters of credit issued
in the ordinary course of business, including, without limitation, letters of
credit in respect of workers’ compensation claims or self-insurance obligations
or bid, performance or surety bonds issued for the account of the Company or
any Restricted Subsidiary, or other Indebtedness with respect to reimbursement
type obligations regarding workers’ compensation claims, self-insurance or bid,
performance or surety bonds (in each case, other than for an obligation for
borrowed money); provided, however, that, upon the drawing of such
letters of credit or the incurrence of such Indebtedness, such obligations are
reimbursed within 30 days following such drawing or incurrence; 


 


(11)                            the
incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness
arising from agreements of the Company or such Restricted Subsidiary providing
for indemnification, adjustment of purchase price or similar obligations, in
each case, incurred or assumed in connection with the disposition of any
business, assets or Capital Stock of the Company or a Restricted Subsidiary,
other than guarantees of Indebtedness incurred by any Person acquiring all or
any portion of such business, assets or a Subsidiary for the purpose of
financing such acquisition; provided
that the maximum assumable liability in respect of that Indebtedness shall


 


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at no
time exceed the gross proceeds including non-cash proceeds (the fair market
value of those non-cash proceeds being measured at the time received and
without giving effect to any subsequent changes in value) actually received by
the Company and/or that Restricted Subsidiary in connection with that
disposition; 


 


(12)                            the
issuance of Disqualified Stock or preferred stock by any of the Company’s
Restricted Subsidiaries issued to the Company or another Restricted Subsidiary;
provided that (i) any
subsequent issuance or transfer of any Equity Securities that results in such
Disqualified Stock or preferred stock being held by a Person other than the
Company or a Restricted Subsidiary thereof and (ii) any sale or other transfer
of any such shares of Disqualified Stock or preferred stock to a Person that is
not either the Company or a Restricted Subsidiary thereof shall be deemed, in
each case, to constitute an issuance of such shares of Disqualified Stock or
preferred stock that was not permitted by this clause (12); 


 


(13)                            the
incurrence by the Company or any of its Restricted Subsidiaries of obligations
in respect of performance and surety bonds and completion guarantees provided
by the Company or such Restricted Subsidiary in the ordinary course of
business; 


 


(14)                            the
incurrence by the Company or any Restricted Subsidiary of Indebtedness in an
aggregate principal amount at any time outstanding, including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (14), not to exceed
$15.0 million; 


 


(15)                            contingent
liabilities arising out of endorsements of checks and other negotiable
instruments for deposit or collection in the ordinary course of business; and


 


(16)                            the
incurrence by the Company of Indebtedness consisting of promissory notes issued
to current or former officers, directors, employees or consultants (or their
estates, spouses or former spouses) of the Company or Parent or any Restricted
Subsidiary of the Company, issued to purchase or redeem Equity Interests of the
Company or Parent; provided that (x) the aggregate principal amount of
such Indebtedness at any time outstanding does not exceed $5.0 million and
(y) such Indebtedness is expressly subordinated in right of payment to the
Notes and does not provide for the payment of principal or interest thereon or
other payments with respect thereto until 91 days after the date on which
the Notes mature. 


 


For
purposes of determining compliance with this Section 4.09, in the event
that any proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (1) through (16)
above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09,
the Company will be permitted to classify such item of Indebtedness on the date
of its incurrence, and from time to time may reclassify, in any manner that
complies with this covenant at such time.


 


SECTION 4.10.  Asset Sales.  The Company will not, and will not permit any
of its Restricted Subsidiaries to, consummate an Asset Sale unless: 


 


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(1)                                  the
Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair market
value of the assets or Equity Interests issued or sold or otherwise disposed
of; 


 


(2)                                  such
fair market value is determined by the Company’s Board of Directors and
evidenced by a resolution of the Board of Directors set forth in an Officers’
Certificate delivered to the Trustee; and 


 


(3)                                  at
least 75% of the consideration therefor received by the Company or such
Restricted Subsidiary is in the form of cash, Cash Equivalents or Replacement
Assets or a combination thereof. For purposes of this provision, each of the
following shall be deemed to be cash: 


 


(a)                                  any
liabilities (as shown on the Company’s or such Restricted Subsidiary’s most
recent balance sheet) of the Company or any Restricted Subsidiary (other than
contingent liabilities and liabilities that are by their terms subordinated to
the Notes or any Note Guarantee) that are assumed by the transferee of any such
assets and, in the case of liabilities other than Non-Recourse Debt, where the
Company and all Restricted Subsidiaries are released from any further liability
in connection therewith (including by operation of law); 


 


(b)                                 any
securities, notes or other obligations received by the Company or any such
Restricted Subsidiary from such transferee that are converted by the Company or
such Restricted Subsidiary into cash within 180 days thereafter (to the
extent of the cash received in that conversion); and 


 


(c)                                  any
Designated Non-cash Consideration received by the Company or any of its
Restricted Subsidiaries in such Asset Sale having an aggregate fair market
value, taken together with all other Designated Non-cash Consideration received
since the date of this Indenture pursuant to this clause (c) that is
at that time outstanding, not to exceed $7.5 million (with the fair market
value of each item of Designated Non-cash Consideration being measured at the
time received and without giving effect to subsequent changes in value). 


 


For
purposes of paragraph (3) above, any liabilities of the Company or any
Restricted Subsidiary that are not assumed by the transferee of such assets and
in respect of which the Company and all Restricted Subsidiaries are not
released from any future liabilities in connection therewith shall not be
considered consideration. 


 


Within
365 days after the receipt of any Net Proceeds from an Asset Sale, the
Company may apply such Net Proceeds at its option: 


 


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(1)                                  to
repay Senior Debt and, if the Senior Debt repaid is revolving credit
Indebtedness, to correspondingly reduce commitments with respect thereto; 


 


(2)                                  to
repay any Indebtedness that was secured by the assets sold in such Asset Sale; 


 


(3)                                  to
purchase Replacement Assets or make a capital expenditure that is used or
useful in a Permitted Business; or 


 


(4)                                  some
combination of the foregoing. 


 


Pending the final
application of any such Net Proceeds, the Company may temporarily reduce
revolving credit borrowings or otherwise invest such Net Proceeds in any manner
that is not prohibited by this Indenture. 


 


Any
Net Proceeds from Asset Sales that are not applied or invested as provided in
the next preceding sentence will constitute “Excess Proceeds.”  Within 30 days after the aggregate
amount of Excess Proceeds exceeds $20.0 million, the Company will make an
Asset Sale Offer to all Holders of Notes and all holders of other Indebtedness
that is pari passu with the Notes
containing provisions similar to those set forth in this Indenture with respect
to offers to purchase with the proceeds of sales of assets to purchase the
maximum principal amount of Notes and such other pari passu Indebtedness that may be purchased out of the
Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100%
of the principal amount of the Notes plus accrued and unpaid interest and
Liquidated Damages, if any, to the date of purchase, and will be payable in
cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer,
the Company may use such Excess Proceeds for any purpose not otherwise
prohibited by this Indenture.  If the
aggregate principal amount of Notes and such other pari passu Indebtedness tendered into such Asset Sale Offer
exceeds the amount of Excess Proceeds, the Notes and such other pari passu Indebtedness to be purchased
shall be purchased on a pro rata basis based on the principal amount of Notes
and such other pari passu
Indebtedness tendered. Upon completion of each Asset Sale Offer, the amount of
Excess Proceeds shall be reset at zero. 


 


The
Company will comply with the requirements of Rule 14e-1 under the Exchange
Act and any other securities laws and regulations thereunder to the extent such
laws and regulations are applicable in connection with each repurchase of Notes
pursuant to an Asset Sale Offer.  To the
extent that the provisions of any securities laws or regulations conflict with
the Asset Sales provisions of this Indenture, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under the Asset Sale provisions of this Indenture by
virtue of such compliance. 


 


SECTION 4.11.  Transactions with Affiliates.  The Company will not, and will not permit any
of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer
or otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate on or after the date of this Indenture (each, an “Affiliate Transaction”), unless:


 


64





















 


(1)                                  such
Affiliate Transaction is on terms that are no less favorable to the Company or
the relevant Restricted Subsidiary than those that could have been obtained in
a comparable arm’s length transaction by the Company or such Restricted
Subsidiary with an unrelated Person; and 


 


(2)                                  the
Company delivers to the Trustee: 


 


(a)                                  with
respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $5.0 million,
a resolution of the Board of Directors set forth in an Officers’ Certificate
certifying that such Affiliate Transaction complies with this covenant and that
such Affiliate Transaction has been approved in good faith by a majority of the
members of the Board of Directors (and, if there are disinterested directors, a
majority thereof); and 


 


(b)                                 with
respect to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $15 million, an opinion as
to the fairness to the Company or such Restricted Subsidiary of such Affiliate
Transaction from a financial point of view issued by an accounting, appraisal
or investment banking firm of national standing. 


 


The
following items shall not be deemed to be Affiliate Transactions and,
therefore, will not be subject to the provisions of the prior paragraph: 


 


(1)                                  any
reasonable consulting or employment agreement or arrangement entered into by
the Company or any of its Restricted Subsidiaries approved in good faith by a
majority of the members of the Board of Directors of the Company (and, if there
are disinterested directors, a majority thereof); 


 


(2)                                  transactions
between or among the Company and/or its Restricted Subsidiaries; 


 


(3)                                  payment
of reasonable directors fees to directors of the Company and the Parent or any
Restricted Subsidiary of the Company and the provision of customary
indemnification to directors and officers of the Company and the Parent or any
Restricted Subsidiary of the Company; 


 


(4)                                  sales
of Equity Interests (other than Disqualified Stock) to Affiliates of the
Company; 


 


(5)                                  any
tax sharing agreement or arrangement and payments pursuant thereto among the
Company and its Subsidiaries and any other Person with which the Company or its
Subsidiaries is required or permitted to file a consolidated, combined or
unitary tax return or with which the Company or any of its Restricted
Subsidiaries is or could be part of a consolidated, combined or unitary group
for tax purposes in amounts not otherwise prohibited by this Indenture; provided that any refunds received by any
such other Person attributable to the Company or any of its


 


65





















 


Subsidiaries
shall promptly be returned by such other Person to the Company through a
contribution to the common equity of, or the purchase of common stock (other
than Disqualified Stock) of the Company from, the Company; 


 


(6)                                  Restricted
Payments that are permitted by Section 4.07 or any Permitted Investment; 


 


(7)                                  loans
to employees that are approved in good faith by a majority of the Board of
Directors of the Company in an amount not to exceed $2.5 million
outstanding at any time and advances and expense reimbursements to employees in
the ordinary course of business; 


 


(8)                                  transactions
with a Person engaged in a Permitted Business; provided
that all the outstanding ownership interests of such Person are owned only by
the Company, its Restricted Subsidiaries and Persons who are not Affiliates of
the Company; 


 


(9)                                  so
long as there is no Default or Event of Default that has occurred and is
continuing, the payment of customary annual fees and related expenses to the
Principals; provided that such
fees shall not, in the aggregate, exceed $2.0 million (plus out-of-pocket
expenses) in any twelve-month period commencing after the date of this
Indenture; and 


 


(10)                            so
long as there is no Default or Event of Default that has occurred and is
continuing, the payment of fees for customary management, consulting and
advisory services and related expenses to the Principals made pursuant to
financial advisory, consulting, financing, underwriting or placement agreements
or otherwise in respect of other investment banking, financial advisory or
consulting services, including, without limitation, in connection with
acquisitions or divestitures, in each case, which payments (i) are
reasonably related to the services performed, (ii) are approved in good
faith by a majority of the members of the Board of Directors (and if there are
directors not affiliated with the Equity Sponsor, a majority thereof), and (iii) the
amount of such fees when taken together with all other fees paid in reliance on
this clause (10) does not exceed $1.0 million in any twelve-month
period. 


 


SECTION 4.12.  Liens. 
The Company will not, and will not permit any of its Restricted
Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or
become effective any Lien of any kind securing Indebtedness (other than
Permitted Liens) upon any of their property or assets, now owned or hereafter
acquired, unless all payments due under this Indenture and the Notes are
secured on an equal and ratable basis with the obligations so secured (or, in
the case of subordinated Indebtedness, prior or senior thereto, with the same
relative priority as the Notes shall have with respect to such subordinated
Indebtedness) until such time as such obligations are no longer secured by a Lien.  


 


SECTION 4.13.  Corporate Existence.  Subject to Article 5 hereof, the Company
shall do or cause to be done all things necessary to preserve and keep in full
force and effect


 


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(i) its corporate
existence, and the corporate, partnership or other existence of each of its
Subsidiaries, in accordance with the respective organizational documents (as
the same may be amended from time to time) of the Company or any such
Subsidiary and (ii) the rights (charter and statutory), licenses and
franchises of the Company and its Subsidiaries; provided, however, that the Company shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any of its Subsidiaries, if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct
of the business of the Company and its Subsidiaries, taken as a whole, and that
the loss thereof is not adverse in any material respect to the Holders of the
Notes.


 


SECTION 4.14.  Offer to Repurchase upon Change of Control.  (a) If a Change of Control occurs, each
Holder of Notes will have the right to require the Company to repurchase all or
any part (equal to $1,000 or an integral multiple thereof) of that Holder’s
Notes pursuant to a Change of Control Offer on the terms set forth in this
Indenture. In the Change of Control Offer, the Company will offer a Change of
Control Payment in cash equal to 101% of the aggregate principal amount of Notes
repurchased plus accrued and unpaid interest and Liquidated Damages, if any,
thereon, to the Change of Control Payment Date. Within 30 days following
any Change of Control, the Company will mail a notice to each Holder describing
the transaction or transactions that constitute the Change of Control and
offering to repurchase Notes on the Change of Control Payment Date specified in
such notice, which date shall be no earlier than 30 days and no later than
60 days from the date such notice is mailed, pursuant to the procedures
required by this Indenture and described in such notice. The Company will
comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the Notes as a
result of a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with the Change of Control provisions
of this Indenture, the Company will comply with the applicable securities laws
and regulations and will not be deemed to have breached its obligations under
the Change of Control provisions of this Indenture by virtue of such
compliance.  


 


(b) On
the Change of Control Payment Date, the Company will, to the extent lawful: 


 


(1)                                  accept
for payment all Notes or portions thereof properly tendered and not withdrawn
pursuant to the Change of Control Offer; 


 


(2)                                  deposit
with the Paying Agent an amount equal to the Change of Control Payment in respect
of all Notes or portions thereof so tendered and not withdrawn; and 


 


(3)                                  deliver
or cause to be delivered to the Trustee the Notes so accepted together with an
Officers’ Certificate stating the aggregate principal amount of Notes or
portions thereof being purchased by the Company. 


 


The
Paying Agent will promptly mail to each Holder of Notes so tendered the Change
of Control Payment for such Notes, and the Trustee will promptly authenticate
and mail (or cause to be transferred by book entry) to each Holder a new Note
equal in principal amount to any unpurchased portion of the Notes surrendered,
if any; provided that each such
new Note will be in a principal amount of $1,000 or an integral multiple
thereof. 


 


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Prior
to purchasing any Notes pursuant to this Section 4.14, the Company will
either repay all outstanding Senior Debt or obtain the requisite consents, if
any, under all agreements governing outstanding Senior Debt to permit the
repurchase of Notes required by this covenant. The Company will publicly
announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date. 


 


(c) The
Company will not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in this
Indenture applicable to a Change of Control Offer made by the Company and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer or if a notice of redemption for all outstanding notes has been
given pursuant to this Indenture under Section 3.07. A Change of Control
Offer may be made in advance of a Change of Control, and conditional upon such
Change of Control, if a definitive agreement is in place for the Change of
Control at the time of making the Change of Control Offer. Notes repurchased
pursuant to a Change of Control Offer will be retired and cancelled. 


 


SECTION 4.15.  Limitation on Senior Subordinated Debt.  The Company will not incur, create, issue,
assume, guarantee or otherwise become liable for any Indebtedness that is
contractually subordinate or junior in right of payment to any Senior Debt of
the Company and senior in right of payment to the Notes. No Guarantor will
incur, create, issue, assume, guarantee or otherwise become liable for any
Indebtedness that is contractually subordinate or junior in right of payment to
the Senior Debt of such Guarantor and senior in right of payment to such
Guarantor’s Note Guarantee. For purposes of the foregoing, no Indebtedness will
be deemed to be subordinated in right of payment to any other Indebtedness of
the Company or any Guarantor, as applicable, solely by virtue of being
unsecured or by virtue of the fact that the holders of any secured Indebtedness
have entered into intercreditor agreements giving one or more of such holders
priority over the other holders in the collateral held by them.   


 


SECTION 4.16.  Limitation on Issuances of Guarantees of
Indebtedness.  The Company will not
permit any of its Restricted Subsidiaries, directly or indirectly, to Guarantee
or pledge any assets to secure the payment of any other Indebtedness of the
Company or any other Restricted Subsidiary (other than a Guarantee or pledge by
a Foreign Restricted Subsidiary securing the payment of Indebtedness of another
Foreign Restricted Subsidiary) unless either (1) such Restricted
Subsidiary is a Guarantor or (2) such Restricted Subsidiary simultaneously
executes and delivers a supplemental indenture providing for the Guarantee of
the payment of the Notes by such Restricted Subsidiary, which Guarantee shall
be senior to or pari passu with
such Subsidiary’s Guarantee of or pledge to secure such other Indebtedness,
unless such other Indebtedness is Senior Debt, in which case the Guarantee of
the Notes may be subordinated to the Guarantee of such Senior Debt to the same
extent as the Notes are subordinated to such Senior Debt. 


 


Notwithstanding
the preceding paragraph, any Note Guarantee may provide by its terms that it
will be automatically and unconditionally released and discharged pursuant to Section 11.06.
The form of the Note Guarantee is attached hereto as Exhibit E.  


 


SECTION 4.17.  Additional Note Guarantees.  If the Company or any of its Restricted
Subsidiaries acquires or creates another Domestic Subsidiary on or after the
date of this Indenture, then that newly acquired or created Domestic Subsidiary
must become a Guarantor and


 


68





















 


execute a supplemental
indenture and deliver an Opinion of Counsel to the Trustee within 20 Business
Days of the date on which it was acquired or created. 


 


SECTION 4.18.  Business Activities.  The Company will not, and will not permit any
Restricted Subsidiary to, engage in any business other than Permitted
Businesses.  


 


SECTION 4.19.  Designation of Restricted and Unrestricted
Subsidiaries.  The Board of Directors
of the Company may designate any Restricted Subsidiary of the Company to be an
Unrestricted Subsidiary if that designation would not cause a Default; provided that in no event shall there be
any Unrestricted Subsidiaries on or immediately following the date of this
Indenture. If a Restricted Subsidiary is designated as an Unrestricted
Subsidiary, the aggregate fair market value of all outstanding Investments
owned by the Company and its Restricted Subsidiaries in the Subsidiary so
designated (after giving effect to any sale of Equity Interests of such
Subsidiary in connection with such designation) will be deemed to be a
Restricted Investment made as of the time of such designation and will either
reduce the amount available for Restricted Payments under the first paragraph
of Section 4.07 or reduce the amount available for future Investments
under one or more clauses of the definition of “Permitted Investments.” That
designation will only be permitted if such Investment would be permitted at
that time and if such Restricted Subsidiary otherwise meets the definition of
an Unrestricted Subsidiary. The Board of Directors of the Company may at any
time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such designation shall be
deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the
Company of any outstanding Indebtedness of such Unrestricted Subsidiary and
such designation shall only be permitted if (1) such Indebtedness is
permitted under Section 4.09 hereof calculated on a pro forma basis as if
such designation had occurred at the beginning of the four-quarter reference
period; and (2) no Default or Event of Default would be in existence
following such designation.  


 


ARTICLE 5


 


SUCCESSORS


 


SECTION 5.01.  Merger Consolidation, or Sale of Assets.  The Company will not, directly or indirectly,
consolidate or merge with or into another Person (whether or not the Company is
the surviving corporation), and the Company will not, and will not cause or
permit any Restricted Subsidiary to, sell, assign, transfer, convey or
otherwise dispose of all or substantially all of the properties or assets of
the Company and its Restricted Subsidiaries taken as a whole, in one or more
related transactions, to another Person (including by way of consolidation or
merger), unless:


 


(1)                                  either:
(a) the Company is the surviving corporation; or (b) the Person
formed by or surviving any such consolidation or merger (if other than the
Company) or to which such sale, assignment, transfer, conveyance or other
disposition shall have been made is a corporation, partnership or limited
liability company organized or existing under the laws of the United States,
any state thereof or the District of Columbia; provided
that, in the case such Person is a limited liability company or a partnership,
a co-obligor of the Notes is a corporation; 


 


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(2)                                  the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or the Person to which such sale, assignment, transfer, conveyance
or other disposition shall have been made assumes all the obligations of the
Company under the Notes, this Indenture and the Registration Rights Agreement,
in each case pursuant to agreements reasonably satisfactory to the Trustee; 


 


(3)                                  immediately
after such transaction and any related financing transactions, no Default or
Event of Default exists; and 


 


(4)                                  the
Company or the Person formed by or surviving any such consolidation or merger
(if other than the Company), or to which such sale, assignment, transfer,
conveyance or other disposition shall have been made, will, on the date of such
transaction after giving pro forma effect thereto and any related financing
transactions as if the same had occurred at the beginning of the applicable
four-quarter period, be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the
first paragraph of Section 4.09 or if not, the Fixed Charge Coverage Ratio
on such basis is higher than the Fixed Charge Coverage Ratio immediately prior
to such transactions. 


 


In
addition, neither the Company nor any Restricted Subsidiary may, directly or
indirectly, lease all or substantially all of its properties or assets, in one
or more related transactions, to any other Person.  Clause (4) of this Section 5.01
will not apply to a sale, assignment, transfer, conveyance or other disposition
of assets between or among the Company and any of its Restricted Subsidiaries.


 


SECTION 5.02.  Successor Corporation Substituted.  Upon any consolidation or merger, or any
sale, assignment, transfer, conveyance or other disposition of all or
substantially all of the assets of the Company in accordance with Section 5.01
hereof, the successor corporation formed by such consolidation into or with
which the Company is merged or to which such sale, assignment, transfer,
conveyance or other disposition is made shall succeed to, and be substituted
for (so that from and after the date of such consolidation, merger, sale, conveyance
or other disposition, the provisions of this Indenture referring to the “Company”
shall refer instead to the successor corporation and not to the Company), and
may exercise every right and power of the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein; provided, however, that the predecessor
Company shall not be relieved from the obligation to pay the principal of and
interest on the Notes except in the case of a sale of all of the Company’s
assets that meets the requirements of Section 5.01 hereof.


 


ARTICLE 6


 


DEFAULTS AND REMEDIES


 


SECTION 6.01.  Events of Default.  Each of the following is an “Event of Default”:


 


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(a)                                  default in the payment when due
of interest on, or Liquidated Damages with respect to, the Notes (whether or
not prohibited by Article 10 hereof) and such default continues for a
period of 30 days;


 


(b)                                 default in payment when due of
the principal of, or premium, if any, on the Notes (whether or not prohibited
by Article 10 hereof);


 


(c)                                  failure by the Company or any of
its Restricted Subsidiaries to comply with the provisions of Sections 4.10,
4.14 and 5.01 hereof;


 


(d)                                 failure by the Company or any of
its Restricted Subsidiaries for 45 days after notice by the Trustee or Holders
of at least 25% in principal amount of the Notes then outstanding, to comply
with any of its other covenants or agreements in this Indenture;


 


(e)                                  default under any mortgage,
indenture or instrument under which there may be issued or by which there may
be secured or evidenced any Indebtedness for money borrowed by the Company or
any of its Restricted Subsidiaries (or the payment of which is guaranteed by
the Company or any of its Restricted Subsidiaries) whether such Indebtedness or
guarantee now exists, or is created after the date hereof, if that default (i) is
caused by a failure to make any payment when due at final maturity of any such
Indebtedness (a “Payment Default”) or (ii) results in the acceleration of
such Indebtedness prior to its express maturity, and, in each case, the
principal amount of any such Indebtedness, together with the principal amount
of any other such Indebtedness under which there has been a Payment Default or
the maturity of which has been so accelerated, aggregates $12.5 million or
more;


 


(f)                                    failure by the Company or any of
its Restricted Subsidiaries to pay final judgments aggregating in excess of
$10.0 million, which judgments are not paid, discharged or stayed for a period
of 60 days after such judgments have become final and non-appealable;


 


(g)                                 except as permitted by this
Indenture, any Note Guarantee of a Guarantor shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason to be
in full force and effect or any Guarantor, or any Person acting on behalf of
any Guarantor, shall deny or disaffirm its obligations under its Note
Guarantee;


 


(h)                                 the Company or any of its
Subsidiaries that is a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary
pursuant to or within the meaning of Bankruptcy Law:


 


(1)                                  commences
a voluntary case; 


 


(2)                                  consents
to entry of an order for relief against it in an involuntary case; 


 


(3)                                  consents
to the appointment of a custodian of it or for all or substantially all of its
property; 


 


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(4)                                  makes
a general assignment for the benefit of its creditors; or


 


(5)                                  generally
is not paying its debts as they become due; or


 


(i)                                     a
court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that:


 


(1)                                  is for relief against the
Company or any of its Subsidiaries that is a Significant Subsidiary or any
group of Restricted Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary in an involuntary case;


 


(2)                                  appoints a custodian of the
Company or any of its Subsidiaries that is a Significant Subsidiary or any
group of Restricted Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary or for all or substantially all of the property of any
Guarantor, the Company or any of its Subsidiaries that is a Significant
Subsidiary or any group of Restricted Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary; or


 


(3)                                  orders the liquidation of the
Company or any of its Subsidiaries that is a Significant Subsidiary or any
group of Restricted Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary;


 


and the order or decree remains unstayed and in effect
for 60 consecutive days.


 


SECTION 6.02.  Acceleration.  If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all the principal, premium, if any,
accrued interest and Liquidated Damages, if any, of the Notes to be due and
payable by notice in writing to the Company and (if from the Holders) the
Trustee specifying the respective Event of Default, and upon receipt of such
notice the same shall immediately become due and payable; provided, however, that so long as any
Indebtedness or other obligations incurred pursuant to the Credit Agreement
shall be outstanding, that acceleration shall not be effective until the
earlier of (1) an acceleration of Indebtedness under the Credit Agreement;
or (2) five Business Days after receipt by the Company and the
Administrative Agent under the Credit Agreement of such notice of
acceleration.  Notwithstanding the
foregoing, in the case of an Event of Default described in clause (h) or (i) of
Section 6.01, with respect to the Company or any Significant Subsidiary
(or any group of Restricted Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary), all outstanding Notes will become due and
payable immediately without further action or notice.


 


In the event of a declaration of acceleration of the
Notes because an Event of Default described in clause (e) of the preceding
section has occurred and is continuing, the declaration of acceleration of
the Notes shall be automatically annulled if the Event of Default or payment
default triggering such Event of Default pursuant to clause (e) of the
preceding section shall be remedied or cured by the Company or a Restricted
Subsidiary of the Company or waived by the holders of the relevant Indebtedness
within 30 days after the declaration of acceleration with respect thereto and
if (i) the annulment of the acceleration of the Notes would not conflict
with any judgment or decree of a court of competent jurisdiction and (ii) all
existing Events of


 


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Default, except nonpayment of principal, premium or
interest on the Notes that became due solely because of the acceleration of the
Notes have been cured or waived.


 


SECTION 6.03.  Other Remedies.  If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal, premium, if any, and interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.


 


The Trustee may maintain a proceeding even if it does
not possess any of the Notes or does not produce any of them in the
proceeding.  A delay or omission by the
Trustee or any Holder of a Note in exercising any right or remedy accruing upon
an Event of Default shall not impair the right or remedy or constitute a waiver
of or acquiescence in the Event of Default. 
All remedies are cumulative to the extent permitted by law.


 


SECTION 6.04.  Waiver of Past Defaults.  Holders of not less than a majority in
aggregate principal amount of the then outstanding Notes by notice to the
Trustee may on behalf of the Holders of all of the Notes waive an existing
Default or Event of Default and its consequences hereunder, except a continuing
Default or Event of Default in the payment of the principal of, premium and
Liquidated Damages, if any, or interest on, the Notes (including in connection
with an offer to purchase) (provided,
however, that the Holders of a
majority in aggregate principal amount of the then outstanding Notes may
rescind an acceleration and its consequences, including any related payment
default that resulted from such acceleration). 
The Company shall deliver to the Trustee an Officers’ Certificate
stating that the requisite percentage of Holders have consented to such waiver
and attaching copies of such consents. 
In case of any such waiver, the Company, the Trustee and the Holders
shall be restored to their former positions and rights hereunder and under the
Notes, respectively.  This Section 6.04
shall be in lieu of Section 316(a)(1)(B) of the TIA and such Section 316(a)(1)(B) of
the TIA is hereby expressly excluded from this Indenture and the Notes, as
permitted by the TIA. Upon any such waiver, such Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.


 


SECTION 6.05.  Control by Majority.  Subject to Section 2.10, Holders of a
majority in principal amount of the then outstanding Notes may direct in
writing the time, method and place of conducting any proceeding for exercising
any remedy available to the Trustee or exercising any trust or power conferred
on it.  However, the Trustee may refuse
to follow any direction that conflicts with law or this Indenture that the
Trustee determines may be unduly prejudicial to the rights of Holders of Notes
not taking part in such direction, and the Trustee shall have the right to
decline to follow any such direction, if the Trustee, being advised by counsel,
determines that such action so directed may not be lawfully taken or if the
Trustee, in good faith, shall by a Responsible Officer, determine that the
proceedings so directed may involve the Trustee in personal liability; provided that the Trustee may take any
other action deemed proper by the Trustee that is not inconsistent with such
direction.  In the event the Trustee
takes any action or follows any direction pursuant to this Indenture, the
Trustee shall be entitled to indemnification satisfactory to it in its sole
discretion against any loss or expense caused by taking such action or
following such direction.  This Section 6.05
shall be in lieu of


 


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Section 316(a)(1)(A) of
the TIA, and such Section 316(a)(1)(A) of the TIA is hereby expressly
excluded from this Indenture and the Notes, as permitted by the TIA.


 


SECTION 6.06.  Limitation on
Suits.  A Holder of a Note may
pursue a remedy with respect to this Indenture, the Notes or the Note
Guarantees only if:


 


(a)                                  the Holder of a Note gives to
the Trustee written notice of a continuing Event of Default;


 


(b)                                 the Holders of at least 25% in
principal amount of the then outstanding Notes make a written request to the
Trustee to pursue the remedy;


 


(c)                                  such Holder of a Note or Holders
of Notes offer and, if requested, provide to the Trustee indemnity satisfactory
to the Trustee against any loss, liability or expense;


 


(d)                                 the Trustee does not comply with
the request within 60 days after receipt of the request and the offer and, if
requested, the provision of indemnity; and


 


(e)                                  during such 60-day period the
Holders of a majority in principal amount of the then outstanding Notes do not
give the Trustee a direction inconsistent with the request.


 


A Holder of a Note may not use this Indenture to
prejudice the rights of another Holder of a Note or to obtain a preference or
priority over another Holder of a Note.


 


SECTION 6.07.  Rights of Holders of Notes to Receive
Payment.  Notwithstanding any other
provision of this Indenture, the right of any Holder of a Note to receive
payment of principal, premium and Liquidated Damages, if any, and interest on
the Note, on or after the respective due dates expressed in the Note (including
in connection with an offer to purchase), or to bring suit for the enforcement
of any such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.


 


SECTION 6.08.  Collection Suit by Trustee.  If an Event of Default specified in Section 6.01
(a) or (b) occurs and is continuing, the Trustee is authorized to
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount of principal of, premium and Liquidated Damages,
if any, and interest remaining unpaid on the Notes and interest on overdue
principal and, to the extent lawful, interest and such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.


 


SECTION 6.09.  Trustee May File Proofs of Claim.  The Trustee is authorized to file such proofs
of claim and other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and the Holders of the Notes allowed in any judicial proceedings
relative to the Company (or any other obligor upon the Notes), its creditors or
its property and shall be entitled and empowered to collect, receive and distribute
any money or other securities or property payable or deliverable on any such


 


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claims and any custodian
in any such judicial proceeding is hereby authorized by each Holder to make
such payments to the Trustee, and in the event that the Trustee shall consent
to the making of such payments directly to the Holders, to pay to the Trustee
any amount due to it for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, and any other amounts due
the Trustee under Section 7.07 hereof. 
To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 7.07 hereof out of the estate
in any such proceeding, shall be denied for any reason, payment of the same
shall be secured by a Lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties that the
Holders may be entitled to receive in such proceeding whether in liquidation or
under any plan of reorganization or arrangement or otherwise.  Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to, or accept or adopt on behalf
of, any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding.


 


SECTION 6.10.  Priorities.  Subject to Article 10, if the Trustee
collects any money pursuant to this Article, it shall pay out the money in the
following order:


 


First:  to the Trustee, its agents and attorneys for
amounts due under Section 7.07 hereof, including payment of all
compensation, expense and liabilities incurred, and all advances made, by the
Trustee and the costs and expenses of collection;


 


Second:  to Holders of Notes for amounts due and
unpaid on the Notes for principal, premium and Liquidated Damages, if any, and
interest, ratably, without preference or priority of any kind, according to the
amounts due and payable on the Notes for principal, premium and Liquidated
Damages, if any and interest, respectively; and


 


Third:  to the Company or to such party as a court of
competent jurisdiction shall direct.


 


The Trustee may fix a record date and payment date for
any payment to Holders of Notes pursuant to this Section 6.10.


 


SECTION 6.11.  Undertaking for Costs.  In any suit for the enforcement of any right or
remedy under this Indenture or in any suit against the Trustee for any action
taken or omitted by it as a Trustee, a court in its discretion may require the
filing by any party litigant in the suit of an undertaking to pay the costs of
the suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys’ fees, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made
by the party litigant.  This Section does
not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07
hereof, or a suit by Holders of more than 10% in principal amount of the then
outstanding Notes.


 


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ARTICLE 7


 


TRUSTEE


 


SECTION 7.01.  Duties of Trustee.  (a)  If an Event of Default has occurred
and is continuing, the Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and skill in
its exercise, as a prudent person would exercise or use under the circumstances
in the conduct of his or her own affairs.


 


(b)                                 Except during the continuance of
an Event of Default:


 


(i)                                     the duties of the
Trustee shall be determined solely by the express provisions of this Indenture and
the Trustee need perform only those duties that are specifically set forth in
this Indenture and no others, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and


 


(ii)                                  in the absence of bad
faith on its part, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture.  However,
the Trustee shall examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture (but need not confirm or
investigate the accuracy of mathematical calculations or other facts purported
to be stated therein).


 


(c)                                  The Trustee may not be relieved
from liabilities for its own negligent action, its own negligent failure to
act, or its own willful misconduct, except that:


 


(i)                                     this paragraph
does not limit the effect of paragraph (b) of this Section;


 


(ii)                                  the Trustee shall not
be liable for any error of judgment made in good faith by a Responsible
Officer, unless it is proved that the Trustee was negligent in ascertaining the
pertinent facts; and


 


(iii)                               the Trustee shall not be
liable with respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section 6.05
hereof.


 


(d)                                 Whether or not therein expressly
so provided, every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), and (c) of this Section.


 


(e)                                  No provision of this Indenture
shall require the Trustee to expend or risk its own funds or incur any
liability.  The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.


 


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(f)                                    The Trustee shall not be liable
for interest on any money received by it except as the Trustee may agree in
writing with the Company. Money or assets held in trust by the Trustee need not
be segregated from other funds or assets except to the extent required by law.


 


SECTION 7.02.  Rights of Trustee.  (a)  The Trustee may conclusively rely
upon any document (whether in its original or facsimile form) believed by it to
be genuine and to have been signed or presented by the proper Person.  The Trustee need not investigate any fact or
matter stated in the document.


 


(b)                                 Before the Trustee acts or
refrains from acting, it may consult with counsel and may require (other than
in connection with the Exchange Offer contemplated by Section 2.07(f) unless
required by the TIA) an Officers’ Certificate or an Opinion of Counsel or
both.  The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
Officers’ Certificate or Opinion of Counsel. 
The Trustee may consult with counsel and the advice of such counsel or
any Opinion of Counsel shall be full and complete authorization and protection
from liability in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon.


 


(c)                                  The Trustee may act through its
attorneys and agents and shall not be responsible for the misconduct or
negligence of any agent or attorney appointed with due care.


 


(d)                                 The Trustee shall not be liable
for any action it takes or omits to take in good faith that it believes to be
authorized or within the rights or powers conferred upon it by this Indenture.


 


(e)                                  Unless otherwise specifically
provided in this Indenture, any demand, request, direction or notice from the
Company shall be sufficient if signed by an Officer of the Company.


 


(f)                                    The Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the Holders unless such Holders
shall have offered to the Trustee reasonable security or indemnity satisfactory
to it against the costs, expenses and liabilities that might be incurred by it
in compliance with such request or direction.


 


(g)                                 The Trustee shall not be deemed
to have knowledge of any Default or Event of Default except (i) any Event
of Default occurring pursuant to Section 6.01(a) or 6.01(b) or (ii) any
Event of Default of which the Trustee shall have received written notification
or otherwise obtained actual knowledge.


 


(h)                                 Delivery of reports, information
and documents to the Trustee under Section 4.03 is for informational
purposes only and the Trustee’s receipt of the foregoing shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Company’s compliance with any of
their covenants hereunder (as to which the Trustee is entitled to rely
exclusively on officers’ certificates).


 


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SECTION 7.03.  Individual Rights of Trustee.  The Trustee in its individual or any other
capacity may become the owner or pledgee of Notes and may otherwise deal with
the Company or any Affiliate of the Company with the same rights it would have
if it were not Trustee.  However, in the
event that the Trustee acquires any conflicting interest it must eliminate such
conflict within 90 days, apply to the SEC for permission to continue as trustee
or resign.  Any Agent may do the same
with like rights and duties.  The Trustee
is also subject to the requirements of Sections 7.10 and 7.11 hereof.


 


SECTION 7.04.  Trustee’s Disclaimer.  The Trustee shall not be responsible for and
makes no representation as to the validity or adequacy of this Indenture or the
Notes, it shall not be accountable for the Company’s use of the proceeds from
the Notes or any money paid to the Company or upon the Company’s direction
under any provision of this Indenture, it shall not be responsible for the use
or application of any money received by any Paying Agent other than the
Trustee, and it shall not be responsible for any statement or recital herein or
any statement in the Notes or any other document in connection with the sale of
the Notes or pursuant to this Indenture other than its certificate of
authentication.


 


SECTION 7.05.  Notice of Defaults.  If a Default or Event of Default occurs and
is continuing and if it is known to the Trustee, the Trustee shall mail to the
Holders of the Notes a notice of the Default or Event of Default within 90 days
after it occurs.  Except in the case of a
Default or Event of Default in payment of principal of, premium, if any, or
interest or Liquidated Damages on any Note, the Trustee may withhold the notice
if and so long as the board of directors, the executive committee or a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders of the Notes.


 


SECTION 7.06.  Reports by Trustee to the Holders of the
Notes.  Within 60 days after each May 15
beginning with the May 15 following the date of this Indenture, and for so
long as Notes remain outstanding, the Trustee shall mail to the Holders of the
Notes a brief report dated as of such reporting date that complies with TIA § 313(a) (but
if no event described in TIA § 313(a) has occurred within the twelve
months preceding the reporting date, no report need be transmitted).  The Trustee also shall comply with TIA § 313(b)(2).  The Trustee shall also transmit by mail all
reports as required by TIA § 313(c).


 


A copy of each report at the time of its mailing to
the Holders of the Notes shall be mailed to the Company and filed with the SEC
and each stock exchange on which the Notes are listed in accordance with TIA § 313(d).  The Company shall promptly notify the Trustee
when the Notes are listed on any securities exchange or of any delisting
thereof.


 


SECTION 7.07.  Compensation and Indemnity.  The Company shall pay to the Trustee from
time to time reasonable compensation for its acceptance of this Indenture and
services hereunder.  The Trustee’s
compensation shall not be limited by any law on compensation of a trustee of an
express trust.  The Company shall
reimburse the Trustee promptly upon request for all reasonable disbursements,
advances and expenses incurred or made by it in addition to the compensation
for its services.  Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee’s
agents and counsel and any taxes or other expenses incurred by a trust created
pursuant to Section 8.04 hereof.


 


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The Company shall indemnify the Trustee and its agents
against any and all losses, liabilities, claims, damages or expenses (including
compensation, fees, disbursements and expenses of Trustee’s agents and counsel)
incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, including the costs and
expenses of enforcing this Indenture against the Company (including this Section 7.07)
and defending itself against any claim (whether asserted by the Company or any
Holder or any other person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to the extent any
such loss, liability or expense is judicially determined to have been caused by
to its own negligence or bad faith.  The
Trustee shall notify the Company promptly of any claim for which it may seek
indemnity.  Failure by the Trustee to so
notify the Company shall not relieve the Company of its obligations
hereunder.  The Company shall defend the
claim and the Trustee shall cooperate in the defense.  The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent, which consent shall
not be unreasonably withheld.


 


The obligations of the Company under this Section 7.07
shall survive the satisfaction and discharge of this Indenture.


 


To secure the Company’s payment obligations in this Section 7.07,
the Trustee shall have a Lien prior to the Notes on all money or property held
or collected by the Trustee, except that such Lien shall not apply to money or
property held in trust to pay principal and interest on particular Notes on a
non-pro rata basis.  Such Lien shall
survive the satisfaction and discharge of this Indenture.  The Trustee’s right to receive payment of any
amounts due under this Section 7.07 shall not be subordinated to any other
liability or Indebtedness of the Company.


 


When the Trustee incurs expenses or renders services
after an Event of Default specified in Section 6.01(h) or (i) hereof
occurs, the expenses and the compensation for the services (including the fees
and expenses of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Law.


 


The Trustee shall comply with the provisions of TIA § 313(b)(2) to
the extent applicable.


 


SECTION 7.08.  Replacement of Trustee.  A resignation or removal of the Trustee and
appointment of a successor Trustee shall become effective only upon the
successor Trustee’s acceptance of appointment as provided in this Section 7.08.


 


The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the Company.  The Holders of a majority in principal amount
of the then outstanding Notes may remove the Trustee by so notifying the
Trustee and the Company in writing.  The
Company may remove the Trustee if:


 


(a)                                  the Trustee fails to comply with
Section 7.10 hereof;


 


(b)                                 the Trustee is adjudged a
bankrupt or an insolvent or an order for relief is entered with respect to the
Trustee under any Bankruptcy Law;


 


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(c)                                  a Custodian or public officer
takes charge of the Trustee or its property; or


 


(d)                                 the Trustee becomes incapable of
acting.


 


If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Company shall promptly
appoint a successor Trustee.  Within one
year after the successor Trustee takes office, the Holders of a majority in
principal amount of the then outstanding Notes may appoint a successor Trustee
to replace the successor Trustee appointed by the Company.


 


If a successor Trustee does not take office within 60
days after the retiring Trustee resigns or is removed, the retiring Trustee,
the Company, or the Holders of Notes of at least 10% in principal amount of the
then outstanding Notes may petition at the expense of the Company any court of
competent jurisdiction for the appointment of a successor Trustee.


 


If the Trustee, after written request by any Holder of
a Note who has been a Holder of a Note for at least six months, fails to comply
with Section 7.10, such Holder of a Note may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.


 


A successor Trustee appointed under this Section 7.08
shall deliver a written acceptance of its appointment to the retiring Trustee
and to the Company.  Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee appointed shall have all the rights, powers and duties of the
Trustee under this Indenture.  The
successor Trustee appointed under this Section 7.08 shall mail a notice of
its succession to Holders of the Notes. 
The retiring Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee, provided all sums owing to the Trustee
hereunder have been paid and subject to the Lien provided for in Section 7.07
hereof.  Notwithstanding replacement of
the Trustee pursuant to this Section 7.08, the Company’s obligations under
Section 7.07 hereof shall continue for the benefit of the retiring
Trustee.


 


SECTION 7.09.  Successor Trustee by Merger, etc.  If the Trustee consolidates, merges or
converts into, or transfers all or substantially all of its corporate trust
business to, another corporation or banking association, the successor
corporation or banking association without any further act shall be the
successor Trustee.


 


SECTION 7.10.  Eligibility; Disqualification.  There shall at all times be a Trustee
hereunder that is a corporation or banking association organized and doing
business under the laws of the United States of America or of any state thereof
that is authorized under such laws to exercise corporate trustee power, that is
subject to supervision or examination by federal or state authorities and that
has a combined capital and surplus of at least $50 million as set forth in its
most recent published annual report of condition.


 


This Indenture shall always have a Trustee who
satisfies the requirements of TIA §§ 310(a)(1), (2) and (5).  The Trustee is subject to TIA § 310(b); provided, however, that there shall be
excluded from the operation of TIA § 310(b)(1) any indenture or indentures
under which other securities, or certificates of interest or participation in
other securities, of the Company are outstanding, if the requirements for such
exclusion set forth in TIA § 310(b)(1) are met.


 


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SECTION 7.11.  Preferential Collection of Claims Against
Company.  The Trustee is subject to
TIA §311(a), excluding any creditor relationship listed in TIA §311(b).  A Trustee who has resigned or been removed
shall be subject to TIA §311(a) to the extent indicated therein.


 


ARTICLE 8


 


LEGAL DEFEASANCE AND COVENANT DEFEASANCE


 


SECTION 8.01.  Option to Effect Legal Defeasance or
Covenant Defeasance.  The Company
may, at the option of its Board of Directors evidenced by a resolution set
forth in an Officers’ Certificate, at any time, elect to have either Section 8.02
or Section 8.03 hereof be applied to all outstanding Notes upon compliance
with the conditions set forth below in this Article 8


 


SECTION 8.02.  Legal Defeasance and Discharge.  Upon the Company’s exercise under Section 8.02
hereof of the option applicable to this Section 8.02, the Company shall,
subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be deemed to have been discharged from its obligations with respect to
all outstanding Notes and all obligations of the Guarantors shall be deemed to
have been discharged with respect to their obligations under the Note
Guarantees on the date the conditions set forth below are satisfied
(hereinafter, “Legal Defeasance”).  For this purpose, Legal Defeasance means that
the Company and the Guarantors shall be deemed to have paid and discharged the
entire Indebtedness represented by the outstanding Notes and Note Guarantees,
respectively, which shall thereafter be deemed to be “outstanding” only for the
purposes of Section 8.05 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall
survive until otherwise terminated or discharged hereunder:  (a) the rights of Holders of outstanding
Notes to receive solely from the trust fund described in Section 8.04
hereof, and as more fully set forth in such Section, payments in respect of the
principal of, premium, if any, interest and Liquidated Damages, if any, on such
Notes when such payments are due, (b) the Company’s and the Guarantor’s
obligations with respect to such Notes under Article 2 and Section 4.02
hereof, (c) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Company’s obligations in connection therewith and (d) this
Article 8.  Subject to compliance
with this Article 8, the Company may exercise its option under this Section 8.02
notwithstanding the prior exercise of its option under Section 8.03
hereof.


 


SECTION 8.03.  Covenant Defeasance.  Upon the Company’s exercise under Section 8.01
hereof of the option applicable to this Section 8.03, the Company and each
of the Guarantors shall, subject to the satisfaction of the conditions set
forth in Section 8.04 hereof, be released from their respective
obligations under the covenants set forth in Sections 4.03, 4.07, 4.08, 4.09,
4.10, 4.11, 4.12, 4.14, 4.15, 4.16, 4.17, 4.18 and 4.19 hereof with respect to
the outstanding Notes on and after the date the conditions set forth in Section 8.04
are satisfied (hereinafter, “Covenant
Defeasance”), and the Notes shall thereafter be deemed not “outstanding”
for the purposes of any direction, waiver, consent or declaration or act of
Holders


 


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(and the consequences of
any thereof) in connection with such covenants, but shall continue to be deemed
“outstanding” for all other purposes hereunder. 
For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes, the Company may omit to comply with and shall have no liability
in respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this Indenture and
such Notes shall be unaffected thereby. In addition, upon the Company’s
exercise under Section 8.01 hereof of the option applicable to this Section 8.03,
subject to the satisfaction of the conditions set forth in Section 8.04
hereof, Sections 6.01(c) through 6.01(g) hereof shall not constitute
Events of Default.


 


SECTION 8.04.  Conditions to Legal Defeasance or Covenant
Defeasance.  The following shall be
the conditions to the application of either Section 8.02 or 8.03 hereof to
the outstanding Notes:


 


In order to exercise either Legal Defeasance or Covenant
Defeasance:


 


(i)                                     the Company must
irrevocably deposit with the Trustee, in trust, for the benefit of the Holders
of the Notes, cash in U.S. dollars, non-callable Government Securities, or a
combination thereof, in such amounts as shall be sufficient, in the opinion of
a nationally recognized firm of independent public accountants, to pay the
principal of, premium and Liquidated Damages, if any, and interest on the
outstanding Notes on the Stated Maturity or on the applicable redemption date,
as the case may be, and the Company must specify whether the Notes are being
defeased to maturity or to a particular redemption date;


 


(ii)                                  in the case of an
election under Section 8.02 hereof, the Company shall have delivered to
the Trustee an Opinion of Counsel reasonably acceptable to the Trustee
confirming that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the date
of this Indenture, there has been a change in the applicable federal income tax
law, in either case, to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Holders of the outstanding Notes shall not
recognize income, gain or loss for federal income tax purposes as a result of
such Legal Defeasance and shall be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such Legal Defeasance had not occurred;


 


(iii)                               in the case of an
election under Section 8.03 hereof, the Company shall have delivered to
the Trustee an Opinion of Counsel reasonably acceptable to the Trustee
confirming that the Holders of the outstanding Notes shall not recognize
income, gain or loss for federal income tax purposes as a result of such
Covenant Defeasance and shall be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such Covenant Defeasance had not occurred;


 


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(iv)                              no Default or Event of
Default shall have occurred and be continuing on the date of such deposit
(other than a Default or Event of Default resulting from the borrowing of funds
to be applied to such deposit);


 


(v)                                 such Legal Defeasance
or Covenant Defeasance shall not result in a breach or violation of, or
constitute a default under any material agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound, including the Credit Agreement;


 


(vi)                              the Company shall have
delivered to the Trustee an Officers’ Certificate stating that the deposit was
not made by the Company with the intent of preferring the Holders of Notes over
any other creditors of the Company with the intent of defeating, hindering, delaying
or defrauding any other creditors of the Company or others;


 


(vii)                           if the Notes are to be
redeemed prior to their Stated Maturity, the Company must deliver to the
Trustee irrevocable instructions to redeem all of the Notes on the specified
redemption date; and


 


(viii)                        the Company shall have
delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel,
each stating that all conditions precedent, including, without limitation, the
conditions set forth in this Section 8.04, provided for or relating to the
Legal Defeasance or the Covenant Defeasance have been complied with.


 


SECTION 8.05.  Deposited Money and Cash Equivalents to Be
Held in Trust; Other Miscellaneous Provisions.  Subject to Section 8.06 hereof, all
money and non-callable Government Securities (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee, collectively for
purposes of this Section 8.05, the “Trustee”) pursuant to Section 8.04
hereof in respect of the outstanding Notes shall be held in trust and applied
by the Trustee, in accordance with the provisions of such Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as Paying Agent) as the Trustee may determine, to
the Holders of such Notes of all sums due and to become due thereon in respect
of principal, premium, if any, and interest, but such money need not be
segregated from other funds except to the extent required by law.


 


The Company shall pay and indemnify the Trustee against
any tax, fee or other charge imposed on or assessed against the cash or
non-callable Cash Equivalents deposited pursuant to Section 8.04(i) hereof
or the principal and interest received in respect thereof other than any such
tax, fee or other charge which by law is for the account of the Holders of the
outstanding Notes.


 


Anything in this Article 8 to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon the request of the Company any money or non-callable Cash Equivalents
held by it as provided in Section 8.05 hereof which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee (which may be the
opinion delivered under Section 8.05(a) hereof), are in excess of the
amount thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.


 


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SECTION 8.06.  Repayment to Company.  Any money deposited with the Trustee or any
Paying Agent, or then held by the Company, in trust for the payment of the
principal of, premium, if any, interest, or Liquidated Damages, if any, on any
Note and remaining unclaimed for two years after such principal, and premium,
if any, interest, or Liquidated Damages, if any, has become due and payable
shall be paid to the Company on its request or (if then held by the Company)
shall be discharged from such trust; and the Holder of such Note shall
thereafter, as a secured creditor, look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying
Agent, before being required to make any such repayment, may at the expense of
the Company cause to be published once, in the New York Times and The Wall
Street Journal (national edition), notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such notification or publication, any unclaimed balance of such
money then remaining shall be repaid to the Company.


 


SECTION 8.07.  Reinstatement.  If the Trustee or Paying Agent is unable to
apply any United States dollars or non-callable Government Securities in
accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason
of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the Company’s
obligations under this Indenture and the Notes shall be revived and reinstated
as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof
until such time as the Trustee or Paying Agent is permitted to apply all such
money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided,
however, that, if the Company makes any payment of principal of,
premium, if any, or interest on any Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money held by the Trustee or Paying
Agent.


 


ARTICLE 9


 


AMENDMENT, SUPPLEMENT AND WAIVER


 


SECTION 9.01.  Without Consent of Holders of Notes.  Notwithstanding Section 9.02 of this
Indenture, without the consent of any Holder of Notes, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture or the Notes:


 


(a)                                  to cure any ambiguity, defect,
error or inconsistency;


 


(b)                                 to provide for uncertificated
Notes in addition to or in place of certificated Notes;


 


(c)                                  to provide for the assumption of
the Company’s or any Guarantor’s obligations to Holders of Notes in the case of
a merger or consolidation or sale of all or substantially all of the assets of
the Company or of such Guarantor;


 


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(d)                                 to make any change that would
provide any additional rights or benefits to the Holders of Notes or that does
not adversely affect in any material respect the legal rights under this
Indenture of any such Holder;


 


(e)                                  to comply with requirements of
the SEC in order to effect or maintain the qualification of this Indenture
under the Trust Indenture Act;


 


(f)                                    to provide for the issuance of
Additional Notes in accordance with the limitations set forth in this
Indenture;


 


(g)                                 to add Guarantors with respect
to the Notes or to secure the Notes;


 


(h)                                 to comply with the rules of
any applicable securities depositary;


 


(i)                                     to provide for a successor
trustee in accordance with the terms of this Indenture or to otherwise comply
with any requirement of this Indenture; or


 


(j)                                     to conform the text of this
Indenture or the Notes to any provision of the “Description of Notes” section of
the Offering Memorandum.


 


Upon the request of the Company accompanied by a
resolution of its Board of Directors authorizing the execution of any such
amended or supplemental Indenture, and upon receipt by the Trustee of the
documents described in Section 7.02(b) hereof stating that such
amended or supplemental Indenture complies with this Section 9.01, the
Trustee shall join with the Company in the execution of any amended or
supplemental Indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into such
amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.


 


SECTION 9.02.  With Consent of Holders of Notes.  Except as provided below in this Section 9.02,
the Company and the Trustee may amend or supplement this Indenture (including
Sections 3.09, 4.10 and 4.14 hereof) and the Notes with the consent of the
Holders of at least a majority in principal amount of the Notes then
outstanding voting as a single class (including, without limitation, consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing
Default or Event of Default or compliance with any provision of this Indenture
or the Notes may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Notes voting as single class
(including, without limitation, consents obtained in connection with a tender
offer or exchange offer for, the Notes). 
Without the consent of at least 75% in aggregate principal amount of the
Notes then outstanding voting as a single class (including consents obtained in
connection with a purchase of, or tender offer or exchange offer for, the
Notes), no waiver or amendment to this Indenture may make any change in the
provisions of Article 10 hereof that adversely affects the rights of any
Holder of Notes.  Furthermore, neither Article 8,
Article 10 nor Section 11.02 shall be amended or modified without the
consent of the Administrative Agent under the Credit Agreement. Section 2.09
hereof shall determine which Notes are considered to be “outstanding” for
purposes of this Section 9.02.


 


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Upon the request of the Company accompanied by a
resolution of its Board of Directors authorizing the execution of any such
amended or supplemental Indenture, and upon the filing with the Trustee of
evidence satisfactory to the Trustee of the consent of the Holders of Notes as
aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02(b) hereof
stating that any such amended or supplemental Indenture complies with this Section 9.02,
the Trustee shall join with the Company in the execution of such amended or
supplemental Indenture unless such amended or supplemental Indenture directly
affects the Trustee’s own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental Indenture.


 


It shall not be necessary for the consent of the
Holders of Notes under this Section 9.02 to approve the particular form of
any proposed amendment or waiver, but it shall be sufficient if such consent
approves the substance thereof.


 


After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver.  Any failure of the Company to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such amended or supplemental Indenture or waiver.


 


Subject to Sections 6.04 and 6.07 hereof, the Holders
of a majority in aggregate principal amount of the Notes then outstanding
voting as a single class may waive compliance in a particular instance by the
Company with any provision of this Indenture or the Notes.  However, without the consent of each Holder
affected, an amendment or waiver under this Section 9.02 may not (with
respect to any Notes held by a nonconsenting Holder):


 


(a)                                  reduce the principal amount of
Notes whose Holders must consent to an amendment, supplement or waiver;


 


(b)                                 reduce the principal of or
change the fixed maturity of any Note or alter the provisions, or waive any
payment, with respect to the redemption of the Notes, except with respect to
Sections 3.09, 4.10 and 4.14 hereof;


 


(c)                                  reduce the rate of or change the
time for payment of interest on any Note;


 


(d)                                 waive a Default or Event of
Default in the payment of principal of or premium, if any, or interest or
Liquidated Damages, if any, on the Notes (except a rescission of acceleration
of the Notes by the Holders of at least a majority in aggregate principal
amount of the Notes and a waiver of the payment default that resulted from such
acceleration);


 


(e)                                  make any Note payable in money
other than U. S. dollars;


 


(f)                                    make any change in the
provisions of this Indenture relating to waivers of past Defaults or the rights
of the Holders of the Notes to receive payments of principal of or premium, if
any, or interest or Liquidated Damages, if any, on the Notes;


 


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(g)                                 release any Guarantor from any
of its obligations under its Note Guarantee or this Indenture, except in
accordance with the terms of this Indenture; or


 


(h)                                 make
any change in Section 6.04 or 6.07 hereof or in the foregoing amendment
and waiver provisions.


 


SECTION 9.03.  Compliance with Trust Indenture Act.  Every amendment or supplement to this
Indenture or the Notes shall be set forth in a amended or supplemental Indenture
that complies with the TIA as then in effect.


 


SECTION 9.04.  Revocation and Effect of Consents.  Until an amendment, supplement or waiver
becomes effective, a consent to it by a Holder of a Note is a continuing
consent by such Holder of a Note and every subsequent Holder of a Note or
portion of a Note that evidences the same debt as the consenting Holder’s Note,
even if notation of the consent is not made on any Note.  However, any such Holder of a Note or
subsequent Holder of a Note may revoke the consent as to its Note if the
Trustee receives written notice of revocation before the date the waiver,
supplement or amendment becomes effective. An amendment, supplement or waiver
becomes effective in accordance with its terms and thereafter binds every
Holder.


 


SECTION 9.05.  Notation on or Exchange of Notes.  The Trustee may place an appropriate notation
about an amendment, supplement or waiver on any Note thereafter
authenticated.  The Company in exchange
for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.


 


Failure to make the appropriate notation or issue a
new Note shall not affect the validity and effect of such amendment, supplement
or waiver.


 


SECTION 9.06.  Trustee to Sign Amendments, etc.  The Trustee shall sign any amended or
supplemental Indenture authorized pursuant to this Article 9 if the
amendment or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. 
The Company may not sign an amendment or supplemental Indenture until
the Board of Directors approves it.  In
executing any amended or supplemental indenture, the Trustee shall be entitled
to receive and (subject to Section 7.01 hereof) shall be fully protected
in relying upon, in addition to the documents required by Section 13.04
hereof, an Officer’s Certificate and an Opinion of Counsel stating that the
execution of such amended or supplemental indenture is authorized or permitted
by this Indenture.  The Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee’s rights, duties or immunities under this Indenture
or otherwise.  In signing any amendment,
supplement or waiver, the Trustee shall be entitled to receive an indemnity
reasonably satisfactory to it.


 


SECTION 9.07.  Payments for Consent.  The Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly, pay or cause to be
paid any consideration to or for the benefit of any Holder of Notes for or as
an inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Notes unless such consideration is offered
to be paid and is paid to all Holders of the Notes that consent, waive or


 


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agree to amend in the
time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.


 


ARTICLE 10


 


SUBORDINATION


 


SECTION 10.01.  Agreement to Subordinate.  The Company agrees, and each Holder by
accepting a Note agrees, that the payment of principal, interest and premium
and Liquidated Damages, if any, on the Notes is subordinated in right of
payment, to the extent and in the manner provided in this Article 10, to
the prior payment in full in cash of all Senior Debt of the Company (whether
outstanding on the date hereof or hereafter created, incurred, assumed or
guaranteed), and that the subordination is for the benefit of the holders of
Senior Debt.


 


SECTION 10.02.  Liquidation;
Dissolution; Bankruptcy.  The
holders of Senior Debt of the Company will be entitled to receive payment in
full in cash of all Obligations due in respect of Senior Debt of the Company
(including interest after the commencement of any bankruptcy proceeding at the
rate specified in the applicable Senior Debt of the Company) before the Holders
of Notes will be entitled to receive any payment with respect to the Notes, and
until all Obligations with respect to Senior Debt of the Company are paid in
full in cash, any distribution, to which the Holder would be entitled shall be
made to the holders of such Senior Debt (except that Holders of Notes may
receive and retain Permitted Junior Securities and payments made from the trust
pursuant to Article 8 hereof), in the event of any distribution to
creditors of the Company:  (i) in a
liquidation or dissolution of the Company; (ii) in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Company or its property; (iii) in an assignment by the Company for the
benefit of its creditors; or (iv) in any marshaling of the Company’s
assets and liabilities.


 


SECTION 10.03.  Default on Designated Senior Debt.  The Company may not make any payment in
respect of the Notes (except in Permitted Junior Securities or from the trust
pursuant to Article 8 hereof):


 


(a)                                  in the event of and during the
continuation of any default in the payment of principal of, interest or
premium, if any, on any Designated Senior Debt, or any Obligation owing from
time to time under or in respect of Senior Debt, or in the event that any event
of default (other than a payment default) with respect to any Designated Senior
Debt shall have occurred and be continuing and shall have resulted in such
Designated Senior Debt becoming or being declared due and payable prior to the
date on which it would otherwise have become due and payable; or


 


(b)                                 if any other event of default
other than as described in clause (a) above (a “nonpayment default”) with
respect to any Designated Senior Debt shall have occurred and is continuing
permitting the holders of such Designated Senior Debt or the holders of any
series thereof (or their Representative or Representatives) to declare such
Designated Senior Debt due and payable prior to the date on which it would
otherwise have become due and payable and the Trustee receives a notice of such
default (a “Payment Blockage


 


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Notice”) from a Representative of the holders
of such Designated Senior Debt of the Company.


 


Payments on the Notes may and shall be resumed:


 


(1)                                  in the case of a payment default
on or acceleration of Designated Senior Debt of the Company, upon the date on
which such default shall have been cured or waived in writing in accordance
with the instruments governing such Designated Senior Debt or such acceleration
shall have been rescinded or annulled, and


 


(2)                                  in case of any nonpayment
default specified in clause (b), upon the earlier of:


 


(A)                              179
days after the date on which the applicable Payment Blockage Notice is
received; and


 


(B)                                the
date, if any, on which such Designated Senior Debt to which such default
relates is paid in full in cash or such default is cured or waived in writing
in accordance with the instruments governing such Designated Senior Debt by the
holders of such Designated Senior Debt; and


 


(C)                                the
date the Trustee receives notice from the Representative for such Designated
Senior Debt rescinding the Payment Blockage Notice, in each case, unless the
maturity of such Designated Senior Debt of the Company has been accelerated.


 


No new Payment Blockage Notice may be delivered unless and until:  (i) 360 days have elapsed since the
delivery of the immediately prior Payment Blockage Notice; and (ii) all
scheduled payments of principal, interest and premium and Liquidated Damages,
if any, on the Notes that have come due have been paid in full in cash.  No nonpayment default which existed or was
continuing with respect to the Designated Senior Debt on the date of delivery
of any Payment Blockage Notice to the Trustee shall be, or be made, the basis
for the commencement of any subsequent Payment Blockage Notice unless such
default is cured or waived for a period of not less than 90 days.


 


SECTION 10.04.  Acceleration of Securities.  If payment of the Notes is accelerated
because of an Event of Default, the Company and the Trustee shall promptly
notify holders of Senior Debt of the acceleration.


 


SECTION 10.05.  When Distribution Must Be Paid Over.  In the event that the Trustee or any Holder
receives any payment of any Obligations with respect to the Notes (except in
Permitted Junior Securities or from the trust pursuant to Article 8
hereof) at a time when (i) the payment is prohibited by Article 10,
and (ii) the Trustee or such Holder, as applicable, has actual knowledge
that such payment is prohibited by Article 10 hereof (provided that such actual knowledge shall
not be required in the case of a payment default on or acceleration of Designated
Senior Debt of the Company) such payment shall be held by the Trustee or such


 


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Holder, as applicable, in
trust for the benefit of the holders of Senior Debt of the Company, and shall
be paid forthwith over and delivered, upon written request of the holders of
such Senior Debt or upon any payment default on any Designated Senior Debt, to
the holders of Senior Debt as their interests may appear or their
Representative under the agreement (if any) pursuant to which Senior Debt may
have been issued, as their respective interests may appear, for application to
the payment of all Obligations with respect to Senior Debt remaining unpaid to
the extent necessary to pay such Obligations in full in accordance with their
terms, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Debt.


 


With respect to the holders of Senior Debt, the
Trustee undertakes to perform only such obligations on the part of the Trustee
as are specifically set forth in this Article 10, and no implied covenants
or obligations with respect to the holders of Senior Debt shall be read into
this Indenture against the Trustee.  The
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Debt, and shall not be liable to any such holders if the Trustee shall pay over
or distribute to or on behalf of Holders or the Company or any other Person
money or assets to which any holders of Senior Debt shall be entitled by virtue
of this Article 10, except if such payment is made as a result of the
willful misconduct or gross negligence of the Trustee.


 


SECTION 10.06.  Notice by the Company.  The Company shall promptly notify the Trustee
and the Paying Agent in writing of any facts known to the Company that would
cause a payment of any Obligations with respect to the Notes to violate this Article 10,
but failure to give such notice shall not affect the subordination of the Notes
to the Senior Debt as provided in this Article 10.


 


SECTION 10.07.  Subrogation.  After all Senior Debt is paid in full and
until the Notes are paid in full, Holders of Notes shall be subrogated (equally
and ratably with all other Indebtedness pari
passu with the Notes) to the rights of holders of Senior Debt to
receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the Holders of Notes have been applied to
the payment of Senior Debt.  A
distribution made under this Article 10 to holders of Senior Debt that
otherwise would have been made to Holders of Notes is not, as between the
Company and Holders, a payment by the Company on the Notes.


 


SECTION 10.08.  Relative Rights.  This Article 10 defines the relative
rights of Holders of Notes and holders of Senior Debt.  Nothing in this Indenture shall:


 


(a)                                  impair, as between
the Company and Holders of Notes, the obligation of the Company, which is
absolute and unconditional, to pay principal of and interest on the Notes in
accordance with their terms;


 


(b)                                 affect the relative
rights of Holders of Notes and creditors of the Company other than their rights
in relation to holders of Senior Debt; or


 


(c)                                  prevent the Trustee
or any Holder of Notes from exercising its available remedies upon a Default or
Event of Default, subject to the rights of holders and owners of Senior Debt to
receive distributions and payments otherwise payable to Holders of Notes.


 


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If the Company fails because of this Article 10
to pay principal of or interest on a Note on the due date, the failure is still
a Default or Event of Default.


 


SECTION 10.09.  Subordination May Not Be Impaired by
the Company.  No right of any holder
of Senior Debt to enforce the subordination of the Indebtedness evidenced by
the Notes shall be impaired by any act or failure to act by the Company or any
Holder or by the failure of the Company or any Holder to comply with this
Indenture.


 


SECTION 10.10.  Distribution or Notice to Representative.  Whenever a distribution is to be made or a notice
given to holders of Senior Debt, the distribution may be made and the notice
given to their Representative.


 


Upon any payment or distribution of assets of the
Company referred to in this Article 10, the Trustee and the Holders of
Notes shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders of Notes for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior Debt
and other Indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 10.


 


SECTION 10.11.  Rights of Trustee and Paying Agent.  Notwithstanding the provisions of this Article 10
or any other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts that would prohibit the making of any
payment or distribution by the Trustee, and the Trustee and the Paying Agent
may continue to make payments on the Notes, unless the Trustee shall have
received at its Corporate Trust Office at least five Business Days prior to the
date of such payment written notice of facts that would cause the payment of
any Obligations with respect to the Notes to violate this Article 10.  Only the Company or a Representative may give
the notice.  Nothing in this Article 10
shall impair the claims of, or payments to, the Trustee under or pursuant to Section 7.07
hereof.


 


The Trustee in its individual or any other capacity
may hold Senior Debt with the same rights it would have if it were not
Trustee.  Any Agent may do the same with
like rights.


 


SECTION 10.12.  Authorization to Effect Subordination.  Each Holder of Notes, by the Holder’s
acceptance thereof, authorizes and directs the Trustee on such Holder’s behalf
to take such action as may be necessary or appropriate to effectuate the
subordination as provided in this Article 10, and appoints the Trustee to
act as such Holder’s attorney-in-fact for any and all such purposes.  If the Trustee does not file a proper proof
of claim or proof of debt in the form required in any proceeding referred to in
Section 6.09 hereof at least 30 days before the expiration of the time to
file such claim, the lenders under the Credit Agreement are hereby authorized
to file an appropriate claim for and on behalf of the Holders of the Notes.


 


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ARTICLE 11


 


NOTE GUARANTEES


 


SECTION 11.01.  Guarantee.  Subject to this Article 11, each of the
Guarantors hereby, jointly and severally, unconditionally, as primary obligor
and not merely as surety, guarantees to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the Notes or
the obligations of the Company hereunder or thereunder, that:  (a) the principal of, premium, if any,
interest and Liquidated Damages, if any, on the Notes will be promptly paid in
full when due, whether at maturity, by acceleration, redemption or otherwise,
and interest on the overdue principal of and interest on the Notes, if any, if
lawful (subject in all cases to any applicable grace period provided herein),
and all other obligations of the Company to the Holders or the Trustee
hereunder or thereunder will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and (b) in case of any
extension of time of payment or renewal of any Notes or any of such other
obligations, that same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. 
Failing payment when due of any amount so guaranteed or any performance
so guaranteed for whatever reason, the Guarantors shall be jointly and
severally obligated to pay the same immediately.  Each Guarantor agrees that this is a
guarantee of payment and not a guarantee of collection.


 


The Guarantors hereby agree that their obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a
Guarantor.  Subject to Section 6.06
hereof, each Guarantor hereby waives diligence, presentment, demand of payment,
filing of claims with a court in the event of insolvency or bankruptcy of the
Company, any right to require a proceeding first against the Company, protest,
notice and all demands whatsoever and covenant that this Note Guarantee shall
not be discharged except by complete performance of the obligations contained
in the Notes and this Indenture.


 


If any Holder or the Trustee is required by any court
or otherwise to return to the Company, the Guarantors or any custodian,
trustee, liquidator or other similar official acting in relation to either the
Company or the Guarantors, any amount paid by either to the Trustee or such
Holder, this Note Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect.


 


Each Guarantor agrees that it shall not be entitled to
any right of subrogation in relation to the Holders in respect of any
obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby.  Each Guarantor
further agrees that, as between the Guarantors, on the one hand, and the
Holders and the Trustee, on the other hand, (x) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article 6 hereof for
the purposes of this Note Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event


 


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of any declaration of acceleration of such obligations
as provided in Article 6 hereof, such obligations (whether or not due and
payable) shall forthwith become due and payable by the Guarantors for the
purpose of this Note Guarantee.  The
Guarantors shall have the right to seek contribution from any non-paying
Guarantor so long as the exercise of such right does not impair the rights of
the Holders under the Note Guarantee.


 


SECTION 11.02.  Subordination of Note Guarantee.  The Obligations of each Guarantor under its
Note Guarantee pursuant to this Article 11 shall be junior and
subordinated to the Guarantee of any Senior Debt of such Guarantor on the same
basis as the Notes are junior and subordinated to Senior Debt of the
Company.  For the purposes of the
foregoing sentence, the Trustee and the Holders shall have the right to receive
and/or retain payments by any of the Guarantors only at such times as they may
receive and/or retain payments in respect of the Notes pursuant to this
Indenture, including Article 10 hereof.


 


SECTION 11.03.  Limitation on Guarantor Liability.  Each Guarantor, and by its acceptance of
Notes, each Holder, hereby confirms that it is the intention of all such
parties that the Note Guarantee of such Guarantor not constitute a fraudulent
transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or
state law to the extent applicable to any Note Guarantee.  To effectuate the foregoing intention, the
Trustee, the Holders and the Guarantors hereby irrevocably agree that the
obligations of such Guarantor will, after giving effect to such maximum amount
and all other contingent and fixed liabilities of such Guarantor that are
relevant under such laws, and after giving effect to any collections from,
rights to receive contribution from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under
this Article 11, result in the obligations of such Guarantor under its
Note Guarantee not constituting a fraudulent transfer or conveyance.


 


SECTION 11.04.  Execution and Delivery of Note Guarantee.  Each Guarantor hereby agrees that its
execution and delivery of this Indenture or any supplemental indentures
pursuant to Section 4.17 hereof shall evidence its Note Guarantee set
forth in Section 11.01 without the need for any further notation on the
Notes.


 


Each of the Guarantors hereby agrees that its Note
Guarantee set forth in Section 11.01 shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation relating to such
Note Guarantee.


 


If an Officer of a Guarantor whose signature is on
this Indenture or any supplemental indenture, entered into pursuant to Section 4.17
or otherwise, no longer holds that office at the time the Trustee authenticates
such Notes or at any time thereafter, such Guarantor’s Note Guarantee shall be
valid nevertheless.


 


The delivery of any Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of any Note
Guarantee set forth in this Indenture on behalf of the Guarantor.


 


In the event that the Company creates or acquires any
new Subsidiaries subsequent to the date of this Indenture, if required by Section 4.17
hereof, the Company shall


 


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cause such Subsidiaries to execute supplemental
indentures to this Indenture in accordance with Section 4.17 hereof and
this Article 11, to the extent applicable.


 


SECTION 11.05.  Guarantors May Consolidate, etc., on
Certain Terms.  Except as otherwise
provided in Section 11.06, a Guarantor may not sell or otherwise dispose
of all or substantially all of its assets, or consolidate with or merge with or
into (whether or not such Guarantor is the surviving Person) another Person,
other than the Company or another Guarantor, unless:


 


(a)                                  immediately after
giving effect to such transaction, no Default or Event of Default exists; and


 


(b)                                 either:


 


(i)                                     the Person
acquiring the property in any such sale or disposition or the Person formed by
or surviving any such consolidation or merger is a corporation, partnership or
limited liability company, organized or existing under (i) the laws of the
United States, any state thereof or the District of Columbia or (ii) the
laws of the same jurisdiction as that Guarantor and, in each case, assumes all
the obligations of that Guarantor under this Indenture, its Note Guarantee and
the Registration Rights Agreement pursuant to a supplemental indenture
satisfactory to the Trustee; or


 


(ii)                                  such sale or other
disposition or consolidation or merger complies with Section 4.10,
including the application of the Net Proceeds therefrom.


 


In case of any such consolidation, merger, sale or
conveyance and upon the assumption by the successor Person, by supplemental
indenture, executed and delivered to the Trustee and satisfactory in form to
the Trustee, of the Note Guarantee endorsed upon the Notes and the due and
punctual performance of all of the covenants and conditions of this Indenture
to be performed by a Guarantor, such successor Person shall succeed to and be
substituted for a Guarantor with the same effect as if it had been named herein
as a Guarantor.  Such successor Person
thereupon may cause to be signed any or all of the Note Guarantees to be
endorsed upon all of the Notes issuable hereunder which theretofore shall not
have been signed by the Company and delivered to the Trustee.  All the Note Guarantees so issued shall in
all respects have the same legal rank and benefit under this Indenture as the
Note Guarantees theretofore and thereafter issued in accordance with the terms
of this Indenture as though all of such Note Guarantees had been issued at the
date of the execution hereof.


 


SECTION 11.06.  Releases of Guarantees.  Any Guarantor will be released and relieved
of any obligations under its Note Guarantee, (i) in connection with any
sale of Capital Stock of such Guarantor to a Person that results in the
Guarantor no longer being a Subsidiary of the Company, if the sale of such
Capital Stock of that Guarantor complies with Section 4.10 hereof; (ii) if
the Company properly designates any Restricted Subsidiary that is a Guarantor
as an Unrestricted Subsidiary in accordance with the terms of this Indenture;
or (iii) in the event of a Covenant Defeasance or Legal Defeasance.  Upon delivery by the Company to the Trustee
of an Officers’ Certificate and an Opinion of Counsel to the effect that such
sale or other disposition


 


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was made by the Company
in accordance with the provisions of this Indenture, including without limitation
Section 4.10 hereof, the Trustee shall execute any documents reasonably
required in order to evidence the release of any Guarantor from its obligations
under its Note Guarantee.


 


Any Guarantor not released from its obligations under
its Note Guarantee shall remain liable for the full amount of principal of and
interest on the Notes and for the other obligations of any Guarantor under this
Indenture as provided in this Article 11.


 


SECTION 11.07.  Severability.  In case any provision of this Note Guarantee
shall be invalid, illegal or unenforceable, that portion of such provision that
is not invalid, illegal or unenforceable shall remain in effect, and the
validity, legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.


 


ARTICLE 12


 


SATISFACTION AND DISCHARGE


 


SECTION 12.01.  Satisfaction and Discharge.  (a)  Subject to the provisions of
Sections 12.04 and 12.05, this Indenture shall be discharged and shall cease to
be of further effect as to all Notes issued hereunder, when the Company or any
Guarantor has paid or caused to be paid all sums payable by it under this
Indenture and either:


 


(1)                                  all Notes that have been
authenticated (except lost, stolen or destroyed Notes that have been replaced
or paid and Notes for whose payment money has theretofore been deposited in
trust and thereafter repaid to the Company) have been delivered to the Trustee
for cancellation; or


 


(2)                                  (i) all Notes that have not
been delivered to the Trustee for cancellation have become due and payable by
reason of the making of a notice of redemption or otherwise or shall become due
and payable within one year, including as a result of a redemption notice
properly given pursuant to this Indenture, and the Company or any Guarantor has
irrevocably deposited or caused to be deposited with the Trustee as trust funds
in trust solely for the benefit of the Holders, cash in U.S. dollars,
non-callable Government Securities, or a combination thereof, in such amounts
as shall be sufficient without consideration of any reinvestment of interest,
to pay and discharge the entire indebtedness on the Notes not delivered to the
Trustee for cancellation for principal, premium, accrued interest and
Liquidated Damages, if any, to the date of maturity or redemption; (ii) no
Default or Event of Default shall have occurred and be continuing on the date
of such deposit or shall occur as a result of such deposit and such deposit
shall not result in a breach or violation of, or constitute a default under,
any other instrument to which the Company or any Guarantor is a party or by
which the Company or any Guarantor is bound; and (iii) the Company has
delivered irrevocable instructions to the Trustee under this Indenture to apply
the deposited money toward the payment of the Notes at maturity or the
redemption date, as the case may be.


 


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(b)                                 The Company shall deliver an
Officers’ Certificate and an Opinion of Counsel to the Trustee stating that all
conditions precedent to satisfaction and discharge have been satisfied.


 


(c)                                  Notwithstanding the above, the
Trustee shall pay to the Company from time to time upon its request any cash or
Government Securities held by it as provided in this section which, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification delivered to the Trustee, are in excess of
the amount thereof that would then be required to be deposited to effect a
satisfaction and discharge under this Article 12.


 


SECTION 12.02.  Deposited Money and Government Securities
to Be Held in Trust.  Subject to Section 12.03
hereof, all money and non-callable Government Securities (including the
proceeds thereof) deposited with the Trustee (or other qualifying trustee,
collectively for purposes of this Section 12.02, the “Trustee”) pursuant
to Section 12.01 hereof in respect of the outstanding Notes shall be held
in trust and applied by the Trustee, in accordance with the provisions of such
Notes and this Indenture, to the payment, either directly or through any Paying
Agent (including the Company acting as Paying Agent) as the Trustee may
determine, to the Holders of such Notes of all sums due and to become due
thereon in respect of principal, premium, if any, interest, and Liquidated
Damages, if any, but such money be segregated from other funds except to the
extent required by law.


 


SECTION 12.03.  Repayment to the Company.  Any money deposited with the Trustee or any
Paying Agent, or then held by the Company, in trust for the payment of the
principal of, premium, if any, interest, or Liquidated Damages, if any, on any
Note and remaining unclaimed for two years after such principal, premium, if
any, interest, or Liquidated Damages, if any, has become due and payable shall
be paid to the Company on its request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in the
New York Times or The Wall Street Journal (national edition), notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining shall be repaid to the Company.


 


SECTION 12.04.  Survival.  In the event that the Company makes (or
causes to be made) an irrevocable deposit with the Trustee for the benefit of
the Holders pursuant to Section 12.01(a)(2) hereof, prior to the date
of maturity or redemption, as the case may be, the following provisions of this
Indenture shall survive until otherwise terminated or discharged hereunder:


 


(1)                                  the rights of Holders of
outstanding Notes to receive payments in respect of the principal of, premium,
if any, interest and Liquidated Damages, if any, on such Notes when such
payments are due from the trust;


 


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(2)                                  the Company’s obligations with
respect to such Notes under Article 2 and Section 4.02 hereof;


 


(3)                                  the rights, powers, trusts,
duties and immunities of the Trustee hereunder and the Company’s obligations in
connection therewith; and


 


(4)                                  this Article 12.


 


SECTION 12.05.  Reinstatement.  If the Trustee or Paying Agent is unable to
apply any Government Securities in accordance with Section 12.02 hereof,
as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company’s obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to Section 12.01(a)(2) hereof
until such time as the Trustee or Paying Agent is permitted to apply all such
money in accordance with Section 12.02 hereof; provided, however,
that, if the Company makes any payment of principal of, premium, if any,
interest and Liquidated Damages, if any, on any Note following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.


 


ARTICLE 13


 


MISCELLANEOUS


 


SECTION 13.01.  Trust Indenture Act Controls.  This Indenture is subject to the provisions
of the TIA that are required to be a part of this Indenture, and shall, to the
extent applicable, be governed by such provisions.  If any provision of this Indenture modifies
any TIA provision that may be so modified, such TIA provision shall be deemed
to apply to this Indenture as so modified. 
If any provision of this Indenture excludes any TIA provision that may
be so excluded, such TIA provision shall be excluded from this Indenture.


 


The provisions of TIA §§310 through 317 that impose
duties on any Person (including the provisions automatically deemed included
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.


 


SECTION 13.02.  Notices.  Any notice or communication by the Company,
any Guarantor or the Trustee to the others is duly given if in writing and
delivered in Person or mailed by first class mail (registered or certified,
return receipt requested), telex, telecopier or overnight air courier
guaranteeing next day delivery, to the others’ address


 


If to the Company and/or any Guarantor:


 


National MENTOR, Inc.


313 Congress Street, 6th Floor


Boston, Massachusetts 02210


 


Telecopier
No.:  617-790-4800


Attention:  Christina Pak, Esq.


 


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If to the
Trustee:


 


U.S. Bank
National Association


60
Livingston Avenue


EP-MN-WS3C


St. Paul,
MN 55107-2292


 


Telecopier
No.:  651-495-8097


Attention:  Corporate Trust Services 


(National
MENTOR, Inc. 9-5/8% Senior Subordinated Notes due 2012)


 


The Company, any Guarantor or the Trustee, by notice
to the others may designate additional or different addresses for subsequent
notices or communications.


 


All notices and communications (other than those sent
to Holders) shall be deemed to have been duly given:  at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.


 


Any notice or communication to a Holder shall be
mailed by first class mail, certified or registered, return receipt requested,
or by overnight air courier guaranteeing next day delivery to its address shown
on the register kept by the Registrar. 
Any notice or communication shall also be so mailed to any Person
described in TIA § 313(c), to the extent required by the TIA.  Failure to mail a notice or communication to
a Holder or any defect in it shall not affect its sufficiency with respect to
other Holders.


 


If a notice or communication is mailed in the manner
provided above within the time prescribed, it is duly given, whether or not the
addressee receives it.


 


If the Company mails a notice or communication to
Holders, it shall mail a copy to the Trustee and each Agent at the same time.


 


SECTION 13.03.  Communication by Holders of Notes with
Other Holders of Notes.  Holders may
communicate pursuant to TIA §312(b) with other Holders with respect to
their rights under this Indenture or the Notes. 
The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA §312(c).


 


SECTION 13.04.  Certificate and Opinion as to Conditions
Precedent.  Upon any request or
application by the Company to the Trustee to take any action under this
Indenture (other than in connection with the Exchange Offer contemplated by Section 2.07(e) or
under Section 2.02 hereof unless required by the TIA), the Company shall
furnish to the Trustee:


 


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(a)                                  an Officers’
Certificate in form and substance reasonably satisfactory to the Trustee (which
shall include the statements set forth in Section 13.05 hereof) stating
that, in the opinion of the signers, all conditions precedent and covenants, if
any, provided for in this Indenture relating to the proposed action have been
satisfied;


 


(b)                                 an Opinion of Counsel
in form and substance reasonably satisfactory to the Trustee (which shall
include the statements set forth in Section 13.05 hereof) stating that, in
the opinion of such counsel, all such conditions precedent and covenants have
been satisfied; and


 


(c)                                  where applicable, a
certificate or opinion by an independent certified public accountant
satisfactory to the Trustee that complies with TIA Section 314(c).


 


SECTION 13.05.  Statements Required in Certificate or
Opinion.  Each certificate or opinion
with respect to compliance with a condition or covenant provided for in this
Indenture (other than a certificate provided pursuant to TIA §314(a)(4)) shall
comply with the provisions of TIA §314(e) and shall include:


 


(a)                                  a statement that the
Person making such certificate or opinion has read such covenant or condition;


 


(b)                                 a brief statement as
to the nature and scope of the examination or investigation upon which the
statements or opinions contained in such certificate or opinion are based;


 


(c)                                  a statement that, in
the opinion of such Person, he or she has made such examination or
investigation as is necessary to enable him to express an informed opinion as
to whether or not such covenant or condition has been satisfied; and


 


(d)                                 a statement as to
whether or not, in the opinion of such Person, such condition or covenant has
been satisfied.


 


SECTION 13.06.  Rules by Trustee and Agents.  The Trustee may make reasonable rules for
action by or at a meeting of Holders. 
The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.


 


SECTION 13.07.  No Personal Liability of Directors,
Officers, Employees and Stockholders. 
No director, officer, employee, incorporator or stockholder of the
Company or any Guarantor, as such, shall have any liability for any obligations
of the Company or the Guarantors under the Notes, this Indenture, the Note
Guarantees or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. The waiver may not be effective to
waive liabilities under the federal securities laws.


 


SECTION 13.08.  Governing Law.  THE LAW OF THE STATE OF NEW YORK SHALL GOVERN
AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES.


 


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SECTION 13.09.  No Adverse Interpretation of Other
Agreements.  This Indenture may not
be used to interpret any other indenture, loan or debt agreement of the Company
or its Subsidiaries or of any other Person. 
Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.  All agreements of each
Guarantor in this Indenture shall bind its successors, except as otherwise
provided in Section 11.05.


 


SECTION 13.10.  Successors.  All agreements of the Company in this
Indenture and the Notes shall bind its successors.  All agreements of the Trustee in this
Indenture shall bind its successors.  All
agreements of each Guarantor in this Indenture shall bind its successors,
except as otherwise provided in Section 11.05.


 


SECTION 13.11.  Severability.  In case any provision in this Indenture or in
the Notes shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.


 


SECTION 13.12.  Counterpart Originals.  The parties may sign any number of copies of
this Indenture.  Each signed copy shall
be an original, but all of them together represent the same agreement.


 


SECTION 13.13.  Table of Contents, Headings, etc.  The Table of Contents, Cross-Reference Table
and Headings of the Articles and Sections of this Indenture have been inserted
for convenience of reference only, are not to be considered a part of this
Indenture and shall in no way modify or restrict any of the terms or provisions
hereof.


 


[Signatures on following
page]


 


100





















 


SIGNATURES


 


Dated as of November 4, 2004


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  NATIONAL MENTOR, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ John W. Gillespie

  
	
   

  	
   

  	
  Name:

  	
  John W. Gillespie

  
	
   

  	
   

  	
  Title:

  	
  Vice President and Assistant

  
	
   

  	
   

  	
   

  	
  Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GUARANTORS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  NATIONAL MENTOR HOLDINGS, INC.

  
	
   

  	
   

  	
  NATIONAL MENTOR, LLC

  
	
   

  	
   

  	
  NATIONAL MENTOR SERVICES, LLC

  
	
   

  	
   

  	
  FAMILY ADVOCACY SERVICES, LLC

  
	
   

  	
   

  	
  NATIONAL MENTOR SERVICES, INC.

  
	
   

  	
   

  	
  MENTOR MANAGEMENT, INC.

  
	
   

  	
   

  	
  NATIONAL MENTOR HEALTHCARE, LLC

  
	
   

  	
   

  	
  CAROLINA BEHAVIORAL SERVICES, LLC

  
	
   

  	
   

  	
  CENTER FOR COMPREHENSIVE SERVICES, INC.

  
	
   

  	
   

  	
  ILLINOIS MENTOR, INC.

  
	
   

  	
   

  	
  REHABILITATION ACHIEVEMENT CENTER, INC.

  
	
   

  	
   

  	
  MASSACHUSETTS MENTOR, INC.

  
	
   

  	
   

  	
  LLOYD’S LIBERTY HOMES, INC.

  
	
   

  	
   

  	
  UNLIMITED QUEST, INC.

  
	
   

  	
   

  	
  FIRST STEP INDEPENDENT LIVING PROGRAM, INC.

  
	
   

  	
   

  	
  HORRIGAN COLE ENTERPRISES, INC.

  
	
   

  	
   

  	
  OHIO MENTOR, INC.

  
						



 





















 


	
   

  	
   

  	
  SOUTH CAROLINA MENTOR, INC.

  
	
   

  	
   

  	
  MENTOR MARYLAND, INC.

  
	
   

  	
   

  	
  REM, INC.

  
	
   

  	
   

  	
  REM ARIZONA, INC.

  
	
   

  	
   

  	
  REM ARIZONA REHABILITATION, INC.

  
	
   

  	
   

  	
  REM ARROWHEAD, INC.

  
	
   

  	
   

  	
  REM ATLANTIC, INC.

  
	
   

  	
   

  	
  REM CENTRAL LAKES, INC.

  
	
   

  	
   

  	
  REM COLORADO, INC.

  
	
   

  	
   

  	
  REM COMMUNITY OPTIONS, INC.

  
	
   

  	
   

  	
  REM CONNECTICUT COMMUNITY SERVICES, INC.

  
	
   

  	
   

  	
  REM CONSULTING & SERVICES, INC.

  
	
   

  	
   

  	
  REM CONSULTING OF OHIO, INC.

  
	
   

  	
   

  	
  REM COUNCIL BLUFFS, INC.

  
	
   

  	
   

  	
  REM DEVELOPMENTAL SERVICES, INC.

  
	
   

  	
   

  	
  REM HEALTH, INC.

  
	
   

  	
   

  	
  REM HEALTH OF IOWA, INC.

  
	
   

  	
   

  	
  REM HEALTH OF WISCONSIN, INC.

  
	
   

  	
   

  	
  REM HEALTH OF WISCONSIN II, INC.

  
	
   

  	
   

  	
  REM HEARTLAND, INC.

  
	
   

  	
   

  	
  REM HENNEPIN, INC.

  
	
   

  	
   

  	
  REM HOME HEALTH, INC.

  
	
   

  	
   

  	
  REM INDIANA, INC.

  
	
   

  	
   

  	
  REM INDIANA COMMUNITY SERVICES, INC.

  
	
   

  	
   

  	
  REM INDIANA COMMUNITY SERVICES II, INC.

  
	
   

  	
   

  	
  REM IOWA COMMUNITY SERVICES, INC.

  
	
   

  	
   

  	
  REM IOWA, INC.

  
	
   

  	
   

  	
  REM LEADWAY, INC.

  
	
   

  	
   

  	
  REM MANAGEMENT, INC.

  
	
   

  	
   

  	
  REM MARYLAND, INC.

  
	
   

  	
   

  	
  REM MINNESOTA COMMUNITY SERVICES, INC.

  



 





















 


	
   

  	
  REM MINNESOTA, INC.

  
	
   

  	
  REM NEVADA, INC.

  
	
   

  	
  REM NEW JERSEY, INC.

  
	
   

  	
  REM NORTH DAKOTA, INC.

  
	
   

  	
  REM NORTH STAR, INC.

  
	
   

  	
  REM OHIO, INC.

  
	
   

  	
  REM OHIO WAIVERED SERVICES, INC.

  
	
   

  	
  REM OKLAHOMA COMMUNITY SERVICES, INC.

  
	
   

  	
  REM PENNSYLVANIA COMMUNITY SERVICES, INC.

  
	
   

  	
  REM RAMSEY, INC.

  
	
   

  	
  REM RIVER BLUFFS, INC.

  
	
   

  	
  REM SILS OF IOWA, INC.

  
	
   

  	
  REM SOUTH CENTRAL SERVICES, INC.

  
	
   

  	
  REM SOUTHWEST SERVICES, INC.

  
	
   

  	
  REM UTAH, INC.

  
	
   

  	
  REM WEST VIRGINIA, INC.

  
	
   

  	
  REM WISCONSIN, INC.

  
	
   

  	
  REM WISCONSIN II, INC.

  
	
   

  	
  REM WISCONSIN III, INC.

  
	
   

  	
  REM WOODVALE, INC.

  



 


	
  By:

  	
  /s/
  John W. Gillespie

  	
   

  
	
   

  	
  Name:

  	
  John W. Gillespie

  
	
   

  	
  Title:

  	
  Vice President and Assistant Treasurer of

  
	
   

  	
   

  	
  the above-named Guarantors

  
				



 





















 


	
   

  	
  U.S. BANK NATIONAL ASSOCIATION,

  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Richard Prokosch

  	
   

  
	
   

  	
   

  	
  Name: Richard Prokosch

  
	
   

  	
   

  	
  Title:   Vice
  President

  



 





















 


EXHIBIT A


 


FORM OF
NOTE


[Face of Note]


 


THIS GLOBAL NOTE IS HELD
BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS
NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT
TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE
SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.08 OF
THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT
TO SECTION 2.07(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE
DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.12 OF THE
INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.


 


THIS NOTE AND THE
GUARANTEES ENDORSED HEREON HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS.  NEITHER THIS NOTE NOR THE GUARANTEES ENDORSED
HEREON NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.  THE HOLDER OF THIS NOTE AND THE GUARANTEES
ENDORSED HEREON BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF
THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE AND THE GUARANTEES ENDORSED
HEREON (OR ANY PREDECESSOR OF THIS NOTE AND ANY GUARANTEES ENDORSED HEREON)
(THE “RESALE RESTRICTION TERMINATION DATE”) ONLY (A) TO THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A
PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED
IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE COMPANY’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR


 


A-1





















 


TRANSFER (i) PURSUANT
TO CLAUSE (D) PRIOR TO THE END OF THE 40-DAY DISTRIBUTION COMPLIANCE
PERIOD WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR PURSUANT
TO CLAUSE (E) PRIOR TO THE RESALE RESTRICTION TERMINATION DATE TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO
REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS NOTE
IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE.  THIS LEGEND WILL BE REMOVED UPON THE REQUEST
OF A HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.


 


A-2





















 


	
   

  	
  CUSIP

  	
  144A

  	
  63688XAA2

  
	
   

  	
   

  	
  REG S

  	
  U63622AA5

  
	
   

  	
  ISIN

  	
  144A

  	
  [           ]

  
	
   

  	
   

  	
  REG S

  	
  [           ]

  



 


 


NATIONAL
MENTOR, INC.


 


9-5/8% Senior Subordinated Notes
due 2012


 


	
  No.     

  	
  $                   

  



 


NATIONAL MENTOR, INC., a Delaware corporation (the “Company,”
which term includes any successor under the within-mentioned indenture), for
value received, promises to pay to CEDE & Co., or its registered
assigns, the principal sum of                                  
MILLION DOLLARS on December 1, 2012.


 


	
  Interest Payment
  Dates:

  	
   

  	
  June 1 and December 1
  commencing June 1, 2005

  
	
   

  	
   

  	
   

  
	
  Record Dates:

  	
   

  	
  May 15 and November 15

  



 


Reference
is hereby made to the further provisions of this Note set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as
if set forth at this place.


 


[SIGNATURE PAGE FOLLOWS]


 


A-3





















 


IN WITNESS WHEREOF, the Company has caused this Note
to be signed manually or by facsimile by its duly authorized officers.


 


	
   

  	
  NATIONAL MENTOR, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:  John W. Gillespie

  
	
   

  	
  Title:   Vice President and Assistant

  
	
   

  	
  Treasurer

  



 


(Trustee’s Certificate of
Authentication)


 


 


This is one of the Global Notes referred to in the
within-mentioned Indenture.


 


Dated:                                     November 4,
2004


 


	
  U.S. BANK NATIONAL ASSOCIATION,

  	
   

  
	
  Trustee

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  (Authorized
  Signatory)

  	
   

  	
   

  



 


A-4





















 


[Reverse Side of Note]


 


NATIONAL MENTOR, INC.


 


9-5/8% Senior Subordinated Notes due 2012


 


Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.


 


1.                                       Interest.  The Company promises to pay
interest on the principal amount of this Note at 9-5/8% per annum from the date
hereof until maturity and shall pay the Liquidated Damages payable pursuant to Section 5
of the Registration Rights Agreement referred to below.   The
Company shall pay interest and any Liquidated Damages semi-annually on June 1
and December 1 of each year, or if any such day is not a Business Day, on
the next succeeding Business Day (each an “Interest Payment Date”).  Interest on the Notes shall accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from the date of issuance; provided that if there is no existing Default
in the payment of interest, and if this Note is authenticated between a record
date referred to on the face hereof and the next succeeding Interest Payment
Date, interest shall accrue from such next succeeding Interest Payment Date;
provided, further, that the first Interest Payment Date shall be June 1,
2005.  The Company shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law)
on overdue principal and premium, if any, from time to time on demand at a rate
that is 1% per annum in excess of the rate then in effect; it shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. 
Interest shall be computed on the basis of a 360-day year of twelve 30-day
months.


 


2.                                       Method of Payment.  The
Company shall pay interest on the Notes (except defaulted interest) and
Liquidated Damages to the Persons who are registered Holders of Notes at the
close of business on the May 15 or November 15 next preceding the
Interest Payment Date, even if such Notes are cancelled after such record date
and on or before such Interest Payment Date, except as provided in Section 2.13
of the Indenture with respect to defaulted interest.  The Notes shall be payable as to principal,
premium and Liquidated Damages, if any, and interest at the office or agency of
the Company maintained for such purpose within the City and State of New York,
or, at the option of the Company, payment of interest and Liquidated Damages
may be made by check mailed to the Holders at their addresses set forth in the
register of Holders, and provided that payment by wire transfer of immediately
available funds shall be required with respect to principal of and interest,
premium and Liquidated Damages on, all Global Notes and all other Notes the
Holders of which shall have provided wire transfer instructions to the Company
or the Paying Agent.  Such payment shall
be in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.


 


3.                                       Paying Agent and Registrar. 
Initially, U.S. Bank National Association, the Trustee under the
Indenture, shall act as Paying Agent and Registrar.  The Company may


 


A-5





















 


change any Paying Agent or Registrar without notice to any Holder.  The Company or any of its Subsidiaries may
act in any such capacity.


 


4.                                       Indenture.  The Company issued the Notes
under an Indenture dated as of November 4, 2004 (the “Indenture”) between
the Company and the Trustee.  The terms
of the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended.  The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms.  To the extent any provision of
this Note conflicts with the express provisions of the Indenture, the provisions
of the Indenture shall govern and be controlling.  The Indenture pursuant to which the Notes are
issued provides that an unlimited aggregate principal amount of Notes may be
issued thereunder.  


 


5.                                       Optional Redemption.  Except as
set forth in this paragraph 5, the Notes shall not be redeemable at the Company’s
option prior to December 1, 2008. 
Thereafter, the Company may redeem all or a portion of these Notes, upon
not less than 30 days nor more than 60 days’ notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest and Liquidated Damages if any, thereon, to the applicable
redemption date, if redeemed during the twelve-month period beginning on December 1
of the years indicated below:


 


	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2008

  	
   

  	
  104.813

  	
  %

  
	
  2009

  	
   

  	
  102.406

  	
  %

  
	
  2010 and
  thereafter

  	
   

  	
  100.000

  	
  %

  



 


Notwithstanding the foregoing, at any time prior to December 1,
2007, the Company may on one or more occasions redeem up to 35% of the
aggregate principal amount of Notes originally issued under the Indenture at a
redemption price of 109.625% of the principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the redemption date,
with the net cash proceeds of one or more Equity Offerings of the Company (or
of the Parent to the extent such proceeds are contributed to the common equity
of the Company); provided that at least 65% of the aggregate principal amount
of Notes remains outstanding immediately after the occurrence of such
redemption (excluding Notes held by the Company and its Subsidiaries); and such
redemption shall occur within 90 days of the date of the closing of such Equity
Offering (or, in the case of any Equity Offering by the Parent, the
contribution to the Company).


 


6.                                       Repurchase at Option of Holder.  Upon the
occurrence of a Change of Control, each Holder of Notes will have the right to
require the Company to repurchase all or any part (equal to $1,000 or an
integral multiple thereof) of such Holder’s Notes pursuant to an offer (the “Change
of Control Offer”) at an offer price in cash equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest and Liquidated
Damages thereon, if any, to the date of purchase (the “Change of Control
Payment”).  Within 30 days following any Change
of Control, the Company will mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and offering
to repurchase Notes on the date specified in such notice, which date shall be
no earlier than 30 days and no later than 60 days


 


A-6





















 


from the date such notice is mailed (the “Change of Control Payment
Date”), pursuant to the procedures required by the Indenture and described in
such notice.


 


Within
365 days after the receipt of any Net Proceeds from an Asset Sale, the
Company may apply such Net Proceeds at its option: (1) to repay Senior
Debt and, if the Senior Debt repaid is revolving credit Indebtedness, to
correspondingly reduce commitments with respect thereto; (2) to repay any
Indebtedness which was secured by the assets sold in such Asset Sale; (3) to
purchase Replacement Assets or make a capital expenditure that is used or
useful in a Permitted Business; or (4) some combination of the
foregoing.  Pending the final application
of any such Net Proceeds, the Company may temporarily reduce revolving credit
borrowings or otherwise invest such Net Proceeds in any manner that is not
prohibited by the Indenture.  Any Net
Proceeds from Asset Sales that are not applied or invested as provided in the
next preceding sentence will constitute “Excess Proceeds.”  Within 30 days after the aggregate
amount of Excess Proceeds exceeds $20.0 million, the Company will make an
Asset Sale Offer to all Holders of Notes and all holders of other Indebtedness
that is pari passu with the Notes
containing provisions similar to those set forth in the Indenture with respect
to offers to purchase with the proceeds of sales of assets to purchase the
maximum principal amount of Notes and such other pari passu Indebtedness that may be purchased out of the
Excess Proceeds.  The offer price in any
Asset Sale Offer will be equal to 100% of the principal amount of the Notes
plus accrued and unpaid interest and Liquidated Damages, if any, to the date of
purchase, and will be payable in cash. 
If any Excess Proceeds remain after consummation of an Asset Sale Offer,
the Company may use such Excess Proceeds for any purpose not otherwise
prohibited by this Indenture.  If the
aggregate principal amount of Notes and such other pari passu Indebtedness tendered into such Asset Sale Offer
exceeds the amount of Excess Proceeds, the Notes and such other pari passu Indebtedness to be purchased
shall be purchased on a pro rata basis based on the principal amount of Notes
and such other pari passu
Indebtedness tendered.  Upon completion
of each Asset Sale Offer, the amount of Excess Proceeds shall be reset at
zero.   


 


7.                                       Notice
of Redemption.  Notice of redemption
shall be mailed at least 30 days but not more than 60 days before a redemption
date to each Holder whose Notes are to be redeemed at its registered
address.  Notes in denominations larger
than $1,000 may be redeemed in part but only in whole multiples of $1,000,
unless all of the Notes held by a Holder are to be redeemed.  On and after the redemption date interest
ceases to accrue on Notes or portions thereof called for redemption.


 


8.                                       Denominations, Transfer, Exchange.  The Notes
are in registered form without coupons in denominations of $1,000 and integral
multiples of $1,000.  The transfer of
Notes may be registered and Notes may be exchanged as provided in the
Indenture.  The Registrar and the Trustee
may require a Holder, among other things, to furnish appropriate endorsements
and transfer documents and the Company may require a Holder to pay any taxes
and fees required by law or permitted by the Indenture.  The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption.  Also, the Company need not exchange or
register the transfer of any Notes for a period of 15 days before a selection
of Notes to be redeemed.


 


9.                                       Persons Deemed Owners.  The
registered Holder of a Note may be treated as its owner for all purposes.


 


A-7





















 


10.                                 Amendment, Supplement and Waiver.  Subject
to certain exceptions, the Indenture or the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in
principal amount of the then outstanding Notes voting as a single class, and
any existing default or compliance with any provision of the Indenture or the
Notes may be waived with the consent of the Holders of a majority in principal
amount of the then outstanding Notes voting as a single class.  Without the consent of any Holder of a Note,
the Indenture or the Notes may be amended or supplemented to cure any
ambiguity, defect, error or inconsistency, to provide for uncertificated Notes
in addition to or in place of certificated Notes, to provide for the assumption
of the Company’s obligations to Holders of the Notes in case of a merger or
consolidation or sale of all or substantially all of the assets of the Company,
to make any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect the legal rights under
the Indenture of any such Holder, to comply with the requirements of the SEC in
order to effect or maintain the qualification of the Indenture under the Trust
Indenture Act, to provide for the issuance of Additional Notes in accordance
with the limitations set forth in the Indenture, to add Guarantors or to secure
the Notes, to comply with the rules of any applicable securities
depositary or to conform the text of the Indenture or the Notes to any
provision of the “Description of Notes” section of the Offering
Memorandum.


 


11.                                 Defaults and Remedies.  Events of Default include:  (a) default
for 30 days in the payment when due of interest on, or Liquidated Damages with
respect to, the Notes (whether or not prohibited by Article 10 of the
Indenture); (b) default in payment of the principal of or premium, if any,
on the Notes (whether or not prohibited by Article 10 of the Indenture); (c) failure
by the Company or any of its Restricted Subsidiaries to comply with the
provisions of Sections 4.10, 4.14 and 5.01 of the Indenture; (d) failure
by the Company or any of its Restricted Subsidiaries for 45 days after notice
by the Trustee or Holders of at least 25% in principal amount of the Notes then
outstanding to comply with any of the other agreements in the Indenture; (e) default
under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any Indebtedness for money borrowed
by the Company or any of its Restricted Subsidiaries (or the payment of which
is guaranteed by the Company or any of its Restricted Subsidiaries) whether
such Indebtedness or Guarantee now exists, or is created after the date of the
Indenture, if that default: (i) is caused by a failure to make any payment
when due at the final maturity of such Indebtedness (a “Payment Default”); or (ii) results
in the acceleration of such Indebtedness prior to its express maturity; and, in
each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$12.5 million or more; (f) failure by the Company or any of its Restricted
Subsidiaries to pay final judgments aggregating in excess of $10.0 million,
which judgments are not paid, discharged or stayed for a period of 60 days
after such judgments have become non-appealable; (g) except as permitted
by the Indenture, any Note Guarantee of a Guarantor being held in any judicial
proceeding to be unenforceable or invalid or ceasing for any reason to be in
full force and effect or any Guarantor; or any Person acting on behalf of any
Guarantor, shall deny or disaffirm its obligations under its Note Guarantee;
and (h) certain events of bankruptcy or insolvency with respect to the
Company or any of its Significant Subsidiaries or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary.  If any Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the principal,
premium, if any, accrued interest and Liquidated Damages, if any, of the Notes
to be due and


 


A-8





















 


payable immediately. 
Notwithstanding the foregoing, in the case of an Event of Default
arising from certain events of bankruptcy or insolvency, with respect to the
Company or any Significant Subsidiary (or any group of Restricted Subsidiaries
that, taken as a whole, would constitute a Significant Subsidiary), all
outstanding Notes shall become due and payable without further action or
notice.  Holders of the Notes may not
enforce the Indenture, the Notes or the Notes Guarantees except as provided in
the Indenture.  The Holders of a majority
in aggregate principal amount of the Notes then outstanding by notice to the
Trustee may on behalf of the Holders of all of the Notes waive any existing
Default or Event of Default and its consequences under the Indenture except a
continuing Default or Event of Default in the payment of interest on, or the
principal of, the Notes.  In the event of
a declaration of acceleration of the Notes because an Event of Default has
occurred and is continuing as a result of the acceleration of any Indebtedness
described in clause (e) above, the declaration of acceleration of the
Notes shall be automatically annulled if the holders of any Indebtedness
described in clause (e) above have rescinded the declaration of
acceleration in respect of such Indebtedness within 30 days of the date of such
declaration and if (i) the annulment of the acceleration of Notes would
not conflict with any judgment or decree of a court of competent jurisdiction
and (ii) all existing Events of Default, except nonpayment of principal,
premium or interest on the Notes that became due solely because of the
acceleration of the Notes have been cured or waived. The Company is required to
deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Company is required upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.


 


12.                                 Trustee Dealings with Company.  The
Trustee, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company or its Affiliates, and may
otherwise deal with the Company or its Affiliates, as if it were not the
Trustee.


 


13.                                 No Recourse Against Others.  No
director, officer, employee, incorporator or stockholder of the Company or any
Guarantor, as such, shall have any liability for any obligations of the Company
or such Guarantor under the Notes, the Note Guarantees or the Indenture or for
any claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of Notes by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes.


 


14.                                 Authentication.  This Note shall not be valid
until authenticated by the manual signature of the Trustee or an authenticating
agent.


 


15.                                 Abbreviations.  Customary abbreviations may be
used in the name of a Holder or an assignee, such as:  TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).


 


16.                                 Additional Rights of Holders of Restricted Global
Notes and Restricted Definitive Notes.  In addition to the rights
provided to Holders of Notes under the Indenture, Holders of Restricted Global
Notes and Restricted Definitive Notes shall have all the rights set forth in
the Registration Rights Agreement, dated as of November 4, 2004, between
the Company and the parties named on the signature pages thereof or, in
the case of Additional


 


A-9





















 


Notes, Holders of Restricted Global Notes and Restricted Definitive
Notes shall have the rights set forth in one or more registration rights
agreements, if any, between the Company and the other parties thereto, relating
to rights given by the Company to the purchasers of Additional Notes
(collectively, the “Registration Rights Agreement”).


 


17.                                 CUSIP Numbers.  Pursuant to a recommendation
promulgated by the Committee on Uniform Security Identification Procedures, the
Company has caused CUSIP numbers to be printed on the Notes and the Trustee may
use CUSIP numbers in notices of redemption as a convenience to Holders.  No representation is made as to the accuracy
of such numbers either as printed on the Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon.


 


18.                                 Copies of Documents.  The
Company shall furnish to any Holder upon written request and without charge a
copy of the Indenture and/or the Registration Rights Agreement.  Requests may be made to:


 


National MENTOR, Inc.


313 Congress Street, 6th Floor


Boston, Massachusetts 02210


 


Attention: 
Jeanette Melanson, Executive Administrator


 


A-10





















 


ASSIGNMENT
FORM


 


To assign this Note, fill in the form below:


 


	
  (I) or (we) assign and transfer this Note to:

  	
   

  
	
   

  	
  (Insert assignee’s
  legal name)

  
	
   

  
	
  (Insert assignee’s
  social security or tax I.D. number.)

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Print or type
  assignee’s name, address and zip code)

  
	
   

  
	
  and irrevocably appoint

  	
   

  
			



 


to transfer this Note on the books of the Company.  The agent may substitute another to act for
him.


 


 


	
  Date:

  	
   

  	
   

  



 


	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
  (Sign exactly as
  your name appears

  
	
   

  	
   

  	
  on the face of
  this Note)

  



 


	
  Signature Guarantee*:

  	
   

  	
   

  



 










*                 Participant
in a recognized Signature Guarantee Medallion Program (or other signature
guarantor acceptable to the Trustee).


 


A-11





















 


OPTION
OF HOLDER TO ELECT PURCHASE


 


If you want to elect to have this Note purchased by
the Company pursuant to Section 4.10 or 4.14 of the Indenture, check the
appropriate box below:


 


	
  o
  Section 4.10

  	
   

  	
  o
  Section 4.14

  



 


If you want to elect to have only part of the Note
purchased by the Company pursuant to Section 4.10 or Section 4.14 of
the Indenture, state the amount you elect to have purchased:


 


$                          


 


 


	
  Date:

  	
   

  	
   

  



 


	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
  (Sign exactly as
  your name

  
	
   

  	
   

  	
  appears on the
  face of this Note)

  
	
   

  	
   

  
	
   

  	
  Tax Identification No.:

  	
   

  
				



 


 


	
  Signature Guarantee*:

  	
   

  	
   

  



 










*                 Participant in a
recognized Signature Guarantee Medallion Program (or other signature guarantor
acceptable to the Trustee).


 


A-12





















 


EXHIBIT B


 


FORM OF
CERTIFICATE OF TRANSFER


 


National MENTOR, Inc.


313 Congress Street, 6th Floor


Boston, Massachusetts 02210


Attention: 
Christina Pak, Esq. 


 


U.S. Bank National Association


One Federal Street — 3rd Floor


Boston, MA 02110


Attention: 
Corporate Trust Services 


(National MENTOR, Inc.
9-5/8% Senior Subordinated Notes due 2012)


 


Re:  9-5/8% Senior Subordinated Notes due 2012


 


Reference is hereby made
to the Indenture, dated as of November 4, 2004 (the “Indenture”), among National MENTOR, Inc.,
a Delaware corporation (the “Company”), the Guarantors, and U.S. Bank National
Association, as trustee.  Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture.


 


                                
(the “Transferor”) owns and
proposes to transfer the Note[s] or interest in such Note[s] specified in Annex
A hereto, in the principal amount at maturity of $                     
in such Note[s] or interests (the “Transfer”),
to                                                   
(the “Transferee”), as further
specified in Annex A hereto.  In
connection with the Transfer, the Transferor hereby certifies that:


 


[CHECK ALL THAT
APPLY]


 


o                                    1.                                       Check if
Transferee will take delivery of a beneficial interest in the 144A Global Note
or a Definitive Note Pursuant to Rule 144A.  The Transfer is being effected pursuant to
and in accordance with Rule 144A under the United States Securities Act of
1933, as amended (the “Securities Act”),
and, accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the
Transferor reasonably believed and believes is purchasing the beneficial
interest or Definitive Note for its own account, or for one or more accounts
with respect to which such Person exercises sole investment discretion, and
such Person and each such account is a “qualified institutional buyer” within
the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A
and such Transfer is in compliance with any applicable blue sky securities laws
of any state of the United States.  Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.


 


o                                    2.                                       Check if
Transferee will take delivery of a beneficial interest in a Legended
Regulation S Global Note, or a Definitive Note pursuant to
Regulation S.  The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904
under the


 


B-1





















 


Securities Act
and, accordingly, the Transferor hereby further certifies that (i) the
Transfer is not being made to a person in the United States and (x) at the time
the buy order was originated, the Transferee was outside the United States or
such Transferor and any Person acting on its behalf reasonably believed and
believes that the Transferee was outside the United States or (y) the
transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any Person acting on
its behalf knows that the transaction was prearranged with a buyer in the
United States, (ii) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S under the Securities Act, (iii) the transaction is not part
of a plan or scheme to evade the registration requirements of the Securities
Act and (iv) the transfer is not being made to a U.S. Person or for the
account or benefit of a U.S. Person. 
Upon consummation of the proposed transfer in accordance with the terms
of the Indenture, the transferred beneficial interest or Definitive Note will
be subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Legended Regulation S Global Note and/or the
Definitive Note and in the Indenture and the Securities Act.


 


o                                    3.                                       Check and
complete if Transferee will take delivery of a Restricted Definitive Note pursuant
to any provision of the Securities Act other than Rule 144A or
Regulation S.  The Transfer is
being effected in compliance with the transfer restrictions applicable to
beneficial interests in Restricted Global Notes and Restricted Definitive Notes
and pursuant to and in accordance with the Securities Act and any applicable
blue sky securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):


 


o                                    (a)                                  such
Transfer is being effected to the Company or a subsidiary thereof; or


 


o                                    (b)                                 such
Transfer is being effected to an Institutional Accredited Investor and pursuant
to an exemption from the registration requirements of the Securities Act other
than Rule 144A, Rule 144 or Rule 904, and the Transferor hereby
further certifies that it has not engaged in any general solicitation within
the meaning of Regulation D under the Securities Act and the Transfer complies
with the transfer restrictions applicable to beneficial interests in a
Restricted Global Note or Restricted Definitive Notes and the requirements of
the exemption claimed, which certification is supported by (1) a
certificate executed by the Transferee in the form of Exhibit D to the
Indenture and (2) if such transfer is in respect of an aggregate principal
amount of Notes less than $100,000, an Opinion of Counsel provided by the
Transferor or the Transferee (a copy of which the Transferor has attached to
this certification), to the effect that such Transfer is in compliance with the
Securities Act.  Upon consummation of the
proposed transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Definitive Notes and in the Indenture and the Securities Act.


 


4.                                       Check
if Transferee will take delivery of a beneficial interest in an Unrestricted
Global Note or of an Unrestricted Definitive Note.


 


o                                    (a)                                  Check
if Transfer is Pursuant to Rule 144. 
(i) The Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky securities
laws of any state of the United States and (ii) the restrictions on
transfer contained in the


 


B-2





















 


Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act.  Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial interest
or Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.


 


o                                    (b)                                 Check
if Transfer is Pursuant to Regulation S. 
(i) The Transfer is being effected pursuant to and in accordance
with Rule 903 or Rule 904 under the Securities Act and in compliance
with the transfer restrictions contained in the Indenture and any applicable
blue sky securities laws of any state of the United States and, in the case of
a transfer from a Restricted Global Note or a Restricted Definitive Note, the
Transferor hereby further certifies that (a) the Transfer is not being
made to a person in the United States and (x) at the time the buy order was
originated, the Transferee was outside the United States or such Transferor and
any Person acting on its behalf reasonably believed and believes that the
Transferee was outside the United States or (y) the transaction was executed
in, on or through the facilities of a designated offshore securities market and
neither such Transferor nor any Person acting on its behalf knows that the
transaction was prearranged with a buyer in the United States, (b) no
directed selling efforts have been made in contravention of the requirements of
Rule 903(b) or Rule 904(b) of Regulation S under the
Securities Act, (c) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act and (d) the
transfer is not being made to a U.S. Person or for the account or benefit of a
U.S. Person, and (ii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. 
Upon consummation of the proposed Transfer in accordance with the terms
of the Indenture, the transferred beneficial interest or Definitive Note will
no longer be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.


 


o                                    (c)                                  Check
if Transfer is Pursuant to Other Exemption. 
(i) The Transfer is being effected pursuant to and in compliance
with an exemption from the registration requirements of the Securities Act
other than Rule 144, Rule 903 or Rule 904 and in compliance with
the transfer restrictions contained in the Indenture and any applicable blue
sky securities laws of any State of the United States and (ii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities
Act.  Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.


 


B-3





















 


This certificate and the
statements contained herein are made for your benefit and the benefit of the
Company.


 


 


	
   

  	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [Insert Name of
  Transferor]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
							



 


B-4





















 


ANNEX A TO CERTIFICATE OF TRANSFER


 


1.                                       The
Transferor owns and proposes to transfer the following:


 


[CHECK ONE OF (A) OR (B)]


 


o                                    (A)                              A BENEFICIAL INTEREST IN THE:


 


(i)                                     144A
Global Note (CUSIP                        );
or


 


(ii)                                  Regulation S
Global Note (CUSIP                      );
or


 


o                                    (B)                                A RESTRICTED DEFINITIVE NOTE.


 


2.                                       After
the Transfer the Transferee will hold:


 


[CHECK ONE]


 


o                                    (A)                              A BENEFICIAL INTEREST IN THE:


 


(i)                                     144A
Global Note (CUSIP                         );
or


 


(ii)                                  Regulation S
Global Note (CUSIP                         );
or


 


(iii)                               Unrestricted Global Note
(CUSIP                        );
or


 


o                                    (B)                                A RESTRICTED DEFINITIVE NOTE; OR


 


o                                    (C)                                AN UNRESTRICTED DEFINITIVE NOTE,


 


in accordance with
the terms of the Indenture.


 


B-5





















 


EXHIBIT C


 


FORM OF CERTIFICATE OF EXCHANGE


 


National MENTOR, Inc.


313 Congress Street, 6th Floor


Boston, Massachusetts 02210


Attention: 
Christina Pak, Esq.  


U.S. Bank National Association


 


One Federal Street — 3rd Floor


Boston, MA 02110


Attention: 
Corporate Trust Services 


(National MENTOR, Inc.
9-5/8% Senior Subordinated Notes due 2012)


 


Re:  9-5/8% Senior Subordinated Notes due 2012


 


Reference is hereby made
to the Indenture, dated as of November 4, 2004 (the “Indenture”), among National MENTOR, Inc.,
a Delaware corporation (the “Company”),
the Guarantors and U.S. Bank National Association, as trustee.  Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.


 


                                             
(the “Owner”) owns and proposes
to exchange the Note[s] or interest in such Note[s] specified herein, in the
principal amount at maturity of $                     
in such Note[s] or interests (the “Exchange”).  In connection with the Exchange, the Owner
hereby certifies that:


 


1.                                       Exchange
of Restricted Definitive Notes or Beneficial Interests in a Restricted Global
Note for Unrestricted Definitive Notes or Beneficial Interests in an
Unrestricted Global Note


 


o                                    (a)                                  Check if Exchange is
from beneficial interest in a Restricted Global Note to beneficial interest in
an Unrestricted Global Note.  In
connection with the Exchange of the Owner’s beneficial interest in a Restricted
Global Note for a beneficial interest in an Unrestricted Global Note in an
equal principal amount at maturity, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner’s own account without
transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Global Notes and pursuant to and in
accordance with the United States Securities Act of 1933, as amended (the “Securities Act”), (iii) the restrictions
on transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
beneficial interest in an Unrestricted Global Note is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.


 


o                                    (b)                                 Check if Exchange is
from beneficial interest in a Restricted Global Note to Unrestricted Definitive
Note.  In connection with the Exchange of
the Owner’s beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is
being acquired for the Owner’s own account without transfer,


 


C-1





















 


(ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance
with the Securities Act, (iii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the Definitive Note
is being acquired in compliance with any applicable blue sky securities laws of
any state of the United States.


 


o                                    (c)                                  Check if Exchange is
from Restricted Definitive Note to beneficial interest in an Unrestricted
Global Note.  In connection with the
Owner’s Exchange of a Restricted Definitive Note for a beneficial interest in
an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner’s own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance
with the Securities Act, (iii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial
interest is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.


 


o                                    (d)                                 Check if Exchange is
from Restricted Definitive Note to Unrestricted Definitive Note.  In connection with the Owner’s Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner
hereby certifies (i) the Unrestricted Definitive Note is being acquired
for the Owner’s own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the Unrestricted Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.


 


2.                                       Exchange
of Restricted Definitive Notes or Beneficial Interests in Restricted Global
Notes for Restricted Definitive Notes or Beneficial Interests in Restricted
Global Notes


 


o                                    (a)                                  Check if Exchange is
from beneficial interest in a Restricted Global Note to Restricted Definitive
Note.  In connection with the Exchange of
the Owner’s beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount at maturity, the Owner hereby
certifies that the Restricted Definitive Note is being acquired for the Owner’s
own account without transfer.  Upon
consummation of the proposed Exchange in accordance with the terms of the
Indenture, the Restricted Definitive Note issued will continue to be subject to
the restrictions on transfer enumerated in the Private Placement Legend printed
on the Restricted Definitive Note and in the Indenture and the Securities Act.


 


o                                    (b)                                 Check if Exchange is
from Restricted Definitive Note to beneficial interest in a Restricted Global
Note.  In connection with the Exchange of
the Owner’s Restricted Definitive Note for a beneficial interest in the [CHECK
ONE] :


 


o                                    144A
Global Note, :


 


C-2





















 


o                                    Regulation S
Global Note, :


 


with an equal principal amount at maturity, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner’s own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any
applicable blue sky securities laws of any state of the United States.  Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the beneficial interest issued will
be subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the relevant Restricted Global Note and in the Indenture and
the Securities Act.


 


This certificate and the
statements contained herein are made for your benefit and the benefit of the
Company.


 


 


	
   

  	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [Insert Name of
  Transferor]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						



 


C-3





















 


EXHIBIT D


 


FORM OF CERTIFICATE FROM


ACQUIRING INSTITUTIONAL ACCREDITED
INVESTOR


 


National MENTOR, Inc.


313 Congress Street, 6th Floor


Boston, Massachusetts 02210


Attention:  Christina Pak, Esq.


 


U.S. Bank National Association


One Federal Street — 3rd Floor


Boston, MA 02110


Attention: 
Corporate Trust Services


(National
MENTOR, Inc. 9-5/8% Senior Subordinated Notes due 2012)


 


Re:  9-5/8% Senior Subordinated Notes due 2012


 


Reference is hereby made
to the Indenture, dated as of November 4, 2004 (the “Indenture”), among National MENTOR, Inc.,
a Delaware corporation (the “Company”),
the Guarantors and U.S. Bank National Association, as trustee.  Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.


 


In connection with our
proposed purchase of $                     
aggregate principal amount at maturity of:


 


(a)                                  o:                                 beneficial interest in
a Global Note, or


 


(b)                                 o                                    a
Definitive Note,


 


we confirm that:


 


1.                                       We
understand that any subsequent transfer of the Notes or any interest therein is
subject to certain restrictions and conditions set forth in the Indenture and
the undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Notes or any interest therein except in compliance with, such
restrictions and conditions and the United States Securities Act of 1933, as
amended (the “Securities Act”).


 


2.                                       We
understand that the offer and sale of the Notes have not been registered under
the Securities Act, and that the Notes and any interest therein may not be
offered or sold except as permitted in the following sentence.  We agree, on our own behalf and on behalf of
any accounts for which we are acting as hereinafter stated, that if we should
sell the Notes or any interest therein, we will do so only:


 


(i)(a) to a person whom we reasonably believe is
a qualified institutional buyer (as defined in Rule 144A under the
securities act) in a transaction meeting the requirements of Rule 144A, (b) in
a transaction meeting the requirements of Rule 144 under the Securities
Act, (c) outside the United States to a non-U.S. person in a transaction
meeting


 


D-1





















 


the
requirements of Rule 903 or 904 under the Securities Act, (d) to an
institutional “accredited investor” (as defined in Rule 501(a)(1), (2) (3) or
(7) of the Securities Act (an “Institutional Accredited Investor”)) that,
prior to such transfer, furnishes the trustee a signed letter substantially in
the form of this letter and, if such transfer is in respect of an aggregate
principal amount of Notes less than $100,000, an Opinion of Counsel acceptable
to the issuer that such transfer is in compliance with the Securities Act, or (e) in
accordance with another exemption from the registration requirements of the
Securities Act (and based upon an Opinion of Counsel if the Company so
requests),


 


(ii) to the Company,
or


 


(iii) pursuant to an
effective registration statement and, in each case, in accordance with any
applicable securities laws of any state of the United States or any other
applicable jurisdiction;


 


and we further agree to provide to any person
purchasing the Definitive Note or beneficial interest in a Global Note from us in
a transaction meeting the requirements of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.


 


3.                                       We
understand that, on any proposed resale of the Notes or beneficial interest
therein, we will be required to furnish to you and the Company such
certifications, legal opinions and other information as you and the Company may
reasonably require to confirm that the proposed sale complies with the
foregoing restrictions.  We further
understand that the Notes purchased by us will bear a legend to the foregoing
effect.


 


4.                                       We
are an institutional “accredited investor” (as defined in Rule 501(a)(1),
(2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes, and
we and any accounts for which we are acting are each able to bear the economic
risk of our or its investment.


 


5.                                       We
are acquiring the Notes or beneficial interest therein purchased by us for our
own account or for one or more accounts (each of which is an institutional “accredited
investor”) as to each of which we exercise sole investment discretion.


 


You and the Company are
entitled to rely upon this letter and are irrevocably authorized to produce
this letter or a copy hereof to any interested party in any administrative or
legal proceedings or official inquiry with respect to the matters covered
hereby.


 


	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  [Insert Name of Accredited Investor]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
						



 


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EXHIBIT E


 


FORM OF SUPPLEMENTAL INDENTURE

TO ADD SUBSEQUENT GUARANTORS


 


This Supplemental Indenture, dated as of                                   
(this “Supplemental Indenture”), among [NAME OF FUTURE GUARANTOR] (the “New
Guarantor”), National MENTOR, Inc. (together with its successors and
assigns, the “Company”), each other then existing Guarantor under the
Indenture referred to below (the “Guarantors”), and U.S. Bank National
Association, Trustee under the Indenture referred to below.


 


W I T N E S S E T H:


 


WHEREAS, the Company and the Trustee have heretofore
executed and delivered an Indenture, dated as of November 4, 2004 (as
amended, supplemented, waived or otherwise modified, the “Indenture”),
providing for the issuance of 9-5/8% Senior Subordinated Notes due 2012 of the
Company (the “Notes”);


 


WHEREAS, Section 4.17 of the Indenture provides
that the Company is required to cause Domestic Subsidiaries that are created or
acquired after the date of the Indenture to execute and deliver to the Trustee
a Supplemental Indenture pursuant to which such Subsidiary will fully and
unconditionally guarantee, on a joint and several basis with the other
Guarantors, the full and prompt payment of the Obligations of the Company under
the Notes and the Indenture on a senior subordinated basis, and the performance
of all other obligations of the Company to the Holders and the Trustee all in
accordance with the terms set forth in Article 11 of the Indenture;


 


WHEREAS, pursuant to Section 9.01 of the
Indenture, the Trustee, the Company and the Guarantors are authorized to
execute and deliver this Supplemental Indenture to amend the Indenture, without
the consent of any Holder;


 


NOW, THEREFORE, in consideration of the foregoing and
for other good and valuable consideration, the receipt of which is hereby
acknowledged, the New Guarantor, the Company, the other Guarantors and the
Trustee mutually covenant and agree for the equal and ratable benefit of the
Holders of the Notes as follows:


 


ARTICLE ONE


 


DEFINITIONS


 


Section 1.1                                      Defined Terms.  As used in this Supplemental Indenture, terms
defined in the Indenture or in the preamble or recital hereto are used herein
as therein defined, except that the term “Holders” in this Supplemental
Indenture shall refer to the term “Holders” as defined in the Indenture
and the Trustee acting on behalf or for the benefit of such holders.  The words “herein,” “hereof” and “hereby” and
other words of similar import used in this Supplemental Indenture refer to this
Supplemental Indenture as a whole and not to any particular section hereof.


 


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ARTICLE TWO


 


AGREEMENT TO BE BOUND;
GUARANTEE


 


Section 2.1                                      Agreement to
be Bound.  The New Guarantor hereby
becomes a party to the Indenture as a Guarantor and as such will have all of
the rights and be subject to all of the obligations and agreements of a
Guarantor under the Indenture.  The New
Guarantor agrees to be bound by all of the provisions of the Indenture
applicable to a Guarantor and to perform all of the obligations and agreements
of a Guarantor under the Indenture.


 


Section 2.2                                      Guarantee.  The New Guarantor hereby unconditionally
guarantees, as primary obligor and not merely as surety, jointly and severally
with each other Guarantor, to each Holder of the Notes and the Trustee, the
full and punctual payment when due, whether at maturity, upon redemption or
repurchase, by declaration of acceleration or otherwise, of the obligations
pursuant to Article 11 of the Indenture and subject to the terms and
conditions of the Indenture.


 


ARTICLE THREE


 


MISCELLANEOUS


 


Section 3.1                                      Ratification
of Indenture; Supplemental Indenture Part of Indenture; Trustee’s
Disclaimer.  Except as expressly
amended hereby, the Indenture is in all respects ratified and confirmed and all
the terms, conditions and provisions thereof shall remain in full force and
effect.  This Supplemental Indenture
shall form a part of the Indenture for all purposes, and every Holder of Notes
heretofore or hereafter authenticated and delivered shall be bound hereby.  The Trustee makes no representation or
warranty as to the validity or sufficiency of this Supplemental Indenture.


 


Section 3.2                                      Governing Law.  THE LAW OF THE STATE OF NEW YORK SHALL GOVERN
AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.


 


Section 3.3                                      No Adverse
Interpretation of Other Agreements. 
This Supplemental Indenture may not be used to interpret any other
indenture, loan or debt agreement of the Company or its Subsidiaries or of any
other Person (other than the Indenture). 
Any such indenture, loan or debt agreement may not be used to interpret
this Supplemental Indenture or the Indenture.


 


Section 3.4                                      Successors.  All agreements of the New Guarantor in this
Supplemental Indenture shall bind its successors, except as otherwise provided
in Article 11 of the Indenture.


 


Section 3.5                                      Severability.  In case any provision in this Supplemental
Indenture, the Indenture or in the Notes shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.


 


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Section 3.6                                      Counterpart
Originals.  The parties may sign any
number of copies of this Supplemental Indenture.  Each signed copy shall be an original, but
all of them together represent the same agreement.


 


Section 3.7                                      Headings, etc.  The Headings of the Articles and Sections of
this Supplemental Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Supplemental Indenture and shall
in no way modify or restrict any of the terms or provisions hereof.


 


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


 


	
   

  	
  [NEW GUARANTOR],

  
	
   

  	
  as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NATIONAL MENTOR, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, as

  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [EACH THEN EXISTING GUARANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


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