Exhibit 4.2


 


EXECUTION COPY


 


 


REGISTRATION RIGHTS AGREEMENT




by and among




National MENTOR, Inc.




and




Banc of America Securities LLC


J.P. Morgan Securities Inc.


UBS Investment Bank


CIBC World Markets Corp.




 


Dated as of November 4, 2004


 


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REGISTRATION RIGHTS AGREEMENT


 


This Registration Rights Agreement (this “Agreement”) is made and
entered into as of November 4, 2004, by and among National MENTOR, Inc.,
a Delaware corporation (the “Company”), the guarantors listed in Schedule A
hereto (each, a “Guarantor” and, together, the “Guarantors”) and Banc of
America Securities LLC, J.P. Morgan Securities Inc., UBS Investment Bank, and
CIBC World Markets Corp. (each an “Initial Purchaser” and, together, the “Initial
Purchasers”), each of whom has agreed to purchase the Company’s 9-5/8% Senior
Subordinated Notes due 2012 (the “Initial Notes”) pursuant to the Purchase
Agreement (as defined below).


 


This Agreement is made pursuant to the Purchase Agreement, dated as of October 27,
2004 (the “Purchase Agreement”), by and among the Company, the Guarantors and
the Initial Purchasers (i) for your benefit and (ii) for the benefit
of the holders from time to time of the Notes (including you).  In order to induce the Initial Purchasers to
purchase the Initial Notes, the Company has agreed to provide the registration
rights set forth in this Agreement.  The
execution and delivery of this Agreement is a condition to the obligations of
the Initial Purchasers set forth in Section 5(i) of the Purchase
Agreement.


 


The parties hereby agree as follows:


 


SECTION 1.  Definitions.  As used
in this Agreement, the following capitalized terms shall have the following
meanings:


 


Additional Interest Payment Date:  With respect to the Initial Notes, each Interest
Payment Date.


 


Broker-Dealer: 
Any broker
or dealer registered under the Exchange Act.


 


Business Day:  Any day other than a Saturday, Sunday or a day on
which banks in New York City are authorized or obligated by law to close.


 


Closing Date: 
The date
of this Agreement.


 


Commission:  The Securities and Exchange Commission.


 


Company: 
As defined in the preamble hereto.


 


Consummate:  A registered Exchange Offer shall be
deemed “Consummated” for purposes of this Agreement upon the occurrence of (i) the
filing and effectiveness under the Securities Act of the Exchange Offer
Registration Statement relating to the Exchange Notes to be issued in the
Exchange Offer, (ii) the maintenance of such Registration Statement
continuously effective and the keeping of the Exchange Offer open for a period
not less than the minimum period required pursuant to Section 3(b) hereof,
and (iii) the delivery by the Company to the Registrar under the Indenture
of Exchange Notes in the same aggregate principal amount as the aggregate
principal amount of Initial Notes that were tendered by Holders thereof
pursuant to the Exchange Offer.


 





















 


Delay Period:                    As defined in Section 4(a).


 


Effectiveness Target Date:  As defined in Section 5 hereof.


 


Exchange Act: 
The
Securities Exchange Act of 1934, as amended.


 


Exchange Notes: The Company’s 9-5/8% Senior Subordinated Notes due
2012, of the same series under the Indenture as the Initial Notes, to be issued
to Holders in exchange for Transfer Restricted Securities pursuant to this
Agreement.


 


Exchange Offer: 
The
registration by the Company under the Securities Act of the Exchange Notes
pursuant to a Registration Statement pursuant to which the Company offers the
Holders of all outstanding Transfer Restricted Securities (subject to the terms
and conditions of such offer) the opportunity to exchange all such outstanding
Transfer Restricted Securities held by such Holders for Exchange Notes in an
aggregate principal amount equal to the aggregate principal amount of the
Transfer Restricted Securities tendered in such exchange offer by such Holders.


 


Exchange Offer Registration Statement:  The Registration Statement relating to the Exchange
Offer, including the related Prospectus.


 


Exempt Resales: 
The
transactions in which the Initial Purchasers propose to sell the Initial Notes
to certain “qualified institutional buyers,” as such term is defined in Rule 144A
under the Securities Act, and to certain non-U.S. persons pursuant to
Regulation S under the Securities Act.


 


Guarantors: 
As defined in the preamble hereto.


 


Holders:  As defined in Section 2(b) hereof.


 


Indemnified Holder: 
As defined
in Section 8(a) hereof.


 


Indenture:  The Indenture, dated as of November 4,
2004, among the Company, the Guarantors and U.S. Bank National Association, as
trustee (the “Trustee”), pursuant to which the Notes are to be issued, as such
Indenture is amended or supplemented from time to time in accordance with the
terms thereof.


 


Initial Notes: 
The 9-5/8%
Senior Subordinated Notes due 2012, of the same series under the Indenture as
the Exchange Notes, for so long as such securities constitute Transfer
Restricted Securities.


 


Initial Placement: 
The
issuance and sale by the Company of the Initial Notes to the Initial Purchasers
pursuant to the Purchase Agreement.


 


Initial Purchasers: 
As defined
in the preamble hereto.


 


Interest Payment Date:  As defined in the Indenture and the Notes.


 


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NASD:  National Association of Securities
Dealers, Inc.


 


Notes:  The Initial Notes and the Exchange Notes.


 


Person:  An individual, partnership, corporation,
trust or unincorporated organization, or a government or agency or political
subdivision thereof.


 


Prospectus:  The prospectus included in a Registration
Statement, as amended or supplemented by any prospectus supplement and by all
other amendments thereto, including post-effective amendments, and all material
incorporated by reference into such Prospectus.


 


Purchase Agreement:  As defined in the preamble hereto.


 


Registration Default:  As defined in Section 5 hereof.


 


Registration Statement:  Any registration statement of the Company relating to (a) an
offering of Exchange Notes pursuant to an Exchange Offer or (b) the
registration for resale of Transfer Restricted Securities pursuant to the Shelf
Registration Statement, which is filed pursuant to the provisions of this
Agreement, in each case, including the Prospectus included therein, all
amendments and supplements thereto (including post-effective amendments) and
all exhibits and material incorporated by reference therein.


 


Securities Act: 
The
Securities Act of 1933, as amended.


 


Shelf Filing Deadline:  As defined in Section 4 hereof.


 


Shelf Registration Statement:  As defined in Section 4 hereof.


 


Transfer Restricted Securities:  Each Note, until the earliest to occur of (a) the
date on which such Note is exchanged in the Exchange Offer and entitled to be
resold to the public by the Holder thereof without complying with the
prospectus delivery requirements of the Securities Act, (b) the date on
which such Note has been effectively registered under the Securities Act and
disposed of in accordance with a Shelf Registration Statement and (c) the
date on which such Note is eligible to be distributed to the public pursuant to
Rule 144(k) under the Securities Act or by a Broker-Dealer pursuant to the
“Plan of Distribution” contemplated by the Exchange Offer Registration
Statement (including delivery of the Prospectus contained therein).


 


Trust Indenture Act:  The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa
77bbbb) as in effect on the date of the Indenture.


 


Underwritten Registration or Underwritten
Offering:  A registration in which securities of the
Company are sold to an underwriter for reoffering to the public.


 


SECTION 2.  Securities Subject to this Agreement.


 


(a)  Transfer Restricted Securities.  The securities entitled to the
benefits of this Agreement are the Transfer Restricted Securities.


 


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(b)  Holders of Transfer Restricted
Securities.  A Person is
deemed to be a holder of Transfer Restricted Securities (each, a “Holder”)
whenever such Person owns Transfer Restricted Securities.


 


SECTION 3.  Registered Exchange Offer.


 


(a)  Unless the Exchange Offer shall not be permissible under
applicable law or Commission policy (after the procedures set forth in Section 6(a) below
have been complied with), the Company and the Guarantors shall, upon and
subject to the terms and conditions contained in this Agreement, (i) use
their reasonable best efforts to cause to be filed with the Commission as soon
as practicable after the Closing Date, but in no event later than 360 days
after the Closing Date, an Exchange Offer Registration Statement under the
Securities Act, (ii) use their reasonable best efforts to cause such
Registration Statement to become effective at the earliest possible time, but
in no event later than 180 days after the filing date, (iii) in
connection with the foregoing, (A) file all pre-effective amendments to
such Exchange Offer Registration Statement as may be necessary in order to
cause such Exchange Offer Registration Statement to become effective, (B) file,
if applicable, a post-effective amendment to such Exchange Offer Registration
Statement pursuant to Rule 430A under the Securities Act and (C) cause
all necessary filings in connection with the registration and qualification of
the Exchange Notes to be made under the Blue Sky laws of such jurisdictions as
are necessary to permit Consummation of the Exchange Offer, and (iv) upon
the effectiveness of such Exchange Offer Registration Statement, commence the
Exchange Offer.  The Exchange Offer shall
be on the appropriate form permitting registration of the Exchange Notes to be
offered in exchange for the Transfer Restricted Securities and resales of Notes
held by Broker-Dealers as contemplated by Section 3(c) below.


 


(b)  The Company and the Guarantors shall use their reasonable
best efforts to cause the Exchange
Offer Registration Statement to be effective continuously and shall keep the
Exchange Offer open for a period of not less than the minimum period required
under applicable federal and state securities laws to Consummate the Exchange
Offer; provided, however, that in no event
shall such period be less than 20 Business Days after the date notice of the
Exchange Offer is mailed to the Holders. 
The Company and the Guarantors shall cause the Exchange Offer to comply
with all applicable federal and state securities laws.  No securities other than the Notes shall be
included in the Exchange Offer Registration Statement.  The Company and the Guarantors shall use
their reasonable best efforts to cause the Exchange Offer to be Consummated on
the earliest practicable date after the Exchange Offer Registration Statement
has become effective, but in no event later than 45 Business Days after the
Effectiveness Target Date.


 


(c)  The Company shall indicate in a “Plan of Distribution” section contained
in the Prospectus forming a part of the Exchange Offer Registration Statement
that any Broker-Dealer who holds Transfer Restricted Securities that were
acquired for its own account as a result of market-making activities or other
trading activities (other than Transfer Restricted Securities acquired directly
from the Company), may exchange such Transfer Restricted Securities pursuant to
the Exchange Offer; however, such Broker-Dealer may be deemed to be an “underwriter”
within the meaning of the Securities Act and must, therefore, deliver a
prospectus meeting the requirements of the Securities Act in connection with
any resales of the Exchange


 


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Notes received by such Broker-Dealer in the Exchange
Offer, which prospectus delivery requirement may be satisfied by the delivery by
such Broker-Dealer of the Prospectus contained in the Exchange Offer
Registration Statement.  Such “Plan of
Distribution” section shall also contain all other information with
respect to such resales by Broker-Dealers that the Commission may require in order
to permit such resales pursuant thereto, but such “Plan of Distribution” shall
not name any such Broker-Dealer or disclose the amount of Transfer Restricted
Securities held by any such Broker-Dealer except to the extent required by the
Commission as a result of a change in policy after the date of this Agreement.


 


In the event that the Company receives written notice from a
Broker-Dealer within 30 days of the Consummation of the Exchange Offer that
such Broker-Dealer holds Transfer Restricted Securities that were acquired for
the account of such Broker-Dealer as a result of market-making or similar
activities, the Company and the Guarantors shall use their reasonable best
efforts to keep the Exchange Offer Registration Statement continuously
effective, supplemented and amended as required by the provisions of Section 6(c) below
to the extent necessary to ensure that it is available for resales of Notes
acquired by Broker-Dealers for their own accounts as a result of market-making
activities or other trading activities, and to ensure that it conforms with the
requirements of this Agreement, the Securities Act and the policies, rules and
regulations of the Commission as announced from time to time, for a period
ending on the earlier of (i) 180 days from the date on which the Exchange
Offer Registration Statement is declared effective and (ii) the date on
which a Broker-Dealer is no longer required to deliver a prospectus in
connection with market-making or other trading activities.


 


The Company shall provide sufficient copies of the latest version of
such Prospectus to Broker-Dealers promptly upon request at any time during such
180-day (or shorter as provided in the foregoing sentence) period in order to
facilitate such resales.


 


SECTION 4.  Shelf Registration.


 


(a)  Shelf Registration.  If (i) the Company and the
Guarantors are not required to file an Exchange Offer Registration Statement or
to consummate the Exchange Offer because the Exchange Offer is not permitted by
applicable law or Commission policy (after the procedures set forth in Section 6(a) below
have been complied with), (ii) for any reason the Exchange Offer is not
Consummated within 45 Business Days after the Effectiveness Target Date,
or (iii) with respect to any Holder upon notice to the Company prior to
the 20th day following Consummation of the Exchange Offer that (A) such
Holder is prohibited by applicable law or Commission policy from participating
in the Exchange Offer or (B) such Holder may not resell the Exchange Notes
acquired by it in the Exchange Offer to the public without delivering a
prospectus and the Prospectus contained in the Exchange Offer Registration
Statement is not appropriate or available for such resales by such Holder, or (C) such
Holder is a Broker-Dealer and holds Initial Notes acquired directly from the
Company or one of its affiliates, then, upon such Holder’s request, the Company
and the Guarantors shall:


 


(x)  use their reasonable best
efforts to cause to be filed a shelf registration statement pursuant to Rule 415
under the Securities Act, which may be an amendment to the Exchange Offer
Registration Statement (in either event, the “Shelf Registration Statement”) on
or prior to the earlier to occur of (1) the 90th day after the date on
which


 


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the Company determines that it is not required to file
the Exchange Offer Registration Statement (but in no event prior to 360 days
after the Closing Date), and (2) the 90th day after the date on which the
Company receives notice from a Holder as contemplated by clause (i) above
(but in no event prior to 360 days after the Closing Date), (such earliest date
being the “Shelf Filing Deadline”), which Shelf Registration Statement shall
provide for resales of all Transfer Restricted Securities the Holders of which
shall have provided the information required pursuant to Section 4(b) hereof;
and


 


(y)  use their reasonable best
efforts to cause such Shelf Registration Statement to be declared effective by
the Commission on or before the 180th day after the Shelf Filing Deadline.


 


The Company and the Guarantors shall use their reasonable best efforts
to keep such Shelf Registration Statement continuously effective, supplemented
and amended as required by the provisions of Sections 6(b) and (c) hereof
to the extent necessary to ensure that it is available for resales of Transfer
Restricted Securities by the Holders thereof entitled to the benefit of this Section 4(a),
and to ensure that it conforms with the requirements of this Agreement, the
Securities Act and the policies, rules and regulations of the Commission
as announced from time to time, for a period of at least two years following
the effective date of such Shelf Registration Statement (or shorter period that
will terminate when all the Transfer Restricted Securities covered by such
Shelf Registration Statement have been sold pursuant to such Shelf Registration
Statement); provided, however,
that the Company shall not be obligated to amend such Shelf Registration
Statement after it has been declared effective by the Commission more than one
time per quarterly period to add additional Holders.  Notwithstanding the foregoing (and anything
else to the contrary in this Agreement), the Company and the Guarantors may
allow the Shelf Registration Statement to cease to be effective (a “Delay
Period”) if the board of directors of the Company determines in good faith that
it is in the best interests of the Company not to disclose the existence of or
facts surrounding any proposed or pending material corporate transaction
involving the Company or the Guarantors, and the Company notifies the Holders
of Transfer Restricted Securities named in such Shelf Registration Statement
within two Business Days after such board of directors makes such determination;
provided, however, that the period referred to in this Section 4(a) during
which the Company and the Guarantors agree to use their reasonable best efforts
to keep such Shelf Registration Statement effective shall be extended by the
number of days during which such Shelf Registration Statement was not effective
pursuant to the foregoing provision; provided,
further, that in the event that any Delay Period occurs for a
continuous period in excess of 30 days, a Registration Default (as defined
below) shall be deemed to have occurred on the 31st day of such Delay Period,
and additional interest shall be payable in accordance with  Section 5 below from the day such
Registration Default occurs until such Registration Default is cured or until
the Company and the Guarantors are no longer required pursuant to this
Agreement to keep such Shelf Registration Statement effective, supplemented and
amended; and provided, further, that in no event shall the total of all Delay
Periods exceed 60 days in the aggregate of any 12-month period.  The Holders shall treat as confidential the
existence of any such Delay Period.


 


(b)  Provision by Holders of Certain Information
in Connection with the Shelf Registration Statement.  No Holder may include any of its
Transfer Restricted Securities in any Shelf Registration Statement pursuant to
this Agreement unless and until such Holder furnishes


 


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to the Company in writing, within 20 Business Days
after receipt of a request therefor, such information as the Company may
reasonably request for use in connection with any Shelf Registration Statement
or Prospectus or preliminary Prospectus included therein.  No Holder shall be entitled to additional
interest pursuant to Section 5 hereof unless and until such Holder shall
have provided all such reasonably requested information within the required
timeframe.  Each Holder as to which any
Shelf Registration Statement is being effected agrees to furnish promptly to
the Company all information required to be disclosed in order to make the
information previously furnished to the Company by such Holder not materially
misleading.


 


SECTION 5.  Additional Interest.  If
(i) any of the Registration Statements required by this Agreement is not
filed with the Commission on or prior to the date specified for such filing in
this Agreement, (ii) any of such Registration Statements has not been
declared effective by the Commission on or prior to the date specified for such
effectiveness in this Agreement (the “Effectiveness Target Date”), (iii) the
Exchange Offer has not been Consummated within 45 Business Days of the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement or (iv) any Registration Statement required by this Agreement is
filed and declared effective but shall thereafter cease to be effective or fail
to be usable for its intended purpose without being succeeded within five
Business Days by a post-effective amendment to such Registration Statement that
cures such failure and that is itself immediately declared effective (each such
event referred to in clauses (i) through (iv), a “Registration Default”),
the Company and the Guarantors hereby jointly and severally agree that the
interest rate borne by the Transfer Restricted Securities shall be increased by
0.25% per annum during the 90-day period immediately following the occurrence
of any Registration Default and shall increase by 0.25% per annum at the end of
each subsequent 90-day period, but in no event shall such increase exceed 1.00%
per annum.  Additional interest will not
be payable pursuant to more than one provision of this Section 5 at any
time.  Following the cure of all
Registration Defaults relating to any particular Transfer Restricted
Securities, the interest rate borne by the relevant Transfer Restricted
Securities will be reduced to the original interest rate borne by such Transfer
Restricted Securities; provided, however, that, if after any such reduction
in interest rate, a different Registration Default occurs, the interest rate
borne by the relevant Transfer Restricted Securities shall again be increased
pursuant to the foregoing provisions.


 


All obligations of the Company and the Guarantors set forth in the
preceding paragraph that are outstanding with respect to any Transfer
Restricted Security at the time such security ceases to be a Transfer
Restricted Security shall survive until such time as all such obligations with
respect to such Note shall have been satisfied in full.


 


SECTION 6.  Registration Procedures.


 


(a)  Exchange Offer Registration Statement.  In connection with the Exchange
Offer, the Company and the Guarantors shall comply with all of the provisions
of Section 6(c) below, shall use their reasonable best efforts to
effect such exchange to permit the sale of Transfer Restricted Securities being
sold in accordance with the intended method or methods of distribution thereof,
and shall comply with all of the following provisions:


 


(i)  If in the reasonable opinion of counsel to the Company there
is a question as to whether the Exchange Offer is permitted by applicable law,
the Company and the


 


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Guarantors hereby agree that the Company and the
Guarantors will seek a no-action letter or other favorable decision from the
Commission allowing the Company and the Guarantors to Consummate an Exchange
Offer for such Transfer Restricted Securities. 
The Company and the Guarantors hereby agree that each of the Company and
the Guarantors will pursue the issuance of such a decision to the Commission
staff level but shall not be required to take commercially unreasonable action
to effect a change of Commission policy. 
The Company and the Guarantors hereby agree, however, that each of the
Company and the Guarantors will (A) participate in telephonic conferences
with the Commission, (B) deliver to the Commission staff an analysis
prepared by counsel to the Company setting forth the legal bases, if any, upon
which such counsel has concluded that such an Exchange Offer should be
permitted and (C) diligently pursue a favorable resolution by the
Commission staff of such submission.


 


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


 


(b)  Shelf Registration Statement.  In connection with the Shelf
Registration Statement, if any, the Company and the Guarantors shall comply
with all the provisions of Section 6(c) below and shall use their
reasonable best efforts to effect such registration to permit the sale of the
Transfer Restricted Securities being sold in accordance with the intended
method or methods of distribution thereof, and pursuant thereto the Company and
the Guarantors will prepare and file with the Commission, within the time
periods set forth in Section 4, a Registration Statement relating to the
registration on any appropriate form under the Securities Act, which form shall
be available for the sale of the Transfer Restricted Securities in accordance
with the intended method or methods of distribution thereof.


 


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(c)  General Provisions.  In connection with any
Registration Statement and any Prospectus required by this Agreement to permit
the sale or resale of Transfer Restricted Securities (including, without
limitation, any Registration Statement and the related Prospectus required to
permit resales of Notes by Broker-Dealers), the Company and the Guarantors
shall:


 


(i)  subject to the last paragraph of Section 4(a), use their
reasonable best efforts to keep such Registration Statement continuously
effective and provide all requisite financial statements (including, if
required by the Securities Act or any regulation thereunder, financial
statements of the Guarantors) for the period specified in Section 3 or 4
of this Agreement, as applicable; upon the occurrence of any event that would
cause any such Registration Statement or the Prospectus contained therein (A) to
contain an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein not misleading or (B) not to be
effective and usable for resale of Transfer Restricted Securities during the
period required by this Agreement, the Company and the Guarantors shall file
promptly an appropriate amendment to such Registration Statement, in the case
of clause (A), correcting any such misstatement or omission, and, in the case
of either clause (A) or (B), use their best efforts to cause such amendment
to be declared effective and such Registration Statement and the related
Prospectus to become usable for their intended purpose(s) as soon as
practicable thereafter;


 


(ii)  subject to the last paragraph of Section 4(a), (A) prepare
and file with the Commission such amendments and post-effective amendments to
the Registration Statement as may be necessary to keep the Registration
Statement effective for the applicable period set forth in Section 3 or 4
hereof, as applicable, or such shorter period as will terminate when all
Transfer Restricted Securities covered by such Registration Statement have been
sold; (B) cause the Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
under the Securities Act, and to comply fully with the applicable provisions of
Rules 424 and 430A under the Securities Act in a timely manner; and (C) comply
with the provisions of the Securities Act with respect to the disposition of
all securities covered by such Registration Statement during the applicable
period in accordance with the intended method or methods of distribution by the
sellers thereof set forth in such Registration Statement or supplement to the
Prospectus;


 


(iii)  advise the underwriter(s), if any, and, with respect to any
Shelf Registration Statement, the selling Holders or any Broker-Dealer from
which the Company has received an address for notifications, in each case
promptly and, if requested by such Persons, confirm such advice in writing, (A) when
the Prospectus or any Prospectus supplement or post-effective amendment has
been filed, and, with respect to any Registration Statement or any
post-effective amendment thereto, when the same has become effective, (B) of
any request by the Commission for amendments to the Registration Statement or
amendments or supplements to the Prospectus or for additional information
relating thereto, (C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement under the Securities
Act or of the suspension by any state securities commission of the
qualification of the Transfer Restricted Securities for offering or sale in any
jurisdiction, or the initiation of any


 


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proceeding for any of the preceding purposes, and (D) of
the existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto, or any document incorporated
by reference therein untrue, or that requires the making of any additions to or
changes in the Registration Statement or the Prospectus in order to make the
statements therein not misleading.  If at
any time the Commission shall issue any stop order suspending the effectiveness
of the Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the Transfer Restricted Securities under state
securities or Blue Sky laws, the Company and the Guarantors shall use their
reasonable best efforts to obtain the withdrawal or lifting of such order at
the earliest possible time;


 


(iv)  if requested, furnish without charge to each of the Initial
Purchasers, each selling Holder named in any Registration Statement, and each
of the underwriter(s), if any, before filing with the Commission, copies of any
Registration Statement or any Prospectus included therein or any amendments or
supplements to any such Registration Statement or Prospectus (including all
documents incorporated by reference after the initial filing of such
Registration Statement), which documents will be subject to the review of such
Holders and underwriter(s) in connection with such sale, if any, for a period
of at least three Business Days, and the Company will not file any such
Registration Statement or Prospectus or any amendment or supplement to any such
Registration Statement or Prospectus (including all such documents incorporated
by reference) to which an Initial Purchaser of Transfer Restricted Securities
covered by such Registration Statement or the underwriter(s), if any, shall
reasonably object in writing within three Business Days after the receipt
thereof (such objection to be deemed timely made upon confirmation of telecopy
transmission within such period).  The
objection of an Initial Purchaser or underwriter, if any, shall be deemed to be
reasonable if such Registration Statement, amendment, Prospectus or supplement,
as applicable, as proposed to be filed, contains an untrue statement of a
material fact or omits to state a material fact necessary to make the
statements therein not misleading;


 


(v)  promptly prior to the filing of any document that is to be incorporated
by reference into a Registration Statement or Prospectus, provide copies of
such document to the Initial Purchasers, each selling Holder named in any
Registration Statement, and to the underwriter(s), if any, make the
representatives of the Company and Guarantors available for discussion of such
document and other customary due diligence matters, and include such
information in such document prior to the filing thereof as such selling
Holders or underwriter(s), if any, reasonably may request;


 


(vi)  in the case of any Shelf Registration Statement and subject
to reasonable and customary confidentiality agreements being entered into, make
available at reasonable times for inspection by the Initial Purchasers, any
managing underwriter participating in any disposition pursuant to such
Registration Statement and any attorney or accountant retained by such Initial
Purchasers or any of the underwriter(s), all financial and other records,
pertinent corporate documents and properties of the Company and the Guarantors
and cause the Company’s and the Guarantors’ officers, directors and employees
to supply all information reasonably requested by any such Holder,


 


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underwriter, attorney or accountant in connection with
such Registration Statement subsequent to the filing thereof and prior to its
effectiveness;


 


(vii)  in the case of any Shelf Registration Statement, if
requested by any selling Holders or the underwriter(s), if any, promptly
incorporate in any such Shelf Registration Statement or Prospectus, pursuant to
a supplement or post-effective amendment if necessary, such information as such
selling Holders and underwriter(s), if any, may reasonably request to have
included therein, including, without limitation, information relating to the “Plan
of Distribution” of the Transfer Restricted Securities, information with
respect to the principal amount of Transfer Restricted Securities being sold to
such underwriter(s), the purchase price being paid therefor and any other terms
of the offering of the Transfer Restricted Securities to be sold in such
offering; and make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after the Company is notified
of the matters to be incorporated in such Prospectus supplement or
post-effective amendment;


 


(viii)  in the case of any Shelf Registration Statement, cause the
Transfer Restricted Securities covered by such Shelf Registration Statement to
be rated with the appropriate rating agencies, if so requested by the Holders
of a majority in aggregate principal amount of Notes covered thereby or the
underwriter(s), if any;


 


(ix)  in the case of any Shelf Registration Statement, furnish to
each selling Holder and each of the underwriter(s), if any, without charge, at
least one copy of such Shelf Registration Statement, as first filed with the
Commission, and of each amendment thereto, including financial statements and
schedules, all documents incorporated by reference therein and all exhibits
(including exhibits incorporated therein by reference);


 


(x)  in the case of any Shelf
Registration Statement, deliver to each selling Holder and each of the
underwriter(s), if any, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement thereto
as such Persons reasonably may  request;
the Company and the Guarantors hereby consent, subject to the terms and
conditions of this Agreement, to the use of the Prospectus and any amendment or
supplement thereto by each of the selling Holders and each of the
underwriter(s), if any, in connection with the offering and the sale of the
Transfer Restricted Securities covered by the Prospectus or any amendment or
supplement thereto;


 


(xi)  in the case of any Shelf
Registration Statement, upon the request of Holders who collectively hold an
aggregate principal amount of Transfer Restricted Securities in excess of 25%
of the amount of outstanding Transfer Restricted Securities (the “Requesting
Holders”), enter into, and cause the Guarantors to enter into, an underwriting
agreement, and make, and cause the Guarantors to make, such representations and
warranties, and take all such other actions in connection therewith, in order
to expedite or facilitate the disposition of the Transfer Restricted Securities
pursuant to any such Shelf Registration Statement, all to such extent as may be
requested by the Requesting Holders in connection with any sale or resale
pursuant to any Shelf Registration Statement; provided,
however, that the Company and the Guarantors shall not be required
to enter into any such agreement more than once with respect to all of the
Transfer Restricted


 


11





















 


Securities; and whether or not an underwriting
agreement is entered into and whether or not the registration is an
Underwritten Registration, the Company and the Guarantors shall:


 


(A)  upon the request of the Requesting Holders, furnish to the
Requesting Holders, and each underwriter, if any, in such substance and scope
as they may request and as are customarily made by issuers to underwriters in
primary underwritten offerings, or upon the effectiveness of the Shelf
Registration Statement:


 


(1)  a certificate, dated the date of effectiveness of the Shelf
Registration Statement, as the case may be, signed by (y) the President or any
Vice President and (z) a principal financial or accounting officer of each of
the Company and the Guarantors, confirming, as of the date thereof, the matters
set forth in paragraphs (i), (iii) and (iv) of Section 5(e) (to
the extent that such paragraphs reference the Company) of the Purchase
Agreement and such other matters as such parties may reasonably request;


 


(2)  an opinion, dated the date of effectiveness of the Shelf
Registration Statement of counsel for the Company and the Guarantors, covering
the matters set forth in paragraph (c) of Section 5 of the Purchase
Agreement and such other matters as such parties may reasonably request; and


 


(3)  a customary comfort letter, dated the date
of effectiveness of the Shelf Registration Statement, from the Company’s
independent accountants, in the customary form and covering matters of the type
customarily requested to be covered in comfort letters by underwriters in
connection with primary underwritten offerings;


 


(B)  set forth in full or incorporate by reference in the
underwriting agreement, if any, the indemnification provisions and procedures
of Section 8 hereof with respect to all parties to be indemnified pursuant
to said Section; and


 


(C)  deliver such other documents and certificates as may be
reasonably requested by such parties to evidence compliance with clause (A) above
and with any customary conditions contained in the underwriting agreement or
other agreement entered into by the Company or the Guarantors pursuant to this
clause (xi), if any.


 


If at any time the representations and warranties of the Company and
the Guarantors contemplated in clause (A)(1) above cease to be true and
correct, the Company or the Guarantors shall so advise the Initial Purchasers
and the underwriter(s), if any, and each selling Holder promptly and, if
requested by such Persons, shall confirm such advice in writing;


 


12





















 


(xii)  prior to any public
offering of Transfer Restricted Securities, cooperate with, and cause the
Guarantors to cooperate with, the selling Holders, the underwriter(s), if any,
and their respective counsel in connection with the registration and
qualification of the Transfer Restricted Securities under the securities or
Blue Sky laws of such jurisdictions as the selling Holders or underwriter(s)
may request and do any and all other acts or things necessary or advisable to
enable the disposition in such jurisdictions of the Transfer Restricted
Securities covered by the Shelf Registration Statement; provided,
however, that neither the Company nor the Guarantors shall be
required to register or qualify as a foreign corporation where it is not then
so qualified or to take any action that would subject it to the service of
process in suits or to taxation, other than as to matters and transactions
relating to the Registration Statement, in any jurisdiction where it is not
then so subject;


 


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


 


(xiv)  cooperate with, and cause
the Guarantors to cooperate with, the selling Holders and the underwriter(s),
if any, to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing any
restrictive legends; and enable such Transfer Restricted Securities to be in
such denominations and registered in such names as the Holders or the
underwriter(s), if any, may request at least two Business Days prior to any
sale of Transfer Restricted Securities made by such underwriter(s);


 


(xv)  use its reasonable best
efforts to cause the Transfer Restricted Securities covered by the Registration
Statement to be registered with or approved by such other governmental agencies
or authorities as may be necessary to enable the seller or sellers thereof or
the underwriter(s), if any, to consummate the disposition of such Transfer
Restricted Securities, subject to the proviso contained in clause (xii)
above;


 


(xvi)  if any fact or event
contemplated by clause (c)(iii)(D) above shall exist or have occurred,
subject to the last paragraph of Section 4(a), prepare a supplement or
post-effective amendment to the Registration Statement or related Prospectus or
any document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an untrue statement of a
material fact or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading;


 


(xvii)  provide a CUSIP number
for all Transfer Restricted Securities not later than the effective date of the
Registration Statement and provide the Trustee under the


 


13





















 


Indenture with printed certificates for the Exchange
Notes which are in a form eligible for deposit with the Depositary Trust
Company;


 


(xviii)  cooperate and assist in
any filings required to be made with the NASD and in the performance of any due
diligence investigation by any underwriter (including any “qualified
independent underwriter”) that is required to be retained in accordance with
the rules and regulations of the NASD;


 


(xix)  otherwise use its
reasonable best efforts to comply with all applicable rules and
regulations of the Commission, and make generally available to its security
holders, as soon as practicable, a consolidated earnings statement meeting the
requirements of Rule 158 (which need not be audited) for the twelve-month
period (A) commencing at the end of any fiscal quarter in which Transfer
Restricted Securities are sold to underwriters in a firm or best efforts
Underwritten Offering or (B) if not sold to underwriters in such an
offering, beginning with the first month of the Company’s first fiscal quarter
commencing after the effective date of the Registration Statement;


 


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


 


(xxi)  cause all Transfer
Restricted Securities covered by the Registration Statement to be listed on each
securities exchange on which similar securities issued by the Company are then
listed if requested by the Holders of a majority in aggregate principal amount
of such Transfer Restricted Securities covered by the Registration Statement or
the managing underwriter(s), if any; and


 


(xxii)  provide promptly to each
selling Holder upon request each document filed with the Commission pursuant to
the requirements of Section 13 and Section 15 of the Exchange Act,
unless such documents are otherwise publicly available on the Commission’s
EDGAR system.


 


Each Holder agrees by acquisition of a Transfer Restricted Security
that, upon receipt of the notice referred to in Section 6(c)(iii)(C) or
any notice from the Company of the existence of any fact of the kind described
in Section 6(c)(iii)(D) hereof, such Holder will forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the
applicable Registration Statement until such Holder’s receipt of the copies of
the supplemented or amended Prospectus contemplated by Section 6(c)(xvi)
hereof, or until it is advised in writing (the “Advice”) by the Company that
the use of the Prospectus may be resumed, and has received copies of any
additional or supplemental filings that are incorporated by reference in the
Prospectus.  If so directed by the
Company, each Holder will deliver to the Company (at the Company’s expense)


 


14





















 


all copies, other than permanent file copies then in
such Holder’s possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice.  In the event the Company shall give any such
notice, the time period regarding the effectiveness of such Registration
Statement set forth in Section 3 or 4 hereof, as applicable, shall be
extended by the number of days during the period from and including the date of
the giving of such notice pursuant to Section 6(c)(iii)(C) or
6(c)(iii)(D) hereof to and including the date when each selling Holder covered
by such Registration Statement shall have received the copies of the
supplemented or amended Prospectus contemplated by Section 6(c)(xvi)
hereof or shall have received the Advice; however, no such extension shall be
taken into account in determining whether Additional Interest is due pursuant
to Section 5 hereof or the amount of such Additional Interest, it being
agreed that the Company’s option to suspend use of a Registration Statement
pursuant to this paragraph shall be treated as a Registration Default for
purposes of Section 5.


 


(d)                                 The Company and the Guarantors may
require each Holder as to which any registration is being effected to furnish
to the Company and the Guarantors such information regarding such Holder and
such Holder’s intended method of distribution of the applicable Transfer
Restricted Securities as the Company and the Guarantors may from time to time
reasonably request in writing, but only to the extent that such information is
required in order to comply with the Securities Act.


 


SECTION 7.  Registration Expenses.


 


(a)  All expenses incident to the Company’s or the Guarantors’
performance of or compliance with this Agreement will be borne by the Company
and the Guarantors, regardless of whether a Registration Statement becomes effective,
including without limitation:  (i) all
registration and filing fees and expenses (including filings made by any
Initial Purchaser or Holder with the NASD (and, if applicable, the fees and
expenses of any “qualified independent underwriter” and its counsel that may be
required by the rules and regulations of the NASD)); (ii) all fees
and expenses of compliance with federal securities and state Blue Sky or
securities laws; (iii) all expenses of printing (including printing
certificates for the Exchange Notes to be issued in the Exchange Offer and
printing of Prospectuses), messenger and delivery services and telephone; (iv) all
fees and disbursements of counsel for the Company, the Guarantors and, subject
to Section 7(b) below, the Holders; (v) all application and
filing fees in connection with listing the Exchange Notes on a national
securities exchange or automated quotation system pursuant to the requirements
thereof; and (vi) all fees and disbursements of independent certified
public accountants of the Company and the Guarantors (including the expenses of
any special audit and comfort letters required by or incident to such
performance).


 


The Company and the Guarantors will, in any event, bear their internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company or any Guarantor.


 


(b)  In connection with any Registration Statement required by
this Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company and the Guarantors
will reimburse the Initial Purchasers and the Holders of Transfer Restricted
Securities being tendered in the Exchange Offer and/or


 


15





















 


resold pursuant to the “Plan of Distribution”
contained in the Exchange Offer Registration Statement or registered pursuant
to the Shelf Registration Statement, as applicable, for the reasonable fees and
disbursements of not more than one counsel, who shall be Shearman &
Sterling LLP or such other counsel as may be chosen by the Holders of a
majority in principal amount of the Transfer Restricted Securities for whose
benefit such Registration Statement is being prepared.


 


(c)                                  The Company and the Guarantors shall not
have any obligation to pay any underwriting discounts or commissions or any
transfer taxes relating to the disposition of a Holder’s Transfer Restricted
Securities or any fees and disbursements of any counsel or other advisors or
experts retained by such Holder, other than the counsel or experts specifically
referred to in clauses (a) or (b) above.


 


SECTION 8.  Indemnification.


 


(a)  The Company and each of the Guarantors, jointly and
severally, agree to indemnify and hold harmless (i) each Holder and (ii) each
person, if any, who controls (within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act) any Holder (any
of the persons referred to in this clause (ii) being hereinafter referred
to as a “controlling person”) and (iii) the respective officers,
directors, partners, employees, representatives and agents of any Holder or any
controlling person (any person referred to in clause (i), (ii) or (iii) may
hereinafter be referred to as an “Indemnified Holder”), to the fullest extent
lawful, from and against any and all losses, claims, damages, liabilities,
judgments, actions and expenses (including without limitation and as incurred,
reimbursement of all reasonable costs of investigating, preparing, pursuing,
settling, compromising, paying  or
defending any claim or action, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, including the reasonable
fees and expenses of counsel to any Indemnified Holder), joint or several,
directly or indirectly caused by, related to, based upon, arising out of or in
connection with, any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement or Prospectus (or any amendment or
supplement thereto), or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or expenses are caused by an untrue statement or omission or
alleged untrue statement or omission that is made in reliance upon and in
conformity with information relating to any of the Holders furnished in writing
to the Company by any of the Holders expressly for use therein; provided that with respect to any such
untrue statement or omission from any preliminary prospectus relating to a
Registration Statement, the indemnity provisions of this paragraph shall not
inure to the benefit of any Broker-Dealer to the extent that the sale to the
person asserting any such loss, claim, damage, liability or expense was an
initial resale by such Broker-Dealer and any such loss, claim, damage,
liability or expense of or with respect to such Broker-Dealer results from the
fact that both (i) a copy of the final prospectus (or the prospectus as
then amended or supplemented) was not sent or given to such person at or prior
to the written confirmation of the sale of such Securities to such person and (ii) the
untrue statement in or omission from such prospectus was corrected in the final
prospectus (or the prospectus as amended or supplemented) unless, in either
case, such failure to deliver the prospectus was a result of non-compliance by
the Company with the provisions of Section 6 hereof.  This indemnity agreement shall be in addition
to any liability that the Company and the Guarantors may otherwise have.


 


16





















 


In case any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought or asserted against
any of the Indemnified Holders with respect to which indemnity may be sought
against the Company or the Guarantors, such Indemnified Holder (or the
Indemnified Holder controlled by such controlling person) shall promptly notify
the Company and the Guarantors in writing (provided, that the failure to give such
notice shall not relieve the Company or the Guarantors of their respective
obligations pursuant to this Agreement, except to the extent that it has been
materially prejudiced by such failure). If any such action or proceeding shall
be brought or asserted against an Indemnified Holder and it shall have notified
the Company and the Guarantors thereof, the Company and/or the Guarantors shall
retain counsel reasonably satisfactory to the Indemnified Holder to represent
the Indemnified Holder and any others entitled to indemnification pursuant to
this Section 8 that the Company and/or the Guarantors, as applicable, may
designate in such action or proceeding and shall pay the fees and expenses of
such counsel related to such action or proceeding, as incurred.  Such Indemnified Holder shall have the right
to employ its own counsel in any such action or proceeding, but the fees and
expenses of such counsel shall be paid by such Indemnified Holder unless (i) the
Company and the Indemnified Holder shall have mutually agreed to the contrary; (ii) the
Company and the Guarantors shall have failed within a reasonable time to retain
counsel reasonably satisfactory to the Indemnified Holder; and (iii) the
named parties in any such action or proceeding (including any impleaded
parties) include both the Company and the Guarantors, on the one hand, and the
Indemnified Holder, on the other hand, and representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them.  The Company and
the Guarantors shall not, in connection with any one such action or proceeding
or separate but substantially similar or related actions or proceedings in the
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the reasonable fees and expenses of more than one separate firm
of attorneys (in addition to any local counsel) at any time for such
Indemnified Holders.  The Company and the
Guarantors shall be liable for any settlement of any such action or proceeding
effected with the Company’s prior written consent, which consent shall not be
withheld unreasonably, and the Company and the Guarantors agree to indemnify
and hold harmless any Indemnified Holder from and against any loss, claim,
damage, liability or expense by reason of any settlement of any action effected
with the written consent of the Company. 
The Company and the Guarantors shall not, without the prior written
consent of each Indemnified Holder, settle or compromise or consent to the
entry of judgment in or otherwise seek to terminate any pending or threatened
action, claim, litigation or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not any Indemnified Holder is
a party thereto), unless such settlement, compromise, consent or termination
includes an unconditional release of each Indemnified Holder from all liability
arising out of such action, claim, litigation or proceeding.


 


(b)  Each Holder agrees, severally and not jointly, to indemnify
and hold harmless the Company and the Guarantors and their respective
directors, officers of the Company who sign a Registration Statement, and any
person controlling (within the meaning of Section 15 of the Securities Act
or Section 20(a) of the Exchange Act) the Company, and the respective
officers, directors, partners, employees, representatives and agents of each
such person, to the same extent as the foregoing indemnity from the Company and
the Guarantors to each of the Indemnified Holders, but only with respect to
claims and actions based on information relating to such Holder furnished in
writing by such Holder expressly for use in any Registration Statement.  In case any action or proceeding shall be
brought against the Company, any Guarantor, any such controlling


 


17





















 


person or any such officer, director, partner,
employee, representative or agent in respect of which indemnity may be sought
against a Holder pursuant to this Section 8(b), such Holder shall have the
rights and duties given the Company and the Company or such other parties
indemnified pursuant to this Section 8(b) shall have the rights and
duties given to each Holder by the preceding paragraph.  This indemnity agreement shall be in addition
to any liability that the Holders may otherwise have.


 


(c)  If the indemnification provided for in this Section 8 is
unavailable to an indemnified party under Section 8(a) or Section 8(b) hereof
(other than by reason of exceptions provided in those Sections) in respect of
any losses, claims, damages, liabilities, judgments, actions or expenses
referred to therein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the aggregate amount
paid or payable by such indemnified party, as incurred, as a result of such
losses, claims, damages, liabilities or expenses in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Guarantors on the one hand, and the Holders on the other hand, from the Initial
Placement (which in the case of the Company shall be deemed to be equal to the
total gross proceeds from the Initial Placement as set forth on the cover page of
the Offering Memorandum), or if such allocation is not permitted by applicable
law, the relative fault of the Company and the Guarantors on the one hand, and
of the Indemnified Holder on the other hand, in connection with the statements
or omissions that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations.  The relative fault of the Company and the
Guarantors on the one hand, and the Indemnified Holder on the other hand, shall
be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact or any such inaccurate or alleged inaccurate
representation or warranty relates to information supplied by the Company or
the Guarantors or by the Indemnified Holder and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.  The amount paid
or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include, subject to the
limitations set forth in the second paragraph of Section 8(a), any legal
or other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim.


 


The Company, each Guarantor and each Holder agree that it would not be
just and equitable if contribution pursuant to this Section 8(c) were
determined by pro rata allocation (even if the Holders were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph.  The amount paid or
payable by an indemnified party as a result of the losses, claims, damages,
liabilities or expenses referred to in the immediately preceding paragraph
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.  Notwithstanding the provisions of this Section 8,
none of the Holders (and its related Indemnified Holders) shall be required to
contribute, in the aggregate, any amount in excess of the amount by which the
total proceeds received by such Holder in connection with the sale of its
Notes, or, in the case of an Initial Purchaser, the total discount received by
such Initial Purchaser with respect to the sale of its Initial Notes, exceeds
the amount of any damages which such Holder has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged


 


18





















 


omission.  No
person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.  The Holders’ obligations to contribute
pursuant to this Section 8(c) are several in proportion to the
respective principal amount of Initial Notes held by each of the Holders
hereunder and not joint.


 


SECTION 9.  Rule 144A.  The
Company and the Guarantors each hereby agrees with each Holder, for so long as
any Transfer Restricted Securities remain outstanding, to make available to any
Holder or beneficial owner of Transfer Restricted Securities in connection with
any sale thereof and any prospective purchaser of such Transfer Restricted
Securities from such Holder or beneficial owner, the information required by Rule 144A(d)(4) under
the Securities Act in order to permit resales of such Transfer Restricted
Securities pursuant to Rule 144A.


 


SECTION 10.  Participation In Underwritten Registrations.  No Holder may participate in any
Underwritten Registration hereunder unless such Holder (a) agrees to sell
such Holder’s Transfer Restricted Securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting agreements,
lock-up letters and other documents required under the terms of such
underwriting arrangements.


 


SECTION 11.  Selection Of Underwriters.  Pursuant
to Section 6(c)(xi), Requesting Holders whose Transfer Restricted
Securities are covered by the Shelf Registration Statement who desire to do so
may sell such Transfer Restricted Securities in an Underwritten Offering.  In any such Underwritten Offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering; provided, that such investment
bankers and managers must be reasonably satisfactory to the Company.


 


SECTION 12.  Miscellaneous.


 


(a)  Remedies.  The Company and the
Guarantors each hereby agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by the Company or any
of the Guarantors of the provisions of this Agreement and hereby agree to waive
the defense in any action for specific performance that a remedy at law would
be adequate.


 


(b)  No Inconsistent Agreements.  The
Company will not, and will cause the Guarantors not to, on or after the date of
this Agreement, enter into any agreement with respect to its securities that is
inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. 
Neither the Company nor any Guarantor has entered into any agreement
granting any registration rights with respect to its securities to any Person.
The rights granted to the Holders hereunder do not in any way conflict with and
are not inconsistent with the rights granted to the holders of the Company’s
securities under any agreement in effect on the date hereof.


 


19





















 


(c)  Adjustments Affecting the Notes.  Neither the Company nor any Guarantor will
take any action, or permit any change to occur, with respect to the Notes that
would materially and adversely affect the ability of the Holders to Consummate
any Exchange Offer.


 


(d)  Amendments and Waivers.  The provisions of this Agreement
may not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given unless the Company has
obtained the written consent of Holders of a majority of the outstanding
principal amount of Transfer Restricted Securities.  Notwithstanding the foregoing, a waiver or
consent to a departure from the provisions hereof that relates exclusively to
the rights of Holders whose securities are being tendered pursuant to the
Exchange Offer and that does not affect directly or indirectly the rights of
other Holders whose securities are not being tendered pursuant to such Exchange
Offer may be given by the Holders of a majority of the outstanding principal
amount of Transfer Restricted Securities being tendered or registered; provided
that, with respect to any matter that directly or indirectly affects the rights
of any Initial Purchaser hereunder, the Company shall obtain the written
consent of each such Initial Purchaser with respect to which such amendment,
qualification, supplement, waiver, consent or departure is to be effective.


 


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


 


(i)  if to a Holder, at the address set forth on the records of
the Registrar under the Indenture, with a copy to the Registrar under the
Indenture;


 


(ii)  if to the Initial Purchasers:


 


Banc
of America Securities LLC

40 West 57th Street

27th Floor

New York, NY  10019

Fax:  646-313-4803

Attention:  Legal Department


 


(iii)  if to the Company and the Guarantors:


 


National
MENTOR Holdings, Inc.

313 Congress Street, 6th Floor

Boston, MA  02210

Facsimile:  617-790-4940

Attention:  Christina Pak, Esq.


 


20





















 


with a copy to:


 


Kirkland &
Ellis LLP

200 East Randolph Drive

Chicago, IL  60601

Facsimile:  312-660-0522

Attention:  James S. Rowe, Esq.


 


All such notices and communications 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 on the next Business Day, if timely delivered
to an air courier guaranteeing overnight delivery.


 


Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.


 


(f)  Successors and Assigns.  This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided, however, that
this Agreement shall not inure to the benefit of or be binding upon a successor
or assign of a Holder unless and to the extent such successor or assign
acquired Transfer Restricted Securities from such Holder.


 


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


 


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


 


(i)  Governing Law.  THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE CONFLICT OF LAW RULES THEREOF.


 


(j)  Severability.  In the event that any one or more
of the provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.


 


(k)  Entire
Agreement.  This Agreement,
together with the Purchase Agreement, the Notes, the DTC Letter of
Representations (as defined in the Purchase Agreement) and the Indenture, is
intended by the parties as a final expression of their agreement and intended
to be a complete and exclusive statement of the agreement and understanding of
the parties hereto in respect of the subject matter contained herein.  There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company and the
Guarantors with respect to the Transfer Restricted Securities.  This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.


 


21





















 


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


 


 


	
   

  	
  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.

  
					



 


Registration Rights Agreement Signature Page


 





















 


	
   

  	
  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.

  



 


Registration Rights Agreement Signature Page


 





















 


	
   

  	
  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

  	
   

  
					



 


Registration Rights Agreement Signature Page


 





















 


The foregoing Registration Rights Agreement is hereby confirmed and
accepted as of the date first above written:


 


 


BANC OF AMERICA SECURITIES LLC

J.P. MORGAN SECURITIES INC.

UBS INVESTMENT BANK

CIBC WORLD MARKETS CORP.


 


 


	
  By: BANC OF AMERICA SECURITIES LLC

  
	
   

  
	
   

  
	
  By:

  	
   /s/ Mark Liggitt

  	
   

  
	
   

  	
   

  
	
   

  	
  Name: Mark Liggitt

  
	
   

  	
  Title: Vice President

  



 


 


 


Registration Rights Agreement Signature Page


 





















 


SCHEDULE A


 


GUARANTORS


 


1.                                       NATIONAL MENTOR HOLDINGS, INC. (Delaware
corporation)


 


2.                                       NATIONAL MENTOR, LLC (Delaware limited
liability company)


 


3.                                       NATIONAL MENTOR SERVICES, LLC (Delaware
limited liability company)


 


4.                                       FAMILY ADVOCACY SERVICES, LLC (Delaware
limited liability company)


 


5.                                       NATIONAL MENTOR SERVICES, INC. (Delaware
corporation)


 


6.                                       MENTOR MANAGEMENT, INC. (Delaware
corporation)


 


7.                                       NATIONAL MENTOR HEALTHCARE, LLC (Delaware
limited liability company)


 


8.                                       CAROLINA BEHAVIORAL SERVICES, LLC
(Delaware limited liability company)


 


9.                                       CENTER FOR COMPREHENSIVE SERVICES, INC.
(Illinois corporation)


 


10.                                 ILLINOIS MENTOR, INC. (Illinois
corporation)


 


11.                                 REHABILITATION ACHIEVEMENT CENTER, INC.
(Illinois corporation)


 


12.                                 MASSACHUSETTS MENTOR, INC. (Massachusetts
corporation)


 


13.                                 LLOYD’S LIBERTY HOMES, INC. (California
corporation)


 


14.                                 UNLIMITED QUEST, INC. (California
corporation)


 


15.                                 FIRST STEP INDEPENDENT LIVING PROGRAM,
INC. (California corporation)


 


16.                                 HORRIGAN COLE ENTERPRISES, INC.
(California corporation)


 


17.                                 OHIO MENTOR, INC. (Ohio corporation)


 


18.                                 SOUTH CAROLINA MENTOR, INC. (South
Carolina corporation)


 


19.                                 MENTOR MARYLAND, INC. (Maryland
corporation)


 


20.                                 REM, INC. (Minnesota corporation)


 


21.                                 REM ARIZONA, INC. (Arizona corporation)


 


A-1





















 


22.                                 REM ARIZONA REHABILITATION, INC. (Arizona
corporation)


 


23.                                 REM ARROWHEAD, INC. (Minnesota
corporation)


 


24.                                 REM ATLANTIC, INC. (Iowa corporation)


 


25.                                 REM CENTRAL LAKES, INC. (Minnesota
corporation)


 


26.                                 REM COLORADO, INC. (Colorado corporation)


 


27.                                 REM COMMUNITY OPTIONS, INC. (West
Virginia corporation)


 


28.                                 REM CONNECTICUT COMMUNITY SERVICES, INC.
(Connecticut corporation)


 


29.                                 REM CONSULTING & SERVICES, INC.
(Minnesota corporation)


 


30.                                 REM CONSULTING OF OHIO, INC. (Ohio
corporation)


 


31.                                 REM COUNCIL BLUFFS, INC. (Minnesota
corporation)


 


32.                                 REM DEVELOPMENTAL SERVICES, INC. (Iowa
corporation)


 


33.                                 REM HEALTH, INC. (Minnesota corporation)


 


34.                                 REM HEALTH OF IOWA, INC. (Iowa
corporation)


 


35.                                 REM HEALTH OF WISCONSIN, INC. (Wisconsin
corporation)


 


36.                                 REM HEALTH OF WISCONSIN II, INC.
(Wisconsin corporation)


 


37.                                 REM HEARTLAND, INC. (Minnesota
corporation)


 


38.                                 REM HENNEPIN, INC. (Minnesota
corporation)


 


39.                                 REM HOME HEALTH, INC. (Minnesota
corporation)


 


40.                                 REM INDIANA, INC. (Indiana corporation)


 


41.                                 REM INDIANA COMMUNITY SERVICES, INC.
(Indiana corporation)


 


42.                                 REM INDIANA COMMUNITY SERVICES II, INC.
(Indiana corporation)


 


43.                                 REM IOWA COMMUNITY SERVICES, INC. (Iowa
corporation)


 


44.                                 REM IOWA, INC. (Iowa corporation)


 


45.                                 REM LEADWAY, INC. (Minnesota corporation)


 


46.                                 REM MANAGEMENT, INC. (Minnesota
corporation)


 


A-2





















 


47.                                 REM MARYLAND, INC. (Maryland corporation)


 


48.                                 REM MINNESOTA COMMUNITY SERVICES, INC.
(Minnesota corporation)


 


49.                                 REM MINNESOTA, INC. (Minnesota
corporation)


 


50.                                 REM NEVADA, INC. (Nevada corporation)


 


51.                                 REM NEW JERSEY, INC. (New Jersey
corporation)


 


52.                                 REM NORTH DAKOTA, INC. (North Dakota
corporation)


 


53.                                 REM NORTH STAR, INC. (Minnesota
corporation)


 


54.                                 REM OHIO, INC. (Ohio corporation)


 


55.                                 REM OHIO WAIVERED SERVICES, INC. (Ohio
corporation)


 


56.                                 REM OKLAHOMA COMMUNITY SERVICES, INC.
(Oklahoma corporation)


 


57.                                 REM PENNSYLVANIA COMMUNITY SERVICES, INC.
(Pennsylvania corporation)


 


58.                                 REM RAMSEY, INC. (Minnesota corporation)


 


59.                                 REM RIVER BLUFFS, INC. (Minnesota
corporation)


 


60.                                 REM SILS OF IOWA, INC. (Iowa corporation)


 


61.                                 REM SOUTH CENTRAL SERVICES, INC.
(Minnesota corporation)


 


62.                                 REM SOUTHWEST SERVICES, INC. (Minnesota
corporation)


 


63.                                 REM UTAH, INC. (Utah corporation)


 


64.                                 REM WEST VIRGINIA, INC. (West Virginia
corporation)


 


65.                                 REM WISCONSIN, INC. (Wisconsin
corporation)


 


66.                                 REM WISCONSIN II, INC. (Wisconsin
corporation)


 


67.                                 REM WISCONSIN III, INC. (Wisconsin
corporation)


 


68.                                 REM WOODVALE, INC. (Minnesota
corporation)


 


A-3