Document:

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                                                                    EXHIBIT 10.2

                             FIRST AMENDMENT TO THE
                        AMENDMENT AND RESTATEMENT OF THE
                              EQUITY INCENTIVE PLAN
                               OF MANOR CARE, INC.

            WHEREAS, Manor Care, Inc. (the "Company") has adopted the Amendment
and Restatement of the Equity Incentive Plan of Manor Care, Inc. (the "Plan")
for the benefit of its key employees, directors and consultants;

            WHEREAS, pursuant to Section 11.2 of the Plan the Board of Directors
of the Company (the "Board") has the authority to amend the Plan.

            WHEREAS, at a meeting of the Board of Directors held on May 5, 2004
the Board approved an amendment to eliminate the automatic grant of options to
Outside Directors contained in Section 4.5 of the Plan.

            NOW, THEREFORE, in consideration of the foregoing, the Plan is
hereby amended, effective as of May 5, 2004, by deleting Section 4.5 in its
entirety.

            IN WITNESS WHEREOF, the Company has caused this amendment to the
Plan to be executed by its duly authorized officer as of May 6, 2004.

                                       MANOR CARE, INC.

                                        /s/ R. Jeffrey Bixler
                                       ---------------------------------------
                                       R. Jeffrey Bixler
                                       Secretary of Manor Care, Inc.<PAGE>

                                                                     Exhibit 4.4

                 SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
                 -----------------------------------------------

         This Second Amendment to Loan and Security Agreement (the "Amendment")
is made on July 22, 2004 by GMAC Commercial Finance, LLC, successor by merger to
GMAC Business Credit, LLC ("Lender"), Transcat, Inc. ("Parent"), Transmation
(Canada), Inc. ("Subsidiary", or together with Parent, the "Borrowers", or a
"Borrower").

                                    RECITALS
                                    --------

     A. Borrowers and Lender entered into a Loan and Security Agreement dated
November 12, 2002 (as amended from time to time, the "Loan Agreement").
Capitalized terms used in this Amendment shall have the meanings set forth in
the Loan Agreement unless otherwise defined in this Agreement.

     B. Borrowers and Lender desire to amend the Loan Agreement.

     THEREFORE, in consideration of the mutual promises and agreements of the
parties and for other good and valuable consideration, the receipt and
sufficiency of which is acknowledged, the parties agree as follows:

                              TERMS AND CONDITIONS
                              --------------------

     1. WAIVERS.

     A. Minimum EBITDA. Lender waives the requirements of Section 8.11 for the
first fiscal quarter period ending June 26, 2004. Section 8.11 shall remain in
full force and effect for the fiscal quarter ending September 25, 2004 and for
all subsequent measurement periods.

     B. Wind-down of Subsidiaries. Based on Borrower's representation that such
entity has no assets or operations, and will not in the future have any
operations, Lender waives the requirement of Section 9.13 that Borrowers
wind-down Transmation Singapore Pte. Ltd. by a specific date.

     2. AMENDMENTS. Section 7.13 is amended to read as follows:

          Catalogue Spending. Exclusive of the amortization of any prepaid
          expenses related to the development, printing and mailing of Big Cat,
          spend in excess of $200,000, net of co-op advertising rebates, in any
          fiscal year for the development, printing and mailing of Big Cat.

     3. REAFFIRMATION. Borrowers reaffirm, ratify and confirm their Obligations
under the Loan Agreement, acknowledge that all terms and conditions in the Loan
Agreement (except as amended by this Amendment) remain in full force and effect
and that the security interests granted to Lender in the Collateral are valid
and perfected.

<PAGE>

     4. ENTIRE AGREEMENT. This Amendment constitutes the entire agreement of the
parties in connection with the subject matter of this Amendment and cannot be
changed or terminated orally. All prior agreements, understandings,
representations, warranties and negotiations regarding the subject matter
hereof, if any, are merged into this Amendment.

     5. AUTHORIZATION. Borrowers and the signatories noted below represent that
all necessary corporate actions to authorize Borrowers to enter into this
Amendment have been taken, including, without limitation, board of directors
approval and resolutions necessary to authorize Borrowers' execution of this
Amendment.

     6. COUNTERPARTS; FACSIMILE SIGNATURES. This Amendment may be executed in
counterparts, each of which when so executed and delivered shall be deemed an
original, and all of such counterparts together shall constitute but one and the
same agreement. Facsimile signatures will be treated as originals for all
purposes.

GMAC COMMERCIAL FINANCE, LLC,           TRANSCAT, INC
successor by merger to
GMAC Business Credit, LLC

By:     /s/  Daniel J. Manella          By:      /s/  Charles P. Hadeed
        ---------------------------              ------------------------------
Name:   Daniel J. Manella               Name:    Charles P. Hadeed
Title:  Senior Vice President           Title:   CFO

TRANSMATION (CANADA), INC

By:     /s/  Charles P. Hadeed
        ---------------------------
Name:   Charles P. Hadeed
Title:  CFO

                                       2<PAGE>
                                                                    EXHIBIT 10.1

                          REGISTRATION RIGHTS AGREEMENT

                                  BY AND AMONG

                                 RES-CARE, INC.

                                       AND

            ONEX PARTNERS LP, ONEX AMERICAN HOLDINGS II, LLC, ONEX US
               PRINCIPALS LP, AND RES-CARE EXECUTIVE INVESTCO LLC

                                   DATED AS OF

                                 MARCH 10, 2004

      REGISTRATION RIGHTS AGREEMENT, dated as of March 10, 2004, by and among
Res-Care, Inc., a Kentucky corporation (the "Company"), Onex Partners LP, a
Delaware limited liability company, Onex American Holdings II LLC a Delaware
limited liability company, Onex US Principals LP, a Delaware limited liability
company, and ResCare Executive Investco LLC, a Delaware limited liability
company (collectively the "Purchaser") and such other persons who become
signatories hereto from time to time as provided for herein.

      WHEREAS, pursuant to the Preferred Stock Purchase Agreement, dated as of
March 10, 2004 (the "Preferred Stock Purchase Agreement"), by and among the
Company and the Purchasers, upon the terms and subject to the conditions
contained therein, the Company will issue and sell to the Purchasers an
aggregate of 48,095 shares of Series A Preferred Stock of the Company (the
"Series A Preferred Stock");

      WHEREAS, pursuant to a Stock Purchase Agreement dated as of March 10, 2004
(the "Common Stock Purchase Agreement"), by and among the Purchaser and the
shareholders named therein ("Selling Shareholders"), Purchaser will purchase
3,700,000 shares of Common Stock from the Selling Shareholders;

      WHEREAS, to induce the Purchaser to execute and deliver the Purchase
Agreement and as a condition to Purchaser consummating the transactions
contemplated thereby, the Company has agreed to provide the Purchaser with the
rights set forth in this Agreement.

      Accordingly, the parties hereto agree as follows:

                                    SECTION I

                                   DEFINITIONS

      As used herein, unless the context otherwise requires, the following terms
have the following respective meanings:
<PAGE>
      1.1. "Affiliate" means with respect to any Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person.

      1.2. "Assignee" has the meaning set forth in Section 4.2.

      1.3. "Board of Directors" means the board of directors of the Company.

      1.4. "Common Stock" means any shares of common stock of the Company, now
or hereafter authorized to be issued, and any and all securities of any kind
whatsoever of the Company or any successor thereof which may be issued on or
after the date hereof in respect of, in exchange for, or upon conversion of
shares of Common Stock pursuant to a merger, consolidation, stock split, reverse
split, stock dividend, recapitalization of the Company or otherwise.

      1.5. "Company" shall mean Res-Care, Inc., a Kentucky corporation, and
shall include any successor thereto by merger, consolidation, acquisition of
substantially all the assets thereof, or otherwise.

      1.6. "Common Stock Purchase Agreement" has the meaning set forth in the
recitals.

      1.7. "Demand Exercise Notice" has the meaning set forth in Section 2.1(a).

      1.8. "Demand Registration" has the meaning set forth in Section 2.1(h).

      1.9. "Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any similar federal statute, and the rules and regulations of the SEC
thereunder, all as the same shall be in effect at the time. Reference to a
particular section of the Exchange Act shall include a reference to the
comparable section, if any, of any such similar federal statute.

      1.10. "Form S-3" means a Form S-3 registration statement under the
Securities Act, and any successor or similar form thereto.

      1.11. "Holder" means the Purchaser and any Assignee.

      1.12. "Holder Demand" has the meaning set forth in Section 2.1(a).

      1.13. "Indemnified Party" means any Person seeking indemnification
pursuant to Section 2.6.

      1.14. "Indemnifying Party" means any Person from whom indemnification is
sought pursuant to Section 2.6.

      1.15. "Indemnitees" has the meaning set forth in Section 2.6(a).

                                       2
<PAGE>
      1.16. "Initiating Holder" means the party or parties delivering a Holder
Demand as provided for under Section 2.1(a).

      1.17. "Losses" has the meaning set forth in Section 2.6(a).

      1.18. "Majority Participating Holders" means, at any time, Participating
Holders holding more than 50% of the Registrable Securities proposed to be
included in any offering of Registrable Securities by such Participating Holders
pursuant to Section 2.1 or Section 2.2.

      1.19. "NASD" means National Association of Securities Dealers, Inc.

      1.20. "Nasdaq" has the meaning set forth in Section 2.3(a)(x).

      1.21. "Participating Holders" means any Holder participating in any
offering of Registrable Securities pursuant to Section 2.1 or Section 2.2.

      1.22. "Partner Distribution" has the meaning set forth in Section 2.1(a).

      1.23. "Person" means an individual, a corporation, a partnership, a
limited liability company, a business, an association, a trust, an individual,
or any other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.

      1.24. "Postponement Period" has the meaning set forth in Section 2.1(j).

      1.25. "Preferred Stock Purchase Agreement" has the meaning set forth in
the recitals.

      1.26. "Purchaser" has the meaning set forth in the preamble.

      1.27. "Registrable Securities" means any of the following when held by a
Holder: (i) any shares of Common Stock issued upon the conversion of the Series
A Preferred Stock, and, (ii) any shares of Common Stock acquired by Purchaser
from Selling Shareholders pursuant to the Common Stock Purchase Agreement. For
purposes of this Agreement, a Person will be deemed to be a Holder of
Registrable Securities whenever such Person has the right to acquire, directly
or indirectly, such Registrable Securities whether or not such acquisition has
actually been effected, and such Person shall not be required to convert any
shares of Series A Preferred Stock to participate in any registered offering
hereunder until the closing of such offering. As to any particular Registrable
Securities, such securities shall cease to be Registrable Securities when (a) a
registration statement with respect to the sale of such securities shall have
become effective under the Securities Act and such securities shall have been
disposed of in accordance with such registration statement, (b) when such
securities shall have been sold pursuant to Rule 144 under the Securities Act or
similar rule then in effect or (c) when Rule 144 or another similar exemption
under the Securities Act is available for the sale of all of such Holder's
shares during a ninety (90) day period without registration.

                                       3
<PAGE>
      1.28. "Registration Expenses" means all fees and expenses incurred in
connection with the Company's performance of or compliance with Section 2
hereof, including, without limitation, (i) all registration, filing and
applicable SEC fees, NASD fees, national securities exchange or inter-dealer
quotation system fees, and fees and expenses of complying with state securities
or blue sky laws (including fees and disbursements of counsel to the
underwriters and the Participating Holders in connection with "blue sky"
qualification of the Registrable Securities and determination of their
eligibility for investment under the laws of the various jurisdictions), (ii)
all printing (including printing certificates for the Registrable Securities in
a form eligible for deposit with The Depository Trust Company and printing
preliminary and final prospectuses), word processing, duplicating, telephone and
facsimile expenses, and messenger and delivery expenses, (iii) all fees and
disbursements of counsel for the Company and of its independent public
accountants, including the expenses of "cold comfort" letters or any special
audits required by, or incident to, such registration, (iv) all reasonable fees
and expenses of one law firm or other counsel selected by the Majority
Participating Holders for the benefit of all of the Participating Holders, (v)
all reasonable fees and expenses of any special experts or other Persons
retained by the Company in connection with any registration, (vi) Securities Act
liability insurance or similar insurance if the Company so desires or the
underwriters so require in accordance with then-customary underwriting
practices, (vii) all applicable rating agency fees with respect to the
Registrable Securities, (viii) reasonable fees and expenses of a Qualified
Independent Underwriter (as such term is defined in Schedule E to the By-Laws of
the NASD) and its counsel, (ix) all fees and disbursements of the underwriters
(other than underwriting discounts and commissions but, including reasonable
fees and disbursements of one counsel for such underwriters), (x) all transfer
taxes, and (xi) all expenses incurred in connection with promotional efforts or
"roadshows" (as negotiated by the Company with the underwriters); provided,
however, that Registration Expenses shall exclude, and the Participating Holders
shall pay ratably, underwriting discounts and commissions in respect of the
Registrable Securities being registered for such Participating Holders.

      1.29. "SEC" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.

      1.30. "Section 2.2 Sale Amount" has the meaning set forth in Section
2.2(c).

      1.31. "Securities Act" means the Securities Act of 1933, as amended, or
any similar federal statute, and the rules and regulations of the SEC
thereunder, all as the same shall be in effect at the time. References to a
particular section of the Securities Act shall include a reference to the
comparable section, if any, of any such similar federal statute.

      1.32. "Selected Courts" has the meaning set forth in Section 4.4(b).

      1.33. "Series A Preferred Stock" has the meaning set forth in the
recitals.

                                    SECTION 2

                        REGISTRATION UNDER SECURITIES ACT

      2.1. Registration on Demand.

                                       4
<PAGE>
            (a) Demand. At any time or from time to time beginning six months
from the date of issuance of the Series A Preferred Stock, a Holder or Holders
holding a majority of Registrable Securities then outstanding may require the
Company to effect the registration under the Securities Act of all or part of
their respective Registrable Securities, by delivering a written request (a
"Holder Demand") therefor to the Company specifying the number of shares of
Registrable Securities to be registered and the intended method of distribution
thereof. As promptly as practicable, but no later than 10 days after receipt of
a Holder Demand, the Company shall give written notice (the "Demand Exercise
Notice") of the Holder Demand to all Holders of Registrable Securities. Such
Holders shall have the option, within 20 days after the receipt of the Demand
Exercise Notice (or, 10 days if, at the request of the Initiating Holder, the
Company states in such written notice or gives telephonic notice to each Holder,
with written confirmation to follow promptly thereafter stating that (i) such
registration will be on Form S-3 and (ii) such shorter period of time is
required because of a planned filing date), to request, in writing, that the
Company include in such registration any Registrable Securities held by such
Holder (which request shall specify the maximum number of Registrable Securities
intended to be disposed of by such Holder). The Company shall as expeditiously
as possible use its best efforts to effect the registration under the Securities
Act of the Registrable Securities which the Company has been so requested to
register by the Initiating Holder and any other Holders which have made such
written request. The Company shall (i) use its best efforts to effect the
registration of Registrable Securities for distribution in accordance with the
intended method of distribution set forth in a written request delivered by the
Majority Participating Holders, which may include, at the option of such
Majority Participating Holders, a distribution to, and resale by, the partners
of such Holder or Holders (a "Partner Distribution"), and (ii) if requested by
the Majority Participating Holders, obtain acceleration of the effective date of
the registration statement relating to such registration.

            (b) Partner Distributions. Notwithstanding anything contained herein
to the contrary, the Company shall, at the request of any Participating Holder
seeking to effect a Partner Distribution, file any prospectus supplement or
post-effective amendments and shall otherwise take any action necessary to
include such language, if such language was not included in the initial
registration statement, or revise such language if deemed necessary by such
Participating Holder, to effect such Partner Distribution.

            (c) Registration Statement Form. Registrations under this Section
2.1 shall be on such appropriate form of the SEC (i) as shall be selected by the
Company and as shall be reasonably acceptable to the Majority Participating
Holders and (ii) as shall permit the disposition of such Registrable Securities
in accordance with the intended method or methods of disposition specified in
such Participating Holders' requests for such registration, including, without
limitation, a Partner Distribution or a continuous or delayed basis offering
pursuant to Rule 415 under the Securities Act. The Company agrees to include in
any such registration statement all information which, in the opinion of counsel
to the Participating Holders and counsel to the Company, is necessary or
desirable to be included therein.

            (d) Expenses. The Company shall pay, and shall be responsible for,
all Registration Expenses in connection with any registration requested pursuant
to this Section 2.1. Notwithstanding the foregoing, the provisions of this
Section 2.1(d) shall be deemed amended to the extent necessary to cause these
expense provisions to comply with "blue sky" laws of each state or the
securities laws of any other jurisdiction in the United States and its
territories in which the offering is made.

                                       5
<PAGE>
            (e) Effective Registration Statement. A registration requested
pursuant to this Section 2.1 shall not be deemed a Demand Registration
(including for purposes of Section 2.1(h)) unless a registration statement with
respect thereto has become effective and has been kept continuously effective
for the period set forth in Section 2.3(a)(i) or, if such registration statement
relates to an underwritten offering, such longer period as in the opinion of
counsel for the underwriter or underwriters a Prospectus is required by law to
be delivered in connection with sales of Registrable Securities by an
underwriter or dealer. Should a Demand Registration not become effective due to
the failure of a Participating Holder to perform its obligations under this
Agreement, or in the event the Majority Participating Holders withdraw or do not
pursue the request for the Demand Registration as provided for in Section 2.1(g)
(in each of the foregoing cases, provided that at such time the Company is in
compliance in all material respects with its obligations under this Agreement),
then, such Demand Registration shall be deemed to have been effected (including
for purposes of Section 2.1(h)); provided, that, if (i) the Demand Registration
does not become effective because a material adverse change has occurred, or is
reasonably likely to occur, in the condition (financial or otherwise),
prospects, business, assets or results of operations of the Company and its
subsidiaries taken as a whole subsequent to the date of the delivery of the
Demand Exercise Notice, (ii) after the Demand Registration has become effective,
such registration is interfered with by any stop order, injunction, or other
order or requirement of the SEC or other governmental agency or court, (iii) the
Demand Registration is withdrawn at the request of the Majority Participating
Holders due to the advice of the managing underwriter(s) that the Registrable
Securities covered by the registration statement could not be sold in such
offering within a price range acceptable to the Majority Participating Holders,
(iv) the Demand Registration is withdrawn for any reason at any time during a
Postponement Period or within ten days thereafter, or (v) the Participating
Holders reimburse the Company for any and all Registration Expenses incurred by
the Company in connection with such request for a Demand Registration that was
withdrawn or not pursued, then the Demand Registration shall not be deemed to
have been effected and will not count as a Demand Registration).

            (f) Selection of Underwriters. The underwriters of each underwritten
offering of the Registrable Securities pursuant to this Section 2.1 shall be
selected by the Majority Participating Holders, which underwriters shall be
reasonably acceptable to the Company.

            (g) Right to Withdraw. Any Participating Holder shall have the right
to withdraw its request for inclusion of Registrable Securities in any
registration statement pursuant to this Section 2.1 at any time prior to the
effective date of such registration statement (but in no event less than 24
hours prior to such date) by giving written notice to the Company of its request
to withdraw. Upon receipt of notices from the Majority Participating Holders to
such effect, the Company shall cease all efforts to obtain effectiveness of the
applicable registration statement, and whether the Initiating Holder's request
for registration pursuant to this Section 2.1 shall be counted as a Demand
Registration for purposes of Section 2.1(h) shall be determined in accordance
with Section 2.1(e) above.

                                       6
<PAGE>
            (h) Limitations on Registration on Demand. The Holders shall be
entitled to require the Company to effect, and the Company shall be required to
effect, two (2) registrations in the aggregate pursuant to this Section 2.1
(each, a "Demand Registration"); provided, however, that the Company shall not
be required to have a registration statement declared effective pursuant to a
Demand Registration until at least 90 days after the effective date of any other
registration statement filed by the Company pursuant to a previous Demand
Registration. The aggregate offering value of the shares to be registered
pursuant to any such registration shall be at least $15 million (determined as
of the date the demand is made), unless the registration is of the balance of
the Registrable Securities held by the Holders.

            (i) Priority in Registrations on Demand. Whenever the Company
effects a registration pursuant to this Section 2.1 in connection with an
underwritten offering by Holders, no securities other than Registrable
Securities shall be included among the securities covered by such registration
unless the Majority Participating Holders consent in writing to the inclusion
therein of such other securities, which consent may be subject to terms and
conditions determined by the Majority Participating Holders in their sole
discretion. If any registration pursuant to a Holder Demand involves an
underwritten offering and the managing underwriter(s) of such offering shall
inform the Company in writing of its belief that the number of Registrable
Securities requested to be included in such registration pursuant to this
Section 2.1, when added to the number of any other securities to be offered in
such registration, would materially adversely affect such offering, then the
Participating Holders shall be entitled to participate on a pro rata basis based
on the number of shares of Registrable Securities requested to be included in
the offering by each such Participating Holder prior to the inclusion of any
securities other than Registrable Securities.

            (j) Postponement. The Company shall be entitled once in any
twelve-month period to postpone for a reasonable period of time (but not
exceeding 90 days) (the "Postponement Period") the filing of any registration
statement required to be prepared and filed by it pursuant to this Section 2.1
if the Company determines, in its reasonable judgment, upon advice of counsel,
as authorized by a resolution of the Board of Directors, that such registration
and offering would require premature disclosure of any material financing,
material corporate reorganization or other material transaction or event
involving the Company, and promptly gives the Participating Holders written
notice of such determination, containing a specific statement of the reasons for
such postponement and an approximation of the anticipated delay.

      2.2. Incidental Registration.

            (a) Right to Include Registrable Securities. If the Company at any
time proposes to register any of its equity securities under the Securities Act
by registration on Form S-1, S-2 or S-3, or any successor or similar form(s)
(except registrations (i) pursuant to Section 2.1, (ii) solely for registration
of equity securities in connection with an employee benefit plan (as defined in
405 of the Securities Act) or dividend reinvestment plan on Form S-8 or any
successor form thereto or (iii) in connection with any acquisition or merger on
Form S-4 or any successor form thereto), whether or not for sale for its own
account, it will each such time give prompt written notice (but in no event less
than 30 days prior to the initial filing of a registration statement with
respect thereto) to each of the Holders of its intention to do so and such
notice shall offer the Holders of such Registrable Securities the opportunity to
register under such registration statement such number of Registrable Securities
as each such Holder may request in writing. Upon the written request of any of
the Holders (which request shall specify the maximum number of Registrable
Securities intended to be disposed of by such Holder), made as promptly as
practicable and in any event within 20 days after the receipt of any such notice
(or, 10 days if the Company states in such written notice or gives telephonic
notice to each Holder, with written confirmation to follow promptly thereafter,
stating that (i) such registration will be on Form S-3 and (ii) such shorter
period of time is required because of a planned filing date), the Company shall
include in such registration under the Securities Act all Registrable Securities
which the Company has been so requested to register by each Holder; provided,
however, that if, at any time after giving written notice of its intention to
register any equity securities and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of such
equity securities, the Company shall give written notice of such determination
and its reasons therefor to the Holders and (i) in the case of a determination
not to register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from any obligation of
the Company to pay the Registration Expenses in connection therewith as provided
for in Section 2.2(d)), without prejudice, however, to the rights of the Holders
to request that such registration be effected as a registration under Section
2.1 and (ii) in the case of a determination to delay registering, shall be
permitted to delay registering any Registrable Securities, for the same period
as the delay in registering such other securities. No registration effected
under this Section 2.2 shall relieve the Company of its obligation to effect any
registration upon request under Section 2.1.

                                       7
<PAGE>
            (b) Right to Withdraw; Option to Participate in Shelf Takedowns. Any
Holder shall have the right to withdraw its request for inclusion of Registrable
Securities in any registration statement pursuant to this Section 2.2 at any
time prior to the effective date of such registration statement (but in no event
less than 24 hours prior to such date) by giving written notice to the Company
of its request to withdraw. In the event that the Holder has requested inclusion
of Registrable Securities in a shelf registration, the Holder shall have the
right, but not the obligation, to participate in any offering of the Company's
equity securities under such shelf registration.

            (c) Priority in Incidental Registrations. If any registration
pursuant to this Section 2.2 involves an underwritten offering and the managing
underwriter(s) of such offering shall inform the Company in writing of its
belief that the number of Registrable Securities requested to be included in
such registration or offering, when added to the number of other equity
securities to be offered in such registration or offering, would materially
adversely affect such offering, then the Company shall include in such
registration or offering, to the extent of the number and type which the Company
is so advised can be sold in (or during the time of) such registration or
offering without so materially adversely affecting such registration or offering
(the "Section 2.2 Sale Amount"), (i) all of the securities proposed by the
Company to be sold for its own account; (ii) thereafter, to the extent the
Section 2.2 Sale Amount is not exceeded, the Registrable Securities requested by
the Participating Holders (provided that if all of the Registrable Securities
requested by the Participating Holders may not be included, the Participating
Holders shall be entitled to participate on a pro rata basis based on the
aggregate number of shares of Registrable Securities requested by the
Participating Holders to be registered); and (iii) thereafter, to the extent the
Section 2.2 Sale Amount is not exceeded, any other securities of the Company
requested to be included by Company stockholders holding other such registration
rights.

                                       8
<PAGE>
            (d) Expenses. The Company shall pay, and shall be responsible for,
all Registration Expenses in connection with any registration requested pursuant
to this Section 2.2. Notwithstanding the foregoing, the provisions of this
Section 2.2(d) shall be deemed amended to the extent necessary to cause these
expense provisions to comply with "blue sky" laws of each state or the
securities laws of any other jurisdiction in the United States and its
territories in which the offering is made.

            (e) Selection of Underwriters. The underwriters of each underwritten
offering of the Registrable Securities pursuant to this Section 2.2 shall be
selected by the Company provided that the Majority Participating Holders shall
have the right to select a co-managing underwriter.

            (f) Plan of Distribution; Partner Distributions. Any participation
by Holders in a registration by the Company shall be in accordance with the
Company's plan of distribution, which shall include, upon the written request of
such Holder or Holders, a Partner Distribution. Notwithstanding anything
contained herein to the contrary, the Company shall, at the request of any
Holder seeking to effect a Partner Distribution, file any prospectus supplement
or post-effective amendments and otherwise take any action necessary to include
such language, if such language was not included in the initial registration
statement, or revise such language if deemed reasonably necessary by such Holder
to effect such Partner Distribution.

            (g) Right to Terminate Registration. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 2.2 prior to the effectiveness of such registration, whether or not any
Holder has elected to include Registrable Securities in such registration.

      2.3. Registration Procedures.

            (a) If and whenever the Company is required to effect the
registration of any Registrable Securities under the Securities Act pursuant to
either Section 2.1 or Section 2.2 hereof, the Company shall as expeditiously as
possible:

                  (i) prepare and file with the SEC as soon as practicable (and
in the case of a demand pursuant to Section 2.1, within 30 days after receipt by
the Company of a Demand Exercise Notice) a registration statement on an
appropriate registration form of the SEC for the disposition of such Registrable
Securities in accordance with the intended method of disposition thereof
(including, without limitation, a Partner Distribution) which registration
statement shall comply as to form in all material respects with the requirements
of the applicable form and include all financial statements required by the SEC
to be filed therewith, and thereafter use its best efforts to cause such
registration statement to become and remain effective (A) with respect to an
underwritten offering, for a period of at least 90 days or until all shares
subject to such registration statement have been sold and (B) with respect to a
shelf registration, until the earlier of (1) the sale of all Registrable
Securities thereunder and (2) the earlier of the tenth anniversary of the date
of this Agreement and the third anniversary of the effective date of such shelf
registration;

                                       9
<PAGE>
                  (ii) prepare and file with the SEC any amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such registration statement
in accordance with the intended methods of disposition by the Participating
Holders set forth in such registration statement for such period as provided for
in Section 2.3(a)(i) above;

                  (iii) furnish, without charge, to each Participating Holder
and each underwriter such number of conformed copies of such registration
statement and of each such amendment and supplement thereto (in each case
including all exhibits), such number of copies of the prospectus contained in
such registration statement (including each preliminary prospectus and summary
prospectus) and any other prospectus filed under Rule 424 under the Securities
Act, in conformity with the requirements of the Securities Act, and such other
documents, as the Majority Participating Holders and such underwriters may
request (it being understood that the Company consents to the use of such
prospectus or any amendment or supplement thereto by each Participating Holder
and the underwriters in connection with the offering and sale of the Registrable
Securities covered by such prospectus or any amendment or supplement thereto);

                  (iv) use its best efforts (A) to register or qualify all
Registrable Securities and other securities covered by such registration
statement under such state securities or blue sky laws where an exemption is not
available and as the Majority Participating Holders or any managing underwriter
shall reasonably request, (B) to keep such registration or qualification in
effect for so long as such registration statement remains in effect, and (C) to
take any and all other actions which may be necessary or advisable to enable the
Participating Holders or underwriters to consummate the disposition in such
jurisdictions of the securities to be sold by the Participating Holders or
underwriters, except that the Company shall not for any such purpose be required
to qualify generally to do business as a foreign corporation in any jurisdiction
wherein it would not, but for the requirements of this Section 2.3(a)(iv), be
obligated to be so qualified;

                  (v) use its best efforts to cause all Registrable Securities
covered by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary in the opinion of
counsel to the Company and counsel to the Participating Holders to consummate
the disposition of such Registrable Securities;

                  (vi) furnish to each Participating Holder and each underwriter
a signed counterpart of (A) an opinion of counsel for the Company and (B) a
"comfort" letter signed by the independent public accountants who have certified
the Company's financial statements included or incorporated by reference in such
registration statement, in each case, addressed to each Participating Holder and
each underwriter covering matters with respect to such registration statement
(and the prospectus included therein) as such Majority Participating Holders and
managing underwriter(s) shall request;

                                       10
<PAGE>
                  (vii) promptly notify each Participating Holder and each
managing underwriter (A) when such registration statement, any pre-effective
amendment, the prospectus or any prospectus supplement related thereto or
post-effective amendment to such registration statement has been filed, and,
with respect to such registration statement or any post-effective amendment,
when the same has become effective; (B) of the receipt by the Company of any
comments from the SEC or receipt of any request by the SEC for additional
information with respect to any registration statement or the prospectus related
thereto or any request by the SEC for amending or supplementing the registration
statement and the prospectus used in connection therewith; (C) of the issuance
by the SEC of any stop order suspending the effectiveness of such registration
statement or the initiation of any proceedings for that purpose; (D) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of any of the Registrable Securities for sale under the securities
or blue sky laws of any jurisdiction or the initiation of any proceeding for
such purpose; and (E) at any time when a prospectus relating thereto is required
to be delivered under the Securities Act, upon discovery that, or upon the
happening of any event as a result of which, the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, in the light of the
circumstances under which they were made, and in the case of this clause (E),
promptly prepare and furnish, at the Company's expense, to each Participating
Holder and each managing underwriter a number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made; and (F)
at any time when the representations and warranties of the Company contemplated
by Section 2.4(a) or (b) hereof cease to be true and correct;

                  (viii) otherwise comply with all applicable rules and
regulations of the SEC, and make available to its security holders, as soon as
practicable (and in any event within 16 months after the effective date of the
registration statement), an earnings statement covering the period of at least
twelve (12) consecutive months beginning with the first full calendar month
after the effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 promulgated thereunder;

                  (ix) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration statement
from and after a date not later than the effective date of such registration
statement;

                  (x) (A) use its best efforts to cause all Registrable
Securities covered by such registration statement to be listed on the principal
securities exchange on which similar securities issued by the Company are then
listed (if any), if the listing of such Registrable Securities is then permitted
under the rules of such exchange, or (B) if no similar securities are then so
listed, use its best efforts to (1) cause all such Registrable Securities to be
listed on a national securities exchange or (2) secure designation of all such
Registrable Securities as a National Association of Securities Dealers, Inc.
Automated Quotation System ("Nasdaq") "national market system security" within
the meaning of Rule 11Aa2-1 of the SEC or (3) failing that, to secure Nasdaq
authorization for such shares and, without limiting the generality of the
foregoing, to arrange for at least two market makers to register as such with
respect to such shares with the NASD;

                                       11
<PAGE>
                  (xi) deliver promptly to counsel to the Participating Holders
and each underwriter, if any, participating in the offering of the Registrable
Securities, copies of all correspondence between the SEC and the Company, its
counsel or auditors and all memoranda relating to discussions with the SEC or
its staff with respect to such registration statement;

                  (xii) use its best efforts to obtain the withdrawal of any
order suspending the effectiveness of the registration statement;

                  (xiii) provide a CUSIP number for all Registrable Securities,
no later than the effective date of the registration statement and provide the
applicable transfer agents with printed certificates for the Registrable
Securities which are in a form eligible for deposit with The Depository Trust
Company;

                  (xiv) cause its officers and employees to participate in, and
to otherwise facilitate and cooperate with the preparation of the registration
statement and prospectus and any amendments or supplements thereto (including
participating in meetings, drafting sessions, due diligence sessions and the
marketing of the Registrable Securities covered by the registration statement
(including, without limitation, participation in "road shows") taking into
account the Company's business needs;

                  (xv) enter into and perform its obligations under such
customary agreements (including, without limitation, if applicable, an
underwriting agreement as provided for in Section 2.4 herein) and take such
other actions as the Majority Participating Holders or managing underwriter(s)
shall reasonably request in order to expedite or facilitate the disposition of
such Registrable Securities;

                  (xvi) promptly incorporate in a prospectus supplement or
post-effective amendment such information as the managing underwriter(s) or
Majority Participating Holders reasonably request to be included therein
relating to the plan of distribution with respect to such Registrable
Securities; and make all required filings of such prospectus supplement or
post-effective amendment as soon as practicable after being notified of the
matters to be incorporated in such prospectus supplement or post-effective
amendment;

                  (xvii) cooperate with each Participating Holder and each
underwriter, and their respective counsel in connection with any filings
required to be made with the NASD, New York Stock Exchange, or any other
securities exchange on which such Registrable Securities are traded or will be
traded;

                  (xviii) promptly prior to the filing of any document which is
to be incorporated by reference into the registration statement or the
prospectus contained therein (after the initial filing of such registration
statement) provide copies of such document to counsel for the Participating
Holders and to each managing underwriter, and make the Company's representatives
available for discussion of such document and make such changes in such document
concerning the Participating Holders prior to the filing thereof as counsel for
such Participating Holders or underwriters may request;

                                       12
<PAGE>
                  (xix) furnish to each Participating Holder and each managing
underwriter(s), without charge, at least one signed (which may be a conforming
signature) copy of the registration statement and any post-effective amendments
thereto, including financial statements and schedules, all documents
incorporated therein by reference and all exhibits (including those incorporated
by reference);

                  (xx) cooperate with the Participating Holders and the managing
underwriter(s) to facilitate the timely preparation and delivery of certificates
not bearing any restrictive legends representing the Registrable Securities to
be sold, and cause such Registrable Securities to be issued in such
denominations and registered in such names in accordance with the underwriting
agreement prior to any sale of Registrable Securities to the underwriters or, if
not an underwritten offering, in accordance with the instructions of the
Participating Holders at least five business days prior to any sale of
Registrable Securities and instruct any transfer agent or registrar of
Registrable Securities to release any stop transfer orders in respect thereof;

                  (xxi) to the extent required by the rules and regulations of
the NASD, retain a Qualified Independent Underwriter, which shall be reasonably
acceptable to the Majority Participating Holders; and

                  (xxii) take no direct or indirect action prohibited by
Regulation M under the Exchange Act; provided, however, that to the extent that
any prohibition is applicable to the Company, the Company will take such action
as is necessary to make any such prohibition inapplicable.

            (b) Each Participating Holder agrees that upon receipt of any notice
from the Company of the happening of any event of the kind described in Section
2.3(a)(vii)(C) or (E), each Participating Holder will, to the extent
appropriate, discontinue its disposition of Registrable Securities pursuant to
the registration statement relating to such Registrable Securities until, in the
case of Section 2.3(a)(vii)(E), its receipt of the copies of the supplemented or
amended prospectus contemplated by Section 2.3(a)(vii)(E) and, if so directed by
the Company, will deliver to the Company (at the Company's expense) all copies,
other than permanent file copies, then in its possession, of the prospectus
relating to such Registrable Securities current at the time of receipt of such
notice. If the disposition by a Participating Holder of its securities is
discontinued pursuant to the foregoing sentence, the Company shall extend the
period of effectiveness of the registration statement by the number of days
during the period from and including the date of the giving of such notice to
and including the date when the Participating Holder shall have received copies
of the supplemented or amended prospectus contemplated by Section
2.3(a)(vii)(E); and, if the Company shall not so extend such period, the
Participating Holder's request pursuant to which such registration statement was
filed shall not be counted for purposes of the requests for registration to
which the Participating Holder is entitled pursuant to Section 2.1 hereof. If
for any other reason the effectiveness of any registration statement filed
pursuant to Section 2.1 or Section 2.2 is suspended or interrupted prior to the
expiration of the time period regarding the maintenance of the effectiveness of
such Registration Statement required by Section 2.3(a)(i) so that Registrable
Securities may not be sold pursuant thereto, the applicable time period shall be
extended by the number of days equal to the number of days during the period
beginning with the date of such suspension or interruption to and ending with
the date when the sale of Registrable Securities pursuant to such registration
statement may be resumed.

                                       13
<PAGE>
            (c) If any such registration statement or comparable statement under
"blue sky" laws refers to any Holder by name or otherwise as the Holder of any
securities of the Company, then such Holder shall have the right to require (i)
the insertion therein of language, in form and substance satisfactory to such
Holder and the Company, to the effect that the holding by such Holder of such
securities is not to be construed as a recommendation by such Holder of the
investment quality of the Company's securities covered thereby and that such
holding does not imply that such Holder will assist in meeting any future
financial requirements of the Company, or (ii) in the event that such reference
to such Holder by name or otherwise is not in the judgment of the Company, as
advised by counsel, required by the Securities Act or any similar federal
statute or any state "blue sky" or securities law then in force, the deletion of
the reference to such Holder.

      2.4. Underwritten Offerings.

            (a) Demanded Underwritten Offerings. If requested by the
underwriters for any underwritten offering by the Participating Holders pursuant
to a registration requested under Section 2.1, the Company shall enter into a
customary underwriting agreement with the managing underwriter(s) selected by
the Majority Participating Holders (in accordance with Section 2.1(f) hereto).
Such underwriting agreement shall be reasonably satisfactory in form and
substance to the Majority Participating Holders and shall contain such
representations and warranties by, and such other agreements on the part of, the
Company and such other terms as are generally prevailing in agreements of that
type, including, without limitation, customary provisions relating to
indemnification and contribution which are no less favorable to the recipient
than those provided in Section 2.6 hereof. Each Participating Holder shall be a
party to such underwriting agreement and may, at their option, require that any
or all of the representations and warranties by, and the other agreements on the
part of, the Company to and for the benefit of such underwriters shall also be
made to and for the benefit of each Participating Holder and that any or all of
the conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of each
Participating Holder. No Participating Holder shall be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding such
Participating Holder, its ownership of and title to the Registrable Securities,
and its intended method of distribution; and any liability of any Participating
Holder to any underwriter or other person under such underwriting agreement
shall be limited to liability arising from breach of its representations and
warranties and shall be limited to an amount equal to the proceeds (net of
expenses and underwriting discounts and commissions) that it derives from such
registration.

                                       14
<PAGE>
            (b) Incidental Underwritten Offerings. In the case of a registration
pursuant to Section 2.2 hereof, if the Company shall have determined to enter
into an underwriting agreement in connection therewith, all of the Registrable
Securities to be included in such registration shall be subject to such
underwriting agreements. The Participating Holders may, at their option, require
that any or all of the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of the Participating
Holders and that any or all of the conditions precedent to the obligations of
such underwriters under such underwriting agreement be conditions precedent to
the obligations of the Participating Holders. None of the Participating Holders
shall be required to make any representations or warranties to or agreements
with the Company or the underwriters other than representations, warranties or
agreements regarding such Participating Holder, its ownership of and title to
the Registrable Securities and its intended method of distribution; and any
liability of any Participating Holder to any underwriter or other Person under
such underwriting agreement shall be limited to liability arising from breach of
its representations and warranties and shall be limited to an amount equal to
the proceeds (net of expenses and underwriting discounts and commissions) that
it derives from such registration.

            (c) Participation in Underwritten Registrations. In the case of an
underwritten registration pursuant to Section 2.1 or Section 2.2 hereof, as the
Company may from time to time reasonably request in writing, the Company may
require the Participating Holders (i) to furnish the Company such information
regarding such Participating Holders and the distribution of the Registrable
Securities to enable the Company to comply with the requirements of applicable
laws or regulations in connection with such registration and (ii) to complete
and execute all customary questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements. The Company shall not be obligated to effect
the registration of any Registrable Securities of a particular Participating
Holder unless such information and documents regarding such Participating Holder
and the distribution of such Participating Holder's Registrable Securities is
provided to the Company.

      2.5. Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the Participating Holders, the
managing underwriter(s), and their respective counsel, accountants and other
representatives and agents the opportunity to participate in the preparation of
such registration statement, each prospectus included therein or filed with the
SEC, and each amendment thereof or supplement thereto or comparable statements
under securities or blue sky laws of any jurisdiction, and give each of the
foregoing parties access to its books and records, all financial and other
records, pertinent corporate documents and properties of the Company and its
subsidiaries, and such opportunities to discuss the business of the Company and
its subsidiaries with their respective directors, officers and employees and the
independent public accountants who have certified the Company and its
subsidiaries' financial statements, and supply all other information and respond
to all inquiries requested by such Participating Holders, managing
underwriter(s), or their respective counsel, accountants or other
representatives or agents in connection with such registration statement, as
shall be necessary or appropriate, in the opinion of counsel to such
Participating Holder or managing underwriter(s), to conduct a reasonable
investigation within the meaning of the Securities Act, and the Company shall
not file any registration statement or amendment thereto or any prospectus or
supplement thereto to which the Majority Participating Holders or the managing
underwriter(s) shall object.

                                       15
<PAGE>
      2.6. Indemnification.

            (a) Indemnification by the Company. The Company agrees that in the
event of any registration of any Registrable Securities under the Securities
Act, the Company shall, and hereby does, indemnify and hold harmless, to the
fullest extent permitted by law, (i) each of the Holders and their Affiliates,
(ii) each of the Holders' and their Affiliates' respective Affiliates, officers,
directors, successors, assigns, members, partners, shareholders, employees,
advisors, representatives, and agents, (iii) each other Person who participates
as an underwriter or Qualified Independent Underwriter in the offering or sale
of such securities, (iv) each Person who controls (within the meaning of the
Securities Act or the Exchange Act) any of the Persons listed in clauses (i),
(ii), (iii) or (iv), and (v) any representative (legal or otherwise) of any of
the Persons listed in clauses (i), (ii), (iii) or (iv) (collectively, the
"Indemnitees"), from and against any losses, penalties, fines, liens, judgments,
suits, claims, damages, liabilities, costs and expenses (including reasonable
attorney's fees and any amounts paid in any settlement effected in compliance
with Section 2.6(e)) or liabilities, joint or several (or actions or
proceedings, whether commenced or threatened, in respect thereof, and whether or
not such Indemnitee is a party thereto) ("Losses"), to which such Indemnitee has
become or may become subject under the Securities Act or otherwise, insofar as
such Losses arise out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, or any
preliminary prospectus, final prospectus or summary prospectus contained
therein, any amendment or supplement thereto, or any documents incorporated by
reference therein, (ii) 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, or (iii) any violation by the Company of any federal,
state or common law rule or regulation applicable to the Company and relating to
action required of or inaction by the Company in connection with any such
registration, and the Company shall reimburse such Indemnitee for any reasonable
legal or any other fees or expenses incurred by it in connection with
investigating or defending any such Loss; provided that the Company shall not be
liable to an Indemnitee to the extent that any such Loss arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement, or
document incorporated by reference, in reliance upon and in conformity with
written information furnished to the Company by or on behalf of such Indemnitee,
which specifically states that it is for use in the preparation of such
registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement.

            (b) Indemnification by Participating Holders. As a condition to
including any Registrable Securities in any registration statement, the Company
shall have received an undertaking reasonably satisfactory to it from each
Participating Holder so including any Registrable Securities to, severally and
not jointly, to the fullest extent permitted by law, indemnify and hold harmless
(i) the Company, each director and officer of the Company (including each
officer of the Company that signed the registration statement), employees and
agents and each other Person, if any, who controls the Company within the
meaning of the Securities Act or Exchange Act and (ii) any underwriters of the
Registrable Securities, their officers and directors and each person who
controls such underwriters (within the meaning of the Securities Act or the
Exchange Act), with respect to any statement or alleged statement in or omission
or alleged omission from such registration statement, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, but only to the extent such statement or
alleged statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished by such Participating Holder to
the Company specifically for use in the preparation of such registration
statement, preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement and such Participating Holder shall reimburse such
indemnified party for any reasonable legal or any other fees or expenses
reasonably incurred by them in connection with investigating or defending any
such Loss; provided, however, that the liability of such indemnifying party
under this Section 2.6(b) shall be limited to the amount of proceeds (net of
expenses and underwriting discounts and commissions) received by such
indemnifying party in the offering giving rise to such liability. Each
Participating Holder shall also indemnify and hold harmless all other
prospective sellers and Participating Holders, their respective Affiliates,
officers, directors, successors, assigns, members, partners, shareholders,
employees, advisors, representatives, and agents, and each Person who controls
(within the meaning of the Securities Act or the Exchange Act) any such seller
or Participating Holder to the same extent as provided above with respect to
indemnification of the Company and underwriters.

                                       16
<PAGE>
            (c) Notices of Claims. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in Section 2.6(a) or Section 2.6(b), such indemnified party
shall, if a claim in respect thereof is to be made against an indemnifying
party, give written notice to such indemnifying party of the commencement of
such action or proceeding; provided, however, that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under Section 2.6(a) or Section 2.6(b),
except to the extent that the indemnifying party is actually and materially
prejudiced by such failure to give notice, and shall not relieve the
indemnifying party from any liability which it may have to the indemnified party
otherwise than under this Section 2.6.

            (d) Defense of Claims. In case any such action or proceeding is
brought against an indemnified party, except as provided for in the next
sentence, the indemnifying party shall be entitled to participate therein and
assume the defense thereof, jointly with any other indemnifying party, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof and approval by the indemnified party of such counsel, the
indemnifying party shall not be liable to such indemnified party for any legal
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than costs of investigation and the indemnified party
shall be entitled to participate in such defense at its own expense. If (i) the
indemnifying party fails to notify the indemnified party in writing, within 15
days after the indemnified party has given notice of the action or proceeding,
that the indemnifying party will indemnify the indemnified party from and
against all Losses the indemnified party may suffer resulting from, arising out
of, relating to, in the nature of, or caused by the claim, (ii) the indemnifying
party fails to provide the indemnified party with evidence acceptable to the
indemnified party that the indemnifying party will have the financial resources
to defend against the claim or proceeding and fulfill its indemnification
obligations hereunder, (iii) the indemnifying party fails to defend diligently
the action or proceeding within 15 days after receiving notice of such failure
from such indemnified party; (iv) such indemnified party reasonably shall have
concluded (upon advice of its counsel) that there may be one or more legal
defenses available to such indemnified party or other indemnified parties which
are not available to the indemnifying party; or (v) if such indemnified party
reasonably shall have concluded (upon advice of its counsel) that, with respect
to such claims, the indemnified party and the indemnifying party may have
different, conflicting, or adverse legal positions or interests then, in any
such case, the indemnified party shall have the right to assume or continue its
own defense and the indemnifying party shall be liable for any fees and expenses
therefor.

                                       17
<PAGE>
            (e) Consent to Entry of Judgment and Settlements. No indemnifying
party shall be liable for any settlement of any action or proceeding effected
without its written consent, which consent shall not be unreasonably withheld,
provided, that, in the case where the indemnifying party shall have failed to
take any of the actions listed in clauses (i), (ii) or (iii) of the last
sentence of Section 2.6(d), the indemnified party shall have the right to
compromise or settle such action on behalf of and for the account, expense, and
risk of the indemnifying party and the indemnifying party will remain
responsible for any Losses the indemnified party may suffer resulting from,
arising out of, relating to, in the nature of, or caused by the action or
proceeding to the fullest extent provided in this Section 2.6. No indemnifying
party shall, without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (A) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim, (B) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party and
(C) does not require any action other than the payment of money by the
indemnifying party.

            (f) Contribution. If for any reason the indemnification provided for
in Sections 2.6(a), (b) or (g) is unavailable to an indemnified party or
insufficient in respect of any Losses referred to therein, then, in lieu of the
amount paid or payable under Sections 2.6(a), (b) or (g), the indemnifying party
shall contribute to the amount paid or payable by the indemnified party as a
result of such Loss (i) in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand, and the indemnified
party on the other, with respect to the statements or omissions which resulted
in such Loss, as well as any other relevant equitable considerations, or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law
or if the allocation provided in this clause (ii) provides a greater amount to
the indemnified party than clause (i) above, in such proportion as shall be
appropriate to reflect not only the relative fault but also the relative
benefits received by the indemnifying party and the indemnified party from the
offering of the securities covered by such registration statement as well as any
other relevant equitable considerations. The relative fault 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 relates to information supplied by the indemnifying party or the
indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The parties hereto agree that it would not be just and equitable if
contributions pursuant to this Section 2.6(f) were to be determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to in the preceding sentence of this
Section 2.6(f). 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 amount paid or payable by an indemnified party as a
result of the Losses referred to in Sections 2.6(a), (b) or (g) shall be deemed
to include, subject to the limitations set forth in Sections 2.6(a), (b) and
(g), any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding anything in this Section 2.6(f) to the contrary, no
Participating Holder shall be required to contribute any amount in excess of the
proceeds (net of expenses and underwriting discounts and commissions) received
by such Participating Holder from the sale of the Registrable Securities in the
offering to which the Losses of the indemnified parties relate.

                                       18
<PAGE>
            (g) Other Indemnification. Indemnification and contribution similar
to that specified in the preceding subsections of this Section 2.6 (with
appropriate modifications) shall be given by the Company and the Participating
Holders with respect to any required registration or other qualification of
securities under state or blue sky law or regulation. The indemnification
agreements contained in this Section 2.6 shall be in addition to any other
rights to indemnification or contribution which any indemnified party may have
pursuant to law or contract and shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any Indemnitee or
other indemnified party and shall survive the transfer of any of the Registrable
Securities by any such party.

            (h) Indemnification Payments. The indemnification and contribution
required by this Section 2.6 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and when bills are
received or a Loss is incurred.

      2.7. Limitation on Sale of Securities.

            (a) For the Company and Others. If the Company receives a request
for registration pursuant to an underwritten offering of Registrable Securities
pursuant to Section 2.1 or 2.2 hereof, and if such a request is being
implemented or has not been withdrawn or abandoned, the Company agrees that (i)
the Company shall not effect any public or private offer, sale, distribution or
other disposition of any of its equity securities or of any security convertible
into or exchangeable or exercisable for any equity security of the Company or
effect any registration of any of such securities under the Securities Act (in
each case, other than (x) option grants to employees and directors pursuant to
the Company's option plan, (y) as part of such registration and (z) as a
registration using Form S-8 or any successor or similar form which is then in
effect), whether or not for sale for its own account, during the period
beginning on the date the Company receives such request until 90 days after the
effective date of such registration (or such shorter period as the managing
underwriter(s) may require) and (ii) the Company shall use its reasonable best
efforts to obtain from each of its executive officers, directors and each
affiliate thereof that is in each case the beneficial owner of 1% or more of
Common Stock, an agreement not to effect any public or private offer, sale,
distribution or other disposition of Common Stock, or any securities that are
convertible or exchangeable or exercisable for Common Stock, during the period
referred to in clause (i) of this paragraph, including, without limitation, a
sale pursuant to Rule 144 under the Securities Act.

                                       19
<PAGE>
            (b) For the Holders. If the Company receives a request for
registration pursuant to an underwritten offering of Registrable Securities
pursuant to Section 2.1 or 2.2 hereof, and if such a request is being
implemented or has not been withdrawn or abandoned, each Holder agrees that, to
the extent requested in writing by the managing underwriter(s), it will not
effect any public or private offer, sale, distribution or other disposition of
any Registrable Securities, or any securities convertible into or exchangeable
or exercisable for such Registrable Securities (other than the conversion of
shares of the Series A Preferred Stock), including, without limitation, any sale
pursuant to Rule 144 under the Securities Act, during the 90-day period
beginning on the effective date of such registration statement (or such shorter
period as the managing underwriter(s) may require), provided, that each Holder
has received the written notice required by Sections 2.1(a) and 2.2(a); and
further, provided, that in connection with such underwritten offering each
officer and director of the Company is subject to restrictions substantially
equivalent to those imposed on the Holders.

      2.8. No Required Sale. Nothing in this Agreement shall be deemed to create
an independent obligation on the part of any of the Holders to sell any
Registrable Securities pursuant to any effective registration statement.

      2.9. Rule 144; Rule 144A; Regulation S. The Company covenants that, at its
own expense, it will file the reports required to be filed by it under the
Securities Act and the Exchange Act, and it will take such further action as any
Holder may reasonably request, all to the extent required from time to time to
enable such Holder to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (i) Rules
144, 144A or Regulation S under the Securities Act or (ii) any similar rule or
regulation hereafter adopted by the SEC. Upon the request of a Holder, the
Company, at its own expense, will promptly deliver to such Holder (i) a written
statement as to whether it has complied with such requirements (and such Holder
shall be entitled to rely upon the accuracy of such written statement), (ii) a
copy of the most recent annual or quarterly report of the Company and (iii) such
other reports and documents as such Holder may reasonably request in order to
avail itself of any rule or regulation of the SEC allowing it to sell any
Registrable Securities without registration.

      2.10 The Company agrees that it shall not effect or permit to occur any
combination or subdivision of shares which would adversely affect the ability of
the Holders to include any Registrable Securities in any registration
contemplated by this Agreement or the marketability of such Registrable
Securities in any such registration. The Company agrees, upon obtaining
necessary approval, that it will take all steps necessary to effect a
combination or subdivision of shares if in the judgment of the Purchaser or
managing underwriter(s) such combination or subdivision would enhance the
marketability of the Registrable Securities.

                                       20
<PAGE>
                                    SECTION 3

                 SUBSEQUENT REGISTRATION RIGHTS, NO INCONSISTENT
                                   AGREEMENTS

      3.1. Limitations on Subsequent Registration Rights. From and after the
date of this Agreement until the Holders and their respective assigns shall no
longer hold any Registrable Securities, without the prior written consent of the
Purchaser, the Company shall not enter into an agreement that grants a holder or
prospective holder of any securities of the Company demand or incidental
registration rights that by their terms are not subordinate to the registration
rights granted to the Holders in this Agreement. Notwithstanding the foregoing,
if after the date of this Agreement the Company enters into any other agreement
with respect to the registration of any of its equity securities, and the terms
contained therein are more favorable to, or less restrictive on, the other party
thereto than the terms and conditions contained in this Agreement (insofar as
they are applicable) with respect to the Holders, then the terms of this
Agreement shall immediately be deemed to have been amended without further
action by the Company or the Holders so that the Holders shall be entitled to
the benefit of any such more favorable or less restrictive terms or conditions.

      3.2. No Inconsistent Agreements. The Company will not, on or after the
date of this Agreement, enter into any agreement with respect to its securities
which is inconsistent with the rights granted to the Holders in Section 2 or
otherwise conflicts with the provisions of Section 2, other than any customary
lock-up agreement with the underwriters in connection with any offering effected
hereunder, pursuant to which the Company shall agree not to register for sale,
and the Company shall agree not to sell or otherwise dispose of, Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock,
for a specified period (not to exceed 180 days) following such offering. Except
as set forth on Schedule 3.6 of the Company Disclosure Schedules, the Company
warrants that the rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with any other agreements to which the
Company is a party or by which it is bound. Except as set forth on Schedule 3.6
the Company Disclosure Schedules, the Company has not previously entered into
any agreement with respect to its securities granting any registration rights to
any Person.

                                    SECTION 4

                                  MISCELLANEOUS

      4.1. Amendments and Waivers. This Agreement and any of the provisions
hereof may be amended, waived (either generally or in a particular instance and
either retroactively or prospectively), modified or supplemented, in whole or in
part, only by written agreement of the Company (by an independent committee of
the Board of Directors) and the Purchaser; provided, however, that any
amendment, waiver, modification or supplement of Section 2.6 shall require the
written agreement of the Company and all Holders; and provided, further, that
the observance of any provision of this Agreement may be waived in writing by
the party that will lose the benefit of such provision as a result of such
waiver. The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a further or continuing waiver of
such breach or as a waiver of any other or subsequent breach, except as
otherwise explicitly provided for in such waiver. Except as otherwise expressly
provided herein, no failure on the part of any party to exercise, and no delay
in exercising, any right, power or remedy hereunder, or otherwise available in
respect hereof at law or in equity, shall operate as a waiver thereof, nor shall
any single or partial exercise of such right, power or remedy by such party
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. The execution of a counterpart signature page to this
Agreement after the date hereof by any Person as provided for herein shall not
require consent of any party hereto and shall not be deemed an amendment to this
Agreement.

                                       21
<PAGE>
      4.2. Assignment; Third Party Beneficiaries. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and any of their respective successors, personal representatives and
permitted assigns who agree in writing to be bound by the terms hereof. The
Company may not assign any of its rights or delegate any of its duties under
this Agreement without the prior written consent of the Holders. Any Holder may,
at its election and at any time or from time to time, assign its rights and
delegate its duties under this Agreement, in whole or in part, to an Affiliate,
to a partner of such Holder or Affiliate or to any Person to whom the Holder
sells, assigns or otherwise transfers any of its Registrable Securities (an
"Assignee"); provided that, no such assignment shall be binding upon or obligate
the Company to any such Assignee unless and until the Assignee delivers to the
Company (i) a written notice stating the name and address of the Assignee and
identifying the securities with respect to which such rights are being assigned,
if any, and (ii) a written instrument by which such Assignee agrees to be bound
by the obligations imposed upon Holders under this Agreement to the same extent
as if such Assignee were a party hereto (or executes and delivers to the Company
a counterpart to this Agreement and agrees to be treated as a "Holder" for all
purposes of this Agreement).

      4.3. Notice. Unless otherwise provided herein, all notices, requests,
demands, claims and other communications provided for under the terms of this
Agreement shall be in writing and shall be delivered personally, telecopied or
sent by certified, registered or express mail, postage prepaid. Any such notice
shall be deemed given if delivered personally or telecopied, on the date of such
delivery, or if sent by reputable overnight courier, on the first business day
following the date of such mailing, as follows:

            (a) If to any of the Purchasers, to:

            Onex Partners LP
            712 Fifth Avenue, 40th Floor
            New York, New York 10019
            Facsimile: (212) 582-0909
            Attention: Robert M. LeBlanc, Managing Director

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

                                       22
<PAGE>
            Stites & Harbison PLLC
            400 West Market Street
            Suite 1800
            Louisville, Kentucky 40202
            Facsimile: (502) 587-6391
            Attention: James C. Seiffert

            (b) If to the Company, to:

            Res-Care, Inc.
            10140 Linn Station Road
            Louisville, Kentucky 40223-3813
            Facsimile: (502) 394-2164
            Attention: Ronald G. Geary, Chairman, President and CEO

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

            Frost Brown Todd LLC
            400 West Market Street
            32nd Floor
            Louisville, Kentucky 40202-3363
            Facsimile: (502) 581-1087
            Attention: C. Edward Glasscock

      Any party may by notice given in accordance with this Section 4.3
designate another address or person for receipt of notices hereunder.

      4.4. Governing Law; Venue; Service of Process; Waiver of Jury Trials.

            (a) Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights and obligations of the parties hereto shall be
governed by, the laws of the Commonwealth of Kentucky, without regard to or
application of its conflicts of laws principles.

            (b) Venue and Service of Process. By execution and delivery of this
Agreement, each of the parties hereto hereby irrevocably and unconditionally (i)
consents to submit to the exclusive jurisdiction of the courts of the
Commonwealth of Kentucky in Jefferson County and the United States District
Court for the Western District of Kentucky (the "Selected Courts") for any
action or proceeding arising out of or relating to this Agreement and the
transactions contemplated hereby, and agrees not to commence any action or
proceeding relating thereto except in the Selected Courts, provided, that, a
party may commence any action or proceeding in a court other than a Selected
Court solely for the purpose of enforcing an order or judgment issued by one of
the Selected Courts; (ii) consents to service of any process, summons, notice or
document in any action or proceeding by registered first-class mail, postage
prepaid, return receipt requested or by nationally recognized courier
guaranteeing overnight delivery in accordance with Section 4.3 hereof and agrees
that such service of process shall be effective service of process for any
action or proceeding brought against it in any such court, provided, that,
nothing herein shall affect the right of any party hereto to serve process in
any other manner permitted by law; (iii) waives any objection to the laying of
venue of any action or proceeding arising out of this Agreement or the
transactions contemplated hereby in the Selected Courts; and (iv) waives and
agrees not to plead or claim in any court that any such action or proceeding
brought in any such Selected Court has been brought in an inconvenient forum.

                                       23
<PAGE>
            (c) Waiver of Jury Trial. With respect to any action or proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby, each of the parties hereby irrevocably, to the extent not prohibited by
applicable law that cannot be waived, waives, and covenants that it will not
assert (whether as plaintiff, defendant or otherwise), any right to trial by
jury in any action arising in whole or in part under or in connection with this
Agreement or the transactions contemplated hereby, whether now existing or
hereafter arising, and whether sounding in contract, tort or otherwise, and
agrees that any of them may file a copy of this paragraph with any court as
written evidence of the knowing, voluntary and bargained-for agreement among the
parties irrevocably to waive its right to trial by jury in any action or
proceeding whatsoever between them relating to this Agreement or the
transactions contemplated hereby. Such action or proceeding shall instead be
tried in a Selected Court by a judge sitting without a jury.

      4.5. Remedies. The parties hereto agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with its specific terms or was otherwise breached and
further agree that money damages or other remedy at law would not be a
sufficient or adequate remedy for any breach or violation of, or a default
under, this Agreement by them and that, in addition to all other remedies
available to them, each of them shall be entitled to an injunction restraining
such breach, violation or default or threatened breach, violation or default and
to any other equitable relief, including, without limitation, specific
performance of the terms and provisions of this Agreement. Any requirements for
the securing or posting of any bond with respect to such remedy are hereby
waived by each of the parties hereto. Each party further agrees that, in the
event of any action for an injunction or other equitable remedy in respect of
such breach or enforcement of specific performance, it will not assert the
defense that a remedy at law would be adequate. In any action or proceeding
brought to enforce any provision of this Agreement (including the
indemnification provisions thereof), or where any provision hereof is validly
asserted as a defense, the successful party to such action or proceeding shall
be entitled to recover, to the extent permitted by applicable law, attorneys'
fees in addition to its costs and expenses and any other available remedy.

      4.6. Further Assurances. Each party hereto shall cooperate with each other
party, shall do and perform or cause to be done and performed all further acts
and things, and shall execute and deliver all other agreements, certificates,
instruments, and documents as any other party hereto reasonably may request in
order to carry out the intent and accomplish the purposes of this Agreement and
the consummation of the transactions contemplated hereby.

      4.7. Severability. If any one or more of the provisions contained herein,
or the application thereof in any circumstance, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provisions held
invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.

                                       24
<PAGE>
      4.8. Entire Agreement. This Agreement, the Purchase Agreement and the
documents referred to herein or therein or delivered pursuant hereto or thereto,
are 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 and therein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein or therein. This
Agreement, the Purchase Agreement and the documents referred to herein or
therein or delivered pursuant hereto or thereto, supersede all prior agreements
and understandings between the parties with respect to such subject matter.

      4.9. Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, all 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.

      4.10. Defaults. A default by any party to this Agreement in such party's
compliance with any of the conditions or covenants hereof or performance of any
of the obligations of such party hereunder shall not constitute a default by any
other party.

      4.11. General Interpretive Principles. Whenever used in this Agreement,
except as otherwise expressly provided or unless the context otherwise requires,
any noun or pronoun shall be deemed to include the plural as well as the
singular and to cover all genders. The headings of the sections, paragraphs,
subparagraphs, clauses and subclauses of this Agreement are for convenience of
reference only and shall not in any way affect the meaning or interpretation of
any of the provisions hereof. Unless otherwise specified, the terms "hereof,"
"herein" and similar terms refer to this Agreement as a whole, and references
herein to Sections refer to Sections of this Agreement. Words of inclusion shall
not be construed as terms of limitation herein, so that references to "include",
"includes" and "including" shall not be limiting and shall be regarded as
references to non-exclusive and non-characterizing illustrations.

                                       25
<PAGE>
      IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their respective officers thereunto duly authorized.

                                    RES-CARE, INC.

                                    By: /s/ Ronald G. Geary
                                       -----------------------------------------
                                    Name:  Ronald G. Geary
                                    Title: President

                                    ONEX PARTNERS LP

                                    By: ONEX PARTNERS GP LP, its General Partner

                                    By: ONEX PARTNERS MANAGER LP, its Agent

                                    By: ONEX PARTNERS MANAGER GP INC.,
                                        its General Partner

                                    By: /s/ Robert M. Le Blanc
                                       -----------------------------------------
                                    Name:  Robert M. Le Blanc
                                    Title: Managing Director

                                    By: /s/ Eric J. Rosen
                                       -----------------------------------------
                                    Name:  Eric J. Rosen
                                    Title: Managing Director

                                    ONEX AMERICAN HOLDINGS II LLC

                                    By: /s/ Eric J. Rosen
                                       -----------------------------------------
                                    Name:  Eric J. Rosen
                                    Title: Director

                                    By: /s/ Donald F. West
                                       -----------------------------------------
                                    Name:  Donald F. West
                                    Title: Director

                                       26
<PAGE>
                                    ONEX US PRINCIPALS LP

                                    By: ONEX AMERICAN HOLDINGS GP LLC,
                                    its General Partner

                                    By: /s/ Eric J. Rosen
                                       -----------------------------------------
                                    Name:  Eric J. Rosen
                                    Title: Director

                                    By: /s/ Donald F. West
                                       -----------------------------------------
                                    Name:  Donald F. West
                                    Title: Director

                                    RESCARE EXECUTIVE INVESTCO LLC

                                    By: /s/ Robert M. Le Blanc
                                       -----------------------------------------
                                    Name:  Robert M. Le Blanc
                                    Title: Director

                                    By: /s/ Donald F. West
                                       -----------------------------------------
                                    Name:  Donald F. West
                                    Title: Director

                                       27

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