AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”) dated as of March 22, 2006 (this “Agreement”) is made by and among National Mentor Holdings, Inc., a Delaware corporation (the “Company”), NMH Holdings, LLC, a Delaware limited liability company (“Purchaser”), and NMH Mergersub, Inc., a Delaware corporation and a wholly-owned subsidiary of Purchaser (“PurchaserSub”). Certain capitalized terms used herein have the meanings set forth in ARTICLE 9.

RECITALS

WHEREAS, the board of directors of the Company and the board of directors of Purchaser have each approved the terms and conditions of the acquisition of the Company by Purchaser to be effected by the merger of PurchaserSub with and into the Company, pursuant to the terms and subject to the conditions of this Agreement and the DGCL.

WHEREAS, as an inducement for the Company, Purchaser and PurchaserSub to enter into this Agreement, Vestar Capital Partners V, L.P. (“Vestar”), currently the sole member of Purchaser, has, on the date hereof, executed and delivered to the Company a limited guaranty (the “Guaranty”) of the obligations of Purchaser and PurchaserSub hereunder.

NOW, THEREFORE, in consideration of the foregoing, and of the representations, warranties, covenants and agreements contained herein, and intending to be legally bound, the parties hereto agree as follows:

ARTICLE 1
THE MERGER

SECTION 1.01. The Merger.

(a)           At the Effective Time, PurchaserSub shall be merged with and into the Company in accordance with the terms and conditions of this Agreement and the DGCL (the “Merger”), at which time the separate existence of PurchaserSub shall cease and the Company shall continue its existence. In its capacity as the corporation surviving the Merger, the Company is sometimes referred to as the “Surviving Corporation.”

(b)           As soon as practicable after satisfaction or, to the extent permitted hereby, waiver of all conditions to the Merger set forth herein, the Company and PurchaserSub shall cause to be executed, acknowledged and filed a certificate of merger, substantially in the form of Exhibit A attached hereto (the “Certificate of Merger”) with the Secretary of State of the State of Delaware (the “Secretary”) and make all other filings or recordings required by Section 251 of the DGCL in connection with the Merger; provided that none of the parties hereto shall be obligated to consummate the transactions contemplated hereby prior to the date specified for Closing in Section 1.01(d). The “Effective Time” shall be the date and time that the Certificate of Merger is filed with the Secretary (unless a later date and/or time is otherwise agreed upon by the parties and specified in the Certificate of Merger, in which case, the Effective Time shall be the date and time so specified).

(c)           From and after the Effective Time, the Merger shall have the effects set forth in Section 251 of the DGCL.

(d)           The closing of the Merger (the “Closing”) shall be held at the offices of Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, New York, New York (or such other place as agreed by the parties) on a date to be specified by the parties, which shall be the later of (i) the third Business Day after satisfaction or, to the extent permitted hereby, waiver of the conditions set forth in ARTICLE 7, and (ii) the earlier of (x) a date during the Marketing Period to be specified by Purchaser on no less than three Business Days’ notice to the Company (which date may be reasonably conditioned on the receipt of financing pursuant to the Debt Commitment on such date) and (y) the final day of the Marketing Period, unless the parties hereto agree on another date in writing.

(e)           No later than three Business Days prior to the Effective Time, the Company shall deliver to Purchaser a certificate setting forth the Company’s good faith estimate, as of the Effective Time, of all Transaction Related Expenses, including its good faith estimate of the Persons to whom Transaction Related Expenses have been or will be paid (the “Expense Certificate”). In the event that Purchaser objects that a material item has been omitted from such certificate, the Company and Purchaser hereby agree to reasonably cooperate and to negotiate in good faith to resolve any such objection prior to the Business Day before Closing, and the Expense Certificate shall be revised to the extent necessary to reflect such resolution.

SECTION 1.02. Organizational Documents. At the Effective Time (i) the certificate of incorporation of the Company in effect at the Effective Time shall be the certificate of incorporation of the Surviving Corporation until thereafter amended in accordance with applicable law and (ii) the by-laws of PurchaserSub in effect immediately prior to the Effective Time shall be the by-laws of the Surviving Corporation until thereafter amended in accordance with applicable law, except that the name of the Surviving Corporation shall be “National Mentor Holdings, Inc.”

SECTION 1.03. Directors and Officers. From and after the Effective Time (until successors are duly elected or appointed and qualified), the members of the board of directors of PurchaserSub at the Effective Time shall be the members of the board of directors of the Surviving Corporation and the officers of the Company at the Effective Time shall be the officers of the Surviving Corporation.

SECTION 1.04. Conversion of Capital Stock. At the Effective Time and by virtue of the Merger and without any action on the part of the Company, Purchaser or PurchaserSub or their respective equityholders:

(a)           Each share of PurchaserSub’s common stock outstanding immediately prior to the Effective Time shall be converted into one validly issued, fully paid and nonassessable share of common stock of the Surviving Corporation.

(b)           Except as otherwise provided in Section 1.04(e), each share of Company Common Stock outstanding immediately prior to the Effective Time shall be converted into:

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1.                                       the right to receive $35.30 in cash (the “Per Share Merger Consideration”) as adjusted pursuant to Sections 1.04(c) and (d) below; and

2.                                       if the Per Share Merger Consideration has been adjusted pursuant to Section 1.04(d) below, the right to receive an amount in cash equal to the Per Share Care Meridian Adjustment Amount upon distribution of the Escrow Account in accordance with the terms of the Escrow Agreement.

The aggregate of such cash consideration to be received in respect of the Company Common Stock is referred to herein as the “Merger Consideration.”  All such Company Common Stock, when so converted pursuant to this Section 1.04(b), shall no longer be outstanding, shall automatically be canceled and retired and shall cease to exist. Each holder of Company Common Stock so converted shall cease to have any rights with respect thereto, except the right to receive, without interest, the applicable Merger Consideration.

                                (c)           Immediately prior to the Effective Time, the Per Share Merger Consideration shall be adjusted by adding to it the Per Share Expense Adjustment (whether positive or negative). As used in this Agreement, “Per Share Expense Adjustment” means the result of (i) $2.77, minus (ii) the result of the amount of the Transaction Related Expenses reflected on the certificate delivered and, as the case may be, revised by the Company pursuant to Section 1.01(e), divided by 11,672,957.867.

                                (d)           If the Care Meridian Transaction has not been consummated prior to the Closing, immediately prior to the Effective Time, the Per Share Merger Consideration shall be reduced by an amount (the “Per Share Care Meridian Adjustment Amount”) equal to (i) $15 million (the “Care Meridian Adjustment Amount”), divided by (ii) 11,672,957.867. If the Care Meridian Transaction has not been consummated prior to the Effective Time, (i) at the Effective Time, Purchaser shall deposit the Care Meridian Adjustment Amount into an Escrow Account (the “Escrow Account”) to be held and disbursed in accordance with the provisions of an escrow agreement (the “Escrow Agreement”) substantially in the form of Exhibit E attached hereto by and among Purchaser, the Stockholder Representative (defined below) and Wells Fargo Bank, National Association as escrow agent or another escrow agent mutually acceptable to Purchaser and the Stockholder Representative, (ii) at the Closing, Purchaser and the Stockholder Representative shall execute and deliver to the Escrow Agent the Escrow Agreement and (iii) from and after the Closing, Purchaser shall cause the Company and its Subsidiaries to use their commercially reasonable efforts to cause the Care Meridian Transaction to occur as promptly as practicable.

                                (e)           Each share of Company Common Stock held by the Company in treasury or owned by Purchaser immediately prior to the Effective Time shall automatically be canceled and retired and shall cease to exist, and no payment shall be made in respect thereof. Each share of Company Common Stock issued and outstanding immediately prior to the Effective Time that is a Dissenting Share shall be converted into the right to receive payment from the Surviving Corporation with respect thereto in accordance with the provisions of the DGCL.

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SECTION 1.05. Exchange of Certificates.

(a)           Paying Agent. Purchaser shall act as paying agent for the purpose of effectuating the exchange of the Merger Consideration pursuant to this ARTICLE 1 for stock certificates (“Certificates”) that immediately prior to the Effective Time represented outstanding Company Common Stock, which were converted into the right to receive the Merger Consideration pursuant to Section 1.04(b). This Section 1.05 shall not apply to any Dissenting Shares.

(b)           Exchange Procedures; Lost Certificates. At the Effective Time, Purchaser shall make all of the Merger Consideration available to each Person that is entitled to receive the Merger Consideration pursuant to Section 1.04(b) above (each a “Company Holder”) for exchange in accordance with the terms and conditions of this Agreement. At the Effective Time, upon surrender to Purchaser by a Company Holder of Certificates representing the number of shares of Company Common Stock held by such holder, together with a duly executed and completed letter of transmittal substantially in the form of Exhibit B attached hereto, such holder of such Certificates shall immediately be paid in cash, by wire transfer to the account(s) specified in such holder’s transmittal letter, in exchange therefor the amount of the Merger Consideration to which such holder is entitled pursuant to this ARTICLE 1 in respect of the Company Common Stock represented by such Certificates. Until surrendered as contemplated by this Section 1.05, each Certificate shall be deemed upon and at any time after the Effective Time to represent only the right to receive the appropriate amount of the Merger Consideration without interest as provided in this ARTICLE 1. If any portion of the Merger Consideration is to be paid to a Person other than the Person in whose name the Certificate is registered, it shall be a condition to such payment that the Certificate so surrendered shall be properly endorsed or otherwise be in proper form for transfer. If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such certificate to be lost, stolen or destroyed, the Surviving Corporation will deliver in exchange for such lost, stolen or destroyed certificate, the appropriate amount of Merger Consideration, as contemplated by this ARTICLE 1.

(c)           No Further Ownership Rights in the Company Common Stock. All Merger Consideration paid upon surrender of Certificates in accordance with the terms hereof shall be deemed to have been issued in full satisfaction of all rights pertaining to the Company Common Stock represented thereby. As of the Effective Time, the stock transfer books of the Company shall be closed and there shall be no further registration of transfers on the Company’s stock transfer books of the Company Common Stock formerly owned by the Company Holders. If, after the Effective Time, Certificates are presented to the Surviving Corporation for any reason, they shall be canceled and exchanged for the appropriate Merger Consideration as provided in this Section 1.05.

(d)           Withholding. Purchaser shall be entitled to deduct and withhold from amounts otherwise payable pursuant to this Agreement any amount that it is required to deduct and withhold with respect to the making of such payments under any provision of Federal, state, local or foreign law. Any amounts so deducted and withheld will be treated for all purposes of this Agreement as having been paid to the Company Holder in respect of which such deduction and withholding was made.

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SECTION 1.06. Options.

(a)           Except as otherwise agreed to in writing between any Option Holder (as hereinafter defined) and Purchaser, the Company shall cause all Options that are outstanding immediately prior to the Effective Time to be canceled or terminated, as of the Effective Time, at which time each holder of such cancelled or terminated Option (an “Option Holder”) shall be entitled to receive:

1.                                       an amount equal to the product of (i) the excess of the Per Share Merger Consideration (as adjusted pursuant to Sections 1.04(c) and (d)) over the applicable exercise price per share of such Option as of such time and (ii) the number of shares of Company Common Stock such Option Holder could have purchased if such Option Holder had exercised such Option in full immediately prior to such time; and

2.                                       if the Care Meridian Transaction has not been consummated prior to the Effective Time, the right to receive cash upon distri